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UNITED STATES OF AMERICA 

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DEPARTMENT OF ENERGY 

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CLOTHES WASHER STANDARDS. WORKSHOP 

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WEDNESDAY, 

JULY 23, 1997 

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WASHINGTON, D.C. · 

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The workshop was held at the Department of 

Energy, 1000 Independence Avenue, S.W., Room lE-245, 

at 9:00 a.m., Bryan Berringer 1 DOE Office of Codes and 

.Standards, and Doug Brookman, Facilitator, presiding. 

PRESENT: 

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BRYAN BERRINGER 

DOUG BROOKMAN, FacLl.itator 

DAN BARZEL 

PETER J. BIERMAYER 

CHRISTINE EGAN 

BRAD FLORA 

ALLAN L. FRANK 

PAUL R. BARNES 

DICK BEST 

LAKE COULSON 

TOM ECKMAN 

ERIC ESSMA ", 

EUGENE C. FOLEY, JR. 

MARY S. GAGLIANDI 

DAVID B. GOLDSTEIN 

.MARK R. HASKELL 

DOUGLASS C .. HORSTMAN 

LINDA W. GREINER 

LARRY L. HAWKINS 

NEAL R. GROSS 

COURT REPORTERS ANO TRANSCRIBERS 

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PRESENT: (Continued) 

(202) 234-4433 

DEBORAH JONES 

EARLY F. JONES 

JAMES KAO 

B.J. KUMOR 

JOHN KURTZ 

JACK.LINARD 

PHILIP J. MANTHEI 

MICHAEL. MARSOLLET 

R. MICHAEL MARTI.N 

JAMES E. McMAHON 

DAVE MODTLAND 

WAYNE E. MORRIS 

STEVEN M. NADEL 

TED POPE 

DOUG RINGGER 

STEVE ROSENSTOCK 

CHARLES A. SAMUELS 

GLENN R. SCHLEEDE · 

CHARLES STEPHENS 

RICHARD E. STILWELL 

MICHAEL C .. THOMPSON 

RICHARD F. TOPPING 

ROLAND G. WEINGARTNER. 

LAWRENCE R. WETHJ& 

WILLIAM WUENDERLIN 

GENE MARGOLIS 

MIKE RIVERT 

MICHAEL McCABE 

ZONNIE "LAUGHLIN 

. NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

. ·. 1323 RHODE ISLAND AVENUE, N.W. 

WASHINGTON, _D.C. 20005 

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A G E N D A 

PAGE 

Opening Remarks 4 

Introductions 10. 

Agenda·Review 13 

Overview of Clothes Washer Rulemaking Schedule·· 17 

·Manufacturing Costs: Approaches to Data ....• 44 

Gathering, Reporting, and Statistical Treatment 

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Determining Future Prices fpr Clothes Washers . 101 

Life Cycle Cost Analysis and Preliminary Basecase, 

NESS • . . . . . . . .• . . . . . . . . 129 

Consumer Acceptances . . . . . . . 

Remaining· Issues 

Next·Steps 

Closing Remarks 

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1 P-R-0-C~E-E-D-I-N-G-S 

2 9:11 a.m. 

3 FACILITATOR BROOKMAN: Let's begin~ 

4 Welcome and gooci morning. ··My name's Doug . Brookman. . . . 

5 I'll be facilitating today's se~sion. Let me start 

6 off by_ introducing Bryan B_erringer. 

1 MR. BERRINGER: Good morning. As Doug 

8 · ·said, I am Bryan Berringer, the team leader for 

9 clothes washers. · Also on the team sitting at the 

10 Laughlin, car 1 ·Adams, ·. table . are Qonnie and Barry 

11 Berlin from the Office of Codes and Standards. we· 

12 have our general counsel; Gene Margolis and Ed Levy. 

13 here today. Also from the Off ice. of Policy, Mq.rk 

14 Friedricks. 

. 15 On behalf of the Department I'd like- to 

16 thank everybody· .for coming today, taking the time. 

17 This is the second workshop as far as the standard18 rulemaking f~r clothes washers~ Under the ·new 

19 process, one of the outcomes of ·the November ·15th, 

20 ·meeting, was the last meeting we· had in '96, was to 

21 identify how the new test data would be collected nd 

22 what woμld be used.throughout the process. An done of 

23. _ the things that we've done in response to that, we'v~ 

24 developed_ the framework document which·you should have: 

. 25 in your package. If not, Sandy has that. .She- also 

NEAL. R. GROSS 

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1 has copies of the slides and also the clothe~ washer 

2 - test procedures. So, if you haven't received that, 

3 you can see Sandy at the table. 

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4 One of the things we had talked we had 

5 done as far as the workshop was --- and this ~s in·the 

6 package -- is the framework. One of the things that 

7 came out we also had our manufacturing impact 

8 ~orkshop in March of this. We discuss-ed, and 

9 stakeholders expressed, interest in customizing the 

10 work. So, out of- that March 11th and 12th,_ '97 

- 11 meeting we sort of developed this framework document. 

12 And, this is sort -of a summa_ry of what -

13 we've done. And the purpose of t:-oday' s workshop is -to -__ 

14 discuss the process and -the analytical tools - that 

15 we' 11- use throughout · the rulemaking- process. 

16· Basically,. today'-s work~hop, w~'re going to focus on 

17 the prior to the A_NOPER stage. 

18 We have·a workshop plan on the schedule 

19 whicn is also in yo~r package. A workshop scheduled 

20 in March of '98, that-would--be looking at mo-re the 

21 second phase, the NOPR-phase, and the analysis used in 

22 that. So, today we really·_ want- to focus on the 

23 ~ngineering analysis and stuff leading up to the 

24 ANOPER stage. 

25 _ A public notice was rel"eased on July 3rd,_ 

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NEAL R: GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAl'JD AVENUE, N.W. 

"WASHINGTON, D.c'. 20005 (202) 2~4-4433 
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1 1997. A package was-sent the second week of Juiy to 

2 people that responded t9 the notice .. The package 

3 included the draft .framework report_ c:Iated July 8th, 

4 1997 and as I said, . ·is available, and also, the 

5 preliminary slides tot he workshop. 

6 Anyon~· attending. today's· meeting who 

7 wishes to submit comments can be added to the mailing 

8 list for future mailings. Comments received· here 

9 today and those. already submitted during . written 

10 ·comment period will help the Department in developing 

11 the supplemental ANOPER which we plan to-publish for 

12 January 1998. 

13 The following items are procedural items 

14 most of you are aware· of. I will be pre.siding officer 

15 over the workshop. Doug Brookman will-.be facilitati~g 

·16 and setting the guidelines for conducting the workshop 

17 and other pertinent information. In approximately two 

18 weeks we'll have copies of the·tianscripts available 

19 for copying in the Freedom of .Information room down 

20 the hall in Room 1El90. Anybody wishing to purchase· 

21· a copy can also talk to the court reporter. 

22 To provide the Department with as much 

23 pertinent information and as many views as can be 

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·obtained,· and ~et everybody's Views expressed, -the 

workshop will be conducted in accordance with the 

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COURT REPORTERS AND TRANSCRIBERS 

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WASHINGTON, O.C. 20005 (202) 234-4433 

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1 following procedures. 

The workshop I focus of the workshop I . is tq 

3 listeri to ~he commerits pertaining to the process and 

4 the' analytical tools to be used in this process. 

5 We'll begin with introductions. Then we'll discuss 

6 the agenda, expand on it if necesiary, to provide ~n. 

7 opportunity for other- topics. DOE will remain on the 

8 agenda as lead presentations in respective areas. 

9 We'll take a break about noon for lunch. 

10 There's a cafeteria on the- second floor in the West 

11 Wing. There's· also restaurants in L'Enfant Plaza and 

12 a snack bar below us. 

13 It will reduce interruptions if everyone 

14 wants to speak, please be recognized,_ speak into the 

15- microphones. Make sure you sta.te your name and 

16 cdmpany each time for.the court reporter, please. 

17 Please keep sida· conversations to a 

18 minimum. It may be n~cessary to cut off some debates 

19 in order to keep time. 

.2 0 ·There will be time at the end of the· 

21 workshop for 'additional comments of .significant 

22 issues. We encourage people to present and to· -

23 participate as much as possible so the Department can 

24. get .a tull spectrum o~ opinions on these topics_. 

25 

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The workshop is scheduled to end at 4:00 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

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1 p. rn. , or sooner if .i terns are complete.ct. However,· I 

2 think we' 11 have a full .agenda today and .it will be 

3 very tight to get all the·subjects in. If we don't -

4 address these within the time ·frame, written comments 

5 will be a~cepted and the. deadline for submission can 

6 be a topic of discussion for today's workshop. A 11 

7 comments submitted-will be considered before the DOE 

8 publishes the supplement advanced notice. 

9 All written·cornrnen~s and data submissions. 

10 will be available for public inspe~tion at the DOE 

11 Freedom of Information Room. The.phone number there 

12 is (202) 586-6020. Written · comments should be 

13 addressed to the Department as noted iri the Federal 

14 Register notice. 

15 Ten copies of the comments or data are·. 

16 requested. In addition,. ~e'd appreciate ele.ctronic 

. 17 c6pies of the comments .or data, pref~rably ·in 

18 WordPerfect 6.1. No faxed comments, please. 

. . 19 Anyone submitting· information that he or 

20 she believes i~ confidential, ~xempt by the l~w from·.· 

21 public disclosure, should submit one. copy and ten 

22 ~opies which claim to be ~onfidential wi~h the 

23 . information deleted from that. 

24 In accordance with ·the procedures 

25 established in 10 C~R 1004. 11, the Department of 

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NEAL A. GROSS· 

COUR! REPORTERS AND TRANSCRIBERS . 

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1 Energy shall make its own determination as to whether 

2 the information shall be accepted for public 

3 ·.disclosure. 

4 In keeping with regulations of the 

5 building, there's no smoking allowed in ~his room or 

6 in th~ building:· Restroo~s are down the hall, left. 

7 and right. Phones are located in the main lobbi area. 

· 8 Again, we appreciate the time and effort you've taken 

9 in preparing for· this workshop, and are pleased to 

10 receive your comments and opinions .. . . 

11 I'd like to rei t"erate that the purpose of 

12 this·workshop is to consider stakeholder comments on 

13 the process and analytical. tools to be utilized 

. 14 throughout the· clothes washer rulemaking standards 

15 process prior to proce~ding with any data collection 

16 and analysis. 

17 At this time,. I'd like to turn·it back to 

18 Doug Brookman to begin introductions a~d go over the 

19 .agenda. 

20 Thank you. 

21 FACILITATOR BROOKMAN: Thank you, _Bryan. 

22 Good morning, again. ·Thanks for coming .. 

23 could I start. with. you·, Steve. Could I 

24 ·ask ever~body to introduce yourself. Please say your 

25 name and your organization~! affiliation~ if you 

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NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE IS.LAND AVENUE: N.W. 

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1 would, please, and speak into the microphones. 

• 2 MR. ROSENSTOCK: Steve Rosenstock, Edison· 

3 Electric Institute. 

4 MR. STEPHENS: Charlie Stephens, Oregon 

5 Energy Office. 

6 MR. GOLDSTEIN: David Goldstein witti the 

7 Natural Resources Defense Council. 

8 MR. McCABE: . · Michael McCabe. I'm the 

9 Director of DOE's Office of Codes and Standards. 

10 BER~INGER: · Bryan Berringer, 

11 .Department of Energy. 

12 · MS. LAUGHLIN: ·Qonnie Laughlin, Depe1:rtment 

13 ot .Energy . 

• 14 MR.. WEINGARTNER: Roland _Weingartner, 

15 Miele Appliances. 

MR~ BEST: Dick Best, Whirlpool 

17 Corporation. 

18 MR. HASKELL: Mark Haskell, counsel for 

19 Whirlpool. 

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20 MR. THOMPSON: Mike Thompson, Whirlpool. 

21 MS. GREINER: Linda Greiner, Frigidaire 

22 Company. 

23 MR. MODTLAND: Dave Modtland, Frigidaire 

24 Company. 

•• . 25 MR . STILWELL: Dick Stilwell, Maytag." 

NEAL R. GROSS ; 

- COURT REPORTERS AND TRANSCRIBERS 

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1 MR. JONES: Earl ~ones, GE Applian~es. 

2 MR. HAWKINS: Larry Hawkins,· GE 

3 Appliances. 

4 MR. MARSOLLET: Michael Marsollet I Robert 

5 Bush Corporation. 

6 MR. MANTHEI: Phil Manthei, Raytheon 

7 Appliances, Amana/ Speed.· Queen Brand, and going to 

8 become Goodman Manufactured~ 

9 "MR. MORRIS: Lane Mor~is with the 

10 ·Association of Hom~ Appliance Manufacturers. 

11 MR. SAMUELS: _Chuck Samuels I AHAM. 

12 MR. MARGOLIS: .. Eugene. Margel is I Off ice of 

13 Gen~ral Counsel, Department ·of Energy . 

14 MR. MARTIN: Michael Martin,· California 

15 Energy Commission. 

16 MR. McMAHON::. Jim McMahon, Lawrence 

·17 Be~k~ley National Lab. 

18 MR. RIVEST: Mike Rivest, Arthur D. 

19 Little. 

20 MR. BIERMAYER: Peter .Biermayer, 

21 Lawrence/Berkeley National Lab. 

22 FACILITATOR BROOKMAN: And just as a 

23 matter of courtesy., would everypody in the back just 

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_say your name, please, and go around. 

everybody knows who ,·s ·who. 

(202) 234-4433 

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COURT REPORTERS AND TRANSCRIBERS 

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·1 MR. WUENDERLIN: I Im Phi 1 W~ender 1 in . from 

2 GE Appliances .. 

3 FACILITATOR BROOKMAN: Thank you. 

4 MR. S,CHLEEDE_: Glenn Schleede, Citizens 

5 Tech and general interest. 

6 MR. HORSTMAN: Doug Horstman, Maytag. 

7 MR. RINGGER: Doug Ringger, Maytag. 

8 MR. FRANK: Allan · Frank, Energy and 

9 Housing.Report. 

10 MR. LEVY: Ed Levy, Department of. Energy, 

11 Office of Geneial Couni~l. 

12 MR. BARNES: Ren Barnes, Oak Ridge 

13 National Laborat.ory . 

14_ . FACILITATOR BRbOKMAN: I'll fi'nish here. 

15 Once again, thank you all for being here 

16 and thank you for being he~e 6n time so we can start 

17 on time. We have a full day. 

18 Let me really briefly review ~he agenda. 

19 If I could ask you to look at· the agenda now so that 

20 we can see if there'~ anything· else that isn't 

21 .included here that we should include. 

22 Once again, the pur~ose of this workshop 

23 is to have a detailed disc~ssion on the p~ocess and· 

24 the analytic tools for.the rulemaking_process. Many 

25 of the substantive issues t~at you rnight wish to take 

. (202) 234-4433 

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1 up may not be appropriate to discuss today. -This is 

2 a detailed review of the analytic tools · and the. 

3 process itself. 

4 We are now concluding the first segment on 

5 your agenda which is opening remarks, introduction, 

6 and agenda review.. As soon as we finish this, the 

7 first segment, substant"ive segment, is going to be to 

8 ·talk about the clothes .washer rulemaking and sch~dule. 

9 Michael .McCabe. will discuss that and other relevant 

10 issues. 

11 Following th~t, w~'ll have .approaches to 

12 data g~t6ering,.reporting~ ~nd statistical treatmept; 

13 .Bryan Berringer artd- Mike Rivest will lead ~hat 

14 . discussion. 

15 We'll hav~ a break mid-morning; at 11:00. 

16 Returning from break cind running until noon,, we' 11 

:p have. determining. future prices for clothes ·wasner.s, 

- -· 18 and ·once again~ Bryan and Mik~ Rivest ~ill be w~rking 

19 on that. 

20 ·Each one of these brief presentations wiLL _ 

21 . be followed by a discussion, question and ·answer , 

22 period. That's the format for today's session, .so _ 

23 we're going to try and keep the presentations ·brief 

24 and the discussion substantive. 

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We will ha~~.lunch from noon until l:OO.-

NEAL A. GAO.SS 

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1 You're on your own for lunch. Just prior to leaving 

2 for lunch, we'll, once again, -say wheie the 

3 restaurants a~e for you that are ne~ in the area. 

4 Immediately after lunch more detail on 

5 life cycle cost analysis. A_nd then, moving from there 

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·6 to preliminary bas~case. And Jim McMahon's going to 

7 be the substantive lead on those presentations. 

8 There will be ·an aft~rnoon :break. 

9 Following the afternoon ·break, the National Energy. 

10 S~vings Spreadsheet that is going to be presented in 

11 real time, yes? 

12 And then at the-end of the day, consumer 

13 acceptance issues and. other remaining 'issues to be 

14 addressed, Next steps, and closing remarks. 

15 As the day goes on,. any issues that don't· 

16 seem to fit in the flow of the ~_genda, I'll p·ark on a 

17 ·1is.t and we'll ·take them up .at the end of ·the day, 

18 provided there's time. And one of my goals is to.keep 

19 us moving along today so we get through all of this~ 

20 There's a lot of substance here, a lot of content. 

21 And so, I'm going to keep trying to push to go through 

22 it.. 

23 Questions, comments, potential addit~ons 

24 to the agenda as written? I see none. 

25 

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1 maybe two years ago with ground rules and they've 

2 _emerged as norms for this group. And .I'd like you to· 

3 ·try and adhere to these harms today~ .Please say your 

4 name for the record. Bryan already said that. ·I 

5 would like to reinforce that. It makes it easier for 

6 ·the court recorder sitting up pere. 

7 Sp~ak·orie at a time. Ple~se try and -be 

8 · concise today. There's a ·lot to cover. .There are a 

9 lot of people in the room that wish to say things. 

10 Listen as an ally. One thing we've learned in the 

11 span . of these years is that the quality of the 

12 dfscussion tends to hinge on . the quality of the 

13 listening: so, I'd like to. ask for.your consideration 

14 to keep the listening good so that the discussion is 

15 good as well. 

16 One of my j6b~ is going to be trying to 

17 queue people that wish to speak. I also t~y and:step 

is people.brieflY out of t6e queue or ~u~pend the queue 

19 _long enough for brief follow on comments. So, I'd 

·20 ·like to ask for your cooperation to both keep me on 

21 track and be patient while.I'm stacking the queue so 

22 that everybody gets their comments, and also we also 

23 provide a little bit of $pontaneity. That· was 

24 probably· just about as clear as mud. 

25 I 'm going to ·try and do both, ·queue and do 

NEAL A. GROSS 

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1 follow on comments. And. sometimes this is a 

2 challenge. I know you'll help me.· If I forget you, . 

3 you ~lag me. 

4 We're going to try hard to stay on iime 

5 today .. There's a lot to cove~ and I know some of you 

. 6 have planes that are going to be leaving shortly after 

7 tha end of the day or in fact at .4~0bish. So, we're 

8 going to try and. be pushing through to conclude· on 

9 time~ 

10 Questions or comments before we begin? I 

don't see any. I think w~'ve gotten.used to this 

12 routine. 

13 Michael.· Let me introduce Michael McCabe.· 

14 You' re moving slowly, Michael. That worries me. Keep 

15 the pace up. This is like comedy, you know. 

16 MR. McC~BE: ·r had a lovely experience 

17 yesterday. Going anci ·having teeth drilled and·· then 

18 having termites taken care of. And no, I do not have· 

19 w6oden dentur~s but it was·,a fun· day yesterday and·if 

20 it was a week later, picking up on as far as everybody 

21 wanted to leave or getting a chance to leave, I know 

22 everybpdy a week from now would want to leave real 

23 early since our new National Airport opens this coming 

24 -Sunday. 

25 treat. 

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And apparently it's going to be q\lite_.a 

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1 Again, as the-Director of the Office, I 

2 have had the pleasure for the last decade or· more 

3 working with some rather challenging activities. And 

4 werve_ come a long ways and. one .of the key parts is 

5 that we now have a number or" succes$eS and a major 

6 commitment on the part of · DOE management to this 

7 program. Anq part of _that commitment has been gett"ing 

8 some rulemakings out in 9n accelerated fashion.· 

9 · We made a dommi tment at the last advis~ry10 committee workshop to get the final rule and test 

11 procedures fo~ kitchen ranges a~d ov~ns and clothes 

12 washers out by this meeting: Both of those have b~en 

. . 

13 approved and issqed by the Department and have gone· to 

14 ··the Federal Register. And we expect them to -be 

15 published some time in August. The reason· for the 

16 delay is tliat we will be getting galley proofs :back to 

17 review, to check, but copies are available for both of 

18 those. The clothes washer~, ~ believe, have been 

19 distributed to. a number of people who have alr·ea:dy_ 

20 requested them. 

21 · In addition to that, another item which we 

22 had made. the commitment to getting out by this meeting 

23 is· the final rule on standards for room ait 

·24 conditioners. Those we expect to·be appro~ed by the 

25" Secretary as we speak. They.may have been ap~rox~d 

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1 last night. They have ·been approved by everybody; all 

2 other. levels, within the Administration. So, .. they 

3 will also be going to the ·Federal Register we expect 

4 this week.· If not entirely possible, they' 11 be going 

5 this afternoon .. 

6 But again, part of this process.is aided 

7 the staff, both within my office; General Counsel, and 

8. policy, in. getting the atte.ntion of senior management 

9 and getting products th~ough the system. 

10 As -- To repeat an announcement which was 

11 made at the advisory co.mmittee meeting, the Sec_retary 

12 has --·and the Assistant Secretary, were working on·a· 

. 13. performance agreement .on this rulemaking . The 

14 Secretary is c6mmitted to havifig this rule issued on 

15 schedule for the October 1999 and has indicated· a 

l~ willingness to put .his name.on the line for that. He 

·17 feels that what we can achieve -:- what we achieved for 

~8 refrigerators is a model·of the way the system can 

19 work and we hopes and expects that we will follow suit 

20 with the clothes washer.rul~. 

21 The final rule for clothes washers, again, 

. 2 2 the· Department's committed to the highest level in 

23 energy and water savings that is justified,· both from 

24 

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~n technologic~l and economic framewdrk~ There is, 

. however, ·a commitment to cons id.er trade off between· · 

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COURT REPORTERS AND TRANSCRIBERS. 

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1 efficiency levels and the ·effective date.· Ther~ have 

. . . 

.2 been ~ number of discussi6ns that hav~ ciccurred that· 

. . 

3 we' re aware of between a number of parties on the 

4 possi~ility of trying to come up with a package that 

5 would make sense. And the Department, as was the case 

6 with refrigerators, would be willing to consider such 

7 a trade off, and would actively support some ·of.the. 

. - . . 

8 discussions by providing so_m_e analysis and support in· 

9 a ·fashion "that was similar to what we did with the 

10 refrigerator analysis. 

11 A1so, the Department is more than just 

12 research on fossil en~rg~, nuciear energy, and.ener~y 

13 efficiency regulations .. We do have some market pull 

14 programs and as many of. you a_re probably aware, the 

15 Department has propos~d expanding· the · energy. star 

. . 

16 labeling program to include clothes washers and the 

17 building equipment office. Tl)e research off ice is 

18 responsible for administering that and we've lost Mark 

19 LaFrance who, formerly of my office, now to that 

20 office and Mark will be working on that program as 

21 weil as some of the other market pull activiti~~. 

22 But it's the market pull has· 

23 ·programs have the benefit of, one, possibly pringing 

24 

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into -- aiding the market place and supporting the 

introduction 

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1 technologies that may be coming in as a result of the 

2 . standards. But also, is we've committed that we will 

3 look at these market pull programs ~nd.considei them 

4 in our analysis. And if there is a strong, viable 

5 program that can achieve the same ends or nearly the 

6 same ends as a regulatory·program, that the Department 

7 will delay or refrain from issuing regulations if the 

8 market place can achieve the same ends. 

9. So that,· while our loss with Mark was 

10 significant, I think that ,the program the 

11 Department's program as a whole, will continue to 

12 benefit from that. 

13 Quick update on the schedule. We've had·: 

14 the November '96 workshop that dealt ·with the 

15 screening and engineering analysis. There are a 

16 number of issues that came up that will be finalized 

17 or addressed i'n mor~ detail.-_today. We've had the '.97, 

18 March '97, manufacture impact analysis workshop which 

19 the framework analysis gets into some more detail in 

20· that. 

21 Again, to repeat the commitment· which· 

22 we've.made is that we've committed to customize the 

23 analys.is for the individual ruleffi:aking. · It will· 

24 include not only the cash flow analysis b~t also ~an 

25- · analysis that takes a step back and --looks - at. some 

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1 voice of.reason as to whetb~r or not there are issues 

2 t.hat might be existing -- manufac;turer impacts that 

3 ·cannot be captured from a strict calculation.. The · 

4 earlier pio6~ss that we used, I think that.most of us 

5 have agreed that we focus~d·too much on the results of 

6 calculations without fully apprec~a"t7ing what those 

7 numbers actually ~eant. And that we will. be .looking 

.8 at that with.more rigor in this analysis. 

9 As Bryan had indicated, we've circulated 

10 back~in March the framework document that has been 

11 updated. I believe everybody has a copy of it. Arid 

12 it's -- ~e ~ppreciate the input from all parties iri. 

13 supporting that ievision and I think it goes a 16ng 

14 ·wax to firid ~ow the analysis will be conducted and. 

15 answer many of the meddlesome questions that we've 

16 had. 

i7 Again, to repeat what Bryan ·had to say and 

18 I don't know why I'm standing up here because Bryan 

19 covered it all, but the objective of this workshop is .. 

. -

20 to discuss the tools that will be used throughout the 

21 process. We' 11 be focusing on the framework document, 

22 the.· decisions that DOE made that a;re presented ther~., 

23 arid the issues that stiil remain, looking for·yocir 

24 input. · And ·in particular, we' re seeking comment 

25 w~thiri 30 days on that re~is~d document. 

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1 MR. ROSENSTOCK: Steve Rosenstock, -EEI. 

2 _August 23rd -would be _the deadline, then, for comments? 

3 MR. BERRINGER: Yes. 

4 ._MR. ROSENSTOCK: Just checking. 

5_ MR. McCABE: What day of the week is that? 

6 Make sure it's not a.Sunday. 

7 M~. ROSENSTOCK: Saturday. 

8 MR. McCABE: August 25. 

9 So·, from the schedule, "the· process is 

10 going to start with the data collection. We've had a 

11 series of discussions with AHAM, with certain. 

manufacturers, and others, on the data for the cost 

13 an.d engineering analysis. 

14 One of the keys that the schedule· was 

15 dependent upon was getting the clothes .washer final 

16 rule issued. One of many . reasons to drive us to 

17 complete that rulemaking and 1ssue it. Now that we 

18 have it out,· that the ~ata will be collected based on 

19 the Appendix J-1 test procE?dure that is included in· 

20 it. 

21 ,There is an issue that we would· expect to 

22 ha~e some detailed discussions iater today, and that 

23 ··is how long it's going to take to-collect those data, 

24 review it, scrub it, and ~et it to the Department. 

25 AHAM has reque_ste~ 16 weeks from the issuance of the 

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1 test procedure which- we provided the test procedure to 

.2 AHAM and its members over the weekend. So, four 

3 months from today. That, we're going to propose, is 

4 ten weeks and we expect to have some detailed 

5 discussiori_of that: later today~ We realize that this 

6 ·is the significant issue and want to· address it in 

7 some detail. . 

8 We're sc.heduled to comp_lete the 

9 engineering analysis in November with the publication 

10 of the ANOPER in January. And as we had laid out in 

11 the process rule, that once we publish the ANOPER, or 

12 in ~hi~ case ·the s~pplemental -ANO~ER, that that ~ill 

13 kick off the qomplete ec:onomic analysis and that we've 

14 c6m~itted to a. wor~shop much like this to deal with 

15 the issues related to the eco.nomic analysis, data 

16 input, discussion sensitivi_ty analysis, how they'.11 be. 

17 co'nducted, and other analytic issues associated with·. 

18 the economic analysis: so that we anticipate having 

19 · a workshop foll.owing. t.he supplemental ANO PER that will 

20 deal with, in principle, the ·manufacturing impact 

21 analysi~, but the balance of the economic analysis. 

22 We expect the -- We inten~ to publish .a 

23 proposed rule in January of '99 a~d then complete ~h~ 

24 final rule and submit it to OMB in the fall so we can 

25 mee~ the October 1999 date fo~ th~ publishing of the . 

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1 final rule. 

2 I should ask if there are any questions at 

3 this point? 

4 Dick Best.· 

5 MR. BEST: .Yes, Dick ~es£~ Whirlpool 

6 Corporation. 

7 Is this on? 

8 Michael, will you clarify, on one of· your 

9 first slides, you said.to maximize the energy on water 

10 savings. Anq it's my understanding that water savings. 

11 isn't part ·of the formula for this rulemaking fn t.t:ie' 

12 sense that they may be · ti.ed together. It could be 

13 that you're saving water, but water savings in itself~ 

14 is not part of analysis that I.was understanding. 

15 Would you clarify that? 

16 MR. McCABE: - W.e will be calculating not : 

17 only the energy consu~ption·but the water .use of th~~~ 

. . 

18 products. And that as in the.legislation it lays out. 

19 that this program is intended to save, at least with· 

20 . respect to the appliances, is- to save energy. Now i we 

21 do have the seven factors of which the seventh factor 

22 in· the .. legislation is any other factor which the 

23 . _Dep·artment considers to be relevant. And Dave B.arry 

24 in his. column this past Sunday did recognize the· 

.25 pepartment is 

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dealing with. · · is· qonsidering_ water 

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1 savings, at least for:the toilet products, but also 

2 it's a significant issue, both as fir as the -~ ~n 

3 ~nvironmental issue bu~ also as it effects the energy 

4 use of the product. 

5 So that we will be examining it as well as 

6 in the quantities of wat_er saved. We' 11 be looking at 

7 environmental impacts as we have in the past as far as 

a the quantities of 6arbon dioxide emissions reductions 

as a result of the stand~rds, for example. So, we 

10 will be capturing those in the analysis in a_similar 

11 fashion as has been done with other rulemakings. 

12 Chuck? 

13 MR. SAMUELS: Chuck Samuels, AHAM. 

.· 

14 What's.the justiflcation for the proposal 

15 for a ten week d~ta gathering period? 

16 MR. McCABE: At this point, it's driven by 

17 a number of issues. One is what we believe may be 

·18 possible to be done, that can be done, so we want to 

19 talk about it in more. detail to understand if · it 

20 cannot be done in that time frame. ·.There- is 

21- flexibility there. 

2 2 And second part of,· is the commitment on 

23 the Department to complete .the. rulemaking on ·the· 

24 schedule but it is not -- I ~ecognize that we cannot 

25 make blind commitments just because its there. and then 

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1 affect the· quality of the rulemaking. So in the 

2 discussion later we want to .. focus on that as far as 

3 ·how much time is actually needed and how the quality 

4 of the data may or may not be effected by a ten or 15 

5 week period. 

6 MR. SAMUELS·: No, .r understand what your 

7 motivation is~ I w~~ asking what your rationale was 

8 for ten weeks. In other words, specifically where do 

9 you disagree with our proposal. Where, in your 

10 experience, do you believe it could be done more 

11 quickly or is the ten weeks simply an arbitrary date 

12 that you've set? 

13 MR; McCABE: Bryan. 

14 MR. BERRINGER: We're .just looking at the 

15 o~eiall sc&edule t~at was ~ubmitted and trying to do 

·16 the .engineering analysis to ke~p to that schedule. We. 

17 wanted to talk about that, discuss· that. We have· a 

18 slide. Obviously it's up for discussion in a later 

19 slide, ·and we can see where, what areas, can be· 

20 changed as so. 

21 MR. SAMUELS : We look forward to your 

22 ·slide. 

MR. McCABE: Again, I'd like to repeat the 

24 introduction of Bryan Berringer, that many of -- as a 

team leader for. the clothes washer product 

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1 ·call it clothes washer prod~cts, both test procedures, · 

2 standards, that Bryart is.n~w the individual on the 

3 staff who is responsible for has the lead 

4 respons;i.bi.llty for clothes washers. He. has picked up 

5 this responsible after Mark LaFrance who many of you 

6 · have dealt with for some nearly three years has left 

7 the office. 

8 But· Bryan will be taking a very pro-active 

9 lead in this. That Bryan will be driving the process 

10 with the ~id of the internal DOE t~am and the key 

11. staff person who is a member of th~t team, Ms. ·Qonnie 

12 Laughlin, who will be responsible for the manufacture -

.. 13 impact. analysis as well as much of the.glue that will 

14. be holding the whole process together. 

15 Cari Adams, as the·senior person on the 

16 staff for applian~es,·will be invol~ed as.well as th~ 

17 sag~, bringing ~is wisdom to .the process. 

18 Barri Berlin, who is not here today, wiil· 

19 be involved with the life cycle cost, energy ~orecast 

20 analysis, many·parts of the economic analysis. 

21 The reason -- My reason fbr focusing on 

22. ·these individuals is that one of the pa.rts of the 

23 process that was frustrating, the·previous process, 

. 24· 

25 

was frustrating to many is that DOE staff was 

invisible at many poin.ts in the process in the past. 

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1 That is not going to b~ the process from here on out. 

2 "That Bryan and others will.be visiting with interested 

3 parties,_ whether or not they're manufacturers, states, 

4 utilities, efficiency advocates, what h~~e yciu, in 

5 order to understand the issues directly themsel ve:s and 

6 to be able to drive the analysis to direct the 

7 contractors, and make the decisions that: have to ·be 

8 -made or understand what the issues are to r~ise the~ 

9 to senior management's attention in a timely fashion. 

10 The con~iactor team is Arthur D. ~ittle, 

11 _Lawrence Berkeley Nationa_l Laboratory, and Pacific 

12 No~thw~st National-Laboratory~ ADL will be leading __ : 

13 the engineering and manufacturing impact analysis; 

14 LBL, the life cycle costs and national benefits 

15 analysis. We ar~ -goin-g to be looking to_ PNL for 

-16 support, including technical support as an internal; 

17 if you would, reviewer. Much of the analysts as we've 

18 committed, will be -shared early and often; B~t in 

19 addition to sharing it with the interested parties -

20 before.it becomes final, we're going to double 6heck 

21 and triple check the _analysis before we're comf.ortable 

22 with it-that it's to be able to share with folks.-

23 And PNL will be a principal that we're 

24 going to be using as well as some of the other -staff 

25 that we have available to us. 

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1 Again, we've committed to peer reviews fo·r 

2 the analysis prior to it beco~ing ~oli6y. So, in the. 

3 past, ·we've published the technical- support document 

4 at the same time we've published a proposed ·rule. The 

. - ... 5 technical analysis, whether or not it's engineering or 

6 economic, we' 11 be looking to share .it with' you before_ 

7. it becomes policy so that we can be better focused and. 

g ha~e better proposals as a result~ 

9 One issue that has driven many of the 

10 meetings in the past and· will be, I e~pected, one of 

11 these meddlesome issues that will continue to drive 

12 this process is proprieta~y designs. That we have 

13 made a commitment in the p~ocess ~ule that we will 

14 ·consider proprietary designs,. that we will through the 

. 15 ~cresning portion of the analysfs·screen out desigris 

16 that are not technically feasible; that will effect 

17 the utility of the product, that effect the health c:t"na 

18 sa(ety factors as well. Whether or not the product 

19 . can be mass produced or whether or not it can be · · 

20 served in.the market place~ 

21 The Whirlpool has provided paten~s for, I 

22 believe, it's five different designs. In our 

2 3 ·evaluation of the patents, that in talking to a number 

24 of parties, there is a range of opinion as to certairi 

25 of those designs, .·how reasonable they are, whether or 

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1 not they'll ever appear in the mar~et place. It is 

2 .not DOE'S place to determine what one manufacturer or 

3 another· is actually going to introduce in the market 

4 place because you know products and your customers a 

5 lot better than we/ . 

6 But, based··on the information that has 

7 been provided, statements that have been· made, that 

8 the . Whirlpooi technology I we're confident that it 

9 meets the tests and warrants consideration beyond the 

10 screening analysis. ·we have, in addition to working 

11. with the in<;Iustry to collect information, we are 

12. committing ourselves to p~rf orming a reverse. 

13 e_ngineering wher~ we will look at three different . 

14 technologies. One is a base1ine model that is the 

15 typical model . that is offered for sale today. The 

16 second will be a commercially available H-axis. And . . 

17 the third is a prototype. We are . Whirlpool 

18 prototype. 

19 We are talking with Whirlpool. We are 

20 talking with the others as far as exactly ~ow much 

21 ·data will be collected and how those data will be 

22 shared. And some of the details are yet to-be worked - . . . 

23- out. But, that analysis will supplement the 

24 engineering analysis of the data collection through 

25 AHAM • 

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And we recognize that there_: are· a numbe·r of 

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1 issues we probably cannot answer today. We'll try to 

2 address as many as possible. 

) We will not attempt, for ~xample, to come 

4· up with an estimate as to how much it will cost any 

5 individual manufacturer to produce a specific product 

6 design, but rather AOL will be doing the reverse 

1· engineering analysis. We'll be attempting to dev~l6p 

8 an estimate as to the cost of the different products.· 

9 weire looking at the. baseline model to do that fir~t 

10 in order to establish the approach. That will be the 

11 data collected and the wethodology used will be fully 

12 shared with all parties-s6 they can understand and 

13 -appreciate it . 

14 When it comes to the H-axis model o"r the 

15 Whirlp6ol prototype~ we do not expect -- we expect we 

16 wa~t to be following the same approach but we fully 

17 expect that there will be information that we will.be 

18 -- that ADL will be gat~ering on individual featur~s 

.19 of th~ product as far as the cost of that feature,· 

2 o whether ·or not . it is the · cost of the investment, 

21 materials, labor, what have you~ But.some of that 

22 information will be highly proprietary and in all 

23 likelihood wili not be provided to DOE. We.are still. 

24 trying to,·as I said, work out the details of that at 

25 this point in time. 

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1 Earl Jones. 

2 ·MR. JONES: Michael, I'm not sure that I 

3 understood exactly what yori just said, particularly: 

4 ··how the process .you just laid, out that I assume AOL is 

5 · going. to go through, .how that relates to what you 

6 expect the industry to do or to provide to you· in . 

7 terms of informatio.n about the.Se designs and how they. 

8 might execute. 

9 MR. McCABE: As far as the reverse 

10 engineering,' this will be a parallel path . 

11 . MR. JONES: Well, I'd like to suggest that 

12 it will not be possible for· anybody competently to.-

13 provide data as you have requested here based upon the 

14 information proyided by the patent. , They are. critical 

15 in~ormation~-

16 MR. McCABE: We're not -- on the reverse 

17 engineering analysis, we're not·asking you to provide 

.18 data. 

19 MR. JONES: Oh, I understand that. But I 

20 assume that you were saying there were parallel paths 

21 ·and.that the par~llel path that· you wanted to pursue 

22 was to provide data to you about their cost of 

23 executing that design. 

24 

25 

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MR. McCABE: No. 

MR. JONES: Was I wrong? 

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1 MR. McCABE: Yes, you are wrong. 

MR. JONES: Okay. Then when·-- that is to. 

3 ·be done at some later point in time or not at.all? 

4 MR. McCABE: It I'll look to Bryan and 

5 to Mike Rivest. 

6 MR. BERRINGER: We weren't a·nticipating .;_·_ 

7 _My-understanding, the manufacturers didn't want to go 

8 that approach so w_e were just looking at what A.O.· 

9 Littl~ is going to be. doing. We're not asking the 

10 manufacturers to submit the cost on his prototype 

11 design. 

12 MR. McCABE: The answer to your questi.on 

13 would be not at all . 

14 MR. RIVEST: This is sort of a two step 

15 process as I understand it~ The first step is to -~ 

16 MR. McCABE: Excuse.me one second. You're 

17 going ·to have to speak up hecause you're competing -

18 with a jackhammer.· 

19 MR. RIVEST: The way I understand·_this,: 

20 this would be a. two . step process. The first step 

21 being to cost out the prototype for incorporation, for 

22 possible incorporation into a consumer.analysis. A 

23 -life cycle cost analysis, if you will. Certainiy at· 

24 a later stage, after more information is available on 

25 the prototype and if it's needed to 

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1 prototype be costed in the manner compatible with the 

·2 

3 

ma.nufacture impact analysis, then there . would . be a 

requirement .to understand how those costs would diffe~ 

4 between manufacturers. 

5 MR. JONES: · And how will you know the 

6 answer when will· you know the answer to that 

7 question and how will you get there? You said wheth~r 

8 or not it will be nec,essary. I'm not sure what will 

9 be.decided, how you wiil decide whether it is or it 

10 isn't. rs· it a secret? 

11 MR. RIVEST: It's not a secret. I 

MR. JONES: What's the answer? 

13 MR. McCABE: At this point, I·don'-t' know 

14 ~hat the answer is. 

15 Chuck Samuels.· 

16 MR. SAMUELS : I understand about the 

· 17 reverse engineering on the Whirlpool paten.ts. · 

18 ·obviously, sinde at some point some inform~tion on· 

19 that will be available, other rnanufactur~rs and other 

20 people can comment on it. And that's .the answer to 

21 that question.· 

22 I don't understand, I'm confused. I 

23 believe this is new and is not reflected in your 

24 · draft, the reverse en~ineerin~ on the b~s~line model 

25 or the commercially available .H:..axis. model.. I thought 

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1 we we~e providing you the data on that. What is it 

2 that you'r~ doing and what's the purpose of- it,-·the 

3 baseline model and the co~mercially available H-a~is? 

4 MR. McCABE: In order to make sure that we 

5 are all comfortable with the approach in dev_eloping 

6 the information, developing costs for the Whirlpoc»l or 

7 a proprietary design, we feel that it's important to 

8 -share the approach with all p~rties and that they can 

9 .fully appreciate what has been done. And recognizing: 

10 the sensitivity for the Whirlp6ol prop~ietary design,· 

11 we felt that the. best way .to do that would be with 

12 something that folks are comfortable with and · 

13 knowledgeable of .. So that the baseline model is in . 

14 6rder to establish some ccimfort with the approach. · 

15 MR. SAMUELS: So, in other _words, you're 

16 going to compare the results of that to the data that 

17 we provide you.- And if you -come up wit~ approximately. 

18 the same number, the_n you know you've done. it right, 

19 is that right? 

20 MR. McCABE: The gqal for this is to look 

21 at comparing -- it.can be used in that fashion as well 

22 .but we're· looking at it in . order to be ·able. to 

23 demonstrate an approach in order that we can validate. 

24 the results that we've come up with for the.Whirlpool 

25 design.· 

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1 Similarly, with the H-axis, those are 

2 appearing in the market place now. So, if there are 

3 questions about the . approach taken, that we can 

·4 provide an. additional data point to be able to 

5 validate and reduce -- minim1ze the questions that m_ay 

6 come up with our estimates as far as that product. 

7 MR. SAMUELS: Well, are we going to 

8 receive today, or . before this work is undertaken, 

9 details about how this reverse engineering is going to· . . . 

10 be done? . And when is it going to be undertaken and 

11 when is it going to be completed? 

12 MR. McCABE: Mike, are you pr~pared t6 

13 talk about it in some --

14 MR. JONES: And just to supplement that, 

15 Mike, the same thing, with respect to the . way you 

16 intend to perform . your analysis ·on the Whirlpool 

17 machines, will you also allow_ opportunity to comment 

18 on that? 

19 MR. McCABE: Earl, could you speak up? 

. 20. MR. JONES: I was just following on 

21 ·Chuck's comment and saying with respect to the 

22 methodology you're going to employ in doing your 

· 23 baseline analysis of the Whirlpool prototype,. will you_ 

. . 

24 also share that with th~ rest of us so that we can 

.25 

. . 

comment on whether or not that approach is correct, or 

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1 at least one we recognize? 

2 MR. McCABE: We do not . expect to be 

3 sharing the same level of detail from the contractor. 

4 on the two designs~- two other ~esigns.· 

5 MR. JONES: No, I'm not sugges.ting 

6 information about the design. The appro~ch ·to 

7 analyzing the.design. 

8 MR. McCABE: ·rt will be the same approach 

9 used 

10 MR. JONES: In both? 

11 MR. McCABE: Yes .. 

12. MR. SAMUELS: And where is it? Does it 

. , 

13 exist in a document? 

14 FACILITATOR BROOKMAN: Mike, do you want 

15 to comment at this point? 

16 MR. RIVEST: It doe~ cur~ently exist in 

17 the draft document and it'.s fully the intention. to. 

18 share that draft document and to get your feedback on 

19 that draft docum~nt befrire any w6rk commences. 

20 MR. SAMUELS: When is the work p1anned to 

21 be commenced and completed? 

22 MR. McCABE-: Bryan? 

23 

. . 

MR. BERRINGER: . We're still working o~ 

24 some of the details because some stuff is in draft; 

25 

. . - . 

I mean, that~s our n~xt step, to initiate that.as soon 

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1 as possible. Right:now we don't have a specific-~i~e 

frame for that: We have to work: out th~ details . 

.3 FACILITATOR BROOKMAN: Can you give a ball 

4 park, Bryan? 

·5 MR. RIVEST: I Understand it becomes the· 

6 priority after this workshop to war]( out the details.· 

7 And part of the details that need to be worked out is 

8 the timing. 

9 MR. SAMUELS : Because I assume this 

10 somehow is going to be used to develop the analysis 

11 for the ANPR? 

.. 

12 FACILITATOR BROOKMAN: Yes. 

13 MR. RIVEST: . Ye_s .' th~ ti s correct. 

14 MR .. SAMUELS: . I. ·must say that it's not 

15 very helpful when you supplied this . rulemaki~g 

16 document to us a week or ·so ago, and then there are 

17 ~ignif icant new initiatives that ~re being displayed 

18. up here that aren't discussing in here at all. 

19 Thereby undermining our.abiiity to adequately prepare 

20 for. this workshop. I assume you didn't just think·of 

21 this last night. Why is there not discussion about 

22 this in your workshop materials? 

23 MR~· BERRINGER: I thought we discussed it 

2 4 back in the November workshop. as part of the approach. 

2-5 But I apologize if the information is.not in there~ 

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1 MR. McCABE: We have had a number of· 

2 discussions. I believe·that the first draft of an AOL· 

3 proposal had been shared with the industry some months · 

4 _ago .. But we will make sure that the next· draft. is --

5 the schedule and the d~tails will be shared with all 

6 parties before it proceeds. 

7 FACILITATOR BROOKMAN: Steve Nadel, did 

8 you have a question? 

9 MR. NADEL: I just~ in terms of schedule· 

10 · a question, is it fair to assume that this analysis 

11 will go in parallel with the data collection from 

12 manufacturers with the end· points being to complete 

13 this analysis by the same point that the manufacturer 

14 does. So the two can be evaluated in parallel a~d 

15 used to develop the ANOPER. Is that a fair 

16 ·characteriz~tion? 

17 ·MR. BERRINGER:· Yes, it is. 

18 I w6uld.just add for th~ court ~eporter, 

19 please speak into the microphone. 

20 Yes, we do plan on doing that comparison 

21 and somehow and aggregating that information 

22 together as far as the. informatfon for the ANOPER. 

23 FACILITATOR BROOKMAN: But Bryan, let me 

·44 just back up a step. 

25 In response to· Chuck's question about the· 

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1 materials that are not. included in this packet that 

.2 was sent out prior to this workshop, that material was 

3 di~cussed. in.the November workshop? 

4 MR. BERRINGER: I thought that· was one of 

5 the· i terns that was bro.tight up when the prototype was 

6 first discussed. 

7 MR. SAMUELS: Bryan, . what do you mean when 

8 you say the results of the reverse engineering ·and the 

9 data collection that AHAM' s going to undertake. is 

10 going to be. aggregated? What does that mean?· 

11 MR. BERRINGER: Just to use -- I mean, 

12 somehow we have to incorporate to figure out in the 

13 engineerin_g analysis a comparison between using the 

14 design option obviously can cause efficiency 

15 ·Variables .. I t6ink that still needs to be worked out. 

16 "FACILITATOR BROOKMAN: When you say it, 

17 you mean the Whirlpool design? 

18 MR. BERRINGER: Right, the Whirlpool 

19 · design and the results of the reverse engin~ering. -

20 MR. McCABE: To me,_ aggregation inciudes 

21 in being aggregated _in the life cycle cost analysis, 

22 for example, which includes the various se~siti~ity 

23. analyses that will be discussed. That those.data will 

24 factor into that analysis. 

25 

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1 with a weighted cost. for an engineering analysi:s, .. that 

2 is not what we're looking at. So, .we're talking about 

·3 aggregation in~orporation into the process. 

4 FACILITATOR BROOKMAN: David Goldstein. 

5 MR. GOLDSTEIN: David Goldstein, NRDC. 

6 It seems to m_e that we may. be 

7 overemphasizing the importance of this analysis of the 

a· Whirlpool design. Because, if you're· going to f?ld 

9 that result into a life cycle cost analysis, unless it 

·10 comes out pretty extreme, the w~ight's going to be 

li pretty small. I mean, if the conclusion is that this 

12 adds another thousand dollars to incremental costs, 

13 then you zero weight it because that's not what· 

14 Whirlpool would do. 

15 The interesting case is if you turned out 

16 that it adds zero incremental costs. Otherwise, it 

17 will probably be in the same realm as everything ~lse .. 

18 If it's in the same realm as everything else, it's 

19 almost a moot point. 

20 But, the· point here is the Whirlpool 

21 design is One Of dozens I probably I Of Competing 

22 designs among all the major manufacturers, none of 

23 which you've ever studied in that kind of detail 

24 because your analysis has a~ways been on mo~e generic 

25 measures . 

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1 important here is because of Whirlpool's very large 

2 market share and the po~sibility that they might use 

3 this design for a la_rge fraction of their proquction. 

4 MR. McCABE: You're absolu~ely .right, 

5 David. Just use as a~ example, back in ~he ~riginal 

6. refrigerator rulemaking, there were a number of 

7 different desi_gn options, designs of evacuated panels, 

8 ·that we had considered and we selected one of·thbse 

9 and did the analysis based on that. But as you s~id, 

10 when you have one manufacturer who has the market 

11 share, and you all -- many of the manufacturers hav~ 

. . 

12 been reacting to that and we've had to react in like--

13 in kind, and it is a challerige. And th~ results are 

14 going to dictate how we're going to consider it and 

15 how significant it's going to be in the whole 

16 analysis. At this point in time, we don't know. 

17 FACILITATOR BROOKMAN: Additional and 

18 perhaps final questions for Michael McCabe? I ~hink 

19 l,t's time to start heading towards the substance of 

20 the meeting. AdQ.itional questions, final comm~nts, 

21 be.fore we move on? 

22 Let's move on. The next segm~nt discusses 

23 manufacturing costs, approaches to data ·gathering, 

24 reporting, and'statistical treatment. And Bryan and 

25 Mike Rivest are going to provide a bri~f overview on. 

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1 this subject. 

2 MR. BERRINGER: Yes, as Doug said, we're 

3 going to talk about the _manufacturing costs for 

4 clothes washers, the ~pproaches as· far as· data 

5 gathering, reporting, and statistical treatment. 

6 Basically, where the costs are used as far · 

7 as ·the life cycle cost analysis and· manufacturing 

8 impact. Again, I'd like to- -- a lot of this is 

9 discussed in the draft document as far as where those 

10 are going to be used. Basi6ally; the life cycle dost 

11 analysis and the manufacituring impact. We also hav~ 

12 the need for cost information. 

13 After we had the.screening in engineering 

14 ahalysis workshop back in November; there was a lot of 

15 concern about the updating-and validating the data as . 

16 far as it being too old and .also the recent 

17 ·introduction of new technologies in there, and 

18 considering of the willful design were. all some things 

19 ste_mmed, that have occurred since the· last rulemaking. 

20 Al~o, the compliance with the ~recess rule as far as 

21 the -- just the data, considering variability and 

22 uncertainty as far as-in· the analysis. 

23 As far as data collection, 

24 

25 

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FACILITATOR BROOKMAN: Pardon me, Bryan. 

This document, for th.ose of _you who 

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1 haven't been able to find ·it yet, ·is call~d 

2 M:an.ufacturing costs: · costs for clothes washers.. And 

3 it looks like this. It's in your packet. And we're 

4 now on page 

5 MR. BERRINGER: Page 3 of the document. 

6' FACILITATOR BROOKMAN: Page· .3. Thank you. 

7 "MR. BERRINGER: And again, the -- what 

a we' re lo"oking at as far as data collection issues, -the 

9 tim~ table, I think we'll get into that a little bit 

10_ later as .far as that's concerned .. Basically we want 

1-1 to try and stick to. t.he.schedule. Again, just trying 

. . - . . . . . ~ 

12 to ·keep schedule. . T~e main thing we' re looking at 

13 publication and data for the January planning as fa~ 

14 as the_ANOPER ln·January. 

15 Chaiacterizing- the uncertainty in the 

·16 manufacturing .costs, variability between-manufacturers 

17 as far as the GRIM analysis and the costing approacih, 

18 ~nd engineering analysis, the how we're going to dq 

19 th~t tising the cost efficiency curves and also, again, 

20 the consideration of how to consider the Whirlpool 

·21 prototypes as far as the reverse engineering. 

22 MR. NADEL: Bryan, there's one other data 

.. 23 collection issue that I believe should be included and 

24 .·I know ·will come out in the course of this discussion. 

25· 

- . . 

You've done a lot to address· 'it. And that -is the 

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1 issue of the need for indepen~ent data on costs of 

2 different options and the need for data that is 

3 publicly· accessible . so different parties to the 

4 proceeding can review the data. That it's all not. 

5 confidential provided by just one party but there are 

6 multiple data sources .and data sources that can be 

7 reviewed by other parties· just to make sure that the 

8 values are reasonable. 

9 MR. BERRINGER: Do you have any 

10 sugge_stions as far .as· sources· for that information? · 

11 :MR. NADEL: I believe it ~ilL come up a~ 

12 we go along. My understanding is a key part is as 

13 mariufacturers submit their d~~a,· that a DOE st~ff or 

14 contractor will be reviewing the data for 

15 ieasonabieness,· that-you also have the e~isting.cost 

16 data· by measure~ a~d you~re soliciting revi~ions to 

17 that. That will be a second independent thing. -

18 Third, you· are having the reverse 

19 engineering done not orily the Whirlpool prototype but 

20 also an H-axis prototype, all of which provide dafa. 

21 Most of this,· except for the manufacturers· 

22 submissions, will be public domain and these will be--

23. ail- ~llowed to be internal checks and opportunities .. 

. . . 

24 for the public to comment, just to make sure that· the 

25 values-that are uitimately used are,the best ·and mos€ 

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1 reasonable available. 

2 MR. BERRINGER: Thank you. 

3 MR. JONES: Bryan, one other point. Earl 

4 Jones here, before you remove the slide. 

5 Is there not also, given the size of ~his . 

6 irtqustry, issues about confidentiality iri this data? 

7 Just looking ahead to the couple of slides you've got 

. . 

8 later; I guess it's your page 6, which displays data 

9 by va~ious manufac~urers.where -- with reported-~ 

10· .:with indicated market shares there, for example .. Are 

11 ther~ no concerns, MichaeL, about how you keep the 

12 stuff confidential if you display it ~n this fashion? 

13 MR. RIVEST: You're referring to page 

14 COURT REPORTER:_ Mic. 

.15 MR. JONES: Right~ And I raise .it here 

16 because I look at your issues. 

17 MR. RIVEST: I'll ·be coming up to that in 

18 a minute. 

19 COURT REPO~TER: Mic. 

20 MR. JONES: But that is an issue but jus~ 

21 .not on this chart, or is it not an issue? 

22 

23 ' 

25 

COURT REPORTER: Mic·. 

MR. RIVEST: Wel 1, Mike is. my name so when 

FACILITATOR BROOKMAN: Sorry., Mike .. 

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MR. RIVEST: I'm sorry. I'll be comirig up 

to page·6 iri ~ sec6nd and I could talk about where we 

3 think we're· going with that data collection and we've 

4 had discussions 

5 MR. JONES: -·And address the issue of 

6 confidentiality? 

7 MR. RIVEST: And address the issue of 

8 confidentiality as well. 

9 MR. BERRINGER:. As we've talked earlier, 

10 one of the major things as far as getting this 

11 standards process underway and data collection was the 

12 use of the finalization of -the test procedure.which 

13 Joe Romm did sign on July 18th and· is available today . 

14 Also, the ·establishment·o~· a baseline MEF 

15 ,being a new requirement and-that~s one of the thing~ 

16 that comes up in the· agenda ~s far as the. time 

17 ·schedule. And what we can do,c. since it's up here, if 

18 we could discuss that; 

19 ·I know, Chuck, you had concerns about-th~ 

20 data. We were just looking ai.far as trying to do·--

21 conduct the analysis and keep it_ on schedule, that one 

22 of the areas as far as we und!=rstand that the. 

23 . ·establishment of the baseline,. we have four ·weeks. 

24 originally we thought that could ·be ~- rough 

25 calculation bu~ ~alking with other people, it's got to 

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1 be -- ~he te~t procedure has td.be actually applied or 

2 as_sump.tions. made in that. So, we don't have a problem 

3 with that. 

4 We were just looking at the _ da.ta 

5 submission and release, _ if those dates could _ be 

6 shortened so that we could.still get -- try to stay on 

7 track which _.:... with preforming analysis. 

8 Chuck. 

9 MR. SAMUELS: · Wayne commented on this 

10 specif ical.ly. But, .~e put togeth~r a schedule that 

11 was reasonable based on-Way~e's time availability and 

12 what he tho~ght it would iake to do the job, as well 

13 as the time avail~biliti~6f th~·engineers and other 

14 involved, people involved, including the fact - that 

15 you're talking about Augus~ vacation plant shut down. 

16 ·r ·think we've been fairly ·consistent about that. 

17 Hadn't heard u_ntil. today that you had a dif.ferent 

18 view. And I think we're going to stick with our 

19 schedule. 

20 Wayne, did you want to-add to that? 

21 MR. MORRIS: Wel~, I think that"we've got 

22 a· couple of things that we've.explained tp members of. 

23 the Department staff and the engineers, certainly, 

24 from the member companies can speak to this as well. 

25 But this i$ a -- the first time we've had avail'abi],lty 

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1 of the new J-1 test procedure in its . final form. 

2 There are some changes from. the original dra.ft ... It. 

3- will take the engi~eers from many of these companies. 

4 some time to go through that document and understand 

5 ·how t6 in fact apply the i~1 piocedure to th~ existing 

6 machines> to establish this basel~ne MEF_. This is ·not 

T something they do off th.e top of their heads. So, I 

8 think this will take us a full four weeks. to· establish 

9 that baseline ~EF •. 

10 As far as eight week~ between then and 

11 submitting data back to me, . the last time we did a 

12 data. collection, · that particular portio11 though I 

13 .grant you was done .in th_e design option phas~, it took . 

14 essentialiy the better p~rt of three months. In fact, 

15 I think it was four months·' 

16 so, to agree to shorten this to 

17 essentially two months, and to do.that in the middle 

18 of summer shut down for many of these companies in_ 

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19 vacation is, I think, . aggressive as we've stated 

20 before. 

21 And then to allow for the analysis of this 

22 and woiking with 'Michael as we've agreed to on the 

23 .·release 'of the data back to DOE, we think the f~ui-· 

24 

25 

weeks is very acceptab.le. Like Chuck. said, until 

today we didn't -- we were not. aware that the're was a 

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1 probl,em with what had we· proposed;. We thought it ·was 

2 reasonable in consideration of the.fact that the last 

3 time we did. a· data collection it was, I believe, 

4 almost nine months from the time that we started until . 

5 the time that we. finished.. We've agreed to do it in 

6 fo1:1r here a.nd I really· don't see that there's any· 

7 difference in the complexity of work that we've got to 

8 do. 

9 So I unless the member companies would like 

10 to comment on this, I fhink that the schedule we.laid 

11 out .was a very reasonable one, and extremely 

12 agg~essiVe. 

13 MR. BERRINGER: Thank you. Yes, I can 

14 say·, whatever we can do to help in the process to keep 

15 · ·it along. we· just -- trying. to keep to.schedule. I 

16 mean, we could possibly -- again, push -- look for 

17 other ways to shorten th~ schedule do~n the road as 

18 far a·s analysis. .But we' re just looking to do what we 

19 can to keep the process rnov~ng and keep on schedule ... 

. 20 ·MR. RIVEST: I'll take 20 weeks . 

. 21 . MR. BERRINGER: Characterizing uncertainty 

. . 

22 .of rnanufactu~ing costs, the Department is proposing a 

23 method to capture uncertainty in cost estimates. The 

24 ~anufacttirer will ~rovide range cost~ associated with · 

25 

; . 

- achie~ing ~~ficienc~ levels.· Range is ·provided 

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1 separately for variable and fixed costs. So, again, 

2 this is something, a new approach, as far as getti~~ 

3 away from the d-esign ' option and ' looking at ' cost 

4 effic~ency curves. Range is.described by triangular 

5 distribution with minimal, most likely,. and maximal 

6 Custom distributions will be abcepted. 

7 .Shipment weighted associated with each distribu~ion~ 

8 And at this point, I'd like· to turn it 

9 over to Mike Rivest to talk a tittle bit about Earl's 

10 concerns and the use of crystal ball and the 

11 manufacturers. 

12 MR. RIVEST: In· the pas_t when the data 

13 submittals were provided to AHAM, they were --- th~ 

' 14 costs were, given as a s·ingle value and -a confidence 

15 ·index was given along with . that cost. And· the 

16 confidence index was to 9ive a relative measure of how 

17 certai:r: people felt that. tl:_ley could achieve the design 

18 at that cost. · 

19 And what we've- tried to do is to build on 

20 that concept a way of capturing that uncertainty so 

21 that we could, rather than have a single point, have 

22 an' understanding at· how different efficiency levels 

' -

23 the uncertainty may vary-. - And -through the discussions . 

24 we've had, for example in the ballast rulemaking where 

25 a lot of these sensitivity 'typ~ analyses were 

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1 developed, we -- building on· that and the way the 

. . . 

2 iripu~were described.at that p6int, instead of being 

3 a single value, peo~le_~ere asked to give their·best 

4 estimate of what a cost might be, but also.to try and 

5 bound that estimate with a lower bound and an uppe~. 

6 bound. 

7 And the rationale here for having a lower 

8 bound and an uppe~ bound was that sometimes a cos~ 

9 might be $1.00 and you're fairly -- that's your likely 

10 guess. But it could also be $5.00. But obviously·. 

11 it's not symmetrical.· .. It·could never·be negative 

12 three. so, by going ·to_. this type. of triangul?tr 

. 13 distribution, I· think ·we can reflect the fact that 

14 uncertainty isn't symmetrical. So, that was the· 

15 underlying·prin6iple for:the tiiangular distribution. 

16 We could have used other types of . 

17 distributions as well but they, for example the norma.l 

18 · distribution, but it does. have tha.t symmetrical. look·. 

19 about it which makes it less easy to treat and report 

20 back. 

21 Talking to your ~oncerni Earl, thi~ is 

22 actually an input as we would receive it ~rom- an AHAM 

23 member I for example. . An"d . this would not be. for. 

24 disclosure. . This is ·something _that would be 1riput 

25 into the model, thes~ ~riangies, if you ~ill. 

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1 most likely as well as the minimum in the upper bound. 

2 And the rationale for having a manufacturer identified 

3 with the market share is that since what we're trying 

4 to do is get a s~nse of what is the tendency for:the 

5 industry cost and bound that uncertainty, we want t~ 

6 be able to weigh the responses by the relative 

7 shipments. 

8 Through discussions, I think market share 

9 may not be the-best descripter. It may be the total 

10 number of shipments that we get .from· the~ data 

11 .~u~mittals. But this is certainly not something that 

12 would be.reported back in this fashion. -

13 MR. JONES: What is reported back?· 

14 MR. NADEL: Put up that graph for a 

15 second. 

16 When you talk about minimums and maximums, 

17 there _is different ways to define minimum and maximum~ 

18. Is mihimum the ~bsolute minimum meaning_ the lon~est19 shot possibility which is probably almost always going 

20 to be- zero? And maximum being the total worst case, . . 

21 or -is there some reasonable probability? Gee, the 

2 2 minimum i·s the one that we' re 9 o percent confident 

23 that it will be. 

. 24 Is there guida_nce going to -the 

25 .manufacturers to define-what is meant by minimum.and 

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1 maximum? 

2 MR. RIVES'r ': We've had that type· of 

3 discussion. Fcir ~xample,·we thought we might ask them· 

' ·4 that that ~urface area, if you will, would represent. 

5 ·a 90 per~ent confiden6e int~rval because there'~ n6 

6 such thing as 100 percent confidence. so,· that's 

7 certainly something that we can talk about .at that 

8 point.· . 

9 But, in any case, the lower bound is well 

10 knciwn. It's the existing .cost. So, it's zeio. And 

11 the.upper bound, as you ~ush that unqertainty furth~r 

12 out, really when we i;eported back as a percentile, it 

13 becomes quite irisignificant ln the measure. So, I'm 

14 not certain that we -- for the added complexity of 

15 adding ~-qu~sti6n that says what is your most likely 

16 and y~:>Ur minimum and maximum with a 90 percent 

17 confidence, and theri recompile the numbers ·in 

· 18 percentile groups, I think it adds complexity.and I'm 

19 not certain it adds a ~ot of -- makes a big difference 

20. in the end. But that's open for discussion. 

21 MR. NADEL: Steve Nadel, aga'in. I wasn't 

22 · s·uggesting you do some. d~tail probability analysis .. 

23 · ·I just was suggesting you have a uniform definition as 

.24 reasonable. Saying 9o percent _confidence, _within that 

25 J;ange, .seems an appropriate one. 

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1 MR. RIVEST: We can talk about that. 

2 FACILITATOR BR<?OKMAN: That's what you' re. 

3 thin~ing presently? ~ 

-4 MR. RIVEST: ·well, we flip flop back.and 

5 forth on it. Either we let the maximum be the 

6 absolute maximum they· believe, or we bound that to a 

7 90 percentile. 

8 MR. McMAHON: Why can't you have negativ.e 

9 incremental cost? 

10 MR. RIVEST:· Because why would it- cost 

11 less to be more efficient? Wouldn't you just do ~t? 

12 MR. McMAHON: ·Sometimes it does'.· 

13 MR. RIVEST: Never happens. 

14 ·MR. McMAHON: Ye·s, it happens. 

. 15 MR. RIVEST: It would costs a 

16 manufacturer who today could ptoduce a more-~ffici~nt 

17 product at no cost wouldn't .do it? 

18 MR. McMAHON: Is this based on the part or 

19 the whole unit? 

20 MR .. RIVEST: These are incre6ental costs 

. 21 compared to their baseline and they don't build on 

22 each other. for example, ef~iciency level 1 is··not· 

·23 the cost of -- efficiency level 3 is not the co~t of 

·24 

25 

efficiency level 2 with an incremehtal ·cost. . . . It's 

·_always re la ti ve to the base c·ase. So,. I mean.; YO':l can. 

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1 have an argument about this but --

-· 

2 FACILITATOR BROOKMAN: Let's not have an, 

_ 3 argument about it. Let'? You can take ·that 

4 ·co_nversation off-line and proceed with the 

5 presentation, and answer Earl's question which fo_llows 

6 in the next slide, perhaps. 

7 MR. RIVEST: .sorry. Before I get to the 

8 way it's reported, I'd like ·to talk a litt1e·_just 

9 about how the information ·is manipulated_or treated. 

10 And here what we've, once again building on the· 

11 experience with the ·ballast analysis which was very 

12 well. received,· w~'ve more or less adopted a 

13 stand~rdized risk analysis package which is an add on 

14 to the ·xL spreadsheet. And it has· the benefit that· 

15 an~one. can buy it .at a reasonable cost and ~t's well . 

16 . documented.· so, this· is a ·comi:nercially available 

17 package. 

18 ·And what it does is Monte Carlo 

19 simulation'. So, for example, looking. back at the 

20 original distributions, the. concept is that the·· 

21 spreadsheet samples. each distribution one ·by one, 

22 multipl"ies the resulting cost by a weighing to" market 

. ' 

23 share, and the~ creates a new distribution fo~ th~ 

24 indu·stry. And that sampling proceeds as many times a? 

25 we want. The example I have here is 1,000 sa~pli~gs. 

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1 And you arrive at a new distribution curve which then· 

. . 

2 _hides the fact of basicilly you can no longer get an 

3 understanding of which manufacturer submitted which 

4 cost. 

5 MR. JONES: Sorry, Michael. I was just 

6 going to ask you, is that true without regard to the. 

7 number of data submissions in which that i~ equ~lly 

8 ·~rue for three as it for te~, a~ it is for 20, or 100? 

_9 MR. RIVEST: I think i.t Is equally true f o.r 

10 two. I believe that you· -~ 

11 MR. WUENDERLIN: Can I comment on this.· 

12 I'm Bill Wuenderlin fro~ GE Appliances. 

13 · ·rn the case you have where the 

14 distributions overlap, the examples you hav~ there, 

15 especially the second one, I-think the answer you get 

16 at the end is likely to _be very . similar to the 

17 histograms that you give on ·page 8. But if you had a 

1.8 situation where the distributions didn't overlap. Orie 

19 manufacturer . was ·at the left end and had a small 

20 range, the other was at the high end and had ~ ~arge 

21 range, you would likely not get a normal, something at · 

22 looks like a _normal distribution like you- have here 

23 but a bimodal d.istr ibution. One · for each 

24 manufacturers. And if you know -- have an idea of the 

25 

. . 

market share or shipll_lents, · wh.atever, I think you co"uld. 

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1 distinguish which is which. Sci,, you really don't know 

2 until you see the data wh~t it's going to look like . 

3 MR. RIVEST: Actually I th~ algorithm, the. 

4 way. it works, it -- if you have two -- a l;>imodal 

5 distribution and what you're doing, really, the 

6 question you' re ans~ering is what is the average 

7 . manufacturing cost within uncertainty. 

a. The bimodal distribution, for example, if 

9 I was doing. a manufacturing impact analyses, :i wou_ld 

10 wan~-to keep that bimodal distribution. But what I'm 

11 trying to do here which is arrive at an industry cost 

12 for use in the GRIM, which is industry wide and also 

·13 for forecasting prices, what I'm doing in fact· is an 

algorithm that sample~ averages~ So, if you had·~ 

15 bimodal,· you would now have a normal distribution in 

16 the middle. 

17 MR. WUENDERL!N: · I don't. think that'.s ,. 

18 true, necessarily. 

. 

19 MR. RIVEST: We didn't have the time to· 

2 o shout over the .phone with the model in front of us but 

21 that's in fact what we did and Jim can attest to that. 

22 . MR. McMAHON: I'm not sure if that's 

23 r~ght. But I don't --

24 

25 

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MR. RIVEST: Let's leave· that in the hotel 

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1 -room. 

2 FACILITATOR BROOKMAN: Let's refer to the 

3 -~This is an important-aiscussion~ I want to· press 

4 on with the res~ of this presentation. Maybe. at the· 

5 break you can put your heads_ together b~ief ly at that 

· 6 point and discuss getting together to actually look at 

7 the model, at _the computer: based model. 

8 chuck. Noting that I'd like him to finis.h 

9 with his presentation at some point, Chuck. 

10 MR. SAMUELS: You've described how this is 

11 going to be ·done ·in a way so that it won't be 

12 disclosure of individual manrifacturer data. Now let 

13 me a~k you the other sid~ ?i the coin, which isJ how 

14 are you going to do this in a way that will show, 

15 .represent, subsectors in the industry or represent 

16. possible significant differ.ences in costs between 

17 companies? 

18 MR. RIVEST: By reaggregating the 

19 ~anufacturers by different groups. So, as I ~o the 

20 industry, if I have ten manufacturers, then _I would 

21 capture that single distribution within an uncertainty 

22 bound. 

23 MR. SAMUELS: But specifically how are you·_ 

24 going to do it here? I mean,· you know.what you've- go.t 

25 ··here. .You've got five major manufacturers.. You've. 

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1 got one manufacturer . who -- ·with greater . than 50 

2 percent market share. What -- I mean, do· you know now 

3 specifically how you're going to do it .so that on.the 

4 one hand you can show some of these differences whi.ch 

5 are probably critical to this rulemaking? On the 

6 other hand you can protect confidentiality? Do you 

7 know ·exactly what the bre(lkdowns are going to be or. is 

8 that something you still have t~ figure out? 

g· MR~ RIVEST: No, that-in fact is.one of 

10 the next slides where we ask for specific suggestions 

li on how we will breakdown the ·industry, either by 

12 having· all manufacturers in the GRIM analyses or if _we 

13 would have . subgroups. So -- : · . 

14 FACILITATOR BROOKMAN: Wayne and then he 

15 can go to the next slide· and get into the specifics. 

16 Wayne. 

17 MR. MORRIS: Wayne Morris with AHAM. 

18 Mike, I'm still ·not sure. I understand how 

19 you're going to do that based.on the fact ·that what 

20 you're going to get-from AHAM is a weighted average 

21 situation of the industry and not individual 

22 m·anufacttirers' costs or breakdowns.· Se>, how you're 

23 going to switch that back out --

24 

25 

MR. RIVEST: r ~annot do that. I don~t 

--propose to do that. . I propose to ·go back to the 

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1 ·original data through AHAM' s collaboration or by going 

• 2 directly to the manufacturers. 

3 MR. SAMUELS: · Then why are doing this data 

4 'collection through AHAM if you' re going to do. 

5 individual data collection? · Why are we doing 

6 MR. RIVEST: I'm not saying that. I'm 

7 saying ·the part of the discussion here, and realli 

a it's more of the focus of the phase 2 workshop, ·is 

9 how, then, are we going to ~ork together to do that 

10 subgroup i.mpact analysis: knowing full. well that AHAM 

11 will have in its possession the necessary to do that. 

12 MR. SAMUELS : So, pr~-:-ANPR to th_e ANPR 

13 publication. you' re not prop.osing to undertake· this 

• 14 subgroup analysis? 

15 MR. RIVEST: . No, I'm not. 

16 MR. SAMUELS:· You' 11 use the data to do 

17 something at·an industry l~vel?. 

18 MR. RIVEST: Correct. 

19 MR. SAMUELS: And then, around March of 

20 next year we have to figu~e out how we're going to 

21 start· cutting it into thinner slices, one with some of -

22 the relevant groupings. 

23' ·MR. RIVEST: A_bs9lutely. Hopefully, it 

24 will be resolved before tha€. But that's sort of ~ur 

•• 25 projection. 

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1 MR. SAMUELS: No, but I'm just trying to 

2 understand in answer to Wayne's question, given what 

3 we're_going to give you, you can't do some of the 

4 things· that y"ou' re talki.ng about. 

5. MR. RIVEST:. I'll talk a little bit about 

6 the process. And I did bring the spreadsheet with me 

7 and . we can connect it later. And Mr. Wonderland 

8 from-- . 

9 MR. ·wuENDERLIN: Wuender 1 in. 

10 MR. RIVEST: Wuenderlin. We can run I 

11 have a small 3 by 3 example like ihat. We can bteak 

12 out the c6sts and I feel co~fortable that it works 

13 that way. But I need you to -- I need to-make you 

14 feel comfortable. 

15 Just r~iterating some of the process.· 

16 issues. So, samples are drawn from the manufacturer. 

. . 

17 distributions to create an industry distri_bution. And 

18 then the reports are ·reported . ba.ck as distribution. 

19 curves over the entire ~ange of costs· and for all 

20 efficiency levels. And as a second l~v~l of 

21 reporting, we can have a cost :efficiency curve· with 

22 percentil~ values for ~osts. 

23 

24 

25 

This is the result of the sampling for the 

example that I showed. Basically, you have a. new 

.distribution which represents the industry with the 

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1 unqertainty in the estimates. And that can be 

2 reported back in this fashion· as well as they can be 

3 reported in terms of percentile of the sampling that 

-4 happens betwe~n the mean val~e, for example. 

5 So, if you _would like to know w~at is the 

6 · cost of ef ficie~cy levei 2 within cert~in percentile 

7 values so a 9~ percent percentile value could range 

8 between $3.17 anq $4.56, for example. 

9 One way of display~ng the information and 

10 contrast this to past analyses which essentially would 

-11 have given. you a single line, these are fudged number_s -

12 so it doesn't necessarily tell you all the picked --

13 give you all the information that you might have. For 

14 - example, if it turns out that the uncertainty grows 

. 15 enormously with efficiency level, we' 11 )::>e able· to 

16 capture that_ with this type of distribution. So, the 

17 full length -- the w·idth representing a 90 percentile. 

18 The green a 75 percentile, et cetera. 

19 FACILITATOR BROOKMAN: Yes, question? : · 

20 Your name, please, for the re6ord. 

21 MR. ECKMAN: Tom Eckman, Northwest Power 

22 · ·. Planning Council. On this ?1-ide, which is· a result of 

23 the- aggregation of those curves to begin with, how are 

24 you going to take into account the fact that the 

25 market m~y respond differently in'term~ of the market 

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1 share granted give1.1 a manufacturer if they -have 

2 markedly different ~rices, ·incremental.costs of doirig 

3 this, assuming that that gets passed on to the 

4 consumer? 

5 For ~xample, the 50 percent market share 

6 a guy may have an incremental cost that's twice the 

7 present 30 percent market share manufacturer. What 

8 happens if you go to market with the new standard at 

9 the level, that the 30 peicent guy could do it £or 

10 half.price the 50 percent guy can?. 

11 MR. RIVEST: . That's -"-.you really get into 

12 .. ·a much more detailed analysis about competitive. 

13. impacts and how differences in costs between different 

14 nanufacturers are going to impact that. 

15 MR. ECKMAN: The cost that you show, a 

16 · static market share, that doesn't seem to be a dynamic 

17 that you're capturing··in the model. -

18 MR. RIVEST: There are different 

19 arguments. I mean,. you could claim that -- if the 

20 average manufacturing ~6st. i~ along this line, for 

21 example, there may be someone with 50 percent market. 

22 shaie that.is below that line. We don't krtow that for 

23 a.fact at this level. Now, I would think that that 

24 person· with the large market share won't be very-far· 

25 from the average. So, ~ don't think the analysis is 

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1 .necessarily bought off. 

2 It's totally inadeq~ate for assessing the 

. -

3 impact on a· smaller manufacturer, for example, but I 

4 think pretty good for assessing what are the most· 

5 likely: costs--. 

6 MR. ECKMAN: It seems the weighted average 

7 . price incremental cost has to reflect what competitive 

8 pressures will produce in th~ market place. 

9 MR. RIVEST: If you can -- If .you're 

10 suggesting 

11 MR. ECKMAN: Wh~t do you take the high 

12 bid? 

13 MR. RIVEST: I'm not taking the high. bid. 

14 MR. ECKMAN: But.if you maintain a static 

15 market share. 

16 MR. RIVEST: You're proposing a dynamic 

17 mddel that.~ould somehow btlng in --

18 MR. ECKMAN: . But it Is what the market 

19 does .. It says if I can find a way to produce this at· 

20 a lower cost, the market ~inds tha~ and see~~ it out~ 

·21 It doesn't keep the highest priced way of doing· things 

22 in place. 

23 MR. RIVEST: But I'm not saying that .. 

24 That's not what this is saying. 

25 

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1 MR. STEPHENS: Charlie Stephens, Oregon 

• 2 Energy.Office. On the other hand, we might be able to 

3 capture that later when you look at the necessity of 

4 being competitive arid trying to maintain whatever 

5 market share you have. And t_hen looking at the impact 

6 on margins when you get into _the· manufacture analysis. 

7 And if you do have_ the high market share and you w·ant. 

8 ·to maintain it, you may have to accept the· lower 

.. 

9 margin if your costs are higher. And a company might 

10 ¢0 that for a while, anyway, and you would ca~ture ~he. 

11 effect of that by H:>oking at the manufacturer analysis 

12 ·later. Sd, I'm not sure it all has tb be captured in 

13 one phase of the analysis . 

• 14 ·.MR. RIVEST::· I think what. you're sort of 

15 saying is why we're ...;_ is the difficulty in the . 

16 Whirlpool prototype at this time, is because there'.s 

17 so much uncertainty in terms of its costs and frankly, 

18 no one has seen .one yet. ·The public hasn't seen it;. 

19 so there's uncertainty. · And part of doing the .. costing 

2 0 of it is to at least get part of that uncertainty 

21 resolved~ 

22 FACILITATOR . BR.OCKMAN: I thought as a· 

23 foli6w on, I thought Mike's question· to y6u was, ho~ 

24 ·do you apply that. And perhaps that's a discussion. 

25 that could take _pl~ce. °If you· have i.deas about 

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1 specifically how you address those issues, o_kay. -. 

2 Yes, Mike, continue. 

3 MR. WUENDERLIN: Mike, on this chart 

4 FACILITATOR BROOKMAN: Your name, please. 

5 MR. WUENDERLIN: Bill Wuenderliri from GE 

6 Appliances. 

7 It's quite possible that these lines, w~ 

8 don't know the re~ults yet. They could. be reasonably 

9 tight like you have here or quite wide, going anywher_e 

10 from zero to a high value. If the range is wide, ho~-

11 will ~ decision be made in that c~se, if the , 

12 uncertainty is very high? 

13 . MR. RIVEST: The nice thing about the way_ 

14 the analysis is constructed, and that ties in with 

15 what Jim McMahon will do this afternoon, is there's 

i6 not necessarily a decision point here to say we're 

. 17 going to disregard this band and we're going to go 50 

18 or we're. going to go 50/50. ·That uncertainty-is going 

19 to" be carried through right to the life cycle cos.ting, 

20 for example, to arrive at a _distribution of benetits 

21 at the end to ~ consumeri for example. 

22 So, it's -- the beauty is in that it 

23 doesri't have to be boiled down into anything. At the'.~-

24 end it will, though. When the Department has to say, 

25 wel i'; ·7 o percent winners, 3 o percent losers is --

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1 MR. WUENDERLIN: -And what will· happen·at 

2 the end? 

3 FACILITATOR BROOKMAN: Michael McCabe. 

4 MR. McCABE: There will be· a ra_nge of 

5 results of the sensitivity analysis and the basic 

6 ·analysis that will be presented to management an4 

7 those results w'ill drive the decision. So, we'll look 

8 at them-as with the cas~ with the ballast, we looked 

9 at the percentage of winners. and losers at par_ticular 

10 levels. And ~hat's -- that analysis ;..._ this analysis-_ 

11 would be consistent with that so it would be presented . . 

12 to management to be able to estimate what would be the 

13 result. We don'·t have the data now and the decision 

. 14 makers aren't here . But _they would have the whole 

15 array of information upon which then· to make· a 

16 decision. 

17 MR. RIVEST: Now, this As we sort of 

18 touched ·on earlier·, this does not address the· issue ·of 

19 variability between manufacturers for subgroup GRIM_ 

. 20 analysis. It doesn't do that. Right now, however, 

21 'the shifted weighted cost distributions.- for the 

22 industry can be used to do an industry type anal~ses. 

23 We're still at this ·point seeking 

24 ad.ditional input on how·we will go _about th~ specifics 

25 of the subgrou~ analyses. And we did receive one 

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1 written comment on a possible approach and we'll be 

2 using that as a starting point to initiate -fu;rther 

3 6iscussions with stakeholders .. I'm not prepared to 

4 talk about that today. 

5 FACILITATOR BROOKMAN: David. 

6 MR. RIVEST: Not unwilling, just 

7 unprepared. 

8 MR .. GOLDSTEIN: . David Goldstein, ':NRDC .. It 

9 seems to me, both.for the life cycle cost and for the 

10 manufacture impact, . there o_ught. to be some way of 

11 looking at the variation betw~en manufacturers on a · 

12 statistical basis rather · than just within a 

13 -manufacturer. In other words I if. you . have a 

14 distribution function that's is plus· or minus one, 

15 it's different if.that,.s -- all manufacturers are plus 

16 or minus one and their means are slightly.diffe~~nt· 

17 ·compared to most manufacturers are plus or minus a· 

18 qua~t~r, but one manufacturer is an oritlier, high ~r: 

19 . low. That's going to matter . I mean, if one 

·. 

20 manufacturer was an outlier high, then the o~ds ~re 

21 : they'd either do it a different way or lose market 

22 share when the standard came out. If one manufacturer 

23 was way low, .you'd wonder whethei they aren't being: 

24 over optimistic compared to everybody else. 

25 MR. RIVEST: I don't know;_ Wayne,· -if you'd 

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10. 

11 

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• 14 

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17 

18 

19 

20 

~l 

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70 

like to talk to that. But -- No? 

Basically, there's no way to gauge 

somebody's estimate versus somebody else's estimat~ .. · 

They have different manufacturing processes. And what 

to an external person may seem unreasonable may be 

very we~l be quite reason~ble when we understand the 

s~ecifics of that prociess .. So, at this point, other 

than being able on the. raw data to see outliers and 

ask if there's ~n error in the compilation, in the 

addition or the multiplication, I don't think we're 

trying to screen people out· at this point. 

MR. SAMUELS: Chuck Samue 1 s. Basically 

what you said is ~ight, Michael, except that. one of 

the benefits of having this handled sort of between. 

AHAM and ADL is that you will be able to eyeball the . 

raw data and ask questions, and make sure people are 

interpreting things the _same way and define the terms 

the same way before we get too far down the road. 

So, essentially you're right but there is 

the ability for quality control in the way the GRI~ 

approach is done. 

MR~ RIVEsr: ~Right, which won't go as far 

as visitin~ the· plant now ~ut.at ~ later stage • 

MR. BERRINGER:. Just looking at the 

costihg approach and engirie~ring analysis, this is 

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1 something new under the new processes. Manufacturers 

2 have indicated a preference towards the .energy 

3 efficiency approach for reporting manufacturing costs. 

4 .AHAM members believe that the appropriate levels are· 

5 5, 10·, 15, and 2 O. percent improvement applied to 

6 vertica1·axis. Clothe_s washers and approvements· at 

7 3~, 40, 45, and 50 applied to horizontal ~ccess. So, 

8 there's a· gap in between there. There's- a step 

9 fti~ction in between those two products .. 

10 The value for the baseline MEF will have 

11 to be calculated once the test procedure is finalized, 

12 ·which it is. We've. talked about the four weeks to do 

13 that: Inefficiency improvements reviewed accordingly.· 

. . 

14 So, we may have to readju.st and took at the. baseline 

15 ·to see if that's still on track. _ 

16 ·FACILITATOR BROOKMAN: D<:1,vid. 

17 MR. GOLD~TEIN: ~ David Goldstein, NRDC. 

18 I don't see any reason t6 impose a ban~ 

19 gap between 20 percent and 35 percent at this stage. 

20 If a manufacturer doesn't think there's a possibility, 

ii .then that will come out in their submission. But it _ 

22 seems to me that we shouldn't foreclose the 

23 :possibility oE 25 and 30 percent and we don't really 

24 

25 

care what kind of axis they use. I mean,·we used~to~. 

. joke about diagonal axis until· ·we discovered ·that· 

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1 well, maybe that's not quite so unrealistic after all. 

2 s6, I think we ought to just -- if .we're 

3 using this method, we're asking the manufacturers to4 be creative about meeting_ an efficiency level at 

5 lowest cost,· let's just do it .. 

6 MR. BERRINGER: Thank you. Any other 

7 comments? 

8 MR. RIVEST: I ju~t see Peter Biermayer 

9 there. From .previous ~nalyses _and from your work, 

10 have.there been technologies that fit in that gap? . 

11 . MR. BIERMAYER: Well,· it looks like they_ 

12 looked·at the old analysis and that's where that gap 

13 came from . 

14 MR. RIVEST: So.that would be consistent 

15 with your analysis?· · 

16 MR. BIERMAYER: Yes,· but that doesn't mean 

17 th.ey haven't thought ·of anything new since then. 

18 FACILITATOR BROOKMAN: Chuck. 

19 That was Peter. And your la.st name? 

20 MR. BIERMAYER: Oh, Peter Biermayer. 

21 FACILITATOR BROOKMAN: Thank you. 

22 Chuck .. 

23 MR. SAMUELS: Chuck Samuels. Two things. 

24 First of all, we didn It propose this costing approach. 

25 You proposed it. We agreed to it. 

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1 Th~ second.thing is, we are very confused 

2 about the document that you_ put out because we·thought 

3 we ~ere taking this engineeririg co~ting approach and 

' ' 

4 yet we see in Appendix B a section called refinement 

5 of design options. It's then followed by Appendix C, 

6 data request C-1 looks an awful .iot like the . old 

7 design option approach. 

8 FACILITATOR BROOKMAN: And Chuck, you're 

9 referring to this do6ument~ Appendix B and C, to the 

10 big -- yes, the framework document. 

11 MR. SAMUELS: The fr am·ework document. 

12 I don't -- We don't understand what. thi's 

13· appendix and that form is. We thought that with the 

14 ·exception of the Whirlpool situation, that we.were 

' .. 

15 tak~ng a new- hopefully streamlined approach to doing 

16 the engineering analysis. So, what is the relevance 

17 of ·Appendix B and the associated form? 

·18 MR. BERRINGER: I think it was ieft in 

19 there because _there ·was . questions as far as which 

20 methpd. I think when we first developed this, it 

21 wasn't firm which route we were going to go, if we} 

22 were··going to go d~sign 6ption or efficiency, ·cost 

23 ~ffici~ncy curves. 

24 

25 

FACILITATOR BROOKMAN: But if we.go the 

qost · efficiency curve approach, then this isn't 

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1 particularly relevant~ right? 

2 MR. BERRINGER: Correct. 

3 FACILITATOR BROOKMAN: Steve Nadel. 

4 MR. NADEL: I ·guess I have a somewhat 

5 differertt understanding. -I thought that in line with 

6 the independent checks on the data being deve~oped 

7 from the eff l.ciency curve approach that we were goi~(~r 

8 to give manufacturers an opportunity if they wanted t:o 

9 provide· an updated data on t~e-measure cost approach, 

10 to d6 that because th~t measured cost approadh was one 

11 of the independent checks. And particularly that is 

12 something that's in the public domain. For an 

13 organization like ours~lves, we have no access, 

14 really, to any of the data arid can't ~eally do any of 

15 the· review on the quest level approach .. So, we need. 

16 to have this other approach that we can review and 

17 cqmpare as part of our.input into this process. 

18 MR. SAMUELS: Well, I mean, obviously any 

19 manufacturer is free as is any person to supply any 

20 information that they want. But just so that everyone 

21 is clear, we were asked by the Department to take the 

2~ ~~st efficiency approach. Yhat's the ·appro~ch· that 

·23 we're doing as AHAM. ·we are not ·providing data on 

· 24 desi~n option. 

25 MR .. BERRINGER~ ·And I think as. a reality· 

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1 cneck we would sti11 look at· the design option.s. 

2 There'~ .~ublicly available: as far as· prodtict· 

3 literature, and so forth, that is: available that can 

4 .be a r~ality 6heck, also. 

5 FACILITATOR BROOKMAN: Steve. 

6 MR. NADEL:. I mean, the spirit I· would ·-

7 lik~ to see it in is that we ·have the design option 

8 approach.- That that information will be used. If any. 

9 mariuf acturer believes that .the information in that in 

10 terms of· average costs is off and wants: to submit new 

11 data, they' re encouraged to do so. Otherwise,· if no 

12 one does,- we have the existing data to use as a check. -

13 

.. 

Ma. RIVEST: This is so~ething·that will 

14 come. out a little· late~ as well. But there is the 

15 added_ complexity of the change in the descripter and · 

16 the redefinition of what a baseline model is. 

17· Ce~tainly the cost -~ that puts added difficulty in a 

18 component based analyses .. -. I just want ~o push· that 

19 out there. 

20 FACILITATOR BROOKMAN: I saw David -first 

21 and then Charlie. 

22 MR. GOLDSTEIN: David Goldstein. I just . 

23 want to reiterate Stev.e's point. -The whole directio~ 

24 of the process improvement is to get away from black 

25 . boxes. 

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1 black box are just as black·from my point of view. 

2 we really do not have an open. public· 

3. process. If we see a curve; a line on a paper, and. 

4 sai, well, trust us guys, that's what it is~ There's 

5 got to be some way that we can look independently and 

6 say okay, this is this component or. this ·kind of 

7 refuelingj are the numbers reasonable. 

8 And, I guess I would agree as a practical 

9 matter that we cquld at a least translate the old 

10 curves into modified energy factor. as far as the 

11 performance side of it and keep -the costs.the same. 

12 And if ma·nufacturers .want to submit updated costs ·in· 

13 a reviewable fashion comparable that that, that'-s 

14 fine. But if they don't, I.think we have to presume 

15 that the old component curve and whatever 

16 ·modifications DOE and its contractors do to them is 

.17 strong evidence~ 

18 FACILITATOR BROOKMAN: Charlie. 

19 MR. SAMUELS: Yes, .I just wante~ to ask a 

20 question. If we're going with the energy factor level· 

21 approach with associated costs, is that · h·ow the 

22 Whirlpo9l data is going to be presented? 

23 

24 

25 

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MR. RIVEST: Are iou asking --

FACILITATOR BROOKMAN: Chuck Samuels. 

MR. RIVEST: Wear~ in.discussions with 

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1 ·Whirlpool about.its providing this basic comprehensive 

. . 

• 2 data· as part of AHAM. The so-called Whirlpool patent 

3 situation has already been described by the Department· 

4 as how they' re intending to handle· it which was new to 

5 me, as you know from my comments. 

6 MR. STEPHENS: Charlie Stephens again. I 

7 · was just interested in how it w6uld be presented ~ith 

8 the other data in an aggregated· fashion so that you 

9 come out with the curves about what it costs to reach 

10 certain levels, I_ presume that the Whirlpool. data·. 

11 after that process you just described will be folded 

12 in in the· same way? ' 

13 MR. RIVEST: That's.not That decision 

• 14 hasn't been made. There are questions. that need to be 

15· answered. 

16 MR. MORRIS: Wayne Morris with AHAM. I'd 

17 just iike to follow ~P- with, I guess~ Dav~d's 

18 tjuestion~ In looking at the data form"situation:that 

19 we have now, in looking at the test procedure that we 

2 o have now as opposed to the test procedure that we were 

.. . 

21 working with as a draft document two and a· half years 

22 ago when we did ~ata collection to the_desi~n option'. 

23 phase, in looking at the baseline units and baseline 

. . . . 

24 sifuation as the market place egists· two and a half 

• 

25 years later, it's .considerably different. I do not 

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1 think that from my understanding pf the test procedure 

2 in the J-1 situation as it is £oday) that there's ~ny 

3 way that you can take some magical factor· or number 

4 and take the old MEF: numbers that were in the last 

5 data submission and apply it and sudde~ly come up with 

6 an MEF situation to today. And it just doesn't work. 

7· And therefore; w.e eith.er ·go down this road 

8 of doing the design -- doing the. cost efficiency curve. 

g and we take. data ·that way·, and we all agree and · 

10 understand that the data that we gathered might be 

11 interesting to look at has no·relevance to today's 

12 situation, then we're· fine. Or, w·e can sit down and 

13 we .·can draw a clean sheet of paper. and decide what we 

14 want to do with data collection. 

15 In answer to the Department's· 

16 encou~agement, : we· decided to approach· this cost 

17 efficiency. This was the subject. of . the N'ovember : . 

18 worksh6p where we discussed ~his and I thought that 

19 th1s was the outcome of that. 

20 MR. GOLDSTEIN: . David Goldstein. It 

21 certainly wasn't what I recommended the Department to. 

22 do for the same reasons that I'm articulating today. 

23 This is· not new and you' 11 find the same comments 

24 about black box on the record of that w6rkshop~ 

25 

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I~m not worried about five or ten percen~ 

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1 differences. But if you see a factor of. two 

2 difference in how much it costs to attain a .given 

3 efficiency level, that's not· going . to look really 

4 good. I have no idea how the AHAM process that you've 

5 described is going to come out. And if it comes out 

6 using a· hand calculato_r similarly to the previous·, 

7 then it makes bot~ of the~ a little more credible. 

8 And if it doesn't, then we hav·e to make .some decision 

9 about what they actualty mean. 

10 MR. MORRIS: This is Wayne Morris. David, 

11 I don't think you're really ever going to· know because· 

12 ··you're not going to-be able to take the MEF levels 

· 13 f-rom the last data collection and look at an MEF level 

14 of the new cost efficiency and l~ok at the co~ts and 

15 compare them. The MEF levels are not the· same. 

16 MR. GOLDSTEIN: How much are they 

17 dif~erent? 

18 · MR. MORRIS : · We don't know. ·There's no 

19 way to relate that because the test procedure has 

20 significantly changed. 

21 MR. GOLDSTEIN:. They're not different by . 

22 a factor of two~ 

23 

24 tiick. 

25 

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FACILITATOR BROOKMAN: Steve, and the·n 

MR. NADEL:· · With the old measure cost 

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1 method, we've got cost of measures. We've. got values 

2 ·of savings. It should be relatively straight forward. 

3 to take a baseline, decide· what the MEF the 

4 base.line is and just calculate what the MEF is for 

5 each of those steps. Just like in the past we've 

6 calculated for the energy fac~or, it should be quite 

7 possible for LBL or someone else g~ven the new test 

8 procedure and given those particular design options, 

. . 

9 to come Up with. ~ppropriate.test levels to go with 

10 each of those design options. That's pretty straight 

·11 forward. 

12 The savings, the dollar value of savings 

13 to consumers, will be attributed exactly the same .. 

14 It's. just a question of how . do we calibrate the 

15 efficiency le~els to the new test procedure. 

16 FACILITATOR BROOKMAN: . Do you wish . to 

17 follow on, Wayne~ before I go to Dick? 

18 MR. MORRI·S: Wayne Morris. I· guess ·I 

19 don't follow, Steve, with what you're asking othe_r 

20 than to say, that's, I ~hirik, what we're planning.to 

21 do; is give the data back for the cost estimates at 

22 various efficiency levels above the baseline . 

. 23 All I'm reacting to the fact· is David ·is 

24 asking, I believe, to be able to relate the data 

25 submission·that we did two years .ago to today's data 

.. 

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1 submission that we're going to do in 1997. They are 

2 not the same. So, you can't take an MEF level and 

3 look -at the cost of it, of the 1995 data, and an MEF 

4 level in the 1997 data, and the.cost associated with 

5 it, and have any relevance to each other. They're not 

6 ·relevant. 

7 Today's approach, which you articulated, 

8 I believe, is that we.will be giving information back 

9 at ~he cost of and adceptable ~ff iclency level above 

10 the baseline. So, we' re doing what. you basically · 

11 said, I think. 

12 FACILITATOR .BROOKMAN:. A. brief follow on 

13 and·theh we will go to Dick: 

14 Yes,_ Steve. 

15 I. think· 'this as much as we can create 

16 ~larity here, I think this.is· u~eful. 

17 Steve. 

18 MR.·· NADEL: Right. I mean, we, like 

19 David, have great discomfort· with the new approach and _ 

20 it's extre~ely important to us we have a~ independent 

21 check on it that can be publicly reviewed. 

22 I think .in using the old analysis there 

2 3 are two issues here. One is there's a technical:. How . 

24 do you translate energy factor ·to modified energy 

25 factor. 

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1 for a contractor given .certain design options. You 

2 know what the design option is. You know what MEF 

3 basically adds to that.· It adds dryer energy use but 

4 you know the technical . parameters of those ·design 

5 options and it should be pretty straight forward to 

6 calculate MEF. 

7 The second issue you pointed out is well,· 

8 gee, one's '95 prices. One's '97 prices. What we're 

9 saying, and I believe ~hat the Department is saying, 

10 is manufacturers are given an opportunity if they 

11 believe that .the old prices no longer apply to provide · 

12 new prices. I .think it's ·absolutely essential that we 

13 have this independent check. That the two we need 

14 to be able to look at the two data and as David 

15 pointed out, need to be ~oughly comparable or else 

16 there's some very serious questions to ask~ Because. 

17 .this new data is effectively a black· box that's 

18 basically controlled by a bunch of manufacturers who 

19 are not disinterested parties in this process. 

20 FACILITATOR BROOKMAN: Dick Stilwell. 

21 MR. STILWELL: I just wanted to say that . 

22 in the new process, we're not limited necessarily to 

23 that list of design options ... And if we're not going 

24 

25 

to use we' re going t::o use ·something other than 

those list of design op~io~s, I don't think a~ybody_ 

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1 would want to disclose what they're how they're 

2. going to do it . 

3 And so, to that extent, it's going to 

4 remain a black box, I ·think. For example, the 

5 Whirlpool design option, obviously, you'r~ the 

6 Whirlpool. A proprietary design is not listed as a 

7 design option and I'm sure there may be other 

8 :techniques that are not listed as· design options. 

9 so, to that extent, I think· this 

10 particular way_ of doing it is going to remain a black 

11 box. 

12 FACILITATOR.BROOKMAN: David. 

13 MR. GOLDSTEIN: I agr~e with Dick. I just. 

14 point out that if you put more possible options into 

15 the stew pot and pick out the ?est ones, you should 

16 get a curve that's lower and an efficiency level than 

17 the previous curve. Probably not ·by a lot but a· 

18 little bit lower. And if we· see self consistency 

19 between the two approaches, then we're happy. We're 

20 not saying t~e current approach that AHAM agree·d to is 

2i a·bad one. We're ·saying it's a good one." What we're 

. 22 saying, though,.is it cah't.stand all by itself. It 

23 needs corroboration by other ·approaches. 

24 

25 

. FACILITATOR BROOKMAN: 

point's been made three times now. 

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1 Dave. 

2 MR. MODTLAND: Dave Modtland,· Frigidaire. 

3 Just wanted to make a comment about the 

4 updating the design option scenario. I guess what was 

5 discussed in our June 6th meeting was that data would 

6 be . used as supplemental data and that the latest 

7 approach woulq be the primary data. To expect the 

8 · rnanufact~rers to devote a lot of time to update that 

9 data under the tight co~~traints that the Departm~nt 

10 is pushing to _attain this analysis., I think is 

11 unrealistic. So, the focus would be on the latest 

12 effi~iency data that's· been·requested. 

13· FACILITATOR BROOKMAN: Earl .. 

14 MR. JONES: Right. That's the point I 

·15 .wanted to make. We already believe that we're being 

16 · · pressed by the Department to meet a sc::hedule which is 

17 overly aggressive. Now,. if the Department wants us ·to 

18 a~d some additional.data collection here, theh we're 

19 certainly going to go back to o'ur old date which we're 

20 not giving up anyway. But we will press for more time 

21 - beyond that. So, I think yo~ need to make a choic~. 

22 I thought the choice was that you wanted 

23 the cost efficiency curve because that was the b~st 

24 quality data and it could be achieved in ~ays -- well,· 

25 it· could be collected most efficiently by us. If you 

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1· want both, then you need to redo your schedule. 

2 FACILITATOR BROOKMAN: Thank you. 

3 Additional -- Yes?. 

4 MR.· McCABE: Michael McCabe. We are not 

5 ,asking for both though we will be -- response to David 

6 .and others -- that we will be sharing. as· we have 

7 committed in the past, our engineering analysis prior 

·a to the publication of the supplemental ANOPER. We 1 11 

9 be' sharing othe~ analyses prior to it being used so 

10 that it can be subject to peer review, so that it can 

11 be v~tted. 

12 We have we're heading down the path for 

13 the efficiency level approach. There are other data 

14 that we will be -- that are available to us including 

15 some of the earlier analysis, information that may be 

16 available through journal article.s, publicly avai·lable 

17 from other sources. We' 11 be. looking at that ·as. well. 

18 As far as· how valid the informati6n is 

19 going to be, that certainly is a question since the 

20 test procedure has just come out. But w·e' 11 be making 

21 some extrapolations. We don't know whether or not the 

22 band from the manufacturers for the efficiency level 

23 is going to be plus or minus five percent or plus or 

24 

25 

minus 100 percent. Rather, it's prernatur~ to 

speculate on it. We cannot anticipate all of _the· 

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1 P?ssibilities .if we find that we have a 200 percent 

2 .range in the data, it's certainly going to bring into 

3 question the approach and everythirig's going to be 

4 rethought. If it's plus or minus one percent, then 

5 it's going to be a very different set of decisions and 

6 · path that we' 11 be pursuing. · 

7. FACILITATOR BROOKMAN: ·I think that is 

8 kind of a summary statement. Why don't you conclude 

9 with these slides .. 

10 MR. BERRINGER: Just if I could ask Peter. 

11 Peter has looked into that conversion and he's written 

12 something. And we've put it in the package . 

13 . I. don't know :if you ·had any other 

14 additional input you wanted ·to say as far as this EF 

15 to MEF conversion? 

'16 MR. BIERMAYER: This is Peter Biermayer~ 

17 I do believe that the data that has been collected and 

. 18. the MEFs do have some relevance. There aren't any 

19 exact conversions but they were based on an AHAM 

20 proposed test procedure that evolved.into what is now· 

21 Appendix J-1. And calculations were made to convert 

22 it from the early version to what is the c·urrent · 

23 version of Appendix J-1.· 

·24 

25 

So I there is some relevance. Depending on 

how the new· MEF is calculated, that would be 

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1 interesting to find out from the manufacturers how 

2 they intend to calculate the MEF baseline. If actual 

3 

. . 

tests will be run and those raw data will be put into 

4 the.test procedure, thati·Of course, would give more 

5 accurate information.. But as a rough comparison,. I 

6 don't see any problem_ with using the old MEF data; 

7 FACILITATOR BROOKMAN: Steve. 

MR. NADEL: There is one other issue on 

9 the previous slide that I wanted to comment on which 

10 talked about app~opriate levels being basi6aily-five 

11 to 50 percent energy savings. I'm not sure. I 

12 haven't seen the latest test data on some· of the brand 

13 new moc;lels that have jus( hit the market, but you 

14 should lo_ok at that test data and it's possible that 

15 we need.a slightly higher cap, a ~5 or a 60. 

16 MR . .BERRINGER: Thank you. 

17 FACILITATOR.BROOKMAN: Glenn. 

18 MR. SCHLEEDE: I nave a question really in 

19 the consumer utility_ issue that does not affect 

20 efficiency. Is it appropriate to ask it a~ this time 

21 or after the break with the future price issue? · 

22 FACILITATOR BROOKMAN: I don't --. where 

23 does it fit? 

24 MR. BERRINGER: We had some discussion. 

25 I think it's at ~:30 time, about the consumer 

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1 acceptance and that ~{ght be the appropriate time to 

2 discuss it. 

3 MR. SCHLEEDE: At·3:30. I'd like to raise 

4 it now. ·The question has to do with deterioratioh in 

5 consumer utility of products that. occur -- th~t seem 

6 to be occurring at the same· time that efficiency 

7 improvements are made. Let -me give you a specific 

8 ·example of a clothes washer where clothes washers that 

9 we hav~ purchased used to have off balance· switches 

10 that would shut the machine off .when the clothes in 

11 them got severely out o~ balan6e. 

12 We made th_e mistake of buying one of Sears 

13 Roebuck.' s so-called best. quality or whatever they were 

14 washers not too long ago and my. wife took off and left . 

15 clothes in it. The thing go't so far out of balance 

16 that it used to be mounted next to a cabinet that was 

17 attached to the wall. That cabinet · is no longer 

18 ·attached to the wall. When I tried to open _the. 

19 machine· up, we used to be able to pen the· tops. of 

20 machines so you could see -- take a look at the· off. 

21 balance switch,_and discovered that the quality is so 

· 2 2 improved o_n this one you can no longer open .. the tops. 

23 I dug out my wiring diagram·to find the off balance 

24. switch and discovered couldn't find it on the wiring 

25 diagram. So, ch~cked with g_ood old Sears Roebuck and 

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1 they said, oh, we no tonc;Jer pu~ those switches on even· 

2 on· our so-called best· quality. To me, that's a 

3 significant deterioration in consumer util_ity. 

. . 

4 . Presumably it reduced somebody's· cost of manufacturing 

5 this great machine. 

6 Now, where· do those kind of issues s~ow up 

·7 in the analysis where apparently these things that 

8 have some considerable c·onsumer "utility disappear?-· 

9 Where does that come into the anal~sis? 

10 MR. McCABE: ~his ii Mich~el McCabe. One 

11 oi the answer to the qusstion that was going to be 

... 

12 discussed at the 3:30 slot as far as whether or not 

13 any of these features .will effect consumer utility, 

14 co_nsumer acceptance~· there are certainly many changes 

15 that are incorporated into products that take features· 

16 out, that may or tnay not· have efficiency 

17 consicterati<?hs, and we wanted· to discuss that this· · 

18 ·afternoon. 

19 At this point in time; in answer to your 

20 question, I'm not aware of any of the design options 

21 that would~-- any efficiency.levels that would effect 

. 22 consumer utility . That they can be achieved by ·a 

·23 number of.approaches. That.there is-a .difference of 

·24 opinion as to whether or not the access is a utility 

25 feature. But the information is that'.you can achieve· 

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1 the same level 6f efficiency without r~gard to the 

2 abcess so that the uti1ity can be maintained if you ~o· 

3 define access as utility feature. 

4 But that ~as going to be a subjeci for 

5 this afternoon at the 3:30 time frame. 

6 FACILITATOR BROOKMAN: Let's hang on for. 

7 that discussion for later on. 

8 MR.· SCHLEEDE: Well, in case I'm not still 

9 here, I hope you'll add this to that discussion from 

10 .-the transcript or something. But still, this effects 

11 pr"ice; or it effects cost of man:ufacture, presumably, 

12 or th~ feat~res· would sti~l be in6luded~ And then 

· 13 when you start factoring in ~he price of the product, 

14 if- you .have a deterioration ih qu·ali ty, I 'rn not sure 

15 where yo~ take that ihto account in the models you're 

16 now using. 

17 FACILITATOR BROOKMAN: Proceed with the 

is slides. 

19 MR. BERRINGER: I think we've pretty much 

20· discussed this as far as the following · up. 

21 Manufacturers don't believe· disclosure of design 

. 22 option is practical, possibly in the proprietary· 

23 nature of the information .. I think we just went 

24 through that. 

25 

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1 instrument in order,to segment the cost for tooling, 

2 investn:ient, research, deyelopment, and ~arketing _and· 

3· that IS alSO in your package• I think you have. a 

4 couple. It's so~ething that was just put.in ther~ and 

5 we've referenced the new test procedure· section~. 

6 FACILITATOR BROOKMAN: It's a separate--

7 MR. BERRINGER: It's a· hand out. It 

8 should be in your. package. You should have a se.ries 

9 of six hand outs in total. Basic~lly dat~ sheets. . . 

10 More specific definitions of· these and other cost 

11 categories has been prepared by DOE. 

12 Do yo_l:l have any comments, Mike, about the 

13 data sheets, or does anybody.have questions about the 

14 data sheets? 

15 MR. MODTLAND: Dave Modtland with the 

16 Frigidaire Company: Just cla~ification in that the 

17 information, the data sheets tl)at were sent out. in the · · 

18 mailing ahead of this meeting a~e no~ supers~ded by 

19 . what has been presented-here today? 

20 MR. BERRINGER: . That is correct. 

21 MR. MODTLAND: And incorporates the 

22 comments· from AHAM? 

23 

24 

25 

MR .. BERRINGER: Yes. 

MR. MODTLAND: And they were Appendix_C? 

FACILITATOR BROOKMAN: Wayne? 

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1 MR. MORRIS: I don't know. Wayne Merri~ .. : 

2 You· may be prepared to -discuss this at. some·· point 

3 later·. But one of tl:le t~ings that I believe AHAM 

4 comment to the Department earlier was.that while we 

5 have asked· for the addition of those ·columns, I 

6 believe it's.·18 through 21_, to be more -- to be broken· 

7 out and to be explained later,· one of the things that 

8 we had asked to be.explained today by the Department 

9 or by Michael is how the factors intend to be used to 

10 derive both the total variable cost which .i think we 

11 understand. ·And then more importantly, the total 

12 fixed cost. So, is that going to be dis~ussed at-s6me 

13 poin~ today? 

14 MR. RIVEST: I'll talk a bit --·well, I 

15 cari talk a little bit about it right now. 

16 There's -- in ter~s, the costs are being 

17 used at this. point for two things, for obtaining a 

18 retail price. Also for obtaining a manufacturer price 

19 to perform the GRIM ind~stry analysis. 

2 o The GRIM analysis is a cash flow analysis. 

21 So, . it's one that the costs · be suf f i_c:iently 

22 disaggregated so that we can capture the real cash 

. , 

23 flows. So, in terms of the_ unit Variable cos~s, th~y 

24 lag the irivestment p~riods,_-for ~xam~le. So, if the 

25 

.. 

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1 period, it's impo~tant.th~t we understand_what -- how 

2 those fixed costs are expended. And what -- and theri 

3 it's important to understand how those fixed costs are 

4 · depreciated because depreciation results -- will _lower 

5 the.taxable income and thus improve the cash flow. 

6. So, to the extent that we can do that with 

7 the GRIM, that we have sufficient breakdown, 

8 disaggregation in the costs, that we ~an do that, it's. 

9. not that important how they're broken. down. 

10 However, having ·said that, there is a 

11 deprebiation p~riod that. is one .area of discussion 

1~ · that we have not h?l-d yet. · The earlier submittals have 

13 a five year depreciation that aggregated, I ~elieve, 

14 

15 

. .. tooling in~estment, and expensed R&D, and mafketin~~ 

As y6u'll ~e~ in the footnotes here, we. 

16 fo6tnoted that the ·thi~king at this .time which 

17 reflects the previous thinking, ··was a five ye.ar. 

18 depreciation an~ orie year e~pense. And that:perhaps_ 

19 a sensitivity analysis would be in order when we run 

·20 the GRIM to see if these are important factors. 

21 FACILITATOR BROOKMAN: Dick. 

22 MR. BEST: Dick Besi, Whirlpool. I think 

23 it is in order to ask for .a posltion ~tat~meni a~~ 

·24 · explanation of how some of ·these will be done so that 

25 .we all do it in a consis~ent ~anne~ .. ·And particula.r-ly- · 

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1 £hings such as R&D. R&D is norma~ly, if its expense 

2 is written off your bottom line in the year that 

3 you're doing that which may·not be concurreni~ith the 

· 4 product introductions, the manufacturing co~ts, and· 

5 all of those things. 

6 So~ wheQ you put it into.this spreadsheet 

7 again~t t~ose efficiency levels, the relevancy could. 

8 be questioned. 

9 FACILITATOR BROOKMAN: So, some.further 

10 definition of these --

M~. BEST: Some ·further definition~ 

12 FACILITATOR BRQOKMAN: how these 

13 ·factors ~ould be ap~lied .. 

14 I'd iike to press on with "t:he presentation 

15 so that we finish it.- People are starting to get a 0 

16 little restless so it would·be good to take a break 

17 before we proceed to the ~e~t topic. : I 

18 MR. RIVEST: T just want to ·point ·out 

19 that, because I will be coming back on that~ is that 

20 fact that there's uncertainty within both the variable- . . - . . . 

21 and fixed cost categories. That we're trying to trade -

22 off here comple~ity and_ -- complexity and· 

23 reasonableness in characterizi~g uncerta.inty. So', 

24 through the discussions we had, we thought that 

25 separating out variable costs which have impact.in the 

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1 year of production and capital costs as two different 

• 2 uncertainty bands·, would give us ·sufficient 

3 understanding of the true costs. 

4 And we'll see later as ·when. we look at 

5 different approaches to generating pricing. that 

6 variable costs. are treated very differently from.fixed 

7 costs.· 

8 FACILITATOR BROOKMAN: Yes, Dave. 

9 MR. MODTLAND: Dave Modtland,· Frigidaire 

10 Company. I guess I'm stil·l having a hard time 

11 understanding how the pr-evious. triangular distri_bution 

12 information is folded -into this.data collectioh as to 

13 where the max at this point~ _'and the min is. And also 

·- 14 ·r guess you had indicated earlier that thos.e. 

15 def'initions of min and max you. had flip flopped or 

16 there had been some -- there's not a firm position on 

17 what that is and· when will that be? .And it needs to 

18 be done soon so that· we can get on with the data 

19 collecti6n. 

20 MR. RIVEST: · The position as descriped 

21 here is that the min and max·represent th~ full range 

22 of expected values. It's not a 90 percent certainty. 

23 It's· what the range that you feel ieflects the true 

24 .range. 

25 MR. MODTLAND: · So there would not be a -

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1 point estimate, then, provided on this? 

2 MR. RIVEST: There would. be -- You see . 

3 here there is a point_ estimate here. And then you're 

4 being asked to do ·a minimum ·and · a maximum as a 

5 percentag~ value to this unit cost.· We decided to.do 

6 it as a percentage~ You could very well put in the 

7 true numbers if you want. That's okay~ 

8 You want to go for a break? 

9 FACILITATOR BROOKMAN: Are you finished? 

10 MR. RIVEST: ~ell, we just have --

11. FACILITATOR_. BROOKMAN: I thought you had 

12 two more slides. 

13 MR. BERRINGER: Two more . 

14 FACILITATOR BROOKMAN: . I believe ·on page 

15 14 now. 

16 MR. BERRINGER: Thirteen. 

17 FACILITATOR BROOKMAN: Thirteen. 

18 MR. BERRINGER: The "next slides deal wi:th 

19 the ·whirlpool prototype~.- I think w~'ve discussed 

20 th~t fairly lengthy this morning. I guess to further 

21 the slide 13, we ·.had AHAM 'members believe it's not 

22 appropriat~ fot them to domment on·the cost ~fficient 

23 -_curves of Whirlpool. I think this was reiterated this· 

24 morning by Earl as far as . manufacturers doing the 

25 costing on that. 

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1 Whirlpool doesn't feel that it's. 

2 appropriate for them to provide a costing information 

3 on the prototypes. They've offered to cooperate as 

4 far as a third party assessment and that, s sqrt of .the 

5 reasons why we've gone to doing the ·reverse 

. 6 engineering and usin~ A.D~ Little as a 

. 7 The Department intends to have Whirlpool's 

8 designs costed for use ~ri ~uture analysis. We .talked 

9 about that earlier. We stirl have to work out the 

10 details on how we're going to use.that. Details of 

11 this assessment will be vetted to stakeholders prior · 

i2 to initiation. ·Again, we're still working out.the 

13 details of how we're-going to do it; what we're g~ing __ 

.14 to rel.ease, and stuff~ So, we'r·e nqt:at the stage.but 

15 -that is our next priority. 

16 The cost data will not be formally 

17 integrated {n to the life cycle cost'analy~is until . 

18 more information is available ih thes~ designs._ The· 

19 cost data will be included in the_~anufacturing impa~t 

20 analysis. 

21 Arid I think we~ ve discussed this ear.lier .. 

22 Is.there any other comments on this? 

2:3 

24 

25 

FACILITATOR BROOKMAN: Final _questions or 

-comments before we go to break? An· overdue break, I· 

. . might say. 

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1 Steve~ ~nd th~n to Steve Nadel. 

2 MR. ROSENSTOCK: ··Steve Rosenstock, EEL 

3 In terms·of the -- your last comments and looking at 

. . . 

4 the ~chedule, you~re s~ying en~ineering analysis life 

5 cycle costing starting Autjust of '97 and ending in 

6· November. With this activity you're talking about,·· 

7 with these prototypes, is there enough time? That's 

.8 my only ques~iort. 'There might not be. 

.9 MR. BERRINGER: We're looking at, what, 

10 about three months to do the actual· work once we··get 

11· everything resolved possibly? So, we' re probably 

12 running around the same time~' as discussed with the 

13 AHAM submittal of data· to us. Sq, we are cutting it.· 

14 . . close as far .as trying to get the actual analysis done 

15 once we do get the data.· 

16 FACILITATOR BRO.OKMAN: Steve. 

17 MR. NADEL: : Yes, in.terms of the what 

18 you were saying previously, you were di~cussing the 

19 Whirlpool prototype and reverse engineering analysis 

20 on that. I think it's i~portant to ·also include the 

21 reverse engineering on a horizontal access and include 

22 that in the· framework-document. That's going to be 

23 another i~portant independent check on the. data for 

24 getting the efficiency level approach. 

25 

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1 discussed earlier, we're looking at the baseline and 

•• 2 

3 

the com~ercially.available horizontal access, and the 

Whirlpo~l prototype. 

4 MR. NADEL: I'm j~st saying it should be 

5 in the framework specifically. 

6 The other thing, to follow up on ~teve'~ 

7 comments. It may.be useful for a DOE staff to take a 

8 look at this scheduie and maybe make some proposed. 

9 modifications during one of .the breaks. And maybe we 

10 can discuss .this later in terms of how we can try·to 

11 do some shifting ar,ound. What can be shortened- in 

12 order to get maybe a little bit more time - to the 

13 manufacturers for the data collection. But, let's· 

•• 14 make sure that it all works ~s a whole. There are 

15 going to be trade offs. 

16- MR. BERRINGER: Yes, I think that's a good 

17 subject to put on the parking lot and get to that this 

18 afternoon. 

19 FACILITATOR BROOKMAN: .The time line '. 

· 2 O -iss.ue. 

21 Let's go to break. It's now 20 aft.er 

. . 

22 almo~t. We will start, ~e will commence, at 11:35. 

23 We wilt start promptly. 

24 (Whereupon, the foregoing matter went off. 

25 the re~ord at 11:22 a.m. and back on the record· at 

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1 il:35 ·a.m.) 

2 FACILITATOR · BROOKMAN: Let· me make .a 

3 housekeeping announcement. I'm told the. jackha.mmer 

4 will resume at no6n. So, let's proceed as quickly a~ 

5 we can. I don't want anybody to look their ability to 

"6 .comment. I want to make sure we get adequate 

7 discussion. And if we need to continue this after 

·a lunch, we-will~ But let's try and be efficient in 

· g this next half an hour and_ keep our comments brief and10 . the answers brief as well, see what we can do. 

il · ~ecause we will have to stop at noon· when they resume 

12 the jackhammering. 

13 Bryan, are you ready to go? 

14 MR. BERRINGER:· Yes. 

.. 

15 FACILITATOR ~ROCKMAN: This next subject, 

16 you can· see the header up here on .the screen, 

17 determining future pr ices of clothes washers. It's in 

18 your packet. 

19 MR. BERRINGER: Again, if you want to 

20 refer to Figuie 1. in your draft' document, and what 

21 we're. talking about, as Doug alluded to, is the price 

22 forecasting. Again, this -~ we're looking.mainly for 

23 life cycle costs, the inputs.· We're also· talking 

24 

25 

about manufacturi~g. So, prices are used in the· 

~nalysis as far as life ,cy~le. costs, retail prices, 

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1 and also manufacturin~ impact, manufacturer prices. 

2 The relationshi~ b~tween th~ retail and 

3 the manufacturer prices· average -- we have questions 

4 and concerns about fh~ avera~e distributor market up;. 

5 the same relative uncertainty range. There's 

6 different approaches ~hat could be used to determine· 

7 retail- prices,· survey of existing markets, expert. 

8 forecasts, various mark ups over. variable costs, 

9 manufacturing costs. 

10 Does anybody· have other .suggestions of 

11 approaches that we could use as far as determini~g 

12 retail~prices? 

13 Is everybody up with us? 

14 FACILITATOR BROOKMAN: Wayne. 

15 MR .. MORRIS: This ·is. Wayne Morris with 

_16 AHAM. Just one comment. And that is that we'd like 

.17 to •ake ~ure that iri any discussion of retail prices, 

18 that we also make sure 'that we capture any derivery or 

19 installation costs that are associated with the 

20 products. In some cases, that may have changed in the 

21 way that retailers were passing those costs along over _ 

22 periods of time. Whereas, in previous times, that may· 

23 have been a part of an actual distributor's -retail 

24 cost,· delivery. and installation was "free. II That may 

25 not ·in fact be the case today and those costs may be 

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1 separate. And they need to be captured and they need· 

2 to be figured as part of whatever ~s intended by th~ 

3 Department as a retail cost; And we'd-.just like to 

4 make sure that that's captured. 

5 Th_ank_ you. 

6 MR. BERRINGER: Thank you. 

7 Any other comments? 

·a FACILITATOR BROOKMAN: Charlie.· 

9 MR. STEPHENS: Charlie Stephens, Oregon 

... 

10 Energy Office. 

11 I just wanted to make sure that you have 

12 the means in place to make sure that by the time 

. . 

13 · you're finished with this that everything . is 

14 internally consistent· in the analysis_. That the price 

15 relationships that you establish work backwards into 

16 th~ manufactu~e ~nalysis and forwards from the 

17 manufacture· analysis the same way you would 

18 · s~arting at either end, you sort of arrive at the same 

19 consistent set of numbers. 

20 MR. ~BERRINGER:. Y~s, thank you. 

2.1 Glen Schleede~ 

22 MR. SCHLEEDE: I just want to make point 

23 again. On the change in qua~ity of the produbt, not 

24 having anything to do wit~ e~er~y efficiency, if y~u 

25 have a deterioration in. product quality that does 

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1 enter into the real price of the appliance, and that 

2 . ought not to be ignored.· . Specifically, if yc::m say 

.3 that the price of an . appliance is not really 

4 inc.reasing, but if you take into account the fact that 

5 ·the quality is decreasing, you've had a real price . 

6 increase. And I don't think that should be. ignored in· 

7 the model. 

8 MR. BERRINGER: . Thank you•. . 

g ·some things, a survey of ex~sting retail 

10 prices could help estimate future prices and validate 

11 mark up assumptions. ·Mike Rivest is ·going to get into. 

12 . a little bit more detail as far as· that and we can 

13 discuss that . 

14 DOE has initiated a market assessment of· 

15 the clothes washer industry .. current pricing exists-._ 

16 current pricing of existing models will ):)e researched. 

17 And as again, is there any data sources that we should · 

18 lo6k at.or can pull from t6 get thi~ information? 

19 What factors. may limit ·the usefulness? 

20 Prod~ct not in the market 6r low . qu~lity 

21 ·quantities. Efficiency. features bundled with non22 efficiency features. ·change in the ef~iciency 

23 descripter. And, other factors. 

24 

25 on these 

- FACILITATOR BROOKMAN: Are there comments 

I guess when you' re .talking· about data 

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1 sources, what data sources exists, I think you mean 

2 perhaps there are data source~ that may not.be readili 

3 known.at this time, that sort of thing, right?. 

4. MR. BE~RINGER: ~hat's correct .. 

5 FACILITATOR BROOKMAN: Yes. Steve. 

6 MR. ROSENSTOCK: Steve Rosenstock, EEI. 

7 On· the factors that might limit the usefulness; it 

8 . obviously depends on the survey. But obviously . 

9 there's always the inve.nto'ry factor; If a partic.ular · 

10 model .is sitting on a ·showroom floor arid it hasn't 

11 sold, it's going on sale because the retailer wants to 

12 just get it out of stock, that·might have an impact. 

13 Where it was $50. 00 -it's. now $50.00 less just 

14 because it's been around on·the floor for X number of 

15 months, or even X number of years. That might also,·· . . . 

16 again, depending on.where yo~'re doing the survey and 

17 possibly what tim~ bf year you're doing the survey~ 

18 For example, · th"ere's· a big delivery 

19 usually in January of.certain appliances and they'r~. 

20 trying to unload everything in late December,· it's 

21 go~ng.to make a difference.-. 

22 FACILITATOR BROOKMAN: .Additional comments 

23 

24 

25 

. . ., 

on factors that_ may limit the usef.ulnesses of these 

: price forecasts? 

Chuck. 

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1 MR .. SAMUELS: Just·a comment? 

2 FACILITATOR BROO~MAN: ·Yes. 

3 MR. SAMUELS: AHAM as AHAM is not going to 

4 be able to get involved on this pric~ forecast 

5 ~ituation for obvious r~asons,· legal and 6therwise. 

6 I do think; though, that the Department 

7 and its contractor shouldn't hesitate in reaching out 

8 ·.to indi victual manufacturers, even on . an informal 

9 basis, to at least run by some of the methodology or 

10 some ·of the practical issues such as the one that 

11 Steve just brought up, or retailers for that matter, 

12 Circuit City, Sears; or Others, _to just make sure that 

13 there's some reality check or some verification of the 

14 approaches that have been taken _on this. 

15. FACILITATO~ BROOKMAN: Ch.arlie. 

16 MR .. STEPHENS: Charlie Stephens at the 

17 Oregon Energy Office, again. 

18 My recent ·work out in the field also 

19 suggests that some manufacturers, more .than others in 

20. this case, deliver su~stan~ial numbers of appliances 

21 through channels that. aren't necessarily considered 

I . 

22 retail. They're builder type ·channels, ~or instance. 

23 

24 

25 

Do you hav~ a way of including that as 

sort ot a slice of the.market that's separate from the 

retail? 

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1 MR. BERRINGER: No, I don't know that 

2 We I Ve looked at 'it and if there IS any information• · ts . 

3 anybody aware of any information that can be.pulled·. 

4 from? 

5 MR. RIVEST: · I did receive in.formation 

. 

6 ·from AHAM through their data book that identifies the. 

7 proportion of sales.through different channels, for 

8 example. What we haven't done yet is try ·to 

9 understand how the markets might be different or how 

10 the pricing might be different .th.rough those different 

11 channels. That's something· that might be worthwhil~ .. 

12 to do.· 

13 The problem here is that we're looking.at 

14 . ntodels that are' described in ·terms of an EF and we I re . 

15 trying to speculate on the prices of models that will: 

16 be with MEFs. And given that there's not a large 

. . 

17 market share currently ·for high efficiency ·products --

. 18 it will give us some data points, but · not very. 

·19 comprehensive. 

20 MR. STEPHENS: Yes, Charlie Stephens 

21 again. I can get my local data· by model number and 

22 price~ but I can't necessarily apply that to the res~ 

23 

. 24 

25 

of-the country, obviously. 

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MR. FOLEY: Gene Foley from the Allianc~ .. 

FACILITATOR BROOKMAN: Gene, . please use· 

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1 the mike, Gene. 

• 2 

3 

MR. FOLEY: I'm sorry. Gene Foley,· the 

Alliance to S~ve Ene~gy. 

4 It would seem to me -rather easy to 

. 5 establish the high end of what the price should be and 

6 then the object would be to consider to work 

7 backwards. Manufacturers tend to publish manufacturer 

8 suggested list price on everything that they ·produce. 

9 That would seem to be a good logical starting point 

10 and then work your model backwards as to how. much. 

11 beyond that the price is actually disco.unted. 

12 MR. RIVEST: There'~. good information 

13 about what models are sold at what price. But there· 

• 14 are current models with EF .des er ipters. 

15 MR. FOLEY: Gotcha.-

'16 FACILITATOR .BROOKMAN: Thank you. 

17 MR. BERRINGER: Expert· f oreS'.ast 

18 manufactur~r cost data sheet~ ~ould.include a.column -

19 listed as estimated increa_sed retail. price. The 

20 format could be modified to in~lude in the range.and 

21 other . features. DOE will consider_ any additional.. 

· 22 forecasts received and comments. 

23 And while I'm at that point, one of the 

. 24 issues that was raised was the ·framework report.· Tha·t 

25 is a living.do6um~nt: we·do have a lot o~ qu~stions 

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1 in' there that have not been answered and w~ still have· 

2 . to resolve. so, by no means is th~t repor~ finalized. 

. . ·. . 

3 We h~ve con~inued to get more comments on that and I 

4 assume we'll get more comme6ts -- Obviously we have 

5. comments· based on today and within the 30 day period. 

· 6 So, please let us know if there's anything -that's 

7 missing out of that that should be addressed. Let us 

8 know. 

. . 

9 FACILITATOR BROOKMAN: And just for those 

io people that have not yet gone through.the frame.work 

11· document, I would call your attention.to specifically 

. . . . . 12 the boxes. The Department has ~ut questions, _major 

13 qu~stions, major is·s~es', that are stili outstandin_g. · 

14 They've drawn to your- attez:ition - by inserting them 

15 inside boxes. So, please refe·r to them anq respond. 

'16 MR. RIVEST: I· guess just -:- I think it_ 

17 ·_ w~s clear tom~. I think it's clear' to me, tha~ there 

. . . 

18 was a .column within the· AHAM survey that said ..:__ I 

19 forget the exact wotds_but basically asking for an 

20 estimate of retail prices. So, :t conclude, then, that 

21 :it wouldn't be appropriate for AHAM. to be gathering 

22 that information but that we might -- is that --

23 

24 

25 column? 

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MR. MORRIS: I don't remember that --

MR. RIVEST: You don't remember that 

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1 MR. MORRIS: No. 

2 MR. RIVEST: I think it's there.· 

3 FACILITATOR BROOKMAN: Chuck. 

4 MR. SAMUELS: Is there in increased retail 

5 price, page 3. 

6 FACILITATOR BROOKMAN:. Increase in retail. 

7 price. 

8 - MR. ·SAMUELS: No, I've got to put on my. 

9 legal couns~l hat now. I don't think we're going to· 

10 engage in that. That's· not a good .appropriate 

11 activity for us. 

12 MR. BERRINGER: At"this time, I'd like to 

13 turn it over to Mike Rivest just to .talk about the 

14 mark up approaches that will be -- that can be used.· 

15 ·- .· 

And if there's any comments on that, if.we can see 

16 where we're at as. far as· that. If people agree.or 

17 not. 

18 MR. RIVEST: Sort of· repeating one of your 

· 19 comments, Charlie, what we're striving for is 

20 consistency. So that if we say that retail prices are 

21 going to be at such a level, then we want consistency -

22 . in th~ mark ·up assU:n\ptio_ns between the various levels 

23 of distribution. And that's what we're doing. ·And 

24 we're trying to the extent possi~le of-bounding what 

25 the estimates might be · at those two levels of 

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1 distribution. And, we realize that there's 

2 significant issues and understanding how·. with 

3 increasing efficiency may be increase in price, that 

4 that range may differ. 

5 For example, as efficiency increases, its 

6 price increases. And maybe the margins are squeezed •. 

. . . 

7 So, we recognize that issue~ And the way we prop6se 

8 to treat it is.to have uncertainty analysis and once 

9 again_using our risk analysis mqdet to describe those 

10 ~ark ups as probability distributi6ns. 

11 ·And what we did is we looked back 'into 

12 we looked at what data was available in terms of what 

13 those two mark up structures might be. And, we ha~e' 

14 fairly.good aggregated dat~ as far as ·ret~il pricing 

15 that might allow us to understand on average. And I'm 

16 looking at the gentleman from Circuit City here. 

17 We have fairly goqd data from the C~ns_us 

18 Bureau and some of the marketing firms of what the 

19 _aggregate retail price might be· and what the -- from-_ 

2 o . the _Census Bureau, from .indu.stry shipments, from the 

21 AHAM track book, we have an idea of what the total 

22 shipments are. So,. we can arrive at some aggregate 

23 level for retail. mark up. 

24 In order of sort of in the time sequence~ 

25 I listed how that retail mark up's been· applied in· 

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1 past analyses and I've given those as potential range 

2 

3 

4 

end points~ The 1982 analysis h.ad a reta.il. mark up of 

1.7. The important thinq to realize here is that how 

this definitely there seems to be a de~reasing 

·5 trend in the mark up at the retail level. That's one 

6 thing. And a corr~sponding decrease in the total mark 

7 up. 

8 As far ·as the manufacturer mark up, 

9 there's·much less information available. It's less 

10 understood. What we do have is an industry submittal 

·11 from 1991. The way they treated the mark up 

12 assumptions · was by doing sensitivity analysis, 

13 assu:ming variable mark .ups over incremental 

14 manufacturing casts. 

15 And we see here the extreme·s of the 

16 sensitivity cases that were used. Going from a simple 

17 mark·~- a simple pa~s throug~ of in~remental variable 

18. costs to doing a sensitivity analysis where what 

19 that was answering the question, what is th~ mark up 

20 req~ired th~t would ·b~ini us at the sam~ net present 

21 value, just maintain our current present value~ And 

22 that number came out to be i.53. 

2 3 The Department of Transportation, for it's 

24 financial analysis, developed a financial method of 

25 deriving mark up· to see how increased in· cost to 

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automobile dealers might-be translated to first order 

distribution. ·And th~y arrived at a ~ark up of 1.42. 

.· 

And that's based on their applying their 

metho?ology onto publicly available information about 

appliance manufacturers. 

It's important to note here.in all these 

mark up assumptions is that· mark ups have been applied 

to different things over different times. For 

example, with previous ·manu~~cture impact analyse~; 

the mark up was applied to what was described as long 

run variable costs. So,. the planning horizon was in· 

the 10 to 2 o year_ time frame whereas the Department of 

Transportation's analyses: applies short term variable 

·costs. 

FACILITATOR BROOKMAN: Steve. 

r1R. NADEL:. A couple of questions .. First, 

- ~ . . 

on the first three rows .you ·do give dates of that 

data. For the last three rows, what years wouid you 

.ascribe --

MR. RIVEST: 1~94. I'm sorry, that's an·. 

oversight. 

MR. NADEL: So all three of them are 1994? 

MR. RIVEST: ·These two market surveys are 

based on 1994 data. 

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1 MR. RIVEST: This was based on financial 

2 ·statements of manufacturers three years times series 

3 ending '95. 

4 MR. NADEL: So,· '93 to '95 data. Just 

5 it's helpful· to fi~ure out dated something is versus 

6 how recetit it is. 

7 The other question. On the 1991 AHAM 

8 report whi6h I believe was done hy Arthur o~ Little; 

9 was there any actual data collection there or are 

10 thoss just hypothetical scenarios that led to:the 1 

11 and 1. 53? 

12 MR. RIVEST: Those are scenarios, the 

13 industry's position at the time was that a best guess 

14 scenario was cost pass through, straight pass through· 

15 . of variable costs.· 1. 53 ·was to try and understand 

16 what was need to 'be able to ·recuperate the fixed costs 

17 and to see how that might compare to historical 

18 trends, for example. 

19 MR. NADEL: So they are scenarios, not 

20 MR. RIVEST: They are scenarios. 

21 MR. 'NADEL: -- actual data. Okay. 

22 MR. RIVEST: Correct. 

23 MR. ~OLDSTEIN: would there be -any value 

24 in studying ·consumer. products where high· capit_al 

25 -investments are trad~tionally required and. see how 

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1 those markets work, say, something lik~ computers? 

2 MR. RIVEST: Actually, the Department .of . 

3 Transportatiop did de:> that type_ of analyses. The 

4 difference here being that the relative cost increase 

5 compared to the base cost has been -- An airbag in a 

·6 car compared to a double of costs for an appliance, 

7 .for example .. 

8 FACILITATOR BROOKMAN: Additiorial 

. 

9 questions on these mark ups? I see none. 

10 MR. JONES: I only have one. 

11 FACILITATOR BROOKMAN: Yes,· Earl. 

. 12 MR.· JONES:. So,. Michael, what is the 

13 ~hat does this mean? 1 mean, page 7 is -- Oh, sorry . 

14 MR. BERRINGER: I think you're going to 

15 answer it in the next slide. 

16 MR. RIVEST: I'm sorry. 

17 Now, the· commitment ·in the process tool 

18 was to look at manufacture impact by applyin~ various: 

19 scenarios ·of cost pass· through. And the way we're 

20 proposing to implement that is essentially doin~ the 

21 same typ~ of analysis I described this morning for 

22 costs which is to arrive at a possible distribution of __ 

23 mark ups at both levels,. keep them separate, .and apply. 

24 _this mar_k up, this distribution .of mark up~, over the_ 

25 distribution of costs. That's how we would achieve .,;,_ 

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1 we would bound the price based on the mark- up 

2 approach. And compare those prices to prices we may 

3 have from existing su~veys of existing appliances, for 

4 e~ample. 

5 I definitely would appreciate comments on 

6 those. 

7 . FACILITATOR BRQOKMAN:· oa·n. 

8 MR. BARZEL: Dan Barzel with Circuit City. 

9 As far as the retail mark up.range goes, 

10 I think the· range. is high. And if you look at, for· 

11 example·, the net profit margins of appliance and 

12 electronic retailers as a group, even including Sears 

13 who.'s probably in the high ·end of the group, you'd 

14 fihd that a lot of them are making nominal levels-of 

15 profit, if any. And there's been a considerable 

·16 amount of shake out in the market. 

17 People wor)$ing on -- :t converted your mark 

18 ups into gross margins,.and ~hey would suggest 1.475 

19 . is about a 32 percent m·argin- for· a retailer, a gross 

20 margin. 1.3 is .in the lo~ 20s, I think 23 percent 

21 margin. And I think people working at 23 to ~2 

22 percent margin are going to be healthy .. And I don't 

23 think that's what youire seeing in the market place 

24 

25 

·.today. I think you're seeing a lot of difficulty. 

People going out of bU~iness,· closing theif doo~~. 

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1 And the competition that· is left is ·very, very 

2 serious·. And I don't think they're.operati!'ig in those 

3 ranges.-

4 So, I don't know how you get at· that 

5 because you don't really have access to what they're 

6 pay{ng for products. So,. it's very difficult to 

7 arrive at what's their gross margin. You can only 

a look at companies as a whole, I thinki because they 

9 won't. break out their individual clients n1argins for 

10 you. 

·11. MR. RIVEST: Would you think that their 

12 overall gross margin would be indicative of the margin 

13 on appliances, or~- . 

14 MR. ·BARZEL: That's the only inference you 

. 

· 15 can. draw because -- since they won't break it·out for· 

16 you. Somebody like Sears, for example, who's got 30 

17 plus p·ercent market share migh~ be doing significantly 

18 better thari their company overall, but a littl~ guy 

19 might be doing worse than his company's stated margin~· 

20 So, on an average I -- .that's r~ally the only thing 

21 you could go on. · 

2.2 And I've got ~n analysis· enrichment of net 

23 margins after taxes and overhead, and so.on. But I 

24 don't expect on the publicly. traded companies that it 

25 ·.· 

wouldri't be difficult to get,. the RECS and so pns of 

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1 the world, to try to get at what the number really is. 

2 But I · think that's an optimistic range or a high. 

3 range. 

4 FACILITATOR. BROOKMAN·: David? 

5 'MR. GOLDSTEIN: A quick question and then 

6 a follow up. 

7 The mark up r~nge; 1.00 to 1.42, is that 

8 . on variable costs alone? 

9 MR. RIVEST: Yes. 

10 MR. GOLDSTEIN: You should consider a 

11 .range of ability· to pass through capital costs 

12 regardless of what the ~perating costs are. Becarise 

13 there certainly are industries where you can p~ss on 

14 capital costs at the r~tail level. I think we had an 

15 exam.ple a second ago, computers would have to be one. 

16 Software is probably the best_ example. There's hardly 

17 any costs' variable co_sts to make software with all 

18 the intellectual properties:. So, ~f yoti're selling 

19 sbftware and making money at it which obviously seems 

20 to be happening, you must be.figuring out how to pass 

21 on capital costs to retail somehow or other. 

22 MR. RIVEST: But isn't that fact that some 

23 have the abilit~ to pas~· on fixed costs reflected iri 

24 the fact that th~ mark up is· greater.than 1?· Because 

25 that's· in fact what it's doing, it''s contributing to. 

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1 fixed cost. 

2 MR. GOLDSTEIN: Well, you. ·may be 

3 · multiplying the wrong thing. You· may have an equation · 

4 that's fundamentally wrong.· In other words, you cou+d 

·5 be dealing with an issue here, I don't know the data, . 

6 but it'~ possible you could be dealing with an issue 

7 wher·e a lot of the costs,. the . bigger share_, are 

a· capital and not variable. And so, an.analysis based 

. 9 on a· constant factor times variable could be· ·wrong 

10 when you're dealing with a change that's now mostly 

11 non-variable costs. 

12 FACILITATOR BROOKMAN: Charlie. 

13 MR. _STEPHENS: .What's your_ -- the time 

14 period·over which you.tend to use those mark ups? Is 

15 this a shor~ term like.a five year period, or are you 

16 looking at this a long ~erm? 

17 ·MR. RIVEST: These numbers are generated 

18 - through different means. The retail mark up was a one. 

19 year's timi series of data for retail pricing and for 

20 manufacturer shipments. And the mark up methodo~ogy 

21 used by NHTSA is to look at a time series of financial 

22 statements.-

·23 MR. STEPHENS: .. 

I'm.just -- ~s you apply 

24 that and look at a price that you're trying to say, 

25 okay, here's the staiting price. 

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1 escalation you may see. in it due to inflation or 

2 whatever over long analysi~ periods for the consumer 

3 analysis. You're making some assumptions there about 

4 a manufacturer's prices and where they stay over. time~ 

5 Initially you· may be writing off or marking up certain 

6 costs· and then after· five years when you've 

7 depreciated all the tooling and everything else, riow. 

8 you' re marking up something else if the ~rice is 

9 staying the same. 

io But it just -- I'm not sure it pays to~get 

11 into this too deeply·, I gues_s is what I ,·m saying .. 

12 FACILITATOR BROOKMAN:. 'Yes. 

·13 MR. RIVEST:- It gets complicated fast. 

14 FACILITATOR BROOKMAN: Addi tion·al comments 

15 or questions? 

16 Steve and then Steve. · 

17. Let me just ~emind you, it-seems they 

18 predict that t'he jackhammer will begin again at- noon.· 

19 So, we -- there are a few more pages to go through in· 

~o this and I'd like-for us to press on and conclude this 

21 packet if at all possible. so, we will work until 

22 we're done or until the .jackhammer begins, and then 

23 we'll go to lunch. 

24 Stev~ and then Steve. 

25 MR. NADEL: When I see these ranges·, r. · · 

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1 wonder whether you're going to be applying. any 

2 probabilities to these ranges? Because, it. strikes 

3 me, given the supporting data that some ends of these 

4 ranges are muc~ more likely than others. For example, 

5 on . manufacturing costs, the . · l. O O is ·based on a. 

6 hypothetical scenario and not on an actual data. 

7 Whereas, the two actual data points we have are 1.37 

8 and 1. 42. So, I think the high end ·seems much·more 

9 likel~ than 

10 MR. RIVEST: I'm·sorry,· the 1.37. -- Let's 

11 ~i~tinguish between.what's real and what's not. ~.37 

12 and 1.42 are .real for products ~s they ~xist today 

13 ·given the price. They become· hypothetical when you're 

14 trying to look at a· pric~.· increase. See what.. I'm 

15 saying? 

16 When you look at a. price increase, then 

.17 the ability to be able to pass on those costs, first 

. . 

18 of all, your cost structure changes on account your 

19 fixed to variable to costs change, and· then your 

20 ability to pass on the costs depend on· the gentleman 

21 from the Department of Justice isn't here, but it 

22 depends upon the shape of the deinand curve. And 

23 there's not much known about it. 

24 

25 

MR. NADEL: Yes. I mean, traditionally 

we've always assumed that ·you'll .get the same mark up 

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1· on the incremental costs. To the ext~nt you want to -.,.. ... .~ .. ; 

2 get empirical data, we have these 1994 clothes washer 

3 standards and that data.can be looked at empirically. 

4 MR. RIVEST: There was a $1. 00 increase in 

5 manufacturing costs . 

6 . MR. NADEL:. You can also look at the 1993 

. - . 

7 _refrigerator standard which is a comparable product.-

8 MR. RIVEST: Would I have data just for 

9 refrigerators ~or costs? 

10 MR.· NADEL: There is a wholesaler price 

11 index and retailer price index I · believe ju?t for 

12 r~frigerators. · 

13 Likewise, when we start talking the retail 

14 mark up, the two empirical points you have are the 

15 m?1-rket service at 1. 33 and 1. 35. And even Dan's 

16 comments that even.·those may_be too high, I would tend 

17 to discount this higher end and _probably look ·at · 

18 something more. And lower than 1.3 up to 1.35 because 

19 ·that's your highest relatively recen~ empiiical data;-

20 FACILITATOR BROOKMAN: Steve. 

21. MR. ROSENSTOCK: Steve Rosenstock, EEI. 

22 The other thing there's, also, is that with this model 

23 it's obviously units of one individual product being· 

24 

25 

purchased. The bulk market might be totally 

.. 

different.- The end user.is buying ten or 100, maybe 

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1 they're. even going around the middle man in some 

2 cases. ·That might also -- again it's a separate but 

3 there might be some parallel ·paths here that you might 

4 somehow fit to reflect more of what is also . 

5 happening in the market. 

6 Again, X percent of .the people might be 

7 buying multiple numbers of products. 

·8 MR. RIVEST: Right. Maybe what you're 

9 saying that 1.4 is high for ari average but that the 

10 full range or retail mark ups -~ay in fact be wider, 

11 depending on the distributi9n. But the middle has to 

12 somehow match with the data that's being on aver~ge. 

13 Like the 1.33, 1.35 is, to my understanding·, fairly 

14 good data. But .the'iange of what people really pay 

15 .may be quite wider. 

16 FACILITATOR BROOKMAN: Questions, · 

17. additional comments? 

18 MR. RIVEST: You talked about assessing · 

19 probabilities ·to values and this is not a proposal 

20 here. This i~ an illu~tration how we could deal with 

·21 something like that. 

22 I also warit to make-the point that as you 

23 go up in efficiency, it's probably that they'll -- the 

24 

25 

margins will be· squeezed. So, even if you were to 

make the -- since we could never decide which ·is most 

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1 likely - and we just put · the midpoint as the . most 

2 likely, it's possible that the most likely would shift 

3 along the axes. depending on if you're talking about a 

4 $20.00 increase or a $400.00 increase. The amount of 

5 pass through would depend would be correlated to 

6 the price increase. 

7 ~ow this would be applied, once again, is 

. . 

8 taking samples of the mark up, multiplying. out by 

9 samples of the cbst, and generating a range of retail 

10 prices for any given eff~ciency l_evel. And. using that 

11 as input to the life cycle cost curve that Jim soon 

12 will be talking about. 

13· Do you·w~nt to close it ~p7 

14 . MR. BERRINGER: 'Yes. rn· summary, 

15 consistent with the process rule, the prices will be 

16 described within an uncertainty range. The Department 

17 will use all approaches previously describe to bounq 

18 ~he ~ticertainty. Mark up approach, we'll us~ vario~s. 

19 assumptions about cost pass through and the price 

20 forecast will be reported as probability distribution 

21 and be used as input -into manufacturing impact. and 

22 life cycle cost analysis. 

23 ·Are there any additional questions as far 

24 as t~is is concerned? 

25 Brad? 

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1 MR. FLORA: Brad Flora with Whirlpool. 

·What I miss· in this discussion is the 

• 3 whole issue of price elasticity. And I'm wonderinq 

4 how we're going to deal with that. rt . seems l·ike 

5 we're dealing ~ith price in isolation from shipment 

6 volume here. I guess I don't see any way to address 

7 that here. 

FACILITATOR BROOKMAN: Do you have an idea 

9 about how it might be addressed in this context? 

10 MR. FLORA: I think in some prior 

11 analyses, as I understand from other workshops, that 

12 ·LBL did some work with price elasticity in their· 

13 shipment model. So, I guess I'm only just voicing_ a 

• 14 need, I think, to try and link.what's happen1ng with 

15 price,· or what we're assuming is happening with price, . . . ' . 

16 and what we assume happens with shipments. 

17 FACILITATOR BROOKMAN: We obviously need 

18 to end this fairl~ quickly. -. 

i9 Charlie and then maybe Mike or Bryan can 

20 speak to the elasticity issues if they have anythin.g 

21 to say·. 

22 Yes, Charlie. 

23 MR. STEPHENS: · We've had some discussions. 

24 about this in some other forums. .And I think one of 

25 ·the -- there are two ptaces where this might come into 

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1 play. Right now pr~ce elasticity for the higher 

. . 

2 per~orming or the more efficient products is in play 

3 and you're.seeing whatever-market place effects there 

4 are from price when people are facing the ·more 

5 expensive stuff. 

6 Once you make a product efficiency level 

7 ·the standard, then that's the floor. And it'i no~ so 

8 much a matter of whether consumers are going to pay 

9 .that or not, they either pay it or they don't buy·a 

10 clothes washer. And so, that shows up as a perhaps·a 

11 reduction. in shipment levels which is al'}other variable.· 

12 that gets varied as we look .at the analysis. And 

·13 perhaps there is a correlati'on between shipments and 

14 price increase. And I think that might be the place 

15 to explore that effec"t, perhaps, of elasticity. 

16 MR. RIVEST:· I.don'tknow,.Jim, if you get 

17 into any discus~ions of elasticity values for 

18 forecasting future price, future shipments? 

. 19 MR. McMAHON: No, .we've . not. You're 

20 correct that in previous analyses we've used··price 

21 elasticities in the forecast, both in the basecase and 

22 in the standards case. Maybe· that should be added as 

23 an additional methodology here to the list of-~ethods 

24 that have been proposed. 

25 

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. But I had not planned to talk abo·ut that 

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1 . in the basecase proj.ection today and specifically flag 

2 that as something that is not yet in there . 

3 .FACILITATOR BROOKMAN: Additional 

4 questions, comments, on this segment?. 

5 Have you finished with this slide? 

6. MR. BERRINGER: Yes. 

7 FACILITATOR BROOKMAN: .r think you have. 

8 Additional questions or comments before we 

9 go to lunch? 

10 When we come back from lunch Stay 

11 seated for just a moment. I'll.talk loudly. 

12 You . may leave your bags, papers, 

13 materials, here in this room. ·It· wili be closed up or 

14 someone will be here watchin~ it. 

15 Lunch here in the building is down the 

16 stairs there's a small cafeteria and all the way at. 

17 ·the 0th.er end ·of the ·building and· up the e.scalator 

18 like stairs is -- up two flights of escalator. like 

19 stairs is a cafeteria that you can go to. You can 

20 ·also leave the building and gb up to L'Enfant Plaza 

21 and there 

22 can eat. 

23 

24 

25 you have 

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are some other few hotels nearby where you 

Ed, 

ED: 

to go 

do you have a comment 

Yes, just. to get to 

down. 

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before we go? 

the escalator, 

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1 FACILITATOR BROOKMAN: Yes, you need to go 

2 -down a floor to get to all eating facilities in here 

3 in Forrestal. 

4 It's now 10 after 1:00. Let's start up --

5 that is start, start at 10 after 1:00. It's 10 after 

6 12:00 now. Did I say that right? We will start at 10 

7 after 1:00. 

8 (Whereupon, the hearing was recessed at 

9 12:33 p.m. to reconvene at 1:45 p.m. this same day.) 

-10 

11 

12 

13 

14 

15 

·16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

"" 

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1 A-F-T~E-R-N-0-0-N S-E-S-S-I-0-N 

2 1:14 p.m. 

3 MR. BROOKMAN: would you please· ·start 

4 taking your · seats. -We're ·about to beg.ln. 

5 . Housekeeping items. On~~or two housekeeping items . 

6 For those of you _who have not yet signed in with Sandy 

7 o~er·here at the registration table, please do so.·and 

~ the pre-registrants do not ne~d to leave a business 

9 card. Those of you.that are new that have joined us 

10 for the first time that would like to be included on 

11 the mailing list,· please leave your business. card .. 

12 I_n addi tiol), I see that we have copies of 

13 several of the major documents that were being 

14 discussed this morning and the referenQe points for· 

15 the discussion all throughout the day-today. So those 

16 are over there on the ·registration table should you be. 

17 lacking of them at present. 

1a Are you ready to ~o, Jim? 

19 MR. McMAHON: 'Yes, sir.·. 

20 MR. BROOKMAN: Bryan, would you like to 

21 introduce Jim. 

22 

23 

24 

25 

MR. BERRINGER: Yes. 

MR. BROOKMAN: Let's begin and devil take 

the hind mos~. Let's st~rt. We're: beginriing. If-I 

could have the side bar conversations cease for now. 

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1 Thank you. 

2 MR. BERRINGER: Thanks everybody for 

3 corning back trorn ·lunch. Try and get back on track 

4 here. At this time, I'm going to have LBNL discuss 

5 some simplified models that use part of the process. 

6 We're committed, out of results out of the-Advisory 

7 Committee I to try and get away from the black box type 

8 of models and this is ou~ a€tempt, the Department's 

9 attempt and LBNL's attempt to simplify it and Jim's 

10 got two spreadsheets on ·life cycle costs and .. the 

11 National Energy Savings spreadshe'et and he's also 

12 going to talk about prelimi~ary base case. so with 

13. that, I' 11 turn it over to Jim . 

14 MR. McMAHON: Thank you, Bryan. 

15 You have a handout with a cover page that· 

16 looks like this. "Life cycle cost. Analysis." I'm 

17 going to run through ~bout four transparencies that 

18 correspond to your handou~ and then I·~ill show you 

19 the spreadsheet on the laptop. 

20 First of a~l, just a general slide about 

21 the issue of . black boxes: We've· given a lot of 

22 thought to how to . eliminate the problem of black 

23 boxes, and these are some of the ideas .. We want to 

24 

25 

make the model as simple as possible. I'm sure you 

can find that the· models I show you today could be 

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1 made simpler and you always bump up against being 

2 complete and dealing.with the issues_ you need to 'deal 

3 with at the same time you're trying to make them 

4 simple. But I wo~ld welcome suggestions about how to 

5 simpiify the spreadsheets. 

6 Everything that I show you today in.the 

7 spreadsheets is available electronically. We have 

8 some copies over there on the~desk.· I have all four. 

9 There are three spreadsheets and a chart that are on 

10 there and you're welcome to take copies or contact me 

11 or DOE if you need copies. 

-

12 We want to ~ake the models accessibl~ so 

13 some of them are available right now. We are 

14' con~idering putting some things on the web. We have 

15 not yet done that. The idea there would b~ that you 

16 would be able to access spreadsheets on tne web and 

17 manipulate them, change 'the inputs and see th.e results 

18 v.ri thout actually having . to have your own personal 

19 copy~ That's in exploration: I'd be interested in 

20 feedback about interest in that. 

21 We're trying to make the.models easier to. 

22 .use. You will see 'in the_ life cycle cost spreadsheet 

23 that ·r show you we've put a graphical us~r interface 

· 24 on it and we· will eventually develop detailed 

25 documentation. I will give you a disclaimer. .We have 

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1 not previously been in the business of producing 

2 commercial quality software. I think all of us are 

3 ·spoiled by products by such· small firms as Microsoft. 

4 It takes millio~s of dollars of re~earch and 

5 development to produce t~ose products that are nice 

6 and seamle~s and have on board help and all of that 

:1 stuff, so I'm trying to lower your exp~ctations ~ith 

8 regard to what you see from us. We haven't had the 

9 millions of dollars to put into it yet. If DOE would 

10 like to give us that, that would be nice. But the· 

11 docum~ntation is to 6ome. 

12 And finally, in termi of process, I think 

13 in som~ cas~s it's not. j~~t.a matter of making the 

14 tool simple but actually spending.time with people so 

15 th~y get familiar with it an~ learn how to ~se it. 

16 Public workshops like this are a good way .to get an 

17 ·introduction but there's limited time. We are happy_ 

18 t6 teach people on their own site.or set up a compute~ 

19 link. We have done demonstrations of these 

20 spreadsheets from Berkeley to computers here in the 

21 Department of Energy and· also to LBL'.s Washington 

22 office and if you have the appropriate software, ·you· 

23 ca~ dial us up and look at the stuff also. 

24 

25 

The last thing is a video conference 

·. 

· r·ather than a computer link.·. We' 11 take a look at 

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1 that also. so we're trying to make this as accessible 

2 as possible . 

3 Now, · turning tci · the · life cycle cost 

4 spreadsheet itself, you will see the graphical user 

5 interface, so I'll describe that at that time. There 

6 are menus of alternative assumptions. One of the 

7 areas-that we're moving into is the ability to ~o what 

.8 if ·analyses so, for example, futur~ energy prices, 

9 there is not agreement about what the future energy 

10 prices will be. My personal opinion is no one knows. 

11 So the w.ay that we are handling. that is with a number 

12 of : .. boundary cases and you wilL be able in the 

13 spreadsheet to select the ·en.ergy price projection of 

. 14 your choice or create pne to your own liking . 

15 Baseline efficiency~ That you can select 

16 from a menu. Standard levels you can select from the 

17 menu. In addition, you have direct control of some 

18 inputs. You can specify the ~tart date of a standard. 

19 Just type in the year. You can specify the discount 

.20 rate for the life cycle cost, and there's an override 

21 ·feature which just means you type over the values that 

22 are in there. 

23 For example, appliance p"rices for the more 

24 efficient designs. · There's some .discus.sion about 

25 wheth~r those ~rices can or will go up. 

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1 that we have and·all. of the numbers in the spreadsheet 

2 right now are just place holders. So as th.e analysi~ 

3 pro~eeds and ~he new data comes in, if you: feel that 

4 you have a better assumption than what's· in there, you 

~ can easiiy replace what's.th~re. 

6 The life cycle cost itself includes the 

7 appliance price plus installation costs.. We don't 

8 :have' those in there yet but we intend to. Ope~ating 

9 expenses for clothes wash~rs· include energy, the cost · 

10 of water and disposal of . that wat.er, sewage charges, 

11 maintenance costs and service costs. I· belie·ve the 

12 distinction between those are maintenance. is before it 

13 breaks and service i·s after it breaks. The life time 

14 ot the clothes washer is in there. In fact, we have -

15 a di~tribution of life times and the discount ·rate. 

16 Turn to the energy expenses. For the 

17 clothes washer ·itsel:f, there is· the electricity 

18 consumed by the clothes washer. However, since the 

19 clothes washer is using hot water that is typically 

20 coming from a storage type water heater; one needs to 

21 account for the different fuel .types of water heaters . 

. 22 In.the demonstration that.I will show you today, we 

23 have electri~ity, gas.and fuel oil. 

24 We are aware that there are some instances 

25 of LPG.and other fuels .and, in fact, there are a few 

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1 houses in the country that don't have· storage water 

2 h~aters b~t do have·~lothes-washers and one issue ior 

3 discussion is whet~er ~e need to get to every one of 

4 those instances or if us'ing the three major fuels will 

5 be sufficient. 

6 For clothes dryers, they tend to be 

7 electricity or natural gas or some houses do nbt~have 

8 clothes dryers. 

9 • The.iast page, I'm not going to say a lot 

10 about this today but our intention in the future is· to 

11 do a thorough uncertainty analysis. We would like to 

12 identify the key uncertainties and variabilities. The 

' 13 distinction ·between those two terms is that an- .. 

14 uncertainty is incomplete ·information. An exampl·e · 

15 would be what is the future cost of an efficiency 

16 improvement that has not yet been built? One can 

17 estimate that. You can make your guesses but, in 

18 fabt, ~e don't kn6~. ior-certain what that cost will 

19 be .. 

20 variability is different. Variability has 

21 to do with the diff.erence from one household· to 

22 another. For examp.le, in the pr ice · of _ energy. 

23 Different in . this country . face very different 

24 electricity prices and different gas prices and what 

'25 we would like to do is handle- that as.a distribution 

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1 r~ther than a single national average. 

2 For those things .that are uncertain, we 

3 would like to estimate ranges rather than point values 

4 and the· examples yo~ saw this morning reflect that .. 

5 We would like to also e~press the output as ranges and 

6 an example that was talked about this morning is the 

7 perce):"lt of cons~mers who have lower life cycle costs--. 

8 that is, they benefit. in net from the standard .-..,.. 

9 compare~ to the percent who would have higher life 

10 ·cycle costs -- that is, ~hey would not recover the 

11 increased price of a product· due to price·inc~ease .. 

12 And finally, scenarios such as an energy prices. 

13 I have a laptop here on the podium.· .I-'rn 

14 going to turn to that. 

15 MR. BROOKMAN: Before you do, questions 

16 and comments on those. early slides. None. Okay. 

17 ~hank you. 

18 MR. McMAHON: · There'·s an additional 

19 handout that you have }?ecause I know in the back · 

20 you're not going to be able to read a lot of the small 

21 print. I apologize for that. We did a demonstration 

22 like this a month ·ago at a hotel room where the 

2 3 ·audience was much closer to. the screen and the quality 

24 of the projector was better and it was no problem .. In· 

25 this room, because there's such a distance, it's ·hard 

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1 for you to see. 

2 MR. BROOKMAN: Everybody should have this~ 

3 I think we put t~em at every place .. 

4 MR. McMAHON: The first page says ~Help 

5 screen, Life Cy~le Cost of Clothes Washers - Draft 

6 July 7, 1997." Now, .this is· a help screen but it's 

7 also an input screen and the intenti6n here is to pull 

8 together most of the inputs that you, the user, want 

9 to work with all in one place ·so t~at you can set.up 

10 the calculations~ 

11 The first one is the Energy Price Forecast 

12 and if you'll watch while I ~anipulate this, can you 

13 see the hand moving here? .The Energy Price Forecast 

14 button, if you pre~i it, will come ·up with a menu and 

15 th~ list on there iight now is AEO 97. That's the 

16 mbst recent DOE forecast. GRI ·97, the Gas Resear6h 

17 Institute 1997 forecast. Gas.Research Institute 1996~ · 

18 A constant electricity price at last year~ s prices and 

19 theri we have some that we made up. starting iri year 

20 2000 a decrease of two percent a year in electricity 

21 prices. Starting in the_year 2000 a decrease of four 

22 percent a year. 

23 

24 

25 

And you can go to the page, the tab here 

that says fuel price. I'm going to switch to that. 

I kno~ you· can't read this, most of you in the back, 

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1 but this has the actual numbers that are used -so if . 

2 ·you want to check our calculations by hand or whatever 

3 to see the numbers; th~y're here. Incidentally; last 

4 time I made this presentation I commented that I would 

5 not give. you the GRI" numbers. We've gotten permission 

- 6 from GRI to give these riumbers out, so you will have· 

1 them and it's all right. 

8 Let me go ·back. Okay~ So you can s~lect 

9 your energy price forecast. I'm going to stay ~ith 

10 AEO 97 for now: You can pick yo~r start. year. If you. 

11 click on that button., a little box come~ up and says· 

12 "Enter start' year. " Let's .say, for example, 2003 

13 hypothetically. And this·· one is •ispecify water 

.14' heater and dryer fuel type." . Please stop me if You· 

15 have· questions. I'm ju.st going to go through this 

16 real quick .. We've put· in the six common combinations. 

17· That isJ those that haye electric, gas or oil ~ater 

18 heaters combined with electric or gas dryer?. There. 

19 are other minor combinations that we could talk. about· 

20 if it's worth the effort. · 

21 At the.right hand side of these you can 

22 see the pe.rcents of the population. That's based upon 

23 the 1993 RECS survey, so 35 percent of households h~d 

24 

25 

electric water heaters with electric dryers. .5 

percent had electric w~ter heaters with gas dryers. 

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1 Thirty one percent,. gas water heaters with electric 

2 dryers~ 17 percent gai wit~ gas and so on~ So let's 

3 take electric/electric for the example. 

4 Next one, the design option for the base 

.5 case. The list her~ is the-set of designs that were 

6 ·in the previous engineering analysis. I understand 

7 that in the new method we'~e going to use efficiency" 

8 levels rather than .design options and, in fact, if you 

9 look at the table behind this, you will see·that the 

10 percentage improvement in efficiency is in there and · 

11 we will .substitute that descriptor for the desig.n 

12 option· descriptors once·we ha~e the new data. 

13 But you can se~ect on here·if you believe 

14 ·.· that the ~arket is goin~ to move to the next ~esigri 

15 option on its own, you can .select that design option 

16 as the· base case. so now- I'm going to stay with the 

17 base .line vertical axis. - So the standard level. You 

18 can see the one that'~ highlighted. It's the same 

19 lift. You can pick any one of these a~ the standard 

20 level. We selected ·the horizontal access as the 

21 e~ample. 

22 on the right,, the other numbers that are.-

2 3 there are the components o_f the energy use. The water 

24 heating energy assumes electric water heater is here 

25 but- - in the calculation, if you select a different 

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1 water heater,· it will do it in the other spreadsheet. 

2 The machine energy, the dryer energy and th~ water use 

3 . ~n gallons and the purchase price is at the bottom. 

4 You can change any one of the~e just by going in and· 

5 typing over them, so you c~n completely replace the 

6 engineering data if you have better data. 

7 MR~ GOLDSTEIN~ Q~estion. 

8 MR. McMAHON: Yes. 

9 MR. GOLDSTEIN: Assuming, therefcire, with 

10 the data collection approach that we've taken where 

11 you just get an energy factor that _whatever ratio 

12 there is between dryer savings an·d washer savings at 

13 whatever percentage impro_vement is the same as your 

14 original curve. Is that right? 

15 MR. McMAHON: I'm confused. You seem to 

16 be c6mbining two ele~~nts. I'm not sure what you're 

17. concerned about. The saturations of the fuels? 

18 MR .. GOLDSTEiN: ·r'rn concerned about how 

19 the fuels get used given the data that we have to run 

20 it. The data that ~e have will say energy use is 

21 going to go down by 3 O percent -for certain costs. 

22 Thirty percent is some mixture of water heater and 

23 ·dryer and you're going to 

24 

25 

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MR~ MORRIS: You still h~ve the data. 

MR.· McMAHON: · AHAM is going to provide· the 

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1 breakout, so it wili-not j~st be the MEF. We. will 

2 have the breakout. 

3 At the bottom there's a list called 

4 Assumptions. These are additional numerical values 

5 . that are in there. They I re here so that if you wc:inted 

6 to change them, yo~ could~ I d6n't think any of these 

7 ·are controversial excep~ possibly if· you want to ·do 

8 sensi ti vi ties on the last ·one, the cycles per year, \Ye 

9 want· to put in a distributio.n there. So this· is the 

10 recovery efficiencies of the water heaters. The 

11 values there for electric and· gas are in the· test 

12 procedure. The one for fuel oil is not. The 

13 t~mperature difference_ ·for hot water .is test proced_ure. 

14 value. This is just. a conversion. factor, the· .18 .. 

15 And, as I said, the cycles per year is something that 

16 ·we· want to put actual field data in eventually. 

17 MR. MODTLAND: Dave Modtland fro~. 

18 Frigidaire Company. You identified the six 

19 combinations of water heat~r and dryer ~hoices. 

20 MR. McMAHON: . Yes. 

21 MR. MODTLAND: What percentage does that 

22 account for then? 

23 MR. McMAHON: Of the ones that I Ive shown· 

24 here? 

25 MR. 

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MODTLAND: Yes. 

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1. identified a percentage of each combination. What's 

2 the sum of those six? Yo.u were asking the q~estion. 

3 whether we needed to consider-other combinations~ 

4 MR. McMAHON: Thirty si~, 67, 77,· 84, 87,· 

5 87 or· 88 percent. 

6 MR~ MODTLAND: Okay. Thank you. 

7 MR. McMAHON: And in fact, if you would 

8 like to see the full set, this is the full 

9 -distribution. Dryer fuel here, water heater fuel 

10 here. So the biggest one is electric water h~atei 

. . 

· .11 with electric dryer. . These are all ·the electric. 

12 dryers. These are the piped _gas dryers. This is no 

_ 13 dryer. So we've accounted for the~e nine. We've left·-· 

14 off the LPF is the biggest one that's lett off' and · 

15 there's a few other. 

16 MR. BROOKMAN: Wayne· and then Glenn. 

-

17 MR. -MORRIS: I'm not sure how to phr~se . 

18 this but in the MEF ·we account for the dryer energy 

19 and we account for the no dryer portion in the setting 

20 of the percentage of that MEF. Are we not double 

21 counting that situation then by doing this as a factor 

22 the second time? 

23 MR. McMAHON: We are breaking out the 

24 factors here, and I presume the breakout corresponds. 

25 to the breakout that you will have. That's something 

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1 .we'll have to check ·to make sure we're making the.same 

2 assumptions. I don't think so but you're right that. 

3 ·we should make sure that we are not double counting. 

4 MR. SCHLEEDE: Glenn Schleede. Since AEo· 

5 qata are always one· of the ·prices that DOE likes to 

6 use,. I have a specific question there. When you did 

7 the refrigerator analysis, you assumed .that.electric 

8 prices were really .six percent above what AEO showed· 

9 and you j~stified. that on the. grounds of the 

10 residential electric coniumpfion data which seems to 

11 show th.at number~ In fhe case of water heaters, it 

12 goes the other way and tqat same survey suggests that 

13 the electricity . used for water heaters is at 90 

14 percent of what the average cost o.f electricity is. 

15 Are you going to make that 10 percent. 

16 deduction.? Maybe this question should go to DOE. But. 

17 are you. going to be consistent here and take the 

18 deduction since you used the inflation factor when the. · 

19 prices were perceived to be higher? 

20 MR. McMAHON: We haven't taken a position 

21 on that. I'm happy to do it either way. Is there a 

22 recommendation that we do? 

23 MR. SCHLEEDE: My recommendation would be 

24 that you ignore that RECS.survey and ideally go back 

25 and redo the refrigerator analysi~. 

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1 what's behind.that RECS survey and actually· read the_ 

2 t~chnical details behind it, I think you will be 

3 embarrassed that you ever used the six percent 

4 inflation factor. But I think since you started doing 

5 tha~ with the refrigerators, you've got an obligation 

6 to use the same kind of assumption when you do the 

7 water heater and take the lO·percent discount.· 

8 MR. McMAHON: I'm confused by your answer. 

9 Are you suggesting we do use the 10 percent discount? 

10 MR. SCHLEEDE: I think at this po_int 

11 that's the most honest thing you could do. 

12 MR. McCABE: We'll look into that, Glenn. 

13 MR. BROOKMAN: Additionai questions~ 

14 Charlie. 

15 MR. SAMUELS: I'm pretty impressed by the 

16 flexibility of this approa~h,· and I. command you for 

17 it. I think.it'll be -- in order to· provide _value to 

18 outsider~ such as the manufacturers, it' 11 be 

19 important that we be able to start using the program 

20 and also have some acce~s to its documentation at.the 

21 earliest possible time~ Can you give us some idea 

22 what.the schedule of its availability is going to be? 

23 MR. McMAHON: There are diskett_es · 

24 available here today, so you're welcome to take· a 

25 . copy. I think we had 18 copies. · If we run out, we 

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1 can make more copies available. ·I'm happy to provide 

2 documentation as soon as we wr~te.it. I don't have a 

3 schedule for that, but I think if. you look at the 

4 _spreadsheet, you can give us comments right away and· 

5 we'll respond to questions. 

6 MR. BROOKMAN: Gene ·Foley. Use the mic,_ 

7 please. 

8 . MR. FOLEY: This is on an Excel platform? 

·9 MR~-· McMAHON: That's correct. Other 

10 questions or.comments. 

MR. BROOKMAN: Steve. 

12 MR. ROSENSTOCK: , I think Jim's heard it . 

13 bef.ore. Are. there any plans . to -- well, ca_n this be - . 

14 converted over to other spreadsheet platforms with the 

15 Crystal Ball. I know you. said that Crystal Ball is an. 

16 ·Excel add on, I believe. 

17 MR. McMAHON: Yes. Crystal Ball is -

18 available. as an Exce1. add o_n,. 

19 MR.· ROSENSTOCK: And Lotus as well? 

20 MR. McMAHON: - I'm not certain. We have 

21 not looked- into that. Is that essential? 

22 MR. ·ROSENSTOCK: Well,· I don't know what .. 

23 the pe~centage -6f the ~arket place is but I kriow it 

24 seems like word processing is like 50/50 Word Perfect 

25 and Word, so it might be_ the saine with spreadsheets. 

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1- I don't know. 

2 MR. McMAHON: Can we ask how many people-.· 

3 .are ~sing Lotus or something el~e that is not Excel. 

4 Two Lotus users. If you have both, you can use Excel. 

5 If you only have non-Excel, then we need to be.awar~ 

6 of that. We will look into that. I'll get back to 

7 you. 

8 Shall I proceed? 

9 MR. BROOKMAN: Proceed. 

10 MR. McMAHON: This is the life cycle cost 

11 sheet. It's pretty dense which is why it's easier if 

12 you have it on .your own -laptop. It is the back pag~ 

13 of the fi;rst page, so it's the flip side of page ·one_ . 

14 Those in the ba~k will not be abl~ to see the numbers,' 

15 but you can pick up a diskette and check them out; 

... 

16 The same buttons that were on the first page are. 

17 repeated here and you can change things in. either 

18 place, so starting her~ there's an intervie~ prrce · 

19 button. If you push that, you get the same :menu of 

20 energy.price for~casti, so you can make a sele~tion 

21 here and it will update the entire sheet. 

22 Same thin~ for the.start d~te. You can 

23 select it here. The choice of water heater and dryer.· 

24 is here. The choice of base line unit and standard 

25 unit are here. What you will notice he~e is several 

.··. · . . . .,. - . :. --

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1 additional pieces.of information. so going back to 

2 the top, energy pri.ce, AEO 97 I the start year of 2003 I 

3 the end year of 2016. The end year is determined by 

4 the life time here. So the energy prices are shown. 

5 Eight cents a kilowatt hour fo~ electricity in the 

6 year 2003, 7;5 bents in the ye~~ 2016. So you can see 

7 the assumptions that ·are going in .. 

8 The water prices are on the right. As I 

9 said earlier, all of the numbers in he~e are pla~e 

10 holders. The water price is correct for a couple of 

11 years ago.but we· did not ·put in a forecast. We just 

12 kept the 1995, I believe it is, price constant.for the 

13 future. I don't believe that's correct but I don't 

14 yet have a fotecast. 

15 MR. STEPHENS: Charlie Stephens, Oregon 

16 Energy Office. I've been talking to Al Dietemann 

_17 lately from where tho~e_original numbers came f~om. 

18 I have found out so far that there are no new numbers, 

19 better numbers than that at. this point and ·it takes a. 

2 o lo.t of work to get those numbers. I also have got a 

21 preiiminary esc~lation r~te in water and waste water 

22. treatment costs over a 20 year.period anyway that I'm 

·23 beginning. Who should I send that to? 

24 

25 

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MR. McMAHON: To Bryan. Thank you. 

Okay. so for those of you· in· the back·, I. 

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1 apologize . .t}1at you can't see the numbers. · What is 

•• 2 h~re under the ba~e line unit energy use per·_yeai, 

.1, 296 kilowatt hours. The gas and oil consumption are-

·4 zero because we have chosen a house that doesn't have 

5 gas or oil water heaters or dryers. The water use is 

6 reported. The price of . the clothes washer is 

7 repo_!ted. 

8 Then the annual 6peiating co~ts are 

9 calculated for the first year and last year of th·e 

10 life cycle and_here for the base case and to_the right 

11 for the standards case. The· difference is calculated 

12 so .it reported as a percent change. The pay backs are 

13 on here as wel~ for the' first and la~t year: 

• 14 That brings us down to a cumulative cash: 

15 flow which is just th~ sum over the life. without' any 

16 discounting of what the c.osts are _and then finally at 

· 17 the bottom here where it says discount . rate we get 

18 into.the life cycle cost. You can change the discount 

19 rate here. It's currently six percent. If you·w~re 

20 to make it zero percent, then this would rever~ to the 

21 cumulative cash flow. You can see that has already 

22 been updated on the curves. Change it~back to six 

23 percent. 

24 And.so down here at the bottom is life 

25 

• 

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1 standards case, a difference of $300. The cost of 

• 2 

3 

conserved energy is reported, three cents a kilowatt 

hour. The graphics wbich ar~ I think particula~ly 

4 useful when you' re doing differ~nt scenarios. The top 

5 graph is the life cycle ~ost, cumulative cost at. 

6 whatever discount rate you select. 

7 The blue line-is the base case and the red 

8 line is the standards case, so you start off her~ with 

9 the standard, the standard case· clothes washer having 

10 a ~igher first cost in you~ zero but a lower slope 

11 because the operating ~osts are lower. After a few 

12 years,· it looks. like: after three years, the lines 

13 cross so at that point the standards case becomes less 

• 14 costly than the base case. The bottom curve is the 

15 difference between those two and it crosses over at 

16 about three years. 

17. The reason the cross over point is not the 

18 same as the p~y back period is because this is a cross · 

19 over with discounting; The pay back period ignores 

20 .discounting so that inflates· the cross over.- Are 

21 there: questions on this page? 

22 Okay. So I'm not going to go through all 

23 . of the numerical values behind this. ' You can see at 

24 the bottom of the screen there are tabs here for the 

• 

25 engi'neerfng analysis arid that's in your handout. We 

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1 understand all that data is going to be replaced. The 

2 ·water prices, the fuel prices, the life time and so 

3 forth. If there's any part of this where you have 

4 more current in~ormation·or you would like to comment 

5 on this, please do so.to the Department. That's all 

6 I have to-say about life cycle cost. 

7 MR. BROOKMAN: ·Questions on -this 

8 spreadsheet· or the rest of Jim's presentation to this 

9 point? 

10 MR. ROSENSTOCK: Steve Rosenstock. Just 

11 a quick comment that tomorrow our Energy Cost and· 

12 Economic Analysis Subcommittee to the Industry 

13 Advisory Committee is meeting ai:d we've published some 

14 information if people ·are interested to see kind of 

15 where we're going and where we think the Depart~ent 

16 ·should ·go in that regard. . . . . We sent information to 

17 Brya~ Berringer and others in the department. 

18 MR. . BROOKMAN: You say you did publish 

19 -some? 

20 MR. ROSENSTOCK: Yes. They have· been 

21 published and sent to the department. 

MR. BROOKMAN:, So do you have copies with 

23 you today by- any chance? 

24 MR. ROSENSTOCK·: No. The last round, -the 

25 one we published in June. 

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1 MR. BROOKMAN: The materials that were 

2 presented at the last meeting of the Advisory 

3 Committee which was in June. 

4 MR. ROSENSTOCK: One of them was a 

5 sprea.dsheet and the other ohe was. a report that 

6 Charlie Stephens wrote. 

7 MR. BROOKMAN: Thank you· for that note. 

8 You'fe our next· presenter, as well? 

9 MR. McMAHON: I 'm the next two presenters. 

10 Should I sit down and get back up? 

11 MR. BROOKMAN: Now I'd.like to introduce 

12 Jim McMahon. He's our next presenter. 

13 MR. McMAHON: Thank you~ 

14 You have a handout called Base Case 

15 Shipments. Your. agenda ·says preliminary base case· but 

16 the only part of the b~se c~se that I'm addr~ssing 

17 today is the shipments forecast arid nothing else in -

18 this presentation. I will talk about the-national 

19 base case in the national energy savings spreadsheet. 

20 in my next time ·slot. 

21 So let's talk about shipments for a 

22 moment. There are several possible approaches for 

23 projecting what the shipm~nts of clothes washers will 

... 

24 be in the future. The fir$t is simply to extrapolate 

25 the historical trend and I w_ill show you. an example -of· 

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1 . that taki~g the annual shipment by year and just doing· 

2 a regression against time, a linear regression ifl · .. · 

3 broj~cting that over time~ I'll sho~ you those in a 

4 moment. 

5 Another way to do it is to derive a 

6 dependence on key drivers.· We believe there are two 

7 basic ~arkets~ One is the rep~acement market arid the 

8 ·.other is tiew cioristruction. For the. replacement 

9 market,· the shipme.nt~ will depend upon the life time 

10 of the products. already ·in stock and how many were 

11 sold one life time ago. Th~ new housing constructio~. 

12 will also d~ive shipments and we h~ve to worry about 

13 what fraction of new houses will install clothes· 

14 washers. 

15 A third approach would be to have economic 

16 .mcidels which would include ·elasticities. The 

17 ·elasticities might be· about the appliance prices and 

18 energy ·prices and possibly theoretically water and 

19 . sewage pr ices. Nothin~ today addresses. those 

20 elasticities.· Previous analyses hav·e included 

21 elasticities for the first two, appliance.prices and 

22 energy prices. ·we have not ·assumed any elasticity_to 

23 water prices. I would .be interested in any comments 

24 about that. And if you have any other approaches ·that 

25 you_ *ould like to recommend, I~m ~ute the Department 

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1 would like to hear about them . 

2 . MR. BROOKMAN: I see no other approac~es 

3 being offered .at this time. 

4 MR. McMAHON: The first one was to 

5 extrapolate. the historical trend. What I· did was take 

6· u.s. shipments of washers as·· reported in the AM Fact 

7 Book and we also took trade journals going back 

8 farther so we went back to 1957. We excluded.compact 

9 washers and we also excluded exports from those 

10 figures that you see ·in Appliance Magazine. 

11. . We did four regressions . by taking 

12 different ·segments of time,· so .the first one just took 

13 the last .10 years, 1987 to j~6, then we took 20 years, 

14 30 and 40. The profection to the .future, we went out 

15 to the year 2030. Then in a moment on the iaptop·r 1 ll 

16 show you what that looks like. 

17 The second appr:oach involved using key 

18 drivers where -we segme.nted the sal~s into repla,ceinent, 

.19 new housing construction. I'v~ already mentioned how 

20 .we did that with historical 'shipments and an average 

. 21 iiie. New housing construction u~e4 Bureau of Census 

2 2 housing starts by house type . and the percent of 

23 consumers that are expe6t~d to have clothes washe~s, 

24 

25 

. and I' li show you all those. numbers. We did not 

attempt t~ account for additions~ That is, if there_ 

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1 ar.e existing homes that don't currently own clothes 

• 2 washers and they decide at some point in the fut~re to 

3 add one, we have not forecast that,. nor have we put in 

4 any economic. facitors like price and energy. 

5 This is the historical data. It's annual 

6 shipments where we've taken all compacts and exports·. 

7 from 1957 -to 1996 and you can all take your pens now 

8 and draw in your forecast from 1997 on to 2030 and 

9 we'll ·compare th~m to the methods that we have here. 

10 These are the regressions~ I h9pe you can·see the 

11 - ccilor coding here. There w~s a handout of these as 

12 well. You should have all of this in a handout. where 

13 the front page starts ·with everything on it. It shows 

• 14 the.regressions. and the dependence on key factors, all. 

15 calculated together. 

16 MR. BROOKMAN: It should· be in your 

17 ·packet. 

18 ~R. McMAHON: So if you go to page 2 of 

19 that, you'll see historical shipments, .page .3.is the 

20 graph that is:currently up here. 

21 You can se_e _that you can get some nice· 

22 regressions. The· top.one is using 20 years.of data. 

23 That one is steeper because there was a low point iD·· 

24 here so if yo~ go bac~ prior f~ 1~86, you ·get some: 

. . 

•• 25 lo~er values that slants it u~ f~rthe~. · The 40_year 

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1 r~gressioh is here. That uses all the data. Thirty 

2 yea~ regression is he~e. Fairly similar. 

3 The· 10 ·year regression. The 10 years have 

4 been_ pretty go6d but pretty flat and so the 10 y~~i 

5 regression is a flatter one. so those are the 

6 r.esul ts. We are open to any suggestions about what to 

7 do with those. As an analys"t:, I would recommend using · 

8 the_40 year projection:but if there's str6ng feelings· 

~ ~bo~t something ~lse, I'd be interested in hearin~~ 

10 MR. WUENDERLIN: Bili.Wuenderlin from GE. -

11 ·You use one year regression least square bu~ you.gave 

12 ·_equal weight to each. poin_t .. Is that correct? 

·. 13 MR. McMAHON: That's correct. 

14 MR, WUENDERLIN: I'd 1 ike to recommend 

15 using a time series ID.bdel I ·an. ARIMA model. I don't 

16 know if you're familiar with that. 

-17 MR. . McMAHON : Yes. 

18 MR. WUENDERLIN: That would give more. 

19 weight to the more recent points and it would also 

20 allow to give competence intervals ori the projections.· 

21 I think_ g~ving confidence _intervals on projections 

22 would be valuable as well as just the point estimate~ · 

23 

24 

25 

.MR. McMAHON: Okay. 

MR·. ROSENSTOCK: _ Steve Rosenstock, .Edison · 

Electric Institute. . One· of ~h-e·. lines with the 

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1 triangle says "Projected 1981 to 2030." 

2 MR. McMAHON:· I' 11 · get to that next. 

3 That's the next methodology. 

4 MR. SAMUELS: I don't claim to know how to 

5 do this right, but I do want to say that it concerns 

6 me that forecasts were used that all of a ·sudden 

7 showed shipments going· from around six million to nine . . . 

8 • ' I ~ • • . mi].l1on because unless there's a pretty substantial_ 

basis for thinking that was rea~onabl~; you're going 

10 to erid up with esti~ates of the energy savings that'll 

11 be dandied about both for these regulatory and greater· 

12 political purposes that will be. potentially g~ossly an 

13 exaggeration of the reality . 

14 I don't know how· to deal with it.but I 

15·. mean obviously in the '50s and the '60s the ~~rket 

16 perietration of this product ~as ~eiativeiy low. It 1 s 

17 now gotten an awful· lot higher; I assume it. ·can It 

18 exceed 100 percent and probably somewhat less .than 

19 that, particularly with multi-family dwellings like 

20 apartments and that kind of thing. So one would think 

21 that the flattening you're showing in the last 10 .· 

. . 

2 2 years· or so WO\jld be pretty much what the stOry is and .. 

23 I. guess that's what one of .tho.se lines·, the reg·ress 10 

24 years 

-25 .. 

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1 10 years·. 

2 MR. SAMUELS: But I guess I al though I know 

3 the 2030 date has been used by: DOE iri previous rule 

4 makings, it would be worth reviewing just so we can· 

5 all iemember so we're just not ~oing it because we've 

6 done ·it before .. Why it is we're using 2030~ From the 

.7 industry's p~int of view, the.reality is we hav~ no 

8 idea what the shipment is going to be lik~ in 2030 and 

9 we ~oubt that anyone else does, so tell me wh~ it is 

10 really important that.we have these forecasts to ·2030 

11 versus some shorter date. 

12 MR.- McCABE: The 2030 date came when we 

13 were iooking at a whole range of products and .we were 

14 looking for a p~riod tha~ worild include.the average 

15 life time of the product that had the longest life. 

16 MR. McMAHON: One complete turnover of the 

17- stock after the standards go.into.place~ So in this 

18 case, you want·to replace all the clothes washers in 

19 the country once. 

20 .MR. SAMUELS: So you're saying if, for 

21 example, there was no further change in the standard 

22 in the future and you put the standard in.effect, this 

23 would show what the energy. savings are through a 

24 complete turnov~r. 

25 

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1 MR. SAMUELS: Well, as I say, I think this 

2 is a difficult problem. r·am concerned about the use 

3 of· these proj~ctioni, both inside and outside of the 

4 rule making, to grossly _e~aggerate the energy savings .. 

5 and·the value of. the rule making which I think should 

6 be able to starid on its own feet.and I just think we· 

7 need. to be reasonable and ~onservative about it and 

.8 hopefully there' 11 be some additional thinking .that 

9 other people can provide- on ·what's the best way to···., 

10· approach this. 

. . 

11 MR. McMAHON: I think your suggestion that 

12 we.worry about the saturation is a good one. I don't 

13 believe the~e'll be more than 6ne clot&es washe~ per 

14 house and, as you . indi~ate,. for some · house types 

15 probably less than that. .In the next method that I 

16 show you we can check that.· I have those numbers. 

17 M~ .. SAMUELS:· .·And for those of you ~hat 

18 studied the Dave Barry column closely, you 1 11·realize 

19 there's the ~otential of combining product functions. 

20 MR. .BROqKMAN: Would you like, for the 

21 record, to explain that a little in more detail? 

22 

23 

24 column .. 

25 

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MR. SAMUELS: No. 

MR .. ROSENSTOCK: The Sunday, Juli 20th 

MR. BROOKMAN: ·I ,·m sure you' il make ·copies 

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1 ~f that available. Wayn~. 

2 

3 

MR. MORRIS: This is Wayne Morris with AM~ 

r -would· strongly support what Bill Wuenderlin sa.id. 

4 r really beli~ve that time seri~s modeling a~d tha~ 

5 type of thing, 9i v;i.ng a little more weight to the 

6 closer in data which will ._show the flattening trend of. 

7 the replacement ·market which i~·, I . think, what ch_uck 

8 was getting at as well as.to lead us to the economics 

·9 that y.re're dealing with in this time period as opposed 

10 to the economic growthi_ in. the '50s and i6os. 

11 The projections, even by Mr. Greenspan, 

12 are certainly nic~ to hear yesterday but I doubt he 

13 ·would go out .to 2 03 O in his pr_oj ections ·of ·what the 

14 ~conomy of the United states is going to do either. 

15 So ·r think that we. need to err on the very 

. l6 conservative side here and make sure that we give high 

17 w~ight.to the most·rec~nt data and 16ok at a 10 year 

18 type of regression based on time· series modeling~ 

19 With the confidence factors, I agree. I 

20 think Bill is . right. Looking at the confidence. 

21 fact~:n~·s will give us a lot better information which to 

22 de.al y.iith, but I think we.'re on the right track in 

2 3 te·rms of being able t6 model this thing and I 

24 appre6iate the work th~t yoμ'~~ ~one going back __ and -

25 looki~g ~t the historical:t~~nds. ·r just think that: 

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1 we need to be real careful about that. Thank you. 

2 MR. BROOKMAN: Charlie. 

3 MR. S'f'EPHENS: Jim, a que~tion. poes your 

4 modeling t·reat each net new household in the country 

5 over . the 3 0 year pe.r iod due to economic growth or 

6 physical growth equally as a potential clothes washer 

7 owning household?· 

8 MR. McMAHON: This method is totally blind 

9 to new house construction. ·This· is simply regression. 

·10 .Maybe I sh.ould go to the next method which is 

11 dependent upon new housing construction and. then · 

12 answer your question .. 

. 13 MR. STEPHENS: Yes. Somewhat. I may have 

14 to restate some more. 

15 . . MR. McMAHON: -Sure. This is a slightly 

16 . more complex calculation~ · we segmented the shipments 

17 into two parts: replacement shipments and new· 

·18 construction. And the three lines that are shown on 

19 _here in addition t6 the historic~! one, the first one20 is new units, that is new clothes washers added to new 

21 ··houses. What was done here was we took the historical 

22 data for housing starts shown up through 1996 from.the 

23 Bureau of Census. This is the sum 6f all the house 

24 types, but we do ha~e the breakdo~n of singie iamily; 

25 . multi family and mobile homes. And we took saturation 

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1 data from the RE~S survey and applied that ·with a 

2 trend over time in order to estimate what percerit of 

3 new households would purchase clothes washers. Let me· 

4 come back to the numerical stuff in a momertt: 

5 In the futtire we took:a p~ojection of new 

6 housing construction. · This is from the Annual Energy 

7 outlook 1997. And we again applied. those saturations-, 

8 the~ expected ownership rates of each of the house 

9 types and calculated a number . which came out· 

10 reasonably consistent with what has ~appened.in the 

11 past. For the replacement market, we are· ·taking a 

12· distrib~tion of life tlmes ranging fro~ approximately 

13 11 to 17 years, and I can show you th~t distributi~n, 

14 an average of about 14 and the historical shipment. 

15 S.o, · for. example, if you take the 1997 

16 number for replacement ~ales,. it's calculated by going 

17 back to the period 11 to 17. year·s earlier,· 1980- to·' 

1B 19~6, lookirig at thos~ shipments and.calculat~ng the 

19 probability that those clothes washers will pe 

20 replaced in 1997. And· then those numbers are 

21 calculated for each. year. So these wave~ follow 

22 historical waves. So if. you look back 14 years 

23. ·earlier, you see there was a wave of sal~s 

24 historically and the replacements followed that and 

25 then again .later on·. . So ·you see these replacemen.t.:. -· 

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1 waves ·coming through that better capture historical: 

2 chahges in p~r~hase behaviors; 

3 If.we add these two together, we get this 

4 top line. We did this study in 1981 just to see how 

5 it would compare ~o the historical record arid it -

6 compares quite well. And t~en we just continued on 

7 into the future. - There is no economic consideration 

8 here so income, appliance price and energy pr!ce are 

9 not considered. 

10 MR. FLORA: This is Brad _Flora from 

11 W~irlpool. Let me just·ask a question, Jim. Is the 

12 saturation percentage for· washers approximately the -

13 -same in 1980?-

14 MR. McMAHON: No. 

15 MR. FLORA: Because there's a change in 

16 saturation over this tim_e frame that we're missing 

17 somewhere then this analysis~ . I think- that's_. the 

18 pdint Chuck made. 

19 MR. -McMAHON: You're not_ going to be able 

20 to read this, but this is the saturation in stock. 

21 I have it by house type. We had 86 percent of single 

22 family houses in 1980 have clothes washers. In.1993_ 

23 it's 9 3 percent. For multi-family, 28 percent -i~ 

24 1980, 30.6 percent in 1993. For mobile homes, 65 

25 percent_up to almost 84 percent. So they have changed· 

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1 over time and that's accounted for. 

2 MR. FLORA:· So could you go over. how 

3 that's accounted for then in this model, Jim, because 

4 I don't quiie understand.it. 

5 MR. SAMUELS: In the future? 

6 MR. FLORA: Yes, in the future. ·when we 

7 make the projection lnfo the future, it seems to me if· 

8 we're already. at a very high. saturation point, 

9 assuming we're going ·to break 100 percent and keep 

10 going. 

11 PARTICIPANT: Each of us will have·two 

12 washers~ 

13 MR. FLORA: Yes . That's what we're 

14 seeing, I think, out into th~ future with the ~ery 

15 . large--

MR. McMAHON : What we did was top the 

17 saturations in new constructioh at 100 percent. So 

18 the saturations of new construction have _been 

19 increasing over time. I'~ looking here in li99 it was 

20 96.7 perce~t of new sirigle family homes had clothe~ 

21 washers. ·That's up from 94.7 perc~nt in 1980. 

22 continued that up until it .reached 100 percent. Now 

23 I think it would ·be useful to h~ve a discussion about 

24 what that maximum value really ought t6 be, whether 

25 .. 

we're· really get 100 percent_ of households or not. We 

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1 can put that in as a cap~ 

2 MR. FLORA: When I look at your chart, I 

3 don't have any trouble believin9 this. It's this one 

.. 4. that I'm concerned with. 

5 MR. . McMAHON: I. can't tell what you're 

6 pointing at. 

7 MR. FLORA: I'm sorry. I don't have any:. 

a trouble with the new housing .. We're going to have a.· 

9 constant saturation level. I_t' s your green line that 

10 I'm concerned with bec~use·it seems td me that the. 

11 part between 1980 ~nd 1985 also includes increases in 

12. ·saturation and then we' re projecting that out into· the· 

13 future which -- I mean ..:.-. 

14 MR. McMAHON: The.future projection gets_ 

15 up· to·· a total of 84 percent of households having 

16 clothes washers in the year ~030. So no, we don't get. 

17 over 100 percent. We do continue the trend up to-the· 

18 100 ·percent for some house types. 

19 MR. SAMUELS: - Okay. Jim, . then help me 

20 out. You said th~t you didn't take into account an~ 

21 kind of consideration of the effect on the replacement 

22 grade of either prices on the one hand or energy 

21 savin~s on the other hand. 

24 MR. McMAHON: c·orrect. That's right. 

.25 · MR. . SAMUELS : So · then what is . <fri"ving 

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1 this? If you're not .changing signific~ntly· the 

2 saturation rate and you've got here this bottom-c~art 

3 that shows the new units pretty flat, what's going on 

.4 here?· How are we going fr~m six to nine million? 

5 MR. McMAHON: What's driving it is there 

6 is an increase in saturation from current levels out 

7 to 2030. It's going up from whateve~ numbers I just 

8 said., 76 percent now to 85 percent 30 years ·from now. 

MR. SAM°UELS: O_kay. And that's based on. 

10 some change from multi family to single family or the 

11 mul.ti family dwellings are getting their own units? 

·12 I mean what's going on in.there? 

13 MR. McCABE: ·Let. me ask, Jim .. The base·· 

is increasing:every year beca~~e new construction in 

15 .the next year becomes part of the base that's going to 

16 be replaced. But new construction has a higher 

17 saturation 

18 MR. McMAHON: Correct. 

19 MR. McCABE: -~ than the market that year~ 

20 So · as time goes on with the. effect of· the new 

21 construction, you' re going to have a higher saturation 

22 of· laundry products in the future. 

23 -MR. McMAHON: That's exactly right~ 

24 You.'re moving from a situation where three-quarters-of 

25 hom~s today have clothes ~ashers,· riut almo~t ill the 

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1 new homes~ more than 90 percent, have clothes washers. 

2 So as you bring in the ·new homes, you're moving from 

3 a 75 percent saturation to a 9ci percent saturation: 

4 MR. SAMUELS: But you're saying over the 

5 next 30 years you're going to ba~ically have the·same 

6 increase in the market that.' s · occurred . over the 

7 previous 30 yea~s. It looks to me like it's roughli 

8 what you're showing there. ·I don't know. It just 

9 strikes me th.at given the change in the saturation 

10 rate that either that's unreaiistic or there's .so~e 

, 

ll dynamic going on here that I don't understand like· all 

12 . of a ·sudden apartment. buildings, you're assuming 

13 people will start getting their own units rather than 

14 central laundry or something like that. What am I 

15 missing? 

16 MR. McMAHON: No. Michael's explanation 

17 is to the point which, is new· names have a much higher 

18 saturation than existing homes. Over time, as new 

19 homes come in, your P.ercentage of stock that have 

20 clothes washers changes so that it becomes closer to 

21 what's happening in new homes. So you move from 

22 existing homes now having 75 percent. As those homes 

2.3 are replaced with new homes that all have clothes 

24 

25 

w~shers, you move towards a much higher saturation. 

MR. SAMUELS:·. Because they repla.ce their' 

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1 clothes washers. 

2 MR. PETERSEN: Presumably 14 years out· 

3 they'll replace their blothes washer. 

4 MR. BROOKMAN: This gentleman in the back 

5 has been patient. 

6 . MR. WUENDERLIN: ·Bill.Wuenderlin from G.E. 

7 There's a lot of details here that I don't know if 

8 we're going to be able to get all the d~tails. We've 

9 raised a lot ot gobd things, good questions. Is.it 

io possible to. get the details, the ·data, t.he 

11 assumptions, the calculations? . 

12 MR. McMAHON: Take a diskette. It's all 

13 there·. ~he entire calculation is on the diskette. 

14· This is Shi~Calc 2.· 

15 MR. BROOKMAN: Charlie was first and then 

16 Steve. 

17 MR. STEPHENS: Just one comment. I think 

18 what most people I guess don't -- I mean I do.this a 

19 lot for our own region a~yway and what's really going 

20 · on here is physical growth. That .is the phenomenori · 

21 tha~'s driving this whole thing. I think.you'll find 

22 that yes, there's.an increase in saturation there that· 

23 s~ems kind of small. You look at the percentages each 

24 year and it only creeps up~ but physical growth, it · 

. 25 . you look at physi_cal growth in the next 30 years and 

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1 physical growth in the last 30 years and the number of 

2 households, · pick any one type, you' 11 find they .. 

3 probably are trackin~ pretty close to the same and 

4 that can explain most of what you see there in those 

5 numbers. 

6 PARTICIPANT: It's a shame but it's .true. 

7 MR. SAMUEI,.S: Well,· I don't know if 1t'.s 

8 a shame at all. I mean actually. we're going to be 

9 .shipping nine million of these at some point, that 

10 would be great. And I do want· to ~ay. that I 

11 appreciate. that it appears that f6r the first time, · 

12 and I really give LBL credit for this, -we will be able 

13 to, through the diskette and the data. contained in 

14 t~~re, take a ·look at it for ·ourselves and possibly 

15 comment on it. But it is difficult to accept on its 

16 face and I think it's going to take some more study. 

17 MR. BROOKMAN: Steve. 

18 MR. ROSENSTOCK: Just a quick one~: just 

19 .looking.at the shipment calculations. Multi family, 

20 I am kind· of curious how -- Y.ou know, there are 

21 percentages here but again, with multi family it's a. 

22 matter of is· that two uni~s per floor or is that 

23 percentage per apartmerits or that, to me, ·seems that 

24 it might be the most interesting part of the 

25 calculation because if . it''s saturation new for. multi 

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1 family going frqm about 38 perqent in 1980 to about 77 

2 percent in mid 1990. 

3 MR. McMAHON: Yes. Act~ally, we have a 

4. questi.on. We've been trying tci .talk to EIA about the 

5 1993 RECS survey. The saturation in multi .family was 

6 about 38 percent in i980. It was about 42 percent in 

7 1987 and then suddeniy it was 73 percent in 1990 and 

a a reported 75 percent iri 1~~3.· so we.have a 4uestion 

9 ~bout ~hether that big:jump up actually occurred or 

10 whe~her .there was· some·probiem with the data there. 

11 I agree with you that's worth double.checkirig. 

12 MR. ROSENSTOCK: Again, just ·from a 

13 numeric~l perspective, ·thcit just .seems like a really 

14· huge jump. 

15 MR. McMAHON: Yes. We .have checked in 

16 terms of confirming that this is what the RECS survey 

17 does say. 

18 MR. ROSENSTOCK: But you look back, you 

19 . know. It says saturation ·new and .then saturation" 

20 stock. it doesn't seem to have any sort of impact. 

21 Maybe it's just because of the numbers over at the 

22 housing starts. It's just something to conside~, I 

2 3 gue'ss I especially._ I think the number of. units per 

24 multi family. How many clothes washer~ are in those 

. 25 buildings is obviously going to have a big impact 

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1 here. 

• 2 

3 

MR. BROOKMAN: Charlie . 

MR. STEPHENS: Just-on~ ~uick question; 

4 Does the definition of multi family stay the same over 

5 that period? 0hatis included 'in that. 

6 MR. McMAHON: Yes. 

7 MR. STEPHENS: 'And you can account for the 

8 increase in t_he number of. towntiomes and things being 

9. built and that sort of thing as multi family .. 

10 MR. McMAHON: We'll check that again but, 

11 I believe-that has been consistent. 

12 MR. STEPHENS: Okay. 

13 MR. BROOKMAN: Wayne. 

• 14 MR. MbRRIS: Wayne Morris. Just a quick 

15" - - question for you, Jim. The-shipment calculations and 

16 projections that are on this sec_ond chart that you17 showed us, are these -in fact based on the projection_ 

·18 that you showed us in the first chart? 

MR. McMAHON: Are you asking about. the 

20 regression? 

MR. MORRIS: Yes. 

22 MR. McMAHON: Yes~ 

23 . MR. MORRIS: The answer is yes? 

24 MR. McMAHON: The first c.hart ·being the 

• 

25 historical shipments? 

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1 MR. MORRIS: The one that you've got up 

2 there on the screen now. 

3 MR. McMAHON: No. ·This stands alone. 

4 This is just from historical shipments. The other one 

5 that we're calling projections from 1981 t'orward used 

6 the historical shipments to ~et the replacements but· 

7 they ·separately calcul_ate new construction a·nd add 

8 that in. 

9 MR. BROOKMAN: s_ay that again. 

10 MR. McMAHON: The projected from 1981 

. -

11 forward uses historical.shipments to get replacements. -

12 It's not a regression ... It-looks at the life time, how 

13 many units were soid 10 .ye~rs ago, and the prob~bility 

14 that they will need to be repla~ed this year. so· it 

15 uses the shipments· information in a different way, the 

16 historical shipments information. -

17 MR.: MORRIS: Okay; Then is that· based on 

18 a regr~ssion by· the 20, 4b, 30 or 10 year --

19 MR. McMAHON: No, it is not. It is. 

20 totally independent of that. So if you have the first 

21 page on th~ hand out which has all of these co~~ined, 

22 ·I turned the historical data into filled squar.es not 

23 connected . by a line and ·then the lines are the 

24 

25 

projections. The four regression lines are to the 

right and I've made _the ·40 year projection· 

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1 particularly dark and our projection, based upon the 

2 replacement plus new construction, is that other 

3 wiggly line and they fall upon top of each other 

4 reasonably well. They' re independent methods. I 

5 didn't .make that happen. That's the way it came out. 

6 MR. BROOKMAN: Addi tiorial questions ori 

7 this group of slides? 

8 MR. JONES: One thi~g. I want to be sure· 

9 because the -- doesn't indicate -- we unders.tand that. 

10 But that's because· really this is not . very 

11 comprehensible. Once people go through the software 

12 package, they'll have a ·1ot more. Now is the 

1j expectation ~~at we will have done that and submitt~d 

14 these commehts in thi5 30 day time frame? Is .that 

15 wh~t you, re exp~cting? That· the comment on that 

16 program is subject to the same 30 day period, comment 

17 period or ·is that handled ~if ferently? 

18 MR. BERRINGER: Bryan Berringer. In the 

19 analysis, ,it's ·not needed within the 30 days so you'll 

20 probably have more time to do that now. Is there any 

21 specific time 1rame that you're looking for comments, 

22 Jim? 

24 

25 

MR. McMAHON: At the time that we.do the 

preliminary base . case, we'll need to have a · 

methodology so your. comments need to be 

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1 MR. JONES: When .is that? 

• - 3 

2 MR. McMAHON: I don't have the calendar 

here with me. Bryan, what is the start of the 

4 national savings calculation? 

5 MR. BERRINGER: Currently October of '97. 

6 MR. BROOKMAN: What day? 

7 MR. BERRINGER:. ·Let's. see. Is that week 

8 10? 

9 MR. BROOKMAN: So that Jim and others have 

10 time to rec~ive and incorporate those comments, it 

11 would have to fall prior_ to that October date, I 

12 presume. End of the summer. Perhaps September 1st, 

13 . in that range. Right, can we say as a ball park? 

•• 14 MR. BERRINGER: Yes. 

15 MR. BROOKMAN: Or should we. establish a 

16 date certain at this point? But·earlier comments are 

.17 ·well taken and that's why the diskettes are available 

18 and I'm. sure the Departm.ent would be happy to receive · 

19 those comments. 

20 MR. MODTLAND: Dave Modtland frpm 

21 Frigidaire. On your saturation spreadsheet there 

22 you've got SF, MF and MB. 

23 MR. McMAHON: Yes. Single family., ·mult;i.. 

24 family,. mobile home. 

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25 MR. MODTLAND: . Mobile home. Okay. Thank 

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1 you. 

2 MR. McMAHON: I agree that this is not 

3 cle_arly documented. Please call me with questions_ or 

4 iend me e-mail~ I'd be happ1 ~o answer and we will. 

5 produce additional documentation as soon as we can._ 

6 MR. ROSENSTOCK: One quick comment. - I 

7 don't know if you've talked ·to AOBA~_ AOBA I thirik is 

8 Apartment and Off ice Building Association. They might 

9 have some information you might be able to use just_ as 

10 _a data source. 

11 MR. - McMAHON: Okay. Thank you. Steve, 

12 could _you give me contac~ information for that? 

13" MR. ROSENSTOCK: "They're probably on.the 

14 web. I'll see what I have. 

15 MR. BROOKMAN: Addi tiona1 · questions or 

16 comments on this portion. 

17 MR. McMAHON : National Energy Savings 

18 Spreadsheet. I've been struggling for years to come 

19 up w~th an acronym that's as.good as GRIM and I think 

20 I've still failed but :there!s a subtle joke here which 

21 is we have LCC which is pronounced lock. 

22 MR. - JONES: I think this one is_ quite 

23 appropriate. NESS. 

24 MR. .McMAHON: We have Loch Nes$. You 

25 know; at one time we recommended for the residential 

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1 model we use EPRI' s reach REEPS model and then we 

2 would have had GRIM REEPS, but the Department didn't 

3 take us up on that recommendation~ 

4 Okay. so let's turn to the National 

5 Energy Savings Spreadsheet. · So we are moving from the· 

6. life cycle cost which deals with one clothes washer at 

7 a time to the.nati6nal impacts of a standard. Again, 

8 .we're ·going to presen~ a graphical user interface. 

9 This-bne is not very developed yet. It's not as good 

· 10 as the life cycle cost, but if:you like the life cycle· 

11 cost features, we will start incorporating them into 

. 12 this one. There will. be menus of alternative 

13 assumptions such as futu~e energy prices, the base 

14 case efficiehcy projection, for example, to account 

15 for non-regulatory approacl1es, and the base. case 

16 shipments _projection .which is what we ·were just 

17 talking about. It may turn ou~ that there is not 

18 agreement about what the future shipments are and we 

19 . want to analyze some boundar_y cases. That's fine. --. 

. . . 

20 Again, we have user control of inputs. 

21 You can specify the.standard level and the start date 

22 and, as the Department indicated this morning, there's 

23 ··an i.ntention to be· able ~o trade off those two against 

24 · eabh other and see what the impacts are. 

25 

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1 average energy consumption per clothes washer and tnat 

2 is broken ·out ·into the motor· energy, the electric 

3 energy and the water heater, the gas and the.water 

'1 heater and so forth; the average water consumption p~r 

. 5. clothes washer . we ~o have the economic factors irt 

. -

6 here so the average price,. the shipments data is an· 

7 input so that c·an be developed separately- and ·then 

8 just plugged into this spreadsheet and, in fact, we 

9. could link t.he spreadsheet so this was all automatic 

10 if we ~et to that point. That would facilitate quick 

11 turn around of analyses. Energy prices are an input, 

12 w~ter and sewage costs. 

13 In addition, you can specify the start and 

14 end year of the forecast, the product life time wh1ch 

15 is currently a probability distribution, and the 

16 discount rate for the net present value. 

17 - What dbes the spr~adsheet do? It 

18 calculates annual values for national· energy arid water 

19 consumption, the .dollars associated· with those 

20 consumptions and the national consumer expenditures to 

21 .pμrchase clothes_washers. In ad~ition, it ca~culates 

22 cumulative impacts over the time period . so total 

23 shipments over the 30 year p_eriod, for example, the 

24 total· national energy and water consumption in 10 year. 

. 25 increments . 

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1 looked at energy savings to the year 2010, to the year. 

2 ·2020 and to the year 2030,· so we've maintained that 

3 and then the net present value over the full time 

4 period. 

5 It is our intention here also -- yes, 

6 David, question? 

7 MR. GOLDSTEIN: Would it be possible for 

8 you to add the emissidns d~ta in that? 

9 MR. McMAHON: It is· possible, yes, if 

10 someone provides conversion rates from electricity to· 

11 carbon · nitrogen, sulphur· oxides or whatever. 

12 Certainly." That's a separate.spreadsheet. 

13 MR. BROOKMAN: · Steve and then Gene at the 

14 mic. 

15 MR.. FOLEY : -.-·. 

16 MR. BROOKMAN: The comment was that data 

17 is available on the EPA Green Lights web page. It's· 

·1s available ·there. 

. . 

19 Steve Rosenstock. 

2 0 "MR. _ROSENSTOCK: Steve Rosenstock, - EEI. -

21 Again, this comes down to, like I said, the previous -

22 one. . To talk about some emissions while ignoring_ 

23 others is just not telling the.whole story. I mean to 

24 tal~-~bout po~er plants but i~nore there'.s emissions 

25 on site, depending on the fuel source, I mean._ there's··. 

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1 going to be both and.I wou~d.say it's going to add 

2 another layer if you want to do everything. Do both, 

3 whatever, and also the fact that in a restructured 

4 . env~ronment, if people . are . able to choose their 

5 generation source, that's going to make an even more 

6 interest.ing model. Put it that way. · But I would say 

7 if ~ou're going to do ~hat, do both. · Not just one 

8 side. 

9 MR .. BROOKMAN: Modeler's delight. 

10 MR. ROSENSTOCK: Oh, absolutely,. 

11 ·Especially in ·California - after January 1st. It's 

12 going.· to be really ·exciting. if people can change 

13 suppliers on a daily or h.ourly basis . 

14 MR. MORRIS: That's for people who do 

15 - .·chaos theory. 

16 MR.·McMAHON: I .thought we were keeping 

17 thl:ngs simple. You've got_ 1;-_ci keep adding things.· I'm 

18 trying tb make them simpl~. 

19 Uncertainty .variability can be treated. 

20 This is another Excel spreadsheet. You can· use. 

21 Crystal Ball. You can assign distributions in place 

22 of average values· foi everything on here. For those 

2j of you who are not involved in the.ballast process, 

24 for fluoresc'ent lamp balla~t we di_d "a full uncertainty. 

25 analysis _where, for -example; we put .in a distribution 

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1 of .ele.ctricity prices that corresponded to the· prices 

2 utility by utility. across the country .. If that data 

3 is available -- and I know Steve Rosenstock has done 

4 a lot of work on utility° residential pricing -- we can 

5 plug that in here instead.of·having a single national 

6 average value. we would- then· do random ~amples wit.hin 

7 ·each di~tribution, get.s~mmary statistics and be able. 

8 to do scenario analyses. 

9 I'm going to turn back· to the laptop one 

io last time. 

11 MR. JONES: ·Jim·,· what is the delivery date 

12 · 6f .this product? 

13 MR. McMAHON:· The· delivery date of this 

14 spreadsheet? 

15 MR. JONES: Yes. 

16 MR. McMAHON: We need to have at the date 

17 that we·just talked abo~t, the beginninq ~f Oc~pber · 

18 for these to be ready to run; 

19 MR.· BROOKMAN: Yqu mean whether itf-s 

20 available now to be used, ·Earl? 

21 MR. JONES: Ri~~t. 

22 ·MR. McMAHON: Oh, it~s on the disk. It's 

2 3 here today. Everything that I· have shown you in terms 

24 ·of- spreadsheets are all on. one diskette. There are 18 .·· 

25 copies, that is 18 physical diskettes. · I don't ·know 

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1 if they have been distributed yet. Ever~thing that I 

2 have shown you, all of.th~ spreadsheets are available 

3 today. 

4 MR. SAMUELS: · It sounds, Jim, like we're 

5 going to need som~ more. 

6 MR. McMAHON: That's fine. 

7 You have one more hand out which is really 

·8 small print. It says "Shipments. and Electricity 

9 Consumption of New· clothes Washers Base Case" at the 

10 top. I'm concerned becau~e I just opened the sheet 

11 that's on the diskette and ·there appears_ to be 

12 something wrong with it. I'm going to go to a backup 

13 copy. So Earl, I may ha~e·to take.that back arid get . 

14 you a revision. 

15 MS. LAUGHLIN: Jim, did you say we have to 

16 redo- them all? 

17 ·MR. McMAHON: · What' s on there as MES· 

. -

18 undersc6re CWl appears to have a problem but let m~ . 

19 look at that later. Let's continue with· the 

20 present~tion~ This is a backup copy. I'll tell you 

21 what happened since I'm in .the embarrassing situation 

· 22 of having a flawed copy. When I was leaving my office 

23 yesterday morning on the way to the airport, I noticed 

24 that when you made some.of the input changes on here, 

25 the calculations qid not automqtic.ally refresh so they 

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1 didn't carry all the way through~ You had to hit the 

2 recalc button. so that may be all you have ~6 do on 

3. the copy that you have. I called my programmer who 

.4 . :~aid, Oh, tha~'~ no p~oblem~ Type ·in thi~ lirte of 

5 code a_nd it'll be fine. So I said,· Okay. I ran .for 

6 the plane. When I got to the hotel last night a~_ l: 00 

7 ·in the morning, I typed in-~ :line of code and there 

8 was a. bug. So it comes from making last .minute 

9 changes~ 

10 Thi~ is the results. I'm going to start 

11 with the results here to change the pattern of 

12 presentation a little bit. So what we.have here is 

1j the.National Energy Savings. There is a table-that 

14 says Energy Savings in Quads, Total Energy, 

15 Electricity, Gas -and Oil and then Water . Savings. 

16 Because this is my back~p copy, this. has not been 

17 .corrected. This .should be mil~ions of gallons. So we 

18 have here an analys·is already done of a standard level· -

19 

20 

21 

22 

23 

24 

25 . 

. -and it shows.the energy savings from the start year 

which appears to be year· 2000, not a realistic year_ 

but it's just example. .. 

an 

MR. FOLEY: Are these sheets on the 

handouts? 

MR.· McMAHON: These sheets are not on the 

handouts. 

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1 of numbers --

2 MR. BROOKMAN: It l<;>oks 1 ike this .. 

3 MR. McMAHON: -- tha·t are in here but does · 

4 not have this graphi<::al piece. So the idea is -- just 

5 focus not on the numerical content but rather on the 

6 structure of this thing for a moment: The i~ea.here 

7 is to have the energy sa"'.'ings 'in quads by fuel· type in. 

8 different time periods; the w~te~ savings in. those 

9 same time periods, and then on the left a net present 

10 value.·.. So this is discounted at seven percent to 

11 1995 .. We're looki~g at the time_ frame from the year 

12 ·_2000 to 2030 which shows a total fuel· savings_ of $18 

13 b_illion. That actua1·1y is · fuel and water. .It~s 

14 energy and water. ~he equi~ment costs approxim~tely 

15 $i5 billion incremental and S

0

0 a new present benefit 

16 6f $3 billion~ So a benefi~ cost ratio. of 1.2. 

17 The idea here is·theSe are the ~inds of 

18 outputs and I need. feedba.ck· both fr.om the Dep.artme.rit: 

19 and from stakeholders· about. what other- outputs or· 

20 whether these are acceptable. 

21 .MR. BROOKMAN: . Steve. 

22 MR. ROSENSTOCK: On ·this sheet~ 

23 · spreadsheet, you're showing columns for dryer energy 

24 use p~r cycle. 

25 

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1 MR. . ROSENSTOCK: Now, ju~t· out of 

2 curiosity, is dryer energy or is that involved with 

3 this calculation? 

4 MR. McMAHON:.· Yes. 

' . 

5 MR. .ROSENSTOCK: Up in the spreadsheet. 

6 Okay. I guess the thing is obviously there's probably · 

. . 

·7 going to be impact. There probably will be an impact 

B on drye~ energy with some of these rtew wa~her 

9 technologies . .rtis just a-question. Should 'it be put 

10 in· with this because all of a sudden you're· just 

11 'looking at the clothes washer as a closed system. Now· 

12 all of ·a sudden it's ariother piece of'equip~ent with 

13 · other life times and other t~chnical types of advances 

14 or .improvements. 

15 The question I might have. Yes, ·there's 

16 an impact but should it be in here f6r this ·~nalysis. 

- 17 since any technology improvement is-really going to 

18 have the primary. -- ·it's the ·secondary impact· and 

19 · should it be looking at secondary impacts? Throw that 

20 out. 

21 MR. McMAHON: I think the Department · 

22 should answer. 

23 MR. BERRINGER: I think this is something 

' ' 

24 that was brought up before, that the MEF will take 

25' . that into con_sideration' so we. heed' to look at that 

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1 when we do the analysis . 

2 . MR; BROOKMAN: . Steve. 

3 ·MR. JONES: It's double counted; 

4 MR. McMAHON: No. I'm sorry. It is not 

5 double counted .. It is counted correctly. ·We break· 

6 out the component that is dryer energy and count it 

7 here. We don't count it twice. 

8 MR. NADEL: Let me attempt to answer this. 

·9 My.understanding is what this does is it looks at the 

10 energy consumption of a dryer as ·.a· result of technical 

11 changes in the clothes washer. If you replace the.·· .. 

12 dryer next year,· the.a~surnption is that the new dryer.· 

13 will perform at the nation~l ave~age and it doesn't 

14 ·make anX' difference. We're not making any technical 

-15 changes to the dryer. It doesn't affect the dryer 

16 iife. ~t's just given. a certain rernaininq rnoisfure 

17. . content of the clothes· corning out of the washer ·has an. 

18 impact on dryer use and that's the only part, I 

1~ believe, that jou're loo~ing at.· 

20 MR. McMAHON: Correct. 

21 MR. ROSENSTOCK: The only reason I mention 

22 that is there migh~ -be situati~ns with oth~r. 

2 J appliances. · There might be secondary impacts on oth·er 

24 

25 

appliarices. I'm ~rying to think. Extra irisulation on. 

the water heater means that yo~.mig6t have ·to add a 

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1 little extra cooling or heating in certain.points for 

2 a basement, for example. Obviously .it's negligible 

3 but I'm just saying it's a.secondary result from a 

4 primary change so again, obviously it's adding a lower 

5 · complexity. I just wanted to throw it out that you 

6 are looking at secondary impacts now. That was my 

7 main point. 

8. MR. McCABE: 'This is Michael McCabe~ The 

9 clothes washer affects the energy use by two different 

10 appliance; water heaters and the clothes dryers. In 

11 the past, we have not 16oked at clothes dryer~, the 

12 relations6ip between cl6thes dryers and clothes.: 

13 wa~heri because our test:pr6cedure did n6t.take that~ 

14 into account.. With' the ·new test procedure, we're 

15 giving credit for water removal that affects the dryer' 

16 use. We·would be accounting for that here, the water 

11· ·usage and water savings in~some of ~he technolo~ies 

18 for home laundry t_hat- affect the. water heater and 

19 we'll take that into account: 

20 MR. BROOKMAN: And as Bryan said a moment 

21 ago, that's incorporated in the MEF. 

22 MR. McCABE: It's because of the MEF-that 

23 we're.~oin~ it. 

24 

25 

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MR. JONES: Earl: Jones. 

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1 ·explain why this is not doubl~ counting. If indeed 

2 the savings which you are taking into account 

3 otherwise through the wash~r improvements, their new 

4 standard which we just discussed; looks to what's 

5 happening in the dryer ~~d then you're counting here 

6 savings in the dryer. Why is that not double 

7 counting? 

8 MR. McMAHON: I have to find the 

9 appropriate. page but.the engineering analysis th~t is 

10 behind this that I showed in I guess the first 

11 · preseri~ation of the life cycle cost there's an 

12 engineering page that is current design options. Each 

13 · one· of those had on the right hanq side. associated 

14 with ·it an energy consumption associated with the .· •' . . 

15 motor and energy consumption associated with water and 

16 . energy consumption associated with the dryer and 

17 they're broken out. 

18 MR. JONES: Okay. So in th.is calculation· 

19 you're looking· at a dryer and the only savings you're· 

20 counting for the washer 'is water and. _motor. 

21 Mechanical and heat. 

22 MR. . McMAHON: The washer i tsel"f . saves 

·23 electricity for th~ motor .. If it uses less water, 

2·4 . then that shows up in the wate_r heater. And if it 

25 

·- ~ . uses_ less dryer: energy, that's shows up in ·the dryer. 

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1. We do not count them twice. 

MR. BROOKMAN: Additional qcies~ions, 

3 comments at this point? 

4 MR. WEINGARTNER: . Roland Weingartner. 

5 with what you're just saying on the dryer energy, as 

6 the new standards drive to a. lower RMC, lower:- residual 

7 moisture, you-would expect the dryer energy to go over 

. 8 the years but it's not . It's sta~ing constant -at 

9 1.533. 

10 MR. McMAHON: Tell. me wh~re ·you're. 

11 looking. 

·12 MR. WEINGARTNER: I'm looking at the .firs.t 

13 page of that handout. · 

14 MR. McMAHON: The ·f~rst page is a base 

15 case .. 

16 MR. WEINGARTNER: Yes, it's a base case 

. 17 but you've got the washing machir:ie energy decre.asing:, 

18 you've got motor energy decreasing slightly and,~et 

19 the dryer energy stays constant~ 

20 MR. McMAHON: Yes. Let me explain. 

21 ~he~e's small print, the second line on the page just 

.. 

22 underneath the title says, "Assumes 98 percent 

23 ·baseline and two percent horizontal axis .in 1996 with 

24 a . 5 percent increas·e in horizontal a~is. ·What we're 

25 doing there in the base case is rolling in an 

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1 increasing penetration of hor{zontai axis over time 

2 with no ef feet on t.he dryer. It's affecting hot water · 

3 and motor but it's not affecting the dryer. 

4 MR. BIERMEYER: · Peter Biermeyer, LBNL. In 

5 this case like when we originally did it by the design 

6 option method, one of· the design options· was 

· 7 horizontal axis with . the same remaining moisture 

8 content as vertical axis.· 

g· MR.· McMAHON: . Right~ 

10 MR. ROSENSTOCK; I would assume the same 

. . 

11 moisture content delta. · 

12 MR. BIERMEYER: . Jes. 

13 ·MR. McMAHO~: All that engineering data 

14 will'be replaced. We understand that. T~is is us~ng 

15 the old data. 

16 . MR. STEPHENS: I had just a question on 

17 the-~ thos~ are base c~se numbers.that are on the 

18 screen or were on the sdreen ther~ a ~~cond ago. 

19 . ·MR. McMAHON: · The first page . in your 

20 handout is bas~ case. What I'm showing here_ is the 

21 difference between a standards case and a base case.· 

22 MR. STEPHENS: Do you know which standards 

23 case it is? 

MR.· McMAHON: Yes. This is the standards 

. 25 case . It's a unit that.cost $596 and there.his· the 

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1. breakout of the energy consumption. It's basically a 

2 horizontal axis with· the same RMC as the vertical axis 

3 baseline. 

4 MR. STEPHENS: I think you might want to 

5 look at your ~ater savin~s. I thirik you.may be off by 

6 a few orders of m~gnitude on the water savings. 

7 MR. McMAHON: A few orders of ·magnitude? 

8 Okay._ 

9 'MR .. STEPHENS:. out at year 2030 you're at 

- -

10 30 million gallons. 

11 MR. McMAHON: Yes. 

12 MR.· STEPHENS: I think that may be a 

13 little low. I think we're talking billions· of gallons 

- 14 there ~t that point. You might want to check.that. 

15 . MR. McMAHON: . Thank you. 

16 MR~ BROOKMAN: _ Additional que~tions, 

17 comments on these screens and on the data? 

18 MR. McMAHON: I didn't fully explain the 

-19 graph. If yo~ like, I'll explain the.chart-and then 

20 we can move on. This i-s a· presentation of the 

21 national economic impacts from the perspective of the 

22 consumer.· ~illions of dollars.on the vertical axis~ 

23 Price changes are here so this is the incremental· 

24 price due to the standard t1mes the number of 

25 purchases in that year~ so this is $L 3 biilion .. -

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1 additional spent. The energy savings are at the top. 

2 In the first year, . washers are bought at some 

3 inc~emental price. They save a certain amo.unt of 

4 energy but then those are used for 14 years so tho~e 

5 washer savings continue for that set of washers bought 

6 in a particular year: 

7 In the second year I more washers . are .. 

s bought at this expense.· They also have energy savings 

· 9 and so energy savings ac·cumulate until you replace all 

16 the washers at which poin~ you h~ve a constant delta 

11 and they go on. The red line in.the middle is th~ net 

12 effect so initially the increased price of the washers 

13 is not compensated in t~e first year by the ~nergy · 

14 savings. but over time it ev~ntually accumulates ~nd 

15·. you wind up with.a net_sa~ings of about $1 billion a 

16 year in.the example~ It's not disdounted. ·When you. 

17 apply the discount rate, yo~ get th~ NPVs.over here. 

18 MR. GOLDS.TEIN: . My. assumption is this· ls. 

19 a·new tool that doesn't replace _the LBL·residential 

20 model but is simply. some~hing that's more use~ 

21 manipulable. Is that correct? 

22 MR. McMAHON:. That's right. That's my 

.23 understanding. 

24 MR. ROSENSTOCK: Another quick comment. 

25 In- this sheet here, it's.actually th~ third page but 

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1 it says page five on the bottom about. water heatei;- ·and 

• 2 dryer saturations by fuel type . 

3 MR. McMAHON: yes. 

4 MR. ROSENSTOCK: rt· looks like you assumed 

. . . 

5 just' constant over the next 

6 MR. McMAHON: Just for convenience. These . 

7 are place holders. That · is another . topic of 

8 discussion is w~at- all the.inputs ought to be: The 

.9 focus today is on the analysis process and whether we . 

10 ought to use this kind.of a spreadsheet; 

11 MR. ROSENSTOCK: Ok~y~ 

12 MR. McMAHON: And then, . of course, we need 

13 to decide what all the inputs are . 

• 14 MR. ROSENSTOCK~ I'll pass. 

1,5 MR. SAMUELS: My question is probably for 

16 DOE. If this doesn't replace the LBL residential 

17 model, 'then What is this being.used for versus the 

18 residential model? 

19 MR. McCABE: I think Jim j_ust made the 

20 point that the decision hasn't been made. We're 

. . 

21 looking for discussion/comme.nt for you . as to the 

22 usefulness of this and whether or not it should be 

23 used instead of LBL. 

24 MR .. SAMUELS: If David hadn't asked the 

• 25 . question'· I don't know how _many. peop'ie here would h·ave. 

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1 understood that was the issue. The assumption· wa_s 

·2 that we were being presented with the proposed tool 

3 MR. BROOKMAN:· . David. 

4 MR. GOLDSTEIN: . My comment on this. ·I 

5 don't think· it's going to make a heck· of a lot of 

. . 

6 difference which we choose in terms of any policy 

7 decision. I believe the LBL model is mor~ ~cc~rate 

8 ~nd we should us~ that as ~he primary decision making 

9 .too1 because it includes_ more interactions, lets you 

10 get things wi~h higher de~ree of precision. B:ut I 

11· doubt whether that difference would ever really show 

12 up'· so it seems to me that the process of having _this 

13 available as· a sanity- check and as the way that 

14 commenters can provide alternative scenarios and argue 

. . 

15 for them is good and if we're convincing enough, then 

16 what we submit would be input on the LBL model ,...-. 

17· MR. BROOKMAN: Chuck.· 

18 MR. SAMUELS: . Well, I have no idea which 

19 one is more accurate. ·I can't -imagine that David does 

20 either. The fact that there's so called more 

21 interactions in one model doesn't make it more 

22 accurate. It just makes it more complex. It may or 

23 may not be more· accurate. ·Now that we know this i.s an 

· 24 issue, we' 11 obviously try and .consider it .. Certainly 

25 it everything ~lse was equal,· something that all of us 

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1 can access and use just as wi)the the manufacturer's 

2 im~act model is far superior to something that none df 

3 us except for the contractor 6in access and use. 

4 MR. BROOKMAN: · I wasn't sure whether the 

5 earlier comment meant for these to be mutually 

6 exclusive or one repl~cing the other. I wanted to 

7 clarify_ that qu_iestion.· 

.- 8 MR. McCABE: we: will be using one of the· 

9 mddels as a principal tool and it's ex~ected that we 

10 will be using this spreadsheet but since ·we have not 

11 fully expior~d it~ we're looking for some feedbaci on 

12 A's we add more features . to this such as the -

13 shipments forecast where it takes a look.· at the 

history, the replacement market. The second example_ 

15 that Jim provided becomes.more and mor~ like the LBL 

16 REK as far as the variables ~hat it considers so that 

1.7 · the less difference there would :likely be that. yqu 

18 could imagine would be bef~een the_out~ut of the two 

19 models. ~ould you agree with that, Jim? 

20 MR. McMAHON: . . Yes . I agree. 

21 MR. BROOKMAN: Steve. 

22 MR. ROSENSTOCK: ·I just want to say tha_t 

23 .I think that this path th~t-Jim McMahon has shown I 

24 

25 

~hi~k'is a real good path to go down~ In my mina~ 

again, since it's not. a black box that it's go~ng to 

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1 be in terms-of process and-getting consensus that this · 

2 should be this path· should definitely :be· .. 

3 considered. I don't know wh~ther you want to say one 

4 -or the other. I think this .is an equally.valid tool 

5 at this point. 

6 MR. BROOKMAN: Dave? No? Okay. 

7 Additional questions or comments on this group of 

8 slides and.the methodologies· that are embedded? 

9 Let's take a 'break. 

10 (Of~ the record for a 19 minute break at 

11 -2:40 p.m.). 

12 MR. BROOKMAN: Okay. Let's begin. · As I 

-· 13 ·look at the agenda, we've covered almost all·· of the 

14 substantive.areas and we are riow in the segment which 

15 is the last substantive portio~ of the day listed 3 :-30 · 

to 4: 00 at the bottom of the agenda. Consumer 

17 acc"eptance, remaining issues t;.o be addressed and next -~. 

18 steps .. So let's ·take up the . issue of consumer 

19 acceptance. Bryan, are you.going to lead on ~hat? 

20 Yes? 

21 MR. BERRINGER: Yes. Basically, ·consumer 

22 · acceptance has been an issue specifically with clothes 

2·3 washer I Clearly looking at utility top load versus·:; 

24 front load and horizontal axis and vertical axis being · 

25 at same levels. one ·of the things that we're aware of·".·· 

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1. is the THELMA study looking at a market core type· of 

2 pr~gram for hori~ontal .axis.· We're aware of that. 

3 what we're looking to, we're trying to open. this up to 

4 more discussion as far as issues as far as. consumer 

5 acceptability and if ~eople are aware 6f any other 

6 sttidies out there that we could titilize. 

7 Glenn Schleede ~~ he's gone he had 

8 mentioned some Consumer accep~ability issues today. 

9 The other thing is could all clothe~ ~ash~r~ 

10 ev.entually become front loaders? If not, why not? 

11 Those type of issue~. So I'd just lik~ to open it ~p 

li to the floor to see.if there's any issuas that we need 

13 t~ address, if there's any studies or any information 

14 -~ut the~e that-we should consider as far as consumer 

15 adceptability. And I'll ·cip~n it up to the floor~ 

16 MR. POPE: - Ted Pope with PG&E in San 

17 Francisco. Just a thought. I know you folks have 

18 some kind of whole town demonstration g~ing on with 

19 the new type of clothes washer. I would imagine you 

20 could get some good satisfaction data there. 

21 MR. BERRINGER:. Yes. EPRI is sponsori~~· 

22 that. We're part of that_. That's. part· of the THELMA 

23 study._ 

24 MR. POPE: . One other issue that I think 

25 relates probably as.much to LCC as this issue and that 

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1 is the whole detergent value versus cleaning 

2 performance economic value and I don't see· that 

3 showing. up here. One statement was made back in 

· 4 November, I think,. that people are ·going to start 

5 using these newly formulated detergents when they get 

6 the· new :machines once that formulation is on the . 

7 market and available easily. The question is if 

8 they're willing to pay more for that, then the sayings_·.· 

- · 9 they would get by using ~!1e older detergent, that 

10 implies·· an economic benefit to the improved wash 

11 performance they get with the new detergent~. How ban 

12 we factor that in? 

13 I think another big one ·is the.reduction· 

14 in the li~~ing factor, whatever you want to call it, 

15 wear and ·tear. People have a large investment in 

16 their household l~undry and it seems to me ~hat we 

17 ought to be able to derive seine kind of -- it m~y have 

18 a fairly wide band of uncertainty around it but 

19 ther~' s got to be some significant economic value that· 

20· shoul~ show up in the con~umer utili~y side or on the· 

21 LCC side. So I'd like to see·if there's any thoughts 

22 on how that might be factored-in. 

23 

24 

25 

MR. BROOKMAN·: Dan Barzel. 

MR. BARZEL: Although your idea is 

. appealing, I'm afraid that the realities of the market 

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1 place generally the competitive conditions wi11· 

2 create a situation where everybody will. strive for the 

3 lowest possible cost. As lorig as you do that, what' 11 

4 happen is . the ·cost to the consumer will. get much 

5 cioser to the true cost of manufacturing as time goes 

6 alorig. So I think by virtue 6f the fact that the unit 

7 is costing more; if you t~y to add to that the fact 

8 that you can get more money for -- I .mean.I think what 

.9 · you were trying to get at is there's benefit~ to a lot 

10 of people here~ ·There's benefits to laundry 

11 manufacturer_s, detergent, arid there's benefits to 

12 people who manufacture ~ashing ma~hines. 

13 But what will_ hap.pen over a_ long period of 

14 time is people will strive to find the lowest possible . 

15 cost of producing the same product and bring that to. 

16 market in order to ma~ntain a market share or gain in 

17 market · share,; So over . a long period of time I 

is ~ouldri't expect that consumer~ are going to end up 

19 paying. more for · det~rgent and really over a long 

20 period of time you'd expect that the cost of the 

21 washing machine will ·get very close to the true 

22 incremental cost to build it, given that there are 

23 millions of units being built. 

24· So ~lthough it's nice to think of tlie fact 

25 that everybody will make more money as a result of it, 

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1 I think if you look at the situation that's out there 

2 today; .you see that wherever there's excess capacity, 

3 costs go down and the consumer wins. Ii's difficult 

4 for retailers and difficult for manufacturers but the 

5 truth is in ·the long run it's better· off for .. 

6 consumers, so I think our discussion centered on very 

7 efficient product is a·g6od one ahd l think if you can 

8 bring this to market with a very high consumer 

9 .accep~ance. For example, the way the ~ayt~g unit is 

10 being accepted. ·There will be a positive benefi~ and·· 

· 11 I wouldn't get distracted by the detergent discussion,' 

12 I guess. 

13 MR. BROOKMAN: Ted, follow-on. 

14 MR. POPE: I think perhaps I mis-spoke 

15 thete: I wasn't trying to say that manufacturers of 

16 detergent folks are going to make ~ut in the process. 

17 What I was trying to say is that I believe there's .an· 

18 econ9mic value, a significant one,· that accrues to the 

19 cons·umer that isn't reflected in the ec.oriomics here 

20 th~t we're looking at ~ri:the life cycle cost or~ ii 

21 . you will, on consumer utility. 

22 So what .I'm. saying is I agree that 

23 consumers may use the new~reformulated detergents but 

24 I think everyone in the room is kind of agreed th~t 

25' they will get. superioi. ~leaning ·periormance ou~ ot· 

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1 those products. So while you may riot ·~ee ·any 

• 2 

3 

significant net change in the cost of detergent to 

consumers, they're getting better cleaning 

4 perfOJ;manCe I better Stain remOVa·l, Which means ClOtheS 

5 last longer looking better plus the reduction in dryer 

6 time that comes with. the lower RMC. There's also less 

7 linting and so forth which also increases the life 

8 span of the clothing, so I think what you're saying is. 

9 a savings on your clothing ~udget. 

10 I realize that's a pr.etty squishy. number 

11 but it seems to me -we can · look to the ·textile· 

12 industry,. unde~stand a little bit about the wear and .. 

13 tear factor and the machines. A 16t of t~e-· 

• 14 manufacturers claim wear and tear benefits with ~ach 

.15 axis. Let's take a look at that and see if we can't 

16 ·develop some band of probability on clothing savings. 

17· MR. BROOKMAN: Steve. 

18 MR. ROSENSTOCK: In terms of consumer 

19 acceptance; the other_ factor is the fact of what kind. · 

20 of reputation the equipment will have af~er the firs~ 

21 year or two of entry on the market. I just kri9w that 

22 like 14 years ago when electronic ballast .for 

. . 23 fluorescent lighting fixtures came on the marke:t, they 

24 did not get the best reputation and I reme~ber: as a 

• 

25 r~presentative for an electric utility talking to some .. 

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1 customers about electronic ballast about seven or 

••• 2 . 

3 

eight years ago. It's like no ~ay. Forget it .. I've 

heard horror stories about electronic ballast. No way 

4 I'm going to try them. . And, of course, I had to . 

5 explain th~t they had.changed. That was maybe the · 

· 6 first generation and there. was a ·second and third 

7 ge~eration. 

a But my point being is word of mouth can be 

. . 

9 very strong on some of the acc~ptance and obvio~sly 

10 it's not quantifiable but I think it can have a big 

11 impact, especially if people think that it's less12 performance at a hi_gh cost, forget it.· That; s just 

13 the reality of the market pl~ce. ·or it's. not going to 

• 14 have as long a life. If they think it's only going to 

15 last five years instead of 15 years, no. 

16 MR. BROOKMAN: Earl. 

17 MR. JONES: ·I apologize for having_ gone to 

·1s get coffee to get throutjh the r~st of the afternoo~. 

19 In case I missed the introduction here, but the 

20 interpretative rule says the Department would commit 

21 to get input from consumers. Do I understand that 

22 that is what we're doing supposedly here or is this 

23 just something which is indep~nden,t of t_hat which you 

. 24 all are pursuing otherwise? 

• 

25 MR. BERRINGER: ·_ weil, as far as trying to 

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1 answer· what the issues are and that there are.groups 

2 or studies out there that we can utilize, we'd be glad 

3 to 

4 MR~ JONES: Well, have you all made ariy 

5 effort to pursue this issue aside from talking to the · 

6 same old folks who have been talking about this issue 

7 for the last who knows how long? 

8 MR. BERRINGER: We've made efforts _to 

9 contact consumer groups in the American Fed~ration~~ 

10 Consumers and ~eeping.them involved on the advisory 

11 committee also, so we've made steps towards that but 

12 .we still haven't got any other information. If there 

13 ls studies, anteing out ther~, to as~ist ~s, that's 

14 what we're looking for. 

15 MR. BROOKMAN: Chuck. 

16 MR. SAMUELS: .. Well, at the . advisory 

17 co'mmi ttee there was a presentation by the Consumer 

18 Federation of America. You also had a pers?n there 

19 from AARP and I believe there was another person 

20· r~presenting a consumer interest and there was talk' 

21 about using in the future --·this being the first·rule 

22 making under that -- some kinds of studies or surveys 

23 that would be . new, that would be done for this 

24 specific application. Do you have that in this work 

25 ~lan that you've pr~sente~ t~ us1 Have you made:a 

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1 decision not to do that or what? 

2 MR. BERRINGER: We have not included it 

3 either way. I mean we haven't made a decision not to. 

4 I mean we're pursuing this --

-5 __ MR. SAMUELS: Well, yo~ have a work plan 

6 so you've either included i~ or·you haven't. 

7 MR. BERRINGER: I would say it's part of 

8 our plan as far as ~he analysis -but we haven't put- any 

9 task 6r anything to that concrete intd it. I- mean 

10 it's still something that we'll be working on~ 

11 MR. ·sAMUELS: Well, you have to decide for. 

12 yourselves how· to orgariiz·e your efforts int~_rna~ly 

13 ·obvi?usly but I_ think this ·is something that you need 

14 · to do·. 

15 MR .. JONES: Excuse me again, Bryan, but 

16 didn't I understand that at. · one point I don't 

17 recall whether it was iri November of last year· or 

18 March, of this year, but wasn't.there was a ·plan 

19 there was discussion_ of a consumer impact workshop?. 

20 Wasn't.that laid down somewhere, either in an earlier 

21 -draft of your work plan or in some schedule that was 

22 presented at a workshop? 

23 MR. BERRINGER: I don't recall it being 

24 the case . 

. 25 MR. BROOKMAN_:.: Glenn . 

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MR. SCHLEEDE: I've had the privilege of 

sitting in. on the twci public meetings of the: subgroup 

of th~ Advisory Committee, the two public meetings of 

4 the so-called Consumers Group which is chaired by ·Mark 

5 Cooper. The oth?r co-~hair ·resigned from the 

· 6 committee. That has been a joke from the beginning. -

7 The meetings have 'consisted of .two rather long 

8 conference calls, most of which have _been devote4 to 

9 a focus group kind of discussion or a possibiiity of 

10 a focus group. 

11 However~ most of ·the comments that have 

i2 been made, Jim McMahon supplied a fairly detailed memo 

13 suggesting ways- of getting at some consumer que~~ions. · 

14 It has been ignored as far as ·r can ~ell. The DOE 

15 folks that were.participating in this conference call 

16 . asked for comments. I've submitted two sets . of 

i 7 detailed comments I : both Of. which were ignored . for . 

18 purposes of the Advisory Committee. I don't really 

19 think DOE is serious aborit that effort. 

2 o In ·addition, · one of the DOE people who . ' 

21 participated in both those telephone conferences has 

22 written a memo that suggested under the Herringt~n 

23 decision DOE does not really need to consider consumer.· 

24 interests anyway. So I'd· sugges_t that this is a ·very 

25 murky area and that none of us have any ·basis for 

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1 knowing what DOE's·real intent is as far as dealing 

2 with- consumer issues. 

3 MR. McCABE: This is Michael McCabe. As 

4 Bryan indicated, in the work plan we do not have 

5 anything on the consumer analysis. It is something 

6 which we would like to develop. We're looking f6r 

. . -

7 some· feedback from the parties here as fa_r as for the 

8 laundry products as far as what are the issues, what 

9 are so~e of the approaches. The discussion of ·a focus 

10 group is one issue Glenn touched on that . had been 

11 raised in the subgroup and discussed at the last 

12 Advisory Committee. It has not gone very far·and we 

13 are somewhat at a loss as to-how to get· full consumer 

14 input and exactly what sort of input would be useful .. 

15 We have discussions as far .·as the 

16 different technologies, as far as how would those· 

17 affect the utility of the product, and· that is warm. 

18 The other is the cost as to whet~her or not consumers 

19 would refrain from purchasing the products if the . 

20 price of the products _went up a certain percentage 

21 which gets into the demand. elasticity. From my 

. . . 

22 perspective, the reason why I wanted to see this on 

23 the agendi is just to ~et some feedback from those 

24 here as to what are some_of the issues that you see as 

25 being the consumer issues-and.any suggestions as to 

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1 approaches to deal with _those. 

2 MR. BROOKMAN: Charlie and then·to thi$ 

3 ·gentleman. 

4 MR. STEPHENS: Charlie St~phens, Oregon 

5 Energy Off ice. 

6 I've said this before i~ other forums and 

7 I-can't speak tor the people wh~ have the data but 

8 there is data out there that supposedly keeps getting · 

9 closer·and closer.to being available. I think it's 

10 the kind Earl· would like to see. It's where· they 

11 actually ask consumers who had experience .with the 

12 technologies. It's- not .fair tq ask those people about;. 

13 _their experience with the technologies a month after: 

14 they get it r~ally. I mean, you know, it takes some 

15 time for· these peopie to own it and see what they 

16 think. - Most people have used the alternative 

17 .technology at one point or. ariother and so, given a 

18 little bit of time, I think we can get the data. 

19 There are plans I know of to get some more 

20 d~ta but on6e again~ the ~om~stic made equipment has 

21 only been available for about nine months now so it's 

22 not like we really just rush right 6ut and ask these 

23 people right after they bought it what they think of --

24 their new pur~hase. I think though; given that this 

25 ·is not quantitative stuff and it is taken into account 

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1 in the process of the rule making, we don't have to 

2 have it next month . 

·3 However, I think we do need to have it 

4 before any decisions are.made, so I think a~· long as 

5 there is a _way to get it and I think we should all be 

scouring_ looking_ for it. r·only know of two data 

7 sources. One that's about to be available and one 

s· that is planned to be available once we actually out 

9 in our area go out and get the data from the people 

10 I've. identified that have brought the produc"ts from 

11 the ptogram. Then we'll have more. ~ut until then,·· 

12 it's obviously not there. 

13 MR. BROOKMAN: Michael, a follow-on 

14 comment? No. This gentleman back here, would you· 

15 'find a microphone and ideri~ify yourself please and 

16 "then to Chuck. 

.17 MR. ESSMA: Eric Essma, Clorox Company. 

18 I'm General Manager for Textile Industry Affairs for 

19 Clorox and I've been working with th_e textile industry 

20 and their consumers for the last 10 years and to speak 

21 di_rectly to Todd's question. I can offer· you the 

22 information and this is all top line information but 

23 I' 11 be glad· to share with DOE :the research that 

24 documents it. The textile industry anticipates that 

25 their garments will last a ·life. time of 50· 

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1 launderings. 

2 MR. JONES: Fifty what? 

3 MR. ESSMA: Fifty .launderings. That's 

4 ··considered the average life time of a garment. As for 

5 their consumers, their two major concerns ii') the 

6 laundering proc~ss are in t'erms of frequency of 

7 problems stated, the #1 problem·stated in t~rms of 

8 frequency is wrinkles. In terms of importance, the 

9 #1 problem that they experience with laundry is stain 

lo removal. 

11 I think as long as you address those three 

. 12 issues, that you don't shorten the life expectancy of 

13 a garment, that you provide adequate stain ·removal. and 

14 you don't increase the wrinkling that they're 

15 experiencing now and stay within the parameters of 

16 acceptable pricing, as Mike said, and .general 

17 performance of cleaning, I don't think you're going to 

18 have a problem with ~onsum~r acceptanc~ ·of ·the new 

19 technology. These are the things they're looking _for.· 

20 They don't really· care how they get there. 

21 MR. BROOKMAN: So .the different 

22 configurations, are you addressing those as weli in 

23 your comments? 

24 

25 

MR. ESSMA: These comments don't address· 

the different machine. configurations. 

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1. MR. BROOKMAN: _Yes. 

2 MR. ·ESSMA: They address. the c9nsumer .. 

3 concerns. In· my dealings with apparel consumer·s ~ 

4 there's never been a statement from any of them how 

5 their laundering process, how that .function 1s 

6 performed. They're only ~nterested in the results. 

7 As long _as you' re providing acceptable results,. I 

8 don't.think they're going to object to the technology~ 

·g MR. BROOKMAN: Thank.you for clarifying 

10 that. 

11 Earl, Chuck was first and then you. Do 

12 you ha~e a follow on t6 that? 

13 MR. jciNES: Follow on to his comment. 

14 MR. BROOKMAN: Please, by all m~ans. Yes .. 

15 MR. JONES: I'm sorry. Your name? 

16 MR. ESSMA: Eric. 

17 MR. JONES:. Eric, I assume that the 

18 research you're talking ·about· has to do with 

. ·.19 performance, if you will. That is to -- or clothes 

20 care type concerns. Is that correct? 

21 MR. ESSMA: That's correct. 

.. 

22 MR. JONES: And, for example, you have not 

2 3 addressed and I don't know whether you have data which 

24 addresses issues about ~dding things mid-cycle, for ". 

25 ·example. 

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1 part of the data which you've got? 

2 MR. ESSMA: No. 

3 MR. JONES: ~ell again, that's one of the 

4 issues.which iri terms of utilities which, as we all 

5 kndw. is on the table here, that needs td be. 

6 considered. But I would also add this. Eric's 

7 comments m_ake more pointed the- need -- and I'd like to 

8 get to Michael now and ask you ~- given the importance· 

9 of these t~ree issues for consumers, you indicated 

10 earlier that you were satisfied -- I think wer~ the 

11 words you used -- about the feasibility, performance 

12 specs, wha_tever, of the Whirlpoo_l product. I guess my 

13 qu~stion is is that true with respect to these three 

14 considerations and, ·if so, h~w do you know that? 

15 MR. McCABE: I have observed a model being 

16 . tested, have looked at the product after it's been 

. 17 laundered so have sat in discussions· with Whirlpool on· 

18 their products . as well as similar: discussions· with .. · . 

19 some other manufacturers on other technologies, 

20 looking at that whole array· of information. 

21· MR. JONES: so you discussed wrink"iing, 

22 for example, and you understand how consumers view 

23 wri~kling issues, MichaelJ 

24 

2.5 

MR. McCABE: ;I have had deaccessions·with 

respect to wrinkling,· yes. As to how· consumers 

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1 per~eive it, there's probably a whole host of 

2 knowledge and information on how consumers .perceive it 

3 .that I do not appreciate. 

4 MR. JONES: Okay. What I really wanted to 

5 ask you is how are you going to-provide to the rest of 

6 us or to this rule making process the appropriate 

7 assurances in terms of the performance of those 

8 machines that I think the pro~ess requires in order 

9 for it to go forward and consider them.?· 

10 MR. McCABR: I think that the assurances 

11 that you're looking for --

12 MR. JONES: Not me, Michael. The process 

13 that you '.re :looking ·for, I assume, because th.is is not 

14 my process. I~'s DOE's. 

15 MR. McCABE: In t~is case,· the.technology 

16 is one that, in discussions with the manufacturer, 

17 they have demonstrated .. that it can be assembled,· a 

18 prototype of it, and that similar to prototypes made. 

-19 ·by competitors for their own products an~ th~t they 

20 have, while it's not in the market place.at this·point 

21 in time, have indicated that. it is their intention to 

22 c?me into.the market with that product. As to whether 

. 23 or not that design will ever make it into the ma~ket, 

24 I'm not able to say·that ·one way or anoth~r·because 

25 there are a lot of f~ctors which they're going to have 

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1 to bonsider that I'm riot privy. to and they're not the 

2 subject of this rule making . 

3 MR. JONES: Oh, I agree with.you on that. 

4 · I'~ not askirig for you to indicate some proprietary 

5 decision on their part whether to go or no go. My 

6 question had to do with whether or not the machine had . 

7 achieved that level of demonstrated performance ~ith 

8 respect to the issues that -consumers are concerned 

9 about that it properly can enter intq this rule making 

10 and you' re saying that under the Michael McCabe 

11 scoring system that it has· and that we should be 

12 satisfied: that that is the case. 

13 MR. McCABE: We're· looking to get some 

14 ·further embellishment record to add . to the Michael 

15 McCabe scoring system. 

·16 MR. JONES: You're.committing to do that 

17 and that'll be done after yout reverse .engineering 

. . . 

18 analys_is so that then we can understand what the full 

19 impact would be in this rule making. 

20 MR. McCABE: Yes. 

21 MR.· JONES: You're going to. share that 

22 wi]the us. 

23 MR. McCABE: I don't believe that we will 

24 ever understand the full impact of that as similarly 

·25 we won't understand.the full impact of soma bther 

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1 design options that we've looked at for other 

2 products. 

MR. BROOKMAN: Several people seem_ to have 

4 follow-on comments. ·chuck was first in the queue~ 

5 Chuck and then Jim and then Steve. 

6 MR. SAMUELS: I think that this question 

7 of consumer interest and consumer acceptanc~ is 

·a knotty. A number of us· a:te perhaps avoiding it. 

9 because it's very hard to quantify and get-·your arms 

10 around all the aspects of it~ But nonetheless, it 

11 can't be neglected under ·th~· law ·and the 

12 interpretative rule makes that· clear. 

13 If it's not goirig to be dealt with.pre14 ANPR, it certainly must be dealt with post~ANPR before 

15 the proposed rule is issued. Theref-ore, it strikes me 

16 that the Department can't keep letting this one slide 

17 and that in the March workshop . you must have a 

18 presentation that's equivalent to what 'the fine ,• 

19· presentations we've seen from Bryan arid from AOL and 

20 LBL today that discusses a specific game pla~ to deal 

21 w.i) the these issues from the softer consumer issues to 

22 some of the more specific utility type of issues: 

23 Obviously, I'm sure you would welcome 

24. input from people and I hope you'll get some but one· 

25 way or ·another, you've got to dea,l with this by no 

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1 later than March. Certainly as a head start, we ought 

2 to.get Jim McMahon's pa~er circulated. We ought to3 get Glenn Schleede's paper circulated. I'd love.to 

4 see the internal memo from the DOE em~loyee who says 

5 this· is irrelevant and anything else -and th~n, 

6 although ii's ·a squishy_ subject, it's a really7 important one and I just.think you've got to decide 

8. that·you're going to have $Omething. very concrete in_ 

9 March and force yourself _ to work backw~rds and 

10 schedule activities around.it .. 

11 MR. BROOKMAN: Michael, you're next and 

12 ·then Steve. 

13' MR. MARTIN: Michael Martin, California 

14 Energy Commission. - I· have. heard ·an awful lot of 

15 evidence that these new machines are be~ter 

16 performers_, quite apart from .their energy performance, 

17 . _and I am in a situation to replace a clothes washer 

18- · very_ soon. I would very much like to have evidence 

19 . that these new ones perform worse than the ones they 

20 replace which I've· heard can be implied. Does DOE 

21 have any such studies that indicate that ·these are 

22 worse? 

·23 MR. BROOKMAN: You're looking at this from 

24 the standpoint of a prospective consumer. 

25 

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points of view. One is I~ve got to go back to the 

. . 

2 Energy Commission and tell them what happened today . . ' 

3 ~nd there's always somebody who.'11 come up and sa~, 

4 Does this make it perform any wors~? This is· the 

5 first time I've heard any. suggestions that they do 

6 perform worse. 

7 MR. BROOKMAN: Steve is next in the queue.· 

8 He seems to want to respond to this. 

9 MR. ROSENSTOCK: When I meritioned that 

10 before, I said I was.just in a supposition. I tried 

11 to use the word if just because for consumer 

12 acceptafice, if it· doesn't perform as well, word of 

·· 13 mout_h spreads_ around. If .it's perceived not to ia'si;. 

14 as.long as current t~chnology; again that would be two 

15 big strikes against the·~echnology. I guess in terms 

16 of 9onsumer acceptance. I just said if. · I didn't 

17 know ii they performed better or worse. i I have no 

18 idea. 

. 19 MR. MAR.TIN: I heard your if. I didn't 

20 hear Mr. Jones's if. 

21 MR.· JONES: Just a moment now. There's no 

.22 suggestion on my part, hopefully nobody takes the 

23 inference from anything I'v~ said with.respect t~any 

24 ·product on the market today. We're talking about a 

25 p~oduct which is not on the market and the impact on_ 

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1 this rule making. I thought I made that pretty clear. 

2 so unless you have a_special ~ource that you can buy 

3 one, I don't think you need worry about it, at least 

4 not in the short term. 

5 MR. MART.IN: I have a special source.-· I 

6 just viewed a Maytag the other day. 

7 MR. JONES: No, that's not the one I was 

8 referring to. I said the W?ir_lpool· so unless you've 

9 g~t a ~ipeline into their skunkworks, if_ you -~et one 

10 of those·, .then I think you needn't worry about my 

11 comm~hts. 

12 MR. MARTIN: I feel better already. 

13 MR. JONES: Thank you. 

MR. BROOKMAN: Thanks for clarifying all 

15 that. 

16 Anybody else with issues to comment? 

17 Steve, then Dick. 

18 MR. ROSENSTOCK: The other thing. . In the 

19 consumer issues subgro_up to the Industry Advisory 

20 Committee I think there. were some good suggestions 

21 passed around that could be under consideration in 

22 terms of -- but especially· just the historical data _·or 

23 even -- I hate to put it on Maytag -- I think they did 

24. 

25 

some consumer resear~h before they introduced th~{r 

·Neptune product li~e. ·What did' that show in terms- of 

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1 consumer acceptance? And they introduced it so they . 

. . 

2 must have done some ·research, I would assume~ I'm not 

3 in the market research area of Maytag by any means, 

4 stretch of the imaginatio~, but I would assume'-- and 

5 I'm. making an assumption -- that they_ did market 

6. research and there might be some data available that 

7 they may be willing to share with DOE and there might 

8 be·other_manufacture'rs"·who have done similar research . 

·9 . MR. JONES: I.think they ought' to file it 

10 for public inspection. 

11 MR.·ROSENSTOCK: .well, that's up to .them .. 

12 Just a suggestion . 

13 . MR. BROOKMAN_: We' 11 leave it to· Dick to.-.. 

. 14 see if he chooses to co~ment on this. ~hat is Dick 

15 Stillw~ll. Good.· 

16 MS. GREINER: I'd like to ask if 

17 Frigidaire is a potted plant? 

18 MR. BROOKMAN: Is _tha:t the new technology? 

19 MR. BEST: Just a couple of comments here 

20 regarding some of the discussio~. There seems to b~ 

21 an inordinate interest -in the degree of ·performance 

22 and such 

23. point in 

24 

it's a 

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of the Whir~poc;>l prototypes and,. 

time, they are prototype·s ~ 

But 

lot of 

I would also·l.i,ke to 

conjecture whether 

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1 worse, or equal to today's products that are .in the 

2 market·~nd it's probably a little bit irrelevant h~re 

3 in the sense thq.t ·exist. methods for testing the 

1 performance and other issues on the products, but 

5 ·there are no guidelines;· benchmarks, . whatever that 

6 define specifically what's acceptable and what's not 

7 acceptable from the consumer viewpoint. 

. 8 If Maytag wants· to put ·out a product . 

9 . wi ]_the either exceptional perforrr1ance or v~ry · l.ow 

10 ~erformance, they ha~e every right to d~ that and the 

11 same with Mr. Jones, your company, and everybody else 

12 here. You don't have a mandate that says you ha-Ve to 

13 have· a ·cleaning . performance stain -removal index of· 

14 anything here and the question.her~ is how do we know 

15 that Whirlpool's i~ good.enough for the m~rket? We 

16 don't know if. anybody's produc~ here is good_enough 

17 ·for the market other than.all of you are sellin~ them18 to people and that must be some indication that 

19 whatever it is yo~'re building is good enough. 

20 If you ~ant us to prove that ours is good 

21 enough, I gues~ we I :i:-e the "peopl~ going tq invest in it 

22 and put it .in the market~ If you want to establish 

2 3 the benchmark and say, this. it h~s to reach to ·be 

24 .acceptabl~ and relevant t6 this rule making, tell us 

25 - - _what that bench mark is and show us that you've.also 

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1 reached that bench mark. Show us your data. I ·mean 

this·i~ a lot of conject~r~ that's really irrelevant· 

3 to this rule making. 

4 MR. JONES: I agree that that product is 

5 absolutely irrelevant·to this rule making, which.is 

.. 

6 why the rule making ought to proceed without regard to 

7 ·. it and I think Michael should come to the same 

8 .conclusion and.we all get a lot further along. 

9 MR. BROOKMAN: Charlie and then to Dan arid 

10 then to this gentleman. 

11 MR. STEPHENS: Charlie Stephens, Oregon. 

12 Energy Office. 

13 I'd just. like a· general follow-up to·-

14 summarize my view of what_ Dick Best just said and that 

15 i~ that I really think we .s.hould avoid focusing on the 

16 consumer impacts of one product. The fact is· there 

17 are_ energy {actor levels· or en·ergy perf o!mance leve·ls · 

18 .we're all examining and I'm· not sure that·a1i we.want_ 

19 .to do is stay focused on the consumer impacts of any 

20 particular performance level. · There's a lot of 

21 machines out there, a lot of engineering solutions to 

22 the same problem, and I don't want to focus on one. 

23 I think we should stay glued to the ones that seem to 

24 shift everything in one 'direction from the perspective 

25 of the _consumer, ·if the~e is such· a. one.. If there 

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1 isn't; then we.move· on . 

2 MR. BROOKMAN: Dan. 

3 MR. BARZEL: Dan Bariel with Circuit City. 

4 I thi_nk one of . the reasons why we I re 

5 talking around the edge of this topic is for a couple 

6 of reasons. #1, ther~ really ~asn't been signiiicant· 

7· penetration by an H~axis machine of the market ~nd 

8 there's an understandable amount of interest in the 

9 new Maytag product, no.t saying that Frigidaire isn't 

10 important or that. Imana Is product is important or . 

11 anybody else's, but· they· .I think have fairly 

12 significant market share and introduced pretty_ 

13 impressive product I - think by· anybody's· gauge and 

14 we're buying that product from them and selli~g ~t at 

15 a· fairly rapid clip and_ I'm very pleased with the 

16 iriitial results. 

17 ·I would say t~e issues around the ,consumer 

18 acceptance thing_are thre~fold. #ii~ the usability 

19 of the product. How do you get into and out of it and 

20 are-people going to accept ~he way they have to use 

21 the machine. #2 is the performance which are the 

22 three issues that Eric talked about: stain removal,: 

23. wrinkling, and the life cyc~e of the cl~thes that you 

24 

25 

Pl:lt it in. #3 ·is the elastici~y and this· consumer 

su_bgroup on the Advisory Committee has been struggling -

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1 with that issue because it's very difficult to 

2 measure, even when you have a perfect laboratory to do 

3 it in. 

4 That is.to say, if you had four pro~ucts 

5 sitting there at different· price points offering 

6 different levels of performance, how much will people 

7 .pay ·for that add_i tional · feature? That's terribly 

a difficult to measure because everybody is speculating .. 

9 and ~he person you're asking is speculating and it's 

.10 whatever's in their mind. So in one respect, the fact 

11" that there are. now many. ·.different products on: the . . . 

12· market and some from significant. manufacture_rs, · that 

13 will give. us a laboratory :to· actually see what 

14 elasticity does with respect to a- product that 

15 supposedly saves a lot of. money. 

16 So I think three or four months from now, 

17 the point that Charlie made, we'll be able to go tci 

18 people wh6 1 ve been using the product.for quite. sbme 

19 time and say, Are you satisfied with it, and then 

. 20 you'll be able to get a good read of what' will people 

21 coming into the market perceive based on that? So I 

22 think the consumer subgroup of the Advisory Committee 

23 has rea.lly got to ·focus on that, 

24 groups, get some really good feedback, and then if you 

25 :·go ·back and ask people wh6 own. the product, I t~ink 

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1 we'll have the opportunity·to get some feedback about 

2 th~ technology, whatever that is, and how do people 

3. feel about paying extra money for a product that saves 

4 them because it i~ going t6 cost more money for the 

5 initial product that ·saves· them a lot of money on 

6 energy and water. I think three or four months from 

7 now we'll be in a lot bett~r position to do that than 

8 we are today; given that· there will be a lot more 

9 product out in the market place. 

10 So I'm looking forward to it and sitting 

11 on that committee, ~'m.goinq to push very ~~rd to get· 

12 results ~arly so that we can bring ·it back her~ and 

13 say this is what we've got, this is what p~ople are 

14 saying, and then let's decide whether we should listen 

15 to that or not . 

. 16 MR .. BROOKMAN: · Your name, please. 

17 .MR. LEONARD: · Jack Leonard, Lever 

18 Brothers. We have beeri selling laundry dete~g~nt for 

19 washing machines for almost two years now · in 

20 conjunction with Frigidaire. Most of them are sold to 

21 · people who buy that Frigidaire washing machine .. Since 

22 w_e do sell it by mail order and we do admit it's 

23 reiatively expensive, that's the cost of mail order,. 

24 we also happen to have the luxury of.knowing'each:of 

25 the consumers very well. By·and ·1arge 1 the comments· 

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1 we get from the consumers, primarily about our prodμct 

2 but also by inference to· the front load mach_ine,. is 

3 extremely positive. 

4 . The one thing that. we could not do p;rio~._ 

5 t:o launching is actually get any consumer data because· 

6 you have to have. people using these machines and 

7 preferably actually buying them in order .to get 

8 relev~nt data. If.you gi~e-them a machine; thei tend 

.. 9 to like it. If you give them detergent, .they also 

10 tend to like it. 

11 (Laughter} 

MR. LEONARD: So by actually having people 

13 who have purchased the machin·e . and the product,: I 

14 ·believe you' re really getting the appropriate consumer 

15 feedback. 

16 In terms of p~r~ormance, as with any 

17 washing mach.ine and with any detergent, it's · the: 

18 consurn~r who determines the u·1 tirnate performance. 

19 They can cut their detergent. in half now if .they want 

·-

20 to with any machine. They'll get lower performing 

21 wash. We also know that on the_machine·side you can 

22 actually get a much higher energy figure by cu~ting 

23 off ·hot water inlet to the machine. The machine_ · 

24 itself. would be· quite a bit cheaper, at least 

25 eliminate a valve·. But then people start talking 

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1 about performance. Performance would be inferior.· 

2 So you can do it now if you wanted to,· but 

3 your performance would suffer and in the end, _that's 

4 what you're looking for. So I think there's a lot of 

5 give and take here. ·consumer in the end in our eyes 

6 will determine the ultimate performance of the product 

· 7 and the machine and th~ detergertt . 

. 8 In· terms of textile wear, again, we can do 

. . 

9 all the laboratory testing we want to show that th~ 

10. machines are better or worse· for maintaining garments.· 

11 The problem .is is that c.onsumer habits, to a great 

12 extent, will determine the ultimate wearability. If 

13 you take the machines on the. market now, certainly the._ 

14 Frigidaire· machine. has been there for I guess almost 

15 two years in some parts of the.county, and look at 

16 textile wear, accordirig to.the consumer h~bits we're 

17 sesing, clothes do last longer. 

18 However, if· ·consumer habits· chahge and· 

19 they start putting in twice as many clothes as they20 ·used to· with their old to'p·loading machine, I would 

· 21 bet that the wearability ratings would go down. 

22 Clothes would start wearing.out.faster simply because 

23 there's much more friction in the wash.. So I .thirik 

24 there's a lot of factors that we can't con$ider until 

25 there·are machines in the market placie that people 

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1 have bought and products available to wash the clothes 

2 in in ·order to get the :tight. -- you need all . this-.. 

3 information to get. the appropriate data. 

4 Now, I believe we ar~ riow beginning to 

5 accumulate a lot of that.data that you need. I don't 

6 know how much of it can be available by March but 

7 certainly if you've got a machine that's been on the 

8 market for nearly two ·years1 there. is data. I think· 

9 it's a·lso critical that the Maytag_Neptune washer 

10 accumulat~ similar types of .data, good or bad. But 

· 11 right now, as I said, "t:here is d~tathere. Froi11 what 

12 we gather, it's extremely positive, even for peopl·e. 

13 who do pay a premium· for their laundry detergent 

14 itself. It's been highly favorable. 

15 MR. BROOKMAN: Steve. 

16 MR. NADEL: Trying to kind of clc»se the . 

17 circle here and respond to,. I believe, Bry~n, on~ o~~-

18 ·your initial questions. Are there other .p6tenti~l 

19 · sources of information?· one major source I· think 

20 you' 11 be able to tap. are evaluations of utility . 

21 programs. You have a major initiative in the 

2 2 no+thwest, the wash Wise Program. There's a number of 

23 utilities in the northeast that are planning prog_rams. 

24 

25 

. . 

. There's been a . lot of stuff, PG&E. and others • I 

·understand these people. are starting to plan· 

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1 evaluations of their :programs including consumer 

2 surveys and other types of things so that I think that· 

J would be a major source of information for you and you 

4 should get abreast of these . efforts, contact the 

5 program managers. 

6 If there's maybe a question or two 

7 specifically that you have, you maj be able t6 add a 

8 question· on to their questionnaires and you may be 

9 able to do this with relatively little work on your 

10 part because so many other people are int~rested in 

11 these same questions . 

12 . MR. BERRINGER: Thank you. And additional·. 

13 comments on that? 

14 MR. BROOKMAN: other consumer acceptance 

15 issues. 

16 MR. BERRINGER:·, Okay. The next thing we. 

17 had on the agenda was remaining issues to .be 

18. address~d. We talked about a Yittle bit ~bout B and 

19 I think we kind of discussed the time· frames. Steve 

20 Nadel had mentioned about compressing the sch~dule .. 

21 we' re going to look at that. Are there any Other 

22 issues that people feel they want to get ~ddressed, 

23 concerns about the draft reports.· Again, the~e's a.:· 

24 lot of things that.we didn't really touch oh ~he-draft 

25 report but if you have· comments·,· once you ·hq.ve a 

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1 chance to look through it, please provide those to us. 

2 So at this time I'll open it up. Wayne. 

3 MR. MORRIS: This ·is Wayne Morris with 

4 AAM. I ·think that we do still have some issues 

5 revolving around some of the questions that.I believe 

6 Bill Wuenderlin raised from Michael Rivest having to 

7 do with the_ aggregation of the data and how that is 

8 going to be handled by the statistical mode~ing 

9 _package that we have recently seen. 

10 S~ecifically, I believe Bill raised some 

11 questioris about what would hap~en· if we.were to ~ee, 

12 say, a bi-modal or tri-modal type of distribution and 

13 I think that we need to ~till res6lve some of these 

14 issues. I don't think ~t thi~ present time·we are 

15 prepared t:.o be able to say. without having actually 

16 done the · data _collection and looked at thi~ 

17 information whether ~r not this package approach; this 

18 statistical modeling ·approach is going to be able to 

19 capture the full range of .information and capture it 

20 well.· 

21 · So until we've had an opportunity ,to 

22 really run through this situation and und~rstand what 

23 we're dealing with here, I think we're going to have 

24 t~reser~e some judgment as to whether or not this is 

25 g9ing to ~e -an accepta~l~ ~ay tci look at fhis data. 

.. 

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1 We have some questions and that's really what they're 

2 going to have .to probably remain. But I would say 

3 that if ·we're within 16 weeks of having some data 

4 analysis that probably shortly after that time we're 

5 going to have to resolve those questioris. 

6 MR. BROOKMAN: Bill, a follow-on. 

7 MR. WUENDERLIN: Yes. Bill Wuenderlin 

8 from GE. could we develop a specific follow-up to· 

9 that? I agree with·what you're saying. I don't know,· 

10 Michael if you have. any· ideas. Should we put together 

11 a couple of case studies and illustrate the advantages 

12 and disadva'nta9es of . a few different . ways; .of 

13 aggregating the data? 

14 MR. RIVEST: .Mike Rivest. ·.I.think what 

15 would be easiest is to set .up a. smal1 model like. three 

16 manufacturers, three efficiency ·1evels with some 

17 extreme case type· exampies and distribute the disks. 

18 So we could put several of these· diffe_rent examples· on 

19 different spreadsheets and then let people observe 

20 what's the output, what it looks like. ·Two methods of 

21 aggregating and they have pro~ and cons and it may be. 

22 that for one ptirpos~ one aggregati6n is better than 

23 the other one. 

24 

25 

MR. WUENDERLIN: Okay. I think we have to 

d_escribe how the aggregatio"ns are done and get some 

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1· pro~ and ~ons for each one for people to understand~ 

2 MR. RIVEST: I'll work.on that first and 

3 if we can· communicate, maybe.· we can develop those 

4 together. 

5 MR. WUENDERLIN: . Good. . 

6 MR. BROOKMAN: So that will.be how you 

7 demonstrate different ways_ of. aggregating and view the 

8 results. So L'm goi~g ~6 put you on th~ hook, Mike 

9 Rivest, for being the lead person· working ·with th·e 

. . . . . 

10 Department to coordinate this activity and who else in ·· 

11 addition to Bill would like to be included irt this? 

·12 Bill will be.the lea~ person. He's th~ only on~ so 

13 far. If other people wish to step forward, they can 

14 contact Mik~ Rivest or Bryah Berringer directly. And 

15 so give me a target date for how when this gets done. 

16 MR. RIVEST: Thirty days. 

17 MR. BROOKMAN:. W?yne also. 

18 MR. RIVEST: Maximum three weeks __ including 

19 the discussions. 

20 MR. BROOKMAN: Thirty_· days, three we_eks. 

21 Great. 

22 Anything else? That's the only issue that 

. . 

-23 . I captured that w~s -- in addition to th~ time fram~, 

24 

25 

-the actual . time lines. Steve, you . suggested that 

maybe there are ways to look.at this time line and in· 

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1. response to Chuck's concern about sticking with the 16 

2 week time frame that he had laid out. 

3 MR. NADEL: Yes, exactly. I heard Chuck 

4 say no, .we re~lly need 16 ~e~ks and then heard Bryan 

5 say, well, we'r~ not going _to make adjustment. · As 

6 long as we have everybody in the room, maybe now's 

7 the time to make. appropriate ~djustments ~o we have 

8 the -- you know, effectively --- I mean a 16 week 

9 period begins July 18 so w~'r~ saying we're going to 

10 make it two ,months beyond what's in this schedule and 

·11 where do we make those two months up? 

12 MR. MORRIS: Just one slight correction, 

13 Steve. Actually, the test pr6cedures were not 

. . 

_delivered to all of the manu_facturers until yesterday. 

is In fadt, one manufactu~er I thi~k didnit get.it.until 

16 ~oday. So there is an issue. I would say that-if· 

17 you' re going to ·stick to a clock start ·kind of. 

18 situation, then you . ought to really. look at today 

19 being the first day of that situation. What weive 

20 tried to do is commit· to two week's of getting the 

21 information on the MEF and ·to work from that 

22 situation. That's our firs·t sort of, if you will,_. 

. . . . 

23 ~oal post or gate t~ try and pass through. Assuming 

24 we can do that kind of situation and get back, then we· -· 

25 need the additional time frd~ there. 

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1 If there's adjustments, I know that the 

2 schedule that shows up there shows actually a data 

3 collection during July and of dourse July is over with 

4 essentially. I realize today being the 23rd but we're 

5. really looking at data collection during the mo~th of 

6 Au9ust and September, not really July and August. I'm 

7 not trying to be picky here., ~ut I am tryirig to make 

8 sure that we are dealing in accuracy. We'll do 

9 everything we can to.w6rk wi]thi~ the schedule and we 

10 are dealing with an unknown here, how long i~ will 

11 take manufacturers to, in fact, do all of this work. 

12 But our best guesstimate at this.point is 16 weeks. 

13 MR. BROOKMAN: . This chart shows 

14 graphically how these activities run in sequence and_: 

15 where they cross ?Ver and maybe can run concurrently 

16 which causes me to ask: if there_ are places in these 

17 different activ{tie~ where there'~ so~e slip can·b~ 

18 moved up or whether there a~e acti~ities that c~n ruri 

19 concurrently that aren't shown here in this chart. 

20 MR. BERRINGER: The place that I can see 

21 that we can possibly do is the last section as far as 

22 review we have.· In ·the past, there's OMB review and 

23 ju~t comment period. A lot of those things are pretty 

24 fixed but if we can make it through the ANOPR stag~. 

25 ·This is the biggest sta·ge as far .as getting through 

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1 the process. And we have a workshop in March to start 

2 the. second phase of that as far as the analysis. 

3 Obviously, those steps whenever we get the data and 

4 the analysis done, get the ANOPR - out, then we can 

5 .. proceed. But that's the· only place we do ·show a lot· 

6 ·of .time but that's one of the places we could make· up 

7 ~ime pqssibly. 

a MR. McCABE: Tpe schedule is presented as 

9 something that is static. We certainly appreciate the 

10 time that it' 11 take the industry to collect the data. 

11 We will be making ourselves available so that we cari 

12 help in shortening that as far as finding the bas~line 

13 and.maybe by wor~ing together we can shave ~om~ time 

14 ·off there. we will.al~o a~ our· own process continue 

15 over the ·next approximately two years. If we have the 

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opportunity to shorten one step in the process, that 

·doesn't meari that we'll sit around and wait until the 

next one is s~pposed tci start so that we'll try to-· 

reduce that so that, if possible, that it may be that 

the period of time to do one particular part of the 

~nalysis, we might be able to accelerate and as such, 

. . -

we would pus~·the entire ichedule up and make up.for 

some of the losses. 

we will go ba~k aDd look at the schedule 

to see where we can affect some changes and make the 

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1 commitment from my staff and the contractors that we 

2 will work with the industry and others to try to. 

J· assist the process as_much as possible. Comments such 

4 as the ·consumer acceptance that were well taken ·and in .. 

. . 

5 the next couple of mon~hs work with the subcommittee· 

6 and others to structure something in more detail so 

7 th~t we dort't get hung up and we can accelerate the 

8 process. 

9 MR. BROOKMAN: I saw Steve Nadel. 

10 MR. NADEL: One area specifically that 

11 strike~ me th~t.yo~ may be able to sh6rten is it looks 

12 like you have a 90 day, a three·month comment period 

13 on the . ANO PR. This is the ·second ANOPR. We've 

14 already had I think three workshops on this product. 

15 We're in addition talkirig a document a~ailable· 

16 November/December maybe that gets pushed back a little 

17 bit .. That strikes me-~s extremely generous and I 

18 would think JO days should be sufficient, .60 at the 

19 ·very most. So that ~ay be a way.to save a month or 

20 two. 

21 MR. BROOKMAN:. What was that comment 

22 again? 

23 MR. NADEL: The comment period on the 

24 supplemental.ANOPR. 

25· MR. BERRINGER:.·· We could reduce· some of 

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1 the analysis that's overlapping in there, too. If we 

• 2· 

3 

can accelerate .some· of that or maybe · full blown 

analysis, if we can get agree~ent on certain aspects; 

4 we won't have io do some. analysis if there's 

·5 agreement. 

6 MR. BROOKMAN: Additiona·l comments before 

7 we move off this subject on other opportunities in the 

8 existing schedule as you see it. 

9 MR. SAMUELS: What was the title of your · 

10 prev_ious page? It looked like it said parks or 

11 something. 

12 MR. BROOKMAN:· Yes. Items that don~t 

13 really fit. It's ca~led th~ park list~ the p~rking 

14 lot, if you will. It's where items . 

that we don't take . 

15 up in sequence get par:ked so they can be taken ~p 

16 later. They get parked there. 

17 MR. SAMUELS: Does it include; for 

18 example, the need for manufacturers to review and 

19 . probably have some interaction with LBL and then 

20 comment to the Department on the new software? 

. 21 MR. BROOKMAN: I thought we'd capture . 

22 those kinds of items in these next steps and that's 

23 where we are about to enter as soon as we finish with 

24 the scheduling issue.· Any additional opportunities_ 

• . 25. that.you see in the schedule. Steve? . 

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1 .MR. ROSENSTOCK: Steve Rosenstock, EEI. 

2 It says "Approval of NOPR 90 days internal." Is that 

.j standard, would you say? 

4 MR. BERRINGER: Again, we have some 

5 overlap there, too; but --

6 MR. ROSENSTOCK: · And then after that 

7 there's a comment period and a hearing and then review 

8 comments. Maybe that might be able to be shortened a 

9 little .bit. I.don't know. 

10 MR. BROOKMAN: Michael McCabe offered that 

11 he a~d his staff would come.back and look at this. 

12 · -I've noted it as a next step, so let's see what they -

- . . 

13 can come up with. Anybody who's got additional ideas· .•· ' 

14 ~bout where some efficiencies can be obtained, IJm 

15 sure Michael and Bryan would welcome that information. 

16 Yes, Steve~· 

17 MR. NADEL: And then ·is there an· action 

18 item that ~ill be mailed out to us? 

19 MR. BROOKMAN: ·Yes. · Can you give me a 

20 ball park date for that when iou'd send·out a revis~d 

21 schedule. 

22 MR .. McCABE: Mid-August. 

23 MR. BERRINGER: I would say mid-August . 

24 would be good. It gives us time or even if we have 

25 . . ·-

addi ti<:mal c"omments, we may have comments on the draft 

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1 -report and just do a mail out to include any revision~ 

2 to ·the draft report. 

3 MR. BROOKMAN: .Okay. Good. 

4 MR. BERRINGER: I think we've pretty much 

5 covered the schedule. We will work on that and .see 

6 where we're at. Are th~re any other issues then that 

7 people feel that we need to address? 

8 MR. BROOKMAN: Glenn·. 

9 MR. SCHLEEDE: I'd just like to sugges~· 

10 you get a specifi6 next step on· there on tbis consumer 

11 issue which include~ first _DOE making very cle~ryhat .-

12 it· believes its obligations are to consider consumer 

13 interest because I think that's v~r~ 6onfused at this 

14 time·. 

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15. And second, address the question of what 

16 -this consumer subcommittee is going to do, if 

17 anything. It currently has a chairman or co-chairman 

18 who doesn't seem particularly interested in the_ issues·: 

19 involved. He seems primarily ·interested in 

20 telecommunications. A very bright guy. I've dealt 

21 with him before. But· neither he nor the other person 

22 who ·allegedly· represents consumer interests on· .the 

23 advisory committee seem to have any . particular 

24 _interest in the energy efficiency standards and- it 

25 s·eems to me DOE needs to address tl)is question and··· · -

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1 maybe ask that chairman to. step aside and get one of 

2 the people like the gentleman at the table who also 

3 ,participates in it who seems to have some interest in 

4 both energy efficiency £tandards and consumer issues~ 

5 To just let this thing go ori and have a conferen'ce 

6 call ·every two months with the last one being a few 

7 _weeks before the advisory committee suggests to me 

8 that OdE isn't ·the least bit serious about this issue 

9 and that we ought to get somebody here like Mr. McCabe 

10 to commit to do something about this or else tell us 

11 all that DOE doesn't give a-damn about it. 

12 MR. BROOKMAN: Charlie. 

13 MR. STEPHENS: I think . we have a b.ft of 

14 confusion of i~sues here, too. The committee that· 

15 works in theory for the aqvisory committee in looking 

16 at theae issues has to deal wi)the.the broadest range 

17 of products.· . I mean it'.s not a subcommittee that's 

18 looking into clothes washer consumer issues. I mean 

19 water heaters don't have the same set of· consumer 

2 o issues that clothes washer~ have and that subcommittee 

· 21 I think may find itself. a little lost right now 

22 -because air conditioning, water heaters, clothes 

23 washers, refrigerators, all these things are quite. 

24 different every one of them and trying to come up with .•. 

25 some generic list or some generic ·appro_ach to all of-

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236 

1 these things is probably not doable. 

2 I think :r would rather ·suggest to the 

3 group here that we pursue whatever ~~ can, ~hatev~r 

4 methods are available to us in the clothes washer rule 

5 making and if we leain ~omething geneiic from that6 process, we can pass it on.to the committee ~nd they 

7 can use it later if parts .of it apply to the next 

8 product down the road. 

9 MR. BROOKMAN: Okay. Additional comments 

10 on these issues or additional next steps that derive .. 

11 from today's.workshop. Any additional next steps? No 

12 ~dditional next steps. I think we went through the 

13 list then. Okay. Then Bryan, T'll turri it over to 

. 14 you and Michael McCabe .for closing remarks• 

15 MR. BERRINGER:. I'd just like to thank 

16 everybody for participating today. rt was very 

17 useful .. One of the next steps I think we're.tasked is 

18 to get the consumer acceI?tance out, something done for 

19 the next workshop, something concrete. So I see that 

20 as an action item. It's one of the tasks. We have a 

21 number of them that we've listed here and gone through 

22 just now. 

23 · I would like to tharik everybody for coming 

24 out today. Again, we have written comments. I think 

25 ·we said by August 25th so whenever we get that, we' 11 .. 

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238 

• CERTIFICATE 

This is to certify that the foregoing transcript in the 

matter of: Clothes Washer Standards Workshop 

Before: U.S. Department of Energy 

Date: July 23, 1997 

Place: Washington, DC 

• represents the full and complete proceedings of the 

aforementioned matter, as reported and reduced to 

typewriting . 

• 
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• 

'1-~- . 

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. 07/23/97 6:45 am · 

PROCEEDINGS 

Good morning, I am B.ryan Berringer, Team Leader for the clothes. ·washer standards 

rulemaking team in the Office of Codes and Standards. J:he following people are ~lso on the 

team: Qonnie Laughlin, Carl Ada~s, and Barry Berlin from the Office of Codes and Standards; . 

. · Eugene Margolis and Edward Levy from General Counsel; ~nd Mark Friedrichs from the Office. 

. of Polley and International Affairs. On behalf of the Department of Energy, l would like to thank 

all 6f you for taking the time to participate in this second public workshop on clothes ~as.hers to 

take place under the new process improvement effort for appliance rulemaking as set forth in the 

J~ly 15th, 1996, interpretati~e rule. One of the outcomes.of the Nov~mber 15th, °1996, Clothes· 

"Washer workshop was for ~he Department to identify h<?\;v any new data would be collected and 

used throughout the process. In response to that we developed the Framework Report. Based on 

the outcome of the Manufacturing Impact Workshop held on March 11th and 12th, 1997, 

stakeholders and interested parties requested that the process be customized for each product: · . . . . .• . 

The purpose of this workshop is to discuss the process and analytical toois to be utflized: 

throughout the clothes washer standards rulen:iaking process. We plan to provi.de a. more 

detailed understanding of the process and analytical tools to be utilized and receive comrrients 

prior to proceeding with· data collection and analyses. Today's workshop will focus on the 

process and analytical tools needed for publication of the ANPOR (show Figure 1). A 

workshop is planned for _March 1998 to. further discuss analysis for t~e next phase of t~e 

process (s~ow sch.edule).· -. ' 

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A public notiCe of this workshop was published in the.fe~eral Register on July 3, 1997.: 

The Department. sent a package the second week of July, to all interested parties that responded . 

to the Federal Register notice. The package included th~ "Draft Clothes Washer Framework 

. Report" dated July _8, 1997, and the preliminary slides for the workshop. Copies of the draft 

report, slides and the new clothes wash('.r test proc-edure_s are available at the table (See Sandy). 

. . . 

Anyone atten~ing today's workshop or anyorie who submitted comments will be added to our 

mailing list for future mailings. 

The c~mments received here today an.d those already subffiitted during the written 

co~ent period will assist the Department in developing the supplemental advance notice of 

proposed rulemaking planned for January 1998. 

· The following are pr:ocedural items which most of you are aware of 

I will be the presiding officer for this workshop. Doug Brookman will be facilitating the 

workshop and will be setting the guidelines for conducting the workshop and providing other 

pertinent information. 

In approximately two weeks, a complete copy of the ~rariscript ;will be av~ilable for · 

inspection.and copying at. the Department of Energy's Freedom oflnformation reading room, 

located down the hall in Room IE-190. Anyone wishing to purchase a copy of the transcript may 

make arrangements with the court reporter. 

To provide the Department with as much pertinent information and as m,any views as ca11 

be reasonably obtained, and to enable·interested persons to express their view~,."the work~hop will: 

be conducted in accordance with the following procedures: . 

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The focus of this workshop is for the Department to listen ~o comments pertaining to .the 

process and analytical tools tq be used .. 

. . We will begin with introductions, the.n discuss the agenda and expand on the agenda if 

.necessary to provide everyone_ with an opportunity to discuss their topic. DO~ topics will remain: · · 

on the agenda as lead presentations in their respectiVe areas. 

We'll take an hour lunch break at a.convenient·time near 12 noon which is on your own. 

. . . . 

There is a snack bar one floor below us. There is the DOE cafeteria on the second floor of the 

west building, and a ~umber of restaurants in the underground mall atL'Eilfant Plua up the 

street. 

It will reduce interruptions if eyeryone who wants to speak ~aits to be recognized. Please .: . 

remember to speak into the microphones, especially those i_n the audience, and state your name _ 

and your company name ea~h time before you speak for the ·court reporter . 

. Side conversations should be kept to a minimum to avoid interrupting the presenter; _if a 

lengthy pri~ate discussion is needed, please move to a corner of the ro~m or out of the room. 

It may be necessary to cut off debate on some ~opics to maintain the schedule. There will 

. . . . . . 

be time at the end of the· workshop for additional discuss of significant issues. ·!"encourage.all · 

, persons present to participate as much as possible so that the Department may get a full spectrum 

of opinion on.these topics. 

This workshop is scheduled to end by 4 p.m., or sooner if all items have been ·completely 

· discussed. However, I don't think that willbe the·case today, we have a pretty fu~l agenda. 

Topics which have not been completely discussed by 4 p.m. can be addressed in additional written . . . . 

. comment's. The deadline for additional wrltte~ comments and.data submissions following this . . - . . . ~ 

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workshop will be determined based on responses received tod~y. All comments and data 

• · submitted will be considered befqre DOE publishes the supplemental advan~e notice of proposed: 

• 

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rulemaking. 

All written comments and data submissions will be available for public inspection at the 

DOE Freedom _of Information Re.ading Room. Phone number (202) 586~6020. Written 

comments should_be addressed to the Department of Energy as noted in the Federai Register 

'notice·for today's workshop. 

Ten copies of the comments or data are requested: In addition, the Department would 

appreciate an electronic copy of the comments or data. The Department is using WordPerfect 

6.1. No faxed comments will he accepted. 

Any ·persons submitting information which he or she believes to be confidenti.al and 

exempt by law from public disclosure should submit oqe complete-copy and ten copies from 

. which ·information claimed to be confidential has been deleted. 

In accordance with the procedures established at 10 CFR 10_04. i 1, ~he Department of . . 

Energy shall make hs own determinations as to whethei: the information shall be exemp~ from· 

public disclosure.' . 

In keeping with the regulations of these facilities, there is no smoking allowed in this.room· 

or building. The restrooms are down the hall to your left and right.· Pho~es are located in the · 

main lobby area. Again, we appreciate the time and effort you have taken in preparing for this·. . 

workshop, and are pleased to.receive your comments"and opinions, 

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I wo-uld like to reiterat~, the purpose of the workshop is to consider stakeholder 

. . 

comments on the process and analytical· tools to be utilized throughout the clothes washer 

standards rulemaking process prior to proceeding with data collection and analyses. 

At this time, I would like to tum it over to Doug Brookman to begin the introduct_ions, 

and then we'll go to the agenda review . 

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· · · · .•·· ..... Clothes. Washer. Standards 

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.·workshop . 

. . . . '· . ,· . . . .·; .. _.,.· ' 

July 23, 1997" · 

• ' ,t 

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U.S .. Department of Energy 

. . Office of Energy Efficiency and Renewable Energy . 

. · Office of Cqde~ and Standards 

I 000 .~dependence Avenue, SW . 

·. Washington, DC 20585 · 

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Clothes Washer Workshop . 

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• Major DOE Commitment .. · 

.. + EERE Performance Agreement with Office of the Secretary 

. · ~ Final Rule - h~ghest energy and ·water .savings justified · 1' • ' ' • ' -, • ' • ' I • ' ' ' ' 

. . ' ~· . 

.. ,_ .. . . . . . 

· · · • Possible tradeoff between time and ·1evel 

.. 

• Issuance Date: October 1999 .. 

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· ·· · · · · · . ·· -:Initiation of Energy Star labeling program ' I: :• ~ ', '' ·,, ' \, ,'" • ' ' ' • . • ' , • • , •' 

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· Clothes Wc;tsher Workshop . 

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. • Qbjective of the Workshop 

To discu.ss the process ~nd analytical tools. to be utilized 

.· .·. 'througnout th~ clothes washer standards.rulemaking process. 

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+ Framework Document '· .. . · '! . . . . ~ 

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•' ... - ·.-Issues relating .to proc_ess a·nd analytical tools discussed · I ' • ' 

. ~ DOE decisions . 

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· · · - .Comments _(within 30 days) 

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• · Propos·ed Schedule (cont'd) .. 

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· Clothes Washer Workshop: Manufacturing Costs 

Illustrative Input Distribu~ions for Incremental Manufacturing Costs 

·Efficiency 

Level 1 ·· 

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Incremental Cos,t($) 

. , ._ Ma.nufacturers can specify the mini.mum,_ most likely, and· niaxi~um. 

costs of achieving a .Particul.ar efficiency level.· · · · · -' · .. , I 

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... ' . I"· DRAFT July 9. 1991 6 . . , . •; . . ' ' . . . . . ~ ,,. . . .. 

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. · . · Clothes Washer Workshop .. 

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·, · · . ··.... _. e· . Proprietary Design " ' 

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. -. R~v.erse Engineering ' . .·I, • Baseline model · · · 

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·· · • Comm~rcially available H-axis model 

• Whirlpool prototype 

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Clothes Wasber.akings Schedule 

Fd> Mr Apr May Jn Jly Aug -Sep Oct Nov Dec Jn Fd> Mr Apr May Jn Jly Aug Sep Oct Nov Dec Jan Feb Mr Apr l\lay 

'97 '97 '97 '97 '97 '97 ''Tl '97 '97 '97 '97 '98 '98 '98 '98 '98 '98 '98 '98 '98 '98 '98 '98 '99 '99 '99 "99 '99 

Test Procedures 

Drafl Final Ruic · 

An.......,. Final Ruic - Standards 

·Publish 

Federal 

Issue Fmal 

Final 

Re.;....,. 

Ruic 

Rule 

Proof 

I 

I 

I 

~ · Rulcmakine Framework 

-'If!'!! n••· > 

Stakeholder Review ~I 

DOE discussion wit Stakeholders .111! 

Notice of Work•hnn p 

Commen1 Period I'll l"llll&'' 

· .Rulcmakina Framcwcnk W.S. -

Commcn1 

Prel. 

Notice 

Ir 

D.iu 

EnR. 

DraflANOPR 

dala 

Collcc1i<in 

Natiooal 

AnalJLCCICand. 

avail 

or A 

Pcri.Jd 

vailabililv 

.• Cash 

Fon:casline 

Row 

Std. 

Anal. 

Lev. 

~ Annmv:il or ANOPR 

Publish ANOPR 

· Corruncnl Period 

· Wcnkshop 

Revise ANOPR Anal'°""' 

Consumer Subt>iutm Analvsis 

.. Manufac1urcr Im""" Analvsis 

Utility/Environnicntal Anal,,... 

Notice or Anvailabilirv 

Comment Period 

Workshop " 

' l>rah NOl'R 

DOJ & OMO Review• 

Aooroval of NOPR 

Issue NOPR. 

: Comment Period & Hcarina 

Rev. Cmnts & Revise An:il. 

Sukcholdri Review 

Final Ruic Drarl/Annmval 

OMB Review &: Annmval 

Publish Final Ruic 

. - DOJ cOmullatioa and OMB review and 11pPJOval . 

.. 

J 

-, ~ • > 

··. 

I\ ;; ".'.· 

. ; 

. ,, ! . 

a 

II: .. I .. ~ 

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·,· 

....... I 

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;1mr.. \~'!I".". '".flf:P' 

~-~.A .: .. · 

•• 

Jn Jly Aug Sep Ocl 

'99 '99 '99 '99 '99 

111.11!11 

1!lff' lj!lm lWl!l'.I 

• 
. , ··. 

' ·. . . ~· 

., . ·· ... :. ; . 

' " . .• 

... . 

.. ' .. •. '· 

~ . ' . ·.· :, ::·' .. - ,'f•.• . 

,.•. 

: Manufacturing Co$tS for 

· · ·. Clothes Washers 

Approaches· to bata·-Gatheri.ng, · · 

. .. . · · Reporting and $tatistical 

,. _,_ .. Treatment·· · ,.-.. . ... ' 

j ~: ~ 

.. '; . ' 

. : . . .~ . 

' . ' . . ,· . , .. ' . 

.. :..,. ·, ~ 

... ' 

•,> ·-. '··' • ..... · ' 1-•' 

•• 

Clothes Washer 

·Workshop. 

July 23, 1997 

·t . 

' ; ' 

'· 

• 

U.S. Department of Energy 

. Office of Energy"Efficiency 

and Renewable Energy . . 

1000 Independence Avenue, SW 

. Washington, DC 20585 
... . 

'! 

•• . Clothes Washer Workshop:. Manufacturing Costs . . . 

Introduction 

Where costs are used 

Life-cycle cost analysis 

Manufacturer impact analysis 

... [vj . Need for new .cost information ,. ·. 

. . 

" .. .. - Update/yalidate· current information . 

.• 

.. ' 

. . ... ;. I 

. ·.· .. . '~-· . . . .:" . ~. .~. 

• " ••. y .. 

: ' ,· .:·: '_. I 

'•' '>L '_''"'"'"' J. "• 1 •• 

· .. 

.... _ .... 

-. Recent experience with new technologies 

Consider~tion of .. Whirlpool technologies 

· . - Compliance with the Process Rule 

• 

DRAFT July9.1997. 2 .. 

. . f ~ ' . 

.,, •. f . 
• 

,. <, 

. ' 

! • '• ! 

. '. 

•••• . . . . . 

Clothes Washer Workshop: Manufacturing Costs 

Data Collection Timetable 

r-.Z. ' . lmporta'nce of a finalized revision .to. 'the test procedure .. 

·. 'i/J · .. ···.Establishment of a baseline MEF value . .. _;, , r' ·~. ~- . '• ; : , ~ 

. ' ' ·•. ~ . 

. ~" . ., . '.~. ' 

' I ,• ', ' 

.. ··'· ' 

·. i/J. MilEistones (approximate) ,•I • 

·•'\ 

Finalized revision to test procedure (Begin) · 

Establishment of baseline MEF (Week 4) 

. ' 

Data submittals to AHAM (Week 12) 

Release o,f data .to DOE (Week 16) 

. •.;: 

• 

~... .. . 

' . : : ' 

. ·. ·~ . " .DRAFT July9.1997 .. 

. . . . . , ' .. . : ~ ' 

: 1 .... •.• 

. ..... ' ~. . ' ' . • ~. • '•.• ! • • • • '. • • > • ; ,' ~ '! • ., : > ·• ,._,, •. I ' ' • • • • ~~· . . . . ' . . . . . 

4 
•• 

,. 

. :~· ' 

·' 

I ,· 

..... ' ....... :· 

·' " . ' ,' :· 

. . :··'I .. JI' 

· .. ". 

. ·.·· ·/· ' ... ·. 

•. ~.: ' ' I' 

. . ~ • ·!· 

. . 

. .. . , 

• 

Clothes Washer Workshop: Manufacturing Costs· 

Sf'.lipment Weighted Cost Distributions 

Efficiency 

Level 1 

. Efficiency 

Level2 

Efficiency . 

Level3 

. •, 

.... 

1,000 Trials 

Forecast: W Avg Var Cost Lvl 1 

Freq~ncy Chart . 20utliers .032 ------------------------32 .024 

~ :a 

... .016 • 

.c 

.. ·d: .008 

.ooo 

• 

1,000 Trials 

$1.75 • $2.25 S2.75 

Forecast: W Avg Var Cost Lvl 2 

Frequency Chart 

$3.25 $3.75 

-; 

2.0utliers 

.027 ....----------r---------.. 27 

~ ii .014 ...----.-~ttt .c 

ct .007 +---:f-1 

S2.75 . $3.31 $3.88 

1,000 Trials 

Forecast: W Avg Var Cost Lvl 3 

Frequency Chart 

~ 

:.a ... .012 -----11- .c 

ct .006 '!--,---++• 

$4.00 $4.75 

. ',. 

$5.50 

·cost 

: ~. '. ; . 

$4.44 

20.25· 

:r1 

C"D 

13.$ ..cl . c: 

C"D 

= 6.75 ~ 

0 

$5.00 

0 Outliers 

24 

18 

:r1 

C"D 

12 ·= 

·~ 

= 

~ 

$7.00 

.. '• 

• 

Sampling of cost 

. distributions with 

application .of market 

share weights results in . . . 

. industry cost ·f. 

distributions for each 

· efficiency. level 

· »DRAFT J~ly9.1997 .. 8 
•• • • 

' 

'' .. 

. . .. ' ' .I' 

\». .•. . .,. 

I< ' ~ • • 

'. ' . I '' 

c1·othes Washer Workshop: Manufacturing Costs 

Cost - Efficiency curves can be constructed for various.percentile 

values indicating o/o of shipments within a certain cost range. 

'. 

Weighted .cost Distribution by Efficiency Level 

$7.50 

• 

$6.00 ~ . 

... 

Cl) $4.50 • 0 

0 

. 

~3.00 

~ 

•• 

1 . 2 3 

Efficiency L.evel 

.· .... 

·. ·" 

. ·.·. . ....... · 

Certaintie$ Centered on Means"· • ' ~ ,., r ' 

. . . · .. . • l • ' 

.... ·'._ ::· DRAFT Ju1v ~. 1997 . 

.. 

. :. ! 

· ...... 

90% 

75% . 

50% 

25% 

10% 

10 ' 
'; ' • 

.. ',, 

•• 

Clothes Washer Worksh~p: Manufacturing Costs 

··.Costing Approach/En·gineering Analysis 

ii/J Ma.ri'qfaCturers have indicated their preference for an ENERGY-

. · , .. Ef='.FICIENCY approachto,reporting manufacturing costs., · 

.. ~' AHAM members believe appropriate levels are baseline, 5%, 10%, 

15°/o~ and 20°/o · i_mprovement applied to an existing Vertical Axis 

· · · clothe~ washer and improvements of 35°/o, 40°/o, 45°/o and 50o/o 

;"\':'.-applied to a Horizontal Axis clotnes washe_r.. · · . · 

• ~ hThe value of the baseline MEF will be calculated once the test 

, . • " ..• ! : · procedure. is finalized and efficiency imp.rovements reviewed 

. ' . . '\.' ·,accordingly..... . . 

. ;".' . . : 

". 

-' ~. . . ' 

. : ~ 

. . . : . i . . . DRAFT Ju1y9.1~1. . 12 .... . .. 

• . . : ' . 

: .: . -. .; - · ....... ' . ;,.: ~ .· ... ~· ' .. ~ •, I , 

~- . . . 
• • • • •• 

. • . . . '• 

· .. ·. 

·" 

" . 

. . ' 

' ·.·. ' . 

Clothes .Washer Workshop.: Manufacturing Costs 

_Consider~tion ·of.Whirlpool Prot.otypes 

f.-./J · AHAM members believe it is: not appropriate fo_r -them to com.ment. · · 

. . '. ,;JJ·-···· : i ! 

. '··· .J 

.. on the cost/efficiencies of ~hirlpool.designs. ; . 

Whirlpool does not think it is appropriate for them to provide costing 

· information on these prototypes. They have offered to cooperate 

. instead with. a third..:party cost assessment. 

' ' .... ' '. 

' . ··•'. 

. . ' . ' . 

' . • • l .· : •. : • -. ' 

. , .. · DRAFT Ju~9,-1!191 ~ ' I : ' I •,' . : . 

~ . -~- '. v: .' , .. . · ',· . ,· 

. " ' . / . ' . '. 

·. · .. . ' 

. '•.,.. f.'1 ~· • .j ' - ' ' I • '' '. ~ ·' . 

14 
A. Home Laundiy Data COiiection 

DOE .Rulemaking 

Summer; 1997 ·, 

. . ~lothes Washer, Standard Capacity (1.6 cu.ft. or greater) 

,._ 

.. 

···. ," 

··.·' 1:·.: 

Percent 

Improvement 

111 

Baseline 

5% 

10% 

15% 

20% 

35% 

40% 

45% 

50% 

I .• 

7/22/97. 

Proauct 1,;naractenst1cs 

MEF Total 

Enerav 

w/dryer 

cu. ft./kwh/cycie kwh/cycle 

121 (31 

0.885? 

· .... ~ :; t .... : ; · •. :. • :- ' •• l •• ·, ·- ·., ,>·•' 

Clothes 

Container 

cu.ft. 

141 

Hot 

Water .. 

kwh/cycle 

151 

• • 

Energy Use Water 

Energy Estimated 

Machine Dryer Water Water Data 1997 

Energy .Energy Use Use Source Annual 

Production 

Volume 

kwh/cycle kwh/cycle gaVcycle galJcu.11. 

161 171 18] [91 1101. (11] 

----------

....................... 

...................... 

'' ----------

..................... 

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,• ...................... .. ----------

.:Page 1 
. A&ome .Laund~ Data Collection 

DOE Rulemaking 

··Summer, 199i 

•• 

Clothes Washer, Standard Capacity (1.6 cu.ft. or greater) 

Variable Costs lotal vOSt Uncertainty Range . 1-:'roduct Conversion <.;osts 

-· Costs per Unit Variable (+/-percentage) Total (millions of$) 

Percent Costs Variable Costs 

Improvement Materials Labor Overhead ($per unit] Tooling Investment Research Marketinq 

Maximum Minimum Costs & Devel: 

[121 [13) [14) (151 [161 [17] [181 (19) (20) (21) 

Baseline 

5% 

10% 

15% 

.·,' . 20% 

... 

35% '. ' ' . '·,,. 

40% 

45% : 

50%· 

.. · .. . { ....... ,. 

···,· ...... 

... ·•' ·:.' 

/ . ' ' ·.: 

·,·, ... ,. 

·-· .. ~. . ~ . " 

7/22/97-. ~ Page 2 ....... · .. · '· .. ' 

·' t 

·:'. . { ·.:' .... •' ..... .11·. 

• 

lotal c:ost uncertainty Hange 

Fixed (+/-percentage) 

Costs of Fixed Costs · 

(millions$ 

·Maximum Minimum 

[22) [23) [24J 
. A. Home ~undry Data Collection 

DOE Rulemaking 

Summer, 1997 

Clothe.s Washer, Standard Capacity (1.6 cu.ft. or greater) 

.: I 

-.. . ··.: .. ... , ... ; ·' ·· ... 

"· 

...... 

·,.:· .. . . ·: ~ . '· ... . ~·' • • I 

,. 

,·, -.... ; <· ':' : I• • '~. ,, ' 

. '" . :.•: .:. 

·>'' .. :' ; .. :: ,-712.2.197' .. 

·:·~;Y~'.\~:;i.~-:';~··r..\~·t?;~::1~~>:;:..~,:_ ·~;·'· .. ~:-~ .. -~ .. ·.·; -.. . 

Percent 

Improvement 

Baseline '• 

5% 

10% 

15% 

20% 

35% 

40% 

45% 

50% 

.. 

. (~ " .·. ;: 

, . 

. ·::· . . '· -... -.. . • . ' .. ~· • .;.·. - : ., ~ t 

• • 

• I 

I 

Comments Estimate 

increase in 

·Retail Price 

[25) [261 

.. 

'. 

' 

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'"'1 . 

.,: . . 

Page 3' 

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• 

• 

•• 

Data Request .C2: Efficiency-Level Approach Footnotes 

This approach consists of letting the manufacturers supply cost and corresponding 

efficiency data using any design options or design option combinations they choose. 

[ 1] Based· on MEF (includes washer and dryer energy). Percent increase column 

[2] 

[3) 

[4] 

[5] 

[6] 

[7] 

[8] 

[9] 

[10] 

[11] 

[.12) 

could be replaced by a MEF column. 

Percent improvement = { 1 - (baseline MEF I new MEF)} x 100 

Refer to Section 4.4, MEF, DOE Test Procedures'. Baseline MEF value to be 

provided by AHAM. 

Sum of Ere and DE; where ErE is from Section 4.1. 7 and DE is from Section 4.3 of 

. DOE Test Procedures'. · 

Re.fer to Section 3 .1, C, DOE Test Procedures 1

• 

Refer to Section 4.1.3, HEr, DOE Test Procedures'. Includes only externally 

applied hot water. · 

Refer to. Section 4.1.6, MEr. DOE Test Procedures'. Includes internal hot wate~. 

Refer to Section 4.3, DE~ DOE Test Procedures'. · 

Refer to Section 4.2.2, QT, DOE Test Procedures' .. 

Refer to Section 4.2.3, WCF, DOE Test Procedures1• 

Source fpr Energy Use data: test data (T), calculations (C), or estimation (E) .. 

Assumes a constant production volume at the level anticipated for the year the 

riew standard comes into effect (2003). For production of all models in product · class. . · · · 

Material costs are th_ose costs associated with the purchase of all materials 

required iri the manufacturer's production process. Accordingly, material costs. 

include not only the cost of the material in the finished component, but also that·of 

the material scrapped (because 9f material removed or scrapped components) 

minus salvage price. Estimates of direct material costs account for all raw . 

. materi_als and purchased' finished supplier parts that are directly assigi\able to the 

end product. . 

[13] Labor costs include al_l direct costs that are physically traceable to the end product, 

plus any-overtime premium. 'Labor costs are determined as ari average wage rate, ... 

·depending. on worker classification, required to perform the tasks resulting in the . 

end product~ ·Total labor cost per unit is a summation of costs taken over all tasks . 

or operations· required in the production process. · 

[14] Overhead includes factory overhead excluding depreciation. Includes both_ direct · 

and indirect components. . 

Direct overhead costs are_ the estimated overhead charges that attempt to ac~ount 

for all other expenses that are due to the production process, vary directly with the 

production volume, and contribute to the cost of sales. Examples of such . 

<;< 

1 _Cloihes Washer Test Proeedure titled "Uniform Test Method for Measuring the Energy 

. Consumption of Automatic and Semi-Automatic Clothes Washers." All are part of Appendix Jl .· 

.. to Subpart B of Part 430. · 

Draft CWASHER5.WPD 'July 22, 1997 C-9 

l. 

: . . , 
• 

•• 

[15] . 

[16] 

[17] 

[18] 

. [19] . 

. [20] 

[21] 

[22] 

.· [23] 

·_.[24j 

expenses include, but are not limited to, expendable tools, material handling 

support, fuel and power requirements, set up costs, freight in and out, costs of 

direct supervision, and clerical costs. (The estimated total of all expenses that 

vary with the production quantity is based on the volume of common or near 

. common components to be produced. The sum of these expenses is then.· 

apportioned ~o each component on some logical scheme.) . 

Indirect overhead are comprised of,.burnot limited to, property taxes, insurance 

costs, etc .. 

The inanufacturers_could either provide the direct ·and indirect overhead costs 

separately, or provide the total overhead costs and a percentage value indicating 

the direct vs. indirect split. _ · 

Total of columns numbered [12] through [14]. . 

· Show the range of expected variable costs expressed as maximurμ value (% over 

column [15]). 

Show the range of expected· variable costs expressed as minimum value (% below 

column [15]). 

Tooling cost is the total·cost of special tooling to manufacture a component' over 

the entire life production volume of that coinponent. Tooling costs will be .. -· 

amortized over a period of 5 years2 

•. 

Investment cos.ts are those costs associated with the purchase of property, plant' 

and equipment required for the inanufacturer's production process. Investm~O,t 

·costs will be amortized over a period of 5 years2• 

R&D costs are costs incurred for the purpose of designing and developing new 

and improved products, or processes. R&D costs will be treated as an expense. 

Marketing costs ate the ·expens.able costs for new product advertisements, . 

literature and catalogs, and various related marketing expenses. Marketing costs 

· include market research, advertising, point-of-sale· promotions, and s~espersons' 

compensations and travel costs. Marketing costs will be treated as an expense. 

Total of columns numbered [18], [19], [20] & [21]. 

Show the range of expected variable costs expressed as Iilaximuin value (% over 

column [22]); · · · -

Show the range of expected variable costs expressed as minimμm value-(% bel~w ' 

column [~2]). · 

2 The Department will perfonn sensitivity analysis on this variable as appropriate on the 

suggestion of stakeholders. . . 

Draft CWASHERS.WP_D . July 22, 1997 C-10 

·'' 

•'. 

.:• 
• 

• 

• 

Explanation of Relationship Between Percent Improvement and l\IBF 

· Definitions·and Equations 

(1) MEF = cu.ft. capacity I kWh energy used 

We see that MEF is inverse))' proportional to the energy use .. 

(2) Perceni energy savings= [(reduction in kWh 's used) I (original amount of kWh's used)] x 100% 

· Therefore, 

(3) Percent energy savings= {[(JIMEF,orig.) - (JIM~F~new)] 1(1/MEF,orig.)j x 100%. 

An assumption is made that the capacities· of the different design options are constant. Equation-(3) is the · 

mathematical equivalent of: 

(4) . Percent energy savings= {(MEF,new - MEF,orig.) I MEF,new] x 100% · 

(5) . Percent energy savings= { 1 - (baseli~e MEF I new MEF)j xJOOo/o 

• Baseline and orig. (Original) are used interchangeably here .. · 

To calculate a New MEF, given a Percent Decrease in Energy ·consumption 

(6) · MEF,new· = (MEF,baseline) I [ 1 - (%energy savings) I 100] . 

Example: 

Baseline energy consumption = 3.306 kWh/cycle 

Baseiine MEF = 0.885 

Horz. Axis, recirc·., 40% RMC energy consumption = 1.685 kWh/cycle 

. .. 

Steps for· calculation of MEF for the Hon Axis, recirc., 40% RMC: 

" Percent energy savings= (3.306 -1.685)1(3.}06) = 49.0% [Use Equation (2)] 

Or, 

" MEF;new = 0.8851 [1- (49.01100)]= 1.736 ' [Use ~uation (6)L 

Summarv. 

Design Option kWh/cycle MEF 

Baseline 3.306 0.885 

Horz. Axis, recirc., 40% RMC 1.685 . 1.736 

(=> 49% energy savings) 

. . 

Note: The percent efficiency can be b.ased on either a) the actual kWh/cycle orb) the MEF. The differenc~ being· 

that the MEF normalizes for washer basket volume .. This is illustrated in Equation ·t and Equation 6. Since DOE 

does not have the capacity data at this point the percentage improvement is expressed as MEF values . 

.•'-I 
• 

.-

• 

EF, MEF, and Conversions 

Background _ 

At the start of the cWTent clothes washer rulema!Qng process,AHAM submitted efficiency data based_on two test 

procedures: a) the test procedure in effect at that time (usmg EF) and b) a proposed AHAM test procedure (using MEF). 

The proposed AHAM test procedure was modified by DOE and AHAM and is now known as the Appendix JI test 

procedure. This test pr~ure was sent to stakeholders qn July 18th, 1997. 

• . Based on the CWTent test procedure the AHAM submitted a shipment weighted average .(SWA) baseline EF of 

1.198. The baseline in the Draft Preliminary Engineering Analysis has an shipment weighted average MEF of 

0.885 ft3

/kWh. (This value is intended to correspond to a EF of! .198). The minimum required standard is an 

EF of 1.1 S ft3/kWh. 

Adjusting MEF to Modified Test Procedure 

As the AHAM proposed test procedure was modified, the energy use values, including MEF values were adjusted by 

LBNL. These adjustments required that certain assumptions be made. Further detail on adjustments to the MEF are 

detailed in the Draft Report on the Preliminary Engllieering Analysis presented at the November 1996 Workshop. Also, 

fwther detail on adjuStments are discussed in supplements made available after the 1996 Workshop. For example, in· 

my corrections I always assumed a washer with HC, WC, and CC temperature selections. Had I made different 

assumptions, the correction fa~tors u.sed would have bee.n different. 

Converting EF to MEF . -

• There is no direct way to convert the old EF values to the new MEF values Without making assumptions or 

having raw data to input into the new test procedure. · · 

• In determining the MEF, manufacturers had to make assumptions on the type of clothes washer used and what 

. kind of temperature selections were. available. The new Appendix JI test proce<iure also has several raw data 

inputs that weren't required under current test procedure.· 

• A shipment weighted average MEF value of0.923 was used in the Cloihes Washer Ru/emaking Fram.ework, 

-Appendix A. This value was anived at by using the current shipment weighted average energy factor (EF = 

1.23 as described in the ft.HAM fact book) and subtractmg 25% (l .23 less 25% = 9.23 ft3/kWh). The 25% . · 

reduction was based on 1.18 (the current minimum EF) less 25% = 0.885 (the baseline MEF). However, the 

0.885 MEF should have been eompared to the shipment weighted average baseline EF supplied.by·AHAM 

which is 1.198. ·If a rough approximate conversion is wanted then a conversion factor of 26. l % should have 

been used Cl.! 98 less 26.1 % = 0.885). . . . -

·• MEF based on actual testing has not been required by the FTC or the DOE and therefore, there is no database 

on this metric. To get actual MEF values, raw data should be· inputted into the.Appendix Jl test procedure. 

• Ted Pope, Andre~ DeLaskey (CEE) and others have convert~d from MEF data in my analysis to an EF they 

could use as a basis for their market pull programs. Assumptions had to be made to make these conversion as 

·well. 

Discussion 

• The minimilln standard should be the baseline. for the life-cycle cost. 

• For national energy savings the shipme~t weightCd average efficiency should be used as a baseli.De. 

Future Work 

· .. · As a check on future data submitted by manufacturers, a parametric analysis eould be done, where temperature and 

water consumption values are entered into test procedure equations. The test procedure calculations can be set up in a. · spreadsheet. · · · · · . ,