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 distribution) plus the cost of the T&D system 

itself as well as a customer charge (meter, billing, etc.) A & B factors should not 

be based on selling price. 

 Wholesale price of power (in 9/24 version) substantially understates what IOUs 

report to FERC for purchased power, and appears to be closer to average 

generation costs. The A factor is typically 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 costs flow through dollar-for-dollar on a 

monthly basis, underscoring the need for greater efficiency. 

 Debt costs are nowhere near 7%, nor are they forecasted to be that high. The 

weighted average cost of capital for IOUs appears to be about 8%, based on 

recent awards. 

 DOE prices reported in the HVOT analysis and sourced to the PTSD (April) are 

substantially less than those in chapter 8 of the document. 

 Except for 25 kva (DL 2), prices represented, as manufacturer prices are 

substantially greater than those reported on the Internet 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 which is essentially system lambda, and 

driven about 90% by current fuel prices. There is typically no relationship. The 

former is used for planning. The latter for short-term cost minimization. 

 Losses associated with RMS loads depend on coil losses and core losses. Thus 

they cannot be representative of total load losses without 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 evidence to suggest that the B factor should be changed 

beyond the calculation specified by NEMA. Some regulatory jurisdictions, 
requiring TOC, are based on NEMA. DOE’s General Counsel has already called 

into question DOE’s authority to base efficiency standards governing 

manufacturers on the preferences of their customers. 

 The relationship of no-load to load losses 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.