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# • ..**~** UNITED STATES OF AMERICA + 

## + + +.+. DEPARTMENT OF ENERGY + + ·+ + 

### + CLOTHES WASHER STANDARDS. WORKSHOP

···, +·+ + + + WEDNESDAY, JULY 23, 1997 ++++.+ WASHINGTON, D.C. · 

## + + + + +
The workshop was held at the Department of Energy, 1000 Independence Avenue, S.W., Room lE-245, at 9:00 a.m., Bryan Berringer1 DOE Office of Codes and .Standards, and Doug Brookman, Facilitator, presiding.

PRESENT:

(202) 234-4433 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 

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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



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• ·3 

### 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

.. Determining Future Prices fpr Clothes Washers . 101 Life Cycle Cost Analysis and Preliminary Basecase, NESS • . . . . . . . .• . . . . . . . . 129 Consumer Acceptances 

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# . . . Remaining· Issues Next·Steps Closing Remarks

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•• 4
,· 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, car1 ·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 Office. 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 

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• 5 

### 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.

- - 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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• 6 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 24 25 ·obtained,· and**~et** everybody's Views expressed, -the workshop will be conducted in accordance with the

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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. .20 

### ·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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• 8 1 p.rn. , or sooner if .iterns 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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• . 9 

### 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 reit"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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.**-~·**10 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.

.. 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 

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• 11 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. Margelis I Office 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
25 _say your name, please, and go around. everybody knows who

### ,·s ·who.

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# • 12 ·1 

### MR. WUENDERLIN: I 

### Im Phi1**W~ender**

### 1in.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

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• 13. 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. -25

(202) 234-4433 We will**ha~~.lunch** from noon until l:OO.- 

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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

. . . 

### ·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

(202) 234-4433 

### Just very,· very**b~iefly.** 

### We started. out 

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• . 15 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 

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• 16 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.

(202j234-4433 

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


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• 17 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 dommitment 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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••• 18 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 25**~n technologic~l**  and economic**framewdrk~** There is,

.however, ·a commitment to consid.er trade off between· ·

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• 19 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 office 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 25 into
-- aiding the market place and supporting the introduction

(202) 234-4433 . of new. technol6gies, particularly 

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• 20 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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### R. GROSS

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# •

•

• 21 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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### R. GROSS· COURT REPORTERS ANO TRANSCRIBERS 1323 RHODE ISLAND AVENUE, N.W.

. WASHINGTON, .O.C. 20005 (202)**234-443~** .··

# •

•

•**----~-·---** ---- 22 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

. (202) 234-4433 NEAL R. GROSS· COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVENUE, N.W. WASHINGTON, D.C. 20005 (202) 234-4433 '· ..

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•

•• 23 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 ANOPER 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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### NEAL R. 

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# ...

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•• 24·. 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. Nowi 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

(202)"234-4433 dealing with. ·· is· qonsidering_ water 

### NEAL R GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVENUE, N.W. WASHINGTON_, D.C. 20005 (202) 234-4433 . -·:·. . ...**~**.-.

.. .**-~·-~:,** _.

. .. ·.

.. ·.**·~,**...- ' . ' '

# •

•

• - ---------- --- 25 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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# •

•

• 26. 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

: (202) 234-4433 

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.WASHINGTON, D.C. 2poos. I'll

(202)**234~433** •

# •

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• 27 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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### - .

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• 28 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 themselve: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. 

### NEAL 

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-(202) 2344433 ·•

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•• 29· 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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• 30 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•

(202) 234-4433 . And we recognize that there_:are· a numbe·r of 

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•

• 31 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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• 32 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

(202) 234-4433 MR. McCABE: No. MR. JONES: Was I wrong? NEAL 

### A. GROSS

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• . 33 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 NEAL 

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### that.the·

.·.... ·-

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• 34 

### 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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• .35 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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• 36 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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•

• ·37 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

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE**IS~AND** AVENUE, N.W. WASHINGTON, D.C. 20005 (202) 234-4433 ..·' .

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•

• 38 

### 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~**

### tis 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 24 

### 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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•

••• 39 

### 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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• 40 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·iterns 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

. (202) 234-4433 As far 

## ai**agg~egation** in order to come up 

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• 41 

### 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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### And it seems to me the only reason it's 

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•• 42 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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• 43 

### 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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• ---- ----------**------------~** 44 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, variabilitybetween-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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# • 45 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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# • .46 

### 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: Wel1, Mike is. my name so when
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••• 1 2 47 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 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS

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• 48 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 specifical.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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• 49 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_



### - 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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• 50 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: Characterizinguncertainty

. . 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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• 51. 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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• 52 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 butthey, 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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• 53. 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~est** 19 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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• 54 

### 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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•

• 55 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 relative to the base c·ase. So,. I mean.; YO':l can.

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• 56 

### 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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• 57 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.tIs equally true fo.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.istribution. 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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• 58 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: ActuallyI**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

(202) 234-4433 MR..WUENDERLIN: I think you can l_ikely
-- MR. RIVEST: Let's leave· that in the hotel 

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• 59 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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• 60 

### 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 ·notsure. 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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# • 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** 

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• 62 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: Wuender1in. 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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•

• 63 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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.... 64 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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•• 65 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 itIs 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

(202) 234-4433**~** FACILITATOR BROOKMAN: Charlie. 

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# • 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 20 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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• 67 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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• 68 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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• 69 

### 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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# • 2 3 4 5 6 7 8 9 10. 11 12 13 

# • 14 15 16 17 18 19 20**~l** 22

.23

24· 

# • 25 . 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 Samue1s. 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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••• 71. 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 2O. 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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• 72 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 didnIt propose this costing approach. 25 You proposed it. We agreed to it.

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••

• ' 73 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 fram·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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• 74 

### 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 effl.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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• 75 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 mariufacturer 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.

(202) 234-4433 And an**indust~y** black box and a**governm~nt** 

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• 76. 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

.(292) 234-4433 MR. RIVEST: Are iou asking
-- FACILITATOR BROOKMAN: Chuck Samuels. MR. RIVEST:**Wear~** 

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# • 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 2o 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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• 78 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

(202)234-4433**I~m** not worried about five or ten**percen~** 

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• 79 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

(202) 234-4433 FACILITATOR BROOKMAN: Steve, and the·n
MR. NADEL:· · With the old measure cost NEALA. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVENUE, N.W. WASHINGTON, D.C. 20005 (202) 234-4433

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•• 80 

### 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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# • ... 81 

### 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.

(202) 234-4433 

### That should be relatively straight forward 

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• 82 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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# • 83 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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### I think that

(202) 234-4433 ..•.. .: •..... .**'~**...

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• 84 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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# •

• 85 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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• 86 

### 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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• 87 

### 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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• 88 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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• 89 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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• 90 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·ality, 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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### 91 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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• 92 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 suffi_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 .. investments are phased in over a three or five-year

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# • 93· 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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• 94 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

(202) 234-4433 · NEAL 

### R. GROSS
. COURT REPORTERS AND rRANSCRIBERS - 1323 RHODE ISLAND AVENUE, N.W. WASHINGTON·. D.C. 20005 ' (202) 234-4433 . . '.**~**-.95 1 year of production and capital costs as two different 

# • 2 uncertainty us ·sufficient give would bands·, 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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•• 96 

### 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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•

• 97 

### 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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..· 

### ....**~·-**

.**~** ·' .-.**-.~** · .. ,. •,..

# •

•

• 98 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

:. (202) 234-4433 

### MR.. BERRINGER: Right. As Michae'i McCabe NEAL

### R. GROSS 'COURTREPORTERS ANO TRANSCRIBERS 1323 RHODE ISLAND AVENUE, N.W. WASHINGTON, O.C. 20005 (202)"234-443399 

### 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 '.

·2O 

### -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 

# •• NEAL 

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•

• 100 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 prices 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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# •

•

•• 101 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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•

•**10~** 

### 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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# •••



# •

... 103 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 NEAL 

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•

•• 104 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 FACILITATORBROOKMAN: .Additional comments 23 24 25 . . ., 

### on factors that_ may limit the usef.ulnesses of these : price forecasts? Chuck.

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# •

•

•• ---- --··------- 105 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 indivictual 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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•

• 106 1 MR. BERRINGER: No, I don't know that 2 

## We IVe 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.

.(202) 234-4433 . MR. FOLEY: Gene Foley from the**Allianc~**.. FACILITATOR BROOKMAN: Gene, .please use· NEAL 

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.**~** . '

# ....•107 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 .deseripters. 15 MR. FOLEY: Gotcha.- '16 FACILITATOR .BROOKMAN: Thank you.

17 MR. BERRINGER: Expert· foreS'.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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•

•• 108 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?

(202) 234-4433 

### MR. MORRIS: I don't remember that
-- MR. RIVEST: You don't remember that


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••



# • ·109 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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•

• 110 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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### .·

# •

•

• 111 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 Departmentof Transportation, for it's 24 financial analysis, developed a financial method of 25 

### deriving mark up· to see how increased in· cost to**(~02)** 234-4433 NEAL 

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# • 2 3 4 5 6 7 8 9 10 11 ·12 13 

# • 14 15 16. 17 18 19 20 21 22 23 24 25 

# • 112 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.

(202) 234-4433 MR. NADEL: And how ab6ut the**l~st** onei 

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# •

•

• 113 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

(202) 234-4433 

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# •

•

• l.14 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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# •

•

• 115 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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•

• 116 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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# •

•

• 117 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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•

•• 118 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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.··..



## .**~·'** -.

# •

•

• 119 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: Addition·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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# •

• 120 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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•

• 121. 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

(202) 234-:4433 

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•

• 122- 

### 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

. (202) 234-4433 . 

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## -·-**~·** .··..

# •

•

• 123 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?

(202) 2J4...i433 

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. 124 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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• 125 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

(202) 234-4433 .But I had not planned to talk abo·ut that NEAL 

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•

• 126 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

(202) 234-4433 are some other few hotels nearby where you Ed, ED: to go do you have a comment Yes, just. to get to down. 

### NEAL 

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(202) 234-4433 ) .

# •

•

• 127 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

"" (202) 234-4433 . 

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• 128 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 additiol), 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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# •

•

• . 129 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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•

• 130 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.rithout 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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•

• 131 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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•

• 132· 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. 

### NEAL H. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVENUE, N.W. 

### The prices

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# •

•

• 133 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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•

•• 134 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 price · 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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•

• 135 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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### "'·

.- .... :

# •

•

• 136 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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•

• 137 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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# •

•

• 138 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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•

• 139 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 3O percent -for certain costs. 22 Thirty percent is some mixture of water heater and 23 ·dryer and you're going to 24 25

(202) 234-4433**MR~** MORRIS: You still**h~ve** the data. MR.· McMAHON: ·AHAM is going to provide·the NEAL 

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# •

• 140 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 sensitivities 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.

(202) 234-4433 MODTLAND: Yes.

.NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVENUE, N.W. WASHINGTON, D.C. 20005 The six.. 

### .:You.

(202) 234-4433 . .. ..

.· - 

# ..

,"I.··

. "· • T ..,.**~ \.~** ...

.:·;

# •

•

• 141 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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# •

•

• 142 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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### If you ·1ook at

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# •

• 143 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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# •

•

• 144 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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## ...**~**

. 't _:.• ,
_ .....·-

## ·-**-'~~~-~·:··<~**

....<

# ••

•

• -------- ----------- 146 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

(202) 234-4433 MR. McMAHON: To Bryan. Thank you. Okay. so for those of you·in·the back·, I. NEAL 

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### 147 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 

# • -cycle costs, $1,

### 732 in the base case, $1,400. 

### in ·the 

### NEAL 

### A. GROSS .· . . COURT REPORTERS AND TRANSCRIBERS 1323·RHODE ISLAND AVENUE, N.W. (202) 234-4433 . WASHINGTON, D.C. 20005 (202) 234-4433148 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 NEAL 

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• 149 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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• 150 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· NEAL 

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• 151 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 prices.**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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• 152 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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### ...:·153 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 NEAL R GROSS: COURT REPORTERS AND TRANSCRIBERS .. 1323 RHODE ISLAND AVENUE, N.W. (202) 234-4433 WASt:flNGTON, D.C. 20005 : (202) 234'-4433_

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• 154 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.esults. 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 1ike 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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• 155 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 1s 17 now gotten an awful· lot higher; I assume it. ·canIt 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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• 156 1 10 years·. 2 

### MR. SAMUELS: But I guess I 

### although 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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• .157 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

. (202) 234-4433 MR. SAMUELS: No. MR.. ROSENSTOCK: The Sunday, Juli 20th
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•• 158 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, 9iv;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 203O in his pr_ojections ·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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• 159 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 30 year pe.riod 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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• 160 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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• 161 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 93 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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• 162 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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• 163 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 NEAL.

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• 164 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 NEAL

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## ----------- 165 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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• 166 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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•

• 167 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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# ••

• 168 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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# • 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? NEAL

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# • --**·-~-~-** __,,....._.. 170 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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### .·.

. .**~**

. ' .. ;

. ,;·.. :. '**:.~:,~_;:**

.·.· ..

- •**~** •. •**~~r~** • -

-·· "...

# •

••

•• 171 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: Additiorial 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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### A. GROSS COURT REPORTERS ANO TRANSCRIBERS 1323 RHODE ISLAND AVENUE, N.W: WASHINGTON•.o:c. 20005 . (202) 234-4433172 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. 

# • 25 MR. MODTLAND: . Mobile home. Okay. Thank NEAL 

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• 173 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 Office 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: Additiona1· 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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• ·174 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

(202) 234-4433 The inputs to**t~e** spreadsheet**ar~:** 

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# •

• 175 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.

(202) 234-4433 Last ·time in refrigerators the ·oepartment 

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• -P:-· 176 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. 20 "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··. NEAL R. GROSS· COURT REPORTERS ANO TRANSCRIBERS 1323 RHODE ISLAND AVENUE, N.W. •. ;.

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•

• 177 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 

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•

• 178 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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• 179 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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•

... 180 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.

(202) 234-4433 What·you have is a handout that has tables

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•

•• 181 1 of numbers
-- 2 MR. BROOKMAN: It l<;>oks 1ike 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 00 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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•

• ·1a2 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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••

• .·183 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.** 2J 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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•

• 184 

### 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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### Jim, would you

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# •

•

• 185 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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• 186 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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# •

••



# • 187 1 increasing penetration of hor{zontai axis over time 2 

### with no effeet 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 NEAL

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• 188 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 $L3 biilion ..-

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•

•• 189 

### 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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### ...

-·· - "

. . (202) 234-4433 ..···.190 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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• 19], 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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•

• 192 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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• 193 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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•- 194 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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•• 195 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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•

• : 196 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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•• 197 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~** 

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. .198 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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### 199 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 NEAL 

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•

• 200 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'mmittee 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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• 201 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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•• 1 2 3 202 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

. (202) 234-4433 . 

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# •

•

• 203 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

(202)**234~4433** ·NEAL 

### R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVENUE, N.W. WASHINGTON, O.C. 20005 (202) 234-4433 . .....

# •

•

• - 204 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 Office. 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

(202)**2~-4433** NEAL**R~** GROSS .COU_RT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVENUE, N.W. WASHINGTON, D.C. 20005 (202) 234-4433 .

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•

• 205 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·

(202) 234-4433 

### .NEAL R. 

### GROSS

.COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAl';ID AVENUE, N.W. WASH.INGTON, D.C. 20005 (202) 234-4433

# •

•

• 206" 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.

(202) 234-4433 NEAL 

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•

•• ·207 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.

. (202).234-4433 You did not corncient .on**th~t~** 

### NEAL 

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(202) 2_34-4433 ··..,. .·.·.

# •

•

• 208 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

(202) 234-4433 NEAL 

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. (202) 234-4433'·**~-** .

# •

•

•• 209 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

(202) 234-4433 

### NEAL R. 

### GROSS COURT REPORTERS ANO TRANSCRIBERS · 1323 RHODE ISLAND AVENUE, N.W
.. WASHINGTON, O.C. 20005 (202) 234,4433 .

# ••

•

• 210 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

(202) 234-4433 

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# ••

•

• 211 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

(202) 234-4433 NEAL 

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# •

•

• 212 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

(202) 234-4433 MR. MARTIN: I'm looking af it from two NEAL 

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•

• ·213 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_

(202)**234~433** . 

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•

• 214 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**~NEAL** 

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### .. ·.· . .·.**·~** t •


### . -
. -**~** .

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. . '
. '

# •

•

• 215 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

(202) 234-4433 .. of the**Whir~poc;>l** prototypes and,. time, they are prototype·s**~** But lot of I would also·l.i,ke to whether conjecture

.. NEAL 

### A. GROSS. COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVENUE, N.W. WASHINGTON, p.C
...2000S say that they're at this

I think

..**better~** -.

: .- (202) 234:4433

# •

•

•• 216 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

(202) 234-4433 NEAL R. GROSS

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•

• 217 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 perfo!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

(202) 234-4433 

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# •

•

• 218 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. ImanaIs 

### 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
-

(202) 234-4433 

### NEAL 

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. . . ' -- . (202) 234-4433 '
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# ••

•

•• 219 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_itional· 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**

(202)**2~-4433** 

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# ••

••

• . 220 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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• 221 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·1tirnate 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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• 222. 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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# •••



# •

• 223 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· NEAL

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• 224 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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... 225 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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• . . 226 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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•• 227 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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• 228 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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• 229 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 reviewand 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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• 230 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 16 17 18 19 20 21 22 23 24 25 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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• 231 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 .ANOPR. 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?. NEAL 

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• 233 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 . . ·- 

### additi<:mal c"omments, we may have comments on the draft

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• --·.

- ......**..,..,,.~** ..-......**-~-** • ---·**~ -~~-"T,".;l.:..°"."-.....-=i;,,..**  2_34 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·.

- 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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..· ..-,

:-
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. ·-
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# •

•

•• 235 

### 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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# • 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.


# •

# •

••

• '1-**~-** . - .

. 07/23/97 6:45 am · PROCEEDINGS Goodmorning, I amB.ryanBerringer, TeamLeaderfortheclothes.·washer standards rulemakingteaminthe OfficeofCodesand Standards. J:hefollowing peopleare**~lso** onthe team: QonnieLaughlin, Carl

### Ada~s, andBarryBerlinfrom the Office ofCodesand Standards; .

. · EugeneMargolis andEdwardLevyfrom General Counsel;

### ~ndMarkFriedrichsfrom the Office.

. ofPolleyand InternationalAffairs. OnbehalfoftheDepartmentofEnergy, l wouldliketo thank

all 6fyoufortakingthetimetoparticipateinthis secondpublicworkshop onclothes**~as.hers**to takeplaceunderthenewprocessimprovement effort for appliancerulemaking as setforth inthe

### J~ly 15th, 1996,

### interpretati~erule. Oneoftheoutcomes.ofthe

### Nov~mber 15th, °1996, Clothes· "Washerworkshopwasfor**~he**Departmenttoidentifyh<?\;v any newdatawouldbecollected and usedthroughouttheprocess. InresponsetothatwedevelopedtheFrameworkReport. Based on the outcomeoftheManufacturingImpactWorkshop held onMarch 11thand 12th, 1997, stakeholdersandinterestedpartiesrequestedthattheprocessbecustomizedfor eachproduct: ·

. . . . .• . Thepurposeofthisworkshopis todiscuss the process and analytical toois to beutflized: throughoutthe clotheswasher standards rulen:iaking process. Weplan to provi.de

## a.more detailed understanding ofthe process and analytical tools to be utilizedand receivecomrrients priorto proceeding with·datacollection and analyses. Today'sworkshop will focus on the process and analytical tools needed for publication ofthe ANPOR (show Figure 1). A workshop is plannedfor_March 1998 to.further discuss analysis for**t~e** nextphase of**t~e** process**(s~ow** sch.edule).· -. '

1 .

'"' ... •·. '·· "**~·**

. ··.....· ; ..,• .

. -.**..::.~::­ ~:**  • •'.J

# ••

•

••• Apublic notiCe ofthis workshopwaspublishedin**the.fe~eral**RegisteronJuly 3, 1997.: TheDepartment.sent apackagethe secondweekofJuly, to all interestedpartiesthatresponded . totheFederal Registernotice. Thepackageincluded**th~** "DraftClothesWasherFramework

.Report"datedJuly_8, 1997, andthepreliminary slidesfortheworkshop. Copiesofthedraft

report, slides and thenewclotheswash('.rtestproc-edure_s are available at thetable (See Sandy).

. . . Anyone**atten~ing**today'sworkshop oranyoriewho submitted commentswill be addedto our mailinglistforfuture mailings. The**c~mments**received heretodayan.dthosealready subffiitted duringthewritten**co~ent** periodwill assisttheDepartmentin developingthe supplemental advancenotice of proposedrulemakingplannedforJanuary 1998.

·Thefollowing arepr:oceduralitems which most ofyou are awareof Iwill bethepresidingofficerforthisworkshop. DougBrookmanwillbefacilitating the workshop andwillbesettingtheguidelinesfor conductingtheworkshop andprovidingother pertinentinformation. Inapproximatelytwoweeks, a completecopyofthe**~rariscript**

### ;willbe**av~ilable**for · inspection.and copyingat.theDepartmentofEnergy'sFreedomoflnformationreadingroom, located downthehallinRoom IE-190. Anyonewishingtopurchaseacopyofthetranscript may make arrangementswiththecourtreporter. ToprovidetheDepartmentwithas muchpertinentinformation and as m,anyviews as ca11 bereasonablyobtained, andtoenable·interestedpersonstoexpresstheir**view~,."the work~hop**  will: beconductedin accordancewiththefollowing procedures: .

2



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# •

•• Thefocus ofthis workshopis fortheDepartmenttolisten**~o** commentspertainingto.the process and analytical tools

### tqbeused..

. .We will beginwithintroductions, the.n discussthe agendaand expand onthe agendaif .necessarytoprovide everyone_with an opportunitytodiscusstheirtopic.**DO~** topicswill remain:·· ontheagenda as lead presentationsintheirrespectiVe areas. We'lltakean hourlunchbreakat a.convenient·timenear 12 noonwhichis onyourown.

. . . . Thereis a snackbaronefloorbelowus. Thereis theDOEcafeteriaonthe second floor ofthe westbuilding, and a

### ~umberofrestaurantsintheunderground mall atL'EilfantPluaupthe street. Itwill reduceinterruptionsifeyeryonewhowantsto speak**~aits**toberecognized. Please .:. rememberto speakintothemicrophones, especiallythosei_nthe audience, and stateyourname_ andyourcompanyname**ea~h**timebeforeyou speakforthe·courtreporter.

.Sideconversationsshouldbekeptto aminimumtoavoidinterruptingthepresenter;_ifa lengthy

### pri~ate discussionis needed, pleasemoveto acornerofthe

### ro~m oroutoftheroom. 

### Itmaybenecessarytocut offdebateonsome**~opics**tomaintainthe schedule. Therewill

. . . . . . betimeattheendofthe·workshopfor additional discuss ofsignificantissues. ·!"encourage.all ·

,personspresenttoparticipateasmuch aspossible sothattheDepartmentmay get afull spectrum

ofopinionon.thesetopics. Thisworkshopis scheduledtoendby4 p.m., orsoonerifall itemshavebeen·completely

·discussed. However, I don'tthinkthatwillbethe·casetoday, wehave apretty**fu~l** agenda.

Topicswhichhavenotbeencompletelydiscussedby4p.m. canbe addressedin additionalwritten

. . . .

.comment's. Thedeadlinefor additional

### wrltte~ commentsand.data submissionsfollowing this

. . - . . .**~** 3

_... .·,..**~** . : .:workshopwill bedeterminedbased onresponsesreceived**tod~y.** All commentsand data

• ·submittedwill be consideredbefqreDOEpublishesthe supplemental

# advan~enoticeofproposed:



# •

• rulemaking. All writtencomments and data submissionswill be availableforpublicinspection at the DOEFreedom_ofInformationRe.adingRoom. Phonenumber(202)**586~6020.** Written comments should_be addressedtotheDepartmentofEnergyas notedintheFederaiRegister 'notice·fortoday'sworkshop. Tencopiesofthecomments ordataarerequested: Inaddition, theDepartmentwould appreciateanelectroniccopyofthecomments ordata. TheDepartmentis usingWordPerfect 6.1. Nofaxed commentswillheaccepted. Any·persons submittinginformationwhichhe orshebelievestobeconfidenti.al and exemptby lawfrompublicdisclosure should submitoqecomplete-copyandtencopiesfrom

.which·informationclaimedtobeconfidential hasbeendeleted. Inaccordancewiththeproceduresestablishedat 10 CFR 10_04.

### i 1,**~he**Departmentof . . Energyshall makehsowndeterminations astowhethei:theinformation shallbe**exemp~** from· public disclosure.' . Inkeepingwiththeregulations ofthesefacilities, thereis no smoking allowedinthis.room· orbuilding. Therestroomsaredownthehalltoyourleftandright.·**Pho~es** arelocatedinthe · main lobby area. Again, weappreciatethetime and effortyouhavetakeninpreparingforthis·. . workshop, and arepleasedto.receiveyourcomments"andopinions,

.· . ---·. ·._:

.4

.**··~** . ,,,. .. . _._; '-,_ ..'

- 

# .·



# •

•

• ..**~·** ·. I wo-uld like to

### reiterat~, thepurposeoftheworkshopis to considerstakeholder

. . comments on the process and analytical·tools tobeutilized throughoutthe clothes washer standards rulemakingprocesspriorto proceeding with datacollection and analyses. At this time, Iwould liketotumit overtoDougBrookmantobegintheintroduct_ions, and thenwe'll gotothe agendareview.

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. . . . '·

. ,· . . . .·;.._.,.· ' 

# July 23, 

# 1997" ·

• ' ,t ' ' . ' . ' ... 

### U.S..DepartmentofEnergy

. . Office ofEnergyEfficiency

# and Renewable Energy .

. ·Office of**Cqde~** 

### and Standards I000**.~dependence** 

### Avenue, SW . ·. Washington, DC 20585 ·

·.·.

. ., " ' ' ..

...· 

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# ClothesWasherWorkshop .

. . 

# • Major DOE Commitment
.. ·



# .. +EERE PerformanceAgreementwith Office ofthe Secretary

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# Final Rule -**h~ghest** 

# energyand·water.savingsjustified ·

1' • ' ' • ' -, • ' • ' I • ' ' ' '

.. '**~·**.

.. ,_

### .. . . . . 

# . 

# ···• Possibletradeoff betweentime and·1evel

.. 

# • Issuance Date: October 

# 1999 ..

' . . . 

# ··· · ·· · · .·· -:Initiation of Energy Star labeling program 'I::•**~** ', '' ·,,'\, ,'" • ' ' '• . • ' , • • ,•'

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# .• Qbjective oftheWorkshop To discu.ss the process**~nd** 

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# 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 ·

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# ·· ·- .Comments_(within 30 days)

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# Illustrative Input**Distribu~ions**

# for Incremental Manufacturing Costs

·Efficiency Level 1 ·· 0 

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# ·,··. ··.... _.e· .Proprietary Design " '

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# ·.··:+**Whi~lpool** 

# prototypes

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# Engineering ' . .·I, 

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### ClothesWasber.akingsSchedule 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 TestProcedures Drafl Final Ruic · 

# - An.......,.FinalRuic

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# ••

ClothesWasher ·Workshop.

July23, 1997

·t . ' ; ' '· 

# •

U.S. DepartmentofEnergy

.OfficeofEnergy"Efficiency

andRenewable Energy
. . 1000IndependenceAvenue,SW

. Washington, DC 20585

## ... .

'! 

# ••

. ClothesWasherWorkshop:. ManufacturingCosts

. . . 

# Introduction Where costs are used Life-cycle costanalysis Manufacturer impactanalysis



# ...[vj
. Needfornew.cost information ,. ·.

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.

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## -. Recentexperience with newtechnologies

# Consider~tion of
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· . - Compliancewith the Process Rule 

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# r-.Z. ' .lmporta'nce of afinalized revision.to.'the test procedure
.. 

# ·.'i/J· ..···.Establishmentofa baseline MEFvalue
.

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# of baseline MEF(Week4)

. ' 

## DatasubmittalstoAHAM (Week 12) Release o,f data.to DOE (Week 16)

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# • ClothesWasherWorkshop: ManufacturingCosts· 

# Sf'.lipmentWeighted Cost Distributions

Efficiency Level 1

. Efficiency

Level2

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. Level3

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. . .



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·»DRAFT**J~ly9.1997** .. 8

# •• 

# • •

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'' ..



## .. ' ' .I' 

### ..\». .•. . .,. I< '**~** • • '. ' . I '' 

### c1·othes WasherWorkshop: ManufacturingCosts 

# Cost- Efficiencycurves can be constructedforvarious.percentile values indicating

# o/o

# ofshipmentswithinacertain cost range. '. 

### Weighted.costDistribution by Efficiency Level $7.50 

# • $6.00

### ~ .



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# • 0 0

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### Efficiency L.evel

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..

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10 ''; ' 

# •

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# ••
ClothesWasher**Worksh~p:** 

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# ··.Costing Approach/En·gineering Analysis 

# ii/J Ma.ri'qfaCturers have indicatedtheir preferenceforan 

## ENERGY-



# . ·, .. Ef='.FICIENCY approachto,reporting manufacturing costs., ·



# ..

# ~' AHAMmembers believe appropriate levelsare baseline, 

## 5%, 10%,**15°/o~** 

## and

# 20°/o ·i_mprovement applied to an existing Vertical Axis ···**clothe~** 

## washerand improvements of

# 35°/o, 40°/o, 45°/o and

# 50o/o ;"\':'.-appliedtoa Horizontal Axis clotnes washe_r.. · · . · •

# ~ hThevalueofthe baseline 

## MEFwill be calculated oncethetest

, . • " ..• ! : · 

## procedure.is finalized and efficiency imp.rovements reviewed

.'
. .'\.' ·,accordingly.....
. . . ;".' . .: ".

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### Clothes.WasherWorkshop.: ManufacturingCosts

# _Consider~tion·of.Whirlpool Prot.otypes 

# f.-./J ·AHAM members believe it is: notappropriatefo_r-them to com.ment. ··

. . '. ,;JJ·-···· : i !

. '··· .J 

## .. onthe cost/efficiencies of**~hirlpool.designs.** 

## ; . Whirlpool does notthink it is appropriateforthem to provide costing · information on these prototypes. They have offered to cooperate

. instead with.athird..:party cost assessment.

' ' .... ' '. ' . ··•'.

..'
.' . ' .
• • l .· : •. : • -. ' 

### ·DRAFT**Ju~9,-1!191**

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. '. ·. ·.. . '

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. 

### .**~lothes** Washer, Standard Capacity (1.6cu.ft. orgreater)

,._

.. ···. ," ··.·'

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 

# ••

ClothesWasher, Standard Capacity (1.6 cu.ft. orgreater)

Variable Costs lotal vOSt Uncertainty Range
.1-:'roduct Conversion <.;osts -· Costs per Unit Variable (+/-percentage) Total (millions of$) Percent Costs Variable Costs Improvement Materials Labor Overhead ($perunit] 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%·

.. ·.. . { .......,. ···,· ...... 

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lotal c:ost uncertainty Hange Fixed (+/-percentage) Costs of Fixed Costs · (millions$ ·Maximum Minimum [22) [23) [24J.A. Home

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•• Data Request.C2: Efficiency-Level Approach Footnotes This approachconsists oflettingthemanufacturers supplycostandcorresponding efficiencydatausinganydesign options ordesignoptioncombinationstheychoose. [1] Based·onMEF(includes washerand dryerenergy). Percentincreasecolumn 

### [2] [3) [4] 

### [5] [6] [7] [8] 

### [9] [10] [11] [.12) couldbereplacedbyaMEFcolumn. Percentimprovement

# = { 1 - (baselineMEFInew MEF)} x 100 Referto Section4.4, MEF, DOETestProcedures'.BaselineMEFvalueto be providedbyAHAM. Sumof

## Ere andDE; whereErEisfromSection4.1. 7andDEis from Section4.3 of

.DOETestProcedures'. ·

Re.ferto Section3.1, C, DOETestProcedures1• Referto Section4.1.3, HEr, DOETestProcedures'. Includesonlyexternally appliedhotwater. · Referto. Section4.1.6,

## MEr. DOETestProcedures'.Includesinternalhot**wate~.** RefertoSection4.3,**DE~**DOETestProcedures'. · Referto Section4.2.2, QT, DOETestProcedures'.. Referto Section4.2.3,WCF, DOETestProcedures1• SourcefprEnergyUsedata: testdata(T), calculations (C), orestimation (E).. Assumesaconstantproductionvolumeatthelevelanticipatedfortheyearthe riew standardcomesintoeffect (2003). Forproductionofall modelsinproduct · class. . · · · Materialcosts areth_osecosts associatedwiththepurchaseofall materials requirediri themanufacturer'sproductionprocess. Accordingly, material costs. includenotonlythecostofthematerialinthefinished component,butalsothat·of thematerial scrapped (because9fmaterialremovedorscrappedcomponents) minus salvageprice. Estimates ofdirectmaterialcostsaccountforall raw .

. materi_als andpurchased'finished supplierpartsthataredirectly assigi\abletothe

endproduct. . [13] Laborcostsincludeal_l directcoststhat arephysicallytraceableto theendproduct, plus any-overtimepremium. 'Laborcosts are determinedas

### ari averagewagerate, ... ·depending.onworkerclassification, requiredtoperformthetasksresultinginthe . end**product~** ·Totallaborcostperunitis asummationofcoststakenoverall tasks. oroperations·requiredintheproductionprocess. · [14] Overheadincludesfactoryoverheadexcludingdepreciation. Includesboth_direct· and indirectcomponents. . Directoverheadcostsare_theestimatedoverheadchargesthatattemptto**ac~ount** for all otherexpensesthat areduetotheproductionprocess, varydirectlywiththe productionvolume, andcontributetothecostofsales. Examplesofsuch .

<;< 1_Cloihes WasherTestProeeduretitled "UniformTestMethodforMeasuringtheEnergy

.ConsumptionofAutomaticandSemi-AutomaticClothesWashers."

### All arepartofAppendixJl .·

.. to SubpartBofPart430. · Draft CWASHER5.WPD 'July 22, 1997 C-9

l.

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•• [15] . [16] [17] [18]

. [19] .

.[20]

[21]
[22] .· [23] ·_.[24j expensesinclude, butare notlimitedto, expendabletools, materialhandling support,fuel andpowerrequirements, setupcosts,freightinandout,costsof direct supervision, andclerical costs. (Theestimatedtotal ofall expensesthat vary withtheproductionquantityisbasedonthevolumeofcommonornear

.commoncomponentstobeproduced. The sumoftheseexpensesis then.· apportioned**~o** eachcomponenton somelogical scheme.) . Indirectoverhead arecomprisedof,.burnotlimitedto, propertytaxes, insurance costs,etc.. Theinanufacturers_couldeitherprovidethe direct·andindirectoverheadcosts separately,orprovidethe total overheadcostsand apercentagevalueindicating thedirectvs. indirectsplit. _ · Totalofcolumnsnumbered [12] through [14]. . ·Showtherangeofexpectedvariablecostsexpressedas maximurμ value (% over

column [15]). Showtherange ofexpected·variablecostsexpressed as minimumvalue(% below column [15]). Toolingcostis thetotal·costofspecialtoolingto manufactureacomponent'over theentirelifeproductionvolumeofthatcoinponent.Toolingcosts willbe .. -· amortizedoveraperiodof

### 5years2•. Investmentcos.ts arethosecostsassociatedwiththepurchaseofproperty,plant' andequipmentrequiredfortheinanufacturer'sproductionprocess.**Investm~O,t** ·costswillbeamortizedover

## aperiodof

### 5years2• R&Dcosts arecostsincurredforthepurposeofdesigningand developingnew andimprovedproducts, orprocesses. R&Dcosts

## willbetreated as anexpense. Marketingcosts atethe·expens.ablecostsfornewproductadvertisements, . literature andcatalogs, andvariousrelatedmarketingexpenses.Marketingcosts ·includemarketresearch, advertising,point-of-sale·promotions,and**s~espersons'**

compensationsandtravelcosts. Marketingcosts

## willbetreatedas an expense. Totalofcolumnsnumbered [18], [19], [20] & [21]. Showtherangeofexpectedvariablecostsexpressedas Iilaximuinvalue (% over column [22]); · · · - Showtherangeofexpectedvariablecostsexpressed

# as minimμm value-(%**bel~w** ' column**[~2]).** ·

2TheDepartmentwillperfonnsensitivityanalysis onthis variableas appropriateonthe

suggestion

## ofstakeholders. . . Draft CWASHERS.WP_D
. July22, 1997 C-10

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• ExplanationofRelationshipBetweenPercentImprovementandl\IBF

· Definitions·andEquations

(1) MEF

## =cu.ft. capacityIkWh energyused We seethatMEFis inverse))'proportional to theenergyuse.. (2) Percenienergysavings= [(reduction in kWh's used)I(originalamountof kWh's used)]x 100%

· Therefore,

(3) Percentenergysavings= {[(JIMEF,orig.)
-**(JIM~F~new)]**1(1/MEF,orig.)jx 100%. An assumptionis madethatthecapacities·ofthedifferentdesignoptionsareconstant.Equation-(3)is the · mathematical equivalentof: (4)
. Percentenergysavings= {(MEF,new
-MEF,orig.)IMEF,new]x 100% · (5) .Percentenergysavings= { 1
-**(baseli~e**MEFInewMEF)jxJOOo/o • Baselineandorig. (Original)areusedinterchangeablyhere..· Tocalculatea NewMEF,givena PercentDecrease inEnergy·consumption (6) · MEF,new·

## =(MEF,baseline)I[ 1
- (%energysavings)I100] . Example:

Baselineenergyconsumption

## =3.306kWh/cycle BaseiineMEF

## = 0.885 Horz. Axis, recirc·., 40%RMCenergyconsumption

## =1.685kWh/cycle

. .. Stepsfor·calculationof MEF for theHonAxis, recirc., 40%RMC: " Percentenergysavings= (3.306 -1.685)1(3.}06)

## = 49.0% [UseEquation (2)] Or,

" MEF;new

## = 0.8851[1- (49.01100)]= 1.736 ' [Use**~uation** (6)L Summarv.

DesignOption kWh/cycle MEF Baseline 3.306 0.885 Horz. Axis,recirc.,40%RMC 1.685 . 1.736 (=>49%energy savings)

. . Note: Thepercentefficiencycanbeb.asedoneithera) theactual kWh/cycleorb)theMEF. The**differenc~** being· thattheMEFnormalizesfor washerbasketvolume.. ThisisillustratedinEquation·t andEquation6. SinceDOE does nothavethecapacitydataatthis pointthepercentageimprovementis expressedas MEFvalues.

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• EF,MEF,andConversions Background _ Atthe startofthecWTentclotheswasherrulema!Qngprocess,AHAMsubmittedefficiencydatabased_ontwotest procedures: a)thetestprocedureineffectatthattime (usmgEF) andb) aproposedAHAMtestprocedure(usingMEF). TheproposedAHAM testprocedurewasmodifiedbyDOE andAHAMandisnowknownastheAppendixJI test procedure. Thistest**pr~ure**was sentto stakeholdersqnJuly 18th, 1997. •. BasedontheCWTenttestproceduretheAHAM submittedashipmentweightedaverage.(SWA)baselineEFof 1.198. ThebaselineintheDraftPreliminaryEngineeringAnalysishas an shipmentweightedaverageMEFof 0.885 ft3/kWh. (ThisvalueisintendedtocorrespondtoaEFof!.198). Theminimumrequiredstandardis an EFof1.1Sft3/kWh. AdjustingMEFtoModifiedTestProcedure AstheAHAMproposedtestprocedurewasmodified,theenergyusevalues,includingMEFvalueswereadjustedby LBNL. Theseadjustmentsrequiredthatcertain assumptionsbemade. FurtherdetailonadjustmentstotheMEFare detailedintheDraftReportonthePreliminaryEngllieeringAnalysispresentedattheNovember 1996Workshop. Also, fwtherdetail on adjuStments arediscussedin supplementsmadeavailableafterthe 1996Workshop. Forexample, in· mycorrectionsIalways assumedawasherwithHC,WC,andCC temperatureselections. HadImadedifferent assumptions,thecorrection**fa~tors**u.sedwouldhavebee.ndifferent. ConvertingEFtoMEF . - • ThereisnodirectwaytoconverttheoldEFvaluestothenewMEFvaluesWithoutmaking assumptionsor havingrawdatatoinputintothenewtestprocedure. ·· • IndeterminingtheMEF,manufacturershadtomakeassumptions onthetypeofclotheswasherusedandwhat

.kindoftemperatureselectionswere.available. ThenewAppendixJI testproce<iurealsohas severalrawdata inputsthatweren'trequiredundercurrenttestprocedure.· 

### • AshipmentweightedaverageMEFvalueof0.923 wasusedinthe Cloihes WasherRu/emakingFram.ework, -AppendixA. Thisvaluewas anivedatbyusingthecurrentshipmentweightedaverageenergyfactor(EF = 1.23 asdescribedinthe

### ft.HAMfactbook) andsubtractmg25% (l.23 less 25% =9.23ft3/kWh). The25% .· reductionwasbasedon 1.18 (thecurrentminimumEF)less 25%

## = 0.885 (thebaselineMEF). However,the 0.885MEF shouldhavebeeneomparedtothe shipmentweightedaveragebaselineEFsupplied.by·AHAM whichis 1.198. ·Ifaroughapproximateconversioniswantedthenaconversionfactorof26.l%shouldhave been

## usedCl.!98 less 26.1%

### =0.885). . . . - ·• MEFbasedon actual testinghasnotbeenrequiredbytheFTC ortheDOE andtherefore,thereisnodatabase onthismetric.

### TogetactualMEFvalues, rawdatashouldbe·inputtedintothe.AppendixJl testprocedure. • TedPope,**Andre~**DeLaskey(CEE) andothershave**convert~d**fromMEFdatainmyanalysisto anEFthey coulduseas abasisfortheirmarketpullprograms. Assumptionshadtobemadetomaketheseconversionas ·well. Discussion • Theminimilln standardshouldbethebaseline.forthelife-cyclecost. • Fornational energy savingsthe**shipme~t**weightCdaverageefficiencyshouldbeusedasabaseli.De. FutureWork ·.. · Asacheckonfuturedatasubmittedbymanufacturers, aparametricanalysiseouldbedone,wheretemperatureand waterconsumptionvaluesareenteredintotestprocedureequations. Thetestprocedurecalculationscanbesetup ina. ·spreadsheet. ·· · · · .,