HVOLT LF Analysis

 Confuses retail residential price with value of losses. Residential retail price includes cost of energy (including losses at different stages – transmission, primary distribution, secondary distributi on) plus the cost of the T&D system itself as well as a customer charge (met er, billing, etc.) A & B factors should not be based on selling price.

 Wholesale price of power (in 9/24 versi on) substantially understates what IOUs report to FERC for purchased power, and appears to be closer to average generation costs. The A factor is typi cally forward looking and based on the longrun marginal cost (energy plus capacity). The near-term savings is typically much higher and based on higher of purchased power or high-cost generating units (the high cost sources not used when efficiency gains put less demand on generation).

 Ignores environmental costs – the reason why we’re looking at this again in the first place

 Inflation has not been 3% for years. There are no economic forecasts putting the inflation rate that high. Also, fuel co sts flow through dollar-for-dollar on a monthly basis, underscoring the need for greater efficiency.

 Debt costs are nowhere near 7%, nor ar e they forecasted to be that high. The weighted average cost of capital for I OUs appears to be about 8%, based on

recent awards.

 DOE prices reported in the HVOT analysis and sourced to th e PTSD (April) are substantially less than those in chapter 8 of the document.

 Except for 25 kva (DL 2), prices repr esented, as manufacturer prices are substantially greater than those reported on the In ternet for small quantity open market sales to public power utilities.

HVOLT Load Study.

 Any historical relationships between load and no-load losses are substantially affected by the choice of core material and are also affected by the choice of coil material. As the former is heavily impacted by MEPS and the latter is commodity price driven, historical relationships between load and no-load losses are meaningless.

 A & B factors represent long-term marginal energy and capacity costs. They have nothing to do with the dispatch order wh ich is essentially system lambda, and driven about 90% by current fuel prices. There is typically no relationship. The former is used for planning. The latt er for short-term cost minimization.

 Losses associated with RMS loads depend on coil losses and core losses. Thus they cannot be representativ e of total load losses w ithout an assumption of the transformer configuration.

 Manufacturers do not have knowledge of actual RMS loads. Specification may be simply for DOE MEPS at lowest first cost.

 The DOE measurement point for efficiency occurs at 50% load regardless of actual RMS load. Comments seem to suggest that the actual RMS load 16% -

25% below that.

 There is no objective ev idence to suggest that the B factor should be changed beyond the calculation specified by NE MA. Some regulator y jurisdictions,requiring TOC, are based on NEMA. DOE’s General Counsel has already called into question DOE’s authority to ba se efficiency standards governing manufacturers on the preferences of their customers.

 The relationship of no-load to load lo sses in the 1960s – 50 years ago – has no relevance to MEPS today. Similarly for more recent decades.

 Presentations to the LV-Dry group, reconciled with fire codes, indicate that the LV-Dry load is closer to the 6 – 12% range (max about 16%) rather than the 35% assumed in the HVOLT analysis.