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Neal R. Gross and Co., Inc.

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 U.S. DEPARTMENT OF ENERGY

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 CENTRAL AIR CONDITIONER REGIONAL STANDARDS

 ENFORCEMENT WORKING GROUP

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 PUBLIC MEETING

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 Thursday

 September 25, 2014

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The Public Meeting met in Suite GH-019, 1000

Independence Avenue, S.W., Washington, D.C.,

at 9:09 a.m, Neil Eisner, Meeting

Facilitator, presiding.

PRESENT

NEIL EISNER, Meeting Facilitator

DANIEL ARNOLD, NORDYNE 

TIMOTHY BALLO, Earthjustice

GARY CLARK, Goodman Manufacturing Company

JORDAN DORIA, Ingersoll Rand

V. RAY ELLIS, Lincoln Electric Cooperative 

GARY FERNSTROM, California Investor Owned 

 Utilities 

JOHN GIBBONS, Carrier Corporation 

DAVID HUNGERFORD, California Energy 

Commission 

JOHN HURST, Lennox International

CHARLES McCRUDDEN, Air Conditioning 

Contractors of America 

JONATHAN MELCHI, HARDI 

KAREN MEYERS, Rheem Manufacturing Company

 ELIZABETH NOLL, Natural Resources

 Defense Council (via teleconference)
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Neal R. Gross and Co., Inc.

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DOUG RAWALD, U.S. Department of Energy, 

 General Counsel

BRYAN ROCKY, Johnson Controls

ANIRUDDH ROY, Goodman Manufacturing Company 

HARVEY SACHS, American Council for an 

 Energy-Efficient Economy

AMY SHEPHERD, Air-Conditioning, Heating and 

 Refrigeration Institute

CHARLES WHITE, Plumbing-Heating-Cooling

 Contractors - National Association 

ALSO PRESENT 

MEG WALTNER, Natural Resources Defense

Council KARIM AMRANE, Air-Conditioning,

Heating, and 

Refrigeration Institute 

LAURA DEGITZ, Navigant Consulting
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 TABLE OF CONTENTS

Discussion on Manufacturers. . . . . . . . . . . . . . .3

Discussion on Distributors . . . . . . . . . . . . . . 32

Discussion re: caucuses. . . . . . . . . . . . . . . . 75

Presentation by Doug Rawald. . . . . . . . . . . . . . 78

Final Discussion Brochure Changes. . . . . . . . . . .292

Prohibited Acts. . . . . . . . . . . . . . . . . . . .296
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1 P-R-O-C-E-E-D-I-N-G-S

2 9:09 a.m.

3 MR. EISNER: Why don't we get

4 started. Do we want to start off with what

5 you met with manufacturers on last night?

6 MR. RAWALD: Sure, so yesterday I

7 met with the distributors, contractors, and

8 the manufacturers with the distribution

9 asparts of their business and went over the

10 proposed ideas for record retention. So I've

11 put together these slides that kind of

12 summarize what our thoughts were. Now they

13 didn't necessarily agree to everything, but

14 this is kind of what I wanted to put before

15 the group after having some feedback from

16 those folks.

17 So if we go to the first slide, so

18 here's what we were looking at. We discussed

19 what possibly contractors and dealers would

20 have to keep. So looking at split system

21 central air conditioners, the things that we'd

22 want would be for outdoor condensing unit, the
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1 manufacturer, the model, and serial number. 

2 For the indoor unit, the evaporating unit,

3 evaporating coil in this case, the

4 manufacturer and model number. And if the

5 ducted air mover is being installed with it,

6 then the manufacturer and model number of that

7 as well because from the AHRI database those

8 three components together will often be a

9 certification. So that's why I want to keep

10 all those together.

11 MR. SACHS: Excuse me, Doug. This

12 is Harvey. Will you be circulating these or

13 just the next iteration?

14 MR. RAWALD: So this is for us to

15 talk about. We can circulate a copy. I don't

16 have a copy. I just finished the slides like

17 literally 20 minutes ago. But we can give you

18 a copy to bring back to your interests, if

19 you'd like.

20 MR. SACHS: We'd appreciate it. 

21 Thank you.

22 MR. RAWALD: So single package air
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1 conditioner because it is a concern in the

2 Southwest, the manufacturer, model, and serial

3 number. And then for all the units for the

4 contractors and dealers to keep, where they're

5 installed, when they're installed, and who

6 they bought it from. That was a general

7 thought on what we want contractors and

8 dealers to keep for record retention.

9 Any reactions from the folks that

10 weren't part of that discussion?

11 MR. FENSTROM: That's good. So

12 what's the consequence if the record isn't

13 there when you might want to see it?

14 MR. RAWALD: Right, so we didn't

15 discuss all of that, but we have on the table

16 what we talked about before was the

17 possibility of a prohibited act for not

18 producing records. But we had discussed that,

19 the consequence. We can discuss just

20 basically what would be required to keep.

21 MR. SACHS: This is Harvey. And my

22 guess, but I want to get it clarified, is this
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1 would be a DOE requirement for all SEER 13

2 condensing units sold anywhere in the country

3 or only in the South or --

4 MR. RAWALD: So we had a lot of

5 discussion of that. We didn't come to an

6 accord about whether this would be a

7 nationwide requirement of all, any split

8 systems, whether we focus only systems that

9 are below 14 SEER or whether it would be only

10 people working in the Southwest and Southeast. 

11 We didn't come a final decision on that.

12 In my -- what I am putting forward

13 here is a nationwide idea, but I'm open to

14 judgments or any sort of narrowing of the

15 scope. So Charlie, in particular, wanted to

16 think about it overnight because he had some

17 real thoughts and he was going back and forth

18 on what we thought would be the right scope

19 for him.

20 MR. WHITE: I'm surprised. Well,

21 this is Chuck White, PHCC. One of our issues

22 is if we require everyone with SEER 13, that's
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1 the people in the North. So the people in the

2 North are going to be doing all the

3 registration and with equipment that's

4 legitimate to install. 

5 The people in the South, if you're

6 following the rules, you have nothing to

7 register. If you're not following the rules,

8 you're probably not going to register. 

9 MR. RAWALD: I want to avoid the word

10 "register" because this is all about

11 recordkeeping. We're not getting to this yet,

12 registering.

13 MR. WHITE: Yes but, it puts the

14 onus, the work, and the issue kind of in the

15 wrong area. You're still going to keep

16 records, but we couldn't really settle on

17 should this be 13, should this just be the

18 South. We couldn't really settle on it.

19 MR. FENSTROM: So this is Gary. If

20 the prohibited act is to use your term failure

21 to register, or Doug's term, failure to keep

22 the record, then if we go out and do some
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1 auditing and we find an absence of records,

2 then you know, there's a civil penalty

3 associated with it.

4 MR. AMRANE: Why would this

5 requirement apply to contractors while you're

6 dealing, installing units in the North?

7 MR. RAWALD: Right, so I think it's

8 a fair question. So why would a contractor in

9 the North have any sort of requirement at all? 

10 So there's two reasons that I can think of. 

11 One, a nationwide standard is always easier to

12 kind of teach and get people to understand

13 than variants. So if a guy works mostly in

14 the North, but then he goes to the South

15 occasionally and he forgets what he's supposed

16 to do because it's not a common practice for

17 him. 

18 The second thing is as I've

19 described a couple of times, there are two

20 scenarios by which there could be a non21 compliant product. There's the first which we

22 talk about all the time which is the product
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1 labeled 13 is installed in the South and

2 shouldn't be. The second is a product labeled

3 as 14, tested by DOE and determined to be

4 13.8. So the manufacturer has to figure out

5 what went where because they don't want to be

6 liable for all the 13.8s that were installed. 

7 So they didn't want to reconstruct, okay,

8 these 25 are installed in the North, so

9 they're in the clear. 

10 So the manufacturer may want dealers

11 and contractors in the North to keep track of

12 what they're installing to help minimize their

13 liability. So that's the only other incentive

14 I would see. Otherwise, I think it makes more

15 sense to focus on the regions from a

16 contractor/dealer point of view than on the

17 SEER value, I think, because you want to have

18 a kind of consistent pattern of practice from

19 the Southwestern and the Southeastern guys to

20 keep these records so we can ask them and

21 prove that they didn't do something or they

22 did do something. I think that's probably
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1 what I would prefer as opposed to looking at

2 the SEER value.

3 But I'm open to thoughts. I'd

4 definitely want to get some dialogue on this.

5 MR. ROCKY: Doug, this is Bryan

6 Rocky. The discussion on indoor unit, I'm

7 assuming with the third bullet saying ducted

8 air mover that the indoor unit is considered

9 the evaporator coil?

10 MR. RAWALD: Yes, yes. I changed it

11 to the indoor unit from the evaporator coil. 

12 When we were discussing it yesterday, we were

13 talking about the evaporator coil.

14 MR. EISNER: Other comments,

15 questions?

16 MR. SACHS: Doug, this is Harvey. 

17 Perhaps this is a surprise, but I'm going to

18 remain in the listen mode, question mode. I

19 need to hear a lot more responses, pluses and

20 minuses.

21 MR. RAWALD: Okay, so you're asking

22 one of us to volunteer some more thoughts. So
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1 Charlie, I don't know if you've come to a --

2 MR. McCRUDDEN: So this is Charlie

3 at ACCA. I reached out to my folks. I

4 haven't heard from our Board to sort of

5 definitively say one way or another. The

6 issue -- I mean, these are for the most part

7 records that contractors already keep in some

8 form or another. And Doug and I in our

9 discussions I'm comfortable with sort of how

10 they need to be kept. There was a --

11 MR. RAWALD: It'll be the last slide.

12 MR. McCRUDDEN: Okay.

13 MR. RAWALD: It'll be the last slide.

14 We'll discuss that.

15 MR. McCRUDDEN: I'll get to that in

16 a second. But essentially, there's not a

17 tremendous burden on the contractor. The idea

18 is that the only time a contractor would have

19 to produce these records are upon request. 

20 There may be some legwork to find all the

21 records necessary because they're not going to

22 be associated in a database, in a relational
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1 database. Some may have that, some may not. 

2 I believe that the DOE would use its

3 discretionary authority for the smaller folks

4 in these instances.

5 MR. RAWALD: This is Doug, and I

6 would interject, the less sophisticated folks.

7 So people --

8 MR. McCRUDDEN: The less

9 sophisticated. But I'm just not sure what to

10 do about nationwide versus narrow, from a

11 narrow scope. Nationwide offers the

12 opportunity for consistency. It offers the

13 manufacturers an opportunity to mitigate a

14 case where they may be on the hook, but as

15 Chuck noted, the burden is being carried by

16 the contractor who really is just going to

17 have its standard operating procedure as it

18 always was. 

19 The focus -- we've been so focused

20 on the Southeast/Southwest, clients in

21 Southeast/Southwest, this record-keeping

22 requirement has not been a part of that in a
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1 sense.

2 MS. MEYERS: This is Karen with

3 Rheem. Is this just for 13 SEER units or is

4 this for all split system central air

5 conditioners of which there are millions sold

6 yearly.

7 MR. SACHS: Karen, this is Harvey. 

8 Can we finish up the other one? I had a

9 question on the other side of this. I'm very

10 much interested in the 13/14. In fact, it 

11 confused me that there are two things in play.

12 MS. MEYERS: Okay with me.

13 MR. RAWALD: Right, and so I think

14 Charlie and I discussed it there. They're

15 totally -- they can't coexist. Either we

16 narrow the scope to what's less than 14 which

17 has the real unintended consequences of burden

18 really will be borne by the Northern

19 contractor much more than the Southern

20 contractor -- which is not the consequence I

21 think I'm really in favor of --- or we narrow

22 the scope to only those who operate in the
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1 Southeast and the Southwest which I think is

2 more consistent with the idea of regionalizing

3 the standard, but requires them to keep track

4 of not just 13s, but all installations they

5 do.

6 Now I don't think it's anything that

7 they don't already keep track of as Charlie

8 and I discussed. I don't think it's all that

9 burdensome, but I do think we have to make

10 clear that that's what they're keeping. 

11 I think for me from an investigative

12 point of view, it would be helpful if I'm

13 going to go to a Southeast contractor and if

14 I can look at and see what is positive as well

15 as -- it might be negative, it's helpful. So

16 I would want it to be not just 13, but also

17 all above SEER so I can look at a record and

18 say oh, you had 25 installations and only one

19 was a mistake. That would be helpful. I

20 think that makes sense to me.

21 So if I were going to narrow the

22 scope, I would just narrow it to Southeast and
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1 Southwest, but that's just me talking out

2 loud. And I don't know how hard this is to

3 sell and I don't know from the manufacturer's

4 point of view how much you want to insulate

5 your liability for this concern if you put out

6 in the universe a unit that tests less than 14

7 to be able to track back what actually was

8 sold in the South and installed in the South.

9 MR. SACHS: Doug, this is Harvey. 

10 Again, a question.

11 MR. RAWALD: Okay.

12 MR. SACHS: The proverbial 13.8

13 condensing unit that's revealed as a result of

14 DOE testing, or it fails in AHRI, strikes me

15 as being an issue for what records the

16 manufacturer wants to demand from down the

17 chain. Do the manufacturers want DOE's, air

18 quotes, help on that issue or is that

19 something which can be left to them?

20 MR. RAWALD: I think I had the exact

21 same question. That is my exact same

22 question. There's an ability here because
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1 we're negotiating, to create by regulation

2 that for the manufacturers or to not. And so

3 I want to hear from the manufacturers whether

4 they want that assistance.

5 MR. FENSTROM: Doug, this is Gary. 

6 Let's talk about a hypothetical.

7 MR. RAWALD: Okay.

8 MR. FENSTROM: So I'm a small

9 contractor in a region that requires

10 compliance and we collectively decide that

11 only compliance-required regions are going to

12 be reporting, so we're going to exempt the

13 rest of the country.

14 MR. RAWALD: Maintaining, not

15 reporting.

16 MR. FENSTROM: Maintaining, thank 

17 you. We're only going to report noncompliant

18 units where there's no need to report

19 compliant units. So you come up to my place

20 of business and I say well, Doug, I don't have

21 anything to report. Everything I installed

22 was compliant. Thank you.
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1 MR. RAWALD: Right, I don't want

2 that outcome.

3 MR. FENSTROM: No, and I just put

4 that out there to show that if we do exempt

5 the rest of the country and just require

6 retention in compliance-required areas, we'd

7 have all the equipment that was shipped into

8 that area and installed in that area.

9 MR. RAWALD: No, I wouldn't agree

10 with that. It's got to either be across the

11 board, below 14 SEER, or just focus on a

12 region, but all that were installed. I think

13 it's got to be one or the other. 

14 From what I heard from Charlie, that

15 he's in agreement with that as well as he

16 thought about it. If any at all, if any

17 narrowing at all. Because the third option is

18 no narrowing and everyone has the burden.

19 MR. FENSTROM: Well, this is Gary

20 again. So let me throw out a position. I

21 don't see value in having the whole rest of

22 the country required to retain records. There
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1 may be some slippage where contractors in the

2 rest of the country do occasional business in

3 compliance-required areas. But that slippage

4 is probably going to be small.

5 MR. RAWALD: Right.

6 MR. FENSTROM: And correcting it or

7 capturing it wouldn't merit the burden on the

8 entire rest of the country.

9 MR. MELCHI: Jon Melchi from HARDI. 

10 To Gary's point, that still wouldn't prevent

11 DOE from asking those contractors in the

12 northern regions for those records. It just

13 maybe takes away the guarantee that it will

14 have -- that that contractor will have

15 absolutely every piece of information.

16 MR. RAWALD: Because they're not

17 familiar with the regulation.

18 MR. MELCHI: Yes.

19 MR. RAWALD: Right, I agree.

20 MR. MELCHI: They still may have

21 those records. 

22 MR. RAWALD: Any other thoughts on
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1 this? We haven't heard from any manufacturers

2 at all in response to Harvey's question

3 whether they want help.

4 MR. SACHS: They may want to caucus.

5 MR. RAWALD: Yes, I don't mind. If

6 you guys want to talk about it, we can move on

7 and we can come back to this later. I just

8 want to present the topics.

9 MS. MEYERS: So this is Karen with

10 Rheem. I think as we said in the past eight

11 meetings and the issue is the border states,

12 so that's North and South. So -- and that's

13 probably where you're going to have your

14 issues. So not that I want to burden the

15 whole North, but I think just making this a

16 requirement for the South and the Southeast

17 regions is probably not really going to even

18 get to -- I mean if you're not going to

19 require Minnesota, I don't think you should

20 require Texas because Texas isn't going to be

21 an issue either. So I'm not sure how this is

22 solving the issue, just a --
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1 MR. McCRUDDEN: So this is Charlie

2 of ACCA. You could say all installs in the

3 North and South, so then let's say you've got

4 the case where you've got a Michigan

5 contractor that does a lot of multi-family or

6 multi-family housing and he'll take a job

7 anywhere. In fact, that's his specialty. He

8 travels around the country. This was the case

9 we talked about yesterday where the equipment

10 may be shipped, like with -- what was it,

11 Hobbs or whatever it was, where you've got the

12 manufacturer shipping directly to Atlanta a

13 bunch of 13 SEERs that are going to get on a

14 truck.

15 In that case, you could say okay, if

16 you're doing a job in the Southeast or

17 Southwest, you must maintain the records of

18 that information from those jobs. That, of

19 course, requires that the contractor

20 essentially self-certify or declare that

21 they've done jobs in the South and Southwest

22 and so the contractor from Ohio, on the border
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1 there, could just claim well, I didn't do any

2 jobs in the South, when in fact, they did.

3 And I'm playing devil's advocate

4 against myself in this situation, but these

5 are the things we've sort of got to unpack,

6 figure out and I think it's just what's going

7 to be most effective is the question not

8 what's -- do we do record keeping requirements

9 or not.

10 MR. FENSTROM: So this is Gary. 

11 That's the very reason why we need what I

12 would call a sweep, some sort of minimal,

13 random audit at the installation level.

14 MR. RAWALD: Gary, I hear that you

15 want DOE as part of their investigative tools

16 to use the robocalling or the surveying and I

17 think it's a good idea. I put it before for

18 the Department. I don't think it's going to

19 be regulated under the regulation. I think

20 that's something that we can do and I

21 certainly hear that and I think we will look

22 into doing that.
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1 MR. FENSTROM: Well, I would hope

2 that as an outcome of this working group and

3 the term sheet, we create the expectation that

4 DOE will do certain things, rather than just

5 listing DOE's authority or capability and

6 leaving it entirely up to DOE because we're

7 supposed to come up with a plan to assure

8 compliance and I would want to see some

9 expectation of minimum survey work. That's

10 not so necessary in the current paradigm,

11 because with national standards it's pretty

12 conspicuous when something doesn't comply. 

13 But with regional standards, it's not at all

14 so conspicuous. 

15 MR. RAWALD: Okay. Well, we can put

16 an item for the term sheet whether it's some

17 sort of proactive DOE robocall on an annual

18 basis as part of the regulation, so -- Harvey?

19 MR. SACHS: I have a question that

20 was -- this is Harvey. The question was

21 sparked by Karen's question. It's two parts. 

22 The first part is would it be within this
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1 group's capabilities to suggest to ASRAC a

2 record-keeping requirement for contractors

3 within one state of the North, South,

4 Southwest, North boundary and would that be an

5 advisable compromise? It will not catch the

6 multi-family guy, but it would certainly ease

7 the record keeping where we feel the trauma is

8 likely to be concentrated.

9 MR. RAWALD: So your first question,

10 of course, is within the boundaries of this

11 group. I think at DOE, to pose that question

12 would not support that proposal. We don't

13 want to have a hodgepodge of states. We

14 really want to have it coexistant with the

15 region or nationwide. That's easier for us

16 for a number of reasons and it helps, at

17 least, keep a clear message in some way. So

18 we're not going to be -- it would be hard for

19 DOE to support that.

20 I'll go back and ask the question,

21 if the group wants it and consensus comes to

22 that, but I think it would be awfully hard for
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1 us to maintain that position.

2 MR. SACHS: I would like for us to

3 please get some reactions before you ---

4 MR. RAWALD: Before I close this?

5 MR. SACHS: Before you can say no or

6 go back.

7 MR. RAWALD: Right.

8 MR. ARNOLD: This is Dan Arnold. I

9 think we'd want to caucus on this. I have my

10 own personal feelings, but I don't want to be

11 out there and I don't want to impose my

12 feelings on contractors and others that are

13 part of our business model.

14 MR. RAWALD: Can I propose that we

15 go through the rest of the record retention

16 slides and then possibly caucus in small

17 groups?

18 Okay, let's go to the next one. So

19 we talked about distributors. And one thing

20 at the bottom here, I do want to --

21 MR. SACHS: As Karen parked one item

22 and I'm not sure we got back to it.
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1 MS. MEYERS: I think my question was

2 all efficiencies. Are we doing this for all

3 efficiencies or just 13 SEER units or just --

4 MR. RAWALD: Right, this is Doug. 

5 And so I think it's got to be either by region

6 or by below 14 SEER. It can't be both. My

7 preference -- because I don't want to walk

8 into a situation where a guy says I only do

9 compliant installation as Gary describes, so

10 he has no records at all. That, to me is not

11 an acceptable outcome. I'd rather it be all

12 SEERs that you install and that way I can look

13 at your records and say these are all good. 

14 Or he's falsified the records and he's saying

15 13 SEERs or 14 SEERs, at least he has some

16 sort of records so I can see there what's

17 going on. That's my preference. I think it

18 makes a lot more sense. I'm more supportive

19 of the region. I'm not supportive of

20 narrowing it by SEER.

21 MR. BALLO: When you say region, 

22 you mean the region of installation, not the
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1 region that the contractor is located in?

2 MR. RAWALD: Absolutely correct. 

3 The region of installation. It would not be,

4 once again, I don't want it to be where you

5 are housed. You know, in Louisville, you can

6 cross the border and still work in the South. 

7 It's where the install takes place.

8 MS. MEYERS: So it would only be for

9 products subject to regional standards so

10 condensing units of package air conditioners. 

11 So you're not required to keep records on heat

12 pumps?

13 MR. RAWALD: Absolutely correct. 

14 That's correct, Karen. Let's assume it's in

15 the cycle package.

16 MR. McCRUDDEN: And Karen, I'll say

17 -- this is Charlie with ACCA. Again, most

18 contractors are keeping these records in some

19 form or another. It may not be paper. It may

20 not be electronic, but this is for the most

21 part a standard operating procedure. The less

22 sophisticated contractors may have to make
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1 adjustments, depending on how this works out. 

2 For that contractor, if they're essentially

3 exempt, then there's no change in how they

4 operate.

5 MS. MEYERS: So then just for

6 clarification, we're calling a 14 SEER unit

7 what?

8 MR. McCRUDDEN: I don't think we've

9 made that definitive or a determination yet.

10 MR. RAWALD: I don't understand the

11 question.

12 MR. McCRUDDEN: I think she -- well,

13 I'll let her.

14 MS. MEYERS: Well, so if I've got a

15 15 SEER unit that I put with an oversize coil

16 and an air handler so the efficiency --

17 because its installation demands it, but it

18 brings the efficiency rating that I've

19 certified the 14.8, do I have to keep a record

20 on that?

21 MR. RAWALD: Yes, in my opinion, I

22 want to keep records of all installs,
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1 regardless of SEER value, I want to do it by

2 region. Now if we were to do it by SEER value

3 those questions would come in, maybe a lot

4 more complicated I think.

5 MR. McCRUDDEN: More complicated -- 

6 this is Charlie at ACCA. More complicated,

7 but potentially less burdensome in a sense. 

8 MR. RAWALD: In burdensome, you keep

9 less records, but more burdensome you have to

10 keep it in the first place, otherwise you have

11 a complete -- hey, I did a job, I keep a

12 record. So if you have to think about whether

13 you're keeping a record that's time wasted

14 possibly or eternally to keep the records, I

15 don't support.

16 MS. MEYERS: If the product is not

17 subject to a regional standard, I don't know

18 why the enforcement rule would have a

19 requirement that they have to keep a record on

20 it. So if it's a 15 or a 16 or an 18 SEER,

21 the contractor may elect to do that because

22 it's simpler to do it for everything, but I
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1 don't know why we would include it as part of

2 the enforcement rule.

3 MR. RAWALD: And this is Doug. So I

4 would push back on the notion that the product

5 is not subject to regional standards because

6 the way we view product, it is subject to to

7 regional standards. It's just that particular

8 model meets or exceeds the standard. So just

9 because it meets or exceeds doesn't mean that

10 it's required to reported. In fact, in DOE's

11 parlance, we require reporting of meet or

12 exceeds standards from manufacturers every

13 day. So I think it's consistent with our

14 practice. And we require manufacturers to

15 keep records on things that meet or exceed

16 standards currently.

17 MS. MEYERS: But you couldn't be

18 bringing an enforcement action against one of

19 those units.

20 MR. RAWALD: But, Karen, I'm not

21 bringing it against the unit. I'm bringing it

22 against the contractor and so the existence of
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1 compliant installs or at least recorded to be

2 compliant installs could be helpful for me in

3 trying to figure out what happened in the

4 course of the investigation.

5 So it can indicate either the guy is

6 doing everything right and this one thing was

7 a one-off. It could be the guy is faking all

8 these records and all the installs are

9 actually bad installs and he's lying on the

10 record. So I need to be able to, I think, see

11 the complete record of what the installer is

12 doing to build a good enforcement case.

13 MR. SACHS: This is Harvey. Looking

14 at it a slightly different way, I think it's

15 baked in, once everything hinges on a routine

16 violator.

17 MR. McCRUDDEN: Yes, this is

18 Charlie. And that's what I think, too. I do

19 want to hear what the manufacturers are saying

20 and I'll let you guys caucus, but I'm curious

21 because in the instance where there is a 14

22 that's not 14 and you can under this factor
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1 method say well, only 25 of the product that

2 didn't meet the rating we said it did, ended

3 up in the South, versus the 15,000 we made.

4 MS. MEYERS: Yes, that makes sense.

5 MR. McCRUDDEN: The other question I

6 have is what happens in the case of a 13 SEER

7 product that winds up rating or testing at

8 less than 13.

9 MR. RAWALD: Right, that's a

10 national standard. The manufacturer is

11 responsible for it period. That's

12 specifically how we do things --

13 MR. McCRUDDEN: I guess you're

14 right, it doesn't matter.

15 MR. RAWALD: It would be --

16 MR. McCRUDDEN: Well, I'll let that

17 one go.

18 MR. BALLO: Just one question, the

19 real value to DOE of seeing those compliant 14

20 plus installations is for the routine violator

21 assumption could then or determination could

22 you just have it that it's not a requirement
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1 to keep the 14 SEER records, but if you don't

2 keep it, you're assumed to be a routine

3 violator if we catch you with the --

4 MR. RAWALD: We could adopt that. I

5 don't think the contractors would want that.

6 MR. BALLO: Well, if they don't want

7 to keep the records --

8 MR. RAWALD: Right. I don't hear the

9 contractors pushing back as hard as I hear

10 Karen pushing back on the manufacturer point

11 of view on behalf of the contractors.

12 MS. MEYERS: I'll withdraw. I was

13 just questioning. You won me over.

14 MR. McCRUDDEN: This is Charlie. 

15 You're talking about two different types of

16 violations. One is an installation violation

17 and the other is a record-keeping violation.

18 I think they are separate functions. I don't

19 think you should be able to move from one to

20 the other based on -- I don't think you should

21 be able to move from record-keeping violation

22 to a routine violator for installations. That
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1 may not be the case.

2 MR. RAWALD: Right, I was just

3 offering you a compromise which is hey, if the

4 guys want to keep records, fine, but if they

5 done one thing wrong, we assume all their

6 things are wrong. So that's a compromise

7 we're offering which I would not be surprised

8 you'd want to take it. But you can think

9 about it.

10 So let's move to distributors. So

11 distributors is basically the same form of

12 information on the units and for them we want

13 them to keep the date they buy and who they

14 buy it from and the date they sell it and who

15 they sell it to. And I then I added the last

16 one after meeting with these folks, so we had

17 not discussed this, if it's delivered, where

18 was it delivered to. I think that would be

19 something that they would be maintained

20 already since it's a delivery record, but at

21 least having that possible piece. So that's

22 a new piece that we've not discussed before. 
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1 And I do want to make sure I call it out to

2 folks.

3 Understand, it may not be delivered

4 to the contractor or not even to where it's

5 being installed. So that might not give us

6 everything we want, but still, it's something

7 that it's already being kept. We would like

8 to have it be considered still kept.

9 MR. FENSTROM: This is Gary. 

10 Furthermore, if the distributor has retained

11 a complete record of what was sold to the

12 contractor and the contractor is obligated to

13 keep records of all equipment, compliant or

14 not, you can match what was sold to what the

15 contractor said they installed and it would

16 make your job much easier and complete.

17 MR. RAWALD: Everything Gary is

18 saying is completely true from my point of

19 view. That's part of the reason for why I

20 would want to have the complete record on the

21 part of the contractor so I can build this

22 picture when I compare it to the distributor
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1 record.

2 MR. ROCKY: This is Bryan from

3 Johnson Controls. My question is to John and

4 Chuck and Charlie, what's the impact of this

5 on your cash sales?

6 MR. RAWALD: There were a lot of

7 discussions about that yesterday, Bryan.

8 MR. SACHS: Before we get to that, I

9 think in the next to last bullet, it's party

10 to whom?

11 MR. RAWALD: Right, it should be to

12 whom, you're correct. We'll take that from

13 to. That's correct, Harvey. That goes to show

14 I did it this morning too fast.

15 MR. SACHS: That's fine. I just

16 wanted to make sure I wasn't misunderstanding.

17 MR. RAWALD: No, you are correct. 

18 John, you had a point, too?

19 MR. GIBBONS: Well, I was the one

20 who brought up the cash sale and I did some

21 surveying last night. We got domestically,

22 the United States-wise, we have roughly 14
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1 brands. I checked on the Carrier side which

2 the guy said we require a license and we also

3 take names and numbers of who we sell to,

4 whether it's a cash sale or a credit card sale

5 or whatever. 

6 And then I was checking on our ICP

7 side of the fence and it was probably 50-50. 

8 I checked with two different distributors,

9 both from the West Coast that said, yes, we

10 track everything because we don't want -- in

11 case there's a consumer recall, we want to

12 make sure we know where the unit is at.

13 And then the one guy said, well --

14 he got a little iffy, he said, probably about

15 half of what we sell over the counter, it's

16 what he was calling selling over the counter

17 was tracked, the other half was kind of --

18 vaporizes.

19 MR. MELCHI: This is Jon from HARDI. 

20 When we're talking cash sales ---- those of

21 you who haven't had the privilege of visiting

22 a distributor. Customer comes in, he's not
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1 a regular customer. Maybe, you know, and

2 maybe they're looking to purchase a coil, a

3 simple coil. This supply house is the closest

4 one to the job. I'm going to pay cash for it. 

5 The distributor is not going to take the time

6 to put in the information of the customer. 

7 He's never seen him really before. No need to. 

8 You know, line is out the door. It's just a

9 busy, quick transaction. It happens pretty

10 regularly. Call up my members yesterday they

11 would -- typical industry-wide, somewhere

12 around 20 percent of transactions are

13 conducted on a cash, over-the-counter basis.

14 Now that transaction could be parts

15 and pieces and it could be --

16 MR. RAWALD: And Jon, with or

17 without accounts?

18 MR. MELCHI: Yes, without an

19 account. Particularly, the scenario would be

20 like, for instance, one of our members last

21 night and I think it was brought up as we were

22 talking about this. And this was the issue
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1 with serial number on the outdoor condensing

2 unit is I come ---- somebody comes to the

3 counter, they want to buy a system. They're

4 not a typical customer, but they have a client

5 that wants Brand X. That's what they've

6 always had. They want Brand X, but they want

7 their customer to install it. The contractor

8 comes to the store and says I will buy this

9 one time. I don't typically do business with

10 you, I never do business with you. I'm a

11 Brand Z contractor. If there's a premium to

12 be paid, they'll for it. They'll pay cash. 

13 They'll get a bill at a sale. They roll their

14 truck around back. If my distributor doesn't

15 have a scanning system, we wouldn't know which

16 serial number is going to be loaded on the

17 truck. We would know what model number. 

18 They'd be able to tell you that because you're

19 going to hand them a billing slip that is

20 going to tell them what to put on the truck. 

21 But they're not going to know the serial

22 number.
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1 So this was not how I expected to

2 spend my evening last night on the phone on

3 this one, but there was a heck of a lot of

4 opinions on this. For 80 percent of our

5 members and their customers, this information

6 is pretty easy and standard to track. This 20

7 percent though is a huge, huge change to our

8 industry.

9 Now we have gone through, in the

10 limited time we had between last night and

11 today, trying to figure out what the cost of

12 this would be. We're assuming that this is

13 going to be nationwide because that's a

14 commitment that I made to Doug that

15 distributors would keep these records -- try

16 to keep records on a nationwide basis. 

17 Because of the regionality of distribution,

18 it's going to be really tough for one of my

19 members that straddles the border of different

20 regions to say, well, you keep these records

21 in this branch, but not in this branch. It

22 just doesn't really make any sense. And that
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1 was a commitment we're trying to make to make

2 this go along. But you were talking at a

3 minimum for those three pieces at least four

4 million, probably substantially more than

5 that, transactions a year that are conducted

6 on a cash out basis. Now --

7 MR. HURST: That's not condensing

8 units. That's all ---- total.

9 MR. MELCHI: That's condensing

10 units, ducted air movers --

11 MR. HURST: ---- parts and supplies.

12 MR. MELCHI: Yes -- no, and coils. 

13 So somewhere around that time.

14 MR. SACHS: That doesn't count the

15 duct tape sales?

16 MR. MELCHI: No. 

17 MR. SACHS: Okay.

18 MR. MELCHI: Let's say that takes 15

19 minutes to try to capture that information at

20 each transaction for each -- at least right

21 off the bat. Because you're talking

22 nationwide. You're trying to get this
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1 information. You're looking at a cost to my

2 members, in the distribution neck of this, in

3 excess of $10 million annually to change a

4 practice. The way one of my members put it to

5 me -- this is the biggest change to the HVAC

6 industry since the implementation of 608 regs

7 from the EPA, in as far as deviating

8 practices.

9 Having said all that, we're not

10 opposed to trying to do this. We think that

11 as far as the one -- the continued question we

12 heard was the serial number piece on the

13 condensing unit is going to be problematic and

14 it would require, in addition to a change in

15 the behavioral practices and SOPs of a counter

16 guy, it would take, you know, you're talking

17 changes to your ERP system and implementation

18 of scanning and things like that that not all

19 distributors have. If it's just a

20 manufacturer or model number which given that

21 we do have the pending guidance which we think

22 solves a lot of -- answers a lot of these
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1 questions, it makes it easier to swallow. 

2 Just so there's no shock, when we go

3 to OMB, if this implemented -- and we're

4 talking including cash sales, it's going to be 

5 -- it's a huge cost. I mean it's a

6 massive cost to our industry. And again, just

7 the behavioral change. In a lot of our

8 markets -- one of my guys mentioned to me, I

9 mean we've got language barriers, you know,

10 where somebody can come in and point to

11 something in the catalog and you can kind of

12 communicate that way. There's a lot of

13 challenges that distributors are going to face

14 in this right off the bat.

15 I will be perfectly honest. I don't

16 think there's any way that we would be able to

17 change the entire practice of how distributors

18 do this by January 1, 2015. There's just no

19 way. We're not against trying to do it

20 though, if it means to helping this -- they're

21 trying to do this to try to help it along. 

22 I'm going to get absolutely killed
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1 because, as Gary mentioned, we're going to

2 have a distributor in Milwaukee or Detroit who

3 does -- a perfect example. I've got a guy in

4 Detroit who does almost entirely cash

5 transactional business. That's just the way

6 the market is up there. And they do a lot of

7 it. Now he is -- his business practices are

8 going to have to change. The guy from Detroit

9 is not going to be running south of the

10 border, but that's kind of the -- if that's

11 the way it's going to have to be, we're

12 willing to try -- admitting that that's going

13 to be the hardest part of this. 

14 For 80 percent of our business

15 stuff, this is not going to be -- we don't

16 necessarily -- the serial number thing varies

17 from -- but the manufacturer and model number. 

18 We've got that. And for customers that we

19 have, that will be information that we would

20 be able to provide. The delivery address,

21 I'll have to check with. I am 99 percent sure

22 nobody keeps those records for 5 years, so
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1 there's going to be an additional cost to that

2 and I don't know how those -- or if those

3 records are even kept outside of notation in

4 an account. So I'll have to go back and check

5 those.

6 MR. RAWALD: Right, and I didn't

7 mean to spring that on you, it's just that

8 those were asked this morning. It was in

9 regard to our chat about the zip code and

10 everything else, this was the ask. So I want

11 to make sure that we have it out there for

12 discussion because we had talked about it. I

13 told these guys yesterday and I've told them

14 before -- my personal love for the serial

15 number is not great, but there's a Department

16 interest in the serial number. And there

17 seems to be interest from other people in the

18 -- stakeholders in the serial number. So I

19 don't want to give up on the serial number so

20 lightly, but I will ask the question of the

21 serial number for both the distributor -- I

22 think it's the biggest shift for the
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1 contractor as well. I think it's the hardest

2 thing for them because ---- definitely I'm not

3 all that confident with giving serial numbers. 

4 So that is the hardest task, I think, for

5 that.

6 MR. MELCHI: The date code? We

7 talked a little bit about --- you mean as far

8 as --

9 MS. MEYERS: Can they keep track of

10 the date code?

11 MR. RAWALD: Karen, if you guys want

12 to be on the record, we're not getting any of

13 this --

14 MR. MELCHI: She asked him ---- can

15 you keep track of the date code. Are you

16 talking about the date purchased?

17 MS. MEYERS: No, the date code of

18 the manufacturer.

19 MR. MELCHI: I don't ---- it's not

20 something we typically track. I can ask and

21 take that back for sure. Without knowing how

22 the manufacturers are going to handle this,
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1 are we looking at January 1 for -- I mean for

2 model number? Will there be different -- are

3 the model numbers going to stay pretty

4 consistent or are we looking at wholesale

5 changes is one thing -- question, that we had. 

6 I wouldn't suspect that there would be a ton

7 of difference.

8 MR. ROCKY: This is Bryan Rocky. 

9 We're going to do everything to keep it as

10 simple as possible because a model number

11 change is a significant thing, as you know. 

12 It goes through the whole thing from bill of

13 materials and structures, or engineering bills

14 and model numbers and DOE ratings and

15 technical literature and sales information to

16 our customers. We're going to try to keep

17 things as simple as possible. 

18 I'm going to have product that will

19 not have a model number change because of the

20 sell-through process. The only way to track,

21 which it is, is going to be the serial number

22 because that's where my date code is. And
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1 it's got to be required that that's what's

2 tracked if you ---- Doug's really looking for

3 an enforcement because of the sell-through

4 period.

5 I've got units that are going to be

6 built December 30th, December 31st. They'll

7 have the same model number as units built

8 January 2nd. So tracking model --

9 manufacturer and model number doesn't do

10 anything for the enforcement of product built

11 in 2015 and beyond. Some model numbers will

12 change. I'm sure other manufacturers are

13 going to do the same thing. But we don't like

14 changing model numbers if we don't have to.

15 MR. McCRUDDEN: So this is Charlie

16 at ACCA to follow up on that. How would a

17 contractor determine compliance with a sell18 through?

19 MR. ROCKY: So we're looking at, as

20 a manufacturer -- this is Bryan, at do we do

21 -- and we talked a little bit about it in the

22 last meeting. I have requests from my
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1 distribution partners and Mr. Porter is one of

2 them. They want an additional label on the

3 outside of the package beyond the FTC label,

4 beyond everything else that says 2015 --

5 something that is big and bold, so that this

6 unit, if it has it, it's easily identifiable

7 in my warehouse, in Steve's warehouse, and for

8 the pick up for the guy at the contractor

9 level, the OTC guy. And that's what we're

10 probably going to do to protect ourselves. I

11 do not think that's something we want to

12 require because again, every manufacturer is

13 going to look at this differently, but we've

14 had a lot of discussions about what the

15 manufacturer is liable for, so we're looking

16 at doing everything we can to make it easy

17 down the chain to identify a unit.

18 MR. MELCHI: I have just been

19 advised that the Energy Guide label is going

20 to be changing roughly on the first of the

21 year -- although I guess it wouldn't prevent

22 a manufacturer from putting it on earlier. 
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1 But ---- so my advice has been if the Energy

2 Guide label changes, that's when you -- 2014,

3 2015, you put a piece of paper with the two

4 Energy Guide labels and maybe that should

5 help, but we appreciate -- we've never done

6 this before. We've never had an issue where

7 after the sell-through date ---- you can sell

8 this product now, but you can't sell it

9 tomorrow and if it's built for this date, it

10 has been a manufacturing ban. We have it. We

11 can sell it. Now if you have it, you might

12 not be able to sell it. You've got to figure

13 out if you can sell it. Oh, and if you still

14 have it by X date, it's dead. I mean there's

15 a lot of stuff that I can't tell you how we're

16 going to handle it, because I don't know. 

17 We've never done it before and a lot of guys

18 are going to do it a lot of different ways.

19 MR. RAWALD: Though I would hope the

20 18 months is a sufficient period to get rid of

21 it --

22 MR. MELCHI: That's why -- yeah,
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1 well, that's why -- that was part of the

2 factor into it because, quite frankly, we

3 didn't believe the first go around during the

4 initial standard that all those factors were

5 factored into the cost of the regulation.

6 MR. RAWALD: John Hurst had his hand

7 up before.

8 MR. HURST: I was just going to --

9 John Hurst with Lennox. We're going to do

10 something similar. We've been asked by --

11 MR. RAWALD: To Bryan Rocky.

12 MR. HURST: Yes but -- to Bryan, our

13 independent distributors have asked that we

14 put something on the packaging that clearly

15 identifies 2014 versus 2015 product. 

16 I think the other point is this

17 isn't all -- I'm not going to speak for all

18 contractors, but a lot of the contractors know

19 how to read the serial number better than we

20 do. They know what they're looking at. They

21 know what model it is. They know when it was

22 made. They know the date code, so there is a
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1 -- I want there to be a recognition that

2 contractors don't look at that as gibberish. 

3 They understand how the serial numbers are

4 broken down and what they mean. So they can

5 fairly easily figure out what the date code is

6 -- both on the box and on the unit.

7 MR. BALLO: Doug, earlier you said

8 that you didn't view the serial number as

9 particularly important and I'm wondering why.

10 MR. RAWALD: No, no. So I still

11 view it as important. I'm just less in love

12 with it than others is what I was saying. I'm

13 more willing to compromise than possibly the

14 people I work with are because I think we get

15 a lot of information from the model number and

16 from the end of the manufacturer to help me

17 enforce.

18 Now trying to track a product

19 through its life, the only way to do that is

20 with the serial number. And trying to

21 determine the sell-through option is only with

22 the serial number. So there have to be some
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1 presumptions made if there's no serial number

2 -- going back to your idea of presumption.

3 So I guess, I'm more willing to kind

4 of look at other options, but there are folks

5 that I work for and there are folks I've heard

6 from in the stakeholder world that think

7 serial numbers are much more important than I

8 do and I am willing to ask the question, but

9 I don't think the serial number is something

10 we'll compromise on. That was my point. And

11 Harvey had another question.

12 MR. SACHS: Jon, I very much -- this

13 is Harvey Sachs -- hear the concerns about

14 serial numbers, it's a possible issue and I'm

15 looking forward to hearing much more on this. 

16 The one place where I'm a bit uncomfortable

17 with what you said is that -- a couple of

18 times a month, I involuntarily do an a over19 the-counter transaction when I walk into the

20 auto parts house for stuff that broke. And

21 these are not 15-minute transactions no matter

22 how hard it is to look it up. As I think
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1 about those lines, an over-the-counter retail

2 transaction that takes more than two minutes

3 on average would be very surprising. And

4 that's the one thing that led to the estimate

5 of cost because it did make me a little

6 uncomfortable and I'd like to understand that

7 better.

8 MR. MELCHI: Yes, I think our

9 counter people are oftentimes charged with

10 helping the contractor find a good solution,

11 so maybe they say, maybe he doesn't know what

12 kind of coils you have in stock, so you have

13 to go through that and explain. You go to the

14 auto parts store. You know what kind of car

15 you have. You tell them what kind of car you

16 have, what's wrong. And they can typically

17 pick ---- so in that scenario, yeah, you might

18 have a pretty quick transaction. 

19 MR. SACHS: But that's not a

20 different cost structure for the OTC versus

21 your standard mainline customer.

22 MR. MELCHI: But it's a huge
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1 difference when you say, okay, well now I need

2 to -- keep in mind the guys at the counter

3 aren't at the counter because they're really

4 good at data entry. They're at the counter

5 because they're really good at what they do --

6 sales and taking care of their customers. 

7 There's just an absolute cost to

8 trying to capture information in addition to

9 the normal transaction stuff that you do. 

10 Cash sales tend to take longer than those with

11 an account where you can just put -- click to

12 the bill, you know? It takes time. There's

13 a reason that your supermarket has self14 scanning checkouts now. There's an absolute

15 cost. I mean if you want to get into parsing

16 10 minutes and 15 minutes.

17 MR. SACHS: I also pay more on my

18 over-the-counter sales.

19 MR. ROCKY: Well, this is Bryan

20 Rocky. So the point, Harvey, that I got out

21 of this, your question is valid, but you're

22 missing the key thing. You go into an auto
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1 parts store and you want an alternator for

2 your '72 car, vintage car. Those are not

3 serialized. Your parts aren't serialized. 

4 Almost everything you buy at an auto parts

5 store, everything you buy at a hardware store,

6 every consumer appliance -- you go to Best Buy

7 or Home Depot, has serial numbers, but they're

8 not tracked as part of the sale. They require

9 you to put that on warranty information, but

10 if you don't have a serial number that's

11 tracked or your need for it, the cost of your

12 transaction is tremendously different.

13 MR. HUNGERFORD: We're not talking

14 about $15 parts. We're talking about $1,000,

15 $3,000 units.

16 MR. SACHS: I did start out by

17 saying I understand the serial number issue.

18 MR. ROCKY: So I have to respond to

19 David's comment. A replacement coil that

20 Harvey starts with might be $300, not

21 thousands of dollars. A replacement condenser

22 unit from a ---- that a contractor is buying
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1 from a distributor could be up to $1,000.

2 MR. MELCHI: David, this is Jon

3 Melchi from HARDI. The question is, my guys

4 sell a heck of a lot more coils than they do

5 condensing units because it's a replacement

6 part. The condensing unit may be good, we've

7 just got to change the coil out. That factors

8 into the total transactions that we're talking

9 about. It's not -- we did really crude math

10 in trying to guess the number of condensing

11 units and just overestimating. I would wager

12 that a significant number of more ducted air

13 movers and coils are sold nationally than are

14 condensing units. And those transactions are

15 less -- maybe -- are less expensive than your

16 condensing units. It's just a lot of

17 transactions.

18 And when you're talking about a

19 distributor, there's typically, it's not an

20 even -- I mean some have an even flow of

21 business throughout the day, but typically

22 it's mornings that's got lines out the door --
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1 maybe at lunchtime. Then you'll have business

2 throughout the day, but you're adding costs as

3 your peak hours is the point I think that

4 people were trying to make. They're not able

5 to service their customers as quick.

6 MR. EISNER: Other comments?

7 MR. MELCHI: This is Jon from HARDI. 

8 I just want to go on the record again, we're

9 not opposed to trying to do this. We're not

10 opposed to trying to do this. But it's a heck

11 of a list and to Charlie's point, we've got --

12 the people that this penalizes the most are

13 the small distributors in the North who now

14 have to change their practices because of a

15 regulation that's in the South and Southwest.

16 MR. RAWALD: Okay, so let's go on to

17 the next slide, please.

18 So we put up kind of the

19 manufacturer records. I think manufacturers

20 keeping these is just kind of what would be

21 the complete expectation, so everyone on the

22 chain of commerce would have the same playing
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1 field. If the manufacturers want to take a

2 quick look at this. Half the manufacturers

3 were in the room yesterday were discussing it

4 so they kind of got ahead in this, but I think

5 this is all stuff that you guys already have. 

6 I don't think it's any additional burden at

7 all.

8 Any reactions to that from the

9 manufacturer point of view? You guys can talk

10 about it in your caucus and then come back.

11 MR. GIBBONS: You didn't change

12 anything?

13 MR. RAWALD: Nothing has been added

14 or changed from the discussion last night. As

15 a matter of fact, I removed reference to

16 manufacturer and I removed serial number from

17 the handler and brand.

18 Okay. This last slide is basically

19 the last issues that were ---- some of which

20 were teed up by Charlie. So we want ---- from

21 the DOE's point of view, we would like five

22 years because that matches our statute of
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1 limitations for bringing actions so that seems

2 to make sense from us.

3 For dealers, contractors, I'd go

4 from the date of installation. For

5 manufacturers and distributors, it would be

6 the date of when you sell the item. 

7 We'd want record -- this is what

8 Charlie was talking about -- to organize and

9 index in a fashion that makes it readily

10 accessible for review by DOE upon request. 

11 It's very standard language in all record

12 retention requirements. What that means

13 essentially is if I ask for it, you have to be

14 able to figure out where it is and give it to

15 me. 

16 So we're not dictating how you keep

17 it. We're not dictating that it be kept

18 electronically, that there be an electronic

19 search or any of that. It's just -- we're not

20 dictating how you do forms. You could have

21 basically three forms: your bill of lading,

22 your invoice and your receipt and that could
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1 be -- catalog all the information together. As

2 long as you have the information available so

3 you can provide it, that's what we ask, and

4 that you do it in a timely fashion. That's

5 the basic premise of a record retention

6 requirement with production upon request.

7 Any questions about this?

8 MR. SACHS: This is Harvey. The

9 only question is does the industry want

10 guidance on the words that you've just spoken

11 about, what this really means?

12 MR. RAWALD: As far as how to keep

13 them?

14 MR. SACHS: Yes, right.

15 MR. RAWALD: I think what would

16 probably be easiest would be in a preamble17 type discussion, to explain what we mean by

18 that. So we would have the standard language

19 in the regulation that explains in the

20 preamble that, hey, when we say that, this is

21 what we're saying. We're not creating new

22 forms, unless you don't have it already. 
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1 We're not requiring you to have electronic

2 database. It just needs to be producible upon

3 request in whatever way that you think works

4 best for you in keeping your records.

5 There are some people who like to

6 have a mess on their desk because they find

7 things wherever they know where it is. Some

8 people are very meticulous and organized in

9 keeping things in a different fashion. We're

10 not going to dictate what works for you as

11 long as when we ask for it, you can find it

12 and give it to us.

13 MS. MEYERS: This is Karen with

14 Rheem. I'm just going to say for the record,

15 I would rather it be for three years versus

16 five years.

17 MR. RAWALD: Okay.

18 MS. MEYERS: I'm not going to throw

19 a big huge objection to the five years, but I

20 think three years is much more reasonable than

21 five years.

22 MR. RAWALD: And the reason why I
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1 think the Department prefers five years, from

2 our discussions internally, is because of what

3 Harvey raised with how soon will someone

4 actually have the incident spotted. When will

5 the first time a home inspector looks at it or

6 its purchase for sale or when would be the

7 first time you get your unit serviced. 

8 Hopefully, you get your unit serviced annually

9 as the contractors would prefer, but when will

10 something actually go wrong. 

11 So we think five years maximizes the

12 opportunity, but keeps into consideration the

13 fact that we can't bring in a case after it's

14 been more than five years old. So that's why

15 I can't go to Harvey eight to ten years out. 

16 There's no reason for it. 

17 MS. HARIHARAH: This is Johanna from

18 the Department of Energy. What is the ---- is

19 there any kind of estimate of the financial

20 burden that there would be to contractors for

21 this requirement?

22 MR. RAWALD: What, so -- Johanna's
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1 question is, can you estimate how many dollars

2 it would cost to keep records five years

3 versus three years?

4 MR. WHITE: Not this minute.

5 MR. RAWALD: Right. That might be 

6 something for you to think about long term and

7 come back to us if you can't give a ball park,

8 but that's always a question for us when we

9 have to do a Paperwork Reduction Act request,

10 this would require -- we have to give a

11 ballpark of what it's going to cost people to

12 do this. So for us to explain what the costs

13 will be, which is seemingly minimal to me

14 because most of the things you're keeping

15 already. That's what we're trying to really

16 focus on. We're trying to focus on making

17 sure that the records we're asking for are

18 ones folks are already keeping. So -- and

19 that's what we're asking you to look at. So

20 if it's beyond that because of the length of

21 time, then tell us that, too, so we can kind

22 of estimate the cost that would be on folks.
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1 MS. MEYERS: This is Karen with

2 Rheem. And I just think there is still a

3 conflict between five years and readily

4 accessible. So I think if you want both of

5 those, that's a stretch. So I think you need

6 -- I think one of the things we might need to

7 discuss is what's more important. Five years

8 and readily accessible is a problem.

9 MR. RAWALD: Okay.

10 MR. AMRANE: What the question to

11 ask, for the manufacturers, the contractors,

12 and everybody else is how long do you usually

13 keep this? Five years or less? Maybe that's

14 a way.

15 MR. MELCHI: This is Jon Melchi with

16 HARDI. Certain records are required by IRS to

17 maintain for seven years. That could be your

18 purchases and your sales. But what those

19 records don't contain are serial numbers and

20 model numbers or anything like that. It could

21 just be, I sold ten coils to this buyer

22 somewhere around there or this was a cash sale
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1 of five coils. It doesn't require us to say

2 who we sold it to or who we bought it from,

3 but we typically have those for seven years

4 which is -- and most folks didn't think that

5 maintaining some of the records that Doug was

6 asking for for five with specificity of detail

7 was going to be too hard of an ask is ----

8 since it's a moving forward date and not

9 retroactive.

10 MR. SACHS: This is Harvey. The

11 records that we talked about certainly

12 involves things like real estate transactions

13 six years afterwards and stuff. We try to be

14 pragmatists. We can live with five years. 

15 Karen has raised a very interesting point and

16 I would translate it as, do records have to

17 have the same amount of accessibility for the

18 entire five years? Could you live with

19 something which said, archiving is lowest once

20 we get them out of the archive -- is easy for

21 the last two years of that five-year period. 

22 I think that's what you're driving at.
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1 MS. MEYERS: We archive after three. 

2 So you know, readily accessible ---- you're

3 going to have to probably define what that

4 means because archive records are much more

5 difficult. It's not that they can't be

6 accessed, but they're not as readily as -- we

7 keep active data is three years. Everything

8 after that is archived.

9 MR. RAWALD: Right, this is Doug,

10 and this goes to the point of level of

11 sophistication that we also have, so the guy

12 with all file cabinets ---- it's going to be

13 a little hard for him to look through five

14 years of information than three years of

15 information. I get that ---- just looking for

16 forms. So there's layers of complexity to

17 this. I'm certainly amenable to explain that

18 further. And of course, within our discussion

19 and understanding, hey, if you give us the

20 first three and say, oh I'm working on the

21 last two years, okay, we get that. We can

22 build that in somehow. We can make that
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1 explanation pertinent.

2 MR. WHITE: Well, this is Chuck

3 White. Readily accessible, you're not going

4 to come and say, I want them right now. 

5 You're not going to walk in my office and say,

6 please hand them to me. You're going to say

7 produce these in a time frame. What we talked

8 about was 30 days.

9 MR. RAWALD: That's correct. 

10 MR. WHITE: It's not formal, and

11 then probably you could say, I need some more

12 time and given your discretion you could grant

13 some extensions, but that all depends on the

14 players you're dealing with.

15 MR. RAWALD: No, I 100 percent

16 agree. We would look at each case

17 individually and if we're dealing with a non18 sophisticated actor who has a number of

19 records and is trying their best to find them

20 and gives us what they have and says, well, I

21 need 45 more days, we'll consider that. Okay,

22 how about 15, we would work with them to see
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1 what they need. 

2 If we're dealing with a manufacturer

3 who has three years data readily available,

4 but has two more years they have to comb

5 through the archives to give us the three

6 years, then we'd say, okay, come back in 15

7 days with the rest or 20 more days. We'd work

8 things out. So there is a lot of discretion

9 there.

10 MR. WHITE: From a contractor's

11 perspective, in lots of codes, things are

12 readily accessible. And to a contractor,

13 readily accessible means you can walk right up

14 to it.

15 MR. RAWALD: Okay.

16 MR. WHITE: So I walk right up ----

17 it's cleaned out, it's readily accessible. 

18 It's there. I don't have to move anything. 

19 I don't have to do anything. It's right

20 there. So in my language, when you tell me

21 readily accessible, that means I can hand it

22 to you --- 
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1 

2 MR. RAWALD: Immediately upon request.

3 MR. WHITE: Right.

4 MR. RAWALD: So lots of things for

5 us to make clear.

6 MR. WHITE: It's your standard

7 language, but again in the preamble it could

8 be explained that readily accessible is an X

9 amount of time to --

10 MR. RAWALD: Okay. Any other

11 comments or do you folks want to caucus for

12 a little bit about this record retention

13 issue?

14 MR. EISNER: Do you want to caucus

15 now?

16 MR. ARNOLD: Sure.

17 MR. EISNER: How much time do you

18 think you'll need for caucusing, 20 minutes,

19 30 minutes?

20 MR. ARNOLD: Twenty.

21 MR. EISNER: Twenty minutes. Come

22 back at 10:30 everybody.
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1 (Whereupon, the above-entitled

2 matter went off the record at 10:11 a.m. and

3 resumed at 10:41 a.m.)

4 

5 MR. EISNER: Okay. Why don't we get started? 

6 Anybody want to fill us in on what you talked

7 about in the manufacturer caucus?

8 All right. Somebody want to raise

9 what was resolved, if anything, in the caucus?

10 MR. ARNOLD: This is Dan Arnold from

11 NORDYNE. I'll take a shot at it. 

12 The three versus five years, I mean,

13 that's something again Karen's passionate

14 about. From my company's perspective, I don't

15 know, to be honest. And so several of us want

16 to go back and check with our organizations to

17 see if that was an issue or not.

18 MR. EISNER: Okay.

19 MR. ARNOLD: So that's kind of where

20 we left at. 

21 On the other issue of record

22 retention and serial numbers, kind of came
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1 away with the same perspective I went in with. 

2 That's not my business. So I'd have to defer

3 to Jon and his organization.

4 MR. EISNER: Okay.

5 MR. ARNOLD: So we didn't really

6 reach a consensus on manufacturers having one

7 point of view and saying this is the way we

8 see the world and want the world to be. There

9 was varying opinions, so we really didn't

10 reach a consensus on that again, not wanting

11 to impose manufacturer's will on somebody

12 else's business. I mean, there's reasons why

13 the manufacturers would like serial numbers,

14 to be honest. I mean, from my standpoint, I'd

15 love to know where everything went in case we

16 have to go do, heaven forbid, a recall or have

17 a defective product or a defective part from

18 a supplier, if we had to do that. But again,

19 it's not for me to say. Jon's members, you

20 need to go do this and here's how they have to

21 do it.

22 MR. EISNER: Okay. Aniruddh?
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1 MR. ROY: Aniruddh Roy with Goodman. 

2 We also have a distribution network, and we

3 kind of share some of Jon's sentiments when it

4 comes to the cash transactions. So we would

5 propose that -- you think on the lines of

6 something like 70 percent or 80 percent record

7 keeping and account for the fact that some of

8 those cash transactions are done impromptu and

9 it would be tough to account for the serial

10 numbers in those cases. 

11 MS. WALTNER: May I ask a follow-up

12 people? Meg Waltner from NRDC. 

13 So would you ask that for 80 percent

14 just for the tracking of the serial numbers or

15 all of the other information as well? I

16 understood the issue with tracking the serial

17 number because you don't know that when you're

18 at the counter, but --

19 MR. ROY: It would also be the other

20 information as well, because as Jon had

21 mentioned that example, sometimes it's either

22 you have an account or you don't have account,
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1 someone just needs an indoor coil and just

2 comes and picks it up from the facility and

3 it's just a cash transaction. So it's not

4 always possible to get all the information for

5 that person. It's done in an emergency

6 situation sometimes, so --

7 MR. RAWALD: So this is Doug, and so

8 quite the -- the issue that came up last night

9 last when we were talking about this, with the

10 over-the-counter sales, was -- is it possible

11 that the actors who are more likely to be

12 trying to service them are going to be the

13 ones who are going to be doing the over-the14 counter cash/no account sales. And so are we

15 thereby creating a loophole that allows those

16 people who we think are the most likely to

17 commit to get through? And that's the

18 concern. 

19 And then also are we going to drive

20 the market in some way so people who otherwise

21 ---- would otherwise have accounts would have

22 a preference for not having an account. Now,
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1 there are probably a lot of reasons to not do

2 that, but I don't know if there's any

3 unintended consequences by us not documenting

4 a certain part of the market. Would that

5 drive people to then take advantage of that

6 part of the market? I don't know the answer

7 to that at all. That's just merely a kind of

8 question really. 

9 So there=' two concerns there from

10 my point of view. Meg has a -- 

11 MS. WALTNER: Yes, well -- just

12 another thought on that is whether we should

13 talk about condensing units and coils

14 separately, because those sort of cash coil

15 replacement sales seem to be an issue. But

16 are there cash sales of condensing units and

17 how burdensome would it be to track those and

18 would that get at a big chunk of what we're

19 looking for here?

20 MR. RAWALD: Right, and my

21 understanding from Jon -- I guess he could

22 best respond to this ---- is that there are
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1 cash sales of condensing units and they do

2 represent a sizeable part of the market of

3 what cash sales are. And when I say cash

4 sales, I mean cash with no account. But

5 that's the concern. A cash with account

6 doesn't matter to me. I mean, if you're

7 paying cash but you have an account, we know

8 who you are, it doesn't matter. It's the no

9 account where we don't know who you are is the

10 concern.

11 MR. MELCHI: Yes, this is Jon from

12 HARDI. I think it's probably -- I think to

13 Aniruddh's point about the coil -- if you had

14 to do a weight of the three product classes,

15 what is paid for mostly cash/no account, I

16 think condensing units would probably be

17 slightly under the duct air movers and the

18 coils. That's just a guess. There's nothing

19 scientific to that. But it does happen

20 regularly, especially in major metro markets.

21 MS. WALTNER: Right, but it seems

22 like what we really care about is tracking the
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1 condensing unit sale and that would be less

2 burdensome than the whole tracking everything.

3 MR. MELCHI: I would agree. But --

4 yes, as far as tracking one thing versus two

5 from the cash sales, yes. 

6 MR. SACHS: This is Harvey, and I

7 share Doug's concern about market distortions,

8 but I think it's pretty clear to me that since

9 we've got our compliance built around the

10 condensing unit as being SEER 14 ---- I don't

11 see any reason why I care about tracking the

12 OTC sales. 

13 And I keep thinking -- no account

14 has two different meanings, both of which

15 might be applicable.

16 (Laughter)

17 MR. SACHS: I think I don't -- I

18 haven't heard any reasons why in this context,

19 as opposed to manufacturer warranty or other

20 things, I care about tracking anything but the

21 condensing unit itself.

22 MR. RAWALD: Right. So I guess --
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1 so I'm hearing two different things from you. 

2 So you would still want to keep track of

3 condensing units over-the-counter sold though?

4 MR. SACHS: Yes, sir.

5 MR. RAWALD: Okay. That's what I

6 want to make sure we're -- 

7 MR. SACHS: I don't see any other

8 way to avoid significant market distortions. 

9 I don't care if those records are kept by

10 photographing the driver's license, but I do

11 think we need to have those. 

12 MR. FERNSTROM: So ---- this is

13 Gary. I think having an account in the term

14 ---- in the context of cash sales has two

15 different meanings. Whether you have

16 established credit with the institution and

17 you have a business account there or whether

18 you buy something over the counter and they

19 fill out an invoice with your name and

20 information on it. So that's a cash sale. 

21 And I frequently go buy things on cash basis

22 at ---- but, at Grainger, for example, but
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1 where I get a detailed invoice and they keep

2 a copy of it -- I don't have an account there.

3 MR. RAWALD: Right, I think what --

4 when I heard Jon and Gary yesterday talk about

5 no accounts, they were talking about folks

6 that didn't provide any information about who

7 they were purchasing it. They simply provide

8 the cash and they get the receipt with the

9 item they're purchasing. Is that correct?

10 MR. MELCHI: Yes.

11 MR. RAWALD: And so we're trying to

12 capture that. So if we were to winnow this

13 down ---- to get off the ducted air mover and

14 the coil from all phases, would that relieve

15 a lot of burden?

16 MR. MELCHI: Yes, I think it would. 

17 I absolutely think it would. And I appreciate

18 that point. I think your -- the number of

19 transactions that we're talking about

20 capturing has just shrunk substantially.

21 MR. RAWALD: It seems to me that

22 with the 14 SEER guidance that we discussed
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1 and that the Department still agrees with ----

2 and I mean, so we're still on that basis, and

3 I think it's the presumption we're all going

4 on here, which is that the least efficient

5 combination of the condensing unit with other

6 things must be 14. Condensing is what really

7 matters. And so, if we're tracking the

8 condensing unit throughout the process, maybe

9 we don't need to track the ducted air mover

10 and the coil at all. So I could bring that

11 idea back to the Department -- it's more

12 palatable because the Department wants to

13 track over-the-counter sales at least for the

14 condensing unit, I can tell you that, that's

15 for sure.

16 MR. MELCHI: Yes, and we understand

17 --

18 MR. RAWALD: ---- it's not even a

19 compromise.

20 MR. MELCHI: Yes, we commit that --

21 you know, is that -- Meg had mentioned the --

22 I'm sorry. This is Jon Melchi out of HARDI. 
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1 You know, just from a practical SOP the

2 concern that some of our guys had on -- with

3 regarding this particular sales was capturing

4 that serial number exactly, because it would

5 almost -- the contractor would have to come

6 back in the store and give it to you and --

7 but we would certainly have the unit number

8 and the name -- the model number and the name,

9 and contact information of to whom it was sold

10 and -- depending the system, what time and day

11 it was sold, too.

12 MR. RAWALD: Right. Well, this is

13 Doug. So I live in a practical world in some

14 way, even though Harvey wants me to not listen

15 to the fact that we're not going to be 100

16 percent compliant because ---- you know, I

17 have my government mandate, which is to ensure

18 100 percent compliance, but I understand that

19 we live in a real world. And I expect that

20 when I get records from people they're not

21 always 100 percent complete. So if I can go

22 to the Department and say, hey, most of the
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1 time in a transaction involving a condensing

2 unit, they're going to have the serial number

3 -- there are occasionally ones where they

4 won't. I think we'll expect that as a

5 practical reality, even if we have a

6 regulation requiring you keep the serial

7 number.

8 MR. MELCHI: I think that's probably

9 -- I mean, I think your realism is probably --

10 is pretty practical in that, especially those

11 who have customers. They're dealers. They're

12 contractors. That information will be within

13 our records.

14 MR. RAWALD: Okay.

15 MR. MELCHI: And that's the vast

16 majority of that. And we will do everything

17 we can on that percentage that's not to

18 capture that information.

19 MR. RAWALD: Okay. So what I will

20 do is this, I will come back and -- I will

21 leave this meeting and I will let the people

22 I work with know that if we dropped the ducted
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1 air mover and the indoor unit and focus only

2 on the outdoor condensing unit as a tracking

3 item, that would at least alleviate a lot of

4 burden and be more palatable to the group. 

5 And of course alleviate the number of records

6 that were kept. So, and ---- I'll see if that

7 will work for folks.

8 MR. MELCHI: Okay. Thank you, Doug.

9 MR. McCRUDDEN: This is Charlie of

10 ACCA. So would that be for --

11 MR. RAWALD: Everyone.

12 MR. McCRUDDEN: Everyone? Okay.

13 MR. RAWALD: Yes. I'm not going to

14 keep only one -- it makes no sense to me. If

15 I'm not tracking it, keeping it makes no

16 sense. 

17 MR. McCRUDDEN: Just checking. 

18 MR. RAWALD: So it would be -- my

19 ask would be, let's just track the condensing

20 unit, which will be the thing that matters the

21 most from the way that we view the guidance

22 we've issued regarding 14 SEER that I think
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1 Harvey is focusing in on. 

2 MR. SACHS: Now, this is Harvey. 

3 Charlie, we really do want -- for new

4 construction, all of the information, as well

5 as the duct tightness. 

6 (Laughter)

7 MR. McCRUDDEN: I mean, Doug, if you

8 could -- and this is what I'm supposed to ask

9 -- make sure that our quality installation

10 standard is part of every installation, great.

11 MR. SACHS: And we second that

12 motion.

13 MR. McCRUDDEN: Right, and this --

14 MR. RAWALD: And I have been

15 interested in that, but I don't know how

16 effectively we could do that. So ---- but

17 that's for a different day. 

18 Okay. Any other -- so the other ask

19 was regarding the scope, southwest versus

20 southeast and 13 versus above 14. So, did

21 anybody have any thoughts on that in their

22 meetings individually outside the room? 
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1 (No audible response)

2 MR. RAWALD: Everyone is famously

3 silent. No one has any thoughts. 

4 Contractors, are you still thinking

5 on it, Charlie?

6 MR. McCRUDDEN: Yes, I mean I need

7 to go back. I still haven't heard from enough

8 folks.

9 MR. RAWALD: Okay.

10 MR. McCRUDDEN: And I just --

11 MR. RAWALD: My strong preference

12 would be for the contractors to be southeast,

13 southwest.

14 MR. McCRUDDEN: I understand that. 

15 And that's where we're leaning -- the sense I

16 get from my folks, I just want to make sure

17 I get the cross-section --

18 MR. RAWALD: Okay.

19 MR. McCRUDDEN: -- because this is

20 implications for the people who thought

21 potentially there are no implications.

22 MR. RAWALD: Okay. Now Harvey had
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1 the air quotes question for the manufacturers

2 -- on whether you need the Department of

3 Energy's help to minimize your liability. And

4 so did you guys get to talk about that while

5 you were caucusing or is that not an issue you

6 guys broached or feel comfortable sharing with

7 the group at this point?

8 MS. SHEPHERD: This is Amy Shepherd. 

9 We didn't talk about that.

10 MR. RAWALD: Okay.

11 MS. SHEPHERD: Karen was so worked

12 up about the three versus five years, it 

13 was --

14 MR. RAWALD: I can understand. She

15 can be distracted. 

16 MS. SHEPHERD: So we still need to

17 discuss that, I think.

18 MR. RAWALD: Understood. Okay. 

19 Well, that's fine.

20 Okay. So that's kind of where we'll

21 -- so the distributors would be nationwide

22 still, as far as we're discussing. We'll
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1 consider ---- the contractors will look at

2 whether they want southeast, southwest or

3 possibly at -- below 14 SEER only. But I have

4 to say that I would be very reluctant to agree

5 to that. And then we'll come back and talk

6 about that at -- next meeting. So and I will

7 have the ask about whether we can just make it

8 the condensing unit only. So, okay? So

9 everyone fair about where we are with the

10 record retention then? Any other questions? 

11 I'm also going to try to --

12 MR. EISNER: Records retention?

13 MR. RAWALD: Yes, record retention. 

14 MR. EISNER: Where are we then? Is

15 it still an open question?

16 MR. RAWALD: Well, we have these do17 outs that people are going to have, so --

18 which is the contractors are going to go back

19 and try to ascertain whether their comfortable

20 with southeast or southwest, whether they

21 want, you know, something else. I'm going to

22 look at the condensing unit issue. And the
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1 manufacturers are also going to let us know

2 their thoughts on southeast/ southwest from

3 the dealer point of view, because it could

4 help them have, nationwide, minimized their

5 liability for a 14 SEER that tests as a 13.6

6 -- that scenario.

7 MR. SACHS: This is Harvey, and I

8 think, given the concerns we've heard about

9 the archiving schedule for records, if the

10 OEMs were to say they really wanted something

11 in the preamble ---- or whatever, that

12 differentiates between the two types of

13 accessibility, the first three years versus

14 later, that's not a make or break for me. 

15 MR. RAWALD: Okay. Yes, what I

16 think I'll do is I'll circle back with folks

17 on some language regarding readily accessible

18 -- that you didn't mean preamble or in the reg

19 text, to kind of parse out what that means and

20 understanding the realities of the business of

21 currently available records versus those that

22 are older and explain that, at least in the
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1 preamble if not somewhere else.

2 MR. SACHS: Is the question for you

3 guys whether the term readily, has to be

4 included?

5 MR. RAWALD: Well, so Chuck hasn't

6 necessarily written readily accessible. From

7 us, it's pretty much standard language in all

8 record retention things. And so folks are

9 comfortable with it ---- that they see it

10 regularly. So I'll have to go back and talk

11 to make sure everyone is comfortable with

12 that. That's a term that we're all familiar

13 with, and so I'll have to go back and just

14 push some buttons and see what I can get. 

15 MR. WHITE: Well, this is Chuck. I

16 think if you kind of explain that in the

17 preamble, I think that will --

18 MR. RAWALD: I think so, too. I

19 think that will assuage the concerns.

20 MR. WHITE: Yes, that readily is a

21 timeframe.

22 MR. RAWALD: Right, but I want to
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1 make sure that -- I want to make everyone else

2 comfortable here so we can all agree to it and

3 vote on it and have it on the term sheet and

4 everything will be finalized with it. 

5 But I think, pending those answers,

6 we could vote on that next week without a

7 problem and put that behind us, I think,

8 right? Does everyone else feel good about

9 that?

10 (No audible response)

11 MR. RAWALD: Okay. Seeing a lot of

12 nodding of heads. 

13 Okay. I have another slide show for

14 you folks, if you want to do that one now.

15 MR. AMRANE: Maybe you could --

16 MR. RAWALD: Karim, yes?

17 MR. AMRANE: Can you give us an

18 update on this guidance that you're working

19 on?

20 MR. RAWALD: Okay. So which

21 guidance? So we have --

22 MR. AMRANE: The guidance for the
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1 14.

2 MR. RAWALD: Okay. So -- and Amy

3 and I talked about this last week. So four

4 weeks ago now, I announced to this room that

5 the Department views 14 SEER essentially to be

6 the least efficient combination of a

7 condensing unit when it's paired with -- so in

8 other words, on the Energy Guide label that --

9 as FTC currently has it, if you're below 14 on

10 the range, it wouldn't be allowed to be sold. 

11 And the Department still agrees with that. 

12 Everyone agrees with that. 

13 The question, when I ask people to

14 write guidance on it, the responses I received

15 over some while was we think it's better to

16 put it in the regulation text as part of the

17 rulemaking that you're currently engaged in. 

18 So if the room wants to vote on that and say

19 this is a precondition for everything else

20 we're doing, this would be the understanding. 

21 If you feel comfortable, we can do that. 

22 I talked to Amy last week. Amy told
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1 me the manufacturers are feeling pretty

2 uncomfortable with that state of affairs, so

3 I went back to the Department. I said, here's

4 what we really need. Johanna and I have both

5 worked on something that -- and are hopeful

6 that something will come of that, but I can't

7 say what will happen. 

8 So it's possible we can issue

9 guidance or not, and I will be able to give

10 you more information as we develop that. But

11 I'm herding these requests. I understand it's

12 a pertinent issue. What I can say is,

13 everyone's on board with the notion. There is

14 no -- it's just a question about, how do we

15 document best given the current state of

16 affairs of the regs and the way we do things,

17 as far as regulatory rulemaking. 

18 And so I'm not an administrative

19 lawyer, so when I say I need things, I have to

20 of course acquiesce to those who know how to

21 do rulemaking better than I do. So we're

22 working on that, but that's where we are. 
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1 Does that answer your question, Karim?

2 MR. AMRANE: Yes.

3 MR. RAWALD: Okay.

4 MR. MELCHI: Doug, this is Jon with

5 HARDI. The only caveat to that -- I

6 understand the Department's wanting to put it

7 in the rule, but our members, they're

8 operating still under the -- kind of the

9 assumption that 13 can be made 14 to achieve

10 --

11 MR. RAWALD: I understand.

12 MR. MELCHI: -- compliance. And

13 we're getting close to or have already passed

14 last call for stocking for orders placed and

15 it has caused significant kind of confusion.

16 Just last week I was at a conference

17 and I told members about the draft guidance

18 and where I anticipated this going, and they

19 said, well, that just changes everything for

20 how we're going to place our orders. The

21 sooner the better for us and our purposes

22 because we're already pushing lead times for
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1 end-of-the-year construction.

2 MR. RAWALD: I understand that. And

3 one -- hopefully at least the fact that the

4 sell-through minimizes some of that, but I do

5 understand the frustration.

6 MR. MELCHI: Yes.

7 MR. RAWALD: I know there's a number

8 of comments, especially the -- I read

9 Johnson's Controls the other day and I read

10 AHRI's to the other guidance included adding

11 this particular portion to the guidance we

12 already had out there. So I've asked the

13 question of, hey, folks have asked for it. 

14 Can we just slide it in, what we already have? 

15 So that's a possibility. 

16 Once again, I'm not the regulatory

17 rulemaking attorney, so I can't say what we

18 can do and what we can't do. So I'm going to

19 work on that some more over the next couple

20 days and have information to you guys. So but

21 we're doing -- we're working hard on this. I

22 mean, I can guarantee you that we're working
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1 on that.

2 MR. MELCHI: Thank you. I

3 appreciate that.

4 MR. RAWALD: Okay. And as for the

5 other guidance, because Karim did not ask this

6 question, but there was guidance. Comments

7 were due last Friday. We received comments

8 all through the weekend even.

9 (Laughter)

10 MR. RAWALD: So we are looking at

11 them. There's a lot of good comments. I

12 think having seen a lot of these comments

13 periods go on before, this was a very

14 productive comment period, I thought. People

15 had really good comments. So people are

16 working on it today even how to -- the

17 Department will approach responding to those

18 comments. So I'm very hopeful by the time we

19 get back next week -- if we don't have final

20 guidance, I can at least tell you when it's

21 going to be at least hopefully coming. So I

22 know it's very important. So, but I think
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1 it's -- we're very close to having this thing

2 very good. And I really appreciate all the

3 comments we received on that. I thought it

4 was very helpful.

5 So, any other questions on guidance

6 at all? 

7 (No audible response)

8 MR. RAWALD: Well, you guys are

9 easier on me than I thought you were going to

10 be. I thought you'd be a little harder and

11 meaner. You can yell at me.

12 MS. MEYERS: We're holding our

13 yelling and screaming to see what the outcome

14 is next week.

15 MR. RAWALD: Okay. Well, and I told

16 Neil I really hope that next week is our last

17 meeting. I like you guys, but I think we can

18 finish this next week. I'm very hopeful about

19 where we are today.

20 So let's go to the next -- the other

21 slide show that I prepared.

22 So I promised folks that I would
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1 outline based on what we've discussed so far

2 how I would see a DOE investigation going so

3 we can all kind of see how these pieces fit

4 together with what we've been building here. 

5 And so none of this is final. None of this is

6 DOE-approved. It's what we have talked about

7 combined with Doug's experience to kind of

8 show you how we would do things. So the

9 general process would be that we'd get a

10 complaint or DOE would have some reason to

11 think that something happened based upon our

12 own proactive efforts through robo-calling or

13 through surveying or other things. And then

14 we'd investigate. We'd make a finding of an

15 individual violation. And then we'd look at

16 whether or not there's evidence of a routine

17 violation. And if it's a routine violation,

18 we'd then issue some sort of finding or

19 determination that there's been a routine

20 violation. And then we'd examine the possible

21 manufacturer liability given the prohibited

22 act that we have from Congress. 
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1 So let's go through the --

2 MR. EISNER: On the first slide when

3 you say "makes a finding of violation or not"

4 --

5 MR. RAWALD: Right.

6 MR. EISNER: -- is the finding,

7 especially if it's a negative, public?

8 MR. RAWALD: Well, that's an open

9 question. So what will people want, so -- and

10 we'll get to that in a moment. 

11 So we have the complaint, which when

12 we were talking with Chuck yesterday, Chuck

13 voiced the opinion of, hey, I'm really

14 concerned about a complaint being there that's

15 frivolous and then the Department mobilizing

16 its activity and therefore wasting the time of

17 contractor whose competitor narc'ed him out in

18 order to cause this frustration for the

19 contractor. 

20 And so I've offered the possibility

21 of having a possible threshold for initiating

22 an investigation. And so as I was thinking
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1 about this, the kind of ideas that came to me

2 were, well, the things that I would want to

3 actually feel like a credible investigation

4 could be started would be a location of a non5 compliant installation or an attempted sale,

6 a bid sheet saying we're going to try to sell

7 this to you.

8 MR. McCRUDDEN: This is Charlie.

9 MR. RAWALD: Yes?

10 MR. McCRUDDEN: Attempted sale?

11 MR. RAWALD: Yes. Why would that

12 cause an investigation?

13 MR. McCRUDDEN: Yes.

14 MR. RAWALD: So that would raise the

15 question of if the person is doing this once,

16 have they done it before? So if the person is

17 offering to sell some 13 SEER to a homeowner,

18 is it possible if I go look at his records I'm

19 going to see four or five other 13 SEERs he

20 sold? 

21 MR. McCRUDDEN: I get it. It's just

22 it's not a sale. And actually it's not an
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1 installation.

2 MR. RAWALD: Right. That particular

3 event would be a non-event. You're correct.

4 MR. McCRUDDEN: Okay. I get it.

5 MR. RAWALD: So but it might be

6 indicative of the fact that that person has

7 other events that I want to be interested in. 

8 So I would assess it. I mean, if someone came

9 to me, handed a report to me, hey, I was in a

10 home with someone -- and the homeowners gave

11 me a bid sheet from my competitor and here it

12 is and can you look into this. I would

13 probably call that contractor and say let me

14 look at this. I think it would be worthwhile

15 to follow up on.

16 Now if the group here thinks that's

17 not, then tell me and then we'll parse it out. 

18 But I think that's credible enough information

19 for me to at least investigate the contractor

20 we alleged to have given that bid. Yes,

21 Harvey?

22 MR. SACHS: This is Harvey, and this
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1 relates very closely to Chuck's concern and a

2 flip side that it's what would wind up

3 allowing a contractor to do his own sting.

4 MR. RAWALD: Yes.

5 MR. SACHS: He could have his

6 sister-in-law down the street try to get bids

7 for SEER 13s from Joe Sixpack.

8 MR. RAWALD: And is that a good

9 thing or a bad thing? 

10 MR. SACHS: I'm only making an

11 observation.

12 MR. RAWALD: Okay.

13 (Laughter)

14 MR. SACHS: I mean it could be 

15 harassment, but it also could be kind of the

16 only tool that a contractor has to fight back.

17 MR. RAWALD: Right. 

18 MR. DORIA: So, Doug, this is

19 Jordan. I think just so I understand it; and

20 I had the same reaction I think that Charlie

21 did, the attempted sale is merely something

22 that could trigger an investigation. If that
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1 investigation only concluded was that an

2 attempted sale had happened, there would be no

3 violation.

4 MR. RAWALD: Absolutely. There

5 would be no violation --

6 MR. DORIA: Yes.

7 MR. RAWALD: -- because nothing was

8 installed.

9 MR. DORIA: Correct.

10 MR. RAWALD: So we'd probably send

11 that person a sternly-worded warning saying

12 you shouldn't do this. And those are

13 educational in large part. 

14 MR. DORIA: Sure.

15 MR. RAWALD: Here's what the

16 regional standards are. We're aware you

17 released this bid. Don't do that. That's how

18 I would see that concluding. That's how I'd

19 wrap that matter up. And I wouldn't see it

20 taking awfully long. And so, but I think that

21 that would be enough to me to trigger us

22 looking into it.
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1 MR. McCRUDDEN: And I think that's

2 one of the ways I'm going to sort of watch

3 this slide show is what actions does DOE take

4 I would almost say between DOE and an

5 individual contractor and DOE in a public way?

6 MR. RAWALD: Yes.

7 MR. McCRUDDEN: And so you just

8 said sending a letter. I'm assuming that

9 letter is not public.

10 MR. RAWALD: Right. Our warning

11 notes are routinely not public. So I mean I

12 can't control what someone does when they

13 receive it --

14 MR. McCRUDDEN: Right.

15 MR. RAWALD: -- but the Department

16 does not post our warning notices, so I

17 probably would not do that. Now I'm leaving

18 open with the group here for discussion as we

19 go along on what things you want to be

20 transparent and public on. I think that we

21 can talk about that more. And there are

22 reasons for why we might want to make these
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1 public that otherwise we might not. So I want

2 to hear your thoughts on that as we go along

3 here. 

4 So, and the question is whether we

5 want some sort of -- so I'd also want to have

6 an identity. If you don't tell me who the

7 person is that's supposedly doing this thing,

8 I can't do anything about it. I need to have

9 that. And then possibly some levels of

10 evidence. I mean, do we want to require some

11 sort of photo of a nameplate, the photo of the

12 nameplate, especially as Bryan was showing us

13 that says not to be installed here? Do we

14 want to have a bid? Like, is there anything

15 else that we'd want to have as sort of a

16 necessary minimal level of evidence for DOE

17 then to begin investigating? So I don't know

18 if folks have thought of this at all, but it's

19 something I put out to you. If you want to

20 put in our regulations some sort of threshold

21 for me to start investigating, this is kind of

22 how I could approach it. 
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1 MR. BALLO: This is Tim. I guess I

2 have a concern about the identity of the

3 contractor/dealer/distributor. If all you

4 have is -- I see a unit out here that's a SEER

5 13, you're not necessarily going to know any

6 of that, but you know it's installed out of

7 region. If you know the serial number, it

8 should be easy for DOE to determine the

9 identity.

10 MR. RAWALD: Right. So I hear what

11 you're saying. So you're afraid that if a

12 contractor goes into a home and sees a unit

13 they're servicing is non-compliant and he

14 can't complain because he doesn't know

15 actually who put it in, what's it going to be

16 worth? That's a valid point.

17 MR. HURST: I would just add to the

18 evidence the actual work ticket of the

19 completed installation. So you have a bid. 

20 And then once the job is done, you may

21 actually have this was the invoice and -- the

22 invoice, yes.
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1 MR. RAWALD: Okay. 

2 MR. HURST: Work ticket or invoice.

3 MS. WALTNER: That sounds like; this

4 is Meg Waltner from NRDC, that would be

5 helpful information, but I wouldn't

6 necessarily see that as a necessary threshold

7 if there's just a bid and the job hasn't

8 actually been completed.

9 MR. HURST: No, but I'm --

10 MS. WALTNER: Yes.

11 MR. HURST: -- trying to get back to

12 what the DOE is going to find as useful

13 information.

14 MS. WALTNER: Right.

15 MR. HURST: Hey, Bobby's doing bad

16 stuff in Toledo.

17 (Laughter)

18 MR. RAWALD: Right, but a work

19 ticket alone would seemingly be enough for me

20 to then go on and investigate that. It would

21 be sufficient.

22 MR. HURST: Yes.
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1 MR. RAWALD: Yes, in my opinion.

2 MR. WHITE: Well, I would think that

3 would give you pretty much everything on a

4 number of things. Can you check my mic? I

5 would think this probably is not an all6 inclusive list.

7 MR. RAWALD: No.

8 MR. WHITE: That this is something

9 that you take all the factors, again our

10 factor approach, and the more of these you

11 have, the more realistic the case seems, but

12 you may have only one or two of these things

13 that are pretty convincing and you're missing

14 a couple others that -- so it's not

15 necessarily this is all and, and, and.

16 MR. RAWALD: Right. And so this is

17 -- to get to the answer, it's to whether or

18 not we would start an investigation.

19 MR. WHITE: Right.

20 MR. RAWALD: And so the point is how

21 do we make sure we avoid frivolous claims? So

22 I want to address your frustration and make
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1 sure that we're maintaining a minimum

2 threshold. And so to me there are some ideas

3 here we can -- and I'm -- this is open for

4 opinion. I mean, this is the first time I've

5 thought of this was after you mentioned it

6 yesterday. So I want to give people ideas and

7 give people the opportunity to tell me what

8 else do you think would be enough? 

9 So I hear Tim's concern that

10 identity probably would be too much. And so

11 I want to make sure we caveat that that may be

12 more than what we're asking for. 

13 So what else?

14 MR. GIBBONS: This is John Gibbons

15 from Carrier. How do you know the photo,

16 unless it's next to a palm tree, is actually

17 in the south?

18 MR. RAWALD: Right. Right. Okay. 

19 So a photo alone with some sort of other

20 information verifying where it is?

21 MR. GIBBONS: Yes, I mean, address

22 and phone as well.
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1 MR. RAWALD: Right. Okay.

2 MR. EISNER: Some cameras will

3 actually give you the GPS location. So it

4 will tell you taken in Des Moines, Iowa on

5 September 5th, 2015.

6 MR. MELCHI: Your iPhone does that. 

7 MR. EISNER: Well, if you do it with

8 a phone, it's going to have the GPS location.

9 (Simultaneous speaking) 

10 MR. RAWALD: Right, that makes

11 sense. That makes sense. So we need to have

12 something else with it. 

13 MR. GIBBONS: I'm really mad at

14 Chuck because Chuck is undercutting me in just

15 normal course of business, if I have one unit

16 maybe. 

17 MR. RAWALD: Right.

18 MR. HURST: I don't understand --

19 this is John Hurst from Lennox -- there "may

20 be too much" comment than the identity of the

21 contractor, dealer or distributor.

22 MR. RAWALD: So what Tim is saying
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1 it may be too much to require an investigation

2 to be initiated that the person complaining

3 know who actually installed the bad unit.

4 MR. HURST: Right. Yes.

5 MR. RAWALD: That it would be too

6 high of a bar.

7 MR. HURST: But if you have the work

8 ticket or the invoice you most likely would

9 know who the contractor --

10 MR. RAWALD: Certainly if we knew

11 it, that would be great, but what Tim's point

12 was -- I think DOE should at least follow up

13 on it even if you don't know who did the bad

14 installation.

15 MR. HURST: Oh, absolutely.

16 MR. RAWALD: So I agree with that. 

17 So, okay. Any other thoughts on things you

18 want as a minimal threshold kind of an entry

19 of DOE to this foray?

20 (No audible response)

21 MR. RAWALD: We're going to give you

22 slides to take with you so you can think about
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1 it over lunch. So I definitely don't want to

2 make you feel like you're required to come up

3 with ideas now.

4 So let's go to the next slide. So

5 there's the question what do we do with that? 

6 And so from my approach seemingly the first

7 thing I'd want to do is actually talk to the

8 homeowner, because to Jon's point I want to

9 verify that the unit actually is in that

10 person's house. So I don't want to just

11 presume the assumption that, okay, I've got an

12 address and a picture. I can now bother the

13 contractor. I want to verify that that

14 actually is a real legitimate complaint. 

15 So I'm going to probably contact the

16 homeowner first. I'm going to call them and

17 hope that they're going to be compliant with

18 me or caught it in some way and say, okay, we

19 have this picture of your unit in your house. 

20 Can you verify this is your unit, that kind of

21 thing. And then they may know who installed

22 it and that may actually have given you that
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1 lead in the case.

2 So then the question is we have

3 these subpoenas that we could issue. And so

4 -- and typically I want to give -- well, 30

5 days to respond. That's what we do under the

6 statute. And so the various actors we could

7 subpoena would be contractor, dealer,

8 distributor, manufacturer. 

9 Now to assure everyone, I would not

10 do all of those at the first foray. Like I

11 would not say, okay, I want everyone to talk

12 about this. So I think it would be a targeted

13 request to the person that is alleged to have

14 done the bad thing; either the contractor,

15 dealer, or the distributor depending on who's

16 alleging what, and then I would look into the

17 matter. And then possibly make sure what I

18 get from them I verify or pair to information

19 received from the distributor or from the

20 manufacturer upstream. So that's how I would

21 kind of build this is by looking at those

22 pieces together. 
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1 And then question is, okay, now I

2 look at the records and I see clearly Chuck

3 has installed four 13 SEERs in Florida. So

4 what do I do with that? So I think it would

5 be on the Department then to say to Chuck,

6 well, Chuck, this is what we found. Can you

7 explain these? And so give Chuck the chance

8 to explain whether they're right or not to

9 involve some process here. And then based

10 upon what response I receive from Chuck, then

11 we make a finding as to those individual

12 violations. 

13 So the possibility is do we want

14 provide a warning notice at some point to the

15 person under investigation that they're being

16 investigated? So do we want to make that part

17 of the process? And would we want that to be

18 public? So that's the second question I had

19 for the group. So how public do you want this

20 to be while we're investigating a matter? So

21 I could see pluses and minuses about it. 

22 What DOE typically does is we do not
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1 publicize investigations until they're

2 complete. So if we don't want people

3 prejudging the outcome. We don't want it

4 affecting what's going on with their product

5 until we know the outcome. So I think from a

6 Department point of view I'm very comfortable

7 with waiting until the investigation is

8 complete or we've made a finding to making it

9 then someway public, but I want to hear folks'

10 kind of thought if they have a different

11 thought. 

12 Harvey?

13 MR. SACHS: This is Harvey, and I

14 guess my question is in terms of what might

15 have moved through the channel. How long does

16 your investigation typically take? Is it 60

17 days or 90 days or 180 days?

18 MR. RAWALD: Right. So with the

19 manufacturer case, because we involve testing,

20 it's always the long pole in the tent. But

21 without the manufacturing, without the testing

22 part of it we can typically be done with our
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1 investigation, the information part of it,

2 within 60 to 90 to 120 days is probably the

3 realm of reasonable time frame. So hopefully

4 faster, but it just depends on -- we give a

5 lot -- we have a lot of discretionary ability

6 to people. As they're looking for records

7 they're hard to find sometimes. So we do take

8 more time. But I would say that kind of time

9 frame.

10 So I would want this to be quick. I

11 mean, I'd want this to be a very quick process

12 to looking at records and moving on. So I'd

13 hope we get through this within 90 days, would

14 be my hope. 

15 MR. HURST: So, John Hurst from

16 Lennox. I'm a little conflicted on this. It

17 would be nice to know the information so that

18 you kind of know who's being investigated so

19 you might change your behavior towards that

20 potential violator.

21 MR. RAWALD: YES.

22 MR. HURST: But I said potential. 
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1 The flip side of it is we're kind of

2 convicting the potential crime committer

3 without being proven guilty. So I don't know

4 if I'd want to start treating my customers

5 differently if 90 days later you come back and

6 say their claim -- there's erroneous

7 information or a misunderstanding, or whatever

8 the situation is. 

9 So presuming that the process goes

10 relatively quickly, between 60 and 120 days,

11 my preference would be to not know until an

12 actual finding has been -- an actual

13 determination has been made.

14 MR. RAWALD: Okay. 

15 MS. MEYERS: This is Rheem with

16 Karen. I concur with that.

17 MR. RAWALD: Karen with Rheem

18 actually.

19 MS. MEYERS: Yes, with Rheem.

20 (Laughter)

21 MR. RAWALD: Or the Rheem with

22 Karen.
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1 MS. MEYERS: Rheem with Karen. 

2 Karen with Rheem. 

3 MR. McCRUDDEN: So this is Charlie

4 with ACCA. So to either Karen or John or any

5 of the manufacturers, if you've got a -- or

6 actually to John, I guess, if you've got a

7 subpoena or if you issued a subpoena, is it

8 going to be tied to potentially the serial

9 number that they could trace to a contractor? 

10 And is that the clutch there going to be an

11 alert to you?

12 MR. RAWALD: Right. So potentially,

13 right? So I mean we would try not to do that

14 if we were trying to keep it not public, but

15 it's possible that an industrious manufacturer

16 could try to track down, well, what's this all

17 about? So, and I can't do anything about that

18 --

19 MR. McCRUDDEN: Right.

20 MR. RAWALD: -- because that's going

21 to be on the manufacturer.

22 MR. McCRUDDEN: And that's why I'm
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1 not sure that the question --

2 MR. HURST: So in our case, part of

3 our business where we deal in distribution, we

4 would -- once you come and ask for that

5 information, I can surmise -- I'll know who I

6 sold it to. So I will know that there is some

7 sort of action or investigation against a

8 particular dealer.

9 Now when it goes through independent

10 distribution I'll know that I have somebody

11 with an issue in North Carolina, but that's

12 about all I'll know. 

13 MR. BALLO: Doug, I think at least

14 some of the time you have to go up the chain

15 just to protect against the possibility that

16 when you ask for records from a manufacturer

17 they're selectively providing --

18 MR. RAWALD: Right, in order to

19 verify the information of the installer I

20 would probably have to lay it against

21 information from the distributor. I mean, I

22 think that would be helpful. So that's why we
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1 want this. So I think if I don't have that up

2 the chain linkage, I have to really just blind

3 faith believe the person I think is possibly

4 cheating. So those are two hard things to

5 coexist in my mind, right? So checking data

6 is always important. 

7 MR. BALLO: With that being the

8 case, it's sort of hard to keep people from

9 finding out the identity of the person you're

10 investigating. 

11 MR. RAWALD: Right. Right. But

12 there's a difference between them figuring out

13 and the Department publicizing it. My

14 preference, I think the prior practice of the

15 Department is not to publicize an ongoing

16 investigation. I think it's our practice

17 across the board for a number of reasons. I

18 think it's a very good practice for the

19 Government not to publicize investigations

20 that are ongoing. But I want to make sure

21 everyone's comfortable with that.

22 MR. McCRUDDEN: So this is Charlie
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1 of ACCA. Let's say you subpoena a contractor

2 and this is a case where it's an honest

3 mistake, it's a mistake, but it's an honest

4 mistake, are you satisfied that it's a one-off

5 if they tell you, or are you sort of going to

6 want to say, okay, let's see -- let's trace

7 this up --

8 MR. RAWALD: Right.

9 MR. McCRUDDEN: -- and see if there

10 are other -- I mean, where does the

11 investigation go to routine violator

12 investigation? Is that sequential or is it

13 concurrent?

14 MR. RAWALD: So I'll probably be

15 investigating -- I want to focus on the one

16 allegation, but if there are other things that

17 are appearing, I'm going to look at those as

18 well. But you're correct in that every case

19 is different. And so, you may deal with

20 someone that they are very open and honest and

21 they give you all the records and say, no,

22 this is a one-time thing. Here's all my
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1 records for the past three years. Look. I'm

2 really sorry. 

3 And I'll say, okay, this guy was

4 very forthright, very forthcoming. This is

5 very well documented records. They're very

6 easy to follow and understand. I can't see

7 how he could have done anything else. I am

8 familiar with these model numbers. They're

9 all ones that make sense to me. I may call a

10 couple of the homeowners and verify that

11 possibly rather than bothering his -- who he's

12 selling to or getting from. So I may look at

13 different approaches to try and solve that

14 rather than trying to alert the entire chain

15 and getting everyone else mobilized to produce

16 records that might not need to. 

17 So each case is different, so I

18 don't want to prejudge how we -- this is the

19 kind of the breadth of the things that we

20 could do, so you'll understand what we're

21 talking about here. 

22 MR. SACHS: This is Harvey. To me
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1 it circles back to an earlier safe harbor

2 question, a little simpler case as John's that

3 you asked him for some of his distribution

4 records. And at that point he knows there's

5 an investigation of Chuck. 

6 COURT REPORTER: I'm sorry, I'm

7 having trouble picking you up.

8 MR. SACHS: Oh, I'll pull back in. 

9 COURT REPORTER: Thank you very much.

10 MR. SACHS: I'm sorry, ma'am. This

11 is Harvey and the question becomes -- the end

12 point is safe harbor, I guess is what I would

13 call it, that John Hurst becomes aware that

14 there is an investigation of Chuck. At what

15 point is John liable if he doesn't quit

16 selling to Chuck when everyone knows that

17 stopping his sales to Chuck is going to have

18 a major impact on Chuck's business? And

19 that's the question I don't have an answer to,

20 the sort of due process side of this.

21 MR. RAWALD: Right. And I think

22 that people have to make their own business
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1 decision on this, because I can't dictate

2 what's the outcome going to be. But if you

3 think Chuck is a good guy and you think this

4 is all going to blow away, then you keep

5 dealing with Chuck. But if you're worried

6 about Chuck and you're saying, well, maybe I

7 should stay away from Chuck, maybe you choose

8 to stay away from him. So I can't dictate the

9 outcome there. And I can't say that I've

10 discussed the idea of a safe harbor in that

11 sense. 

12 Now there's one that we'll talk

13 about later on for the manufacturer prohibited

14 act, but -- that I put in here so folks can

15 discuss it. But that particular scenario I

16 haven't really thought through how we would

17 provide such safety for folks to continue

18 operating in that fashion. 

19 Okay. So next slide. And so this

20 is the violation we talked about before, so

21 I'm just putting it here again. So you'll

22 have the slides to bring home with you for
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1 lunch. Nothing different than what we talked

2 about yesterday. 

3 The next slide. So DOE then issues

4 for a finding that a violation or -- and so

5 the question is if we don't find a violation,

6 would you want a finding saying, oh, we didn't

7 have a violation, or would you not? And would

8 you want a finding of that individual

9 violation to be public?

10 Now in the case where we were to

11 have a prohibited act, then we would -- this

12 would be the point where we'd have a public

13 action of getting civil penalty authority. So

14 if we were to find there was a violation and

15 we had a prohibited act saying I could charge

16 money, I would follow this up with a notice

17 saying, okay, Chuck, we found that you had a

18 violation and you owe us now $200 for that

19 violation. And that's how we would -- and

20 that would be public. So if we don't have a

21 prohibited act, then the question is would you

22 want this finding to be public or not, the
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1 individual violation? Not the routine one,

2 but the individual violation. And how would

3 folks feel about that?

4 MS. NOLL: This is Elizabeth. Can

5 you guys hear me in the room?

6 (Chorus of yeses)

7 MR. RAWALD: Very low.

8 MS. NOLL: So I have a comment going

9 back a little bit to the John Hurst's concern

10 about do I want to or do I not want to know?

11 MR. RAWALD: Could you repeat who

12 you are, ma'am?

13 MR. EISNER: It's Elizabeth Noll.

14 MS. NOLL: Would DOE consider -- and

15 because all we're really talking about is the

16 sale of the non-compliant product through a

17 contractor or distributor who's potentially

18 under investigation. And would DOE consider

19 a modification in that sale of that product

20 sufficient for manufacturers being protected? 

21 I guess my thinking is that if somebody -- if

22 you made the violation known that you're
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1 investigating this person for a violation and

2 then you're not putting that person out of the

3 building business and you're not impacting

4 their sales, if all you're doing is saying I'm

5 not going to sell you a 13 SEER product

6 because you're under investigation, but you're

7 more than welcome to 14, 15, 16 whatever else,

8 other products you might want, then the only

9 time when you really throw the hammer down is

10 when you're considered routine and then you

11 are not allowed to have business done with you

12 from anyone. Does that make sense?

13 MR. RAWALD: So I think your

14 question is to the manufacturers about their

15 conduct vis-á-vis the individual that's under

16 investigation?

17 MS. NOLL: And distributor.

18 MR. RAWALD: Okay. 

19 MS. SHEPHERD: This is Amy Shepherd

20 from AHRI. But, Doug, do you agree with the

21 way she characterized that in terms of the

22 product that would be sold? So DOE would not
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1 view it that way. DOE would view that you

2 can't sell -- like you could be liable for

3 anything you sell, any central air4 conditioning seller. 

5 MR. RAWALD: Right, and we'll get to

6 that. So that's the routine violator.

7 MS. SHEPHERD: Right, but she was

8 saying you would only have to not sell them

9 13s.

10 MS. NOLL: No, I was not. No, I'm

11 saying at the time -- if we decide that we

12 want to make this person who's under

13 investigation public so everyone knows that

14 this person is under investigation, the really

15 only action that you would not want to

16 continue doing business with them is on the

17 restricted product. They can continue to do

18 business with that person as long as it's 

19 not --

20 MS. SHEPHERD: A central air21 conditioner.

22 MR. RAWALD: Well, what I view,
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1 Elizabeth, is offering an alternative to

2 keeping it public with curbing the

3 manufacturer reactions some way by making it

4 public. So is there any sort of desire to

5 make the investigation public before the

6 finding because of the -- by changing what

7 people would do conduct-wise? So I'm still

8 preferring keeping the investigation not

9 public until a finding has been made. I think

10 that's the preferred approach from my point of

11 view. But I'm hoping that we'll -- 

12 MR. McCRUDDEN: This is Charlie with

13 ACCA. I think since there is potentially a

14 due process that has to occur that I guess the

15 burden of proof would switch back and forth. 

16 It would first come from you and then come

17 from the contractor. And we don't know the

18 outcome. I think publicizing the existence of

19 an investigation may prejudice manufacturers

20 because of the hammer that does come down if

21 that contractor winds up as a routine

22 violator. And so I would prefer that
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1 investigations remain just between you and

2 that contractor.

3 MR. RAWALD: Okay. 

4 MR. WHITE: This is Chuck White. I

5 would second that. Until there is a finding

6 you're severely limiting the contractor's

7 options. And if there is no finding, if he's

8 in the clear, you've harmed him unnecessarily.

9 MR. RAWALD: Right.

10 MR. ROCKY: Yes, this is Bryan from

11 JC. I'd say the finding itself of a violation

12 should not be public. And if we're going to

13 talk about a finding of routine violations,

14 then that's a different story. 

15 MR. RAWALD: Okay. So if we found

16 one violation -- unless we have a prohibited

17 act, which would be separate, the prohibited

18 act then would become public. But the actual

19 finding that it's a one-time violation, you're

20 saying you prefer it not to be public?

21 MR. ROCKY: At this point that is

22 correct. I would rather the Department notify
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1 the affected user, look, we found you did

2 something wrong. Here's your slap on the

3 hand. Don't do it. If we find it's routine,

4 then we're going to take further actions and

5 go from there. 

6 MR. RAWALD: So how does everyone

7 else feel about it? So Bryan is advocating

8 for not making the finding of a one-time

9 violation public. 

10 MS. MEYERS: Well, this is Karen

11 with Rheem. A one-time violation is not -- it

12 wouldn't trigger a prohibited act, right?

13 MR. RAWALD: Right. 

14 MR. HURST: Just for clarification,

15 a one-time violation is one unit, not one

16 truckload of fifty units?

17 MR. RAWALD: Right. So I would view

18 50 units as 50 violations.

19 MR. HURST: Thank you.

20 MR. RAWALD: Yes, ma'am?

21 MS. WALTNER: So I guess I'm sort of

22 caught up in whether we're considering this a
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1 prohibited act or not and that sort of affects

2 whether it's public. And for the prohibited

3 act do we have a decision of any of the single

4 violations of a prohibited act or is a routine

5 violation a prohibited act?

6 MR. RAWALD: So we have not any

7 decision at all about whether a contractor or

8 a dealer should have a prohibited act. The

9 room seemed to generally be in consensus

10 yesterday that distributors would not face a

11 prohibited act for this conduct, so how that

12 would be described for a dealer, whether it's

13 a one-time thing or multiple thing. So the

14 statute the way it's set up now is we charge

15 every violation as a prohibited act. 

16 So we could say you have to have at

17 least five bad violations, but then the

18 minimum threshold would be $1,000 as opposed

19 to having a $200 penalty. So that's something

20 for the room to consider, to talk about

21 prohibited acts. But if we develop a

22 prohibited act, it will by nature of the
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1 prohibited act, because of how we collect the

2 money, become public. That will always be the

3 thing. So if we don't create a prohibited act

4 that allows us to collect money, then we could

5 decide to keep the finding of the one-time

6 violation not public. 

7 So and the question is do you want

8 there to be a finding of no violation to be

9 similarly created? If our investigation

10 concludes, hey, we looked at you and nothing

11 happened, what we would typically do in the

12 case that we deal with now with the

13 manufacturers is I write a letter closing the

14 case. I say, hey, manufacturer X, you gave me

15 -- and I asked you about this. You gave me

16 the documents. Everything seems fine. Case

17 is closed. That's how I handle it now. 

18 There's no official finding. I just close the

19 case. And so we could do that as well in the

20 case of a guy we're investigating from the

21 installer/dealer, if folks are comfortable

22 with that. 
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1 MR. FERSTROM: So this is Gary. 

2 Following David's thinking, I think we want to

3 make the penalties so onerous that it

4 encourages a paradigm of compliance. 

5 MR. RAWALD: I'm not sure what

6 thought of David's you're looking back to --

7 (Laughter)

8 MR. RAWALD: -- but I hear what

9 you're saying individually here certainly.

10 MR. FERNSTROM: And thanks to the

11 manufacturers we have a label where I think on

12 inspection we can readily identify whether a

13 product is compliant or not. We'll get out

14 our phone and the GPS location and we'll know

15 where we are and be able to check it. But

16 it's going to be hard to find these things,

17 and then secondly to get the records that we

18 need, even though retention is required. So

19 there isn't much -- there aren't many teeth

20 there to encourage compliance. So I think we

21 need to make these things prohibited acts and

22 make them public and have a penalty system
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1 that just encourages people not to take the

2 risk. 

3 MR. RAWALD: Okay. And I think

4 it's consistent with what you said throughout

5 the -- and I think there are folks here that

6 support that and folks here that are against

7 that. So possibly -- I want to get the whole

8 thing out there so people can see what we're

9 dealing with so they could figure out how this

10 would play into what a -- how important it

11 would be to have a prohibited act or not. And

12 then maybe after lunch we could sit down and

13 really debate the topic. But I think we need

14 to debate and finish up whether we're going to

15 have a prohibited acts for contractors and

16 dealers or not. I think it's a good thing for

17 after lunch. Let's just deal with that. 

18 So let me go through the rest of

19 this and then we'll come back to that after

20 lunch. 

21 MR. FERNSTROM: Okay. Can I just

22 make one additional point?
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1 MR. RAWALD: Yes.

2 MR. FERNSTROM: So as far as the

3 distributors or dealers are concerned,

4 yesterday we had this discussion about whether

5 the settlement agreement let the distributors

6 off the hook, and I think we'd like to discuss

7 that some more this afternoon.

8 MR. RAWALD: Okay. Let's put that

9 back on the table then. That's fine. So

10 because we certainly didn't come to a final

11 answer. I mean, Harvey at least reserved time

12 to talk about it with his people and certainly

13 we want to talk about it. So that's fine.

14 Okay. Next slide. So then the

15 question becomes assessing how it's routine. 

16 And so yesterday we outlined a bunch of

17 factors that we could look at to decide

18 whether they're routine violations. And so we

19 had a number of violations, and I would say

20 both in my current investigation and any past

21 ones. So if I already investigated Chuck's

22 company four times, that's going to be a
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1 contributing factor to my assessment of

2 whether he's a routine violator. 

3 The length of time over which the

4 violations were committed. The ratio of

5 compliant to non-compliant installations or

6 sales. The percentage of employees committing

7 the violation. If all their employees are

8 doing it, then probably they're a violative

9 entity versus if they have one employee that

10 keeps breaking the rules and they fire that

11 employee, as Jon Melchi mentioned, maybe

12 that's a cure. 

13 So and then what subsequent remedial

14 actions they've taken. How they're replacing

15 non-compliant units, as Tim mentioned. Have

16 they fired the person as Jon Melchi mentioned? 

17 And any other ideas folks may have for

18 subsequent remedial actions that we'd want to

19 consider. 

20 So that's kind of the things that I

21 would look at then and try to assess, okay, is

22 it a routine violation going on here? 
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1 Any other thoughts based on our

2 discussion yesterday?

3 MS. SHEPHERD: This is Amy Shepherd. 

4 My only thought is the same point I made

5 yesterday, which I think kind of goes back to

6 Jordan's, the diversions Jordan thing we

7 talked about, which is that there's no way

8 that a manufacturer can look on that list and

9 figure out whether DOE is going to find that

10 that's a prohibited act.

11 MR. RAWALD: Right, we'll get to

12 that. 

13 MS. SHEPHERD: Okay.

14 MR. RAWALD: We'll get to that. So,

15 yes, I get that. So, okay.

16 So then if DOE decides that -- yes,

17 Harvey?

18 MR. SACHS: This is Harvey. I'm

19 trying to think while listening and the

20 distributor is different from the installer,

21 in degree at least. And if I'm a 17-year-old

22 kid who's been told to go install this unit,
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1 I'm not sure as a 17-year-old kid who's doing

2 the physical installation I'm the one who

3 ought to be held responsible as opposed to the

4 salesman who sold the job or the owner of the

5 company, or whatever.

6 MR. RAWALD: And so let me be clear. 

7 So I consider -- DOE action is taken against

8 a corporate entity, a company, not against the

9 individual installer. But what might be the

10 case is that it turns out that the company is

11 trying to do the right thing, but they have

12 one installer that's out there buying his own

13 parts and installing them and making money off

14 on the side. So the company fires that

15 person. And so it's not the company that

16 should be held the routine violator if there

17 was somebody who routinely violating in their

18 pay and they've gotten rid of that problem. 

19 So I don't want to hold the company

20 responsible for one rogue actor in the

21 company's pay that they've gotten rid of. 

22 Does that make sense? 
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1 MR. SACHS: Yes, I just hadn't

2 thought about the guy doing it on his own time

3 as being doing it as an employee. 

4 MR. RAWALD: Right. Well, I don't

5 know. I'm trying to cover all the scenarios

6 I've been hearing people across the board

7 here. So I think you're making a sound point.

8 MR. AMRANE: Doug?

9 MR. RAWALD: Yes?

10 MR. AMRANE: This is Karim. Are you

11 also then going to require then the

12 contractors to keep record of who has

13 installed the unit as well then?

14 MR. RAWALD: That's a good point. 

15 So on the record retention we don't have a

16 retention requirement for who installed the

17 units. And Charlie McCrudden looks very upset

18 about the idea.

19 (Laughter)

20 MR. McCRUDDEN: I just shot a look

21 at Karim, that's all. 

22 MR. RAWALD: Yes, so that may be
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1 worthwhile, Karim.

2 So see from my point of view, the

3 production would be the company responsible

4 until the contractor shows otherwise, right? 

5 So I think the contractor -- I don't want to

6 require the contractor to keep those records,

7 but if the contractor wants to bring back

8 records showing, no, no, it's only one guy

9 who's done all those jobs and here he is, we

10 fired him, that would be something that the

11 contractor would bring to me voluntarily

12 without me requiring it by regulation. That

13 I think might be the right solution to that.

14 MR. SACHS: Doug?

15 MR. RAWALD: Yes?

16 MR. SACHS: The point here as I

17 understand that end of the business; and it's

18 far from being perfect, is that I want my

19 lowest paid employees doing the routine

20 installations, among other things, because it

21 involves a heck of lot of just plain sitting

22 time waiting for the pump down there, and I
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1 don't want to get into a situation that we're

2 encouraging shortcuts by having the most

3 qualified people watching that gauge. 

4 MR. RAWALD: Okay. 

5 MR. SACHS: So that's what I'm

6 trying to say here --

7 MR. RAWALD: Yes, I don't know how

8 to address that.

9 MR. SACHS: -- about that 17-year10 old whoever.

11 MR. WHITE: This is Chuck White. I

12 don't think I necessarily agree with your

13 sentiment of the installers in the industry. 

14 Certainly there are some people that view

15 installations as entry level, but quality

16 installations are done by trained and skilled

17 individuals. So --

18 MR. SACHS: I wish they were so.

19 MR. WHITE: -- please don't minimize

20 the skill and integrity of installers, because

21 there's a lot of very good ones out there. 

22 And, yes, we watch a vacuum pump run, but it
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1 doesn't take that long on most systems these

2 days. So there are operations where you start

3 in installations, but that's not the first

4 thing you do. You advance to being an

5 installer, and there's a lot of skill to that.

6 MR. SACHS: We may have a

7 nomenclature issue, but thank you very much.

8 MR. RAWALD: Okay. So now if the

9 Department finds a routine violation, we would

10 issue a notice saying that a routine -- and

11 that would be public. So that would be akin

12 to our notice, not the fine determination that

13 we make now for manufacturer products where we

14 would do something like that. 

15 And then as part of the notice we

16 want to build and discuss some sort of appeal

17 right. So either through the boss of my boss

18 who issued the notice or through an outside

19 agency, which we can look at further. So it

20 seems to me that that would give you the

21 appropriate level of due process people are

22 worried about here. So, but we're open to
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1 thoughts on that. So please come back to us

2 with more thoughts on that.

3 MR. DORIA: This is Jordan. Can I

4 ask a clarifying question? So assuming this

5 were for a distributor, they must file an

6 appeal within 30 days. If we're a

7 manufacturer, during that intervening 30-day

8 period can we continue to sell product to that

9 distributor?

10 MR. RAWALD: Right. So I haven't

11 addressed that question squarely --

12 MR. DORIA: Okay.

13 MR. RAWALD: -- and I haven't

14 thought about it. So we need to talk about it

15 more.

16 So let's go to the next slide,

17 because it's really -- that's what we're

18 talking about here, is, okay, what's the

19 manufacturer liability in all of this? 

20 Because they had a prohibited act which I'm

21 reminding you of here. 

22 Next slide, please. And we have the
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1 knowingness -- knowingliness defined in that,

2 so we've talked about that ad nauseam.

3 Next slide. So, and we've talked

4 about the products and what the product means,

5 so we have all seven classes here that are

6 found, that these are all the things that you

7 could not sell that person who was found to be

8 a routine violator. These are the things that

9 you couldn't sell them. Those are the things

10 that are defined to be central air11 conditioners under 432(c). So selling them

12 any of those things to the guy found to be a

13 routine violator, regardless of SEER value,

14 would be a violation.

15 MS. MEYERS: So this is Karen with

16 Rheem. Can we just discuss that?

17 MR. RAWALD: Yes.

18 MS. MEYERS: So it's not that I

19 disagree with that, but if he's a routine

20 violator you can't sell him -- it doesn't make

21 sense, because he could not be in violation of

22 installing a heat pump or anything else.
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1 MR. RAWALD: No, I hear that. I

2 hear the question.

3 MS. MEYERS: So he's out of

4 business. So we're saying if he's a routine

5 violator we are putting this guy out of

6 business?

7 MR. McCRUDDEN: It's the death

8 penalty.

9 MS. SHEPHERD: And I think from --

10 MS. MEYERS: It is? Okay.

11 MS. SHEPHERD: -- this is Amy

12 Shepherd. I think also that I really question

13 this from the Department's perspective because

14 that means all the high-efficiency equipment

15 that you could be selling to a person that

16 could be installed in this region, it's not

17 going to happen. It's not stopping the

18 installation of non-compliant product. It's

19 putting someone out of business. 

20 MR. RAWALD: Right, so --

21 MS. SHEPHERD: That's the remedy.

22 MR. RAWALD: Right, so and I -- what
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1 I can assure you is I've discussed all those

2 points. The legal analysis is based upon the

3 term "product" and how it's defined in the

4 statute and how we treat it otherwise. And so

5 this is what we view to be the Congressional

6 intent of that restriction. So that's where

7 we're coming down on this. 

8 So I'm certainly willing to bring

9 back the frustration of the group at that

10 idea, though it seems like some people may

11 feel it to be the appropriate reaction thereby

12 obviating the need for a prohibited act,

13 because you're saying, oh, well, this is so

14 much worse than any $200 fine, so why do we

15 need to go down that path of creating a

16 prohibited act? We already have this option

17 that's going to make it so the guy is

18 penalized for doing these bad things. So I

19 think there's a balance here people have to

20 strike.

21 MS. MEYERS: Yes, it just seems like

22 an overreach of the Department. 
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1 MR. EISNER: But Doug is saying the

2 statute requires no one can sell the product

3 to this person. So how is the Department

4 overreaching?

5 MS. MEYERS: You're putting him out

6 of business. I guess you're taking --

7 MR. EISNER: The Department is

8 simply implementing the statute, isn't it?

9 MS. SHEPHERD: Well, that's the --

10 this is Amy Shepherd. That's the Department's

11 interpretation of the difference between a

12 product and the product. I don't think -- and

13 there's nothing explicit in the statute. 

14 That's how the Department is interpreting the

15 difference between a product and the product. 

16 And I think there's also an argument that when

17 it talks about the product it could be talking

18 about the product that has a regional standard

19 applicable to it. I mean, so I don't really

20 think this is as cut and dried from an

21 interpretive standpoint as the Department

22 does.
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1 But I guess my follow-up question to

2 Doug would be does the Department view that

3 this group has any authority for the purposes

4 of the enforcement rule to clarify or to make

5 a different -- have a different outcome or a

6 different impact for purposes of the

7 enforcement rule?

8 MR. RAWALD: Right. So I asked all

9 those questions. And I want to --

10 MS. SHEPHERD: Good.

11 (Laughter)

12 MR. RAWALD: I don't think this is

13 an easy question. I mean, I don't think the

14 Department takes this lightly. I think we've

15 really thought about it and we've thought

16 about the legal implication and trying to be

17 consistent with our regulations and how we

18 interpret the statute. 

19 So our perception is this is a legal

20 question squarely within the Department's ball

21 court and not within this group. Now if the

22 group comes to a consensus that they disagree
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1 and they want to narrow the scope of this,

2 then you put that on a term sheet and we'll

3 move forward with that. And I will ask the

4 Department how they fell about that so I can

5 vote accordingly. 

6 But what I'm telling you at the

7 moment based upon the information we have

8 before us, this is how the Department views

9 the term as described in the statute. So I

10 think it's worthwhile for folks to think about

11 that some and come back with a more narrow

12 view of that.

13 MS. HARIHARAH: This is Johanna from

14 the Department of Energy. And the way the

15 statute reads is products and not products

16 class. So just because there are regional

17 standards only applicable to split-system air18 conditioners, does not mean that it's a

19 product class. Under 6291(21) a central air20 conditioner is a product. If a split-system

21 central air-conditioner was a product, then we

22 could talk about it. But the way the statute
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1 reads right now is product.

2 MR. BALLO: Let me ask the question

3 in a different way: My sense from what you're

4 saying is that the Department views this

5 interpretation as the most reasonable

6 interpretation of the statute, but there may

7 be other plausible interpretations that the

8 statutory language could support. Would you

9 say that's accurate?

10 MR. RAWALD: Right, I would say

11 falling along the Chevron line there exactly. 

12 (Laughter)

13 MS. MEYERS: Yes, so I guess I would

14 say that the action of this group is

15 enforcement of products subject to regional

16 standards. So I mean, is it better to have a

17 prohibited act than this? 

18 MR. RAWALD: I think it's up to the

19 group to --

20 (Simultaneous speech)

21 MS. MEYERS: I mean, I'd rather get

22 a $200 fine than be put out of -- I mean, I
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1 agree we don't want these people to -- but it

2 juts seems a lot. You're putting these guys

3 --

4 MR. RAWALD: Well, so what's more

5 likely to cause you to not do the bad thing?

6 MR. HURST: That. Absolutely.

7 MR. RAWALD: Right. So isn't that

8 what we want to -- isn't that what we're --

9 we're trying to stop conduct. We're not

10 trying to make money. We're not trying to put

11 people out of business. We're trying to stop

12 conduct. And if the most deterrent value is

13 by this, then isn't that what we want? 

14 MS. SHEPHERD: No, but if you --

15 MR. RAWALD: I'm just putting it out

16 there.

17 MS. SHEPHERD: But if you prohibit

18 anybody from selling let's say even -- like if

19 you prohibit them from selling the product

20 that will violate the standard, then you can't

21 -- that person can no longer violate the

22 standard because they don't have the
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1 equipment. But if you --

2 MR. RAWALD: After they violate it

3 once. 

4 MS. SHEPHERD: Right.

5 MR. RAWALD: After they violated it

6 already.

7 MS. SHEPHERD: Right. Right.

8 MR. RAWALD: Right. So the point is

9 --

10 MS. SHEPHERD: So I mean, I guess we

11 are getting down to like how much deterrent do

12 you want? Is this -- and I think given

13 especially that we don't have any background

14 in this particular enforcement regime, because

15 we haven't had these standards, I really just

16 would question whether we think we need that

17 much deterrent before we have any idea of how

18 prevalent this is going to be or whether or

19 not we can say, well, let's see what happens

20 if we just try and deter the -- we try and

21 stop prohibited conduct. And if it turns out

22 that's just completely ineffective, then
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1 maybe, yes, then you want to start putting

2 people out of business as a look what happens

3 to you.

4 MR. HUNGERFORD: This is David

5 Hungerford. I guess we're missing half of the

6 equation, because the deterrent effect is a

7 function of the expected value for the

8 contractor. So an expected value is the

9 probability of an event times the cost of an

10 event. 

11 So, Doug, how many of these

12 investigations is DOE capable of doing in a

13 year?

14 MR. RAWALD: I would not even be

15 able to -- I have no idea.

16 MR. HUNGERFORD: Order of magnitude? 

17 One? Ten? A hundred? A thousand? Ten

18 thousand?

19 MR. RAWALD: I mean, certainly not

20 10,000 or 1,000. I think we're talking about

21 double-digits, likely.

22 MR. HUNGERFORD: Like 20, 40, 60
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1 maybe?

2 MR. RAWALD: Maybe.

3 MR. HUNGERFORD: Okay. So the

4 deterrent effect is a function of how likely

5 it is you're going to get caught times the

6 weight of getting caught and getting in

7 trouble with it and getting a violation. So

8 if there's a very, very low probability of

9 getting caught and the consequence is a slap

10 on the wrist, there is no deterrent incentive

11 at all. 

12 MS. SHEPHERD: This is Amy Shepherd. 

13 But I think that, sure, that's theoretically

14 true. And so if we had a huge problem to

15 address where we knew there was a lot of this

16 going on and we weren't able to stop it any

17 other way, then, yes, maybe that's worth it. 

18 But I mean you are coming down with a hammer

19 at a time when people are -- this is a huge

20 change. We've never had regional standards

21 before. So nobody knows what to do. And so

22 that's the moment we're going to pick to say,
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1 well, you don't know what to do? Well, guess

2 what, you better get it right because we're

3 going to blow up your entire business. So as

4 opposed to saying whether or not -- I'm just

5 saying if we've looked at this by product

6 class then, then -- and we said, look -- as we

7 start this we're going to say you can't sell

8 them product that would violate the standard. 

9 You're stopping any violation of the standard. 

10 You'd only be having them install higher11 efficiency equipment, which seems like is the

12 point.

13 MR. HUNGERFORD: But if there was

14 low consequence, there would be -- if the guy

15 down the street who's doing the same thing

16 doesn't get caught, he's going to look at what

17 happens to the guy that got caught and say

18 it's not a big deal for me. 

19 MR. MELCHI: This is Jon Melchi from

20 HARDI. I think maybe the point Amy is making

21 is -- and Chuck and Charlie would probably be

22 able to answer this most, representing
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1 contractors -- is you go on to -- every bid

2 that have to make, every time you sit at that

3 kitchen table, you're going to be selling a

4 higher-efficient equipment at presumably a

5 higher cost than your competitor who can sell

6 that larger margin, it's a significant penalty

7 in that you're likely to lose a lot of

8 business. 

9 MR. RAWALD: But you're losing it

10 because it's not compliant in the first place. 

11 That's a policy --

12 MR. MELCHI: No, no, no, no. 

13 (Simultaneous speech)

14 MR. RAWALD: So you can't be bidding

15 a job at 13.

16 MR. MELCHI: No, I'm talking -- But

17 Amy is serious. 

18 MR. RAWALD: You can still sell a 14

19 SEER to the guy, so he's doing a minimally

20 compliant thing. He longer can sell the 13.6

21 that he shouldn't have been selling in the

22 first place. 
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1 MR. MELCHI: Okay. I was 

2 thinking --

3 MR. RAWALD: That's the problem with

4 that.

5 MR. MELCHI: -- that you wouldn't be

6 allowed to sell 14 in the South. You would

7 only be able to sell 15s. That's the way I

8 viewed it.

9 MR. RAWALD: That's not what 

10 Amy's --

11 MR. MELCHI: I'm sorry.

12 MR. HUNGERFORD: But I wanted to add

13 one thing: I guess this is a question for

14 Doug. Is there an opportunity for DOE to

15 express some sort of judgment during this

16 investigation process such that the degree of

17 the violation affects how far it goes in the

18 enforcement process, and how much of a penalty

19 is assessed? Is there a way to -- if you've

20 got some guy that's really moving truckloads

21 of equipment across the border and selling

22 them in the wrong places, the extreme solution
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1 seems reasonable.

2 MR. RAWALD: Yes.

3 MR. HUNGERFORD: But if you've got a

4 guy that gets caught for one installation

5 because somebody made a complaint, is there --

6 or two. Two for routine. Right. Well, I'm

7 saying -- but a small routine violation versus

8 a large routine violation. I'm thinking of

9 the guy that's running a small business that

10 is subject to the competitive pressure. His

11 competitors are selling 13 units with a wink

12 and a smile and he's going to have to try to

13 compete. If that guy gets caught, does DOE

14 come down with the full weight on that guy in

15 the same way that they would someone who's

16 with intent and purpose trying to make --

17 (Simultaneous speech)

18 MR. RAWALD: Well, this is the

19 problem that we have from the statute, right? 

20 So what we're talking about is market-based

21 outcomes because of the prohibition that

22 penalizes manufacturers. So manufacturers are
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1 the ones who are prohibited from dealing with

2 the person who otherwise would be deemed

3 toxic, essentially. And so the question is

4 how could I change that, right? The outcome

5 is a person routinely violates and the

6 manufacturer sells to them no matter how --

7 what degree of routinely violative they were. 

8 The manufacturer is on the hook for each item

9 they sell to that person. And so the

10 Department in our -- what we believe to be a

11 reasonable view of and consistent with how we

12 view the statute views to be the word

13 "product" there to be all products that are

14 under the caveat of central air-conditioner.

15 So there is no real way to narrow

16 that. The only curative would be the ability

17 to be taken off the routine violation finding,

18 which I'm open to an idea, as Kim proposed the

19 other day, things that you do after, like

20 fixing your bad installation, would take you

21 off the routine violation list. So things

22 that could be done to get you out of being
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1 considered a routine violator.

2 MR. DORIA: So this is Jordan. I

3 guess the one thing I want to say to that is,

4 I mean, I think there is potentially one other

5 sort of way we could push on this without

6 passing judgment on whether we agree with that

7 definition or whether I think we should sort

8 of abandon that. You could just set the bar

9 for being determined to be a routine

10 incredibly high, which in my mind, assuming we

11 stick with that definition of "product," that

12 is a prudent course of action. 

13 So I think, to make a point, that

14 small routine and big routine -- well, you're

15 still a routine violator, that we can't allow

16 for that. There can be no such thing as a

17 small routine because the net effect is you're

18 still out of business, right? So the bar for

19 being determined to be routine, as long as

20 we're operating with that definition, needs to

21 be incredibly high from my perspective. 

22 MR. GIBBONS: This is John with
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1 Carrier. When you say "public notice on known

2 violators," what exactly -- my fear; let me

3 tell you where I'm coming from, is that, okay,

4 I know -- I'm tired of picking on Chuck, so

5 I'll pick on Roy C. Cooling Guy. So I know

6 he's a bad actor, so I stop selling to him. 

7 But what's going to stop him from changing his

8 company name and doing it as John Hurst

9 Heating and Cooling and buying from that

10 distributor? 

11 MR. RAWALD: Right.

12 MR. GIBBONS: I just want to know

13 how public we ought to get. Should we have

14 planes with banners behind them or advertise

15 on the Redskins -- I'm sorry, the 

16 Washington --

17 (Laughter)

18 MR. GIBBONS: How public are we

19 going to get?

20 MR. RAWALD: Right. So we're not

21 diverge from our standard practice, which is

22 the Department maintains a Web page where we
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1 put all of our public actions on. And so this

2 would just be another thing put on that.

3 Now, if because the manufacturers

4 live in a world where they want -- once we've

5 issued the notice, dealing with that person

6 would make them be at risk, we could possibly

7 talk about the ability or desire to blast that

8 to manufacturers so they're aware, but that

9 would be a divergent from the current

10 practice. 

11 So what I would prefer would be the

12 manufacturers are going to have to pay

13 attention to our Web page and if they see

14 somebody pop up there as being found to be a

15 routine violator, they have to then be be

16 concerned about that person. 

17 MR. SACHS: This is Harvey, and I'd

18 like to try to recast the mental image of the

19 contractors going back to discussion the first

20 or second time we were together. There are

21 different kinds of contractors, whether it's

22 a small well-trained, long-time-in- business
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1 contractor or a larger production contractor

2 running 100 trucks. Let's call them invested

3 contractors. We also have a huge turnover at

4 the bottom end of people who spin out of the

5 contracting companies thinking they can make

6 more their boss did and last an average of a

7 year or two. 

8 My mental model is that those guys,

9 who are on some basis at least a quarter of

10 the business in any given year, even though

11 their turnover is incredibly high -- those

12 guys don't have much stake. They don't

13 understand their overhead. And they're the

14 ones who are most likely to be cutting all

15 sorts of corners, whether it's not doing

16 proper transitions or trying to skirt the law

17 on SEER 13s in the south. 

18 My sense is this death sentence

19 approach, at least in part; this nuclear

20 option in John's words, is in part trying to

21 tip the scales a little bit toward quality

22 contractor use and discourage the kind of
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1 rogue competition that they have had so much

2 trouble with in the absence of effective

3 licensure in some many states. 

4 MR. RAWALD: And so you have trouble

5 with this because it has that?

6 MR. SACHS: I can certainly be

7 talked about of that. I can be talked out of

8 anything. But it is a consideration that this

9 is not likely to hit the contractor with 100

10 trucks who did the most recent install at my

11 house.

12 MR. RAWALD: Okay. So you just feel

13 there's a desirable market out there possibly

14 I guess is what --

15 MR. SACHS: I think that that public

16 hanging has a deterrent effect.

17 (Laughter)

18 (Simultaneous speech)

19 MS. MEYERS: I definitely agree. 

20 (Simultaneous speech)

21 MR. SACHS: I'm just trying to say

22 that there is another perspective on this and
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1 it does require some judicious consideration

2 of what constitutes routine violation.

3 MR. MELCHI: Doug, this is Jon with

4 HARDI. A quick question. So Charlie's

5 company, boom, routine violator. You're going

6 to put him out of business. All right. Well,

7 can Charlie sell his company at least

8 including all that information to somebody

9 else and continue to work for them, or is he

10 out of the industry for good?

11 MR. RAWALD: Right. So we make

12 findings about companies. So if Charlie

13 opened a new business under his own name as

14 the boss again, would he still have the

15 moniker of routine violator? Probably not,

16 right, because we wouldn't know that Charlie

17 McCrudden has now become Charlie MacCrudden.

18 (Laughter)

19 MR. RAWALD: So I mean, you went

20 from the Irish to Scottish overnight.

21 (Laughter)

22 MR. RAWALD: So we wouldn't know. 
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1 So now --

2 MS. MEYERS: Would the same apply to

3 the distributor?

4 MR. RAWALD: So I think it's more

5 difficult for a distributor to close up shop

6 and reopen because of the difficulty --

7 MS. MEYERS: No, I mean that we as a

8 manufacturer can no longer sell to a

9 distributor any of that product. So they --

10 MR. RAWALD: If a distributor has

11 been found to be a routine violator, which is

12 obviously more difficult because of the layers

13 involved --

14 MR. MELCHI: So I'm just putting

15 myself in -- okay, I'm a bad distributor and,

16 boom, I got busted. My question is, okay, I'm

17 going out of business one way or the other. 

18 Can I at least sell my business and my

19 employees can at least continue to work if I

20 sell my business to a competitor, or are we

21 shutting the doors, those people are out of

22 work and everything is basically -- all the --
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1 well, going out of business sale at the

2 warehouse and those people are out of work? 

3 That's just a question I -- if somebody's a

4 violator like in this instance, do they have

5 the ability to sell their business and say --

6 MR. RAWALD: I would think yes, but

7 this is somewhat market-driven, right, because

8 --

9 MR. MELCHI: Yes.

10 MR. RAWALD: So, because the

11 consequences are on the manufacturers. So the

12 manufacturers no longer are able to deal with

13 them, but would someone who subsequently buys

14 your business still have the --

15 MR. MELCHI: Yes.

16 MR. RAWALD: -- imprimatur of being

17 a routine violator?

18 MR. MELCHI: Even if they've

19 maintained the name. Just because in a lot of

20 purchasing the brand name of McCrudden's

21 Heating in Youngstown is extremely popular,

22 according to Charlie, and McCrudden's Heating
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1 Supply is bad. But I buy him and I want to

2 keep that name, that's still --

3 MR. RAWALD: Right. Well, I get

4 that. And so there are asset-only sales. 

5 There are a lot of corporate questions here

6 that go beyond the level of law that I have.

7 MR. MELCHI: Yes.

8 MR. RAWALD: So I think would all

9 come into play. So I can't say the definitive

10 answer, but my gut reaction would be, no, it

11 follows the bad actor, the bad --the business

12 gets sold, but the business might have to sell

13 it as well because it had that bad name

14 attached to it. So I don't know. I don't

15 have an answer for you. I think it's a

16 complicated question.

17 MS. SHEPHERD: This is Amy Shepherd. 

18 But, Doug, the Department is not going to

19 change anything, right? They would have that

20 corporate name and that would be the routine

21 violator and that's going to stay there. 

22 MR. RAWALD: Right. That would be
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1 okay.

2 MS. SHEPHERD: That's going to stay

3 there.

4 MR. RAWALD: Right.

5 MR. SACHS: But it could become

6 McCrudden DBA Melchi.

7 MR. RAWALD: Right, but I guess --

8 what also could happen is that when the new

9 person buys Melchi Company, they could go to

10 the Department and say, Department, I know

11 when John owned this company that he ran it

12 into the ground, but he sold it to me and so

13 now can we now be taken off the routine

14 violator list? And we can create a process by

15 which people in either by selling or by

16 themselves being a good actor to be off the

17 list. 

18 MR. MELCHI: And that was one of the

19 questions I had for -- okay. So a lot of

20 times -- this is Jon with HARDI. I'm sorry. 

21 Sorry, reporter.

22 A young guys starts out in the
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1 business, to take think Chuck's scenario from

2 weeks ago, takes a few classes at the trade

3 school, knows enough to be a tech, works for

4 six months and says you know what, I'm going

5 to start my own thing. I can do this. Well,

6 maybe he skirts around the edges, gets caught. 

7 He's 21 years old. Goes to work for a

8 reputable company, kind of just the

9 rehabilitation process and reapplying. 

10 So now that he's got the experience,

11 he realized he screwed up earlier. Can he

12 come back in? He's been good actor for a good

13 company and his name has not been tied to any

14 violation after an act when he was 21. But

15 now he's 30 years old and he wants to open his

16 own shop again. Is that something that he'd

17 be able to do?

18 MR. RAWALD: Right. 

19 MR. SACHS: Has he gotten ACE

20 certified?

21 MR. MELCHI: Of course.

22 MR. RAWALD: And so this is Doug. 
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1 And so I would think yes.

2 MR. MELCHI: Okay.

3 MR. RAWALD: And I would think we

4 would want to have a process by which people

5 who have deemed to be a routine violator can

6 then be un-deemed. But that's me speaking, so

7 I'd like to hear from the group. If we want

8 to develop that sort of process, we possibly

9 can.

10 Well, it's almost lunch time, so

11 maybe can just --

12 MR. ROCKY: One last question, and

13 this is something that may need some

14 discussion, but notice of routine violation is

15 published. The person who did that violation

16 has a right to appeal.

17 MR. RAWALD: Yes.

18 MR. ROCKY: Within 30 days was kind

19 of the discussion. There is an appeal process

20 that will take some part of some time. 

21 Manufacturers are required -- by this

22 discussion as soon as that becomes a notice of
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1 violation, we're supposed to stop doing

2 business with them. No time frame indicated. 

3 So we can't do business with someone who's

4 appealing a ruling of violation. At time of

5 notice of violation are we as manufacturers

6 required to stop doing business with that

7 individual or that company?

8 MR. RAWALD: Right, so we haven't

9 discussed that. And so I don't think there's

10 a definitive answer for you on that. 

11 So if we go to the very last slide

12 here about what the -- so after the notice is

13 issued, you're on notice that the Department

14 believes that person is a bad actor. So my

15 opinion would be then any sales to that person

16 would then be a violation, even during the

17 pendency of an appeal. So now if it turns out

18 at the end of the appeal the guy is no longer

19 on the list, then, hey, you've been in the

20 clear. You've been selling to them and no

21 problem. So you kind of take the risk. 

22 So if you want to keep selling to
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1 that person, well, you just might adopt

2 yourself a $200 per sale, actually a fee if we

3 keep up the -- after the end of the appeal the

4 fact that he is a violator. That's how I

5 think we would view it because this is how we

6 do things otherwise. But I can't say with

7 certainty the Department would take that

8 approach, and so I'm open to other options.

9 Well, you keep on playing while your

10 appeal is pending. That's right. You're

11 correct, John.

12 MR. EISNER: Do you want to continue

13 talking or do you want to break for lunch now

14 and --

15 MR. RAWALD: This is the very last

16 slide. And so after the notice is issued, I

17 think everyone has knowledge that they're a

18 bad actor. The question between Jordan and I

19 has been, okay, what about before the notice

20 is issued? And what I would suppose it would

21 be only if DOE has evidence the manufacturer

22 was aware of the bad actor. So if you knew
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1 what they were doing and you kept selling to

2 them, then that would be a cause for us

3 assessing some sort of penalty against the

4 manufacturer for those sales and it would be

5 mitigated entirely in my opinion by the

6 manufacturer who came into such knowledge,

7 reporting it to the Department within a

8 reasonable length of time that we could then

9 dictate. 

10 So I think that would be the safe

11 harbor of sorts that you realize this guy is

12 doing something bad, you don't want to be

13 associated with it, you let the Department

14 know and then any sort of thing you're doing

15 with that we mitigate it because you let us

16 know what's been going on. 

17 MR. DORIA: Mitigate -- excuse me. 

18 This is Jordan. Mitigate meaning to

19 continuing to sell during an investigative

20 period?

21 MR. RAWALD: Right. So I think

22 that's open for discussion. I haven't had a
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1 decision on that. 

2 Okay. So that's the last of the

3 slides. So lots to think about over lunch

4 obviously. I don't know if people want to

5 take a longer lunch to talk? Gary's shaking

6 his head yes. So if you want to come back -- 

7 MR. EISNER: Everybody back by 1:30. 

8 (Whereupon, the above-entitled

9 matter went off the record at 12:03 p.m. to

10 resume at 1:30 p.m. this same day.)

11 MR. EISNER: All right, it looks

12 like we've got everybody back. Charlie White

13 asked if he could have some -- could we have

14 everybody's attention? All right, Doug, I'm

15 going to have to ask you to yell and start

16 from --

17 MR. RAWALD: Okay everyone, we're

18 ready to start.

19 MR. EISNER: Big difference there. 

20 You're military.

21 MR. RAWALD: My command voice.

22 MR. EISNER: Yes. Charlie White
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1 asked if he could have some time at the

2 beginning of the meeting after lunch. It's

3 yours.

4 MR. WHITE: Chuck White with PHCC. 

5 So, I've had discussions with my folks

6 upstream, and I need to really, directly ask

7 Doug a question that we keep kicking around

8 and dancing around. And I've talked to a few

9 people around the table about this, but we

10 keep making reference and joking about it, but

11 it's a really serious question.

12 Is there a method by which this can

13 become SEER 14 across the country, that -- and

14 I'm not asking for a yes or no now. I really

15 -- think about it. I don't think any of us

16 can really come up with a definite firm

17 position for our respective organizations on

18 this short notice.

19 But we've spent nine days with lots

20 of words flying around -- and I know we've

21 gained ground, and I know we've established a

22 lot of things, but we have a complex
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1 implementation program. In some instances the

2 word unworkable has been used to me. And I

3 don't know that I necessarily agree with all

4 that, but SEER 14 across the nation resolves

5 a huge portion of the issues.

6 I know we have the Southwest EER

7 issues, and that's a point. I don't think I'm

8 suggesting that that would become the national

9 standard. And I'm just going to be

10 stream-of-conscious for a little bit here, and

11 you can pick on me later.

12 Building codes, HVAC codes, tell you

13 how to do the job, and they reference

14 standards. In the plumbing world it's a

15 standard, 1.6 gallons per flush toilet. 

16 That's a federal standard. If I violate that,

17 I'm in trouble. And the inspection agency,

18 the authority having jurisdiction has a way to

19 recognize that. They can look at the standard

20 on the product and know it complies.

21 So if we say that we have to be SEER

22 14, the HAs have the ability to look and
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1 verify that. If in the Southwest we say it

2 meets those EER values that we've -- kick

3 about that I haven't memorized, I think that's

4 a function of the HA to determine compliance

5 of the product in their regions.

6 And with all due respect to DOE, I'm

7 not sure this is their thing, to go chasing

8 down every installation in every state. I'm

9 not sure, to borrow his phrase the other day,

10 they have statutory authority. Maybe they do,

11 maybe they don't

12 And I don't want to get into that

13 particularly, but I don't think I'm willing to

14 grant it voluntarily. Now if they already

15 have it, so be it. But I don't know that

16 there is an easy way to do that, and I

17 recognize, we're pretty far down the path.

18 I recognize that people have made

19 changes in forecasts and productions and

20 planning and a variety of things. So perhaps

21 that all needs to be factored in there, too,

22 but it takes the death penalty off the table. 
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1 It takes the tracking of the manufacturers, of

2 distributors, of contractors and I don't know

3 who did what when, it takes that off the

4 table.

5 We keep saying we want to be

6 business as usual. We don't want to disturb

7 the way we're doing things now. We can't

8 change this because, you know, that's business

9 as usual. Doing this keeps us business as

10 usual, or as near as we can.

11 The contractors, I recognize from my

12 perspective and Charlie's -- I'm not putting

13 words in his mouth, but our members in the

14 north have a little bit of a cross to bear

15 there. We're going to have to tell people,

16 we're going to put SEER 14 in and, you know,

17 we -- that's a trade-off.

18 The trade-off is, how are we going

19 to comply with this otherwise? Because no

20 matter what system we create, no matter how we

21 think about the bad actor or the good actor,

22 the accident, the whatever, it's still going
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1 to happen. And there's still going to be ways

2 around this.

3 If there's no SEER 13 product out

4 there, there's no way around it. And if there

5 is, and you find it installed, it's an easy

6 discussion. So that, there really -- these

7 discussions I've had upstream, it's not an

8 official position.

9 It really is a question, I think,

10 more from me, as a member of this Committee,

11 to recognize, we've done a lot of work here

12 and we've gained some ground, but we're not

13 there yet. Doug thinks maybe we'll get done

14 next week. I think Doug's an optimist. But

15 that's okay. Be optimistic as you like.

16 I just want to throw that out there. 

17 I would like an official answer. And you

18 don't have to give me an answer now. But is

19 there a mechanism that that could happen,

20 whether that is a rulemaking, whether it's

21 some kind of consensus agreement, how -- I've

22 never done a rulemaking.
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1 I've said it before, I'm not an

2 attorney. I'm not a politician. I'm a guy

3 that turns wrenches and got dragged into

4 representing the viewpoint of those people at

5 meetings like this.

6 MR. HURST: Well, and you do it very

7 well.

8 MR. WHITE: Well I try, and

9 sometimes I get a little agitated, but I do

10 pretty good to keep that under control too, so

11 --

12 MR. FENSTROM: Well, this is Gary --

13 MR. WHITE: Comments?

14 MR. FENSTROM: -- and that would be

15 great. And I think there's a simple solution. 

16 It's just that all the contractors have to

17 tell their customers' clients that the 14

18 isn't that much more expensive, it would be

19 better for them, and that's all they're going

20 to sell. And it would be great.

21 MR. EISNER: Doug, do you have any

22 thoughts on whether it can be done? Or even
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1 if you don't want to do that, do you want to

2 talk about what you see as some of the issues?

3 MR. RAWALD: Right so, I mean, it's

4 -- this is an administrative law rulemaking

5 problem. So we have a regulation in place

6 that's effective in mere months. And so we'd

7 have to go through some sort of rulemaking

8 procedure by which to increase the standard

9 for those places where it's not currently in

10 place.

11 Now, anyone can petition the

12 Department at any time to amend the standard,

13 so PHCC or anyone else could approach the

14 Department and say hey, we'd like you to look

15 at doing this, submit a petition to consider

16 it. So that's one approach.

17 I don't know of any way that this

18 group, that has been formed solely for

19 purposes of looking at how to enforce the

20 standards, could in any way actually come back

21 with a recommendation of just making an above

22 the board increase in standards, nor do I know
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1 that everyone else would be in consensus with

2 that approach.

3 Frankly, I'm not sure all the

4 manufacturers would be on board because they 

5 have probably invested money in 13 product for

6 this year, at least.

7 So I don't know how this particular

8 body could do it. But I can go back and ask

9 the question of the Department, and we can see

10 if there's any sort of thought at all.

11 But it's not a question that they

12 have spent a whole lot of time thinking about

13 how this body could increase the standard, and

14 it would not be a usual course of business

15 activity. I mean, it would be, may require

16 some effort and difference in the approach.

17 MR. WHITE: Chuck White again. I

18 appreciate that, and I'd say the whole thing's

19 not a usual course of business --

20 MR. RAWALD: True.

21 MR. WHITE: -- so what's one more

22 thing, but it's helpful to me if I have an
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1 answer, yes or no, because that helps me

2 direct my upstream, my constituency, and bring

3 them along to whichever direction things have

4 to be. So I thank you for listening to me.

5 MR. MCCRUDDEN: And this is Charlie

6 with the ACCA. I've heard a very similar

7 question from a lot of my members, and I've

8 out talking about these regional standards,

9 and I get a lot of questions, well, why don't

10 you just make it a national standard again?

11 So, it's a question that's being

12 posed, and to have a real answer, sort of

13 official answer back, would be helpful to sort

14 of, I think, better our understanding of sort

15 of this process, how we got to this, and our

16 eventual outcome.

17 MR. EISNER: Others have comments,

18 questions, issues to raise?

19 MR. FENSTROM: This is Gary. I

20 think I have a quick comment on the issue of

21 the national versus regional standards in

22 general. And while there are a lot of reasons
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1 why it's desirable to have this single

2 national standard for these energy efficiency

3 things, it's hard to reach a single number

4 that really satisfies the public need in

5 different parts of the country.

6 So for example, in California, the

7 climate is different. The operation of the

8 utility system is a little different with

9 respect to air conditioning. The prices are

10 higher.

11 And, you know, it would be great to

12 have the rest of the country come up to the

13 hot dry states or the warm wet states' level,

14 but that doesn't mitigate the reality that

15 different parts of the country might merit

16 different standards on account of the

17 climactic conditions and utility systems and

18 costs.

19 So, you know, we've to balance the

20 simplicity of one standard, nationally,

21 against meeting the public need in different

22 parts of the country for different standards. 
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1 That's why we have, or we've been advocating

2 for this regional standard thing for over a

3 decade.

4 MR. EISNER: Do you have any sense

5 of how much you narrow the difference in price

6 because you require two different items to be

7 manufactured, and then you require labels to

8 be put on some of them about where they can be

9 sold, and then you require additional steps in

10 record keeping?

11 Does there come a point where there

12 isn't much difference in price, at least

13 compared to what there would be right now,

14 though?

15 MR. FENSTROM: Well, this is Gary,

16 and I believe the answer to that is yes. As

17 these products have to meet the standard, and

18 the volume of manufacturing increases and they

19 become commoditized, the incremental price

20 drops, so it's not that much different.

21 All I can say to the rule is DOE

22 determined that the incremental price
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1 associated with these higher efficiency units

2 is justified by the energy saving benefit they

3 offer customers.

4 MR. HUNGERFORD: And this is David. 

5 And the inverse of that is that the low -- you

6 could -- it wasn't possible to justify, when

7 the analysis was done, a higher standard in

8 the North, because the savings, given the duty

9 cycles in the North and the temperatures in

10 the North, the amount of use in the North, and

11 the prices, could not justify the additional

12 investment, from the consumer perspective.

13 Could you guys correct me if I'm

14 wrong on that? But that's my memory of how

15 that went. The more technical differences

16 between the hot dry weren't given, or hot

17 humid difference, which requires more of a

18 different configuration approach, where you're

19 using different -- that's why the EER versus

20 the SEER ratings, right?

21 The engineers here can explain that

22 better than I do, but the -- that's where that
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1 justification, the 13. The 14, from

2 north-south -- but I'm using my hands to

3 indicate north and south, for those on the

4 phone, was a -- couldn't justify a higher

5 standard on the basis of cost effectiveness,

6 if my understanding is correct, if my memory

7 of how that process works.

8 MR. EISNER: Would that, did that

9 process consider the costs of an enforcement

10 role being added on? That's what I'm asking.

11 MR. HUNGERFORD: I do not know the

12 answer to that question.

13 MR. MCCRUDDEN: This is Charlie with

14 ACCA. Going back to the original law in 2007,

15 the DOE was instructed that the next time they

16 had a chance to write regional -- write

17 standards for HVAC products, they could impose

18 regional standards.

19 Once they finished the regional

20 standard, then they would write enforcement

21 rulemaking for those regional standards. And

22 so they weren't contemplated at the same time. 
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1 It was one, then the other.

2 And that was possibly a mistake. It

3 may have moved the numbers around a little bit

4 had they looked at enforcement, but then they

5 may not have and the ability to sort of

6 consider all of the aspects of enforcement. 

7 They have just been lumped in with all the

8 tables and data with that. So enforcement was

9 not considered as part of the standard itself.

10 MR. SACHS: This is Harvey, and I

11 would try to respond to the first presented

12 question. From our community's perspective,

13 I think we would have to separate out two

14 aspects, our true national standard versus

15 dropping the EER in the Southwest.

16 In terms of the SEER 14, taken by

17 itself, there is no loss of national energy

18 savings by going in that direction, therefore

19 our question immediately would be, why would

20 we object?

21 We would, as part of an informal

22 coalition, have to look at the question, if
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1 that's part of Chuck's proposal, of the impact

2 of loss of the EER, in terms of the

3 time-dependant valuation that California does,

4 and is symbolic for other areas.

5 MR. WHITE: This is Chuck White. I

6 think we're going to respond to that

7 sentiment. I'm not suggesting we drop EER in

8 the Southwest. I'm suggesting we don't apply

9 it across the entire country.

10 If it remains in the Southwest, it

11 becomes an enforcement issue for the states

12 affected by their authorities having

13 jurisdiction.

14 MR. SACHS: Okay, well this is

15 Harvey again, and thank you, Chuck. I

16 appreciate that, and that's very important. 

17 But in terms of position I think you all could

18 expect us to take as a community, what would

19 we have to object to the national standard

20 with 14 instead of this split 13 and 14?

21 Let me just finish with one thing. 

22 My -- I would have some concern about
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1 reopening the whole ball of wax. For example,

2 we had some, I think some significant

3 electricity crisis or issues in the

4 intervening years.

5 MR. BALLO: So, my point is not an

6 objection, because I agree with Harvey but,

7 you know, we really have no objection to

8 increasing to 14, but I just want to remind

9 everyone that we're seated around this table

10 because back around 2010, maybe --

11 MS. WALTNER: Nine.

12 MR. BALLO: -- a bunch of other

13 people were seated around the table and

14 thought regional standards were a great idea. 

15 And there was a lawsuit that came out of that,

16 because we didn't have everybody around the

17 table that we ultimately really needed to have

18 at the table.

19 And I wonder if that's the case

20 here, because I can already think of, if I was

21 unhappy with the move to a 14 standard at the

22 national level, there are arguments that I
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1 think are at least plausible for why that

2 would be unlawful for DOE to go to a 14 level

3 at the national level.

4 So if really there is nobody out

5 there opposing it, it's a great idea, but I

6 don't know that we know whether really no one

7 would oppose.

8 MS. WALTNER: This is Meg from NRCD. 

9 Just another thought to add to this is, I

10 agree with Harvey and Tim that yes, SEER 14,

11 nationally would provide greater energy

12 savings, but there may be future benefits of

13 regional standards looking at other SEER

14 levels.

15 You know, the next time we do a

16 standard revision, that I think we would want

17 to think through further before just sort of

18 saying okay, never mind, the enforcement was

19 too hard, let's go back to a national

20 approach.

21 Because as Tim said, what, four

22 years ago, whenever it was, we sat around our
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1 table and said we thought this made sense. 

2 And I think there may be future benefits that

3 we would want to think through further.

4 MR. FENSTROM: So this is Gary. 

5 After Chuck finished suggesting this idea, I

6 semi-jokingly said, well all the contractors

7 have to do is sell 14 units.

8 You know, we have yet to see what

9 the market is going to do, and irrespective of

10 what the DOE regulation is, if there's a good

11 economic reason for it, hopefully the market

12 would just aspire to that level across the

13 country, at least to a greater extent than it

14 currently does.

15 MR. ARNOLD: This is Dan Arnold with

16 NORDYNE. I didn't know we were going to

17 debate this issue again. I'll try, but since

18 we have all salesmen or the three or four

19 people I think I recognize that were around

20 the table five years ago or whenever it was.

21 And yes, if we knew we'd find

22 ourselves here five years later, I think we
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1 would have probably tried for a different

2 outcome.

3 (Laughter)

4 MR. WHITE: He's been here one day.

5 MR. ARNOLD: So, you know, I think

6 the -- you know that this goes one day, but of

7 course I've been going to these rulemakings

8 for about 15 years. So, but we are where we

9 are.

10 And, you know, what I always have

11 said is that, you know, manufacturer's have a

12 voice, everybody has a voice here. The one

13 voice that's not being heard is the consumer's

14 voice. And, you know, there is not a linear

15 cost curve from 13 to 14 to 15 to 16

16 and on up. 

17 And I appreciate the comment about

18 setting a precedent, because when we get to 15

19 it's going to get tougher, and when we get to

20 16 it's going to get really tough, well, to be

21 cost effective plus to have some kind of

22 enforcement, because then you really have to
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1 consider it as a system.

2 And really, you do now. We talk

3 about indoor units and outdoor units. It's

4 really a system. And I'm an engineer. So you

5 can't have just an outdoor unit that provides

6 any cooling. There's got to be an indoor

7 piece to that exposed system.

8 And you don't really know what the

9 efficiency is until you have that indoor piece

10 and you have that air flow and everything else

11 set up.

12 But having said that, you know,

13 again, knowing what I know now, we wouldn't be

14 opposed to the national standard other than we

15 are always concerned about the cost

16 effectiveness of air conditioning.

17 You know, we've never recovered from

18 the high that the industry had before the

19 recession of about 8-1/2 million units. Karen

20 can recite those numbers better than I can,

21 but we've been bumping along at about 5-1/2

22 million units since.
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1 We just don't have the ability to

2 reduce cost because we're making more of them

3 -- we're not making more of them. We're

4 making fewer of them. Room air conditioner

5 companies are making a lot more units because

6 one of our key markets is manufactured

7 housing.

8 Those folks are on fixed incomes,

9 they're senior citizens. They have an option

10 of central air conditioning. They go down to

11 Lowe's or Home Depot and buy a couple of

12 window units for 150 bucks apiece. And that's

13 what people are doing.

14 So, you know, we've had these

15 continual increases in cost drivers, from

16 refrigerant changes to standard changes to

17 commodity price increases and, you know,

18 somebody who only needs air conditioning three

19 or four weeks out of the year really shouldn't

20 have to pay $3,000 for that system, or $4,000,

21 and have it keep going up over time. So

22 that's kind of where we're at.
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1 Again, knowing what I know now, the

2 national standard sounds really good, but we

3 are where we are, and going forward, you know,

4 we're not going to want to enforce 16 SEER on

5 the North, 18 SEER, 20 SEER, wherever it goes. 

6 I mean, the dynamics show that the efficiency

7 levels are going to keep going up.

8 MR. FENSTROM: So this is Gary,

9 guys. I'd like to follow up on that point

10 from a utility perspective. The worst

11 possible thing that could happen to the summer

12 peaking electric utility, from an economic

13 point of view, is for somebody to go down to

14 the retail store and buy a couple of window

15 units that collectively may be drawing 2-1/2

16 kWh or so.

17 They add tremendously to the peak

18 demand, and because they may only be used

19 three or four days a year, don't add that much

20 to the energy user revenue that the utility

21 sees.

22 So the consequence is that utility
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1 economics are really damaged by the sale of

2 inexpensive window and wall units.

3 MR. EISNER: Does anyone else want

4 to make a comment? Any suggestions that we

5 follow up on this, to find out what DOE's

6 legal position might be, whether they think

7 there's room for change here? Or do you want

8 to drop it?

9 MR. FENSTROM: Well it'd make our --

10 Gary again, make our life a lot easier if

11 there were some flexibility here. It's

12 important for the Southwest utilities not to

13 lose this EER factor, because air conditioning

14 use is very coincident with high temperatures

15 in the Southwest, and most of the use is when

16 it's really hot and dry out.

17 So we're more concerned about the

18 efficiency performance under those weather

19 conditions than we are the conditions that are

20 reflected at the SEER value.

21 MR. HUNGERFORD: And this is David. 

22 And it's also the case that if you -- at this
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1 stage, if we're, if we've established that 14

2 SEER is, or the Department has established

3 that 14 SEER is cost effective in the South

4 and, but not in the North, and we move to

5 bring the North up to 14 SEER, then first of

6 all they'd probably need to reach a new

7 finding of cost effectiveness across that

8 region, which might happen with an increase,

9 the more recent increases in utility costs.

10 But the precedent for future

11 rulemakings is that we fall in the same place

12 we were before regional standards, which is a

13 national standard. The level of efficiency

14 that you can get out of a national standard

15 and justifiable cost effectiveness basis is

16 going to be a lowest common denominator.

17 And the separation between the

18 intense, more intense needs in the South and

19 the less intensive needs of the North would

20 always lead to a cost effectiveness

21 calculation at a higher efficiency level

22 that's appropriate in the South, and maybe not
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1 in the North.

2 And we'd be driving down potential

3 for future energy savings, from the

4 perspective of an efficiency advocate and an

5 agency that works at trying to improve

6 efficiency, observing the rest of the country. 

7 That would be a concern that I address.

8 MR. FENSTROM: So this is Gary

9 again. So David, your comment kind of relates

10 to the statement I made about the rationale

11 for having regional standards.

12 MR. HUNGERFORD: I was reiterating

13 that, I suppose.

14 MR. FENSTROM: Yes. I think the

15 more significant thing from a utility point of

16 view, with respect to the need for regional

17 standards, is the EER, not the SEER.

18 So if we could maintain that

19 differentiation, and alleviate all the

20 compliance and enforcement issues, that would

21 be great.

22 MR. RAWALD: Okay. Well I hear what
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1 everyone's saying, and as I said I will bring

2 the question back to the Department. It

3 certainly would require a rulemaking, which

4 would require work and time, and probably

5 would not be done before January 1st of 2015.

6 So, regardless, no matter what we

7 decide, this issue will still be pertinent,

8 and we still have a session remaining to

9 address this issue, regardless of what we

10 decide with regional standards down the road

11 in the rulemaking.

12 So, and we've long delayed beyond

13 our statutory obligation to address the

14 enforcement issue. So regardless of what we

15 decide or whether it's palatable or not to

16 seek a 14 standard, we have to issue a rule,

17 whether this group does it or the Department

18 does it on its own.

19 So it has to be focused back on

20 doing that, if we can, unless we come to a

21 point where we can't come to an agreement, and

22 then the Department will take action on its
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1 own, in an effort to at least be done with

2 this issue, from our point of view.

3 MR. EISNER: Okay. Shall we get

4 back to your --

5 MR. RAWALD: Aniruddh had a point he

6 wanted to make on a separate issue.

7 MR. EISNER: Oh.

8 MR. ROY: Aniruddh Roy with Goodman. 

9 Actually, Doug, I wanted to bring the

10 conversation back to you and Johanna and the

11 point you made about working SEER guidance. 

12 I would recommend --

13 MR. SACHS: Aniruddh, could you

14 speak up just a bit?

15 MR. ROY: Sure, sure. So I would

16 recommend that the Department come up with

17 some kind of a position early next week, we

18 have a first meeting. Because a lot of the,

19 you know, revisions that have been submitted

20 to you by the manufacturers are contingent

21 upon that.

22 And so our ultimate vote will really
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1 rely on that guidance. My personal fear is

2 that, as far as not issuing the guidance is

3 concerned, if it's addressed in the CFR, there

4 will be a gap between the January 1st, 2015

5 date and the final rule. And it will be open

6 to interpretation and a free for all. So --

7 MR. RAWALD: No. And Aniruddh, I

8 get that. And I am sensitive to that. And so

9 I have tried to sensitize everyone else to the

10 fact that we need to give some clarity. The

11 Department, in my position, has already

12 spoken, and we -- this is what we believe. 

13 This is the 14 SEER as I described it. It is

14 what it is.

15 But it would be comfortable, I

16 think, for everyone to actually see that in

17 writing from the Department as opposing from

18 my voice, and I get that. And so we will

19 endeavor to do that.

20 What I would submit to you is that

21 on a term sheet, that the very first term that

22 we have is, this is all based upon a premise
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1 of this particular condition.

2 So it's clear to everyone that all

3 the decisions we're making are based upon that

4 premise, which I think we're all in agreement

5 on, that it should be the basic premise, that

6 14 SEER is determined the way I discussed

7 earlier. So -- but I do hear that.

8 MR. ROY: Thank you.

9 MR. EISNER: Anybody else have any

10 comment on that? Okay. You want to go back

11 to your slides? Is there a good place to go

12 back to the earlier discussion?

13 MR. RAWALD: Well I want to go

14 wherever the group wants to go, I guess, at

15 this point. So I've done all -- I've talked

16 to you about all my thoughts now, based on

17 what we have. So that was a particular area

18 where folks were ready to jump back in and

19 look at some things.

20 There were a couple of things on the

21 table to talk about with your groups over

22 lunch, so I'm ready to go wherever anybody
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1 else wants to go.

2 MR. MCCRUDDEN: So, this is Charlie

3 with ACCA. I think where we left, I think we

4 had a sort of a time to think about maybe 

5 there, I think it was whether -- in terms of

6 the death penalty, and how we want to look at

7 that.

8 And I think part of it is routine

9 violation. Part of it is violations, so

10 transparency of those. And I get the sense

11 from everybody around the table including

12 those who don't manufacturer products,

13 distribute products or install products, that

14 this concept of the death penalty doesn't

15 really make sense. Am I correct there or not?

16 MR. BALLO: I would say on that --

17 MR. MCCRUDDEN: Without having

18 defined routine violation yet.

19 MR. BALLO: There's a tension

20 between -- if there is no prohibited act --

21 If all we have is routine violation

22 and that's the only way to get at this
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1 problem, then I -- that sort of forces us into

2 supporting the death penalty. I don't think

3 -- I can't speak for everybody, but that's

4 not, to me, the best way to do this. But if

5 that's all we have.

6 MR. RAWALD: And I do -- I know

7 we're trying to use terms that are helpful for

8 you right now.

9 (Laughter)

10 MR. RAWALD: I do push back on the

11 notions of the death penalty and --

12 MR. MCCRUDDEN: This is what Frank

13 Lutz told me to say.

14 MR. RAWALD: Right. There are, of

15 course, contractors who have plumbing,

16 heating, cooling businesses, so their cooling

17 side would be eliminated but they have other

18 businesses. So there are parts to this that

19 are driven by that.

20 There is, as Dave pointed out, the

21 order of magnitude issue, which is how many

22 businesses actually would be affected by this
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1 on a regular basis, probably not very many,

2 whereas the deterrent value of it would be,

3 obviously be immeasurable, right.

4 So that's the most deterrent thing

5 that could be possible to me is the risk of

6 your business put in by acting like a scofflaw

7 is high. And so that has a large impact,

8 versus the risk of a $200 fine that you pass

9 along to your consumer is pretty low.

10 And so from that point of view, it's

11 a much more effective remedy in that sense. 

12 Now, I'm not wedded to anything. I'm just

13 pointing out that I don't think it's the death

14 penalty for all, and I think it at least has

15 some more equilibrium here than what might

16 present.

17 MR. MCCRUDDEN: And I had a chance

18 to talk to a couple --

19 MR. EISNER: Did anyone else have

20 comments?

21 MR. HURST: Well, yesterday we

22 talked about having a graduated scale. And I
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1 don't like the term death penalty either, but

2 I -- and I don't like sports analogies, but

3 I'm going to use both.

4 (Laughter)

5 Living in Dallas, Texas, you become

6 very familiar with SMU football. Back in the

7 80s they received the NCAA death penalty, and

8 it's not because they did one or two things

9 and got caught and stopped doing it. It was

10 egregious. It was repeated. It was flagrant.

11 And quite frankly, as a manufacturer

12 and as a distributor, if you have somebody in

13 the marketplace that just kind of doesn't

14 really care about the law, and repeatedly and

15 flagrantly violates the law, I've got no

16 problem with that person going out of

17 business.

18 And I'm sorry but, you know, I don't

19 agree with it one time or two times, or made

20 a mistake here and there, but I think there

21 ought to be a graduated scale that if somebody

22 just flagrantly and repeatedly violates the
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1 law, regardless of what happens to them, they

2 shouldn't be in business.

3 I'm sorry. We do that in many other

4 things, and you all may disagree, but I think

5 if there are reasonable measures that lead to

6 that, I don't want to take it off the table.

7 And I think it would preclude people

8 -- once somebody does get the death penalty,

9 it's a wake-up call for everybody else. And

10 then we don't have to mess around with

11 hundreds of investigations, because people

12 know that the stakes are real. I'm done.

13 MR. RAWALD: So from my vantage

14 point, though, the way I would see the

15 possible implication of a graduated scale is

16 -- so the things that we have at our disposal

17 now at the Department, is we have warning

18 notices that lead to actions.

19 And so we could, of course, give a

20 warning notice to someone saying hey, you did

21 this. You're found in violation. If you

22 continue to do this, this is what the
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1 consequence could be. Manufacturers face a

2 penalty for selling to routine violators, and

3 that could have some consequences on your

4 ability to do business at the end of the day.

5 So, because the Department, in our

6 action, is only taking action against

7 manufacturers. Let's be clear. So it's the

8 market that's eliminating the business from

9 the other folks, because the manufacturers are

10 going to have to make the choice of do I want

11 to risk myself by doing business with these

12 folks.

13 And so I wouldn't be able to say in

14 my notice, well you'll go out of business if

15 you keep doing it. So I would make that

16 clear. But that's how -- that's the approach

17 we have now.

18 Now we could build on the thing into

19 the process. I just want to hear how we would

20 want to approach that. That would be the

21 analogy we have currently, from what we

22 currently do. Meg, do you have a point?
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1 MS. WALTNER: Well you just said,

2 make sure, assumed in the statement you just

3 made that we're not adding a prohibited act.

4 MR. RAWALD: That's what I'm

5 assuming at the moment, right. I'm taking the

6 world as we have it at the moment, which is no

7 prohibited act. So if we were to have a

8 prohibited act, then that would change the

9 calculus some, I think.

10 MR. MCCRUDDEN: And I haven't really

11 conferred with Chuck on this, but from the

12 comment from ACCA's point of view, agreeing to

13 a prohibited act, or accepting a prohibited

14 act, would be essentially contingent upon the

15 threshold of which we've set routine violator

16 and how soon we get to a routine violator

17 situation.

18 MR. RAWALD: Right. I think it's on

19 -- how I would see it would be, without a

20 prohibited act, the routine violator threshold

21 would want to be lower to some folks, because

22 it would have to be palatable.
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1 MR. MCCRUDDEN: I would too.

2 MR. RAWALD: Whereas with a

3 prohibited act you'd want to make it higher so

4 you could say to your people, look, we're

5 doing this so you can avoid the ultimate

6 outcome.

7 MR. MCCRUDDEN: But what I think

8 also has to be built in there for the

9 protection of the contractor, is -- and this

10 is where it becomes the wild card, wherever we

11 set that routine violator threshold, the

12 manufacturers are likely to set it one less,

13 internally, or two less, or five, depending on 

14 how the market is.

15 And that's the concern that I have,

16 is that this unknown threshold, that would be

17 an internal situation, because then -- and you

18 can't control it. I can't control that, but

19 that has to be considered. And I think we

20 heard earlier from some of the manufacturers

21 that under this construct, that would play

22 into it.
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1 And I'll have to admit, when we left

2 -- we did talk about this a little bit

3 yesterday, and I didn't see heat pumps here

4 when we talked. I mean, I didn't assume heat

5 pumps. When you said central air

6 conditioning, I sort of thought --

7 MR. RAWALD: No, I did say

8 yesterday, heat pumps. I didn't make -- I

9 included heat pumps, and some people nodded

10 their heads, but I guess they weren't all

11 listening, so --

12 (Laughter)

13 MR. MCCRUDDEN: It didn't -- 

14 MR. RAWALD: Yes. Chuck's verifying

15 me here, so at least one of the --

16 (Simultaneous Speaking)

17 MS. SHEPHERD: I'll stand behind you

18 on that, too.

19 (Simultaneous Speaking)

20 MR. MCCRUDDEN: You have to tell

21 them three or four times before it sinks in --

22 MR. RAWALD: That's why I made that
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1 slide so big today, so --

2 (Simultaneous Speaking)

3 MR. RAWALD: Because I really wanted

4 to drive the point home. I mean, I'm trying

5 my best to be as transparent with you guys as

6 I can.

7 (Simultaneous Speaking)

8 MR. MCCRUDDEN: Yes. That was my

9 advice, so.

10 MR. FENSTROM: So this is Gary. We

11 were nodding our heads all right, but it

12 wasn't necessarily in agreement.

13 MR. BALLO: This is Tim, and I have

14 been thinking about this issue of people up

15 the chain, and their over-reacting to a

16 finding of a violation that is not, you know,

17 not routine, just a one-off or even a two-off. 

18 It takes a couple to get to a routine

19 violation.

20 And we could have, either in

21 guidance or in the criteria for that person up

22 the chain to be a violator that -- some
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1 language to the effect that the past findings

2 of a violation for anyone that they're dealing

3 with, do not or cannot be used to arrive at

4 the determination that they are dealing with

5 a routine violator.

6 So it sort of takes that off the

7 table for the person up the chain, the

8 distributor or the manufacturer from being

9 penalized for dealing with someone who has, in

10 the past, violated.

11 MS. WALTNER: But not yet determined

12 a routine violator.

13 MR. BALLO: Yes.

14 COURT REPORTER: I'm sorry, who said

15 that?

16 MS. WALTNER: Sorry, that was Meg.

17 MR. RAWALD: Well see, but that

18 really just gets us back to the Amy Shepherd/

19 Jordan request, which would be nobody actually

20 would be found to be dealing with a routine

21 violator, absent a DOE finding of them being

22 a routine violator.
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1 And then after that, they would be a

2 toxic entity, dealing with that person would

3 be a lot of --

4 MR. BALLO: Well, I don't know if it

5 gets all the way there. They could still be

6 found to be dealing with a routine violator at

7 the time they're determined to be a routine

8 violator with the mere fact that they have

9 violated in the past, I guess.

10 MR. SACHS: I guess I'm concerned --

11 this is Harvey, and I would be a bit concerned

12 about that, too. But I think that is asking

13 DOE to make the business judgment, that I

14 think the OEMs would like to reserve for

15 themselves. I can see different legal

16 strategies before this person is indelibly

17 stamped as a routine violator.

18 MS. WALTNER: This is Meg from NRDC

19 again. One thing we discussed this morning,

20 that I think we should make them keep on the

21 table is this idea that you might be able to

22 remediate for a routine violation.
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1 So if you, you know, you go and fix

2 all the noncompliant units, or go through a

3 training program or whatever, you know, we

4 decide that is, that there be some way that

5 you can recover from being deemed a routine

6 violator.

7 MR. RAWALD: Okay. So let's turn

8 back briefly, so I know what the topics -- had

9 some thoughts on what would be -- having been

10 found a routine violator, what would be the

11 things that would allow you readmission into

12 the community of being sold to by a

13 manufacturer? What would be some things you

14 could do?

15 Obviously, the most obvious example

16 is fixing the problem, but what other things

17 could there be that would be worthy of saying,

18 okay, this is a way of correcting it?

19 And we have an analogous thing in

20 the Department, so we have okay, the notice of

21 allowance. So if I find a product

22 noncompliant, and you go back out and you make
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1 it compliant, then I issue a notice of

2 allowance saying hey, you now can sell that

3 product again.

4 So we have an analogous provision. 

5 So I think it's -- there's an idea that we can

6 gain some traction on, with that.

7 MR. SACHS: So we're talking about

8 the price of indulgences.

9 MR. WHITE: Well, it's Chuck White. 

10 I guess in the spirit of the law, the goal is

11 to save energy. So you need to make whole. 

12 And we keep having our discussions about these

13 things like we're in our own little hamster

14 globe and we're not.

15 A customer that's been wronged

16 certainly has civil opportunities to sue a

17 contractor for those issues, outside of

18 whatever the DOE should choose to do. There's

19 a possibility he defrauded them. There's lots

20 of other things that could be attached to

21 this, if it's not an outright error.

22 If you knowingly and intentionally
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1 are out cheating, there's opportunities for

2 you to be dealt with appropriately, or

3 inappropriately.

4 Speaking personally, if my business

5 put the wrong thing in, I would make it right. 

6 And that's pretty painful, folks. I'm going

7 to go out and take a brand new piece of

8 equipment out, that -- and I can probably sell

9 it to somebody else somewhere, but it's now a

10 used piece of equipment, so I'm not going to

11 get my money out of it.

12 I've got to buy another piece of

13 equipment, and I have to spend the labor to

14 take it out and put it back. Doing a job once

15 is bad enough. You've effectively done it

16 three times. That's a pretty big penalty.

17 So having said all that, and my

18 favorite phrase, it depends, if I'm in a

19 one-time situation, or two, maybe that's a

20 doable opportunity. If I did an apartment

21 complex with a thousand units, it's a pretty

22 rare contractor that can stand that type of a
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1 hit and stay afloat. That's probably not

2 likely. So --

3 MR. RAWALD: Well that's what I want

4 to say. The guy who does 1,000 bad

5 installations, do we want him to really have

6 the ability to climb back out of the morass,

7 or should he be there because he chose to be

8 there? So --

9 MR. HURST: I think it depends on

10 your investigation also. I mean, I put --

11 it's hard to believe that a thousand units

12 would be an honest mistake, but if it's

13 flagrant, then I think you know the answer to

14 the question. But I think judgment comes into

15 play also.

16 MR. WHITE: Well, I guess what I'm

17 saying is, the guy that makes a thousand-unit

18 mistake, he's probably going to take his own

19 death penalty option. He's going to close up

20 shop and that's going to be that. And that's

21 -- unless he has a big errors or omissions

22 policy or bond or some such, that's -- it's
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1 going to be a different outcome.

2 But in smaller scale, probably he's

3 going to do what he can to make the situation

4 right. Or he's going to close.

5 MR. RAWALD: Okay. So what I hear

6 folks saying is at least the most simplest and

7 powerful method of either avoiding being

8 labeled a routine violator in the first place

9 or having it obviated once labeled, would be

10 replacement of the units that you installed

11 that were noncompliant.

12 Is there anything else that we want

13 to say would be sufficient to lower someone

14 from being a routine violator back to being

15 just an ordinary citizen doing their job?

16 MR. WHITE: I know you've talked

17 about -- this is Chuck White again. In other

18 situations you have a penalty or -- and I --

19 if that kind of thing is palatable, I suppose

20 that's an option. But I -- again, the spirit

21 of things, that's not really what you're

22 after.
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1 You're after the energy savings, the

2 -- I don't know. I guess I'm not saying that

3 replacing with compliant should be the only

4 opportunity, but I don't know what else there

5 is.

6 MR. MCCRUDDEN: This is Charlie with

7 ACCA. I don't know what would satisfy DOE. 

8 And so I could say that the contractor has to

9 demonstrate an understanding of the rules,

10 going forward.

11 So is that demonstrated through a

12 test that is given? That's, you know, it's

13 almost like going back to driver's ed, when

14 you've been, you know, you've got a couple of

15 moving violations.

16 There's nothing like that, really,

17 for this. And I don't -- you don't want make

18 that. And --

19 (Simultaneous Speaking)

20 MR. RAWALD: I'm open to

21 suggestions, but seeing as this is a

22 bureaucratic issue --
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1 (Simultaneous Speaking)

2 MR. MCCRUDDEN: Yes. I'm just

3 trying to figure out what might satisfy you,

4 because so much -- I mean, replacing the unit

5 is permanent and it's visible. I mean, if

6 there are very few of these, there's no

7 purpose in developing a test or certification

8 or a certificate that I did this.

9 Are there other -- do you let --

10 what do you do when you go after

11 manufacturers, and how do you let them back

12 in?

13 MR. RAWALD: Right. So our process

14 is much simpler, in that we find somebody

15 noncompliant, we announce it. We give the

16 manufacturer the opportunity to change the

17 product and they can sell it in the changed

18 form, but they have to change the model

19 number.

20 Regardless, they -- we then assess

21 full penalties for all the ones they sold that

22 were bad. Now, in assessing the appropriate
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1 civil penalty we consider certain things, as

2 Tim has talked about, and I gave you the

3 guidance in that sense, personally.

4 And many of those things include how

5 bad it was, how many you sold, but also, you

6 know, how bad the product was at failing, was

7 it close or was it far off, you know, what

8 you've done since then, how cooperative you

9 were with the course, in the course of the

10 investigation and those kind of factors.

11 So those are unique to that case,

12 though. I can't see how a lot of those would

13 apply to the incidence of trying to mediate or

14 mitigate the finding of a routine violator.

15 MR. MCCRUDDEN: And potentially they

16 could just create a -- the manufacturer could

17 create a new model number, just through

18 commerce, that is compliant. And so they have

19 the automatic opportunity to get back, whereas

20 this takes that opportunity away. This is --

21 you've got a --

22 MR. WHITE: This is Chuck White
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1 again. If I understand from our discussion of

2 your definition, unless it's a prohibited act,

3 you can't collect money from me.

4 MR. RAWALD: Right. I have no

5 mechanism by which I can collect money. And

6 I think it would be difficult for me to say,

7 pay this thousand dollar fine and we'll get

8 you off the bad person list. That would be

9 hard for me to square that with the statutory

10 scheme. So --

11 MS. SHEPHERD: But Doug, do you

12 think, could you do that bullet, to get them 

13 off the list, to say -- because I'm assuming

14 this is at their cost, right? And do you have

15 the authority to do that, do you think?

16 MR. RAWALD: Demonstrate an

17 understanding, I mean, I think that would be

18 --

19 MS. SHEPHERD: No, no, not that one. 

20 The one above it. So can you being, just be,

21 to say that you could get off the list if you 

22 -- could you --
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1 MR. RAWALD: Right. I think it's 

2 because this went with our policy, which has

3 always been remedial actions are from, you

4 know, the Department will consider. And I

5 think the Department could view its authority

6 broadly enough on the determination of a

7 routine violator to say, somebody who fixes

8 bad things is no longer a routine violator.

9 MS. SHEPHERD: Right. And so you

10 --it would be comfortable, like at their cost?

11 MR. RAWALD: Yes. I would be

12 comfortable with that.

13 MS. SHEPHERD: Okay.

14 MR. RAWALD: And I think the

15 Department would probably, too. I haven't

16 asked the question but I think it's a pretty

17 fair one. I think it's the easiest one, of

18 all the ones I can think of.

19 MR. SACHS: This is Harvey, and I,

20 of course, am very sympathetic to that. But

21 if my colleague, Charlie Harak was still with

22 us, he would be insisting that remediation
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1 does not replace the lost energy savings while

2 it was in use, and imposes additional burdens

3 in terms of scheduling the remediation and all

4 that sort of stuff.

5 So Charlie, being a good attorney,

6 would probably be arguing that it should be

7 remediation plus.

8 MR. RAWALD: Plus a paycheck to the

9 consumer for their lost --

10 MR. SACHS: I don't want to talk

11 about driving the consumers, but it --

12 MR. RAWALD: Right.

13 MR. SACHS: -- might be that other

14 considerations, whether it's a dinner at a

15 good restaurant --

16 (Laughter)

17 MR. SACHS: -- or replacing it with

18 a SEER 15 or -- I just want to make the case

19 that the consumer who has been defrauded is

20 not made whole just by the replacement.

21 MR. RAWALD: Right.

22 MR. SACHS: It could be an extended
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1 warranty, for example. That might be a very

2 appropriate thing to give someone a service

3 contract. Things like that take away --

4 provide real consumer benefits to make the

5 gesture of making the consumer whole.

6 MR. RAWALD: Okay.

7 MR. HUNGERFORD: Beyond the other

8 year of useful life he's getting out of the

9 new unit.

10 MR. SACHS: Or three.

11 MR. HUNGERFORD: Or three.

12 MR. WHITE: And I will say to you --

13 Chuck White again, if you make it too hard --

14 MR. SACHS: Well understood.

15 MR. WHITE: -- you got your unit and

16 I'm no longer in business. And you go get

17 your SEER 14 wherever you'd like. So I

18 understand that there's some lost opportunity,

19 but the contractor's -- if he's changing that

20 unit out of pocket, he's got a lot of skin in

21 that fold, that's --

22 MR. SACHS: I'll pass that along to
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1 Charlie, Charlie Harak.

2 MR. RAWALD: Yes.

3 MR. WHITE: Go right ahead.

4 MR. SACHS: Right.

5 MR. RAWALD: And this is Doug. And

6 so I guess, in some way, we have to keep in

7 mind that while Department of Energy cares

8 about consumers and everyone else involved

9 here, you know, our goal is the saving of

10 energy, right. So that's the primary goal.

11 And so citizens have the ability to,

12 if they feel they're not made whole by the

13 regulatory repair scheme we have evolved, they

14 can bring an action against the contractor for

15 the rest of the thing they feel necessary to 

16 make themself whole.

17 So they could always sue the

18 contractor and say, in addition to that, I

19 still need 500 bucks for those extra energy

20 bills. I want to pursue it. So there's that

21 concept that always goes for the consumer.

22 MR. FENSTROM: So this is Gary. We
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1 talked about this remediation as an

2 alternative to being forced out of business,

3 the execution, and to look at the way building

4 standards work, if you apply for a permit and

5 do something that the building inspector deems

6 to be incorrect, the building inspector

7 requires you to fix it.

8 So far as I'm concerned, if the

9 violating contractor fixes it, that should

10 allow them to get off the hook with DOE.

11 MR. RAWALD: Okay. And I think once

12 again, it's the easy one. That's the most

13 easy answering one. I guess the question is,

14 is there any other things that would -- and I

15 don't think there's anything else that rises

16 to that level, right?

17 So everything else seems much -- to

18 fall short, and not meet the needs of the

19 Department, that I can even think of, so I

20 don't know. I'm open to ideas, but I can't

21 think of anything else.

22 MS. MEYERS: So this is Karen with
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1 Rheem. Would this information be made known

2 to manufacturers? Because I can see what

3 would happen. They're going to go in there

4 and punch holes in the coils, and then claim

5 a warranty claim on them to get a new unit.

6 They're going to process a warranty

7 to help pay for having them -- them having to

8 replace the noncompliant unit in some way.

9 MR. RAWALD: No, that the thing --

10 MS. MEYERS: And it's not an

11 uncommon practice. So I want to make sure

12 that, as a manufacturer, I'm not somehow

13 getting, having to pay for this unit.

14 MR. RAWALD: Well, and that's a

15 valid concern. You know, so we're addressing

16 two possibilities. One is, I've found someone

17 to be a repeat violator, so it's been

18 announced and everyone is aware of that, and

19 now they're trying to take action to cure

20 that, to get off that list.

21 And there's a possibility that

22 before I ever do anything, they said, no, no,
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1 I fixed that issue, I fixed it. So in this

2 latter case, the investigation would be

3 completed without a public finding unless you

4 felt there should be one.

5 And I don't mind doing that. I

6 don't mind embedding in there, for remedial

7 actions, a discussion with the manufacturer

8 about what took place over replacing that

9 unit.

10 MS. MEYERS: You think that you will

11 have the serial number with the non -- if you

12 were to find a violation, would you capture

13 that serial number --

14 MR. RAWALD: Well --

15 MS. MEYERS: -- in your, on your

16 website, or I don't know what -- I've got to

17 be careful what I'm asking here, but --

18 MR. RAWALD: Right. I see what

19 you're asking. And so I would hope we could

20 but, you know, we're -- I mean, if they

21 replace it before we ever know about it, and

22 so they -- we'd never actual see the original
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1 unit they replaced. It wouldn't happen.

2 If I saw a unit, I had the serial

3 number, we said this is bad, the guy said, I'm

4 replacing it, then yes, we'd be able to trace

5 it back and let you know, hey, serial number

6 XYZ, did you get that back, and what happened

7 with it?

8 MR. ROCKY: Okay, so --

9 MS. WALTNER: What -- go ahead.

10 MR. ROCKY: Go ahead.

11 MS. WALTNER: Karen, wouldn't you

12 know if you're getting a service call for a

13 SEER 13 unit installed in a state where it

14 shouldn't be? Because, I mean, you know from

15 the serial number what the manufacture date

16 is.

17 MS. MEYERS: I don't personally get

18 that information, so that's going to go to my

19 warranty department.

20 MS. WALTNER: Right.

21 MS. MEYERS: They may have no idea

22 about anything about a violation or whether --
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1 it's really an automated process that may not

2 have any human intervention in it.

3 MS. WALTNER: Okay. Because it

4 seems -- I mean, it seems like you could add

5 a check in your warranty process of whether

6 this was illegally installed.

7 MALE PARTICIPANT: You'd have to

8 know a lot more information.

9 MS. MEYERS: Yes, I have to -- and

10 it may not just be the unit. They may be

11 trying to recapture some of the savings by

12 claiming the compressor, which is, you know,

13 80 percent of the cost of the -- well, that's

14 probably not true but, you know, they may not

15 -- they may file three warranty claims on this

16 unit over the cost of, you know, the

17 compressor, then the motor, then --

18 MR. ROCKY: So I'm -- yes. So I'm

19 going to go another tack. Because I know

20 where you --

21 MS. MEYERS: This is going way

22 beyond, I think --
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1 MR. ROCKY: So we're talking about

2 remedial action to get off the list of being

3 a violator. Where do they buy new equipment?

4 MR. RAWALD: Where do they buy the

5 equipment they no longer can buy?

6 MR. ROCKY: The new equipment, that

7 --

8 MR. RAWALD: Right.

9 MR. ROCKY: The 14 SEER or 16 SEER

10 --

11 (Simultaneous Speaking)

12 MR. RAWALD: Ostensibly, they'd have

13 to, we'd have to all work together to allow

14 it, and the Department would then say to the

15 manufacturer --

16 MR. ROCKY: Okay.

17 MR. RAWALD: -- you can sell it to

18 them. So yes, but we'd all have to know.

19 MR. ROCKY: How are you going to fix

20 what you can't buy?

21 MR. RAWALD: That's what I'm saying. 

22 I'm saying --
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1 MALE PARTICIPANT: Catch 22, you're

2 burning up.

3 (Simultaneous Speaking)

4 MR. RAWALD: So I with you on it. I

5 have the same question, which is, you know,

6 they wouldn't be able to just buy without

7 letting us know. So they'd have to let us

8 know they want to fix it.

9 MR. ROCKY: So, so --

10 MR. RAWALD: We'd have to facilitate

11 the --

12 MR. ROCKY: -- a dispensation from

13 DOE to go to a manufacturer, to a distributor

14 that said, yes John --

15 MALE PARTICIPANT: Here's my note.

16 MR. ROCKY: -- here's my note. I

17 can buy this unit. I understand. And this --

18 I'm trying to think of all the -- I had the

19 first thought that I didn't say, was like

20 Karen said, you know what, if I'm a contractor

21 and I'm on this list, I'm going to have all

22 sorts of warranty issues to get units because
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1 as Chuck said, this is important.

2 I'm not going to spend the money if

3 I don't have to. And if I can figure out how

4 to get the manufacturer to give me a unit

5 under warranty for the homeowner, that the

6 homeowner doesn't have to pay for, you know,

7 holes all over.

8 But then I realized, and this is

9 Bryan, how do I buy a unit if I'm on the

10 no-sell list?

11 MR. RAWALD: Right. You have to

12 come through me. I have to let the

13 manufacturer know you will be exempt from

14 civil penalties for selling to this person for

15 this purpose.

16 MR. ROCKY: And then we have --

17 MR. RAWALD: Then we have complete

18 track of what's going on.

19 MR. ROCKY: Yes. And then -- so

20 there has to be -- this can't be a -- we go to

21 the website of the manufacturers and see if

22 Chuck's Heating and Air Conditioning has had
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1 a status change.

2 There has to be a special process,

3 right, that allows notification that this is

4 an acceptable remediation. And then at some

5 point they're going to come off the list,

6 right. And there's another notification. It

7 says -- goes through the chain, up and down. 

8 Yes, Chuck's Heating and Air Conditioning is

9 now good, you know, we can do business with

10 them again.

11 MR. RAWALD: I like how logical you

12 always are, Bryan, because it really helps me. 

13 And I absolutely agree with all that thought,

14 so.

15 MR. HUNGERFORD: This is David. As

16 a practical matter, we're still tracking less

17 than 100 events a year. Given the

18 investigation capability of DOE, it seems like

19 DOE could pick up the phone and call reg

20 affairs at the manufacturer and say this

21 person's now off the list.

22 MR. MCCRUDDEN: This is Charlie. 
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1 It's just --

2 MALE PARTICIPANT: Who won't buy,

3 yes.

4 MR. MCCRUDDEN: Okay. What we're

5 talking about here is getting someone off the

6 routine violator list. So they're already on

7 that routine violator list. But let's take a

8 few steps back.

9 There is an incident where you have

10 suspicion -- and so you've started an

11 investigation into the violation, not an

12 investigation into sort of deeming someone a

13 routine violator. Would these remedial

14 actions work for keeping a violation from

15 occurring?

16 MR. RAWALD: Right, from us finding

17 a violation?

18 MR. MCCRUDDEN: From you making a

19 finding of a violation.

20 MR. RAWALD: Right. Like I told you

21 --

22 (Simultaneous Speaking)
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1 MR. MCCRUDDEN: In that case,

2 they're not on the list yet. They can buy the

3 equipment to remediate, and I think it's more

4 likely that if it's the one-off situation, the

5 person we don't want to penalize, they'll take

6 that remediation because they want to avoid

7 the violation notice.

8 MR. RAWALD: Right. But that --

9 which is Karen's concern that they'll be the

10 person to do the warranty --

11 MR. MCCRUDDEN: I understand that.

12 MR. RAWALD: So what I think what

13 will have to happen is, is that I would need

14 proof from the person of the serial number of

15 the unit they took out, and the serial number

16 they're replacing.

17 I would go back to Karen and say,

18 Karen, here's what they had. Did they do this

19 appropriately or did they, you know, do some

20 unsavory methods in order to get it back to

21 you?

22 And you'd say, oh, that's the one we
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1 got back full of holes. And I'd say, okay

2 contractor, we understand what you're doing

3 and I don't -- I still think you're a

4 violator.

5 MR. MCCRUDDEN: Do you care that

6 that happens?

7 MR. RAWALD: Do I care?

8 MS. MEYERS: Yes he does.

9 MR. RAWALD: Well, I will if you --

10 (Simultaneous Speaking)

11 MS. MEYERS: I want you to care.

12 MR. RAWALD: Right.

13 (Simultaneous Speaking)

14 MR. MCCRUDDEN: Do you want to

15 insert yourself in that transaction?

16 MR. RAWALD: I think I do, because I

17 think that to me, he's still a violator,

18 right. Like, I mean, he's trying to skate any

19 way possible, which --

20 MR. MCCRUDDEN: Okay.

21 MR. RAWALD: -- we don't want --

22 part of the thing is that you feel the
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1 financial pain of replacing the unit as the

2 reward for your effort to skate in the first

3 place. And if you don't feel the financial

4 pain, then you're avoiding the consequence.

5 MR. MCCRUDDEN: At this point,

6 there's no transparence -- there is

7 transparency that this is a public -- it's not

8 public, but there -- the relationship between

9 that contractor and that manufacturer now has

10 this black mark.

11 Because they may not reach the

12 violator level because they may remediate and

13 they may not take the actions that Karen's

14 concerned about, but now they've got, whether

15 it's in their own database, internally or in

16 the back of their mind, they say oh, this guy

17 almost got a violation.

18 And that takes me back to things I'm

19 concerned about. I can't control this. I

20 just want to make sure we're thinking about

21 that and how --

22 MR. SACHS: Charlie? This is a
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1 question for you but also for Jon. This is

2 Harvey. It seems to me that that's sort of a

3 notice that's at the same level as this guy's

4 check bounced. This is something that becomes

5 a legitimate business concern.

6 It's not a death penalty, but it may

7 mean that that branch of Jon's distribution

8 starts saying, we've got to watch people who

9 come in from Chuck's contracting.

10 MR. MCCRUDDEN: I agree. And I

11 think that the check bounce sort of analogy is

12 pretty good, because there are times when your

13 bank calls you before they send it through a

14 second time.

15 And so, in this case, the check

16 doesn't bounce, because you've been able to

17 dump some funds in there, not that I would

18 have any experience with that.

19 MR. HUNGERFORD: It doesn't happen

20 that way anymore. We don't have paper checks.

21 MR. MCCRUDDEN: I don't know. I was

22 just call it --
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1 MR. HUNGERFORD: It goes instantly.

2 MR. MCCRUDDEN: But it still doesn't

3 become a bounced check violation, but there,

4 the bank still knows that technically,

5 somebody else knows.

6 MS. SHEPHERD: Or the manufacturer

7 knows, though, because I'm sorry to say

8 Shepherd, vis a vis the contractor, and how

9 often is the manufacturer selling directly to

10 the contractor, such as they're going to say,

11 oh this is my contractor list of bad

12 contractors, so all distributors I work with,

13 I want you to make sure you don't deal with

14 Charlie. I don't how long that it --

15 MR. RAWALD: Right. And I also say 

16 that you might also have the market outcome of

17 maybe he'll be more careful before they make

18 a lot of mistakes because they know that they

19 might be seen to -- might be found out that

20 way. So they'll be more careful than they

21 otherwise would be, because there are

22 consequences.
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1 MR. SACHS: This is Harvey, and what

2 I'm appreciating now is that this conversation 

3 is really about building the non-nuclear

4 options, the non-death penalty options. I

5 think that's an important part of our task.

6 MR. RAWALD: Okay.

7 MS. SHEPHERD: This is Amy Shepherd. 

8 Is it feasible that before the Department were

9 to take someone off the routine violator list

10 that they got a confirmation from the

11 manufacturer there had been no warranty claim?

12 MR. RAWALD: I think so. I think

13 that's very doable.

14 MS. SHEPHERD: I'd -- so I guess I

15 ask the manufacturers, like how burdensome

16 would that be if you were contacted -- like,

17 so my question is, to avoid your issue --

18 MALE PARTICIPANT: That'd be pretty

19 easy for us. You're asking whether or not,

20 well we could tell whether or not --

21 MS. SHEPHERD: They can't get off

22 the list until DOE receives notification from
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1 the manufacturer there's no warranty claim

2 made on whatever --

3 MALE PARTICIPANT: What, the

4 registration warranty claim, compliant?

5 MALE PARTICIPANT: On the

6 noncompliant unit.

7 MS. SHEPHERD: On the --

8 MALE PARTICIPANT: On the

9 replacement unit.

10 MS. SHEPHERD: On the noncompliant

11 unit.

12 MALE PARTICIPANT: That they haven't

13 shot it full of holes, or --

14 MR. RAWALD: Right.

15 MR. HUNGERFORD: Question, this is

16 David. That's triggered something for me. 

17 What kind of evidence would be required in

18 order to demonstrate that the remediation had

19 occurred, that the new unit had been put in? 

20 Would you need a bill of sale for the -- from

21 the distributor, for a unit to be installed at

22 that address?
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1 MR. RAWALD: Yes, that's a good

2 question. So I haven't really thought through

3 what we want. So it seems like you want to

4 have confirmation from the homeowner that the

5 thing is in their house. So that would be the

6 most --

7 MR. HUNGERFORD: And a bill of sale

8 showing -- maybe a bill of sale. In that case

9 you might already have the information you

10 need to demonstrate that a warranty claim

11 wasn't made, wouldn't you?

12 MS. SHEPHERD: I think only the

13 manufacturer would know that.

14 MALE PARTICIPANT: So you think he

15 would.

16 (Simultaneous Speaking)

17 MR. HUNGERFORD: Is there some way

18 that can be constructed in such a way that

19 that piece of information is included?

20 MR. ROCKY: You're talking about a

21 system tracking where you'd have to go back in

22 and literally cross reference an old model
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1 number and indicate that that had been taken

2 out of service and could no longer be used by

3 anybody, and this was replaced by another

4 serial number as a valid system.

5 MS. SHEPHERD: No. I was thinking

6 more along the lines that you could -- and I

7 don't know if this is possible. Can you just

8 check to see whether if you have a serial

9 number? Like so -- because that, they'll have

10 the replacement parts number, right?

11 MR. HURST: If you give me a serial

12 number, I can tell you whether or not I've had

13 a warranty claim.

14 MS. SHEPHERD: How hard is that? 

15 How hard is that?

16 MR. ROCKY: Or whether it's

17 registered as a warranty -- a registered

18 warranty.

19 MR. HURST: I can tell you if it's

20 registered and if it's had a warranty claim

21 against it.

22 MR. ROCKY: Yes.
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1 MS. SHEPHERD: I just thought, yes,

2 so -- because that could be one of the pieces

3 of evidence that you've got to present before

4 you are off the list, assuming that that isn't

5 too burdensome.

6 MR. HURST: Yes.

7 MR. HUNGERFORD: Yes. I was just

8 trying to think of a way that the evidence

9 that they presented sort of made -- puts DOE

10 on the hook to be able to prove that it didn't

11 have the warranty claim, and it sort of just

12 leaves the manufacturers out or makes it very

13 simple.

14 MR. RAWALD: Okay. So with this

15 remedial action built in to the concept of the

16 prohibited act based upon violations, are

17 people more comfortable than you were before

18 lunch on this issue?

19 MR. MCCRUDDEN: This is Charlie. 

20 I'm more comfortable. I still want to see

21 what the routine violator threshold is, where

22 we set that, okay, and review the factors that
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1 go into all that.

2 MR. RAWALD: So you -- let's go back

3 to the factors.

4 MR. MCCRUDDEN: Well actually, why

5 don't we go to -- I think we'd better go to

6 routine violator threshold.

7 MR. RAWALD: Okay.

8 MR. MELCHI: Doug, this is Jon from

9 HARDI. So, just under that remedial actions,

10 so say Chuck's company put out that he's got

11 -- I mean, would termination of an employee

12 also kind of count towards that, or are we

13 just talking about things that --

14 MR. RAWALD: So I list that as

15 things that would help me, before I ever --

16 MR. MELCHI: Okay.

17 MR. RAWALD: -- found someone a

18 routine violator. So if I have got to Chuck

19 and I said, hey Chuck, I see here you had five

20 installations of SEER 13, and what's happening

21 is those were all Tommy's jobs and we fired

22 Tommy, so they figured it out.
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1 MR. MELCHI: Okay. All right.

2 MR. RAWALD: So then I might not

3 find Chuck to be a routine violator because he

4 already took action, so it wouldn't even get

5 to that level.

6 MR. MELCHI: Okay.

7 MR. RAWALD: So.

8 MR. MELCHI: Thank you.

9 MR. RAWALD: I would be -- I'd

10 prefer it if he said, yes, we fired Tommy and

11 we replaced all those bad units. That'd be my

12 preference, right. But so we take it case by

13 case, I think.

14 MR. SACHS: Well, we fired Tommy and 

15 replaced two out of five.

16 MR. RAWALD: Right, something. Yes.

17 MR. WHITE: I got warranty claims

18 pending on the other three that --

19 (Laughter)

20 MR. WHITE: I'm short on shopping.

21 MR. SACHS: One point for you,

22 Chuck.
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1 MR. HUNGERFORD: This is David. I

2 just want to add just a little information to

3 that. We -- the Energy Commission of

4 California -- found itself presiding over a

5 complaint at one point, where a -- I won't go

6 into the details, but a business owner who

7 employed a number of employees that were doing

8 things that were regulated by the Energy

9 Commission.

10 Would the -- a couple of individuals

11 were found to have cheated on the paperwork,

12 and they were summarily fired by the owner. 

13 As it turned out, we ended up presiding over

14 complaints where those two employees filed a

15 complaint saying, we were directed to do this

16 by the owner.

17 We were told this was the only way

18 we could do it. We were given a set of

19 responsibilities where we had to perform these

20 many functions in a day, which are half-day

21 functions, 12 functions in a day that we could

22 only do it once or twice a day.
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1 And so it was clearly the owner's

2 fault. But yet the blame was on the

3 employees. So just to be -- feeling a little

4 bit, feeling a little for the little guy.

5 MALE PARTICIPANT: Right.

6 MR. HUNGERFORD: I wouldn't want to

7 set up the situation that inadvertently

8 through -- gave a contractor that employed a

9 number of people the opportunity to throw

10 their employees under the bus to protect

11 themselves.

12 MR. RAWALD: Okay. But that -- I

13 would also understand that that employee would

14 have the remedy by suing the contractor, once

15 again, for firing him, and they could, you

16 know --

17 MR. HUNGERFORD: That's hard. They

18 don't have a job. They don't have an income

19 and they've got to feed their kids.

20 MR. RAWALD: Right.

21 MR. HUNGERFORD: You know, it's

22 unusual that they would have the opportunity
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1 to actually take -- hire a lawyer. Well, it's

2 a burden for them to have to do that.

3 MR. RAWALD: Okay.

4 MR. HUNGERFORD: So I'd like to set

5 it up so that that's not an option, a

6 possibility.

7 MR. RAWALD: Okay.

8 MS. SHEPHERD: Well, I was assuming

9 Doug isn't just looking for a sacrifice,

10 right? You're going to want them to have some

11 ability to prove to you that this was one

12 person and this is who it is, and this is how

13 we know it's not -- this one person, so.

14 MR. RAWALD: Right. Right, and I

15 would probably talk to that person as well. 

16 So, since I'd like to talk to you, if you

17 want, you guys can help.

18 So we had no slide that you

19 referenced, which was a threshold for

20 routinely --

21 MR. MCCRUDDEN: No. And I'm looking

22 back, and it's really kind of factor of number
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1 of violations. So go back to the "Assess

2 whether violations is routine", and it's the

3 first factor there, is what I was thinking.

4 But I'm also now, I'm wondering if

5 we actually should look at determination of

6 violation first.

7 MR. RAWALD: Okay.

8 MR. MCCRUDDEN: And then go from

9 that point to routine violator.

10 MR. RAWALD: Okay.

11 MR. MCCRUDDEN: Because

12 determination of violation, if you've got the

13 flexibility of building in remediation, there

14 may be points where violations don't occur

15 over a long period of time. It may happen, it

16 may get fixed, and therefore that contractor

17 isn't a violator.

18 MR. RAWALD: Right.

19 MR. MCCRUDDEN: Are you -- is that

20 how you see it?

21 MR. RAWALD: I'm comfortable with

22 that scenario.
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1 MR. MCCRUDDEN: Okay.

2 MS. SHEPHERD: So just to clarify --

3 this is Amy Shepherd, so this slide is then a

4 violation? It's not routine?

5 (Simultaneous Speaking)

6 MR. MCCRUDDEN: This slide,

7 basically, is the threshold to get from a

8 couple of violations --

9 MS. SHEPHERD: Okay.

10 MR. MCCRUDDEN: -- one violation, to

11 a routine violator, which is what you care

12 about.

13 MS. SHEPHERD: Right. Which would

14 -- but we wouldn't be using these factors for 

15 a violation, is what you're saying. So are we

16 talking about --

17 MR. MCCRUDDEN: Perhaps.

18 MS. SHEPHERD: Okay.

19 (Simultaneous Speaking)

20 MS. SHEPHERD: All right.

21 MR. MCCRUDDEN: I think determining

22 a violation is a one -- it just, once, it
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1 happens once.

2 MR. RAWALD: It's really a factual

3 inquiry.

4 MS. SHEPHERD: Yes, right.

5 MR. RAWALD: It's, is it bad or not.

6 MR. MCCRUDDEN: Right.

7 MR. RAWALD: And then if you did

8 something to fix it, then okay, then maybe I

9 said, well you fixed it, so we're going to

10 write this one off.

11 MR. MCCRUDDEN: Right.

12 MR. RAWALD: So --

13 MR. MCCRUDDEN: Is there a way to

14 spell that out?

15 MR. RAWALD: Yes there is.

16 MR. MCCRUDDEN: Okay. So I think

17 that -- let's do that first.

18 MR. RAWALD: So we have here the

19 subsequent remedial actions we see are

20 replacing noncompliant with a compliant unit. 

21 So I wouldn't find you to be a routine

22 violator because you have fixed the things you
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1 did.

2 So, and the finding of violation is

3 meaningless because it's just between me and

4 you. We're not publicizing that, so -- 

5 MR. MCCRUDDEN: We're not?

6 MR. RAWALD: Right. We're not. 

7 We're going to -- unless it's a prohibited

8 act, unless we have civil penalties associated

9 with it, so and then it's a whole different

10 ball of wax.

11 MR. MCCRUDDEN: Right.

12 MR. RAWALD: But as long as it's a

13 private transaction between me and the

14 contractor, then when I'm looking at the

15 assessment of whether he's a violator, I say,

16 well he did this one thing but he then fixed

17 it, so he's not going to be a routine violator

18 because he fixed it.

19 And I'll write it off that way, and

20 it won't be in the math equation for the

21 assessment of a routine violation.

22 MR. ROCKY: So this is Bryan. This
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1 is where I come back to having a little bit of

2 an issue now, relative to the thinking on

3 discussions on warranty claims and things for

4 violation by a contractor. If I don't know

5 about it, I have nothing to check.

6 MR. RAWALD: Right. No, I have to

7 do some legwork myself. I have to verify --

8 MR. ROCKY: But so --

9 MR. RAWALD: I'm not just going to

10 just say okay, fix that. I'm going to have to

11 verify with folks that it was fixed in the

12 right way, without sneaking in and going --

13 MR. ROCKY: So now you -- yes. So

14 you'd have to -- but I think to follow the

15 process, Doug, DOE now has to notify a

16 manufacturer that there was a violation that

17 has been remediated in the field.

18 And then we're going to have to go

19 back to our chain and say, did this particular

20 serial number have warranty claims or any

21 outstanding concessions, which can be done by

22 sales people as well as service people as well
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1 as distribution, relative to that serial

2 number?

3 And if so, then we now have to track

4 back to that contractor and say, you can't

5 have us pay for fixing your mistake.

6 FEMALE PARTICIPANT: Why are you

7 pointing at Chuck?

8 MR. ROCKY: No. I was pointing in a

9 general direction, not pointing at Chuck.

10 MR. RAWALD: Right. No, I hear

11 that, and I understand that manufacturers want

12 to build -- I think that's a -- I think that

13 makes -- I can understand --

14 MR. ROCKY: So I think we're headed

15 back around to where we said earlier -- and I

16 said it, I don't want to know of a violation. 

17 Now I think I have to.

18 MR. RAWALD: You don't have -- well,

19 to an extent, you're right. I mean, we don't

20 have to identify the violator, in looking at

21 it. You don't have to contact the contractor. 

22 All you have to say to me is well, he made a
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1 warranty claim on that. 

2 And then I can go back to him and

3 say, it doesn't count, buddy. You made a

4 warranty claim on that. So we're not going to

5 -- you know, and then I'm going to say you're

6 -- I'm not going to talk, not going to obviate

7 my decision to make you a routine violator.

8 MR. ROCKY: Yes, I got to think

9 about this.

10 MR. RAWALD: Okay. I don't mind.

11 MR. WHITE: But once you look

12 something up for a warranty claim, if the

13 warranty claim is there, the appropriate

14 information is there, where it was, whose

15 house, the installer.

16 MR. MELCHI: If he registered the

17 right address.

18 MR. WHITE: But if I turned it in as

19 a warranty, and I want to get reimbursed or a

20 new product or whatever, my name is attached

21 to that warranty claim.

22 MR. GIBBONS: Well, and timing, too. 
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1 This is John. The timing of that, too. A

2 claim may not show up for who knows when.

3 MR. HURST: Yes. Well, and you're

4 assuming that the person that sees the

5 warranty claims is full up on federal

6 regulations. It could be Mabel stuck down in

7 the accounting department. She doesn't have

8 a clue as to what -- she just processes

9 transactions, so.

10 MR. WHITE: Well what I'm saying is

11 if he goes and accesses the database, and it

12 is there, there was a claim, you're going to 

13 know --

14 MALE PARTICIPANT: We have the

15 information.

16 MR. WHITE: You're going to know who

17 it was. You can't very -- maybe it's the next

18 screen, but I would assume it pops up with the

19 record of the unit, and all the stuff is

20 there.

21 MR. ROCKY: So this is Bryan. So

22 I'm trying to figure out, Chuck, if I get
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1 notified by the Department of a violation, not

2 a routine but a violation that included

3 remediation, I think I have to immediately go

4 through the entire process of flagging that

5 model serial number in my systems, wherever it

6 appears, warranty, field service, sales,

7 whatever, and put a flag on it that said this

8 unit has been identified as a potential

9 violation of federal law, and pop the flag up.

10 And anything comes to this, we're

11 going to have to investigate, including

12 possible -- turn that back to that contractor

13 through our distribution partner that says

14 they violated and they remediated.

15 MR. WHITE: Right.

16 FEMALE PARTICIPANT: Did they --

17 MR. ROCKY: Great. Now we have to

18 do something because they did it by warranty

19 claims or sales concession or whatever.

20 (Simultaneous Speaking)

21 MR. WHITE: Correct. I agree.

22 FEMALE PARTICIPANT: Should we --
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1 MR. EISNER: Doug, do you have to

2 notify when they're in violation, or can you

3 simply notify them that you want to know

4 whether there was this, a warranty claim?

5 MR. RAWALD: They're saying it

6 doesn't matter. Once I give them the serial

7 number, they're going to be able figure it

8 out. That's the point. So --

9 MR. EISNER: Only if they know that

10 it was installed in --

11 (Simultaneous Speaking)

12 MR. RAWALD: Why else would I be

13 asking about a warranty?

14 (Simultaneous Speaking)

15 MR. EISNER: No. Because we've

16 already been told that a lot of the times that

17 the contractor is the one that puts his or her

18 address under, for the address. So you don't

19 necessarily know that it's been installed in

20 the wrong place.

21 MR. ROCKY: So Neil, at this point,

22 if the Department sends me something that
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1 says, check on this serial number, I'm going

2 to have to assume it's a violation. And then

3 we're not liable under knowingly or should

4 knowing discussion.

5 We're going to have to follow up

6 with that, and find out, and flag that unit,

7 that record to see if there was an actual

8 violation or a new -- this is part of a

9 routine violation.

10 It's that -- you do something here,

11 it's going to force me to all these other

12 things, and if nothing else, for my own

13 protection as manufacturer.

14 MR. ELLIS: This is Ray Ellis from

15 Lincoln Electric. Doug, this is after you've

16 made a determination that there's been a

17 violation?

18 MALE PARTICIPANT: It could be

19 before.

20 MR. RAWALD: Well, still --

21 MR. ELLIS: Because if you do

22 determine that there's a violation, can you
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1 not tell the contractor that he cannot turn

2 this in on a warranty?

3 MR. RAWALD: Right. I can make that

4 to clear to them. I can say, listen, if this

5 -- I certainly, what I'm saying to them --

6 MR. ELLIS: To preempt all this?

7 MR. RAWALD: -- that they should not

8 be -- we're going to track it back. I can

9 inform them of that fact.

10 MR. ROCKY: And that might be the

11 appropriate discussion, and it still provides,

12 as Chuck was talking about, it means

13 dis-incentive to the contractor to try to game

14 the system, because if nothing else, there's

15 an awareness that DOE says hey, we're going to

16 be tracking this, and we get to go back to the

17 manufacturer. We might still come back to you

18 if you try to pass this off as warranty or

19 some other thing.

20 If the remediation is you as the

21 contractor fix what you did wrong, then you're

22 liable to do that and not try to pass the cost
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1 of that off to somebody else. Maybe that's

2 the terminology that Chuck and Charlie can get

3 to work on.

4 MR. HUNGERFORD: Yes. This is

5 David. See, it seems like -- maybe I missed

6 part of the conversation, but it seems like we

7 were talking about remediation as potentially

8 happening on both sides of the violation

9 decision.

10 (Simultaneous Speaking)

11 MR. RAWALD: The routine violation

12 decision. On the deeming, the making of the

13 finding is only with a routine violator.

14 MR. HUNGERFORD: Okay.

15 MR. RAWALD: So, I mean, ostensibly

16 someone might decide to replace the unit

17 before I ever find the violation's happened,

18 but that would be pretty early in the process.

19 What I think is most likely is I'm

20 going to say, well the violation is -- oh,

21 well I'm going to go fix that, or I'm fixing

22 it now.
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1 And then, so okay, well just so you

2 understand, as part of this process, if you

3 claim a warranty on that in order to do your

4 remediation, I will find that out, and that

5 will not count as remediation.

6 And your contractor -- and your

7 manufacturer will not view that kindly when

8 they find that out and they will have a black

9 mark when you're dealing with them in the

10 future. So there's a lot of unintended

11 consequences of your trying to save the money

12 to do, to fix what you broke.

13 MR. MCCRUDDEN: But in that scenario

14 you just described, it's still not up for

15 violation, because they've remediated.

16 MR. RAWALD: Well, so it's --

17 MR. HUNGERFORD: Violation

18 remediation prevents routine violation.

19 MR. RAWALD: Right. That's how I

20 view it. And so what I would say is, so if

21 you have skirted the system in order to

22 remediate, I would think that would not
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1 actually count as remediation.

2 MR. MCCRUDDEN: Okay. So what

3 you're saying is, looking at your time line

4 here, complaint, investigation -- the

5 investigation is discussion, or possible

6 subpoena for the records.

7 The contractor knows this. He gives

8 you the records. He sees, oh my gosh, I know

9 what you're talking about. I'm going to go

10 out and fix this. So before we get to you

11 finding a violation, they've fixed it. But

12 what you're saying is, that's still going to

13 be a violation.

14 MR. RAWALD: Because between you and

15 I, I'm going to say it's a violation but it's

16 not going to count for anything. It's going

17 -- because you fixed it. And so you and I

18 will -- there's a fact there that the

19 violation's been committed, but it not will be

20 weighed in any sort of analysis toward a

21 routine violation because of the fact that you

22 fixed it.
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1 MR. MCCRUDDEN: Oh okay. Now I have

2 a better understanding of it.

3 MR. EISNER: But then next week you

4 find another one by the same contractor.

5 MR. MCCRUDDEN: Sure.

6 MR. RAWALD: Right.

7 MR. EISNER: He fixes it, so you

8 don't put it in the file as a violation. Then

9 the third week you find another one. Are you

10 going to say he's never going to be a routine

11 violator because he's always going to fix them

12 when you catch him?

13 MR. RAWALD: Right. So that's not

14 what I'm saying. What I'm saying is that in

15 the analysis I'm going to look at, if he fixes

16 it, it's a violation, but I'm taking into

17 consideration he fixed it.

18 So it could be -- if he has 20

19 violations with 20 fixes, like I said, this

20 guy's a routine violator. He just -- that's

21 past the point of any sort of reasonableness.

22 MR. HUNGERFORD: This is David. I
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1 guess I'm wondering at what point in the

2 process you initiated action, before or after 

3 you've done enough investigation to figure out

4 whether there were multiple violations.

5 Because, for instance, if somebody

6 -- if you hadn't pulled all his records, or

7 you didn't have access to them, or he just

8 didn't give you records that you don't know

9 exist, and so you can't know whether he,

10 you're given all the records.

11 He could come in for a -- he gets

12 cited for a violation. He could remediate

13 that. But in the meantime, he might have five

14 other installations that he doesn't get caught

15 with that he starts punching holes in the

16 lines and getting, making warranty claims on

17 those others before you know they exist.

18 MR. RAWALD: Right.

19 MR. HUNGERFORD: And it's extreme

20 case, but --

21 MS. MEYERS: But this is Karen with

22 Rheem. Didn't you say -- wasn't the
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1 conversation when we were talking about record

2 retention, that you wanted records kept for

3 all units, so if you were doing an

4 investigation on one unit, on one installation

5 you could determine at that point if there

6 were multiple violations?

7 MR. RAWALD: Yes.

8 MR. HUNGERFORD: Okay.

9 MR. RAWALD: Right. I think -- once

10 again, there are possibilities that a million

11 things that can happen in order to get around

12 whatever we regulate here. But I think this

13 is getting us closer to answering a lot of

14 people's questions and concerns you have.

15 MR. HURST: I just -- I think you

16 started to say it, but I want to make sure, be

17 clear is that it's not just warranty that the

18 contractor may try to skirt the issue. 

19 There's, you know, the no-hassle guarantees,

20 100 percent satisfaction guarantees, things

21 like that, that may not show up in a warranty

22 bucket. I just want to make sure --
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1 (Simultaneous Speaking)

2 MR. RAWALD: Yes, I'm not writing --

3 I take the language from you guys, because I

4 don't know what those terms are. So you guys

5 need to give me kind of the term that would

6 encompass all those things, or the individual

7 term that matter across the industry, so that

8 you can make sure that we're capturing that in

9 whatever we put together --

10 MR. HURST: I just want to make sure

11 that you have the conversation. The guy says

12 no, I didn't turn in a warranty claim but I

13 did turn in their no-hassle guarantee.

14 MR. RAWALD: Right.

15 MR. HURST: And I know it's -- 

16 MR. RAWALD: No, and Bryan's thing

17 about service concessions and other things

18 too.

19 MR. HURST: Right.

20 MR. RAWALD: So there are terms that

21 I'm not familiar with, but I'm hoping you guys

22 will give them to me, so that I can
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1 appropriately insulate everyone from people

2 trying to cheat this process.

3 MR. HURST: Yes, there's not --

4 manufacturers don't always get all the claims. 

5 Sometimes a distributor will take it upon

6 themselves to do a concession that we don't

7 get visibility to, so we don't see that.

8 MR. RAWALD: Okay.

9 MR. HURST: So we got to make sure

10 that there's no concession in general.

11 MR. RAWALD: Okay.

12 MR. ROCKY: So an example of that,

13 just for clarification for people, the

14 manufacturer may have a good warranty, but the

15 distributor, to maintain their good business

16 with a contractor may provide, as John's

17 saying, a no-hassle replacement unit.

18 If the compressor goes out, the

19 manufacturers, we say, okay that's good. You

20 know, if it happens within five years, that's

21 fine. That's our standard warranty. But the

22 distributor may, to improve their business
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1 standing with customers say, we're going to

2 replace that unit at no charge to the

3 contractor if there is this kind of failure --

4 MR. RAWALD: Right.

5 MR. ROCKY: -- to the homeowner,

6 right. And it may or may not have labor, so

7 that the homeowner doesn't suffer for a

8 warranty failure of extreme consequence.

9 MR. RAWALD: Understood.

10 MR. ROCKY: In those cases, that

11 goes to Jon's members, not to us, necessarily.

12 MR. WHITE: But -- this is Chuck

13 White, you're not going to give me a SEER 14

14 unit for a SEER 13 unit I turn in.

15 MR. ROCKY: It's going to be the

16 exact unit.

17 MR. RAWALD: Right.

18 MR. ROCKY: Well, okay. Let me

19 rephrase that. Different manufacturers word

20 that differently, but I believe everybody's

21 policies in those cases talk about the

22 equivalent model if available, or something to
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1 that effect.

2 So if a 13 SEER model has been

3 turned in, you're going to get a 13 SEER model

4 unless that model is no longer available by

5 that manufacturer. So now we're getting into

6 discussions as well. It's terms and those

7 type of sales promotion guarantee policies

8 that are not really at warranty.

9 MR. RAWALD: Right. But I can hear

10 Chuck's point is, if I shoot my SEER 13 full

11 of holes and then claim a warranty on it, I'm

12 not going to get the SEER 14 I want to replace

13 it. I'm going to get another SEER 13.

14 MR. ROCKY: I think the people that

15 monitor warranty claims are going to have some

16 interesting questions on those.

17 MR. HUNGERFORD: Yes. So you

18 install it down the street --

19 MS. MEYERS: Well --

20 MR. HUNGERFORD: -- and buy a SEER

21 14 unit for a replacement.

22 MS. MEYERS: So actually that is not
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1 true.

2 MR. HUNGERFORD: Okay.

3 MS. MEYERS: Because we -- if he had

4 put a 13 in a 14 SEER area, and then through

5 the warranty process, we would say, well the

6 unit that you shot holes in is no longer

7 available for installation in that area. So

8 you would get a 14.

9 MR. RAWALD: Okay. So they would?

10 MS. MEYERS: They would get a 14.

11 (Simultaneous Speaking)

12 MS. MEYERS: And in that case, your

13 warranty is the, what's legally available to

14 sell in that area.

15 MR. RAWALD: I had no idea.

16 MS. MEYERS: Same happened with 10

17 and 13. If you had -- you know, you had to

18 replace it with a 13. You couldn't replace it

19 with a 10.

20 MR. RAWALD: At no extra expense to

21 the contractor? Very well. Right. Okay. 

22 Then I understand the concerns, so I think
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1 we're trying to address that here as we build

2 this, so I think that this was -- I think we

3 have at least some sound ideas on how to make

4 this work.

5 MR. EISNER: If the homeowner says,

6 I don't want that crook in my house again, or

7 I don't want a mess made in my house with a

8 new installation, I just want you to

9 compensate me for your illegal act, what would

10 you do?

11 MR. RAWALD: Is "you" me again?

12 MR. EISNER: You.

13 MR. RAWALD: Okay. So --

14 MR. EISNER: It's a capital I.

15 MR. RAWALD: So no, I don't have an

16 answer to that. I don't know.

17 MR. WHITE: It's Chuck White. You

18 can -- other contractors could perform the

19 service.

20 MR. EISNER: Which would solve the

21 problem of having to go back to the

22 manufacturer. Make the penalty where you've
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1 got to hire another manufacturer -- another

2 company.

3 MR. WHITE: Well, it would mean

4 handing the contractor the bill, but that's

5 something that would have to be worked out.

6 MR. RAWALD: Right. So Chuck would

7 come to me and say, so I did a bad

8 installation. They wouldn't let me back in. 

9 I paid Charlie. Charlie went ahead and did

10 it. Here's all the proof of it. Can you

11 please let this go by the wayside?

12 And I'd say, okay, everything's

13 going to get solved here. Okay, no problem.

14 MR. WHITE: Right, which when we

15 originally talked about if you're on the list

16 and you can't buy equipment, that was my first

17 thought, I'll just sub it out. I'll just get

18 somebody else to do it for me that can buy it,

19 and make things whole.

20 MR. RAWALD: Okay.

21 MR. WHITE: As long as I make the

22 thing whole, as long as I make it right at the
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1 end of the day.

2 MR. DORIA: Well, this is Jordan. I

3 mean, I understand the point, and I think it's

4 conceivable that a homeowner might want -- but

5 it could be the other side of it, they may

6 just not care. We're going to force

7 remediation on a homeowner who doesn't want

8 it, right? I mean, I think we're giving them

9 the option, right?

10 And yes, their decision to take up

11 that option might impact the Department's

12 discretion in terms of determining routine

13 violation, I suppose, but I think also if a

14 contractor said, I tried to do the remediation

15 here, and here's the email from the homeowner

16 telling me to get lost, I would assume that

17 the Department could do that.

18 I guess what I'm trying to say is

19 we're not saying remediation has to occur,

20 right? I mean, so.

21 MR. BALLO: Well, we don't want to

22 be in the contractor slips 50 bucks to the
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1 homeowner in exchange for an email saying

2 don't come here.

3 MR. WHITE: Yes. Yes. We can try

4 for 20.

5 MR. SACHS: At this point, hearing

6 short silence, I guess --

7 MR. RAWALD: I wonder who let one of

8 those go.

9 (Laughter)

10 MR. SACHS: I know I'm among friends

11 when I start getting teased.

12 I just thought I'd toss one thing

13 out. I ran a few very rough numbers the other

14 evening for my own entertainment, on the cost

15 to the consumer of having had a 13 SEER

16 installed instead of a legally mandated 14.

17 And I did that for Virginia as being

18 a relatively northern state, and for Georgia

19 as a relatively southern state, because that's

20 just where the data allowed me to look at the

21 individual states.

22 The direct consumer harm -- this is
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1 ignoring things like differences in

2 dehumidification capability, just looking at

3 those numbers for energy use and cost, look to

4 be in the range of $17 to $21 per year per 13

5 installation where a 14 should have been

6 installed. So are these 50 percent --

7 MR. HUNGERFORD: Fifteen year useful

8 life?

9 MR. SACHS: This is the annual cost.

10 MR. HUNGERFORD: Right.

11 MR. SACHS: And then you can figure

12 the 15 year annual loss -- annual life. You

13 can present value if you want. It's just a

14 number that I thought would give us a scale

15 for the direct harm.

16 And if you run those numbers, you

17 would of course say that for a moderate

18 incremental cost of the 14, it certainly would

19 have been the more cost effective furnace. So

20 the consumer does have some harm.

21 MR. FENSTROM: So Harvey, this is

22 Gary. You didn't do it for California because
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1 it would have exceeded the floating decimal

2 point capability of your calculator?

3 MR. SACHS: Mostly because I don't

4 care about California.

5 MR. RAWALD: So are there any more

6 thoughts on this scheme here I've put

7 together?

8 (Simultaneous speaking)

9 MR. DORIA: Doug, this is Jordan. I

10 do have one question. I mean, I've been

11 assuming but it's not, I guess not perfectly,

12 but that's still not here. I've been assuming

13 that a person could go from having no

14 violations to being deemed a routine violator. 

15 But that's possible, right?

16 MR. RAWALD: Yes.

17 MR. DORIA: So, okay. I just, I

18 think that's an important point right, there's

19 not necessarily that stepwise progression,

20 right, from nothing to violator to routine

21 violator. You could potentially just become

22 a routine violator?
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1 MR. RAWALD: Right. If somebody

2 calls me and says, I'm out here in the tract

3 housing they're building in Florida, and

4 everywhere I look there is 13 SEER product

5 being put in these homes.

6 And so then I talked to that

7 contractor and I found out, yes, that's what

8 we're using. We're using 13 SEER in all 55 of

9 these houses we're building, then it's a

10 routine violation. That's --

11 MR. DORIA: And again, I -- like I

12 think we've all sort of intuited that from the

13 discussion, but I think from, when we're

14 talking about what -- to the extent that the

15 penalties have a deterrent effect, people in

16 seeing that there are violations and routine

17 violations could conclude, I can potentially

18 do certain things and now, early on I'm just

19 a violator.

20 But no, you can actually be, for 

21 your first, say set of transgressions, you can

22 actually be a routine violator. I think
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1 that's just an important point to potentially

2 just make clear in this process.

3 MR. RAWALD: Right. I think -- and

4 every time you commit a violation, the

5 probability increases that you're going to be

6 caught, and for everything that you've done in

7 the past, then suddenly it -- you become

8 exposed to -- the more of those things you've

9 done, the more you're going to likely be

10 deemed routine.

11 MR. EISNER: So everybody's okay for

12 now, with this being in the rule, the factors

13 that will be considered?

14 MR. MCCRUDDEN: This is Charlie with

15 ACCA. I mean, I'd almost be a little more

16 comfortable a number of violations, having a

17 number. Or maybe that's not beneficial.

18 MR. RAWALD: Well the problem is

19 that we -- well first we'd be guessing, right,

20 because we don't have any sort of empirical

21 data to base upon how often this is happening.

22 And secondly, we be kind of creating
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1 a safe haven for someone to commit a certain

2 number of violations without any risk to the

3 actual enterprise, which we don't want to do.

4 MR. MCCRUDDEN: Well, but again,

5 subject to -- one, two marks could be enough

6 to get the manufacturers to say, I don't want

7 to deal with you.

8 MR. RAWALD: Right. I mean, one or

9 two is not going to be enough for me, right. 

10 I mean, I think that the word routine has a

11 meaning in the dictionary, and it's going to

12 have at least some sort of import to me. As

13 I look at these cases I'm going to want to see

14 a sufficient number.

15 But it's going to be hard to put a

16 hard and fast number without people then being

17 able to model their business off not hitting

18 that number.

19 MR. MCCRUDDEN: Right. Yes.

20 MR. EISNER: Aren't you going to

21 have a problem with one or two over a week,

22 and one or two over a year, or two years? 
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1 Then you start having to put more and more

2 tails on the number. Does it depend on the

3 size of the company and the number of

4 installations they do in a given time period?

5 MR. MELCHI: But I think that the

6 ratio that you just said -- oh I'm sorry. 

7 This is Jon at HARDI. I think that ratio is

8 important, I think, in considering that

9 routine nature, correct?

10 MR. RAWALD: I think it's important

11 to me. I mean, it seems to think -- to me, I

12 mean, if 100 percent of your business is what

13 it is, and it's only been a few but it's all 

14 you've done, then it seems pretty routine.

15 So it's at least a data point, I

16 think, worthy of consideration.

17 MR. GIBBONS: So, John from Carrier. 

18 We had a discussion a couple of weeks ago, 

19 think Chuck, you started it, about like, is

20 there an opportunity at some point -- because

21 I see July 1st, 2016, there could be -- I'm

22 just envisioning, let's take a multi-family
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1 installation where, you know, all the units

2 have been delivered to the job site.

3 They're not going to all get in by

4 July 1st. Is there some kind of waiver

5 process we could initiate to say hey, I got --

6 you know, I bought them all legal, and they

7 were supposed to be installed but, you know,

8 the rain or, you know, things that are beyond

9 my control, I didn't get the job done, is

10 there a waiver process we could entertain?

11 MR. RAWALD: Right. So standing up

12 a waiver process is difficult because we have

13 a standard, and so the Department's method of

14 waiving the standard is to have people go to

15 the Office of Hearing and Appeals and apply

16 for relief from the standard.

17 And that's what manufacturers

18 typically do when they want to have a standard

19 not apply. They'd say -- like in the case, we

20 have this case with a fluorescent lamp

21 standard that got up and folks said, oh, this

22 is all based upon our ability to obtain in
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1 China a lot of minerals that we can't. And so

2 can we have two extra years?

3 And so the Office of Hearing and

4 Appeals said yes, that makes sense. So that's 

5 the typical mechanism. So a contractor could

6 apply that and say hey, Office of Hearing and

7 Appeals, I've got these 200 extra units that

8 I ordered and I thought was going to have them

9 in place, and due to construction delay that

10 I'm still here with them, can I get some

11 relief here?

12 That's a default mechanism. Now we

13 could talk about our creating one here. I

14 don't know what the legality of that would be,

15 so I'd have to have all the lawyers look into

16 that. And so we have to talk about that more,

17 but we could talk about doing that.

18 MR. DORIA: This is Jordan. I guess

19 the question I would have is, I mean, doesn't

20 the pass-through significantly decrease the

21 likelihood that a waiver would be needed, the

22 18th on?
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1 MR. GIBBONS: No. Because jobs,

2 like multi-family, how many months lead are

3 they? They're nine months lead sometimes. 

4 You order the equipment, and again, things

5 beyond your control where a workforce strike,

6 a tornado, hurricane, I don't know, things

7 that preclude you from getting the work done.

8 And you may have to have a waiver

9 just for 30 days, 60 days to get the job done. 

10 Because I have a feeling, just knowing the

11 multi-family business, where cost is king,

12 they're going to go buy 13 SEER to the bitter

13 end, and they're going to want to try and

14 extend that as long as they can.

15 And if it's available, which it may

16 not be by then, to your point but, you know -- 

17 MR. RAWALD: Right. I think

18 Jordan's point is the stock will be gone, so

19 --

20 MR. GIBBONS: I think there needs to

21 be some kind of waiver.

22 MR. DORIA: I mean, I understand,
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1 yes, but --

2 MR. GIBBONS: You would think. They

3 may put it in a warehouse, you know.

4 MR. DORIA: I guess my -- so where I

5 was going with that is not saying it's not a

6 problem, but I think the pass-through at least

7 addresses it to an extent.

8 But the question of whether or not

9 we need to create a separate waiver process

10 for something that ultimately is a diminishing

11 problem, and eventually will go away.

12 MR. GIBBONS: Well, I'd like to be

13 able to coach our distributors to say, hey

14 look, advise your contractors that if they

15 expect delays or if there's something that --

16 you know, they're not -- it's like there's a

17 wall they're going to run into if they're not

18 done.

19 MR. WHITE: Well I --

20 MR. GIBBONS: That's what happens.

21 MR. WHITE: This is Chuck White. I

22 think you have -- if the products were
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1 manufactured before December 31, or before

2 January 1, 2015, and they didn't get

3 installed, I think you have a good case to

4 come and say look, we bought them, we shipped

5 them and they're all before that date. And we

6 didn't make July 31st. Sorry. We need a

7 little more time. They're probably going to

8 be interested.

9 MR. GIBBONS: Well I just want to

10 make -- I would like to say --

11 MR. WHITE: But if you come to them

12 and say, I've bought a bunch of stuff that was

13 made January 1 of 2016, they're going to say,

14 sorry.

15 And this is going to pose a problem

16 to developers and builders and designers and

17 construction managers that on these longer

18 term programs, I designed it, we bid it and

19 it's going to be a while before it gets out

20 there. I may have designed when 13 was okay.

21 MR. GIBBONS: Yes. And I --.

22 MR. WHITE: And if it gets delayed
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1 --

2 MR. GIBBONS: I can tell you, all

3 the OEMs here --

4 MR. WHITE: -- and that's --

5 MR. GIBBONS: -- had conversations

6 with some big developers --

7 MR. WHITE: Oh I'm sure.

8 MR. GIBBONS: -- management --

9 MR. WHITE: I'm sure.

10 MR. GIBBONS: -- trying to make

11 something about that exact thing.

12 MR. WHITE: And so that sets up the

13 contractor and all those folks in that chain

14 for a -- this is a change order discussion,

15 and nobody wants to have that discussion.

16 (Simultaneous speaking)

17 MR. GIBBONS: Especially not at the

18 end of a job.

19 MR. WHITE: No. Well, and so that's

20 a problem. And you are correct, they're going

21 to have to be educated that we have this time

22 frame when something has to happen. I can go
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1 you a little better here, I need 100 units and

2 you have 80 of them with the right date. I

3 need 20 more. What do I do?

4 Am I updating 20 of the units on the

5 property to 14? So now I've got mismatched

6 install product, and the owner doesn't want

7 that. They want cookie cutter. So I think

8 there's --

9 MR. GIBBONS: You'll be on the

10 Internet buying them.

11 MR. WHITE: I mean, just -- you

12 know, SEER 14 anybody?

13 (Laughter)

14 MR. WHITE: Anybody?

15 MR. GIBBONS: 13.

16 MR. ROCKY: We already know, Chuck,

17 you're going to go down the street to the next

18 manufacturer or distributor and say, have you 

19 got ten units? Have you got ten units?

20 MR. WHITE: But the owner doesn't

21 want that.

22 MR. ROCKY: But that's what the
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1 product's available.

2 MR. WHITE: I know, but the owner

3 wants the same brand, the same -- they want

4 the same everything, so their maintenance

5 people --

6 MR. ROCKY: Then they better buy

7 them early.

8 MR. RAWALD: Or they have to buy

9 them higher than what they otherwise would. 

10 I mean, that's -- but that's -- those are some

11 realities that unfortunately, I can't do

12 anything about.

13 MR. MELCHI: This is Jon with HARDI. 

14 I, you know, I understand the pressure. And

15 I agree that there's probably going to be

16 somebody pushing it but, you know, I think

17 when we settled 18 months sell-through was a

18 pretty substantial period of time. And we've

19 got to do it, fit it in within that scenario.

20 I used to live in a condo, and

21 coincidentally, every building in the condo,

22 each building had a separate air conditioner
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1 from a different manufacturer, so it's

2 obviously whatever was on sale at the time. 

3 I won't tell which one I'm in.

4 MR. EISNER: Thanks. You ready for

5 a 15-minute break? Get some fresh air.

6 (Whereupon, the foregoing matter

7 went off the record at 3:06 p.m. and went back

8 on the record at 3:25 p.m.)

9 MR. RAWALD: So, before people

10 leave, can you, Harvey has given me edits. 

11 John Hurst has given me edits.

12 If anyone else has any written edits

13 to the brochure they think would be helpful

14 for us to work for next week, that would be

15 helpful.

16 So I don't know if it's helpful to

17 sit around and talk about the brochure as much

18 as if you have anything to write down, give it

19 to us before you leave today.

20 And then we could incorporate that

21 and make the brochure better for next week.

22 MR. MCCRUDDEN: I can give you an
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1 oral one. This is Charles with ACCA. We

2 talked about a label and the label is changing

3 by January 1st. It may make sense to put that

4 label.

5 MR. RAWALD: The new one or the old

6 one or both?

7 MR. MCCRUDDEN: Both.

8 MR. RAWALD: Okay.

9 MR. MCCRUDDEN: Old label, new

10 label, region, region and sort of just because

11 if we're, this is for consumers and we're

12 looking at the customers to understand how

13 this works, it may make sense to help them

14 understand that if you're going to process

15 this label --

16 (Off microphone comments)

17 MR. MCCRUDDEN: It is. This label,

18 then that might be an easy one for now.

19 MR. RAWALD: Okay.

20 MR. MCCRUDDEN: I don't know if

21 there's space, but there's things that I would

22 take off. And I'll put that in there. But
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1 I'll send you written. This one is a PDF or

2 a --

3 MR. RAWALD: It's a PDF. We don't

4 even have a Word copy, so we have to go back

5 and work with some people to change it. But

6 it's fine.

7 If you could pencil any thoughts

8 before you leave that would be helpful, but if

9 you want to email me, that's fine, too.

10 MR. EISNER: Anything else anybody

11 wants to raise orally on that? Okay then we

12 probably should go on next to prohibited acts. 

13 Folks said there was some more stuff we might

14 be able to get out.

15 MR. RAWALD: Right, so Gary

16 specifically asked to readdress the issue vis

17 a vis the distributors, and I know that

18 overall folks had not really engaged with the

19 idea of adding a prohibited act for the

20 dealers and contractors.

21 So I guess we can explore that for

22 the rest of the time we have here today if
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1 folks want to.

2 MR. FENSTROM: Tim is our

3 spokesperson.

4 MR. BALLO: All right, so I don't

5 know where to start with this. I guess we do

6 see value in having a prohibited act up and

7 down the chain, not just taking everything

8 over to the manufacturers.

9 Absent a prohibited act, I think it

10 sort of forces us to emphasize the routine

11 violation because it's the only way we have to

12 police this, to lower the threshold for what

13 gets qualified as routine to encourage

14 movement towards the death penalty.

15 And I guess just to look at the

16 contractor level we've decided or we have on

17 the board that if you violate as a contractor

18 you can remediate.

19 And that will be taken into account

20 in determining whether you are routine, so

21 what is having a prohibited act for

22 contractors add?
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1 To my mind at least it adds the

2 potential for a $200 fine if you don't

3 remediate. If you choose not to remediate you

4 say well that was a one off.

5 I'm not going to do it again. I'm

6 never going to get classified a routine

7 violator. I'm pretty comfortable I wouldn't

8 be caught again.

9 The possibility of a $200 fine

10 particularly as a vehicle for steering the

11 contractor towards remediation, takes care of

12 the customer.

13 The $200 goes away. I think we see

14 value in that. But it's also the issue of, I

15 guess I have concern that absent a prohibited

16 act that there's no public finding that

17 there's been a violation.

18 And I understand the reasons for

19 that. I'd rather deal with those reasons,

20 which I understand is the concern.

21 Up the chain people would get

22 nervous. I'd rather deal with that in some
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1 other way than keeping the violation a secret

2 just because as efficiency and consumer

3 advocacy at the table, we've still been

4 talking to them.

5 We have concerns about how do we

6 know this is actually being enforced. If

7 violations are happening, they're being found

8 and it's kept a secret, all we basically have

9 is we can go to Doug and say Doug is this

10 being enforced.

11 And he could say yes. That doesn't

12 make us feel comfortable that this is, that we

13 actually have an effective enforcement or team

14 operating on the ground.

15 Having that record that there were

16 violations found at least does give us more

17 confidence about that.

18 At the distributor level it seems to

19 me just an issue of fairness, that if

20 contractors, if manufacturers have skin the

21 game distributors should do.

22 I say that, and I don't want to make
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1 more about this issue than it needs to be. I

2 think it's so rare that a distributor could

3 ever get tripped up in this, would ever be

4 stupid enough to participate in what amounts

5 to almost a conspiracy to get product

6 installed in the wrong regions.

7 I almost would say that it's fine

8 for us to just agree to disagree on this point

9 and not take up the workgroup's time with it.

10 But I just want to get it out there

11 that we do not agree that there should not be

12 a prohibited act for distributors. Anyone

13 else want to jump in?

14 MR. FENSTROM: Well, this is Gary. 

15 So I have something to add that you talked

16 about with respect to the settlement agreement

17 and the possibility, if not likelihood, that

18 the settlement agreement exempted distributors

19 from being subject to prohibited acts.

20 So if I understand the wording

21 correctly, that all has to do with violations. 

22 It does not have to do with record keeping, so
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1 we might want to see the record keeping aspect

2 of violations be subject to prohibited acts

3 for distributors.

4 And in a way that might be more

5 troublesome and onerous because of

6 administrative glitches that are sure to

7 happen in record keeping than actually just

8 accepting violations as a prohibited act from

9 the distributors' prospective.

10 Now we heard the intent of the

11 meeting of distributors and how they came to

12 the recommendation and the settlement

13 agreement.

14 But nonetheless it's entirely

15 possible that the importance of avoiding

16 record keeping violations would not be subject

17 to being deemed a prohibited act.

18 MR. RAWALD: And so, and Gary this

19 is Doug. I want to read you the exact

20 sentence from the policy statement we issued

21 in light of the settlement.

22 After consideration of the comments
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1 received to date, so that's important. It was

2 based upon information we had then which could

3 be different over time, which is missing.

4 DOE will not assert civil penalty

5 authority for a violation of the regional

6 standard for central air conditioners as

7 defined in 10 CFR Part 430 over parties that

8 are distributors as defined by EPCA.

9 So that's the sole universe of what

10 we said. So I think what you're saying is

11 that covers for violation of the standard but

12 doesn't cover for failure to produce records

13 when requested by the Department. Is that

14 what you're saying?

15 MR. FENSTROM: Yes, the suggestion,

16 did we want to get into really parsing the --

17 MR. BALLO: And not to say that

18 there isn't authority for the Department to

19 get records that it needs.

20 It obviously has the subpoena power. 

21 It just seems to me that having the prohibited

22 act sort of makes it an easier process to get
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1 the records because you don't have to have

2 that extra step of getting the subpoena or

3 potentially having to enforce that.

4 The Department can sort of do the

5 enforcement of the civil penalty in house.

6 MR. RAWALD: Right, so this is Doug. 

7 And so I guess I can only give you the

8 database pull that we've done. And so,

9 certainly it's easier from a performance point

10 of view to hold it ourselves.

11 And so if we have the penalty

12 authority, we're able to act upon it rather

13 than relying upon the Department of Justice to

14 go to the federal court to get an order that

15 then is not obeyed or some attempt to action

16 by the court.

17 So it's obviously an easier process.

18 To date, in the defense of distributors, any

19 time we've subpoenaed the distributors, they

20 have given us documents in any case.

21 And we have subpoenaed at least a

22 sample size large enough of distributors that
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1 I could say that that's been the practice.

2 So there at least is some value to

3 what Jon and Steve have told us has been the

4 distributors' role, comply because they don't

5 want to go to court over this.

6 But I do understand what you're

7 saying, and so this is, I understand both

8 sides of the argument.

9 MR. FENSTROM: So this is Gary. So

10 for us to reach consensus there needs to be

11 significant enough consequences of violations

12 that we're comfortable key stakeholders would

13 simply wish to avoid the consequences and

14 comply with the regulations.

15 MR. RAWALD: Well, one thing I've

16 heard him say is that part of it, concern

17 about a prohibited act for contractors and

18 dealers would be that would be the trigger by

19 which the violation being investigated and

20 found would be public.

21 So if we were to agree as a group to 

22 make that process, make that resolution
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1 public, posted in a finding of routine

2 violation, what if it's an individual

3 violation?

4 That way it's seemingly alleviating

5 some of that concern. The question is whether

6 the group will be amenable to that at all. Is

7 what I'm hearing, too?

8 MR. BALLO: That's certainly a

9 possibility, I think especially talking to the

10 consumer advocates. They really want to do

11 what we can do steer towards remediation for

12 the consumer.

13 So I think that's the number one key

14 thing they want out of this process. To me,

15 having the $200 out there, if you don't do

16 that, it's not going to make a huge

17 difference.

18 But it will encourage that step by

19 the contractor, so I think that's the more

20 important motivation for us at least in the

21 contractor level to seek a penalty.

22 MR. RAWALD: So just as an observer
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1 of single companies and how they --

2 (Off microphone comments)

3 MR. RAWALD: -- one question I

4 always ask myself is, are people who are

5 committing violations building in the cost of

6 paying for the violation to the cost they pass

7 on to consumers.

8 So that's the one thing I do want to

9 I guess have the consumer folks thing about,

10 maybe you can ask Charlie to think about that.

11 Is it more likely that a contractor

12 would then build that $200 expense into his

13 bid for a job knowing that that's what he's

14 going to have to pay if he gets caught.

15 And if he doesn't get caught, well

16 then he has an extra $200. And so he's

17 winning out. I don't know. I just want to

18 make sure people think about that.

19 MR. FENSTROM: So, this is Gary, I

20 can't speak for the trade, but I can certainly

21 reason that competitive pressures would make

22 trying to cover that in every case difficult.
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1 MR. ARNOLD: Yes, this is something

2 that may not carry any weight because I

3 realize we got to follow the rule.

4 But the reality is we monitor social

5 media. We have people that monitor social

6 media. We have a Facebook page. We monitor

7 Angie's List.

8 I'm sure all our competitors do,

9 too. I'm sure all the major contractors, even

10 smaller contractors. There's so much pressure

11 now, pages that have reviews of product.

12 I mean the second we found out that

13 somebody's tagged us, a Maytag, a Westinghouse

14 unit that we produce, on social media, we will

15 be all over that.

16 We'll make that consumer whole that

17 day. We'll figure out who to get the money

18 from later if we have to, the contractor, but

19 we don't want to be associated with that

20 contractor.

21 That contractor will be on Angie's

22 List or whatever as well. I mean you always
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1 talk about the really fly by night people

2 because with social media that media is

3 probably the most powerful enforcement for

4 anything once it's made public.

5 If it's not public, I think it

6 probably eventually will. If the owner finds

7 out, and they say to their neighbor hey I

8 bought this unit.

9 We'll get tagged with it, once it's

10 Maytag unit or I bought this care unit and it

11 turned out it wasn't what I paid for. I got

12 ripped off.

13 And Joe Blow installed it. They'll

14 be on some social media site almost

15 immediately, and it'll spread. And nobody's

16 going to want that.

17 We have people monitor those. 

18 There's HVAC blogs with the trade monitors,

19 and like I said, we monitor those. I mean we

20 go fix those problems real quickly.

21 MR. DORIA: To your point, this is

22 Jordan. I think it brings up two important
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1 points. One is you said there is sort of

2 external compliance of A in the form of social

3 media.

4 But the other is, are we kidding

5 ourselves and saying that a violation against

6 a contractor is actually not going to be

7 public regarding of what the Department does.

8 That I think is a bigger question. 

9 I don't know. It sounds like what you're

10 saying is at least for a significant portion

11 of them, it would eventually become

12 effectively a matter of public knowledge.

13 MR. ARNOLD: How about think if you

14 spent $3000 for a system, and you find out

15 that now DOE or somebody's contacted you,

16 either DOE or us as a manufacturer, somebody

17 and said hey Mr. and Mrs. Jones, you didn't

18 get what you paid for?

19 Wait a minute. What? I just paid

20 $3000 for this. What do you mean? Where's my

21 iPad? This is not right.

22 It doesn't matter who's at fault at
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1 that point. They're not going to care. 

2 They're not going to know if it was the

3 contractor picked up the wrong unit, if he was

4 a bad contractor or a bad distributor or bad

5 manufacturer.

6 They won't know, and they won't

7 care. They know they paid $3000 --

8 MS. MEYERS: I mean what are they

9 going to do?

10 MR. ARNOLD: -- for this Maytag,

11 Carrier or Rheem unit.

12 MS. MEYERS: They're going to call

13 1-800-RHEEM.

14 MR. ARNOLD: They'll write us, and

15 then our people, all of us will be like take

16 care of this homeowner I mean like now.

17 MR. RAWALD: So the one point that

18 Amy brought up before that I think is only

19 worth noting is that at least she puts forward

20 the hypothesis, which I think is some value to

21 that, that sometimes homeowners are going to

22 be complicit in getting less than the standard
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1 because they want to pay less.

2 And so if the contractor says well,

3 I have a 13 SEER. It's going to be $1000

4 less. I'm not supposed to give it to you, but

5 I'm willing to do that, so it's always that

6 scenario as well that we have to keep in mind.

7 It's not always the homeowner did

8 get what they paid for because they got

9 exactly what they paid for, so just put that

10 out there.

11 MR. SACHS: Doug, this is Harvey,

12 and I've tried to give sort of round numbers

13 of the cost of the energy used.

14 We've never talked to the part for

15 competitive reasons, anti-trust reasons about

16 the differential and the cost between the 13

17 and 14s.

18 And I do not believe that a $1000

19 differential would ever represent a cost

20 difference to the contractor.

21 It may well represent a very

22 different feature set, amenities that are also
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1 incorporated, or it may be a question of the

2 contractor pricing to perceived value.

3 But at the commodity level, I think

4 the DOE's analyses, common sense would

5 indicate that a single stage 14 is not that

6 different from a single stage 13.

7 MR. RAWALD: Right, and I hear you

8 Harvey. I just said $1000 as a media graphic

9 example, not to indicate the actual difference

10 in the two.

11 MR. SACHS: And I just wanted to

12 make sure that that wasn't the metaphor that

13 got planted in all our minds.

14 MR. RAWALD: Okay. I understand

15 that. So the delta is different than what I

16 put out there for illustrative purposes.

17 MR. SACHS: And I think the comment

18 was made. An overwhelming fraction of the

19 installs today in one state in the deep south

20 are 14s, of which that just in Texas in which

21 I take back the end level cost, can't.

22 It's a terribly significant cost. 
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1 I'm just saying this is a bound on the

2 incentives to cheat and one of the things that

3 may make us feel that it's less common. I

4 feel that's it going to be less common.

5 MR. RAWALD: So I guess as I see it

6 we have three issues, right. So we have the

7 imposition of a prohibited act on distributors

8 for the violation of the statute itself by

9 doing the things that we consider violations

10 on the board.

11 We have the imposition on

12 contractors and dealers for committing these

13 things on the board, and then the imposition

14 on any of these parties for failing to comply

15 with the record request from the Department.

16 That seems to be three acts that I'm

17 hearing from the advocates. Is that correct?

18 MR. BALLO: Yes.

19 MR. RAWALD: Okay.

20 MS. MEYERS: This is Karen with

21 Rheem. Are you including the, an additional

22 prohibited act against manufacturers for
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1 record retention?

2 MR. BALLO: I think there already is

3 one.

4 MR. RAWALD: Right, so we already

5 have an existing prohibited act with

6 manufacturer records.

7 MS. MEYERS: So you do?

8 MR. RAWALD: Yes, it's already part

9 of our standard operating procedures, so I

10 don't think that's an issue.

11 MS. MEYERS: For business record

12 retentions?

13 MR. RAWALD: Well --

14 MS. MEYERS: I don't think that's

15 correct.

16 MR. RAWALD: So the prohibited act

17 worded in that is pretty broadly, and anything

18 we ask for from, and I think it's beyond

19 simple tech reports. But I have to go back

20 and look at it, so that's all I would about

21 the regulatory text because we actually think

22 that are broader than that than simply just
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1 data.

2 So it would be a 10 CFR

3 429.102(a)(1) would be the prohibited act I'm

4 referring to.

5 MR. MCCRUDDEN: Scary.

6 MR. RAWALD: What?

7 MR. MCCRUDDEN: That you just pulled

8 that number out of the sky.

9 MR. RAWALD: Well, unfortunately we

10 live in a world where I have to do these

11 things, right?

12 So that's the reality of my job,

13 which goes to show you how actually important

14 that particular prohibited act might be and my

15 ability to respond to information requests.

16 MR. MCCRUDDEN: I think Tim found

17 it, and it was useful.

18 MR. MELCHI: This is Jon with HARDI,

19 and it's surprising in view of Tim, Gary and

20 I have a different interpretation of the

21 broadness of our settlement agreement.

22 I want to reiterate Doug's point
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1 that to date that distributors have the good

2 record in complying with requests from DOE.

3 I think it's safe to say that

4 manufacturer and distribution agreements,

5 which are the cornerstone of a lot of these

6 relationships are likely to include and

7 require distributors to do things.

8 That'll vary for manufacturing

9 distributor, but I don't view, I got a tough

10 time with this.

11 MR. MCCRUDDEN: This is Charlie with

12 ACCA. On the issue of the prohibited act

13 about record keeping, it just gets tacked on

14 the system.

15 That's not really my fish bowl. It

16 feels tacked on because there's a gap. I

17 think we have to respect the settlement

18 agreement.

19 And I think that when you

20 characterize it as some people, I think you

21 are capturing people who were on the

22 settlement agreement, who signed the
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1 settlement agreement and say that now there

2 are notes.

3 That's tricky because there's a lot

4 that went into that and then to, I don't know

5 if those folks are now saying not to put this

6 in agreement.

7 I can't say that. But to go after a

8 record keeping violation with certain

9 penalties feels almost arbitrary.

10 MR. FENSTROM: This is Gary. I

11 think it's a matter of consistency and equity

12 and perception.

13 So the argument against it is hey,

14 we've been good citizens. We've exercised

15 good behavior. We don't need a regulation

16 because we're behaving properly anyway.

17 On the other hand, to give the

18 efficiency advocates confidence, we think

19 there needs to be some regulatory authority.

20 And if you're doing it anyway, what

21 difference does it make you see. So that

22 argument comes up often.
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1 MR. MELCHI: Gary, this is Jon from

2 HARDI. This morning we talked a little bit

3 about the costs at cost of these record

4 keeping requirements.

5 Harvey's $21 difference, $17 to $21

6 difference that you cited is blown out of the

7 water by the $10 million plus that this record

8 keeping requirement is going to cost my

9 members immediately per year.

10 And it's a significant cost, which

11 in truth probably costs more to my members

12 than the energy savings that would be

13 hypothetical. And it's just onerous.

14 MR. FENSTROM: And I, correct me if

15 I'm wrong, but is not record keeping already

16 stipulated and we're just discussing whether

17 failure to do so would be a prohibited act and

18 could result in a $200 penalty?

19 I don't think we're discussing

20 whether record keeping is or is not already

21 agreed to.

22 MR. RAWALD: Right, I thought the
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1 general consensus is that everyone agreed

2 there's going to be record retention

3 requirements of some sort.

4 I think what Jon's saying is hey,

5 we've already put skin in the game. This idea

6 that putting us at risk for this $200 whole

7 penalty is not a necessary one.

8 You have to understand that we're

9 already going to bring so much more to the

10 table by agreeing to the records retention. 

11 I think that's what his point was if I

12 understood correctly.

13 MR. MELCHI: Yes.

14 MR. FENSTROM: Well, I'm still not

15 --

16 MR. MELCHI: Well, let me take a

17 different tactic.

18 MR. FENSTROM: I'm still not getting

19 it, so I want to better understand Jon's

20 point.

21 MR. MELCHI: Well, I'll just be

22 quite frank with you is that our members, in
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1 order to sign this, did not want to be

2 assessed civil penalty under anything.

3 So, and that was, and a lot of that

4 had to do with, to Chuck's point earlier I got

5 caught onto that because I hear it from my

6 members all the time about who can regulated

7 in this sort of space.

8 And it was key to us. We do not

9 want to be penalized by DOE regarding

10 enforcement of this standard. It was a key

11 thing for us.

12 MR. FENSTROM: So our perception is

13 there may be some room for different

14 interpretation in the settlement agreement

15 around record keeping.

16 And we intend to explore that. It's

17 not that we're so much interested in penalties

18 for failure to keep records properly.

19 We're really interested in

20 prohibited acts having to do with violations,

21 but the fact that this door may be partially

22 opened would cause us to ask you to rethink
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1 how you feel about prohibited acts for

2 violations given that we might be able to

3 implement prohibited acts for record keeping.

4 MR. SACHS: Jon, I just, this is

5 Harvey. And I very much understand where you

6 all are coming from. I just want to make sure

7 that we're talking the same basis of

8 arithmetic, the $21, $17 to $21 very crude

9 estimate, order of magnitude, was per consumer

10 for a year.

11 So it's a much larger number over

12 the lifetime. And how that compares with your

13 numbers depends on how much of your costs are

14 implementation of ERP changes versus ongoing

15 costs.

16 Hard to believe that the $10 million

17 we did onboarding costs, but I don't know the

18 inside of your business. But in any event, I

19 don't think it's a question of $21 versus $10

20 million.

21 It's very much, even the cost

22 benefit is very much dependent on the number
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1 of units involved.

2 When you get into a few hundred

3 thousand units that were sold as 13s versus

4 14s, then the numbers are pretty much

5 complementary.

6 MR. FENSTROM: This is Gary again.

7 MR. SACHS: Let Jon respond, Gary.

8 MR. MELCHI: I'm not going to

9 quibble math with you Harvey. I just said a

10 number. You crudely said something. I

11 crudely said something.

12 I appreciate that. It's a

13 substantial cost. Listen, I don't know how to

14 be, our interpretation of us this is one

15 thing. Your guy's is another.

16 MR. SACHS: That's the key issue.

17 MR. MELCHI: And I think it's a

18 different interpretation than we've had. And

19 I chuckle at the term fairness from Tim

20 because it's not fair.

21 And part of the reasons we have this

22 settlement is that my members didn't get a say
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1 in the development of this standard and we're

2 tasked with absorbing a substantial cost

3 because of that.

4 And there was a settlement agreement

5 to help remedy that. And now six months later

6 people that got a say in the development of

7 the standard are telling us that we have a

8 different interpretation of this, too.

9 So you're excluded from the

10 rulemaking process, and an agreement that we

11 had, six months later is no longer good.

12 MR. FENSTROM: This is Gary. Tim

13 indicated, and I believe it's true, that any

14 action against distributors is going to be

15 extremely unlikely because of all the other

16 things.

17 If there's something lacking in the

18 settlement agreement, it doesn't seem to me to

19 be unfair that we take a look at it with

20 respect to getting all the traction we can

21 with this.

22 MR. DORIA: This is Jordan. I want
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1 to say, I mean I think it's reasonable to have

2 different interpretations, perhaps, of the

3 actual language.

4 I think what the intent was, was

5 pretty clear. I don't think we're going to

6 resolve these differing interpretations.

7 In fact, I'm quite sure we will not. 

8 So I guess what I would ask is with that being

9 so clear, let's instead ask how important is

10 having a prohibited act for distributors to

11 creating an effective enforcement plan.

12 And I will just give you my opinion,

13 which is we made a lot of progress towards

14 that. I can believe we also agree that there

15 are other areas where we may be able to push

16 that wouldn't necessarily run afoul of

17 something.

18 And that maybe we should talk more

19 about what are those other things that could

20 help us make this effective and part of the

21 plan instead of what may not be the 11th hour

22 but like the 10th potentially really take a
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1 few steps backwards. That would be my

2 concern.

3 MR. FENSTROM: So --

4 MR. EISNER: Meg, did you want a

5 turn?

6 MS. WALTNER: Well, so I was just

7 going to add, I think the part of this that I

8 find most concerning and sort of my desire for

9 some sort of prohibited act has to do with

10 this idea that you could have a contractor

11 that was a routine violator and then a

12 distributor knowingly selling to that

13 contractor and then also needing to be caught

14 as a routine violator before anyone is

15 penalized.

16 And then that all comes up to the

17 manufacturer. That a distributor could be

18 knowingly selling to a contractor that's on a

19 list of do not sell to this contractor.

20 They are a routine violator and

21 essentially have no penalty for that --

22 MR. MELCHI: I think we talked about
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1 there was a penalty out there that was pretty

2 substantial if DOE were to find that there

3 were, if a distributor was routinely and

4 knowingly violating.

5 MS. WALTNER: Right, but it's a

6 second time they have to catch a routine

7 violation.

8 MR. RAWALD: Yes, what I hear Meg's

9 point being is their concern is that in order

10 for the distributor to really feel any sort of

11 concern, there has to be first be a full

12 investigation of the contractor and dealer,

13 finding the violation, which is lengthy

14 process of sorts and then observation and

15 investigation of a distributor, them being

16 involved with that person on a regular basis

17 before their distributor actually would feel

18 any heat for their action.

19 I think that's what I'm hearing her

20 say. So, which is a fact that it's a two

21 stage process for the distributors unless we

22 have the distributor knowingly selling to an
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1 individual. And then that's a one stage

2 process. So I hear that. I do.

3 MR. WHITE: This is Chuck White. 

4 Can I ask how does $200 make you feel better? 

5 That's the penalty they're going to pay. How

6 does that make you feel there?

7 MR. BALLO: So --

8 MR. HUNGERFORD: Well, ideally they

9 wouldn't be just doing it. They wouldn't be

10 paying a penalty because they wouldn't have

11 violated it.

12 MR. WHITE: If you want that because

13 you need to bring up in an act and DOE and

14 maybe it's not $200, but for the sake of our

15 current discussion, what is the prohibited act

16 is really looking to do is assess civil

17 penalties against you of $200.

18 MS. WALTNER: For a violation.

19 MR. WHITE: How does it make you

20 feel better? How does that change anything?

21 MR. MCCRUDDEN: That's $200 for not

22 keeping records.
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1 MR. FENSTROM: So this is Gary. 

2 We're not really so much after the records as

3 we are after the installation violations.

4 It just so happens that there may be

5 a weakness in the settlement agreement around

6 the records. And that's why we're addressing

7 that.

8 Your question is how does $200 make

9 us feel better. In either case, well, $200

10 isn't much. Let's face it.

11 Let's turn the question around. How

12 does $200 make the distributor feel so

13 concerned that they have to be exempted from

14 this prohibited act and civil penalty.

15 It's a catch-22. It seems like the

16 efficiency advocates are put in a position of

17 having the consequence of violation either be

18 a very extreme outcome where the manufacturers

19 might not any longer be able to sell to them,

20 which would effectively put them out of

21 business or nothing.

22 And we'd like to see some little
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1 consequence in between so we don't have to

2 rely on such an extreme consequence.

3 And we hope that would be enough not

4 to find a lot of violations and do a lot of

5 penalties but just to give us confidence that

6 behavior would be discouraged.

7 MR. MELCHI: This is Jon with HARDI. 

8 I think Doug had mentioned this yesterday. 

9 We've talked over and over again about the

10 threat of going, of fighting a subpoena from

11 DOE and providing those records is motivation

12 enough.

13 I think there are a lot of things

14 that are going to happen within the channel

15 with our manufacturing partners that would

16 alleviate a lot of your concerns.

17 I don't know that they all need to

18 be in a regulation.

19 MR. BALLO: Well, okay. Let me

20 address what I think is my main concern with

21 that civil penalty or the prohibited act of

22 failing to provide records.
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1 It's that DOE has the resources to

2 do, we've heard, a few dozen enforcement

3 actions a year. I want to do everything I can

4 to make sure they can commit the least amount

5 of resources to getting the records that they

6 need.

7 So is there something that's

8 non-regulatory that potentially gives us the

9 assurance that DOE can just send you an email

10 that says please give me the records and they

11 get the records.

12 We don't have to go through the

13 subpoena process to have to necessarily

14 enforce that.

15 MR. MELCHI: Yes.

16 MR. BALLO: But I don't know what

17 that is.

18 MR. MELCHI: This is Jon from HARDI. 

19 I mean the only thing I can tell you is we do

20 have a track record here. It's not had to

21 have been used to date.

22 Again, if this is somehow written in
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1 as not a prohibited act of the records that

2 we've discussed, I can guarantee you that

3 every manufacturer is going to have into their

4 distributor agreements the need to comply with

5 regional standards or applicable federal laws.

6 They already have that in the

7 agreements today. They're going to comply. 

8 I don't know what more we can tell you.

9 We have a track record of complying. 

10 We're going to work with our manufacturers to

11 comply will be a part of the agreements that

12 my members have.

13 There's a substantial cost to not

14 complying in that you will be going to court,

15 and it will become, if they have to go to

16 court and start getting records and at that

17 becomes public records, which all of these

18 manufacturers and the entire industry would

19 know.

20 I mean those are pretty substantial

21 things, Tim.

22 MR. BALLO: Yes, but they're --
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1 MR. MELCHI: But it's not just $200.

2 MR. BALLO: No, it's not that it's

3 $200. It's their time taking you to court

4 rather than just slapping you with the $200

5 penalty and moving on to something else.

6 MR. MELCHI: This would make a lot

7 more sense to me if we had a history of

8 non-compliance.

9 MR. FENSTROM: This is Gary. Since

10 you have a history of very high compliance,

11 why are you so --

12 MR. MELCHI: Because my members are

13 not interested in being penalized by DOE for

14 this regulation.

15 MR. FENSTROM: If they have a

16 history of very high compliance, they won't

17 be.

18 MR. MELCHI: And a lot of this has

19 to do with setting precedent and things down

20 the road. We trust Doug.

21 We think Doug and the Department

22 will do the right thing, but we can't trust
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1 who's going to be in Doug's seat five years

2 from now, four years from now or three years

3 from now.

4 And that was part of the, listen. 

5 Gary, I don't know what to tell you. That's

6 why we settled it.

7 MR. FENSTROM: Okay. So this is

8 Gary. Let me propose this temporary resolve. 

9 We may choose in the end to agree to disagree

10 on this.

11 However, Jordan suggested that we

12 look at other things that are going on that

13 might mitigate our concern that we need

14 prohibited act and civil penalty here.

15 And I think in the meantime we'd

16 appreciate hearing all those things, and we'll

17 take them into consideration.

18 MR. MELCHI: This is Jon from --

19 MR. RAWALD: Well, if I can jump in

20 here guys. I think we're pretty well

21 established the battle lines, at least on the

22 distributor.
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1 We're all pretty clear on where

2 everyone stands, and I don't want to give

3 anyone, I want everyone to have the chance to

4 try to persuade one another.

5 It looks like we're pretty

6 unpersuadable at least on some issue of this. 

7 So we kind of have a couple of things that we

8 could do, right?

9 We could vote on adding this

10 endeavor, and it seems they'll be some votes

11 for and some votes against. And there might

12 be three votes against it so that it won't be

13 added.

14 Or we can wait until we get to the

15 final term sheet. I think we're pretty close

16 now. My discussion with Laura is that we're

17 going to work on a final terms sheet here

18 based on how we've discussed this today for

19 bringing it up next week.

20 I think that we're very close to a

21 conclusion here. So I don't think there's

22 much further to kick the can down the road.
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1 So either we could look at it when

2 we get to the whole package and say okay. 

3 Yes, seeing the total package we can live

4 without it, or we can push it to a head today.

5 And so what I'm hearing from Gary is

6 let's see what else is going to be in this

7 whole package, and then if we're okay with

8 that, then we're content to let it be known

9 that we don't like it.

10 But we'll live with it for the deal,

11 or we don't like it. And so we're not going

12 to be able to get anywhere because we won't

13 cut a deal without this portion. And then

14 we'll have to go back and readdress it.

15 MR. BALLO: Well, I guess there's a

16 third option which is we vote in support of

17 the total package but continue to oppose this

18 aspect of it, and it's kicked to DOE to make

19 a decision up or down on prohibited acts,

20 which I'm fine with doing that.

21 I just, I will not sign on to not

22 having prohibited acts up and down the board.
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1 MR. DORIA: Tim, this is Jordan. 

2 You say up and down the board. You mean for

3 all three parties?

4 MR. BALLO: Yes.

5 MR. DORIA: And there's nothing that

6 can be done to change that, at least for

7 distributors?

8 MR. BALLO: Not that there's nothing

9 that can, I haven't heard what could be done

10 yet that would take that off the table.

11 MS. MEYERS: Is there like, so this

12 is Karen with Rheem. So to Jordan's point, is

13 there a death penalty option or a nuclear

14 option that we can put in there for

15 distributors that's more than what's in there

16 today?

17 Or we could find what number of

18 violations is for distributor differently than

19 how we've kind of talked about it for

20 contractors, just some ideas that can we add

21 additional requirements for distributors such

22 as annual compliance statements that they have
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1 to submit to DOE or something like that to

2 just get some more ideas on the board to try

3 and move this forward.

4 MR. RAWALD: Well, I guess in

5 Karen's vein, so one of the two violations for

6 distributors is the routine violation of

7 selling to somebody who's on the list.

8 Do we want to make it just a one or

9 a two time? Hey, if distributor, if you deal

10 with somebody on the list, that's a violation. 

11 Do we want to lower that threshold to make it

12 so Meg's two tier approach is less concerning

13 because the second tier is easier to achieve?

14 So once the dealer is copied on the

15 list, the distributor has got to stay away

16 from them. And if they, I mean if they

17 unknowingly do it, that's different then.

18 But if they knowingly go ahead and

19 deal with the person then even the one time

20 affair is enough that the manufacturer should

21 be careful of the distributor. That's a

22 possibility to put out that.
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1 MR. FENSTROM: So this is Gary,

2 following Jordan and Karen's suggestions that

3 we explore alternatives, I think we're open to

4 considering all of those alternatives.

5 But for the moment, we need

6 something more than what we've got. And it

7 won't cause us not to reach consensus. There

8 might be just one issue where, again, we agree

9 to disagree.

10 MR. SACHS: I have one factual type

11 question. Before that I strongly endorse the

12 path Jordan has suggested and Karen has

13 amplified.

14 And the question really is to Jon,

15 do we have some sort of an estimate of what

16 fraction of total air conditioner shipments

17 are represented by HARDI members?

18 If the contractor --

19 MR. EISNER: Can you speak up? I

20 didn't hear the last part of that sentence.

21 MR. SACHS: What fraction of the air

22 conditioner shipments are handled by HARDI
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1 members?

2 Or let me put it this way, are not

3 handled by HARDI members or manufacturer-owned

4 distribution, because with the contractors

5 we've worried about the rogues.

6 We haven't worried about Chuck and

7 Charlie's members. Our mental image has been

8 the fly by night.

9 And is there an analog in

10 distribution among people who are not John

11 Hurst types and not your independent members? 

12 I just don't know.

13 MR. MELCHI: Yes, I couldn't give

14 the number. I think the folks, the

15 manufacturers would probably have a better

16 idea. And that's history of dealing with very

17 small --

18 MR. SACHS: Very small means 5

19 percent, 10 percent but certainly not 25

20 percent?

21 MR. MELCHI: I would think that for

22 sure. I think where the challenge, I mean
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1 it's hard to pinpoint because what you're

2 talking about may not really be a distributor

3 in the sense that we call a distributor.

4 It could be somebody else. So

5 again, I can't give you a percentage.

6 MR. SACHS: Again, it's something

7 that affects my mental image of the industry,

8 and I appreciate it.

9 MR. EISNER: Jordan, did you want to

10 say something?

11 MR. DORIA: Well, I was just going

12 to say I was actually thinking along the line

13 of what Doug said before because actually when

14 Meg made her comment I realize that I probably

15 didn't fully understand maybe what that

16 violation of a distributor is, that right now

17 as it's written, a distributor could sell to

18 somebody who has been deemed a routine

19 violator at least once.

20 Is that correct, Gary? So I think

21 as a general point, I'm inclined to say we

22 should try and find ways to prevent that.
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1 I mean if you're already been deemed

2 a routine violator, that means it's in public

3 record. I think we should try to work toward

4 that.

5 I think where Jon, chime in on this,

6 what I'm trying to understand is the concern

7 there that there are these cash, over the

8 counter, no account people for whom you would

9 not be looking at their license to cross

10 reference it with the list. That's the

11 concern?

12 MR. MELCHI: Yes.

13 MR. DORIA: Okay.

14 MR. MELCHI: That's a scenario that

15 could come up.

16 MR. DORIA: Yes.

17 MR. MELCHI: I think what we're

18 doing prevents an awful lot of that.

19 MR. DORIA: I guess what I'm trying

20 to get at is there a way to maybe work that in

21 then somehow because that's not the majority

22 of the business, right?
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1 MR. MELCHI: And if we assume that

2 the actual routine violators are going to be

3 such a small percentage of people.

4 MR. HUNGERFORD: And this is David

5 Hungerford. I'm not as concerned about the

6 issue of the reaching violators because as you

7 point out, they're going to be a very small

8 percentage of the population because they're

9 so few prosecutions or actions that will take

10 place compared to the market size.

11 I'm more concerned about the first

12 bullet, the idea of a distributor who can move

13 a truckload of products to a job site in an

14 area that the equipment in that trailer is not

15 compliant for that area.

16 And right now there's no harm that

17 the distributors can suffer for violating

18 that.

19 And that's what seems to be, that's

20 where my sticking point is, that the

21 manufacturers can't do these things. And they

22 can be punished if they do.
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1 The contractors cannot do these

2 things, but they can be punished if they do. 

3 But the distributors cannot be punished for

4 knowingly moving product into the wrong area.

5 And that's fundamentally where my

6 concern is, and I understand what the

7 settlement agreement says.

8 MR. MELCHI: I guess also my members

9 would say it is not illegal for me to move

10 product into that region. It's an install.

11 (Simultaneous speaking)

12 MR. HUNGERFORD: If it's delivered

13 to a job site, it's not unreasonable to expect

14 that they will be installed at that job site.

15 MR. MELCHI: And that would trigger,

16 and that sort of conduct from what we

17 understood could trigger a violation which

18 would result in that distributor being cut

19 off. Correct?

20 MS. MEYERS: Only if you were found

21 routine.

22 MR. MELCHI: If we were found
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1 routine. I mean so --

2 MR. WHITE: But excuse me. If it's

3 a truckload of equipment it's going to be

4 routine because each unit on the truck counts

5 as one.

6 MR. MELCHI: Yes. They're cut off.

7 MR. WHITE: So you're going to be a

8 routine violator for the first time, and

9 you're out of business.

10 MR. BALLO: That's the best solution

11 for you because to me that doesn't seem like

12 the best solution because I hate to put

13 someone out of business for something that

14 happened one time, even if it was a truckload

15 of equipment.

16 It could've been somebody screwed

17 something up.

18 MR. MELCHI: Well, and I thought

19 that as we discussed with Charlie and Chuck,

20 there are things I think we didn't get to how

21 a distributor could remedy a violation.

22 We talked about how a contractor
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1 could remedy a violation. I think there's

2 ways that distributors could make good on

3 violation if something happens.

4 I was thinking about this at lunch. 

5 You have a counter guy who screws up. Okay. 

6 Well, we're going to put him through training,

7 or we're going to let him go.

8 And we're going to try to find out

9 what happened and work to make this customer

10 whole. I think it's our job, too.

11 We're knowingly violating, we also

12 have, we have a role in making the customer

13 whole as well. Maybe that contractor has

14 flown the coop.

15 And we can't track him down. I

16 think the onus would then fall on us to make

17 that customer whole.

18 I think that's a, if you're

19 knowingly doing this. If you are plotting and

20 scheming to get 13s in Texas, or somebody is

21 and facilitates this knowing that a guy is

22 going to make a run from Indiana down to
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1 Texas, you're going to have to remedy that.

2 I don't want to say that we don't

3 have a role in making a consumer whole because

4 we do if we're found to be knowingly

5 violating.

6 MR. FENSTROM: So, this is Gary. 

7 Did we decide that knowingly means plotting

8 and scheming and intentionally, or you should

9 have known better?

10 MR. RAWALD: Knowingly is defined in

11 the statute. Knowingly as a term is defined

12 in the statute. I put it up on the screen

13 before. We can get to it. It means both

14 actual and constructive knowledge, so it's a

15 defined term.

16 MR. FENSTROM: Okay. Thank you.

17 MR. HUNGERFORD: So just to test

18 that because I'm not a lawyer, if the

19 warehouse in Ontario where thousands of units

20 are shipped through and moved to Oregon also

21 has a counter.

22 And that distributor or an employee
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1 at that distributor at that counter sells a 13

2 HVAC unit to a guy in a pick up truck who is

3 not driving to Oregon, can we reasonably

4 assume that an HVAC contractor that lives in

5 Orange County, California, San Bernardino

6 County, California is going to be installing

7 in that area?

8 Does that meet that threshold?

9 MR. RAWALD: Well, I don't want to

10 speak a hypothetical without having the full

11 facts because I'm just guessing here, but it

12 seems that it would be possible that we would

13 find a finding of violation.

14 MR. HUNGERFORD: You're 1000 miles

15 from the closest edge to the southwest

16 territory.

17 MR. RAWALD: You're giving the

18 scenario you're bringing forward, and I'm

19 saying it's possible that we could find it to

20 be a violation.

21 And then if it happens multiple

22 times or on a regular basis, then it would be
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1 a routine violation such as they would be

2 found to be violating.

3 So yes, I think that would be

4 incumbent upon the distributor --

5 MR. HUNGERFORD: Would the

6 contractor have to be a routine violator in

7 order for this to be a routine violation?

8 MR. RAWALD: No, because that's a

9 scenario, if you go back to the violations,

10 that's scenario number two, which is the,

11 what's their number one, that they will sell

12 or install their products.

13 (Simultaneous speaking)

14 MR. RAWALD: It's a one tier thing I

15 think. So I think that has some teeth. I

16 think that puts Jon's people at some risk. I

17 think that makes them want to do the right

18 thing.

19 MR. MELCHI: This is Jon. I've had

20 members that have talked about what they're

21 going to do with this, and things that was

22 floated was on the 13 SEER condensing unit.
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1 Maybe they'll be on the packing

2 slips where it says by accepting this I agree

3 that I will install this product in accordance

4 with the regional standard.

5 And aside from asking the guy at the

6 counter what he's going to do with it and say

7 you know you can't install this in California,

8 correct?

9 And the guy would say presumably

10 yes, and he will take possession of this with 

11 a slip that says I cannot, I should not

12 violate the regional standard.

13 I don't know what more we can do

14 other than you can tell somebody no. I guess

15 you can no sell them.

16 MR. HUNGERFORD: That would be my

17 preference.

18 MR. MELCHI: Well, I guess, David,

19 most of these manufacturers aren't going to be

20 shipping to that Ontario location.

21 And typically a store would not

22 necessarily have access to the entire
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1 distribution center. It's a different

2 process. So that's --

3 MR. HUNGERFORD: What about the

4 distributor moving product to the local store

5 that sells to the local market? Is there a

6 problem with that? And is the distributor at

7 any risk for doing that?

8 MR. GIBBONS: This is John from

9 Carrier. It's not installed. They get there. 

10 They sit there forever. I don't know.

11 If they're not installed, there's no

12 violation, and I think all of the distributors

13 here we've already kind of talked about, we're

14 all working on for our distributors, the ones

15 we can sell to, point of sale material,

16 placard and the mats that sit on the counter

17 that say hey, it's labeled blah blah blah.

18 We're all working on ways to help

19 enforce this. Our consumer relations

20 department, our 1-800-CARRIER, all these

21 people are getting coached, instructed,

22 trained to help distribution in the
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1 contractors be compliant.

2 I mean it's a big undertaking for a

3 manufacturer to aid the whole channel. It's

4 huge. Talk about 10 million. I'll wager 50

5 million to 100 million for manufacturers,

6 frightened about $200.

7 MR. HUNGERFORD: I guess I have in

8 my mind the appliance shop that I used, or the

9 appliance repair parts store that I use when

10 I buy a replacement fan or other parts for my

11 HVAC unit.

12 And it's Standard Appliance Parts, T

13 Street, Sacramento, California. They move at

14 least dozens of HVAC units a day through their

15 old quantum hub to local contractors.

16 What I want to know is how the

17 distribution supply chain or somebody is

18 accountable in that distribution supply chain

19 for having a store full of 13 SEER units in

20 Sacramento, California and how that's going to

21 be prevented, how the distributor, large scale

22 distributor with big warehouses distributes to
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1 the small scale distributor who's the retail

2 establishment, both described as a distributor

3 in our definitions.

4 Who in that supply chain is

5 responsible for making sure those contractors

6 who are all competing with each other are not

7 coming to the counter and trying to undercut

8 each other by buying the cheapest unit that

9 they can get from that store, from that

10 business?

11 And I'm at the point where I really

12 don't want to blame the actual contractor who

13 is trying to make a living because if he

14 doesn't buy that 13 SEER unit that's available

15 to him, then somebody else will and underbid.

16 And so in terms of getting this all

17 to work, it seems like the incentive structure

18 should be such that it's hard to get such a

19 non compliant unit in places where you

20 shouldn't be putting the unit.

21 I've said before, the border issue

22 doesn't really concern me nearly as much as
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1 the loss of savings are not that great. 

2 Harvey disagrees.

3 But, because they're all the same

4 climate. But that's the scenario I'm trying

5 to think of. And I'm trying to figure out

6 where are disincentives.

7 There's no disincentive anywhere in

8 that chain other than the potential for one of

9 those contractors to get caught in the 60 odd

10 enforcement actions the DOE engages in every

11 year. Might as well be no enforcement at all.

12 MR. MELCHI: I think, go ahead Dan.

13 MR. ARNOLD: Dan Arnold, yesterday

14 we talked about everybody was excited about

15 this label.

16 And again, I don't think it would

17 take too long for a consumer to see the label

18 in their backyard, get on Facebook and say

19 hey, I've got a unit that was just installed

20 and I paid umpteen thousand, several thousand

21 dollars for it.

22 And it says it's illegal to be
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1 installed in California where I live. Does

2 anybody know what the heck is going on? In a

3 heartbeat, I mean that's what it would take to

4 put this on Facebook.

5 MR. HUNGERFORD: Well, if they got

6 inspected it would be fine, too, but we know

7 inspection is under 20 percent.

8 MR. ARNOLD: Where in the chain does

9 it get caught? I think that's where it's get

10 caught, and then again, it's pretty quickly

11 put to bed by those of us who we fear for our

12 reputations as clean contractors,

13 manufacturers and to a certain extent

14 distributors.

15 I think that's a --

16 MR. HUNGERFORD: But do they get in

17 trouble if that happens?

18 MR. ARNOLD: It corrects itself at

19 that point. I don't want that contractor. 

20 I'll be glad for Rheem to take that contractor

21 because they're not a good contractor.

22 They're not going to be in business
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1 long anyway, so Gary can have them.

2 MR. WHITE: Let me say this, Chuck

3 White. It's really hard for me to sit here

4 and have my livelihood be run down right and

5 left.

6 Yes, there are bad actors. I'm not

7 happy about it, but I can guarantee you, I

8 can't speak of outside Sacramento, California. 

9 Maybe it's a den of thieves.

10 But in most communities you have

11 people that do the right thing, and if they

12 know I have a supply house with a stack of

13 SEER 13's going out the back door and I'm

14 getting cheated out of work because everybody

15 else is doing it, not every one of them is

16 going to say well, I'm doing it, too.

17 Some of them are picking up the

18 phone, and they're giving my friend Mr. Rawald

19 here a call and saying there's something going

20 on out there.

21 Our industry does not get near the

22 respect it deserves, and I would like to get
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1 some for a change.

2 We have some honest people. We have

3 some qualified contractors. We have

4 professional contractors. Charlie has some,

5 too.

6 MR. HUNGERFORD: And I did not mean

7 to interpret it as insulting the industry

8 because I know that there are good actors in

9 the industry.

10 (Simultaneous speaking)

11 MR. WHITE: And I understand that.

12 MR. HUNGERFORD: My concern is

13 depending on that mechanism to enforce policy.

14 MR. WHITE: My point is I'm

15 concerned about the cheaters, too. And a lot

16 of my brethren are concerned about the

17 cheaters, too.

18 And we're going to look for them. 

19 Are we going to be able to turn everybody in? 

20 No, I don't think so. But we're going to look

21 for this kind of stuff.

22 The answer, if I'm being beat by
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1 people using wrong equipment, isn't to use

2 wrong equipment. It's to make the other

3 people use right equipment.

4 And okay. Not every contractor is

5 going to do that, but a lot of us are. I've

6 said my piece for contractors.

7 MR. EISNER: Any other comments on

8 this subject?

9 MR. RAWALD: So we did focus a lot

10 of discussion. Chuck's antenna went up on

11 some of the negative things about the

12 prohibited acts vis a vis the distributors.

13 We didn't say a lot about the

14 prohibited act vis a vis dealers and

15 contractors. I don't know if the advocates or

16 any particular individual has an argument for

17 that that are separate and apart from what you

18 voiced for the distributors.

19 Obviously it's a different question

20 because there's no settlement agreement

21 regarding those parties.

22 But what I hear Tim saying is he
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1 wants everyone to be treated the same across

2 the board. So I'm not sure how comfortable,

3 I don't know where you folks are as far as if

4 there's no prohibited act towards a

5 distributor you wouldn't want one for a dealer

6 or you want one regardless, I guess.

7 I don't know where you fall on that.

8 MR. BALLO: I think we're still in

9 the same position in that absent the $200 fine

10 which is wholly inadequate.

11 It's just another thumb on the scale

12 that forces us to come down harder than I

13 think it makes sense on routine violators. So

14 I don't know if anyone else has more thoughts

15 on that.

16 MR. RAWALD: I did hear Karen say at

17 one point that she'd rather have the $200 fee

18 than the extreme option. Is that something

19 you thought about more and to the field, or

20 have you changed your opinion on that?

21 MS. MEYERS: Well, so I don't have

22 factory owned distribution. So --
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1 MR. RAWALD: This is from the dealer

2 and contractor point of view.

3 MS. MEYERS: Yes, I mean I'm not in

4 their shoes, but just from an outsider's

5 perspective, the prohibited act appears to me

6 to be the preferable path versus the death

7 penalty.

8 So $200 fine, I mean it's a $200

9 fine. If you sell one unit, or you install

10 one bad unit you're going to have a $200 fine.

11 If you install five, then you're a

12 routine violator and DOE, but I do think that

13 many around this table did make an agreement

14 with the settlement agreement.

15 And then there's a part of me that

16 says there was this agreement that there would

17 not be any civil penalties assessed against

18 distributors.

19 So with that in play, I think we

20 have to respect that to a degree. Now whether

21 the prohibited act can be assessed on records

22 retention and all those other things, I guess
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1 I'm a little more open to those ideas.

2 But the two step approach here that

3 we have, I agree, adds some teeth for the

4 distributor.

5 I think it puts me as a manufacturer

6 more at risk in bullet number one because I

7 don't know what happens to me as the

8 manufacturer, how the prohibited act kicks in

9 with me.

10 If he sells one product to a dealer,

11 can I no longer sell to that distributor at

12 all if I find out about it?

13 Or is it then again only if there's

14 a violation determined by DOE? So I'm really

15 unclear on this. I get Number 2 because

16 there's probably going to be a DOE action.

17 Number 1 I think adds a lot of teeth

18 to make sure the distributor doesn't do that. 

19 But I guess my concern then is how do I, how

20 does the OEM and the prohibited act all

21 interact with the first bullet.

22 MR. RAWALD: Right, so your concern
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1 really is this question that goes back to

2 Jordan and Amy's point, which is how much is

3 it based on DOE determination versus the

4 internal business model that's going to forced

5 to go on.

6 And so with understanding all those

7 points, I'm going to bring that back to the

8 Department tomorrow and really focus our

9 efforts on trying to ferret out what would be

10 comfortable there.

11 You guys raised a very valid point

12 for me to consider and bring back on that. I

13 think I get all that. So I guess, Karen, and

14 I was trying to focus you only on dealers and

15 contractors.

16 And I understand where everyone is

17 on distributors --

18 (Simultaneous speaking)

19 MS. MEYERS: Yes, if we were the

20 contractors, I think that's for them to ask. 

21 I think the nuclear option is definitely

22 appropriately named.
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1 MR. RAWALD: The nuclear option to

2 me was the John Hurst you can't sell them

3 filters or compressors. That was the nuclear

4 option. Mine is a little bit less

5 restrictive.

6 MS. MEYERS: But I think John

7 brought up a great point. If this is a guy

8 who is routinely violating and routinely as we

9 defined, we don't want this guy in business.

10 He brought up a good point, but it

11 depends on if we keep that extreme routine. 

12 And now that we have the remediation options

13 and stuff like that, it may be, that's a path

14 forward as it the $200 fine prohibited act

15 option.

16 So that may, I guess I'm not as

17 strong on that as I once was with the

18 contractors. We did come up with some ways

19 for them to get out of jail essentially.

20 MR. SACHS: This is Harvey, and I

21 can only say where I am, not where you all are

22 right now.
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1 And that is a feeling that the

2 prohibited act for the contractor helps to put

3 people on notice up and down the chain without

4 being nuclear.

5 It's just like the metaphor we

6 talked about this morning of the bounced

7 check. It says you want to be careful in your

8 dealings with that contractor because there

9 has been a finding that there was a violation.

10 He's not a routine violator, so

11 that's my instinct that it is a diffusing of

12 the nuclear while getting the information to

13 people who may be affected in their business

14 decisions. I can be disabused of that, but

15 that's where I am now.

16 MR. RAWALD: So Harvey, I want to

17 put the thought forward that I offered to Tim

18 a little while ago, which is if the finding of

19 the individual violation was public, would

20 that therefore address it even if there was no

21 actual outcome as far as the contractor be

22 charged money, $200 or less, the fact that it
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1 was made public, the one time violation.

2 And any new action they take would

3 of course be out there as well because you

4 want to give the guy a full, fair record. But

5 would that address your concern?

6 MR. SACHS: I think it would because

7 it gets to them, and I just don't completely

8 understand all the realities of when you're

9 finding and when you're not.

10 But it gets to the point of advising

11 Karen and John that there may be

12 ramifications, and you want to be careful to

13 assure that particular actor is only doing

14 installs where they're appropriate.

15 So the $200 is not even important. 

16 It's having the information available for wise

17 business decisions.

18 MR. BALLO: So, channeling our

19 consumer advocate allies, I think what would

20 work for me or for them I guess, since they're

21 interested in remediation. It doesn't have to

22 be a $200 fine as long as there's remediation.
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1 But I think even though it's a

2 wholly inadequate thumb on the scale, it is

3 still a thumb on the scale that pushes the

4 contractor towards remediating the bad

5 installation or at least offering remediation.

6 So to me that's I guess still the

7 value that's still there for the prohibited

8 act.

9 MR. RAWALD: Well, how about this? 

10 If the remediation happens, then it doesn't

11 become public. Would that be something that

12 would be seen as, that's more concerning?

13 So if the matter doesn't become

14 public because they remediate it, does that

15 provide a powerful incentive?

16 MR. SACHS: I think that that's a

17 question I'd like to think about those who are

18 upstream from that dealer, and I try to keep

19 in mind Dan's strong feeling that word is

20 going to get out anyhow on social media.

21 MR. FENSTROM: This is Gary. My

22 opinion is that if we don't know about it, we
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1 don't know that DOE is truly enforcing these

2 regulations. So I believe we've got to.

3 MR. SACHS: The bully pulpit.

4 MR. MCCRUDDEN: So, this is Charlie

5 with ACCA. I think that the potential to

6 remediate a violation to avoid the

7 determination of a violation through

8 remediation may be beneficial.

9 And I know Tim is, or at least I

10 thought I heard Tim being sensitive to the

11 public notification at the violation stage or

12 at least at the civil penalty stage.

13 And so it sounds like now you

14 proposing that there is this sort of spot in

15 between the point where you receive a

16 suspicion or information that there could be

17 a violation and that violation, which is,

18 there could be remediation without getting

19 into the violation because that may trigger

20 the manufacturers.

21 And there are implications there for

22 all of us to do. I think I would support
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1 that. We've got a very different product now

2 than we had say yesterday about all this.

3 And I'd love if I can have a chance

4 to take this back up to my folks and see where

5 they are.

6 I think I said earlier, I think

7 we're getting to the point where there is a

8 path to us accepting a prohibited act, a civil

9 violation or some pathway by which there are

10 steps that we haven't really contemplated yet

11 so that there's protections for the one off,

12 but yet we can always make sure the folks who

13 shouldn't be doing this, keep doing this.

14 One thing I also say though is lack

15 of violations or lack of public notice doesn't

16 mean things are happening and no one knows.

17 It could be that what we come up

18 with is perfect, and the fact that Doug is not

19 taking any actions against anybody is the fact

20 that it's working.

21 But I don't want us to set up this

22 idea that if Doug's not sending out notices
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1 and letters, that he's failed.

2 MR. BALLO: Right, and there are

3 other ways to address the concern. I mean

4 Doug could, DOE, sorry to heap this on you,

5 Doug.

6 (Simultaneous speaking)

7 MR. BALLO: You could do like a --

8 MR. RAWALD: At least they spell the

9 last name correctly.

10 MR. BALLO: -- quarterly report. 

11 During the last quarter we found X amount of

12 violations, or we investigated X number of

13 complaints.

14 I think that would go a long way

15 towards helping us.

16 MR. MCCRUDDEN: And this is Charlie,

17 and I say that because if we haven't learned

18 that maybe every violation results in a

19 violation, and if we can resolve them before

20 they become public in some way, and I don't

21 know how you'd do that if you've got a civil

22 penalty that you have to publish.
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1 MS. MEYERS: That's a good point.

2 MR. RAWALD: No, and it's the

3 standard practice. And listen, I can't even

4 guarantee that we wouldn't naturally view it

5 a legal obligation to make public a lighter

6 action.

7 It's not been our practice to

8 publish warnings, and I will consider that to

9 be at least consisting of a warning, that type

10 of finding of a violation but nothing further.

11 We're telling you hey, you did

12 something bad. You shouldn't do it again. So

13 I think that would be within our standard

14 practice.

15 Now why they will stop a FOIA

16 request for that if Gary sent me a FOIA

17 request saying give me all the actions you're

18 taking, I don't know how that would stand up

19 in a court, would say Doug, put all those

20 things out there to Gary so he can look at it.

21 So that's a legal question I have to

22 look at, but I think what I want to say is if
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1 we want to address the Harvey-Tim underlying

2 concern, which is the publicity of it may make

3 encouraging for folks to remediate.

4 And let's just make it public in the

5 first place, if we think that's going to cause

6 the behavior they want. Those might be

7 addressed by risks, so that may be a way to

8 kind of get there.

9 I think we should all brainstorm

10 here over the next few days and think about

11 other ideas that may be better. I think it's

12 something worth looking a little more.

13 MS. MEYERS: So this is Karen with

14 Rheem. And since you brought up publicity,

15 something I'd like us to talk about maybe next

16 week is what will that public notice say?

17 Because I'm going to have a real

18 problem if it says four Rheem units were found

19 to be illegally installed in the south.

20 If I had no thought in that action

21 --

22 MR. RAWALD: No, that seems unfair.
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1 MS. MEYERS: So, or pictures of, so

2 I want us to really as part of this term sheet

3 to outline really what that's going to say

4 because that's, to me, going to, I don't want

5 that to say that.

6 MR. RAWALD: I understand.

7 MR. EISNER: We'll say Carrier

8 instead of Rheem.

9 MS. MEYERS: Perfectly fine. I can

10 sign off on that all day long. So yes, I do

11 want that to be part of the term sheet on

12 exactly what that wording --

13 MR. RAWALD: Right, there's not a

14 whole lot of benefit from the Department's

15 point of view about advertising the

16 manufacturer of the unit somebody else

17 installed.

18 It's the fact that the unit was not

19 non compliant. That's what's important. Now

20 if it became a litigation situation where we

21 had a prohibited act, which therefore entitles

22 the person who we're bringing the civil action
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1 against to bring us to court, then it would

2 become part of the court record that here's

3 this picture and here's this.

4 So the more we have the prohibited

5 act with us collecting money, there's more the

6 possibility of us having a court action that

7 would involve evidence and those kinds of

8 things going public.

9 So something else to consider I

10 guess as we look at this issue.

11 MS. MEYERS: Absolutely.

12 MR. RAWALD: So do people feel

13 comfortable that we can get to the answer next

14 week? I really do feel comfortable we can

15 finish this next week.

16 I feel really confident. I don't

17 know. I think we're close. Does anybody else

18 feel this way?

19 MR. HUNGERFORD: Does saying that

20 make you feel better?

21 MR. RAWALD: I feel really good

22 about it.
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1 MALE PARTICIPANT: We're halfway

2 there.

3 MR. RAWALD: I feel really good

4 about it.

5 (Simultaneous speaking)

6 MR. WHITE: Well, this is Chuck --

7 MR. EISNER: We're still on the

8 record, so side conversations.

9 MR. WHITE: -- you have this sort of

10 skeleton going of the framework, and if we saw

11 that and could kind of see the ornaments

12 hanging on the tree, I think we might, I think

13 we're kind of still off in the woods a little

14 bit about where we are.

15 So it's kind of hard to determine --

16 MR. RAWALD: Right. My goal is on

17 Tuesday, or next Wednesday, to bring to you a

18 package of here's where we think we are based

19 on all the things that we have.

20 And Laura's been taking really good

21 notes. We're going to try to put it all

22 together. I think we're going to bring you
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1 the package of where we are.

2 And I think we even chisel it around

3 the edges. I think we're pretty close to

4 something that's workable here.

5 MR. EISNER: This last one in

6 particular, it might benefit from describing

7 some detail. For example, what if they

8 remediate as soon as they realize you've come

9 to look at it?

10 What if they wait to remediate until

11 after you tell them it looks like you're going

12 to bring action against them?

13 And what if they remediate right

14 after you find that they're in violation? Is

15 that something you would post?

16 So is there a reason to handle them

17 differently, and if so, what does that mean? 

18 And that might help a little bit in this

19 regard.

20 But I think you should also think

21 over the next few days about some other ways

22 you can get what one side is asking for in
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1 terms of something equivalent to a prohibited

2 act but not a prohibited act because that's

3 troubling to some of the parties.

4 And whether you want to make it a

5 prohibited act for the contractor if you're

6 not making it a prohibited act, even if it's

7 just record keeping, you're not making it a

8 prohibited act for the distributors.

9 So I realize it has a different

10 effect when it's a smaller party with the

11 responsibility for installing it. But you

12 need to think about all that because if we're

13 going to finish next week, we're going to have

14 to have some real clarity on what this is

15 going to say.

16 You're going to be unhappy with the

17 final document.

18 MR. HUNGERFORD: This is David. I

19 do realize we're at the end of the day, but I

20 wanted to tee something up for the future

21 unless it can be dismissed immediately, the

22 idea of is there, we haven't talked directly
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1 about any kind of remediation from the

2 distributor.

3 We've talked about it from the

4 contractor but not from the distributor. If

5 we have a violation, not a prohibited act,

6 from the distributor where product was moved

7 in a way that was known or should have known

8 that they would have been installed in a non

9 compliant way, is there possibility for having

10 that as one of the solutions?

11 MR. RAWALD: Right, and this is

12 Doug. So I guess when I was viewing the

13 remediation we were offering, I was thinking

14 it's both ways, which is the replacement would

15 apply to whoever was the party that was

16 involved with the making of it.

17 Once again, if it's going to be the

18 only way the dealer gets out of it is by

19 replacing it, I think the distributor's in the

20 same boat, which is by making sure the right

21 unit gets in there whether they pay a

22 different contractor than the one they had
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1 before, they bear the cost of that getting it

2 into the house and into the hands of the

3 consumer.

4 So that's how I view it. So I think

5 that's what Jon offered out there as what he

6 thought would make sense as well.

7 MR. MELCHI: Yes, absolutely. I'd

8 be willing to take back SEER level above the

9 minimum standard.

10 MR. RAWALD: Let's not go too far.

11 MR. EISNER: You'll ruin your

12 reputation. Anything else before we break for

13 the day?

14 MR. SACHS: I'd just like to say

15 thank you. I think it's been a good day.

16 MR. HUNGERFORD: A good set of

17 meetings. It was nice to be in the room with

18 you folks. I won't be next week. I'll be the

19 disembodied voice right here in this little

20 spider phone.

21 MR. RAWALD: So please, if you have

22 any comments, give them to Laura before you
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1 leave, on the brochure so we can get working

2 on that. We'll bring an updated version next

3 week.

4 MR. EISNER: Remember next week

5 we're in --

6 MR. RAWALD: Upstairs.

7 MR. EISNER: We're on a different

8 floor.

9 (Simultaneous speaking)

10 MR. EISNER: Does everybody know

11 that, that the numbers we got for next week's

12 meeting, 6097, that's going to be on the

13 eighth floor, not the sixth floor?

14 (Whereupon, the above-entitled

15 matter went off the record at 4:44 p.m.)

16

17

18

19

20

21

22
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A

$1,000 56:14 57:1

131:18

$10 42:3 320:7 323:16

323:19

$1000 313:3,18 314:8

$15 56:14

$17 282:4 320:5 323:8

$200 124:18 131:19

146:14 150:22 173:2

207:8 300:2,9,13

307:15 308:12,16

320:18 321:6 329:4

329:14,17,21 330:8,9

330:12 334:1,3,4

353:6 360:9,17 361:8

361:8,10 364:14

365:22 366:15,22

$21 282:4 320:5,5 323:8

323:8,19

$3,000 56:15 196:20

$300 56:20

$3000 311:14,20 312:7

$4,000 196:20

a.m 1:11 4:2 71:2,3

abandon 160:8

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159:16 162:7 167:5

177:22 189:5 196:1

210:4 220:6 229:11

254:11 288:22 317:15

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33:21 39:18 43:16

44:20 50:12 58:4

60:14 92:9 133:15

153:15 154:16 155:22

157:7 167:12 170:17

210:13 216:21 233:4

236:6 243:16 249:10

264:7 286:17 291:13

298:14 305:12 323:2

326:15 330:19 337:12

358:19

above-entitled 71:1

175:8 380:14

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29:6 48:16 83:10

117:4 120:1 128:13

184:6 188:14 205:3

222:7 285:15 297:1

318:12 368:5

ACCA's 211:12

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351:2 369:8

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88:13

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343:8

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129:17,18 130:12

131:1,3,4,5,8,11,15

131:22 132:1,3

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146:12,16 150:17

170:14 205:20 211:3

211:7,8,13,14,20

212:3 225:2 249:16

258:8 278:9 298:19

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302:12 303:8,17

304:22 305:12 306:17

315:7,22 316:5,16

317:3,14 318:12

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371:17

active 67:7

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366:13

actors 74:11 112:6

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134:15 298:12 302:19

303:2 315:16 322:20

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359:12

actual 105:18 116:12

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265:7 286:3 314:9

326:3 344:2 348:14

354:12 365:21

ad 144:2

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192:9 197:17,19

234:4 252:2 299:22

302:15 327:7 338:20

added 34:15 59:13

188:10 336:13

adding 58:2 94:10

211:3 298:19 336:9

addition 42:14 55:8

229:18

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59:6 134:22 186:9

187:11 227:2 315:21

338:21

address 44:20 107:22

108:21 111:12 141:8

154:15 200:7 201:9

201:13 246:22 261:17

264:18,18 278:1

331:20 365:20 366:5

370:3 372:1

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203:3 372:7

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330:6

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182:4 303:6

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359:15

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200:5

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192:22 193:20 287:18

365:18

agree 4:13 18:9 19:19

68:16 77:3 87:4 90:2

110:16 126:20 141:12

151:1 160:6 164:19

177:3 191:6 192:10

208:19 238:13 243:10

263:21 295:15 302:8

302:11 306:21 326:14

335:9 340:8 351:2

362:3

agreed 320:21 321:1

agreeing 211:12 321:10

agreement 18:15 135:5

180:21 201:21 204:4

214:12 302:16,18

303:13 317:21 318:18

318:22 319:1,6

322:14 325:4,10,18

330:5 345:7 359:20

361:13,14,16

agreements 318:4

333:4,7,11
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Neal R. Gross and Co., Inc.

382

agrees 80:1 91:11,12

ahead 59:4 229:3 233:9

233:10 279:9 339:18

355:12

AHRI 5:7 16:14 126:20

AHRI's 94:10

aid 353:3

air 1:3,19 4:21 5:5,22

11:8 14:4 16:17 27:10

28:16 41:10 57:12

76:17 79:13 80:9 83:1

86:1 127:3,20 144:10

149:17,19 185:9

195:10,16 196:4,10

196:18 198:13 213:5

237:22 238:8 295:22

296:5 304:6 340:16

340:21

air-conditioner 149:21

159:14

Air-Conditioning 2:10

2:19

akin 142:11

alert 117:11 121:14

allegation 120:16

alleged 100:20 112:13

alleging 112:16

alleviate 83:3,5 200:19

331:16

alleviating 307:4

allies 366:19

allow 160:15 217:11

230:10 235:13

allowance 217:21 218:2

allowed 91:10 126:11

157:6 281:20

allowing 101:3

allows 74:15 132:4

238:3

alternative 128:1 230:2

alternatives 340:3,4

alternator 56:1

amenable 67:17 307:6

amend 182:12

amenities 313:22

America 1:20

American 2:8

amount 66:17 70:9

187:10 332:4 370:11

amounts 302:4

amplified 340:13

AMRANE 2:19 9:4

65:10 90:15,17,22

93:2 139:8,10

Amy 2:10 86:8 91:2,22

91:22 126:19 137:3

145:11 147:10 154:12

155:20 156:17 168:17

215:18 245:7 256:3

312:18

Amy's 157:10 363:2

analog 341:9

analogies 208:2

analogous 217:19

218:4

analogy 210:21 243:11

analyses 314:4

analysis 146:2 187:7

269:20 270:15

Angie's 309:7,21

Aniruddh 2:7 72:22

73:1 202:5,8,13 203:7

Aniruddh's 76:13

announce 223:15

announced 91:4 231:18

annual 23:17 282:9,12

282:12 338:22

annually 42:3 63:8

answer 75:6 93:1

107:17 122:19 135:11

155:22 168:10,15

172:10 180:17,18

184:1,12,13 186:16

188:12 220:13 278:16

358:22 374:13

answering 230:13

272:13

answers 42:22 90:5

antenna 359:10

anti-trust 313:15

anticipated 93:18

anybody 71:6 84:21

151:18 204:9,22

248:3 294:12,14

298:10 356:2 369:19

374:17

anymore 243:20

anyway 319:16,20

357:1

apart 359:17

apartment 219:20

apiece 196:12

appeal 142:16 143:6

171:16,19 172:17,18

173:3,10

appealing 172:4

Appeals 288:15 289:4,7

appearing 120:17

appears 263:6 361:5

appliance 56:6 353:8,9

353:12

applicable 77:15

147:19 149:17 333:5

apply 9:5 166:2 190:8

224:13 230:4 288:15

288:19 289:6 378:15

appreciate 5:20 50:5

79:17 95:3 96:2

183:18 190:16 194:17

324:12 335:16 342:8

appreciating 245:2

approach 95:17 104:22

107:10 111:6 128:10

163:19 173:8 182:13

182:16 183:2,16

187:18 192:20 210:16

210:20 339:12 362:2

approaches 121:13

appropriate 142:21

146:11 199:22 223:22

228:2 261:13 266:11

366:14

appropriately 219:2

240:19 274:1 363:22

arbitrary 319:9

archive 66:20 67:1,4

archived 67:8

archives 69:5

archiving 66:19 88:9

area 8:15 18:8,8 204:17

277:4,7,14 344:14,15

345:4 349:7

areas 18:6 19:3 190:4

326:15

arguing 227:6

argument 147:16 306:8

319:13,22 359:16

arguments 191:22

arithmetic 323:8

Arnold 1:14 25:8,8

70:16,20 71:10,10,19

72:5 193:15,15 194:5

309:1 311:13 312:10

312:14 355:13,13

356:8,18

arrive 215:3

ascertain 87:19

aside 351:5

asked 45:8 46:14 51:10

51:13 94:12,13 122:3

132:15 148:8 175:13

176:1 226:16 298:16

asking 11:21 19:11

64:17,19 66:6 108:12

176:14 188:10 216:12

232:17,19 245:19

264:13 351:5 376:22

asparts 4:9

aspect 303:1 337:18

aspects 189:6,14

aspire 193:12

ASRAC 24:1

assert 304:4

assess 100:8 136:21

223:20 255:1 329:16

assessed 157:19 322:2

361:17,21

assessing 135:15

174:3 223:22

assessment 136:1

258:15,21

asset-only 168:4

assistance 17:4

associated 9:3 12:22

174:13 187:1 258:8

309:19

Association 2:13

assuage 89:19

assume 27:14 34:5

213:4 262:18 265:2

280:16 344:1 349:4

assumed 33:2 211:2

assuming 11:7 40:12

103:8 143:4 160:10

211:5 225:13 249:4

254:8 262:4 283:11

283:12

assumption 32:21 93:9

111:11

assurance 332:9

assure 23:7 112:9

146:1 366:13

Atlanta 21:12

attached 168:14 218:20

261:20

attempt 305:15

attempted 99:5,10

101:21 102:2

attention 162:13 175:14

attorney 94:17 181:2

227:5

audible 85:1 90:10 96:7

110:20

audit 22:13

auditing 9:1

authorities 190:12

authority 13:3 23:5

124:13 148:3 177:18

178:10 225:15 226:5

304:5,18 305:12

319:19

auto 53:20 54:14 55:22

56:4

automated 234:1

automatic 224:19

available 61:2 69:3

88:21 275:22 276:4

277:7,13 290:15

295:1 354:14 366:16

Avenue 1:10

average 54:3 163:6

avoid 8:9 78:8 107:21
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

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212:5 240:6 245:17

306:13 368:6

avoiding 221:7 242:4

303:15

aware 102:16 122:13

162:8 173:22 231:18

awareness 266:15

awful 343:18

awfully 24:22 102:20

B

back 5:18 7:17 16:7

20:7 24:20 25:6,22

30:4 33:9,10 39:14

45:4 46:21 53:2 59:10

64:7 69:6 70:22 71:16

80:11 81:6 82:20 85:7

87:5,18 88:16 89:10

89:13 92:3 95:19

101:16 106:11 116:5

122:1,8 125:9 128:15

133:6 134:19 135:9

137:5 140:7 143:1

146:9 149:11 162:19

170:12 175:6,7,12

182:20 183:8 184:13

188:14 191:10 192:19

201:2,19 202:4,10

204:10,12,18 206:10

208:6 215:18 217:8

217:22 219:14 220:6

221:14 222:13 223:11

224:19 233:5,6 239:8

240:17,20 241:1

242:16,18 247:21

250:2 254:22 255:1

259:1,19 260:4,15

261:2 263:12 266:8

266:16,17 278:21

279:8 296:7 298:4

314:21 316:19 337:14

350:9 357:13 363:1,7

363:12 369:4 379:8

background 152:13

backwards 327:1

backyard 355:18

bad 31:9 101:9 106:15

110:3,13 112:14

131:17 146:18 151:5

159:20 161:6 166:15

168:1,11,11,13

172:14 173:18,22

174:12 179:21 219:15

220:4 223:22 224:5,6

225:8 226:8 233:3

244:11 251:11 257:5

279:7 312:4,4,4 357:6

361:10 367:4 371:12

baked 31:15

balance 146:19 185:19

ball 64:7 148:20 191:1

258:10

BALLO 1:14 26:21

32:18 33:6 52:7 105:1

118:13 119:7 150:2

191:5,12 205:16,19

214:13 215:13 216:4

280:21 299:4 304:17

307:8 315:18 316:2

329:7 331:19 332:16

333:22 334:2 337:15

338:4,8 346:10 360:8

366:18 370:2,7,10

ballpark 64:11

ban 50:10

bank 243:13 244:4

banners 161:14

bar 110:6 160:8,18

barriers 43:9

base 285:21

based 33:20 97:1,11

113:9 137:1 146:2

149:7 203:22 204:3

204:16 249:16 288:22

304:2 336:18 363:3

375:18

basic 61:5 204:5

basically 6:20 34:11

59:18 60:21 166:22

256:7 301:8

basis 23:18 38:13 40:16

41:6 78:21 80:2 163:9

188:5 199:15 207:1

323:7 328:16 349:22

bat 41:21 43:14

battle 335:21

bear 179:14 379:1

beat 358:22

bed 356:11

beginning 176:2

behalf 33:11

behaving 319:16

behavior 115:19 319:15

331:6 372:6

behavioral 42:15 43:7

believe 13:2 51:3 119:3

159:10 186:16 203:12

220:11 275:20 313:18

323:16 325:13 326:14

368:2

believes 172:14

beneficial 285:17 368:8

benefit 187:2 323:22

373:14 376:6

benefits 192:12 193:2

228:4

Bernardino 349:5

best 56:6 62:4 68:19

75:22 92:15 206:4

214:5 346:10,12

better 51:19 54:7 91:15

92:21 93:21 150:16

155:2 181:19 184:14

187:22 195:20 250:5

270:2 294:1 295:6

296:21 321:19 329:4

329:20 330:9 341:15

348:9 372:11 374:20

beyond 48:11 49:3,4

64:20 168:6 201:12

228:7 234:22 288:8

290:5 316:18

bid 99:6 100:11,20

102:17 104:14 105:19

106:7 156:1 292:18

308:13

bidding 156:14

bids 101:6

big 49:5 62:19 75:18

155:18 160:14 175:19

214:1 219:16 220:21

293:6 353:2,22

bigger 311:8

biggest 42:5 45:22

bill 39:13 47:12 55:12

60:21 246:20 247:7,8

279:4

billing 39:19

bills 47:13 229:20

bit 46:7 48:21 53:16

70:12 125:9 163:21

177:10 179:14 189:3

202:14 213:2 216:11

253:4 259:1 320:2

364:4 375:14 376:18

bitter 290:12

black 242:10 268:8

blah 352:17,17,17

blame 253:2 354:12

blast 162:7

blind 119:2

blogs 310:18

blow 123:4 155:3

310:13

blown 320:6

board 12:4 18:11 92:13

119:17 139:6 182:22

183:4 299:17 315:10

315:13 337:22 338:2

339:2 360:2

boat 378:20

Bobby's 106:15

body 183:8,13

bold 49:5

bond 220:22

boom 165:5 166:16

border 20:11 21:22

27:6 40:19 44:10

157:21 354:21

borne 14:18

borrow 178:9

boss 142:17,17 163:6

165:14

bother 111:12

bothering 121:11

bottom 25:20 163:4

bought 6:6 66:2 288:6

292:4,12 310:8,10

bounce 243:11,16

bounced 243:4 244:3

365:6

bound 315:1

boundaries 24:10

boundary 24:4

bowl 318:15

box 52:6

brainstorm 372:9

branch 40:21,21 243:7

brand 39:5,6,11 59:17

167:20 219:7 295:3

brands 37:1

breadth 121:19

break 88:14 173:13

296:5 379:12

breaking 136:10

brethren 358:16

briefly 217:8

bring 5:18 63:13 80:10

123:22 140:7,11

146:8 184:2 199:5

201:1 202:9 229:14

321:9 329:13 363:7

363:12 374:1 375:17

375:22 376:12 380:2

bringing 30:18,21,21

60:1 336:19 349:18

373:22

brings 28:18 310:22

broached 86:6

broader 316:22

broadly 226:6 316:17

broadness 317:21

brochure 3:19 296:13

296:17,21 380:1

broke 53:20 268:12

broken 52:4

brought 36:20 38:21

312:18 364:7,10

372:14

Bryan 2:6 11:5 36:2,7

47:8 48:20 51:11,12

55:19 104:12 129:10
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

384

130:7 237:9 238:12

258:22 262:21

Bryan's 273:16

bucket 272:22

bucks 196:12 229:19

280:22

buddy 261:3

build 31:12 35:21 67:22

112:21 142:16 210:18

260:12 278:1 308:12

builders 292:16

building 97:4 126:3

177:12 230:3,5,6

245:3 255:13 284:3,9

295:21,22 308:5

built 48:6,7,10 50:9

77:9 212:8 249:15

bullet 11:7 36:9 225:12

344:12 362:6,21

bully 368:3

bumping 195:21

bunch 21:13 135:16

191:12 292:12

burden 12:17 13:15

14:17 18:18 19:7

20:14 59:6 63:20

79:15 83:4 128:15

254:2

burdens 227:2

burdensome 15:9 29:7

29:8,9 75:17 77:2

245:15 249:5

bureaucratic 222:22

burning 236:2

bus 253:10

business 4:9 17:20

19:2 25:13 39:9,10

44:5,7,14 57:21 58:1

72:2,12 78:17 88:20

109:15 118:3 122:18

122:22 126:3,11

127:16,18 140:17

145:4,6,19 147:6

151:11 153:2 155:3

156:8 158:9 160:18

162:22 163:10 165:6

165:13 166:17,18,20

167:1,5,14 168:11,12

170:1 172:2,3,6 179:6

179:8,9 183:14,19

207:6 208:17 209:2

210:4,8,11,14 216:13

219:4 228:16 230:2

238:9 243:5 252:6

274:15,22 286:17

287:12 290:11 316:11

323:18 330:21 343:22

346:9,13 354:10

356:22 363:4 364:9

365:13 366:17

businesses 206:16,18

206:22

busted 166:16

busy 38:9

buttons 89:14

buy 34:13,14 39:3,8

56:4,5,6 78:18,21

168:1 196:11 197:14

219:12 235:3,4,5,20

236:6,17 237:9 239:2

240:2 276:20 279:16

279:18 290:12 295:6

295:8 353:10 354:14

buyer 65:21

buying 56:22 138:12

161:9 294:10 354:8

buys 167:13 169:9

C

C 161:5

cabinets 67:12

calculation 199:21

calculator 283:2

calculus 211:9

California 1:16,18

185:6 190:3 252:4

282:22 283:4 349:5,6

351:7 353:13,20

356:1 357:8

call 22:12 35:1 38:10

93:14 100:13 111:16

121:9 122:13 163:2

209:9 233:12 238:19

243:22 312:12 342:3

357:19

calling 28:6 37:16

calls 243:13 284:2

cameras 109:2

capabilities 24:1

capability 23:5 238:18

282:2 283:2

capable 153:12

capital 278:14

capture 41:19 55:8

79:12 82:18 232:12

capturing 19:7 79:20

81:3 273:8 318:21

car 54:14,15 56:2,2

card 37:4 212:10

care 55:6 76:22 77:11

77:20 78:9 208:14

241:5,7,11 256:11

280:6 283:4 300:11

310:10 312:1,7,16

careful 232:17 244:17

244:20 339:21 365:7

366:12

cares 229:7

Carolina 118:11

carried 13:15

Carrier 1:17 37:1

108:15 161:1 287:17

312:11 352:9 373:7

carry 309:2

case 5:3 13:14 21:4,8

21:15 31:12 32:6 34:1

37:11 63:13 68:16

72:15 107:11 112:1

114:19 118:2 119:8

120:2,18 121:17

122:2 124:10 132:12

132:14,16,19,20

138:10 191:19 198:22

224:11 227:18 232:2

240:1 243:15 247:8

251:12,13 271:20

277:12 288:19,20

292:3 305:20 308:22

330:9

cases 73:10 275:10,21

286:13

cash 36:5,20 37:4,20

38:4,13 39:12 41:6

43:4 44:4 55:10 65:22

73:4,8 74:3 75:14,16

76:1,3,3,4,5,7 77:5

78:14,20,21 79:8

343:7

cash/no 74:14 76:15

catalog 43:11 61:1

catch 24:5 33:3 236:1

270:12 328:6

catch-22 330:15

caucus 20:4 25:9,16

31:20 59:10 70:11,14

71:7,9

caucuses 3:15

caucusing 70:18 86:5

caught 111:18 130:22

154:5,6,9 155:16,17

158:4,13 170:6 208:9

271:14 285:6 300:8

308:14,15 322:5

327:13 355:9 356:9

356:10

cause 98:18 99:12

151:5 174:2 322:22

340:7 372:5

caused 93:15

caveat 93:5 108:11

159:14

center 352:1

central 1:3 4:21 14:4

127:3,20 144:10

149:19,21 159:14

196:10 213:5 304:6

certain 23:4 65:16 75:4

224:1 284:18 286:1

319:8 356:13

certainly 22:21 24:6

66:11 67:17 81:7

110:10 133:9 135:10

135:12 141:14 146:8

153:19 164:6 201:3

218:16 266:5 282:18

305:9 307:8 308:20

341:19

certainty 173:7

certificate 223:8

certification 5:9 223:7

certified 28:19 170:20

CFR 203:3 304:7 317:2

chain 16:17 49:17

58:22 118:14 119:2

121:14 214:15,22

215:7 238:7 259:19

293:13 299:7 300:21

353:17,18 354:4

355:8 356:8 365:3

challenge 341:22

challenges 43:13

chance 113:7 188:16

207:17 336:3 369:3

change 28:3 40:7 42:3

42:5,14 43:7,17 44:8

47:11,19 48:12 57:7

58:14 59:11 115:19

154:20 159:4 168:19

179:8 198:7 211:8

223:16,18 238:1

293:14 298:5 329:20

338:6 358:1

changed 11:10 59:14

223:17 360:20

changes 3:19 42:17

47:5 50:2 93:19

178:19 196:16,16

323:14

changing 48:14 49:20

128:6 161:7 228:19

297:2

channel 114:15 331:14

353:3

channeling 366:18

characterize 318:20

characterized 126:21

charge 124:15 131:14

275:2

charged 54:9 365:22

Charles 1:19 2:12 297:1

Charlie 7:15 12:1,2

14:14 15:7 18:14 21:1
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

385

27:17 29:6 31:18

33:14 36:4 48:15

59:20 60:8 83:9 84:3

85:5 99:8 101:20

117:3 119:22 128:12

139:17 155:21 165:7

165:12,16,17 167:22

175:12,22 184:5

188:13 205:2 222:6

226:21 227:5 229:1,1

238:22 242:22 244:14

249:19 267:2 279:9,9

285:14 308:10 318:11

346:19 358:4 368:4

370:16

Charlie's 58:11 165:4

179:12 341:7

chasing 178:7

chat 45:9

cheapest 354:8

cheat 274:2 315:2

cheated 252:11 357:14

cheaters 358:15,17

cheating 119:4 219:1

check 44:21 45:4 71:16

107:4 133:15 234:5

243:4,11,15 244:3

248:8 259:5 265:1

365:7

checked 37:1,8

checking 37:6 83:17

119:5

checkouts 55:14

checks 243:20

Chevron 150:11

chime 343:5

China 289:1

chisel 376:2

choice 210:10

choose 123:7 218:18

300:3 335:9

Chorus 125:6

chose 220:7

Chuck 7:21 13:15 36:4

68:2 89:5,15 98:12,12

109:14,14 113:2,5,6,7

113:10 122:5,14,16

122:17 123:3,5,6,7

124:17 129:4 141:11

155:21 161:4 176:4

183:17 190:5,15

193:5 211:11 218:9

221:17 224:22 228:13

237:1 250:18,19

251:3,22 260:7,9

262:22 266:12 267:2

275:12 278:17 279:6

287:19 291:21 294:16

329:3 341:6 346:19

357:2 375:6

Chuck's 101:1 122:18

135:21 170:1 190:1

213:14 237:22 238:8

243:9 250:10 276:10

322:4 359:10

chuckle 324:19

chunk 75:18

circle 88:16

circles 122:1

circulate 5:15

circulating 5:12

cited 271:12 320:6

citizen 221:15

citizens 196:9 229:11

319:14

civil 9:2 124:13 218:16

224:1 237:14 258:8

304:4 305:5 322:2

329:16 330:14 331:21

335:14 361:17 368:12

369:8 370:21 373:22

claim 22:1 116:6 231:4

231:5 245:11 246:1,4

247:10 248:13,20

249:11 261:1,4,12,13

261:21 262:2,12

264:4 268:3 273:12

276:11

claiming 234:12

claims 107:21 234:15

251:17 259:3,20

262:5 263:19 271:16

274:4 276:15

clarification 28:6

130:14 274:13

clarified 6:22

clarify 148:4 256:2

clarifying 143:4

clarity 203:10 377:14

CLARK 1:15

class 149:16,19 155:6

classes 76:14 144:5

170:2

classified 300:6

clean 356:12

cleaned 69:17

clear 10:9 15:10 24:17

70:5 77:8 129:8 138:6

172:20 204:2 210:7

210:16 266:4 272:17

285:2 326:5,9 336:1

clearly 51:14 113:2

253:1

click 55:11

client 39:4

clients 13:20 181:17

climactic 185:17

climate 185:7 355:4

climb 220:6

close 25:4 93:13 96:1

132:18 166:5 220:19

221:4 224:7 336:15

336:20 374:17 376:3

closed 132:17

closely 101:1

closer 272:13

closest 38:3 349:15

closing 132:13

clue 262:8

clutch 117:10

coach 291:13

coached 352:21

coalition 189:22

Coast 37:9

code 45:9 46:6,10,15

46:17 47:22 51:22

52:5

codes 69:11 177:12,12

coexist 14:15 119:5

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28:15 38:2,3 56:19

57:7 74:1 75:14 76:13

79:14 80:10

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57:13 65:21 66:1

75:13 76:18 231:4

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197:15

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20:7 23:7 29:3 39:2

43:10 59:10 64:7 68:4

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87:5 92:6 111:2 116:5

118:4 128:16,16,20

134:19 135:10 143:1

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170:12 175:6 176:16

182:20 185:12 186:11

201:20,21 202:16

237:12 238:5 243:9

259:1 266:17 271:11

279:7 281:2 292:4,11

343:15 360:12 364:18

369:17 376:8

comes 24:21 37:22

39:2,8 73:4 74:2

148:22 220:14 263:10

319:22 327:16

comfortable 12:9 86:6

87:19 89:9,11 90:2

91:21 114:6 119:21

132:21 203:15 226:10

226:12 249:17,20

255:21 285:16 300:7

301:12 306:12 360:2

363:10 374:13,14

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154:18 161:3 323:6

354:7

command 175:21

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109:20 125:8 184:20

194:17 198:4 200:9

204:10 211:12 314:17

342:14

comments 11:14 58:6

70:11 94:8 95:6,7,11

95:12,15,18 96:3

181:13 184:17 207:20

297:16 303:22 308:2

359:7 379:22

commerce 58:22

224:18

Commission 1:18

252:3,9

commit 74:17 80:20

285:4 286:1 332:4

commitment 40:14

41:1

committed 136:4

269:19

Committee 180:10

committer 116:2

committing 136:6

308:5 315:12

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314:3

common 9:16 199:16

314:4 315:3,4

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community 190:18

217:12

community's 189:12

companies 163:5

165:12 196:5 308:1

company 1:15,21 2:7

135:22 138:5,8,10,14

138:15,19 140:3

161:8 165:5,7 169:9

169:11 170:8,13

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company's 71:14

138:21

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344:10

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308:21 313:15

competitor 98:17

100:11 156:5 166:20

competitors 158:11

309:8

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98:14 111:14 158:5

252:5,15 269:4

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370:13

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35:11,16,20 58:21

81:21 114:2,8 237:17

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106:8 232:3

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152:22 366:7

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compliance 17:10 23:8

48:17 77:9 81:18

93:12 133:4,20 178:4

200:20 311:2 334:10

334:16 338:22

compliance-required

17:11 18:6 19:3

compliant 9:21 17:19

17:22 26:9 31:1,2

32:19 35:13 81:16

99:5 111:17 133:13

136:5 156:10,20

218:1 222:3 224:18

246:4 257:20 344:15

353:1 354:19 373:19

378:9

complicated 29:4,5,6

168:16

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306:4,14 315:14

333:4,7,11

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333:14

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274:18

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compromise 24:5 34:3

34:6 52:13 53:10

80:19

conceivable 280:4

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249:15

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76:5,10 77:7 81:2

101:1 105:2 108:9

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212:15 231:15 240:9

243:5 300:15,20

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370:3 372:2

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162:16 195:15 198:17

203:3 216:10,11

230:8 242:14,19

330:13 344:5,11

358:15,16

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339:12 367:12

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88:8 89:19 272:14

277:22 301:5 331:16

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274:6,10

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273:17

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57:14,16 75:13,16

76:1,16 77:1,10,21

78:3 80:5,6,8,14 82:1

83:2,19 87:8,22 91:7

350:22

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conditioner 1:3 6:1

127:21 149:20 196:4

295:22 340:16,22

conditioners 4:21 14:5

27:10 144:11 149:18

304:6

conditioning 1:19

127:4 185:9 195:16

196:10,18 198:13

213:6 237:22 238:8

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198:19,19

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151:9,12 152:21

345:16

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319:18 331:5

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247:4

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Congress 97:22

Congressional 146:5

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72:10 131:9 148:22

180:21 183:1 306:10

321:1 340:7

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14:20 154:9 155:14

197:22 210:1 242:4

275:8 330:17 331:1,2

consequences 14:17

75:3 167:11 210:3

244:22 268:11 306:11

306:13

consider 68:21 87:1

125:14,18 131:20

136:19 138:7 182:15

188:9 189:6 195:1

224:1 226:4 315:9

363:12 371:8 374:9

consideration 63:12

164:8 165:1 270:17

287:16 303:22 335:17

considerations 227:14

considered 11:8 35:8

126:10 160:1 189:9

212:19 285:13

considering 130:22

287:8 340:4

consistency 13:12

319:11

consistent 10:18 15:2

30:13 47:4 134:4

148:17 159:11

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construction 84:4 94:1

289:9 292:17

constructive 348:14

Consulting 2:22

consumer 37:11 56:6

187:12 207:9 227:9

227:19 228:4,5

229:21 281:15,22

282:20 301:2 307:10

307:12 308:9 309:16

323:9 348:3 352:19

355:17 366:19 379:3

consumer's 194:13

consumers 227:11

229:8 297:11 308:7

contact 81:9 111:15

260:21

contacted 245:16

311:15

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369:10

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CONTENTS 3:9

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211:14

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continue 123:17 127:16

127:17 143:8 165:9

166:19 173:12 209:22

337:17

continued 42:11

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contract 228:3

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243:9

contractor 9:8 12:17,18

13:16 14:19,20 15:13

17:9 19:14 21:5,19,22

27:1 28:2 29:21 30:22

35:4,12,12,15,21 39:7

39:11 46:1 48:17 49:8

54:10 56:22 69:12

81:5 98:17,19 100:13

100:19 101:3,16

103:5 105:12 109:21
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163:1,22 164:9 212:9

218:17 219:22 222:8

229:14,18 230:9

236:20 241:2 242:9

244:8,10,11 253:8,14

255:16 258:14 259:4

260:4,21 263:12

264:17 266:1,13,21

268:6 269:7 270:4

272:18 274:16 275:3

277:21 279:4 280:14

280:22 284:7 289:5

293:13 299:16,17

300:11 307:19,21

308:11 309:18,20,21

311:6 312:3,4 313:2

313:20 314:2 327:10

327:13,18,19 328:12

340:18 346:22 347:13

349:4 350:6 354:12

356:19,20,21 359:4

361:2 365:2,8,21

367:4 377:5 378:4,22

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129:6 228:19

contractor/dealer

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105:3

contractors 1:20 2:13

4:7,19 6:4,7 9:5 10:11

12:7 19:1,11 24:2

25:12 27:18,22 33:5,9

33:11 51:18,18 52:2

60:3 63:9,20 65:11

82:12 85:4,12 87:1,18

134:15 139:12 156:1

162:19,21 163:3

179:2,11 181:16

193:6 206:15 244:12

278:18 291:14 298:20

299:22 301:20 306:17

309:9,10 315:12

338:20 341:4 345:1

353:1,15 354:5 355:9

356:12 358:3,4 359:6

359:15 363:15,20

364:18

contributing 136:1

control 103:12 181:10

212:18,18 242:19

288:9 290:5

Controls 2:6 36:3 94:9

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245:2 267:6 272:1

273:11

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375:8

convicting 116:2

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cookie 294:7

cooling 161:5,9 195:6

206:16,16

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298:4

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168:20

Corporation 1:17

correct 27:2,13,14

36:12,13,17 68:9 79:9

100:3 102:9 120:18

129:22 173:11 187:13

188:6 205:15 263:21

287:9 293:20 315:17

316:15 320:14 342:20

345:19 351:8

correcting 19:6 217:18

correctly 302:21 321:12

370:9

corrects 356:18

cost 40:11 42:1 43:5,6

45:1 51:5 54:5,20

55:7,15 56:11 64:2,11

64:22 153:9 156:5

188:5 194:15,21

195:15 196:2,15

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226:10 234:13,16

266:22 281:14 282:3

282:9,18,19 290:11

308:5,6 313:13,16,19

314:21,22 320:3,8,10

323:21 324:13 325:2

333:13 379:1

costs 58:2 64:12

185:18 188:9 199:9

320:3,11 323:13,15

323:17

could've 346:16

Council 1:22 2:8,19

Counsel 2:5

count 41:14 250:12

261:3 268:5 269:1,16

counter 37:15,16 39:3

42:15 54:9 55:2,3,4

73:18 74:14 78:18

343:8 347:5 348:21

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354:7

country 7:2 17:13 18:5

18:22 19:2,8 21:8

176:13 185:5,12,15

185:22 190:9 193:13

200:6

counts 346:4

County 349:5,6

couple 9:19 53:17

94:19 107:14 121:10

196:11 197:14 204:20

207:18 214:18 222:14

252:10 256:8 287:18

336:7

course 21:19 24:10

31:4 67:18 83:5 92:20

109:15 160:12 170:21

183:14,19 194:7

206:15 209:19 224:9

224:9 226:20 282:17

366:3

court 122:6,9 148:21

215:14 305:14,16

306:5 333:14,16

334:3 371:19 374:1,2

374:6

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308:22

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326:11

credible 99:3 100:18

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247:22 343:9

cross-section 85:17

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135:20 162:9 329:15

currently 30:16 88:21

91:9,17 182:9 193:14

210:21,22

curve 194:15

customer 37:22 38:1,6

39:4,7 54:21 218:15

300:12 347:9,12,17

customers 40:5 44:18

47:16 55:6 58:5 82:11

116:4 181:17 187:3

275:1 297:12

cut 147:20 337:13

345:18 346:6

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cutting 163:14

cycle 27:15

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D.C 1:10

Dallas 208:5

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Dan 25:8 71:10 193:15

355:12,13

Dan's 367:19

dancing 176:8

DANIEL 1:14

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119:5 189:8 281:20

285:21 287:15 317:1

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13:1 62:2 242:15

262:11 305:8

date 34:13,14 46:6,10

46:15,16,17 47:22

50:7,9,14 51:22 52:5

60:4,6 66:8 203:5

233:15 292:5 294:2

304:1 305:18 318:1

332:21

Dave 206:20

David 1:18 57:2 153:4

187:4 198:21 200:9

238:15 246:16 252:1

267:5 270:22 344:4

351:18 377:18

David's 56:19 133:2,6

day 30:13 57:21 58:2

81:10 84:17 94:9

159:19 175:10 178:9

194:4,6 210:4 252:20

252:21,22 280:1

309:17 353:14 373:10

377:19 379:13,15

days 68:8,21 69:7,7

94:20 112:5 114:17

114:17,17 115:2,13

116:5,10 142:2 143:6

171:18 176:19 197:19

290:9,9 372:10

376:21
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DBA 169:6

dead 50:14

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132:12 134:17 155:18

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300:19,22 337:10,13

339:9,19

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367:18 378:18

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10:10 60:3 82:11

134:16 135:3 298:20

306:18 315:12 359:14

363:14

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69:2 123:5 134:9

159:1 162:5 215:2,4,9

215:20 216:2,6 268:9

341:16

dealings 365:8

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178:22 205:6,14

206:2,11 207:13

208:1,7 209:8 220:19

243:6 299:14 338:13

361:6

debate 134:13,14

193:17

decade 186:3

December 48:6,6 292:1

decide 17:10 127:11

132:5 135:17 201:7

201:10,15 217:4

267:16 348:7

decided 299:16

decides 137:16

decimal 283:1

decision 7:11 123:1

131:3,7 175:1 261:7

267:9,12 280:10

337:19

decisions 204:3 365:14

366:17

declare 21:20

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217:5 283:14 285:10

303:17 342:18 343:1

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deep 314:19

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defense 1:22 2:18

305:18

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define 67:3

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205:18 304:7,8

348:10,11,15 364:9

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definitely 11:4 46:2

111:1 164:19 363:21

definition 160:7,11,20

225:2

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172:10

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227:19

DEGITZ 2:22

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159:7 361:20

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288:2 345:12

delivery 34:20 44:20

delta 314:15

demand 16:16 197:18

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225:16 246:18 247:10

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department 1:1 2:4

22:18 45:15 63:1,18

80:1,11,12 81:22 86:2

91:5,11 92:3 95:17

98:15 103:15 113:5

114:6 119:13,15

129:22 142:9 146:22

147:3,7,14,21 148:2

148:14 149:4,8,14

150:4 159:10 161:22

168:18 169:10,10

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174:13 182:12,14

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201:22 202:16 203:11

203:17 209:17 210:5

217:20 226:4,5,15

229:7 230:19 233:19

235:14 245:8 262:7

263:1 264:22 280:17

304:13,18 305:4,13

311:7 315:15 334:21

352:20 363:8

Department's 93:6

145:13 147:10 148:20

280:11 288:13 373:14

depend 287:2

dependent 323:22

depending 28:1 81:10

112:15 212:13 358:13

depends 68:13 115:4

219:18 220:9 323:13

364:11

Depot 56:7 196:11

Des 109:4

described 9:19 131:12

149:9 203:13 268:14

354:2

describes 26:9

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327:8

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32:21 97:19 116:13

142:12 215:4 226:6

255:5,12 265:16

363:3 368:7

determine 48:17 52:21

105:8 178:4 265:22

272:5 375:15

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160:19 186:22 204:6

215:11 216:7 362:14

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280:12 299:20

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152:11,17 153:6

154:4,10 164:16

207:2,4 284:15

Detroit 44:2,4,8

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171:8

developers 292:16

293:6

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devil's 22:3

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174:9

dictating 60:16,17,20

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175:19 183:16 186:5

186:12 187:17 307:17

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320:5,6

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282:1

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322:13 324:18 325:8

326:2 339:17 352:1

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378:22 380:7

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225:6 288:12 308:22

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282:15

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260:9

directly 21:12 176:6

244:9 377:22

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209:4 302:8 335:9

340:9

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280:12

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115:5
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135:6 142:16 144:16

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14:14 15:8 34:17,22

79:22 97:1 123:10

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216:19 333:2 336:18

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discussing 11:12 59:3

86:22 320:16,19

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45:12 59:14 61:17

67:18 103:18 135:4

137:2 162:19 171:14

171:19,22 174:22

180:6 204:12 225:1

232:7 265:4 266:11

269:5 284:13 287:18

293:14,15 329:15

336:16 359:10

discussions 12:9 36:7

49:14 63:2 176:5

180:7 218:12 259:3

276:6

disembodied 379:19

disincentive 355:7

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dismissed 377:21

dispensation 236:12

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distracted 86:15

distribute 205:13

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distribution 4:8 40:17

42:2 49:1 73:2 118:3

118:10 122:3 243:7

260:1 263:13 318:4

341:4,10 352:1,22

353:17,18 360:22

distributor 35:10,22

37:22 38:5 39:14 44:2

45:21 57:1,19 109:21

112:8,15,19 118:21

125:17 126:17 137:20

143:5,9 161:10 166:3

166:5,9,10,15 208:12

215:8 236:13 246:21

274:5,15,22 294:18

301:18 302:2 312:4

318:9 327:12,17

328:3,10,15,17,22

330:12 333:4 335:22

338:18 339:9,15,21

342:2,3,16,17 344:12

345:18 346:21 348:22

349:1 350:4 352:4,6

353:21,22 354:1,2

360:5 362:4,11,18

378:2,4,6

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distributors 3:13 4:7

25:19 34:10,11 37:8

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51:6,9 108:14 109:19

115:15 117:4,6

122:13,15 125:9

160:22 161:8 169:11

173:11 236:14 262:1

287:17 296:11 341:10

352:8 364:2,6 366:11

John's 122:2 163:20

274:16

Johnson 2:6 36:3

Johnson's 94:9

joking 176:10

Jon 19:9 37:19 38:16

53:12 57:2 58:7 65:15

72:3 73:20 75:21

76:11 79:4 80:22 93:4

136:11,16 155:19

165:3 169:20 243:1

250:8 287:7 295:13

306:3 317:18 320:1

323:4 324:7 331:7

332:18 335:18 340:14

343:5 350:19 379:5

Jon's 72:19 73:3 111:8

243:7 275:11 321:4

321:19 350:16

JONATHAN 1:20

Jones 311:17

Jordan 1:15 101:19

137:6 143:3 160:2

173:18 174:18 215:19

280:2 283:9 289:18

310:22 325:22 335:11

338:1 340:2,12 342:9

363:2

Jordan's 137:6 290:18

338:12

judgment 157:15 160:6

216:13 220:14

judgments 7:14

judicious 165:1

July 287:21 288:4 292:6

jump 204:18 302:13

335:19

jurisdiction 177:18

190:13

Justice 305:13

justifiable 199:15

justification 188:1

justified 187:2

justify 187:6,11 188:4

juts 151:2

K

Karen 1:21 14:2,7 20:9

25:21 27:14,16 30:20

33:10 46:11 62:13

65:1 66:15 86:11

116:16,17,22 117:1,2

117:4 130:10 144:15

195:19 230:22 233:11

236:20 240:17,18

271:21 315:20 338:12

340:12 360:16 363:13

366:11 372:13

Karen's 23:21 71:13

240:9 242:13 339:5

340:2

Karim 2:19 90:16 93:1

95:5 139:10,21 140:1

keep 4:20 5:9 6:4,8,20

8:15,21 10:11,20 12:7

15:3,7 24:17 27:11

28:19,22 29:8,10,11

29:14,19 30:15 33:1,2

33:7 34:4,13 35:13

40:15,16,20 46:9,15

47:9,16 55:2 60:16

61:12 64:2 65:13 67:7

77:13 78:2 79:1 82:6

83:14 117:14 119:8

123:4 132:5 139:12

140:6 168:2 172:22

173:3,9 176:7,10

179:5 181:10 196:21

197:7 210:15 216:20

218:12 229:6 313:6

322:18 364:11 367:18

369:13

keeping 15:10 22:8

24:7 27:18 29:13

58:20 62:4,9 64:14,18

73:7 83:15 128:2,8

186:10 239:14 301:1

302:22 303:1,7,16

318:13 319:8 320:4,8

320:15,20 322:15

323:3 329:22 377:7

keeps 44:22 63:12

136:10 179:9

kept 12:10 35:7,8 45:3

60:17 78:9 83:6 174:1

272:2 301:8

key 55:22 196:6 306:12

307:13 322:8,10

324:16

kick 178:2 336:22

kicked 337:18

kicking 176:7

kicks 362:8

kid 137:22 138:1

kidding 311:4

kids 253:19

killed 43:22

Kim 159:18

kind 4:11,14 8:14 9:12

10:18 37:17 43:11

44:10 53:3 54:12,14

54:15 58:18,20 59:4

63:19 64:21 71:19,22

73:3 75:7 86:20 88:19

89:16 93:8,15 97:3,7

99:1 101:15 104:21
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

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110:18 111:20 112:21

114:10 115:8,18

116:1 121:19 136:20

137:5 163:22 170:8

171:18 172:21 180:21

194:21 196:22 200:9

202:17 208:13 221:19

224:10 246:17 250:12

254:22 273:5 275:3

285:22 288:4 290:21

336:7 338:19 352:13

358:21 372:8 375:11

375:13,15 378:1

kindly 268:7

kinds 162:21 374:7

king 290:11

kitchen 156:3

knew 110:10 154:15

173:22 193:21

know 9:2 12:1 16:2,3

27:5 29:17 30:1 37:12

38:1,8 39:15,17,21

42:16 43:9 45:2 47:11

50:16 51:18,20,21,21

51:22 54:11,14 55:12

62:7 67:2 71:15 72:15

73:17 75:2,6 76:7,9

80:21 81:1,16 82:22

84:15 87:21 88:1

92:20 94:7 95:22

104:17 105:5,6,7,14

108:15 110:3,9,13

111:21 114:5 115:17

115:18 116:3,11

118:5,6,10,12 125:10

128:17 133:14 139:5

141:7 155:1 161:4,5

161:12 165:16,22

168:14 169:10 170:4

174:14,16 175:4

176:20,21 177:3,6,20

178:15 179:2,8,16

182:17,22 183:7

185:11,19 188:11

191:7 192:6,6,15

193:8,16 194:5,6,10

194:11,14 195:8,12

195:13,17 196:14,17

197:1,3 202:19 206:6

208:18 209:12 214:16

216:4 217:1,3,8

220:13 221:16 222:2

222:4,7,12,14 224:6,7

226:4 229:9 230:20

231:15 232:16,20,21

233:5,12,14 234:8,12

234:14,16,19 235:18

236:5,7,8,20 237:6,13

238:9 240:19 243:21

244:18 247:13 248:7

253:16,21 254:13

259:4 260:16 261:5

262:13,16 264:3,9,19

269:8 271:8,9,17

272:19 273:4,15

274:20 277:17 278:16

281:10 288:1,6,7,8

289:14 290:6,16

291:3,16 294:12,16

295:2,14,16 296:16

297:20 298:17 299:5

301:6 308:17 311:9

312:2,6,7 319:4

323:17 324:13 331:17

332:16 333:8,19

335:5 341:12 351:7

351:13 352:10 353:16

356:2,6 357:12 358:8

359:15 360:3,7,14

362:7 367:22 368:1,9

370:21 371:18 374:17

380:10

knowing 46:21 195:13

197:1 265:4 290:10

308:13 347:21

knowingliness 144:1

knowingly 218:22

265:3 327:12,18

328:4,22 339:18

345:4 347:11,19

348:4,7,10,11

knowingness 144:1

knowledge 173:17

174:6 311:12 348:14

known 125:22 161:1

231:1 337:8 348:9

378:7,7

knows 122:4,16 127:13

154:21 170:3 244:4,5

244:7 262:2 269:7

369:16

kWh 197:16

L

label 49:2,3,19 50:2

91:8 133:11 297:2,2,4

297:9,10,15,17

355:15,17

labeled 10:1,2 221:8,9

352:17

labels 50:4 186:7

labor 219:13 275:6

lack 369:14,15

lacking 325:17

lading 60:21

lamp 288:20

language 43:9 60:11

61:18 69:20 70:7

88:17 89:7 150:8

215:1 273:3 326:3

large 102:13 158:8

207:7 305:22 353:21

larger 156:6 163:1

323:11

Laughter 77:16 84:6

95:9 101:13 106:17

116:20 133:7 139:19

148:11 150:12 161:17

164:17 165:18,21

194:3 206:9 208:4

213:12 227:16 251:19

281:9 294:13

Laura 2:22 336:16

379:22

Laura's 375:20

law 163:16 168:6 182:4

188:14 208:14,15

209:1 218:10 263:9

laws 333:5

lawsuit 191:15

lawyer 92:19 254:1

348:18

lawyers 289:15

lay 118:20

layers 67:16 166:12

lead 93:22 112:1 199:20

209:5,18 290:2,3

leaning 85:15

learned 370:17

leave 82:21 296:10,19

298:8 380:1

leaves 249:12

leaving 23:6 103:17

led 54:4

left 16:19 71:20 205:3

213:1 357:5

legal 146:2 148:16,19

198:6 216:15 288:6

371:5,21

legality 289:14

legally 277:13 281:16

legitimate 8:4 111:14

243:5

legwork 12:20 259:7

length 64:20 136:3

174:8

lengthy 328:13

Lennox 1:19 51:9

109:19 115:16

let's 17:6 21:3 25:18

27:14 34:10 41:18

58:16 83:19 96:20

98:1 111:4 120:1,6,6

134:17 135:8 143:16

151:18 152:19 163:2

192:19 210:7 217:7

239:7 250:2 257:17

287:22 326:9 330:10

330:11 337:6 372:4

379:10

letter 103:8,9 132:13

letters 370:1

letting 236:7

level 22:13 49:9 67:10

104:16 141:15 142:21

168:6 185:13 191:22

192:2,3 193:12

199:13,21 230:16

242:12 243:3 251:5

299:16 301:18 307:21

314:3,21 379:8

levels 104:9 192:14

197:7

liability 10:13 16:5 86:3

88:5 97:21 143:19

liable 10:6 49:15 122:15

127:2 265:3 266:22

license 37:2 78:10

343:9

licensure 164:3

life 52:19 198:10 228:8

282:8,12

lifetime 323:12

light 303:21

lighter 371:5

lightly 45:20 148:14

likelihood 289:21

302:17

limitations 60:1

limited 40:10

limiting 129:6

Lincoln 1:16 265:15

line 38:8 150:11 269:3

342:12

linear 194:14

lines 54:1 57:22 73:5

248:6 271:16 335:21

linkage 119:2

list 58:11 107:6 137:8

159:21 169:14,17

172:19 225:8,13,21

231:20 235:2 236:21

237:10 238:5,21

239:6,7 240:2 244:11

245:9,22 249:4

250:14 279:15 309:7

309:22 327:19 339:7

339:10,15 343:10

listen 11:18 81:14

266:4 324:13 335:4

371:3

listening 137:19 184:4
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

398

213:11

listing 23:5

literally 5:17 247:22

literature 47:15

litigation 373:20

little 37:14 46:7 48:21

54:5 67:13 70:12

96:10 115:16 122:2

125:9 163:21 177:10

179:14 181:9 185:8

189:3 213:2 218:13

252:2 253:3,4,4 259:1

285:15 292:7 294:1

320:2 330:22 362:1

364:4 365:18 372:12

375:13 376:18 379:19

live 66:14,18 81:13,19

162:4 295:20 317:10

337:3,10 356:1

livelihood 357:4

lives 349:4

living 208:5 354:13

loaded 39:16

local 352:4,5 353:15

located 27:1

location 99:4 109:3,8

133:14 351:20

logical 238:11

long 61:2 62:11 64:6

65:12 102:20 114:15

114:20 127:18 142:1

160:19 201:12 244:14

255:15 258:12 279:21

279:22 290:14 355:17

357:1 366:22 370:14

373:10

long-time-in 162:22

longer 55:10 151:21

156:20 166:8 167:12

172:18 175:5 226:8

228:16 235:5 248:2

276:4 277:6 292:17

325:11 330:19 362:11

look 15:14,17 22:21

26:12 49:13 52:2 53:4

53:22 59:2 64:19

67:13 68:16 87:1,22

97:15 99:18 100:12

100:14 112:16 113:2

120:17 121:1,12

130:1 135:17 136:21

137:8 139:20 142:19

153:2 155:6,16

177:19,22 182:14

189:22 204:19 205:6

212:4 230:3 255:5

261:11 270:15 281:20

282:3 284:4 286:13

289:15 291:14 292:4

299:15 316:20 325:19

335:12 337:1 358:18

358:20 371:20,22

374:10 376:9

looked 132:10 155:5

189:4

looking 4:18,20 11:1

31:13 38:2 42:1 47:1

47:4 48:2,19 49:15

51:20 53:15 67:15

75:19 95:10 102:22

112:21 115:6,12

133:6 182:19 192:13

254:9,21 258:14

260:20 269:3 282:2

297:12 329:16 343:9

372:12

looks 63:5 139:17

175:11 336:5 376:11

loophole 74:15

lose 156:7 198:13

losing 156:9

loss 189:17 190:2

282:12 355:1

lost 227:1,9 228:18

280:16

lot 7:4 11:19 21:5 26:18

29:3 36:6 40:3 42:22

42:22 43:7,12 44:6

49:14 50:15,17,18

51:18 52:15 57:4,16

69:8 75:1 79:15 83:3

90:11 95:11,12 115:5

115:5 140:21 141:21

142:5 151:2 154:15

156:7 167:19 168:5

169:19 176:22 180:11

183:12 184:7,9,22

196:5 198:10 202:18

216:3 224:12 228:20

234:8 244:18 264:16

268:10 272:13 289:1

318:5 319:3 322:3

326:13 331:4,4,13,16

334:6,18 343:18

358:15 359:5,9,13

362:17 373:14

lots 69:11 70:4 175:3

176:19 218:19

loud 16:2

Louisville 27:5

love 45:14 52:11 72:15

369:3

low 125:7 154:8 155:14

187:5 207:9

Lowe's 196:11

lower 211:21 221:13

299:12 339:11

lowest 66:19 140:19

199:16

lumped 189:7

lunch 111:1 124:1

134:12,17,20 171:10

173:13 175:3,5 176:2

204:22 249:18 347:4

lunchtime 58:1

Lutz 206:13

lying 31:9

M

ma'am 122:10 125:12

130:20

Mabel 262:6

MacCrudden 165:17

mad 109:13

magnitude 153:16

206:21 323:9

main 331:20

mainline 54:21

maintain 21:17 25:1

65:17 200:18 274:15

maintained 34:19

167:19

maintaining 17:14,16

66:5 108:1

maintains 161:22

maintenance 295:4

major 76:20 122:18

309:9

majority 82:16 343:21

making 20:15 64:16

101:10 114:8 128:3

130:8 138:13 139:7

155:20 176:10 182:21

196:2,3,4,5 204:3

228:5 239:18 267:12

271:16 347:12 348:3

354:5 377:6,7 378:16

378:20

MALE 234:7 236:1,15

239:2 245:18 246:3,5

246:8,12 247:14

253:5 262:14 265:18

375:1

management 293:8

managers 292:17

mandate 81:17

mandated 281:16

manufacture 233:15

manufactured 186:7

196:6 292:1

manufacturer 5:1,4,6

6:2 10:4,10 16:16

21:12 32:10 33:10

42:20 44:17 46:18

48:9,20 49:12,15,22

52:16 58:19 59:9,16

69:2 71:7 77:19 97:21

112:8,20 114:19

117:15,21 118:16

123:13 128:3 132:14

137:8 142:13 143:7

143:19 159:6,8 166:8

173:21 174:4,6

205:12 208:11 215:8

217:13 223:16 224:16

231:12 232:7 235:15

236:13 237:4,13

238:20 242:9 244:6,9

245:11 246:1 247:13

259:16 265:13 266:17

268:7 274:14 276:5

278:22 279:1 294:18

296:1 311:16 312:5

316:6 318:4 327:17

333:3 339:20 353:3

362:5,8 373:16

manufacturer's 16:3

72:11 194:11

manufacturer-owned

341:3

manufacturers 3:11 4:5

4:8 13:13 16:17 17:2

17:3 20:1 30:12,14

31:19 46:22 48:12

58:19 59:1,2 60:5

65:11 72:6,13 86:1

88:1 92:1 117:5

125:20 126:14 128:19

132:13 133:11 158:22

158:22 162:3,8,12

167:11,12 171:21

172:5 179:1 183:4

202:20 210:1,7,9

212:12,20 223:11

231:2 237:21 245:15

249:12 260:11 274:4

274:19 275:19 286:6

288:17 299:8 301:20

315:22 330:18 333:10

333:18 341:15 344:21

351:19 353:5 356:13

368:20

manufacturing 1:15,21

2:7 50:10 114:21

186:18 318:8 331:15

margin 156:6

mark 242:10 268:9

market 44:6 74:20 75:4

75:6 76:2 77:7 78:8

164:13 193:9,11

210:8 212:14 244:16

344:10 352:5
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

399

market-based 158:20

market-driven 167:7

marketplace 208:13

markets 43:8 76:20

196:6

marks 286:5

massive 43:6

match 35:14

matches 59:22

material 352:15

materials 47:13

math 57:9 258:20 324:9

mats 352:16

matter 32:14 53:21

59:15 71:2 76:6,8

102:19 112:17 113:20

159:6 175:9 179:20

179:20 201:6 238:16

264:6 273:7 296:6

311:12,22 319:11

367:13 380:15

matters 80:7 83:20

maximizes 63:11

Maytag 309:13 310:10

312:10

McCRUDDEN 1:19 12:2

12:12,15 13:8 21:1

27:16 28:8,12 29:5

31:17 32:5,13,16

33:14 48:15 83:9,12

83:17 84:7,13 85:6,10

85:14,19 99:8,10,13

99:21 100:4 103:1,7

103:14 117:3,19,22

119:22 120:9 128:12

139:17,20 145:7

165:17 169:6 184:5

188:13 205:2,17

206:12 207:17 211:10

212:1,7 213:13,20

214:8 222:6 223:2

224:15 238:22 239:4

239:18 240:1,11

241:5,14,20 242:5

243:10,21 244:2

249:19 250:4 254:21

255:8,11,19 256:1,6

256:10,17,21 257:6

257:11,13,16 258:5

258:11 268:13 269:2

270:1,5 285:14 286:4

286:19 296:22 297:7

297:9,17,20 317:5,7

317:16 318:11 329:21

368:4 370:16

McCrudden's 167:20

167:22

mean 12:6 20:18 26:22

30:9 43:5,9 45:7 46:7

47:1 50:14 52:4 55:15

57:20 61:17 71:12

72:12,14 76:4,6 80:2

82:9 84:7 85:6 88:18

94:22 100:8 101:14

103:11 104:10 108:4

108:21 115:11 117:13

118:21 120:10 135:11

147:19 148:13 149:18

150:16,21,22 152:10

153:19 154:18 160:4

165:19 166:7 182:3

183:15 197:6 213:4

214:4 220:10 223:4,5

225:17 232:20 233:14

234:4 241:18 243:7

250:11 260:19 267:15

279:3 280:3,8,20

283:10 285:15 286:8

286:10 287:11,12

289:19 290:22 294:11

295:10 309:12,22

310:19 311:20 312:8

312:16 326:1 332:19

333:20 338:2 339:16

341:22 343:1 346:1

353:2 356:3 358:6

361:3,8 369:16 370:3

376:17

meaner 96:11

meaning 174:18 286:11

meaningless 258:3

meanings 77:14 78:15

means 43:20 60:12

61:11 67:4 69:13,21

88:19 144:4 145:14

266:12 341:18 343:2

348:7,13

measures 209:5

mechanism 180:19

225:5 289:5,12

358:13

media 309:5,6,14 310:2

310:2,14 311:3 314:8

367:20

mediate 224:13

meet 30:11,15 32:2

186:17 230:18 349:8

meeting 1:5,10,11,13

34:16 48:22 82:21

87:6 96:17 176:2

185:21 202:18 303:11

380:12

meetings 20:11 84:22

181:5 379:17

meets 30:8,9 178:2

Meg 2:18 73:12 75:10

80:21 106:4 192:8

210:22 215:16 216:18

327:4 342:14

Meg's 328:8 339:12

Melchi 1:20 19:9,9,18

19:20 37:19 38:18

41:9,12,16,18 46:6,14

46:19 49:18 50:22

54:8,22 57:2,3 58:7

65:15,15 76:11 77:3

79:10,16 80:16,20,22

82:8,15 83:8 93:4,12

94:6 95:2 109:6

136:11,16 155:19,19

156:12,16 157:1,5,11

165:3 166:14 167:9

167:15,18 168:7

169:6,9,18 170:21

171:2 250:8,16 251:1

251:6,8 261:16 287:5

295:13 317:18 320:1

321:13,16,21 324:8

324:17 327:22 331:7

332:15,18 334:1,6,12

334:18 335:18 341:13

341:21 343:12,14,17

344:1 345:8,15,22

346:6,18 350:19

351:18 355:12 379:7

member 180:10

members 38:10,20 40:5

40:19 42:2,4 72:19

93:7,17 179:13 184:7

275:11 320:9,11

321:22 322:6 324:22

333:12 334:12 340:17

341:1,3,7,11 345:8

350:20

memorized 178:3

memory 187:14 188:6

mental 162:18 163:8

341:7 342:7

mentioned 43:8 44:1

73:21 80:21 108:5

136:11,15,16 331:8

mere 182:6 216:8

merely 75:7 101:21

merit 19:7 185:15

mess 62:6 209:10 278:7

message 24:17

met 1:10 4:5,7

metaphor 314:12 365:5

method 32:1 176:12

221:7 288:13

methods 240:20

meticulous 62:8

metro 76:20

MEYERS 1:21 14:2,12

20:9 26:1 27:8 28:5

28:14 29:16 30:17

32:4 33:12 46:9,17

62:13,18 65:1 67:1

96:12 116:15,19

117:1 130:10 144:15

144:18 145:3,10

146:21 147:5 150:13

150:21 164:19 166:2

166:7 230:22 231:10

232:10,15 233:17,21

234:9,21 241:8,11

271:21 276:19,22

277:3,10,12,16 312:8

312:12 315:20 316:7

316:11,14 338:11

345:20 360:21 361:3

363:19 364:6 371:1

372:13 373:1,9

374:11

mic 107:4

Michigan 21:4

microphone 297:16

308:2

miles 349:14

military 175:20

million 41:4 42:3

195:19,22 272:10

320:7 323:16,20

353:4,5,5

millions 14:5

Milwaukee 44:2

mind 20:5 55:2 119:5

160:10 192:18 229:7

232:5,6 242:16

261:10 300:1 313:6

353:8 367:19

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104:16 110:18

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141:19

minimized 88:4

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108:1 131:18 379:9

Minnesota 20:19

minuses 11:20 113:21

minute 64:4 311:19

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54:2 55:16,16 70:18

70:19,21

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(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

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misunderstanding

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30:8 39:17 42:20

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52:15 65:20 81:8

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275:22 276:2,3,4

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268:11 309:17 365:22

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325:5,11

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80:9 83:1

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76:17

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157:20 222:15 334:5

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272:6 349:21

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167:20 168:2,13,20

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351:22

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56:11 65:5,6 68:11,21

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109:11 121:16 133:18

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146:12,15 152:16

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264:21

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297:5,9 366:2

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40:2,10 59:14 74:8

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290:3

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273:13 274:17

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126:17 127:10

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232:11 354:19 373:19

378:8

non-compliance 334:8

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125:16 136:5,15

145:18

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217:2,22 221:11

223:15 231:8 246:6

246:10 257:20

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10:8,11 20:12,15 21:3

24:3,4 58:13 118:11

179:14 187:8,9,10,10

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199:19 200:1

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281:18

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note 236:15,16

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142:10,12,15,18

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171:22 172:5,12,13

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209:20 210:14 217:20

218:1 240:7 243:3

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notification 238:3,6

245:22 368:11

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264:2,3

noting 312:19

notion 30:4 92:13

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NRDC 73:12 106:4

216:18

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363:21 364:1,3 365:4

365:12

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Neal R. Gross and Co., Inc.

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57:12 59:16 68:18

73:17 79:18 81:4,7,8

82:2,7 83:5 94:7

105:7 107:4 117:9

119:17 135:19 185:3

223:19 224:17 232:11

232:13 233:3,5,15

240:14,15 248:1,4,9

248:10,12 252:7

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260:2 263:5 264:7

265:1 282:14 285:16

285:17 286:2,14,16

286:18 287:2,3

307:13 317:8 323:11

323:22 324:10 338:17

341:14 350:10,11

362:6,15,17 370:12

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53:7,14 56:7 65:19,20

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328:14

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207:3 217:15 296:2

304:20 305:17 359:19

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280:19

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OEM 362:20

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293:3

offer 187:3

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379:5

offering 34:3,7 99:17

128:1 367:5 378:13

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289:3,6

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184:13

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110:15 122:8 124:6

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242:16 244:11 267:20

269:8 270:1 287:6

288:21 293:7

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14:12 16:11 17:7

21:15 23:15 25:18

41:17 55:1 58:16

59:18 62:17 65:9

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78:5 82:14,19 83:8,12

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88:15 90:11,13,20

91:2 93:3 95:4 96:15

100:4 101:12 106:1

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126:18 129:3,15

134:3,21 135:8,14

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141:4 142:8 143:12

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157:1 161:3 164:12

166:15,16 169:1,19

171:2 173:19 175:2

175:17 180:15 190:14

192:18 200:22 202:3

204:10 217:7,18,20

221:5 226:13 228:6

230:11 233:8 234:3

235:16 239:4 241:1

241:20 245:6 249:14

249:22 250:7,16

251:1,6 253:12 254:3

254:7 255:7,10 256:1

256:9,18 257:8,16

259:10 261:10 267:14

268:1 269:2 270:1

272:8 274:8,11,19

275:18 277:2,9,21

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297:8,19 298:11

314:14 315:19 331:19

335:7 337:2,7 343:13

347:5 348:16 359:4

old 63:14 141:10 170:7

170:15 247:22 297:5

297:9 353:15

older 88:22

OMB 43:3

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onboarding 323:17

once 27:4 31:15 66:19

94:16 99:15 105:20

118:4 152:3 162:4

188:19 209:8 219:14

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253:14 256:22 257:1

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310:4,9 339:14

342:19 364:17 378:17

one-off 31:7 120:4

214:17 240:4

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130:8,11,15 131:13

132:5 219:19

onerous 133:3 303:5

320:13

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121:9 135:21 141:21

159:1 163:14 223:21

226:18 352:14

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open 7:13 11:3 87:15

98:8 103:18 108:3

120:20 142:22 159:18

170:15 173:8 174:22

203:5 222:20 230:20

340:3 362:1

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93:8 123:18 160:20

301:14 316:9

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174:5 326:12 360:20

367:22

opinions 40:4 72:9

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219:1

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63:12 108:7 157:14

219:20 222:4 223:16

224:19,20 228:18

253:9,22 287:20

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58:9,10 77:19 131:18

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280:9,11 337:16

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Orange 349:5

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246:18 268:3,21

272:11 290:4 293:14

305:14 322:1 323:9

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176:17

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267:15

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123:2,9 128:18 148:5

159:4 184:16 194:2

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330:18 365:21

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195:3,5

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(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

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72:17 75:4,6 76:2

84:10 91:16 102:13

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333:11 335:4 340:20

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322:9 327:15 334:13

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Neal R. Gross and Co., Inc.

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330:16 360:9

positive 15:14

possession 351:10

possibilities 231:16

272:10

possibility 6:17 94:15

98:20 113:13 118:15

218:19 231:21 254:6

300:9 302:17 307:9

339:22 374:6 378:9

possible 34:21 47:10

47:17 53:14 74:4,10

92:8 97:20 98:21

99:18 117:15 187:6

197:11 207:5 209:15

241:19 248:7 263:12

269:5 283:15 303:15

349:12,19

possibly 4:19 25:16

29:14 52:13 87:3

104:9 112:17 119:3

121:11 134:7 162:6

164:13 171:8 189:2

post 103:16 376:15

posted 307:1

potential 115:20,22

116:2 200:2 263:8

300:2 355:8 368:5

potentially 29:7 85:21

117:8,12 125:17

128:13 160:4 224:15

267:7 283:21 284:17

285:1 305:3 326:22

332:8

power 304:20

powerful 221:7 310:3

367:15

practical 81:1,13 82:5

82:10 238:16

practice 9:16 10:18

30:14 42:4 43:17

119:14,16,18 161:21

162:10 231:11 306:1

371:3,7,14

practices 42:8,15 44:7

58:14

pragmatists 66:14

preamble 61:16,20 70:7

88:11,18 89:1,17

precedent 194:18

199:10 334:19

preclude 209:7 290:7

precondition 91:19

preempt 266:6

prefer 11:1 63:9 128:22

129:20 162:11 251:10

preferable 361:6

preference 26:7,17

74:22 85:11 116:11

119:14 251:12 351:17

preferred 128:10

preferring 128:8

prefers 63:1

prejudge 121:18

prejudging 114:3

prejudice 128:19

premise 61:5 203:22

204:4,5

premium 39:11

prepared 96:21

present 1:12 2:16 20:8

207:16 249:3 282:13

Presentation 3:17

presented 189:11 249:9

presiding 1:11 252:4,13

pressure 158:10 295:14

309:10

pressures 308:21

presumably 156:4

351:9

presume 111:11

presuming 116:9

presumption 53:2 80:3

presumptions 53:1

pretty 23:11 38:9 40:6

47:3 54:18 77:8 82:10

89:7 92:1 107:3,13

178:17 181:10 207:9

219:6,16,21 226:16

243:12 245:18 267:18

287:14 295:18 300:7

316:17 324:4 326:5

328:1 333:20 335:20

336:1,5,15 356:10

376:3

prevalent 152:18

prevent 19:10 49:21

342:22

prevented 353:21

prevents 268:18 343:18

price 186:5,12,19,22

196:17 218:8

prices 185:9 187:11

pricing 314:2

primary 229:10

prior 119:14
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

404

private 258:13

privilege 37:21

proactive 23:17 97:12

probability 153:9 154:8

285:5

probably 8:8 10:22 19:4

20:13,17 37:7,14 41:4

49:10 61:16 67:3

68:11 75:1 76:12,16

82:8,9 100:13 102:10

103:17 107:5 108:10

111:15 115:2 118:20

120:14 136:8 155:21

165:15 183:5 194:1

199:6 201:4 207:1

219:8 220:1,18 221:2

226:15 227:6 234:14

254:15 292:7 295:15

298:12 310:3,6

320:11 341:15 342:14

362:16

problem 65:8 90:7

138:18 154:14 157:3

158:19 172:21 182:5

206:1 208:16 217:16

278:21 279:13 285:18

286:21 291:6,11

292:15 293:20 352:6

372:18

problematic 42:13

problems 310:20

procedure 13:17 27:21

182:8

procedures 316:9

process 47:20 80:8

97:9 113:9,17 115:11

116:9 122:20 128:14

142:21 157:16,18

169:14 170:9 171:4,8

171:19 184:15 188:7

188:9 210:19 223:13

231:6 234:1,5 238:2

259:15 263:4 267:18

268:2 271:2 274:2

277:5 285:2 288:5,10

288:12 291:9 297:14

304:22 305:17 306:22

307:14 325:10 328:14

328:21 329:2 332:13

352:2

processes 262:8

produce 12:19 68:7

121:15 304:12 309:14

producible 62:2

producing 6:18

product 9:21,22 10:2

29:16 30:4,6 32:1,7

47:18 48:10 50:8

51:15 52:18 72:17

76:14 114:4 125:16

125:19 126:5,22

127:17 133:13 143:8

144:4 145:18 146:3

147:2,12,12,15,15,17

147:18 149:19,20,21

150:1 151:19 155:5,8

159:13 160:11 166:9

177:20 178:5 180:3

183:5 217:21 218:3

223:17 224:6 261:20

284:4 294:6 302:5

309:11 345:4,10

351:3 352:4 362:10

369:1 378:6

product's 295:1

production 61:6 140:3

163:1

productions 178:19

productive 95:14

products 27:9 126:8

142:13 144:4 149:15

149:15 150:15 159:13

186:17 188:17 205:12

205:13,13 291:22

344:13 350:12

professional 358:4

program 177:1 217:3

programs 292:18

progress 326:13

progression 283:19

prohibit 151:17,19

prohibited 3:21 6:17

8:20 97:21 123:13

124:11,15,21 129:16

129:17 130:12 131:1

131:2,4,5,8,11,15,21

131:22 132:1,3

133:21 134:11,15

137:10 143:20 146:12

146:16 150:17 152:21

159:1 205:20 211:3,7

211:8,13,13,20 212:3

225:2 249:16 258:7

298:12,19 299:6,9,21

300:15 302:12,19

303:2,8,17 304:21

306:17 315:7,22

316:5,16 317:3,14

318:12 320:17 322:20

323:1,3 326:10 327:9

329:15 330:14 331:21

333:1 335:14 337:19

337:22 359:12,14

360:4 361:5,21 362:8

362:20 364:14 365:2

367:7 369:8 373:21

374:4 377:1,2,5,6,8

378:5

prohibition 158:21

promised 96:22

promotion 276:7

proof 128:15 240:14

279:10

proper 163:16

properly 319:16 322:18

property 294:5

proposal 24:12 190:1

propose 25:14 73:5

335:8

proposed 4:10 159:18

proposing 368:14

prosecutions 344:9

prospective 303:9

protect 49:10 118:15

253:10

protected 125:20

protection 212:9

265:13

protections 369:11

prove 10:21 249:10

254:11

proven 116:3

proverbial 16:12

provide 44:20 61:3 79:6

79:7 113:14 123:17

192:11 228:4 274:16

331:22 367:15

provides 195:5 266:11

providing 118:17

331:11

provision 218:4

prudent 160:12

public 1:5,10 98:7

103:5,9,11,20 104:1

113:18,19 114:9

117:14 124:9,12,20

124:22 127:13 128:2

128:4,5,9 129:12,18

129:20 130:9 131:2

132:2,6 133:22

142:11 161:1,13,18

162:1 164:15 185:4

185:21 232:3 242:7,8

300:16 306:20 307:1

310:4,5 311:7,12

333:17 343:2 365:19

366:1 367:11,14

368:11 369:15 370:20

371:5 372:4,16 374:8

publicity 372:2,14

publicize 114:1 119:15

119:19

publicizing 119:13

128:18 258:4

publish 370:22 371:8

published 171:15

pull 122:8 305:8

pulled 271:6 317:7

pulpit 368:3

pump 140:22 141:22

144:22

pumps 27:12 213:3,5,8

213:9

punch 231:4

punching 271:15

punished 344:22 345:2

345:3

purchase 38:2 63:6

purchased 46:16

purchases 65:18

purchasing 79:7,9

167:20

purpose 158:16 223:7

237:15

purposes 93:21 148:3,6

182:19 314:16

pursue 229:20

push 30:4 89:14 160:5

206:10 326:15 337:4

pushes 367:3

pushing 33:9,10 93:22

295:16

put 4:11,14 16:5 18:3

22:17 23:15 28:15

38:6 39:20 42:4 50:3

51:14 55:11 56:9

58:18 90:7 91:16 93:6

104:19,20 105:15

123:14 135:8 149:2

150:22 151:10 162:1

162:2 165:6 179:16

186:8 207:6 219:5,14

220:10 246:19 250:10

263:7 270:8 273:9

277:4 283:6 284:5

286:15 287:1 291:3

297:3,22 313:9

314:16 319:5 321:5

330:16,20 338:14

339:22 341:2 346:12

347:6 348:12 356:4

356:11 365:2,17

371:19 375:21

puts 8:13 249:9 264:17

312:19 350:16 362:5

putting 7:12 49:22

123:21 126:2 145:5

145:19 147:5 151:2

151:15 153:1 166:14

179:12 321:6 354:20

Q
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

405

qualified 141:3 299:13

358:3

quality 84:9 141:15

163:21

quantum 353:15

quarter 163:9 370:11

quarterly 370:10

question 9:8 11:18 14:9

16:10,21,22 20:2 22:7

23:19,20,21 24:9,11

24:20 26:1 28:11 32:5

32:18 36:3 42:11

45:20 47:5 53:8,11

55:21 57:3 61:9 64:1

64:8 65:10 75:8 86:1

87:15 89:2 91:13

92:14 93:1 94:13 95:6

98:9 99:15 104:4

111:5 112:2 113:1,18

114:14 118:1 122:2

122:11,19 124:5,21

126:14 132:7 135:15

143:4,11 145:2,12

148:1,13,20 150:2

152:16 157:13 159:3

165:4 166:16 167:3

168:16 171:12 173:18

176:7,11 180:9 183:9

183:11 184:7,11

188:12 189:12,19,22

201:2 220:14 226:16

230:13 236:5 243:1

245:17 246:15 247:2

283:10 289:19 291:8

307:5 308:3 311:8

314:1 323:19 330:8

330:11 340:11,14

359:19 363:1 367:17

371:21

questioning 33:13

questions 11:15 29:3

43:1 61:7 87:10 96:5

148:9 168:5 169:19

184:9,18 272:14

276:16

quibble 324:9

quick 38:9 54:18 58:5

59:2 115:10,11 165:4

184:20

quickly 116:10 310:20

356:10

quit 122:15

quite 51:2 74:8 208:11

321:22 326:7

quotes 16:18 86:1

R

rain 288:8

raise 71:8 99:14 184:18

298:11

raised 63:3 66:15

363:11

ramifications 366:12

ran 169:11 281:13

Rand 1:15

random 22:13

range 91:10 282:4

rare 219:22 302:2

rating 28:18 32:2,7

ratings 47:14 187:20

ratio 136:4 287:6,7

rationale 200:10

Rawald 2:4 3:17 4:6

5:14,22 6:14 7:4 8:9

9:7 11:10,21 12:11,13

13:5 14:13 16:11,20

17:7,14 18:1,9 19:5

19:16,19,22 20:5

22:14 23:15 24:9 25:4

25:7,14 26:4 27:2,13

28:10,21 29:8 30:3,20

32:9,15 33:4,8 34:2

35:17 36:6,11,17

38:16 45:6 46:11

50:19 51:6,11 52:10

58:16 59:13 61:12,15

62:17,22 63:22 64:5

65:9 67:9 68:9,15

69:15 70:2,4,10 74:7

75:20 77:22 78:5 79:3

79:11,21 80:18 81:12

82:14,19 83:11,13,18

84:14 85:2,9,11,18,22

86:10,14,18 87:13,16

88:15 89:5,18,22

90:11,16,20 91:2 93:3

93:11 94:2,7 95:4,10

96:8,15 98:5,8 99:9

99:11,14 100:2,5

101:4,8,12,17 102:4,7

102:10,15 103:6,10

103:15 105:10 106:1

106:18 107:1,7,16,20

108:18 109:1,10,17

109:22 110:5,10,16

110:21 114:18 115:21

116:14,17,21 117:12

117:20 118:18 119:11

120:8,14 122:21

125:7,11 126:13,18

127:5,22 129:3,9,15

130:6,13,17,20 131:6

133:5,8 134:3 135:1,8

137:11,14 138:6

139:4,9,14,22 140:15

141:4,7 142:8 143:10

143:13 144:17 145:1

145:20,22 148:8,12

150:10,18 151:4,7,15

152:2,5,8 153:14,19

154:2 156:9,14,18

157:3,9 158:2,18

161:11,20 164:4,12

165:11,19,22 166:4

166:10 167:6,10,16

168:3,8,22 169:4,7

170:18,22 171:3,17

172:8 173:15 174:21

175:17,21 182:3

183:20 200:22 202:5

203:7 204:13 206:6

206:10,14 209:13

211:4,18 212:2 213:7

213:14,22 214:3

215:17 217:7 220:3

221:5 222:20 223:13

225:4,16 226:1,11,14

227:8,12,21 228:6

229:2,5 230:11 231:9

231:14 232:14,18

235:4,8,12,17,21

236:4,10 237:11,17

238:11 239:16,20

240:8,12 241:7,9,12

241:16,21 244:15

245:6,12 246:14

247:1 249:14 250:2,7

250:14,17 251:2,7,9

251:16 253:12,20

254:3,7,14 255:7,10

255:18,21 257:2,5,7

257:12,15,18 258:6

258:12 259:6,9

260:10,18 261:10

264:5,12 265:20

266:3,7 267:11,15

268:16,19 269:14

270:6,13 271:18

272:7,9 273:2,14,16

273:20 274:8,11

275:4,9,17 276:9

277:9,15,20 278:11

278:13,15 279:6,20

281:7 283:5,16 284:1

285:3,18 286:8

287:10 288:11 290:17

295:8 296:9 297:5,8

297:19 298:3,15

303:18 305:6 306:15

307:22 308:3 312:17

314:7,14 315:5,19

316:4,8,13,16 317:6,9

320:22 328:8 335:19

339:4 348:10 349:9

349:17 350:8,14

357:18 359:9 360:16

361:1 362:22 364:1

365:16 367:9 370:8

371:2 372:22 373:6

373:13 374:12,21

375:3,16 378:11

379:10,21 380:6

Ray 1:16 265:14

reach 72:6,10 185:3

199:6 242:11 306:10

340:7

reached 12:3

reaching 344:6

reaction 101:20 146:11

168:10

reactions 6:9 25:3 59:8

128:3

read 51:19 94:8,9

303:19

readdress 298:16

337:14

readily 60:9 65:3,8 67:2

67:6 68:3 69:3,12,13

69:17,21 70:8 88:17

89:3,6,20 133:12

readmission 217:11

reads 149:15 150:1

ready 175:18 204:18,22

296:4

real 7:17 14:17 32:19

66:12 81:19 111:14

159:15 184:12 209:12

228:4 310:20 372:17

377:14

realism 82:9

realistic 107:11

realities 88:20 295:11

366:8

reality 82:5 185:14

309:4 317:12

realize 174:11 309:3

342:14 376:8 377:9

377:19

realized 170:11 237:8

really 8:16,18 13:16

14:18,21 20:17 24:14

38:7 40:18,22 48:2

55:3,5 57:9 61:11

64:15 72:5,9 75:8

76:22 80:6 84:3 88:10

92:4 95:15 96:2,16

98:13 109:13 119:2

121:2 123:16 125:15

126:9 127:14 134:13

143:17 145:12 147:19

148:15 152:15 157:20

176:6,11,14,16 180:6
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

406

180:9 185:4 191:7,17

192:4,6 194:20,22

195:2,4,8 196:19

197:2 198:1,16

202:22 205:15 208:14

211:10 214:3 215:18

220:5 221:21 222:16

234:1 238:12 245:3

247:2 254:22 257:2

276:8 298:18 304:16

307:10 310:1 318:15

322:19 326:22 328:10

329:16 330:2 340:14

342:2 354:11,22

357:3 362:14 363:1,8

369:10 373:2,3

374:14,16,21 375:3

375:20

realm 115:3

reapplying 170:9

reason 22:11 35:19

55:13 62:22 63:16

77:11 97:10 193:11

308:21 376:16

reasonable 62:20 115:3

150:5 158:1 159:11

174:8 209:5 326:1

reasonableness 270:21

reasonably 349:3

reasons 9:10 24:16

72:12 75:1 77:18

103:22 119:17 184:22

300:18,19 313:15,15

324:21

recall 37:11 72:16

recapture 234:11

recast 162:18

receipt 60:22 79:8

receive 103:13 113:10

368:15

received 91:14 95:7

96:3 112:19 208:7

304:1

receives 245:22

recession 195:19

recite 195:20

recognition 52:1

recognize 177:19

178:17,18 179:11

180:11 193:19

recommend 202:12,16

recommendation

182:21 303:12

reconstruct 10:7

record 4:10 6:8,12 8:22

15:17 22:8 24:7 25:15

28:19 29:12,13,19

31:10,11 34:20 35:11

35:20 36:1 46:12 58:8

60:7,11 61:5 62:14

70:12 71:2,21 73:6

87:10,13 89:8 139:12

139:15 175:9 186:10

262:19 265:7 272:1

296:7,8 301:15

302:22 303:1,7,16

315:15 316:1,11

318:2,13 319:8 320:3

320:7,15,20 321:2

322:15 323:3 332:20

333:9 343:3 366:4

374:2 375:8 377:7

380:15

record-keeping 13:21

24:2 33:17,21

recorded 31:1

recordkeeping 8:11

records 6:18 8:16 9:1

10:20 12:7,19,21

16:15 18:22 19:12,21

21:17 26:10,13,14,16

27:11,18 28:22 29:9

29:14 30:15 31:8 33:1

33:7 34:4 35:13 40:15

40:16,20 44:22 45:3

58:19 62:4 64:2,17

65:16,19 66:5,11,16

67:4 68:19 78:9 81:20

82:13 83:5 87:12 88:9

88:21 99:18 113:2

115:6,12 118:16

120:21 121:1,5,16

122:4 133:17 140:6,8

269:6,8 271:6,8,10

272:2 304:12,19

305:1 316:6 321:10

322:18 329:22 330:2

330:6 331:11,22

332:5,10,11 333:1,16

333:17 361:21

recover 217:5

recovered 195:17

Redskins 161:15

reduce 196:2

Reduction 64:9

reference 59:15 176:10

177:13 247:22 343:10

referenced 254:19

referring 317:4

reflected 198:20

refrigerant 196:16

Refrigeration 2:11,21

reg 88:18 238:19

regard 45:9 376:19

regarding 81:3 83:22

84:19 88:17 311:7

322:9 359:21

regardless 29:1 144:13

201:6,9,14 209:1

223:20 360:6

regime 152:14

region 17:9 18:12 24:15

26:5,19,21,22 27:1,3

29:2 105:7 145:16

199:8 297:10,10

345:10

regional 1:3 23:13 27:9

29:17 30:5,7 102:16

147:18 149:16 150:15

154:20 184:8,21

186:2 188:16,18,19

188:21 191:14 192:13

199:12 200:11,16

201:10 304:5 333:5

351:4,12

regionality 40:17

regionalizing 15:2

regions 10:15 17:11

19:12 20:17 40:20

178:5 302:6

register 8:7,8,10,21

registered 248:17,17

248:20 261:16

registering 8:12

registration 8:3 246:4

regs 42:6 92:16

regular 38:1 207:1

328:16 349:22

regularly 38:10 76:20

89:10

regulate 272:12

regulated 22:19 252:8

322:6

regulation 17:1 19:17

22:19 23:18 51:5

58:15 61:19 82:6

91:16 140:12 182:5

193:10 319:15 331:18

334:14

regulations 104:20

148:17 262:6 306:14

368:2

regulatory 92:17 94:16

229:13 316:21 319:19

rehabilitation 170:9

reimbursed 261:19

reiterate 317:22

reiterating 200:12

relates 101:1 200:9

relational 12:22

relations 352:19

relationship 242:8

relationships 318:6

relative 259:2 260:1

relatively 116:10

281:18,19

released 102:17

relief 288:16 289:11

relieve 79:14

reluctant 87:4

rely 203:1 331:2

relying 305:13

remain 11:18 129:1

remaining 201:8

remains 190:10

remedial 136:13,18

226:3 232:6 235:2

239:13 249:15 250:9

257:19

remediate 216:22 240:3

242:12 268:22 271:12

299:18 300:3,3

367:14 368:6 372:3

376:8,10,13

remediated 259:17

263:14 268:15

remediating 367:4

remediation 226:22

227:3,7 230:1 238:4

240:6 246:18 255:13

263:3 266:20 267:7

268:4,5,18 269:1

280:7,14,19 300:11

307:11 364:12 366:21

366:22 367:5,10

368:8,18 378:1,13

remedy 145:21 207:11

253:14 325:5 346:21

347:1 348:1

Remember 380:4

remind 191:8

reminding 143:21

removed 59:15,16

reopen 166:6

reopening 191:1

repair 229:13 353:9

repeat 125:11 231:17

repeated 208:10

repeatedly 208:14,22

rephrase 275:19

replace 227:1 231:8

232:21 267:16 275:2

276:12 277:18,18

replaced 233:1 248:3

251:11,15

replacement 56:19,21

57:5 75:15 221:10

227:20 246:9 248:10

274:17 276:21 353:10

378:14

replacing 136:14 222:3

223:4 227:17 232:8
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

407

233:4 240:16 242:1

257:20 378:19

report 17:17,18,21

100:9 370:10

reported 30:10

reporter 122:6,9 169:21

215:14

reporting 17:12,15

30:11 174:7

reports 316:19

represent 76:2 313:19

313:21

represented 340:17

representing 155:22

181:4

reputable 170:8

reputation 379:12

reputations 356:12

request 12:19 60:10

61:6 62:3 64:9 70:2

112:13 215:19 315:15

371:16,17

requested 304:13

requests 48:22 92:11

317:15 318:2

require 7:22 18:5 20:19

20:20 30:11,14 37:2

42:14 49:12 56:8

64:10 66:1 104:10

110:1 139:11 140:6

165:1 183:15 186:6,7

186:9 201:3,4 318:7

required 6:20 18:22

27:11 30:10 48:1

65:16 111:2 133:18

171:21 172:6 246:17

requirement 7:1,7 9:5,9

13:22 20:16 24:2

29:19 32:22 61:6

63:21 139:16 320:8

requirements 22:8

60:12 320:4 321:3

338:21

requires 15:3 17:9

21:19 147:2 187:17

230:7

requiring 62:1 82:6

140:12

reserve 216:14

reserved 135:11

resolution 306:22

resolve 326:6 335:8

370:19

resolved 71:9

resolves 177:4

resources 1:21 2:18

332:1,5

respect 178:6 185:9

200:16 302:16 318:17

325:20 357:22 361:20

respective 176:17

respond 56:18 75:22

112:5 189:11 190:6

317:15 324:7

responding 95:17

response 20:2 85:1

90:10 96:7 110:20

113:10

responses 11:19 91:14

responsibilities 252:19

responsibility 377:11

responsible 32:11

138:3,20 140:3 354:5

rest 17:13 18:5,21 19:2

19:8 25:15 69:7

134:18 185:12 200:6

229:15 298:22

restaurant 227:15

restricted 127:17

restriction 146:6

restrictive 364:5

result 16:13 320:18

345:18

results 370:18

resume 175:10

resumed 71:3

retail 54:1 197:14 354:1

retain 18:22

retained 35:10

retention 4:10 6:8 18:6

25:15 60:12 61:5

70:12 71:22 87:10,12

87:13 89:8 133:18

139:15,16 272:2

316:1 321:2,10

361:22

retentions 316:12

rethink 322:22

retroactive 66:9

revealed 16:13

revenue 197:20

review 60:10 249:22

reviews 309:11

revision 192:16

revisions 202:19

reward 242:2

Rheem 1:21 14:3 20:10

62:14 65:2 116:15,17

116:19,21 117:1,2

130:11 144:16 231:1

271:22 312:11 315:21

338:12 356:20 372:14

372:18 373:8

rid 50:20 138:18,21

right 6:14 7:18 9:7

14:13 18:1 19:5,19

25:7 26:4 31:6 32:9

32:14 33:8 34:2 36:11

41:20 43:14 45:6

61:14 64:5 67:9 68:4

69:13,16,19 70:3 71:8

75:20 76:21 77:22

79:3 81:12 84:13

89:22 90:8 98:5 100:2

101:17 103:10,14

105:10 106:14,18

107:16,19 108:18,18

109:1,10,17 110:4

113:8 114:18 117:12

117:13,19 118:18

119:5,11,11 120:8

122:21 127:5,7 129:9

130:12,13,17 137:11

138:11 139:4 140:4

140:13 142:17 143:10

145:20,22 148:8

150:1,10 151:7 152:4

152:7,7,8 155:2 158:6

158:19 159:4 160:18

161:11,20 165:6,11

165:16 167:7 168:3

168:19,22 169:4,7

170:18 171:16 172:8

173:10 174:21 175:11

175:14 182:3 186:13

187:20 206:8,14

207:3 211:5,18

214:11 219:5 221:4

223:13 225:4,14

226:1,9 227:12,21

229:3,4,10 230:16

232:18 233:20 235:8

237:11 238:3,6

239:16,20 240:8

241:12,18 244:15

246:14 248:10 251:1

251:12,16 253:5,20

254:10,14,14 255:18

256:13,20 257:4,6,11

258:6,11 259:6,12

260:10,19 261:17

263:15 266:3 268:19

270:6,13 271:18

272:9 273:14,19

275:4,6,17 276:9

277:21 279:6,14,22

280:8,9,20 282:10

283:15,18,20 284:1

285:3,19 286:8,9,19

288:11 290:17 294:2

298:15 299:4 305:6

311:21 314:7 315:6

316:4 317:11 320:22

328:5 334:22 336:8

342:16 343:22 344:16

350:17 357:4,11

359:3 362:22 364:22

370:2 373:13 375:16

376:13 378:11,20

379:19

ripped 310:12

rises 230:15

risk 134:2 162:6 172:21

207:5,8 210:11 286:2

321:6 350:16 352:7

362:6

risks 372:7

road 201:10 334:20

336:22

robo-calling 97:12

robocall 23:17

robocalling 22:16

Rocky 2:6 11:5,6 36:2

47:8,8 48:19 51:11

55:19,20 56:18

129:10,21 171:12,18

233:8,10 234:18

235:1,6,9,16,19 236:9

236:12,16 237:16,19

247:20 248:16,22

258:22 259:8,13

260:8,14 261:8

262:21 263:17 264:21

266:10 274:12 275:5

275:10,15,18 276:14

294:16,22 295:6

rogue 138:20 164:1

rogues 341:5

role 188:10 306:4

347:12 348:3

roll 39:13

room 59:3 84:22 91:4

91:18 125:5 131:9,20

196:4 198:7 322:13

379:17

rough 281:13

roughly 36:22 49:20

round 313:12

routine 31:15 32:20

33:2,22 97:16,17,19

120:11 125:1 126:10

127:6 128:21 129:13

130:3 131:4 135:15

135:18 136:2,22

138:16 140:19 142:9

142:10 144:8,13,19

145:4 158:6,7,8

159:17,21 160:1,9,14

160:14,15,17,19

162:15 165:2,5,15

166:11 167:17 168:20

169:13 171:5,14
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

408

205:8,18,21 210:2

211:15,16,20 212:11

214:17,18 215:5,12

215:20,22 216:6,7,17

216:22 217:5,10

221:8,14 224:14

226:7,8 239:6,7,13

245:9 249:21 250:6

250:18 251:3 255:2,9

256:4,11 257:21

258:17,21 261:7

263:2 265:9 267:11

267:13 268:18 269:21

270:10,20 280:12

283:14,20,22 284:10

284:16,22 285:10

286:10 287:9,14

299:10,13,20 300:6

307:1 327:11,14,20

328:6 339:6 342:18

343:2 344:2 345:21

346:1,4,8 350:1,6,7

360:13 361:12 364:11

365:10

routinely 103:11 138:17

159:5,7 254:20 328:3

364:8,8

Roy 2:7 73:1,1,19 161:5

202:8,8,15 204:8

ruin 379:11

rule 29:18 30:2 93:7

148:4,7 186:21

201:16 203:5 285:12

309:3

rulemaking 91:17 92:17

92:21 94:17 180:20

180:22 182:4,7

188:21 201:3,11

325:10

rulemakings 194:7

199:11

rules 8:6,7 136:10

222:9

ruling 172:4

run 141:22 282:16

291:17 326:16 347:22

357:4

running 44:9 158:9

163:2

S

S.W 1:10

Sachs 2:8 5:11,20 6:21

11:16 14:7 16:9,12

20:4 23:19 25:2,5,21

31:13 36:8,15 41:14

41:17 53:12,13 54:19

55:17 56:16 61:8,14

66:10 77:6,17 78:4,7

84:2,11 88:7 89:2

100:22 101:5,10,14

114:13 121:22 122:8

122:10 137:18 139:1

140:14,16 141:5,9,18

142:6 162:17 164:6

164:15,21 169:5

170:19 189:10 190:14

202:13 216:10 218:7

226:19 227:10,13,17

227:22 228:10,14,22

229:4 242:22 245:1

251:14,21 281:5,10

282:9,11 283:3

313:11 314:11,17

323:4 324:7,16

340:10,21 341:18

342:6 364:20 366:6

367:16 368:3 379:14

Sacramento 353:13,20

357:8

sacrifice 254:9

safe 122:1,12 123:10

174:10 286:1 318:3

safety 123:17

sake 329:14

sale 36:20 37:4,4 39:13

56:8 63:6 65:22 77:1

78:20 99:5,10,22

101:21 102:2 125:16

125:19 167:1 173:2

198:1 246:20 247:7,8

296:2 352:15

sales 36:5 37:20 41:15

43:4 47:15 55:6,10,18

65:18 74:10,14 75:15

75:16 76:1,3,4 77:5

77:12 78:14 80:13

81:3 122:17 126:4

136:6 168:4 172:15

174:4 259:22 263:6

263:19 276:7

salesman 138:4

salesmen 193:18

sample 305:22

San 349:5

sat 192:22

satisfaction 272:20

satisfied 120:4

satisfies 185:4

satisfy 222:7 223:3

save 218:11 268:11

saving 187:2 229:9

savings 187:8 189:18

192:12 200:3 222:1

227:1 234:11 320:12

355:1

saw 233:2 375:10

saying 11:7 26:14

31:19 35:18 52:12

56:17 61:21 72:7 99:6

102:11 105:11 109:22

123:6 124:6,15,17

126:4 127:8,11

129:20 133:9 142:10

145:4 146:13 147:1

150:4 155:4,5 158:7

179:5 192:18 201:1

209:20 217:17 218:2

220:17 221:6 222:2

235:21,22 243:8

252:15 256:15 262:10

264:5 266:5 269:3,12

270:14,14 274:17

280:19 281:1 291:5

304:10,14 306:7

311:5,10 315:1 319:5

321:4 349:19 357:19

359:22 371:17 374:19

says 26:8 39:8 49:4

68:20 104:13 170:4

238:7 263:13 265:1

266:15 273:11 278:5

284:2 313:2 332:10

345:7 351:2,11

355:22 361:16 365:7

372:18

scale 207:22 208:21

209:15 221:2 282:14

353:21 354:1 360:11

367:2,3

scales 163:21

scanning 39:15 42:18

55:14

Scary 317:5

scenario 38:19 54:17

88:6 123:15 170:1

255:22 268:13 295:19

313:6 343:14 349:18

350:9,10 355:4

scenarios 9:20 139:5

schedule 88:9

scheduling 227:3

scheme 225:10 229:13

283:6

scheming 347:20 348:8

school 170:3

scientific 76:19

scofflaw 207:6

scope 7:15,18 13:11

14:16,22 15:22 84:19

149:1

Scottish 165:20

screaming 96:13

screen 262:18 348:12

screwed 170:11 346:16

screws 347:5

search 60:19

seat 335:1

seated 191:9,13

second 9:18 10:2 12:16

84:11 113:18 129:5

162:20 243:14 309:12

328:6 339:13

secondly 133:17

285:22

secret 301:1,8

see 6:13 10:14 15:14

18:21 23:8 26:16

31:10 68:22 71:17

72:8 77:11 78:7 83:6

89:9,14 96:13 97:2,3

99:19 102:18,19

105:4 106:6 113:2,21

120:6,9 121:6 134:8

140:2 152:19 162:13

182:2 183:9 193:8

203:16 209:14 211:19

213:3 215:17 216:15

224:12 231:2 232:18

232:22 237:21 248:8

249:20 250:19 255:20

257:19 265:7 267:5

274:7 286:13 287:21

299:6 300:13 303:1

315:5 319:21 330:22

337:6 355:17 369:4

375:11

seeing 32:19 90:11

222:21 284:16 337:3

seek 201:16 307:21

seemingly 64:13

106:19 111:6 307:4

seen 38:7 95:12 244:19

367:12

SEER 7:1,9,22 10:17

11:2 14:3 15:17 18:11

26:3,6,20 28:6,15

29:1,2,20 32:6 33:1

77:10 79:22 83:22

87:3 88:5 91:5 99:17

101:7 105:4 126:5

144:13 156:19 163:17

176:13 177:4,21

179:16 180:3 187:20

189:16 192:10,13

197:4,5,5 198:20

199:2,3,5 200:17

202:11 203:13 204:6

227:18 228:17 233:13

235:9,9 250:20

275:13,14 276:2,3,10

276:12,13,20 277:4
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

409

281:15 284:4,8

290:12 294:12 313:3

350:22 353:19 354:14

357:13 379:8

SEERs 21:13 26:12,15

26:15 99:19 113:3

sees 105:12 197:21

262:4 269:8

selectively 118:17

self 55:13

self-certify 21:20

sell 16:3 34:14,15 37:3

37:15 48:17 50:7,8,11

50:12,13 57:4 60:6

99:6,17 126:5 127:2,3

127:8 143:8 144:7,9

144:20 147:2 155:7

156:5,18,20 157:6,7

159:9 165:7 166:8,18

166:20 167:5 168:12

174:19 181:20 193:7

218:2 219:8 223:17

235:17 277:14 327:19

330:19 342:17 350:11

351:15 352:15 361:9

362:11 364:2

sell-through 47:20 48:3

50:7 52:21 94:4

295:17

seller 127:4

selling 37:16 121:12

122:16 144:11 145:15

151:18,19 156:3,21

157:21 158:11 161:6

169:15 172:20,22

174:1 210:2 237:14

244:9 327:12,18

328:22 339:7

sells 159:6 349:1 352:5

362:10

semi-jokingly 193:6

send 102:10 243:13

298:1 332:9

sending 103:8 369:22

sends 264:22

senior 196:9

sense 10:15 14:1 15:20

26:18 29:7 32:4 40:22

60:2 83:14,16 85:15

109:11,11 121:9

123:11 126:12 138:22

144:21 150:3 163:18

186:4 193:1 205:10

205:15 207:11 224:3

289:4 297:3,13 314:4

334:7 342:3 360:13

379:6

sensitive 203:8 368:10

sensitize 203:9

sent 371:16

sentence 163:18

303:20 340:20

sentiment 141:13 190:7

sentiments 73:3

separate 33:18 129:17

189:13 202:6 291:9

295:22 359:17

separately 75:14

separation 199:17

September 1:8 109:5

sequential 120:12

serial 5:1 6:2 39:1,16

39:21 42:12 44:16

45:14,16,18,19,21

46:3 47:21 51:19 52:3

52:8,20,22 53:1,7,9

53:14 56:7,10,17

59:16 65:19 71:22

72:13 73:9,14,16 81:4

82:2,6 105:7 117:8

232:11,13 233:2,5,15

240:14,15 248:4,8,11

259:20 260:1 263:5

264:6 265:1

serialized 56:3,3

serious 156:17 176:11

service 58:5 74:12

228:2 233:12 248:2

259:22 263:6 273:17

278:19

serviced 63:7,8

servicing 105:13

session 201:8

set 131:14 160:8 195:11

211:15 212:11,12

249:22 252:18 253:7

254:4 284:21 313:22

369:21 379:16

sets 293:12

setting 194:18 334:19

settle 8:16,18

settled 295:17 335:6

settlement 135:5

302:16,18 303:12,21

317:21 318:17,22

319:1 322:14 324:22

325:4,18 330:5 345:7

359:20 361:14

seven 65:17 66:3 144:5

severely 129:6

shaking 175:5

share 73:3 77:7

sharing 86:6

she'd 360:17

sheet 23:3,16 90:3 99:6

100:11 149:2 203:21

336:15,17 373:2,11

Shepherd 2:10 86:8,8

86:11,16 126:19,19

127:7,20 137:3,3,13

145:9,11,12,21 147:9

147:10 148:10 151:14

151:17 152:4,7,10

154:12,12 168:17,17

169:2 213:17 215:18

225:11,19 226:9,13

244:6,8 245:7,7,14,21

246:7,10 247:12

248:5,14 249:1 254:8

256:2,3,9,13,18,20

257:4

shift 45:22

shipments 340:16,22

shipped 18:7 21:10

292:4 348:20

shipping 21:12 351:20

shock 43:2

shoes 361:4

shoot 276:10

shop 166:5 170:16

220:20 353:8

shopping 251:20

short 176:18 230:18

251:20 281:6

shortcuts 141:2

shot 71:11 139:20

246:13 277:6

show 18:4 36:13 90:13

96:21 97:8 103:3

197:6 262:2 272:21

317:13

showing 104:12 140:8

247:8

shows 140:4

shrunk 79:20

shutting 166:21

side 14:9 37:1,7 101:2

116:1 122:20 138:14

206:17 280:5 375:8

376:22

sides 267:8 306:8

sign 322:1 337:21

373:10

signed 318:22

significant 47:11 57:12

78:8 93:15 156:6

191:2 200:15 306:11

311:10 314:22 320:10

significantly 289:20

silence 281:6

silent 85:3

similar 51:10 184:6

similarly 132:9

simple 38:3 47:10,17

181:15 249:13 316:19

simpler 29:22 122:2

223:14

simplest 221:6

simplicity 185:20

simply 79:7 147:8

264:3 306:13 316:22

Simultaneous 109:9

150:20 156:13 158:17

164:18,20 213:16,19

214:2,7 222:19 223:1

235:11 236:3 239:22

241:10,13 247:16

256:5,19 263:20

264:11,14 267:10

273:1 277:11 283:8

293:16 345:11 350:13

358:10 363:18 370:6

375:5 380:9

single 5:22 131:3 185:1

185:3 308:1 314:5,6

sinks 213:21

sir 78:4

sister-in-law 101:6

sit 134:12 156:2 296:17

352:10,16 357:3

site 288:2 310:14

344:13 345:13,14

sitting 140:21

situation 22:4 26:8 74:6

116:8 141:1 211:17

212:17 219:19 221:3

240:4 253:7 373:20

situations 221:18

six 66:13 170:4 325:5

325:11

Sixpack 101:7

sixth 380:13

size 287:3 305:22

344:10

sizeable 76:2

skate 241:18 242:2

skeleton 375:10

skill 141:20 142:5

skilled 141:16

skin 228:20 301:20

321:5

skirt 163:16 272:18

skirted 268:21

skirts 170:6

sky 317:8

slap 130:2 154:9

slapping 334:4

slide 4:17 12:11,13

58:17 59:18 90:13

94:14 96:21 98:2

103:3 111:4 123:19

124:3 135:14 143:16
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

410

143:22 144:3 172:11

173:16 214:1 254:18

256:3,6

slides 4:11 5:16 25:16

110:22 123:22 175:3

204:11

slightly 31:14 76:17

slip 39:19 351:11

slippage 19:1,3

slips 280:22 351:2

small 17:8 19:4 25:16

58:13 158:7,9 160:14

160:17 162:22 341:17

341:18 344:3,7 354:1

smaller 13:3 221:2

309:10 377:10

smile 158:12

SMU 208:6

sneaking 259:12

social 309:4,5,14 310:2

310:14 311:2 367:20

sold 7:2 14:5 16:8

35:11,14 57:13 65:21

66:2 78:3 81:9,11

91:10 99:20 118:6

126:22 138:4 168:12

169:12 186:9 217:12

223:21 224:5 324:3

sole 304:9

solely 182:18

solution 54:10 140:13

157:22 181:15 346:10

346:12

solutions 378:10

solve 121:13 278:20

solved 279:13

solves 42:22

solving 20:22

somebody 39:2 43:10

71:8 72:11 118:10

125:21 138:17 158:5

162:14 165:8 196:18

197:13 208:12,21

209:8 219:9 223:14

226:7 244:5 267:1

271:5 279:18 284:1

295:16 311:16 339:7

339:10 342:4,18

346:16 347:20 351:14

353:17 354:15 373:16

somebody's 167:3

309:13 311:15

someway 114:9

somewhat 167:7

soon 63:3 171:22

211:16 376:8

sooner 93:21

SOP 81:1

sophisticated 13:6,9

27:22 68:18

sophistication 67:11

SOPs 42:15

sorry 80:22 121:2 122:6

122:10 157:11 161:15

169:20,21 208:18

209:3 215:14,16

244:7 287:6 292:6,14

370:4

sort 7:14 9:9 12:4,9

22:5,12 23:17 26:16

75:14 97:18 103:2

104:5,11,15,20

108:19 118:7 119:8

120:5 122:20 128:4

130:21 131:1 142:16

157:15 160:5,7 171:8

174:3,14 182:7

183:10 184:12,13,14

189:5 192:17 205:4

206:1 213:6 215:6

227:4 239:12 243:2

243:11 249:9,11

269:20 270:21 284:12

285:20 286:12 297:10

299:10 304:22 305:4

311:1 313:12 321:3

322:7 327:8,9 328:10

340:15 345:16 368:14

375:9

sorts 163:15 174:11

236:22 328:14

sound 139:7 278:3

sounds 106:3 197:2

311:9 368:13

south 7:3 8:5,18 9:14

10:1 16:8,8 20:12,16

21:3,21 22:2 24:3

27:6 32:3 44:9 58:15

108:17 157:6 163:17

188:3 199:3,18,22

314:19 372:19

southeast 7:10 15:1,13

15:22 20:16 21:16

84:20 85:12 87:2,20

88:2

Southeast/Southwest

13:20,21

Southeastern 10:19

southern 14:19 281:19

southwest 6:2 7:10

15:1 16:1 21:17,21

24:4 58:15 84:19

85:13 87:2,20 88:2

177:6 178:1 189:15

190:8,10 198:12,15

349:15

Southwestern 10:19

space 297:21 322:7

sparked 23:21

speak 51:17 202:14

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213:16,19 214:2,7

219:4 222:19 223:1

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sports 208:2

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spread 310:15

spring 45:7

square 225:9

squarely 143:11 148:20

stack 357:12

stage 199:1 314:5,6

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152:15 154:20 177:14

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start 4:4 56:16 104:21

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153:1 155:7 170:5

175:15,18 281:11

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started 4:4 71:5 99:4

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281:19 314:19

statement 200:10 211:2

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(202) 234-4433 Washington DC www.nealrgross.com

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stepwise 283:19

sternly-worded 102:11

Steve 306:3

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sting 101:3

stipulated 320:16

stock 54:12 290:18

stocking 93:14

stop 151:9,11 152:21

154:16 161:6,7 172:1

172:6 371:15

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353:19 354:9

story 129:14

straddles 40:19

strategies 216:16

stream-of-conscious

177:10

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276:18 294:17 353:13

stretch 65:5

strike 146:20 290:5

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strong 85:11 364:17

367:19

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subpoenas 112:3

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supposed 9:15 23:7

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surprise 11:17

surprised 7:20 34:7

surprising 54:3 317:19

survey 23:9

surveying 22:16 36:21

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suspicion 239:10

368:16

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sweep 22:12

switch 128:15

symbolic 190:4

sympathetic 226:20

system 4:20 14:4 39:3

39:15 42:17 81:10

133:22 179:20 185:8

195:1,4,7 196:20

247:21 248:4 266:14

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156:3 176:9 178:22

179:4 191:9,13,17,18

193:1,20 204:21

205:11 209:6 215:7

216:21 301:3 321:10

338:10 361:13

tables 189:8

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tactic 321:17

tagged 309:13 310:9

tails 287:2

take 21:6 34:8 36:12

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103:3 107:9 110:22

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173:7 175:5 190:18

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280:10 287:22 297:22

302:9 312:15 314:21

321:16 325:19 326:22

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351:10 355:17 356:3

356:20 366:2 369:4

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313:14 320:2 327:22

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153:20 156:16 158:20

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targeted 112:12

task 46:4 245:5

tasked 325:2

teach 9:12

team 301:13

teased 281:11

tech 170:3 316:19

technical 47:15 187:15

technically 244:4

tee 377:20

teed 59:20

teeth 133:19 350:15

362:3,17

teleconference 1:22

tell 39:18,20 50:15

54:15 64:21 69:20

80:14 95:20 100:17

104:6 108:7 109:4

120:5 161:3 177:12

179:15 181:17 213:20

245:20 248:12,19

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332:19 333:8 335:5

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telling 149:6 280:16

325:7 371:11

temperatures 187:9

198:14

temporary 335:8

ten 63:15 65:21 153:17

153:17 294:19,19

tend 55:10

tension 205:19

tent 114:20

term 8:20,21 23:3,16

64:6 78:13 89:3,12

90:3 146:3 149:2,9

203:21,21 208:1

273:5,7 292:18

324:19 336:15 348:11

348:15 373:2,11

termination 250:11

terminology 267:2

terms 114:14 126:21

189:16 190:2,17

205:5 206:7 227:3

273:4,20 276:6

280:12 336:17 354:16

377:1

terribly 314:22

territory 349:16

test 222:12 223:7

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tested 10:3

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114:19,21

tests 16:6 88:5

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314:20 347:20 348:1

text 88:19 91:16 316:21

thank 5:21 17:16,22

83:8 95:2 122:9

130:19 142:7 184:4

190:15 204:8 251:8

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thanks 133:10 296:4

That'd 245:18 251:11

the-counter 53:19

themself 229:16

theoretically 154:13

they'd 39:18 199:6

235:12 236:7 288:19

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47:11,12 48:13 54:4

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160:3,16 162:2 170:5

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22:21 24:11,22 25:9

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320:19 321:4,11

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(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

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370:14 371:13,22

372:5,9,10,11 374:17

375:12,12,18,22

376:2,3,20,20 377:12

378:19 379:4,15

thinking 77:13 85:4

98:22 125:21 133:2

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342:12 347:4 378:13

thinks 100:16 180:13

third 11:7 18:17 270:9

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75:12 85:20 95:14

96:3,9,10 104:18

108:5 114:10,11

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192:9 193:1 213:6

236:19 238:13 247:2

249:1 279:17 281:12

282:14 289:8 320:22

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368:10 372:20 379:6

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11:3,22 19:22 84:21

85:3 88:2 104:2

110:17 137:1 143:1,2

181:22 204:16 217:9

283:6 298:7 360:14

thousand 153:17,18

219:21 220:11 225:7

324:3 355:20,20

thousand-unit 220:17

thousands 56:21

348:19

threat 331:10

three 5:8 41:3 60:21

62:15,20 64:3 67:1,7

67:14,20 69:3,5 71:12

76:14 86:12 88:13

121:1 193:18 196:18

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228:10,11 234:15

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106:6 108:2 110:18

131:18 211:15,20

212:11,16 249:21

250:6 254:19 256:7

299:12 339:11 349:8

throw 18:20 62:18

126:9 180:16 253:9

thumb 360:11 367:2,3

Thursday 1:7

ticket 105:18 106:2,19

110:8

tied 117:8 170:13

tier 339:12,13 350:14

tightness 84:5

Tim 105:1 109:22

136:15 192:10,21

214:13 224:2 299:2

317:16,19 324:19

325:12 333:21 338:1

359:22 365:17 368:9

368:10

Tim's 108:9 110:11

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38:5 39:9 40:10 41:13

55:12 63:5,7 64:21

68:7,12 70:9,17 81:10

82:1 95:18 98:16

108:4 115:3,8,8

118:14 126:9 127:11

135:11 136:3 139:2

140:22 154:19 156:2

162:20 171:10,20

172:2,4 174:8 176:1

182:12 183:12 188:15

188:22 192:15 196:21

201:4 205:4 208:19

216:7 243:14 255:15

269:3 285:4 287:4

292:7 293:21 295:18

296:2 298:22 302:9

304:3 305:19 318:10

322:6 328:6 334:3

339:9,19 346:8,14

366:1

time-dependant 190:3

timeframe 89:21

timely 61:4

times 9:19 53:18 93:22

135:22 153:9 154:5

169:20 208:19 213:21

219:16 243:12 264:16

349:22

timing 261:22 262:1

TIMOTHY 1:14

tip 163:21

tired 161:4

today 40:11 95:16

96:19 214:1 296:19

298:22 314:19 333:7

336:18 337:4 338:16

toilet 177:15

told 45:13,13 91:22

93:17 96:15 137:22

206:13 239:20 252:17

264:16 306:3

Toledo 106:16

Tommy 250:22 251:10

251:14

Tommy's 250:21

tomorrow 50:9 363:8

ton 47:6

tool 101:16

tools 22:15

topic 134:13

topics 20:8 217:8

tornado 290:6

toss 281:12

total 41:8 57:8 337:3,17

340:16

totally 14:15

tough 40:18 73:9

194:20 318:9

tougher 194:19

toxic 159:3 216:2

trace 117:9 120:6 233:4

track 10:11 15:3,7 16:7

37:10 40:6 46:9,15,20

47:20 52:18 75:17

78:2 80:9,13 83:19

117:16 237:18 260:3

266:8 332:20 333:9

347:15

tracked 37:17 48:2 56:8

56:11

tracking 48:8 73:14,16

76:22 77:2,4,11,20

80:7 83:2,15 179:1

238:16 247:21 266:16

tract 284:2

traction 218:6 325:20

trade 170:2 308:20

310:18

trade-off 179:17,18

trailer 344:14

trained 141:16 352:22

training 217:3 347:6

transaction 38:9,14

41:20 53:19 54:2,18

55:9 56:12 74:3 82:1

241:15 258:13

transactional 44:5

transactions 38:12

41:5 53:21 57:8,14,17

66:12 73:4,8 79:19

262:9

transgressions 284:21

transitions 163:16

translate 66:16

transparence 242:6

transparency 205:10

242:7

transparent 103:20

214:5

trauma 24:7

travels 21:8

treat 146:4

treated 360:1

treating 116:4

tree 108:16 375:12

tremendous 12:17

tremendously 56:12

197:17

tricky 319:3

tried 194:1 203:9

280:14 313:12

trigger 101:22 102:21

130:12 306:18 345:15

345:17 368:19

triggered 246:16

tripped 302:3

trouble 122:7 154:7

164:2,4 177:17

356:17

troublesome 303:5

troubling 377:3

truck 21:14 39:14,17,20

346:4 349:2

truckload 130:16

344:13 346:3,14

truckloads 157:20

trucks 163:2 164:10

true 35:18 154:14

183:20 189:14 234:14

277:1 325:13

truly 368:1

trust 334:20,22

truth 320:11

try 40:15 41:19 43:21

44:12 47:16 66:13

87:11,19 99:6 101:6

117:13,16 121:13

136:21 152:20,20

158:12 162:18 181:8

189:11 193:17 266:13

266:18,22 272:18

281:3 290:13 336:4

339:2 342:22 343:3

347:8 367:18 375:21

trying 31:3 40:11 41:1

41:22 42:10 43:19,21

52:18,20 55:8 57:10

58:4,9,10 64:15,16

68:19 74:12 79:11

106:11 117:14 121:14

137:19 138:11 139:5

141:6 148:16 151:9
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414

151:10,10,11 158:16

163:16,20 164:21

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293:10 308:22 343:6

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turn 217:7 263:12 266:1

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327:5 330:11 358:19

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276:3 310:11

turnover 163:3,11

turns 138:10 152:21

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twice 252:22

two 9:10,19 14:11 23:21

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type 61:17 219:22

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unlawful 192:2

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unreasonable 345:13

unsavory 240:20

unusual 253:22

unworkable 177:2

update 90:18

updated 380:2

updating 294:4

upset 139:17

Upstairs 380:6

upstream 112:20 176:6

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valuation 190:3

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198:20 207:2 282:13

299:6 300:14 306:2

312:20 314:2 367:7

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variants 9:13

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variety 178:20

various 112:6

vary 318:8

varying 72:9

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vehicle 300:10

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verify 111:9,13,20

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verifying 108:20 213:14

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(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

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328:4 344:17 347:11

348:5 350:2 364:8

violation 33:16,17,21

97:15,17,17,20 98:3

102:3,5 123:20 124:4

124:5,7,9,14,18,19

125:1,2,22 126:1

129:11,16,19 130:9

130:11,15 131:5,15

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350:1,7 352:12

362:14 365:9,19

366:1 368:6,7,11,17

368:17,19 369:9

370:18,19 371:10

376:14 378:5

violation's 267:17

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129:13 130:18 131:4

131:17 135:18,19

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120:11 127:6 128:22

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144:13,20 145:5

160:1,15 162:15

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vis-á-vis 126:15

visibility 274:7

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voice 175:21 194:12,12

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warm 185:13

warning 102:11 103:10

103:16 113:14 209:17

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warnings 371:8

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237:5 240:10 245:11

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(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

416

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214:12 247:11 271:22

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watch 103:2 141:22

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water 320:7

wax 191:1 258:10

way 12:5 24:17 26:12

30:6 31:14 42:4 43:12

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1 43:18 47:1 292:2,13

362:17

1-800-CARRIER 352:20

1-800-RHEEM 312:13

1,000 153:20 220:4

1.6 177:15

1:30 175:7,10

10 55:16 277:16,19

304:7 317:2 341:19

353:4

10,000 153:20

10:11 71:2

10:30 70:22

10:41 71:3

100 68:15 81:15,18,21

163:2 164:9 238:17

272:20 287:12 294:1

353:5

1000 1:10 349:14

10th 326:22

11th 326:21

12 252:21

12:03 175:9

120 115:2 116:10

13 7:1,22 8:17 10:1 14:3

15:16 21:13 26:3,15

32:6,8 84:20 93:9

99:17,19 105:5 113:3

126:5 156:15 158:11

180:3 183:5 188:1

190:20 194:15 233:13

250:20 275:14 276:2

276:3,10,13 277:4,17

277:18 281:15 282:4

284:4,8 290:12

292:20 294:15 313:3

313:16 314:6 349:1

350:22 353:19 354:14

13's 357:13

13.6 88:5 156:20

13.8 10:4 16:12

13.8s 10:6

13/14 14:10

13s 15:4 101:7 127:9

163:17 324:3 347:20

14 7:9 10:3 14:16 16:6

18:11 26:6,15 28:6

31:21,22 32:19 33:1

36:22 77:10 79:22

80:6 83:22 84:20 87:3

88:5 91:1,5,9 93:9

126:7 156:18 157:6

176:13 177:4,22

179:16 181:17 188:1

189:16 190:20,20

191:8,21 192:2,10

193:7 194:15 199:1,3

199:5 201:16 203:13

204:6 228:17 235:9

275:13 276:12,21

277:4,8,10 281:16

282:5,18 294:5,12

314:5

14.8 28:19

14s 313:17 314:20

324:4

15 28:15 29:20 41:18

55:16 68:22 69:6

126:7 194:8,15,18

227:18 282:12

15-minute 53:21 296:5

15,000 32:3

150 196:12

15s 157:7

16 29:20 126:7 194:15

194:20 197:4 235:9

17-year 141:9

17-year-old 137:21

138:1

18 29:20 50:20 197:5

295:17

180 114:17

18th 289:22

1st 201:5 203:4 287:21

288:4 297:3

2

2 362:15

2-1/2 197:15

20 5:17 38:12 40:6 69:7

70:18 153:22 197:5

270:18,19 281:4

294:3,4 356:7

200 289:7

2007 188:14

2010 191:10

2014 1:8 50:2 51:15

2015 43:18 48:11 49:4

50:3 51:15 109:5

201:5 203:4 292:2

2016 287:21 292:13

21 170:7,14

22 236:1

25 1:8 10:8 15:18 32:1

341:19

292 3:19

296 3:21

2nd 48:8

3

3 3:11

3:06 296:7

3:25 296:8

30 68:8 70:19 112:4

143:6 170:15 171:18

290:9

30-day 143:7

30th 48:6

31 292:1

31st 48:6 292:6

32 3:13

4

4:44 380:15

40 153:22

429.102(a)(1) 317:3

430 304:7

432(c) 144:11

45 68:21

5

5 44:22 341:18

5-1/2 195:21

50 130:18,18 280:22

282:6 353:4

50-50 37:7

500 229:19

55 284:8

5th 109:5
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

418

6

60 114:16 115:2 116:10

153:22 290:9 355:9

608 42:6

6097 380:12

6291(21) 149:19

7

70 73:6

72 56:2

75 3:15

78 3:17

8

8-1/2 195:19

80 40:4 44:14 73:6,13

234:13 294:2

80s 208:7

9
NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 

C E R T I F I C A T E

This is to certify that the foregoing transcript 

In the matter of: 

Before: 

Date: 

Place: 

was duly recorded and accurately transcribed under 

my direction; further, that said transcript is a 

true and accurate record of the proceedings. 

 

 ----------------------- Court Reporter 

419

Central Air Conditioner Regional

Standards Enforcement Working Group

US DOE

09-25-14

Washington, DC