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Distribution Transformers – MIA Interview Guide Page 1 of 41

Manufacturer Impact Analysis Interview Guide for 

Distribution Transformers

May 20, 2011
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Introduction

As part of the rulemaking process for amended energy conservation standards for distribution 

transformers, the Department of Energy (DOE) conducts a manufacturer impact analysis (MIA). In this 

analysis, DOE uses publicly available information and information provided by manufacturers during 

interviews to assess possible impacts on manufacturers due to amended energy conservation standards. 

This questionnaire is a part of the MIA process and is intended to inform DOE about how changes in the 

energy conservation standard will affect distribution transformer manufacturers. All information 

provided in response to this questionnaire will be treated as confidential. In addition to questions about 

DOE’s test procedure, scope of coverage, market assessment, and engineering analysis, the MIA 

questions range from requests about specific financial figures for use in industry modeling to generic 

questions intended to solicit qualitative comments. Topics covered will include:

A. Test Procedure

B. Scope of Coverage

C. Market and Technology Assessment

D. Engineering Analysis

E. Market Questionnaire

F. Manufacturer Impact Analysis

1. Key Issues 

2. Company Overview And Organizational Characteristics

3. Markups And Profitability

4. Distribution Channels

5. Shipment Projections and Market Shares

6. Financial Parameters

7. Conversion Costs

8. Cumulative Regulatory Burden

9. Direct Employment Impact Assessment 

10. Capacity/Exports / Foreign Competition / Outsourcing

11. Consolidation

12. Impacts on Small Business
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A. TEST PROCEDURE

DOE published its test procedure for distribution transformers in 2006. Since then, manufacturers and 

other stakeholders have raised issues on several points in the test procedure.

The test procedure states that the manufacturer must determine the basic model’s efficiency either at the 

voltage at which the highest losses occur or at each voltage at which the transformer is rated to operate. 

This provision was implemented to address dual- or multiple-voltage transformers, which have different 

losses for each of their winding configurations (in series or in parallel). In the preliminary analysis, DOE 

proposed allowing compliance testing with the secondary winding in any configuration, but did not 

propose any changes for the requirements of primary windings. DOE understands that the different 

primary winding configurations oftentimes exhibit larger differences in efficiency than the efficiency 

differences between secondary windings configurations.

A.1 Dual/Multiple-Voltage Winding Configurations – Primary Voltages: How does the efficiency 

vary between series and parallel configurations for transformers with dual/multiple-voltage 

primaries? What proportion of distribution transformers are operated with the primary winding 

in parallel and for what portion of their lives?

A.2 Other Issues with the Test Procedure: Are there any other issues or concerns with the current 

test procedure that DOE should be aware of?
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B. SCOPE OF COVERAGE

DOE received several comments about the scope of coverage for this rulemaking. The following 

questions seek additional information on a few scope related topics.

B.1 5 kVA Single-Phase Liquid-Immersed Transformers: Should DOE extend its scope of coverage 

for single-phase liquid-immersed transformers down to 5 kVA? The current minimum is 10 

kVA. Approximately how many annual shipments are there for these transformers? Is the 

design for 5 kVA units similar to the design for 10 kVA units?

B.2 Step-Up Transformers: Should step-up transformers of comparable kVA sizes to DOE’s 

currently covered products be included in the scope of this rulemaking? Do these step-up 

transformers use similar design constructions as step-down covered products? Can they meet 

similar efficiency levels? Would they require comparable cost increases to improve efficiency? 

Can they be scaled from the analysis for step-down transformers?

B.3 Transformers in Renewable Energy Applications: Are distribution transformers that are used in 

renewable energy applications different in any way from distribution transformers used in other 

applications? Are these transformers typically loaded comparably to distribution transformers in 

other applications?
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C. MARKET AND TECHNOLOGY ASSESSMENT

Symmetric Core Designs: DOE is aware of a design concept for three-phase transformers that utilizes 

120 ̊ symmetry and continuously wound cores. These symmetric core designs, such as the Hexaformer® 

design created by Hexaformer AB, have several benefits over a traditional transformer design, including: 

lower losses, lower inrush current, lower weight, and lower external magnetic field. Chalmers University 

in Sweden has conducted a study on symmetric core designs and provided an overview of the design and 

insights into modeling the technology.1 DOE understands that symmetric core designs represent a 

significant shift from current industry practice for manufacturing distribution transformers.

C.1 Symmetric Core Designs - Applications: Please comment on any experience your company has 

with symmetric core designs. Would any barriers exist to implementing this type of technology 

on a large scale? DOE understands that symmetric core designs cannot be used in a wye-wye 

connection unless a tertiary winding is added. What applications would not be suitable for 

symmetric core designs? 

C.2 Symmetric Core Designs – Performance and Costs: How do labor costs for symmetric core 

designs compare to traditional designs? What intellectual property exists for this technology, 

and what are the typical licensing costs of using patented symmetric core designs? Please 

provide any data you have available on the performance and cost of these designs compared to 

conventional core designs, particularly for the representative units of DOE’s analysis.

 

1 Available online: http://www.hexaformer.com/ExternaDokument/chalmers_report1.pdf. 
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D. ENGINEERING ANALYSIS

The purpose of the engineering analysis is to estimate the relationship between the manufacturer’s selling 

price of a transformer and its corresponding efficiency rating. This relationship serves as the basis for the 

subsequent cost-benefit calculations for individual consumers, manufacturers, and the nation.

The engineering analysis considers design lines of distribution transformers that group together kVA 

ratings based on similar principles of design and construction. The design lines differentiate the 

distribution transformers by insulation type (liquid-immersed or dry-type), number of phases (single or 

three), the primary voltage (low-voltage or medium-voltage for dry-types) and primary insulation levels 

(with three different BILs for medium-voltage dry-types).

Within each design line, DOE selects one representative unit for study in the engineering analysis. DOE 

then extrapolates the results from these representative units to the other kVA ratings in its engineering 

design line. The design lines and representative units currently selected for this engineering analysis are 

similar to the ones presented in the preliminary analysis with a few changes and additions.

1 LIQUID-IMMERSED ENGINEERING ANALYSIS

Design Lines and Representative Units

The following table represents the five design lines and representative units DOE is considering for 

liquid-immersed distribution transformers, which have not changed from the preliminary analysis. 

While DOE did not change the voltages for these representative units, it will conduct a sensitivity 

analysis to examine alternate primary voltage levels.
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Design Lines and Representative Units for Liquid-Immersed Distribution Transformers Design Line # of Phases KVA Range Primary BIL

Primary Taps, Full 

Capacity Representative Unit for Design Lines

1 1 10-167 30-150 

kV

Four 2.5% taps, two 

above and two 

below nominal

50kVA, 65 ̊C, single-phase, 60Hz, 14400V 

primary, 240/120V secondary, 125 kV BIL, 

rectangular tank

2 1 10-167 30-150 

kV

Four 2.5% taps, two 

above and two 

below nominal

25kVA, 65 ̊C, single-phase, 60Hz, 14400V 

primary, 120/240V secondary, 125 kV BIL, 

round tank

3 1 250-833 30-150 

kV

Four 2.5% taps, two 

above and two 

below nominal

500kVA, 65 ̊C, single-phase, 60Hz, 14400V 

primary, 277V secondary, 150 kV BIL

4 3 15-500 30-150 

kV

Four 2.5% taps, two 

above and two 

below nominal

150kVA, 65 ̊C, three-phase, 60Hz, 

12470Y/7200V primary, 208Y/120V 

secondary, 95 kV BIL

5 3 750-2500 95-150 

kV

Four 2.5% taps, two 

above and two 

below nominal

1500kVA, 65 ̊C, three-phase, 60Hz, 

24940GrdY/14400V primary, 408Y/277V 

secondary, 125 kV BIL

D.1.1 Liquid-Immersed Design Lines: Please comment on the appropriateness of the design lines and 

representative units chosen for the liquid-immersed distribution transformers. Should any other 

representative units be selected, and why? Would these other representative units experience 

different incremental costs for increasing efficiency as compared to the current rep units?

D.1.2 Dimension and Weight Constraints: For each of the representative units, are there any weight 

constraints or dimensional constraints for customer applications that DOE should be aware of? If 

so, please specify the maximum weight and/or dimensions that are feasible.
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Design Option Combinations

For each representative unit, DOE is considering several design option combinations that characterize a 

range of efficiency levels for distribution transformers. This range spans from the efficiency level 

requirements set forth in DOE’s 2007 final rule to the maximum technologically available level (“max 

tech”). Within this range, DOE considers several discrete candidate standard levels (CSLs) for setting the 

efficiency standard. The following tables present the CSL efficiency level and request feedback on the 

design options available to reach that efficiency level, the manufacturer’s production cost (MPC) of the 

lowest first-cost design at that level, and the manufacturer’s selling price (MSP) for that design. The MPC 

consists of all direct and indirect production costs, and the MSP includes the MPC plus non-production 

costs (e.g., SG&A, R&D, profit factor, etc.).

Design Line 1 

(50kVA, 65 ̊ C, single-phase, 60 Hz, 14400V primary, 240/120V secondary, 125 kV BIL, rectangular tank) 

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

Example: 

99.27

≥M3 (conventional core); 

≥M5 (symmetric core); Al and Cu. 1,840 2,300

0 99.08

1 99.17

2 99.27

3 99.36

4 99.46

5 99.55

6 99.60
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Design Line 2 

(25kVA, 65 ̊ C, single-phase, 60 Hz, 14400V primary, 120/240V secondary, 125 kV BIL, round tank)

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

0 98.91

1 99.02

2 99.13

3 99.24

4 99.35

5 99.46

Design Line 3

(500kVA, 65 ̊C, single-phase, 60Hz, 14400V primary, 277V secondary, 150 kV BIL)

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

0 99.42

1 99.48

2 99.54

3 99.57

4 99.61

5 99.67

6 99.73

7 99.76
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Design Line 4

(150kVA, 65 ̊ C, three-phase, 60 Hz, 12470Y/7200V primary, 208Y/120V secondary, 95kV BIL)

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

0 99.08

1 99.17

2 99.27

3 99.36

4 99.46

5 99.55

6 99.60

Design Line 5

(1500kVA, 65 ̊ C, three-phase, 60 Hz, 24940GrdY/14400V primary, 480Y/277V secondary, 125 kV BIL) 

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

0 99.42

1 99.48

2 99.54

3 99.57

4 99.61

5 99.67

6 99.73
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D.1.3 Amorphous Cores in Large kVA Designs: DOE understands that amorphous cores in large 

distribution transformers (1500 kVA and greater) require additional labor and hardware costs 

above and beyond the requirements for other core steels in these designs. The labor accounts for 

extra handling required for these large, fragile designs, and the hardware costs account for 

additional bracing to prevent short circuit problems. Please comment on how these costs 

compare between amorphous designs and other designs using the table below.

Direct Labor and Bracing Costs for Design Line 5

(1500kVA, 65 ̊ C, three-phase, 60 Hz, 24940GrdY/14400V primary, 408Y/277V secondary, 125 kV BIL) 

Core Steel

Direct Labor for 

Typical Design

[hours] 

Bracing Costs for 

Typical Design

[$] 

Comments

M4

M3

M2

ZDMH

SA1 (Amorphous)
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2 LOW-VOLTAGE DRY-TYPE ENGINEERING ANALYSIS

Design Lines and Representative Units

The following table represents the three design lines and representative units DOE is considering for lowvoltage dry-type distribution transformers, which have not changed from the preliminary analysis. 

Design Lines and Representative Units for Low-Voltage Dry-Type Distribution Transformers Design Line # of Phases KVA Range Primary BIL

Primary 

Taps, Full 

Capacity

Representative Unit for Design Lines

6 1 15-333 10 kV Universal* 25kVA, 150 ̊C, single-phase, 60Hz, 480V 

primary, 120Y/240V secondary, 10kV BIL

7 3 15-150 10 kV Universal* 75kVA, 150 ̊C, three-phase, 60Hz, 480V 

primary, 208Y/120V secondary, 10kV BIL

8 3 225-1000 10 kV Universal* 300kVA, 150 ̊C, three-phase, 60Hz, 480V Delta 

primary, 208Y/120V secondary, 10kV BIL

* Universal Taps = 2 above and 4 below 2.5%

D.2.1 Low-Voltage Dry-Type Design Lines: Please comment on the appropriateness of the design lines 

and representative units chosen for the low-voltage dry-type distribution transformers. Should 

any other representative units be selected, and why? Would these other representative units 

experience different incremental costs for increasing efficiency as compared to the current rep 

units?

D.2.2 Dimension and Weight Constraints: For each of the representative units, are there any weight 

constraints or dimensional constraints for customer applications that DOE should be aware of? If 

so, please specify the maximum weight and/or dimensions that are feasible.
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Design Option Combinations

For each representative unit, DOE is considering several design option combinations that characterize a 

range of efficiency levels for distribution transformers. This range spans from the efficiency level 

requirements set forth in the Energy Policy Act of 2005 to the maximum technologically available level 

(“max tech”). Within this range, DOE considers several discrete candidate standard levels (CSLs) for 

setting the efficiency standard. The following tables present the CSL efficiency level and request 

feedback on the design options available to reach that efficiency level, the manufacturer’s production cost 

(MPC) of the lowest first-cost design at that level, and the manufacturer’s selling price (MSP) for that 

design. The MPC consists of all direct and indirect production costs, and the MSP includes the MPC plus 

non-production costs (e.g., SG&A, R&D, profit factor, etc.).

Design Line 6

(25kVA, 150 ̊ C, single-phase, 60 Hz, 480V primary, 120/240V secondary, 10 kV BIL)

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

Example:

98.23

≥M6 (conventional core); ≥M12 

(symmetric core); butt-lap or miter 1,600 2,000

0 98.00

1 98.23

2 98.47

3 98.60

4 98.70

5 98.93

6 99.17

7 99.40
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Design Line 7

(75kVA, 150 ̊C, three-phase, 60Hz, 480V primary, 208Y/120V secondary, 10kV BIL)

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

0 98.00

1 98.23

2 98.47

3 98.60

4 98.70

5 98.93

6 99.17

7 99.40

Design Line 8

(300kVA, 150 ̊C, three-phase, 60Hz, 480V Delta primary, 208Y/120V secondary, 10kV BIL) 

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

0 98.60

1 98.80

2 99.02

3 99.19

4 99.41

5 99.59
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3 MEDIUM-VOLTAGE DRY-TYPE ENGINEERING ANALYSIS

Design Lines and Representative Units

The following table represents the six design lines and representative units DOE is considering for 

medium-voltage dry-type distribution transformers. DOE is considering an additional sixth design line 

for lower kVA ratings in the highest insulation class. To do this, DOE split its existing design line 13 into 

two design lines, 13A and 13B, where 13A considers kVA ratings between 15 and 500, and 13B considers 

kVA ratings between 750 and 2500. The representative unit from 13B is similar to the one examined 

during the preliminary analysis, but DOE changed its primary voltage. The remaining design lines 9 

through 12 have not changed.

Design Lines and Representative Units for Medium-Voltage Dry-Type Distribution Transformers Design Line # of Phases KVA Range Primary BIL

Primary Taps, Full 

Capacity Representative Unit for Design Lines

9 3 15-500 20-45 kV

Four 2.5% taps, two 

above and two 

below nominal

300kVA, 150 ̊C, three-phase, 60Hz, 

4160V Delta primary, 480Y/277V 

secondary, 45kV BIL

10 3 750-2500 20-45 kV

Four 2.5% taps, two 

above and two 

below nominal

1500kVA, 150 ̊C, three-phase, 60Hz, 

4160V primary, 480Y/277V secondary, 

45kV BIL

11 3 15-500 46-95 kV

Four 2.5% taps, two 

above and two 

below nominal

300kVA, 150 ̊C, three-phase, 60Hz, 

12470V primary, 480Y/277V secondary, 

95kV BIL

12 3 750-2500 46-95 kV

Four 2.5% taps, two 

above and two 

below nominal

1500kVA, 150 ̊C, three-phase, 60Hz, 

12470V primary, 480Y/277V secondary, 

95kV BIL

13A 3 15-500 96-150 

kV

Four 2.5% taps, two 

above and two 

below nominal

300kVA, 150 ̊C, three-phase, 60Hz, 

24940V primary, 480Y/277V secondary, 

125kV BIL

13B 3 750-2500 96-150 

kV

Four 2.5% taps, two 

above and two 

below nominal

2000kVA, 150 ̊C, three-phase, 60Hz, 

24940V primary, 480Y/277V secondary, 

125kV BIL

D.3.1 Medium-Voltage Dry-Type Design Lines: Please comment on the appropriateness of the design 

lines and representative units chosen for the medium-voltage dry-type distribution transformers. 

Should any other representative units be selected, and why? Would these other representative 

units experience different incremental costs for increasing efficiency as compared to the current 

rep units?
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D.3.2 Dimension and Weight Constraints: For each of the representative units, are there any weight 

constraints or dimensional constraints for customer applications that DOE should be aware of? If 

so, please specify the maximum weight and/or dimensions that are feasible.

Design Option Combinations

For each representative unit, DOE is considering several design option combinations that characterize a 

range of efficiency levels for distribution transformers. This range spans from the efficiency level 

requirements set forth in DOE’s 2007 final rule to the maximum technologically available level (“max 

tech”). Within this range, DOE considers several discrete candidate standard levels (CSLs) for setting the 

efficiency standard. The following tables present the CSL efficiency level and request feedback on the 

design options available to reach that efficiency level, the manufacturer’s production cost (MPC) of the 

lowest first-cost design at that level, and the manufacturer’s selling price (MSP) for that design. The MPC 

consists of all direct and indirect production costs, and the MSP includes the MPC plus non-production 

costs (e.g., SG&A, R&D, profit factor, etc.).

Design Line 9

(300kVA, 150 ̊C, three-phase, 60Hz, 4160V Delta primary, 480Y/277V secondary, 45kV BIL)

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

Example:

99.12

≥M3 (conventional core) miter only; 

≥M5 (symmetric core); Al or Cu 6,560 8,200

0 98.82

1 98.97

2 99.12

3 99.28

4 99.43

5 99.58
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Design Line 10

(1500kVA, 150 ̊C, three-phase, 60Hz, 4160V primary, 480Y/277V secondary, 45kV BIL)

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

0 99.22

1 99.31

2 99.40

3 99.50

4 99.59

5 99.68

Design Line 11

(300kVA, 150 ̊C, three-phase, 60Hz, 12470V primary, 480Y/277V secondary, 95kV BIL)

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

0 98.67

1 98.84

2 99.00

3 99.17

4 99.33

5 99.50
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Design Line 12

(1500kVA, 150 ̊C, three-phase, 60Hz, 12470V primary, 480Y/277V secondary, 95kV BIL)

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

0 99.12

1 99.21

2 99.30

3 99.39

4 99.48

5 99.57

6 99.66

Design Line 13A 

(300kVA, 150 ̊C, three-phase, 60Hz, 24940V primary, 480Y/277V secondary, 125kV BIL)

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

0 98.63

1 98.80

2 98.96

3 99.13

4 99.29

5 99.45
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Design Line 13B 

(2000kVA, 150 ̊C, three-phase, 60Hz, 24940V primary, 480Y/277V secondary, 125kV BIL)

CSL Efficiency 

Level [%] Design Options Available MPC of lowest 

first-cost design [$] 

MSP of lowest 

first-cost design [$] 

0 99.15

1 99.25

2 99.35

3 99.46

4 99.56

5 99.66

D.3.3 Amorphous Cores in Large kVA Designs: DOE understands that amorphous cores in large 

distribution transformers (1500 kVA and greater) require additional labor and hardware costs 

above and beyond the requirements for other core steels in these designs. The labor accounts for 

extra handling required for these large, fragile designs, and the hardware costs account for 

additional bracing to prevent short circuit problems. Please comment on how these costs 

compare between amorphous designs and other designs using the table below.

Direct Labor and Bracing Costs for Design Line 12

(1500kVa, 150 ̊ C, three-phase, 60 Hz, 12470V primary, 480Y/277V secondary, 95kV BIL)

Core Steel

Direct Labor for 

Typical Design

[hours] 

Bracing Costs for 

Typical Design

[$] 

Comments

M6

M5

M4

M3

H-0 DR

SA1 (Amorphous)
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4 MATERIALS PRICES, MARKUPS, AND LABOR RATES

Materials Prices

DOE gathers materials price data for the five years between 2006 and 2010, and plans to use the 2010 

materials prices for the reference case of its analysis.

D.4.1 Copper and Aluminum Indices: DOE is considering setting its copper and aluminum materials 

prices based on the commodity’s index price plus a processing cost markup. DOE would 

consider the current (2011) index value and scale it back through 2006 using the producer price 

index. DOE would then apply a processing cost to the commodity price that varies for each of 

DOE’s groupings (e.g., wire vs. strip, different gauges, etc.). Please comment on DOE’s proposed 

methodology for deriving copper and aluminum prices.

D.4.2 Copper and Aluminum Processing Costs: To account for the processing costs of converting 

copper and aluminum into wire and strip, is it appropriate to apply a markup to the underlying 

commodity price, or a straight adder? In the table below, please indicate the appropriate markup 

or price adder for each of the types of copper and aluminum.

Processing Costs for Copper and Aluminum

Material

Processing Cost 

Markup [%] 

or Adder [$] 

Comments

Copper wire, formvar, round #10-20

Copper wire, enameled, round #7-10 flattened

Copper wire, enameled, rectangular sizes

Copper wire, rectangular 0.1 x 0.2, Nomex wrapped

Aluminum wire, formvar, round #9-17

Aluminum wire, formvar, round #7-10

Aluminum wire, rectangular 0.1 x 0.2, Nomex wrapped

Aluminum wire, rectangular #<7

Copper strip, thickness range 0.02-0.045

Copper strip, thickness range 0.030-0.060

Aluminum strip, thickness range 0.02-0.045

Aluminum strip, thickness range 0.045-0.080

D.4.3 Materials Prices: The following table contains DOE’s estimates for material prices for distribution 

transformers in each of the past five years. The prices listed do not include any markups for 

scrap, handling, factory overhead, non-production costs, or profit, but rather represent the price a 

manufacturer would pay for the material, including any bulk purchase discounts. All prices are 

listed in historic dollars (e.g., $2007 for year 2007). Does your company pay a similar price for 

these materials? If not, what price does your company pay?
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Materials Prices for Distribution Transformers

Material Units 2010 2009 2008 2007 2006 Comments

M36 core steel (26 gauge) $/lb 0.66 0.66 0.66 0.80 0.57

M19 core steel (26 gauge) $/lb 0.91 0.81 0.94 0.91 0.70 

M12 core steel $/lb 1.03 1.08 1.25 1.19 1.05

M6 core steel $/lb 1.46 1.62 1.72 1.52 1.18

M5 core steel $/lb 1.51 1.65 1.76 1.55 1.23

M4 core steel $/lb 1.59 1.69 1.80 1.58 1.29

M3 core steel $/lb 1.88 1.95 2.05 1.64 1.32

M2 core steel $/lb 2.00 1.99 2.19 2.09 1.64

H-O DR core steel (laser scribed) $/lb 2.06 2.36 2.54 2.18 1.76

ZDMH (mechanically-scribed 

core steel) $/lb 2.05 2.01 2.53 2.20 1.75

SA1 (amorphous) finished core, 

volume production $/lb 2.38 2.27 2.86

Copper wire, formvar, round 

#10-20 $/lb 4.45 3.97 4.44 4.50 4.21

Copper wire, enameled, round 

#7-10 flattened $/lb 4.85 4.37 4.84 4.90 4.61

Copper wire, enameled, 

rectangular sizes $/lb 4.81 4.33 4.80 4.86 4.57

Copper wire, rectangular 0.1 x 

0.2, Nomex wrapped $/lb 4.95 4.47 4.94 5.00 4.71

Aluminum wire, formvar, round 

#9-17 $/lb 2.47 2.40 2.53 2.48 2.47

Aluminum wire, formvar, round 

#7-10 $/lb 2.17 2.10 2.23 2.18 2.17

Aluminum wire, rectangular 0.1 

x 0.2, Nomex wrapped $/lb 1.68 1.61 1.74 1.69 1.68

Aluminum wire, rectangular #<7 $/lb 2.04 1.97 2.10 2.05 2.04

Copper strip, thickness range 

0.02-0.045 $/lb 5.15 4.67 5.14 5.20 4.91

Copper strip, thickness range 

0.030-0.060 $/lb 5.05 4.57 5.04 5.10 4.81

Aluminum strip, thickness range 

0.02-0.045 $/lb 2.07 2.00 2.13 2.08 2.07

Aluminum strip, thickness range 

0.045-0.080 $/lb 2.08 2.01 2.14 2.09 2.08

Kraft insulating paper with 

diamond adhesive $/lb 1.52 1.53 1.52 1.50 1.46

Nomex insulation $/lb 24.50 24.50 22.80 19.89 17.07

Cequin insulation $/lb 5.53 5.07 4.78 4.93 4.78

Mineral oil $/gal 3.35 2.87 3.02 2.42 2.42

Impregnation $/gal 22.55 22.50 21.45 21.35 21.35

Winding combs $/lb 12.34 12.58 12.10 11.52 7.56

Tank/Enclosure Steel $/lb 0.38 0.38 0.47 0.41 0.40
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Markups

DOE applies markups to all costs to reflect a manufacturer’s internal markups. This interview guide does 

not go into detail on all the markups, but further information can be found online.2

DOE defines factory overhead as the indirect costs associated with production, indirect materials and 

energy use (e.g., annealing furnace), taxes, and insurance. In the preliminary analysis, DOE estimated 

this cost based on a markup applied to direct material production costs. However, DOE received

comments stating that factory overhead should be derived from labor costs or based on a fixed amount 

per design option.

D.4.4 Factory Overhead: How can DOE best characterize factory overhead costs? If DOE should apply 

a markup to labor costs, what markup is appropriate, and should it be applied to labor hours or 

labor cost? If DOE should account for a fixed overhead amount for each design option, what 

overhead amounts are appropriate for the design options considered by DOE for each of the 

representative units? Does factory overhead change with kVA size?

 

2 Preliminary Analysis: Chapter 5 – Engineering Analysis (pp. 39-41). Available here: 

http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/transformer_preanalysis_ch5.pdf. 
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5 SCALING RESULTS

DOE scales its analysis on the representative units to the other kVA ratings that are not directly analyzed. 

In the preliminary analysis, DOE relied on the 0.75 scaling rule to scale efficiency and cost. DOE received

comments that the 0.75 scaling rule may not provide accurate results beyond more than a few standard 

kVA ratings from the reference rating.

D.5.1 The 0.75 Scaling Rule: How accurate is the 0.75 scaling rule when scaling efficiency? When 

scaling cost? For DOE’s specific design lines and representative units, which kVA ratings would 

vary the most between the scaled cost/efficiency and the actual cost/efficiency?

D.5.2 Efficiency Adjustment Factor: If the 0.75 scaling rule is not accurate for wider kVA ranges, 

would it be feasible for DOE to incrementally adjust efficiency standards for certain scaled kVA 

ratings within a design line? If so, please comment on which kVA ratings would require the 

adjustment, what the adjustment should be, and any data used to support the adjustment.

DOE has heard that the 0.75 scaling rule is generally more accurate for scaling efficiency, but that it may 

understate the scaled cost of designs at lower kVA ratings due to certain fixed costs that do not scale 

according to the 0.75 rule. These costs could include tank/enclosure costs and other fixed hardware.

D.5.3 Scaling and Incremental Cost Impacts: Incremental efficiency improvements are typically 

determined by the core and coil specifications, which scale accurately using the 0.75 scaling rule. 

Even if the total cost of the transformer does not scale accurately using the 0.75 scaling rule due 

to fixed costs, wouldn’t the incremental cost for improving efficiency still be accurately 

represented by the 0.75 scaling rule? Why, or why not?
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E. MARKET QUESTIONNAIRE

E.1 Customer purchase evaluation rates: What is the percentage of customers that specify A and B 

parameters when purchasing distribution transformers?

Customer Purchase Evaluation Rates for Distribution Transformers

Current DOE estimate of 

purchasers who specify A and B 

parameters 

% of purchasers who specify A 

and B parameters

Liquid-Immersed 75%

Low-Voltage Dry-Type 10%

Medium-Capacity Dry-Type 50%

High-Capacity Dry-Type 80%

E.2 Refurbished Transformers: Does your company refurbish distribution transformers? What 

portion of the distribution transformer market are refurbished transformers? What factors would 

affect customer decisions to buy new vs. refurbish? How is this expected to change if efficiency 

standards are increased?

E.3 Transformers with Forced Cooling: What percentage of distribution transformers use forced 

cooling? Of the transformers with forced cooling, what percentage of the time are they operating 

using forced cooling rather than natural cooling?
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F. MANUFACTURER IMPACT ANALYSIS

The Manufacturer Impact Analysis (MIA) identifies and quantifies the likely impacts of amended energy 

conservation standards on manufacturers. This section of the interview guide references the equipment 

class groupings and design lines presented previously and repeated below. 

Design Lines and Equipment Class Groupings for Distribution Transformers

Design Line Equipment Class 

Grouping* Type of Distribution Transformer kVA Range

1 

1 

Liquid-immersed, single-phase, rectangular tank 10–167

2 Liquid-immersed, single-phase, round tank 10–167

3 Liquid-immersed, single-phase, round tank 250–833

4 

2 Liquid-immersed, three-phase 15–500

5 Liquid-immersed, three-phase 750–2500

6 3 Dry-type, low-voltage, single-phase 15–333

7 

4 Dry-type, low-voltage, three-phase 15–150

8 Dry-type, low-voltage, three-phase 225–1000

9 

6 Dry-type, medium-voltage, three-phase, 20-45kV BIL 15–500

10 Dry-type, medium-voltage, three-phase, 20-45kV BIL 750–2500

11

8 Dry-type, medium-voltage, three-phase, 46-95kV BIL 15–500

12 Dry-type, medium-voltage, three-phase, 46-95kV BIL 750–2500

13A

10 Dry-type, medium-voltage, three-phase, 96-150kV BIL 15-500

13B Dry-type, medium-voltage, three-phase, 96-150kV BIL 750–2500

* DOE did not select any representative units from the single-phase, medium-voltage equipment classes, but calculated the 

analytical results for them based on the results for their three-phase counterparts.
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1 KEY ISSUES

DOE is interested in understanding the impact of amended energy conservation standards on 

manufacturers. This section provides an opportunity for manufacturers to identify high priority issues 

that DOE should take into consideration when conducting the MIA. 

F.1.1 In general, what are the key concerns for your company regarding this distribution transformer

rulemaking?

F.1.2 How would amended energy conservation standards affect your ability to compete in the 

marketplace?

F.1.3 The limited availability of certain core steels may pose an issue at higher efficiency levels. For each 

type of core steel in the table below, please indicate the names of suppliers that produce it, the 

estimated total global supply of it, barriers in the marketplace for obtaining it, and any other 

comments that you would like to make.
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Core Steel Availability

Core Steel

Type Names of Suppliers Est. Total 

Global Supply Barriers to Availability Other Comments

M4

M3

M2

ZDMH

H-0 DR

SA1 

Amorphous

Other: 
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2 COMPANY OVERVIEW AND ORGANIZATIONAL CHARACTERISTICS 

Understanding how the manufacture of distribution transformers fits within your larger organization

will help DOE better estimate the probable impacts of an amended energy conservation standard. 

F.2.1 Do you have a parent company and/or subsidiary? If so, please provide their names.

F.2.2 What is your company’s approximate market share of the distribution transformer market for: (1) 

liquid-immersed, (2) low-voltage dry-type, and (3) medium-voltage dry-type? Does this vary 

significantly for any particular design line that you manufacture?

F.2.3 What are your product line niches and relative strengths in the distribution transformer market? 

F.2.4 Do you manufacture any products other than distribution transformers? If so, what other 

products do you manufacture? Do you manufacture them in the same facilities as your 

distribution transformers? What percentage of your overall revenue is from distribution 

transformer sales?
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F.2.5 Where are your production facilities located, and what type of product is manufactured at each location? Please provide production 

figures for your company’s manufacturing at each location by design line or equipment class grouping. 

Manufacturing Locations

Location Design Line (DL) or Equipment Class Grouping (ECG) Employees

(Production)

Employees

(Non-production)

Units/Yr 

Produced

Example: Jackson, TN ECG #1. Liquid-immersed, medium-voltage, single-phase 75 25 680,000

 

 

 

 

F.2.6 Are higher efficiency products built at different plants than lower efficiency products of the same design line? 

F.2.7 Would you expect your market share to change once amended energy conservation standards become effective?
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3 MARKUPS AND PROFITABILITY

In this section, DOE would like to understand the current markup structure of the industry and how 

setting an amended energy conservation standard would impact your company’s markup structure and 

profitability. 

The manufacturer markup is a multiplier applied to manufacturer production cost to cover per unit 

research and development, selling, general, and administrative expenses, and profit. It is NOT a profit 

margin. The manufacturer production cost multiplied by the manufacturer markup plus the shipping 

costs covers all costs involved in manufacturing and profit for the product. 

F.3.1 DOE calculated a markup of 1.25 for distribution transformers. How does this figure compare to 

your company’s baseline markups? Do the markups vary by design line?

F.3.2 Within each design line, do the per-unit mark-ups vary by design options? Alternatively, does 

efficiency affect the markup on a product? 

F.3.3 What other factors affect mark-ups in the same design line? 

F.3.4 Would you expect amended energy conservation standards to affect your profitability? If so, 

please explain why. 
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4 DISTRIBUTION CHANNELS

F.4.1 Delivery Channels for Liquid-Immersed Transformers: What percentage of liquid-immersed 

distribution transformers is sold directly to utilities? What percentage of liquid-immersed 

transformers is sold to a utility through an independent manufacturer distributor? For each of 

these delivery channels what is the percentage increase in manufacturer sale price (markup 

factor) that will be realized in the final retail price?

Distribution Channels for Liquid-Immersed Transformers

F.4.2 Delivery Channels for Dry-Type Transformers: What percentage of dry-type transformers is 

sold directly to electrical contractors? What percentage of dry-type transformers is sold directly 

to multi-site commercial/industrial customers (also known as “national accounts”)? For each of 

these delivery channels what is the percentage increase in manufacturer sale price (markup 

factor) that will be realized in final retail price?

Distribution Channels Dry-Type Transformers

Channel % of Units Sold Markup Factor

Sold directly to utilities

Sold through a distributer

Other, please describe:

Channel % of Units Sold Markup Factor

Sold directly to electrical contractors

Sold directly to “national accounts”
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5 SHIPMENT PROJECTIONS AND MARKET SHARES

An amended energy conservation standard can change overall shipments by altering product attributes, 

marketing approaches, product availability, and price. DOE’s shipments model includes forecasts for the 

base case shipments (i.e., total industry shipments absent amended energy conservation standards) and 

the standards case shipments (i.e., total industry shipments with amended energy conservation 

standards). 

To determine efficiency distributions after the compliance date of the standard, DOE modeled a shift 

scenario, in which products that exceed the new standard level in the base case shift to even higher 

efficiencies in the standards case to maintain their relative efficiency premium. 

F.5.1 How do you think amended energy conservation standards will impact the sales of more efficient 

products? For example, would customers continue to buy products that exceed the energy 

conservation standard level? Would your response change for higher mandated efficiency levels?

F.5.2 How sensitive do you think shipments will be to price changes? Will it vary with equipment class

grouping or design line? 

F.5.3 Would you expect your market share to change when higher energy conservation standards take 

effect?

F.5.4 What percent of your transformer shipments come from distribution transformers?

F.5.5 To your knowledge, are there any niche manufacturers or component manufacturers for which 

the adoption of amended energy conservation standard would have a particularly severe impact? 

If so, why?
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6 FINANCIAL PARAMETERS 

Navigant Consulting, Inc. (NCI) has developed a “strawman” model of financial performance called the 

Government Regulatory Impact Model (GRIM) using publicly available data. This section attempts to 

understand how your company’s financial situation differs from our industry aggregate picture. 

Please compare your company’s distribution transformer financial parameters to the GRIM parameters 

tabulated below.

Financial Parameters for Distribution Transformer Manufacturers

GRIM Input Definition

Industry 

Estimated

Value

Your Actual

(If Significantly 

Different from 

DOE’s 

Estimate) 

Income Tax 

Rate

Corporate effective income tax paid 

(percentage of earnings before taxes, EBT) 23%

Discount Rate

Weighted average cost of capital (inflationadjusted weighted average of corporate cost 

of debt and return on equity)

9%

Working 

Capital

Current assets less current liabilities 

(percentage of revenues) 16%

SG&A Selling, general, and administrative expenses 

(percentage of revenues) 16%

R&D Research and development expenses 

(percentage of revenues) 3%

Depreciation Amortization of fixed assets (percentage of 

revenues) 3%

Capital 

Expenditures

Outlay of cash to acquire or improve capital 

assets (percentage of revenues, not including 

acquisition or sale of business units)

3%

Cost of Goods

Sold

Includes material, labor, overhead, and 

depreciation (percentage of revenues) 71%

F.6.1 Are the figures in the table above representative of the distribution transformer industry as a 

whole? If not, why?

F.6.2 Do any of the financial parameters in the table above change for a particular subgroup of 

manufacturers? Please describe any differences.
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7 CONVERSION COSTS

An increase in energy conservation standards may cause the industry to incur capital and product 

conversion costs to meet the amended energy conservation standard. The MIA considers three types of 

conversion expenditures:

• Capital conversion costs -- One-time investments in plant, property, and equipment (PPE) 

necessitated by an amended energy conservation standard. These may be incremental changes to 

existing PPE or the replacement of existing PPE. Included are expenditures on buildings, 

equipment, and tooling.

• Product conversion costs – One-time investments in research, product development, testing, 

marketing and other costs for redesigning products necessitated by an amended energy 

conservation standard. 

• Stranded assets -- Assets replaced before the end of their useful lives as a direct result of the 

change in energy conservation standard. 

With a detailed understanding of the conversion costs necessitated by different standard levels, DOE can 

better model the impact on the distribution transformer industry resulting from amendments to the 

conservation standards. 

F.7.1 At your manufacturing facilities, would amended energy conservation standards be difficult to 

implement? If so, would your company modify existing facilities or develop new facilities?

F.7.2 Are there certain design options that would require relatively minor changes to existing 

products? Are there certain design options where the capital or product conversion costs 

significantly increase? Please describe these changes qualitatively. 

F.7.3 What conversion costs do you anticipate incurring with each design option? In the sections 

below, please indicate any significant capital and product conversion costs associated with the 

core steel options, core configuration options, and core type options listed. These design options 

are presented separately for liquid immersed, low-voltage dry-type, and medium-voltage drytype distribution transformers.
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Design Options Considered for Liquid Immersed Transformers (Design Lines 1-5)

Core Steel Options: Core Configuration Options: Core Type Options:

M5 Distributed Gap Wound Core Shell

M4 Symmetric Core Core

M3 3-Leg

M2 5-Leg

ZDMH 

SA1 Amorphous 

Capital Conversion Costs:

Product Conversion Costs:

Stranded Assets: 

Design Options for Low-Voltage Dry-Type Transformers (Design Lines 6-8)

Core Steel Options: Core Configuration Options: Core Type Options:

M12 Stacked Butt-Lap Shell

M6 Stacked Full Miter Core

M5 Stacked Step-Lap Miter 3-Leg

M4 Distributed Gap Wound Core 5-Leg

M3 Symmetric Core 

M2 (wound cores) 

ZDMH (wound cores)

H0-DR

SA1 Amorphous

Capital Conversion Costs:

Product Conversion Costs:

Stranded Assets: 
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Design Options for Medium-Voltage Dry-Type Transformers (Design Lines 9-13) 

Core Steel Options: Core Configuration Options: Core Type Options:

M6 Stacked Full Miter Shell

M5 Stacked Step-Lap Miter Core

M4 Mitered Cruciform 3-Leg

M3 Distributed Gap Wound Core 5-Leg

M2 (wound cores) Symmetric Core 

ZDMH (wound cores) 

H0-DR

SA1 Amorphous

Capital Conversion Costs:

Product Conversion Costs:

Stranded Assets: 

F.7.4 For any design options that would require new production equipment, please describe how 

much downtime would be required. What impact would downtime have on your business? 
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8 CUMULATIVE REGULATORY BURDEN

Cumulative regulatory burden refers to the burden that industry faces from overlapping effects of new or 

revised DOE standards, and/or other regulatory actions affecting the same product or industry.

F.8.1 Are there other recent or impending standards that distribution transformer manufacturers face 

from DOE, other U.S. federal agencies, State regulators, foreign government agencies, or other 

standard setting bodies? If so, please identify the regulation and the corresponding possible 

effective dates for those regulations. Below is a preliminary list of regulations that could possibly 

affect manufacturers of distribution transformers. Please provide comments on the listed 

regulations. 

Other Regulations Identified by DOE

Regulation Compliance Date(s) Expected Expenses / Comments

EPACT 2005 minimum efficiency 

levels for low-voltage dry-type 

distribution transformers

January 1, 2007

DOE’s 2007 Energy Conservation 

Standards Rulemaking for 

Distribution Transformers

January 1, 2010

F.8.2 Are there any additional regulatory burdens that DOE should take into consideration? If so, 

please identify the regulation, the corresponding effective dates, and your expected compliance 

cost.

F.8.3 Under what circumstances would you be able to coordinate expenditures related to these other 

regulations with an amended energy conservation standard, thereby lessening the cumulative 

burden?
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9 DIRECT EMPLOYMENT IMPACT ASSESSMENT

The impact of amended energy conservation standards on employment is an important consideration in 

the rulemaking process. This section of the interview guide seeks to explore current trends in transformer

production employment and solicit manufacturer views on how domestic employment patterns might be 

affected by amended energy conservation standards.

F.9.1 Would your domestic employment levels be expected to change significantly under amended 

energy conservation standards? If so, please identify particular standard levels which may trigger 

changes in employment. 

F.9.2 Would the workforce skills necessary under amended energy conservation standards require 

extensive retraining or replacement of employees at your manufacturing facilities?
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10 CAPACITY/EXPORTS / FOREIGN COMPETITION / OUTSOURCING

Disparity between domestic and foreign energy conservation standards could impact exports or imports.

Labor content and material changes resulting from amended energy conservation standards may impact 

sourcing decisions.

F.10.1 How would amended energy conservation standards impact your company’s manufacturing 

capacity, in either the short term or the long term? 

F.10.2 Absent amended energy conservation standards, are production facilities being relocated to 

foreign countries? 

F.10.3 Would amended energy conservation standards impact your domestic vs. foreign manufacturing 

decision? 

F.10.4 What percentage of your U.S. production of distribution transformers is exported?

F.10.5 What percentage of the U.S. market for distribution transformers is imported? Would amended 

energy conservation standards have an impact on foreign competition? 

F.10.6 Are there any foreign companies with North American production facilities?
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11 CONSOLIDATION

Amended energy conservation standards can alter the competitive dynamics of the market. This can 

include prompting companies to enter or exit the market, or to merge. DOE and the Department of Justice 

are both interested in any potential reduction in competition that would result from an amended energy 

conservation standard.

F.11.1 Please comment on industry consolidation and related trends over the last 10 years.

F.11.2 In the absence of amended energy conservation standards, do you expect any further industry 

consolidation? Please describe your expectations.

F.11.3 How would industry competition change as a result of amended energy conservation standards? 

F.11.4 To your knowledge, are there any niche manufacturers for which the adoption of amended 

energy conservation standards would have a particularly severe impact?
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12 IMPACTS ON SMALL BUSINESS

F.12.1 The Small Business Association (SBA) denotes a small business in the distribution transformer

industry as having less than 750 employees.3 By this definition, is your company considered a 

small business?

F.12.2 Below is a list of small business distribution transformer manufacturers compiled by DOE. Are 

there any small manufacturers that should be added to this list? Are there specific manufacturers 

on this list that may be more severely impacted by an amended energy conservation standard 

than others? 

CARTE International, Inc. Moloney Electric Inc. (Canadian)

Central Moloney, Inc. NEELTRAN

DYNAPOWER Niagara Transformer Corporation

Electric Service Company (ELSCO) Olsun Electrics Corporation

Federal Pacific ONYX Power Inc.

Hex Tec, LLC (subsidiary of MSE, Inc.) Pacific Crest Transformers

Jefferson Electric Pemco Corporation

JINPAN International USA, Limited Power Partners, Inc.

Kentucky Association of Electric Cooperatives, Inc. Power Quality International

Lindsey Manufacturing Company Powersmiths Int'l (Canadian)

Magnetic Technologies, Inc. Sola/Hevi-Duty

Manufacturing Systems & Equipment, Inc. (MSE) VanTran Industries, Inc.

Marcus Transformer (Canadian) Virginia Transformer

MGM Transformer Company Warner Power

Mirus International (Canadian)

F.12.3 Are there any reasons that a small business might be at a disadvantage relative to a larger 

business under amended energy conservation standards? Please consider such factors as 

technical expertise, access to capital, bulk purchasing power for materials/components, 

engineering resources, and any other relevant issues. 

 

3 DOE uses the SBA small business size standards effective November 5, 2010 to determine whether a company is a 

small business. To be categorized as a small business, a power, distribution and specialty transformer manufacturer 

and its affiliates may employ a maximum of 750 employees. The 750 employee threshold includes all employees in 

a business’s parent company and any other subsidiaries.