U.S. DEPARTMENT OF ENERGY

OFFICE OF ENERGY EFFICIENCY

AND RENEWABLE ENERGY

PUBLIC WORKSHOP ON A RULEMAKING

TO CONSIDER ENERGY EFFICIENCY STANDARDS

FOR COMMERCIAL UNITARY AIR CONDITIONERS

AND HEAT PUMPS

+ + + + +

MONDAY,

OCTOBER 1, 2001

The workshop was held in Room 1E-245,

Forrestal Building, 1000 Independence Avenue, S.W.,

Washington, D.C., at 9:00 a.m.

PRESENT:

FRANCINE PINTO, DOE

QANNIE LAUGHLIN, DOE

EDWARD POLLOCK, DOE

BRYAN BERRINGER, DOE

JAMES RABA, DOE

HARVEY SACKS, American Council for an Energy

Efficient Economy

JIM CRAWFORD, The Trane Company

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

EE-RM-STD-01-375 COMMENT 02EE

u.s. DEPARTMENT OF ENERGY 

+ + + + + 

OFFICE OF ENERGY EFFICIENCY 

AND RENEWABLE ENERGY 

+ + + + + 

PUBLIC WORKSHOP ON A RULEMAKING 

TO CONSIDER ENERGY EFFICIENCY STANDARDS 

FOR COMMERCIAL UNITARY AIR CONDITIONERS 

AND HEAT PUMPS 

+ + + + + 

MONDAY, 

OCTOBER 1, 2001 

+ + + + + 

The workshop was held in Room 1E-245, 

Forrestal Building, 1000 Independence Avenue, S.W., 

Washington, D.C., at 9:00 a.m. 

PRESENT: 

FRANCINE PINTO, DOE 

QANNIE LAUGHLIN, DOE 

EDWARD POLLOCK, DOE 

BRYAN BERRINGER, DOE 

JAMES RABA, DOE 

HARVEY SACKS, American Council for an Energy 

Efficient Economy 

JIM CRAWFORD, The Trane Company 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

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2

PRESENT (Continued):

STEVE ROSENSTOCK, Edison Electric Institute

CHARLIE STEPHENS, Oregon Office of Energy

KARIM AMRANE, Air Conditioner and Refrigeration

Institute

MICHAEL MARTIN, California Energy Commission

BILL PRINDLE, Alliance to Save Energy

JIM MULLEN, Lennox International

HUNG PHAM

JIM WOLF, Trane Company

TOM ECKMAN

TED DOYLE, Mestek

DON BRUNDAGE, Southern Company

MARSHALL HUNT

DAVID WINIARSKI

MARK KENDALL

JOHN STOOPS

MARK FRIEDRICHS

MIKE RAY

NED RAYNOLDS

NEAL R. GROSS

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EE-RM-STD-01-375 COMMENT 02EE

2 

PRESENT (Continued): 

STEVE ROSENSTOCK, Edison Electric Institute 

CHARLIE STEPHENS, Oregon Office of Energy 

KARIM AMRANE, Air Conditioner and Refrigeration 

Institute 

MICHAEL MARTIN, California Energy Commission 

BILL PRINDLE, Alliance to Save Energy 

JIM MULLEN, Lennox International 

HUNG PHAM 

JIM WOLF, Trane Company 

TOM ECKMAN 

TED DOYLE, Mestek 

DON BRUNDAGE, Southern Company 

MARSHALL HUNT 

DAVID WINIARSKI 

MARK KENDALL 

JOHN STOOPS 

MARK FRIEDRICHS 

MIKE RAY 

NED RAYNOLDS 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

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3

C-O-N-T-E-N-T-S

PAGE

Introductions . . . . . . . . . . . . . . . . . 4

Commercial Unitary Air Conditioners and Heat

Pumps: Topics for Discussion

Introduction, Bryan Berringer . . . . . . 16

Market and Technology Assessment, Mark Kendall . 62

Screening Analysis, David Winiarski .. .. . 99

Engineering Analysis:

Equipment Efficiency and Cost Analysis, Mark

Kendall . . . . . . . . . . . . .. 114

Building Energy Use and Electric Load Shape

Characterization, David Winiarski . . . 152

Life-cycle Cost Analysis, John Stoops . 183

Consumer Subgroup Analysis John Stoops .206

National Energy Savings and Net Present

Value Analysis, John Stoops ....... 217

Manufacturer Impact Analysis, Mark

Kendall .. . ........... 228

Employment Impact Analysis, John Stoops 237

Utility Impact Analysis, John Stoops . . 242

Environmental Impact Analysis, John

Stoops .. . ............ 248

NEAL R. GROSS

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EE-RM-STD-01-375 COMMENT 02EE

C-O-N-T-E-N-T-S 

Introductions 

Commercial Unitary Air Conditioners and Heat 

Pumps: Topics for Discussion 

3 

4 

Introduction, Bryan Berringer 16 

Market and Technology Assessment, Mark Kendall 62 

Screening Analysis, David Winiarski 99 

Engineering Analysis: 

Equipment Efficiency and Cost Analysis, 

Kendall 

Mark 

114 

Building Energy Use and Electric 

Characterization, David Winiarski 

Load Shape 

152 

Life-cycle Cost Analysis, John Stoops 183 

Consumer Subgroup Analysis John Stoops 206 

National Energy Savings and Net Present 

Value Analysis, John Stoops 217 

Manufacturer Impact Analysis, Mark 

Kendall 228 

Employment Impact Analysis, John Stoops 237 

Utility Impact Analysis, John Stoops 242 

Environmental Impact Analysis, John 

Stoops 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

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WASHINGTON, D.C. 20005-3701 

248 

www.nealrgross.com 
4

1 P-R-O-C-E-E-D-I-N-G-S

*s 2 (9:10 a.m.)

3 MR. RABA: Shall we get started?

4 Well, welcome, and thank you for being

5 here today at the Department of Energy's workshop,

6 public workshop, to explore and listen to your views

7 on the issues and the processes involved with the

8 rulemaking for commercial unitary central air and heat

9 pumps.

10 If there's anybody who's not here for

11 that, it looks like you're all in the right place

12 then. Good morning.

13 Any newcomers? Show of hands.

14 (Show of hands.)

15 MR. RABA: A lot of veterans out there.

16 Good, good.

17 My name is Jim Raba. I work in the Office

18 of Building Research and Standards. I'll be your

19 facilitator today.

20 I have other programs that I do in the

21 office, but today I'll be facilitating your meeting,

22 and so I want you to help me out also to keep on

23 track. I'll be looking out for you as your

24 facilitator involved with the process, not the

25 substance so much, but the process, to be sure all

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

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EE-RM-STD-01-375 COMMENT 02EE

4 

1 P-R-O-C-E-E-D-I-N-G-S 

2 (9:10 a.m.) 

3 MR. RABA: Shall we get started? 

4 Well, welcome, and thank you for being 

5 here today at the Department of Energy's workshop, 

6 public workshop, to explore and listen to your views 

7 on the issues and the processes involved with the 

8 rulemaking for commercial unitary central air and heat 

9 pumps. 

10 If there's anybody who's not here for 

11 that, it looks like you're all in the right place 

12 then. Good morning. 

13 Any newcomers? Show of hands. 

14 (Show of hands.) 

15 MR. RABA: A lot of veterans out there. 

16 Good, good. 

17 My name is Jim Raba. I work in the Office 

18 of Building Research and Standards. I'll be your 

19 facilitator today. 

20 I have other programs that I do in the 

21 office, but today I'll be facilitating your meeting, 

22 and so I want you to help me out also to keep on 

23 track. I'll be looking out for you as your 

24 facilitator involved with the process, not the 

25 substance so much, but the process, to be sure all 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

WASHINGTON, D.C. 20005-3701 www.nealrgross.com 
5

1 views are heard, in a sense air your comments, and we

2 can move forward with that.

3 I'd also ask as we do introductions around

4 the room if you'd all speak clearly into the

5 microphone so the court reporter can hear your name

6 and your organization, as well.

7 Let's do introductions. We'll go around

8 the table. First, please, we'll start on this side

9 here, then the back of the room, and the sides. Do

10 you want to do that? Please, proceed.

11 MR. SACKS: I'm Harvey Sacks, American

12 Council for an Energy Efficient Economy.

13 MR. CRAWFORD: Jim Crawford, the Trane

14 Company.

15 MR. ROSENSTOCK: Steve Rosenstock, Edison

16 Electric Institute.

17 MR. MULLEN: Jim Mullen, Lennox

18 International.

19 MR. STEPHENS: Charlie Stephens, Oregon

20 Office of Energy.

21 MR. ECKMAN: Tom Eckman, Northwest Power

22 Planning Council.

23 MR. PRINDLE: Bill Prindle, Alliance to

24 Save Energy.

25 MR. MARTIN: Michael Martin, California

NEAL R. GROSS

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EE-RM-STD-01-375 COMMENT 02EE

----------------------------------------~-----

5 

1 Vlews are heard, ln a sense air your comments, and we 

2 can move forward with that. 

3 I'd also ask as we do introductions around 

4 the room if you'd all speak clearly into the 

5 microphone so the court reporter can hear your name 

6 and your organization, as well. 

7 Let's do introductions. We'll go around 

8 the table. First, please, we'll start on this side 

9 here, then the back of the room, and the sides. Do 

10 you want to do that? Please, proceed. 

11 MR. SACKS: I'm Harvey Sacks, American 

12 Council for an Energy Efficient Economy. 

13 MR. CRAWFORD: Jim Crawford, the Trane 

14 Company. 

15 MR. ROSENSTOCK: Steve Rosenstock, Edison 

16 Electric Institute. 

17 MR. MULLEN: Jim Mullen, Lennox 

18 International. 

19 MR. STEPHENS: Charlie Stephens, Oregon 

20 Office of Energy. 

21 MR. ECKMAN: Tom Eckman, Northwest Power 

22 Planning Council. 

23 

24 Save Energy. 

25 

(202) 234-4433 

MR. PRINDLE: Bill Prindle, Alliance to 

MR. MARTIN: Michael Martin, California 

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COURT REPORTERS AND TRANSCRIBERS 

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6

1 Energy Commission.

2 MR. AMRANE: Karim Amrane, Air

3 Conditioning and Refrigeration Institute.

4 MR. BERRINGER: Bryan Berringer,

5 Department of Energy.

6 MR. POLLOCK: Ed Pollock, Department of

7 Energy.

8 MS. PINTO: Francine Pinto, Department of

9 Energy.

10 MR. RABA: In the back, please. And would

11 you use the microphones that are standing up? Thank

12 you.

13 MR. RAY: Mike Ray, Trane Company.

14 MR. DOYLE: Ted Doyle, Mestek Cooling

15 Products Business Unit.

16 MR. LINN: John Linn from Northeast Energy

17 Efficiency Partnerships.

18 MR. GRAVES: Ron Graves, Mestek,

19 Incorporated.

20 MR. SIRAJ: Siraj Shaikh, GPU Energy.

21 MR. HOLT: John Holt, National Rural

22 Electric Cooperative Association.

23 MR. BRUNDAGE: Don Brundage, Southern

24 Company.

25 MR. ROSENQUIST: Greg Rosenquist, Lawrence

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

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EE-RM-STD-01-375 COMMENT 02EE

6 

1 Energy Commission. 

2 MR. AMRANE: Karim Amrane, Air 

3 Conditioning and Refrigeration Institute. 

4 MR. BERRINGER: Bryan Berringer, 

5 Department of Energy. 

6 MR. POLLOCK: Ed Pollock, Department of 

7 Energy. 

8 MS. PINTO: Francine Pinto, Department of 

9 Energy. 

10 MR. RABA: In the back, please. And would 

11 you use the microphones that are standing up? Thank 

12 you. 

13 MR. RAY: Mike Ray, Trane Company. 

14 MR. DOYLE: Ted Doyle, Mestek Cooling 

15 Products Business Unit. 

16 MR. LINN: John Linn from Northeast Energy 

17 Eff~ciency Partnerships. 

18 MR. GRAVES: Ron Graves, Mestek, 

19 Incorporated. 

20 MR. SIRAJ: Siraj Shaikh, GPU Energy. 

21 MR. HOLT: John Holt, National Rural 

22 Electric Cooperative Association. 

23 MR. BRUNDAGE: Don Brundage, Southern 

24 Company. 

25 MR. ROSENQUIST: Greg Rosenquist, Lawrence 

(202) 234-4433 

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COURT REPORTERS AND TRANSCRIBERS 

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7

1 Berkeley National Laboratory.

2 MR. BUSH: John Bush, Lawrence Berkeley

3 National Laboratory.

4 MR. McCABE: Mike McCabe, Department of

5 Energy.

6 MR. HOLLOMAN: Brad Holloman, Pacific

7 Northwest National Laboratory.

8 MR. RAYMOND: Mike Raymond, Department of

9 Energy.

10 MR. ADAMS: Carl Adams, Department of

11 Energy.

12 MR. GINSBERG: I'm Mark Ginsberg,

13 Department of Energy.

14 MS. MILLER: Becky Miller, ICF Consulting.

15 MR. STEINER: Richard Steiner, first

16 company.

17 MR. RABA: Up to the microphone, please.

18 (Laughter.)

19 MR. RABA: Sure, come on. Just for the

20 record.

21 MS. EDWARDS-JONES: Brenda Edwards-Jones,

22 Department of Energy.

23 MR. RABA: Thank you. Good job.

24 MS. FORD: Debbie Ford, temporary

25 Department of Energy.

NEAL R. GROSS

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EE-RM-STD-01-375 COMMENT 02EE

7 

1 Berkeley National Laboratory. 

2 MR. BUSH: John Bush, Lawrence Berkeley 

3 National Laboratory. 

4 MR. McCABE: Mike McCabe, Department of 

5 Energy. 

6 MR. HOLLOMAN : Brad Holloman, Pacific 

7 Northwest National Laboratory. 

8 MR. RAYMOND: Mike Raymond, Department of 

9 Energy. 

10 MR. ADAMS: Carl Adams, Department of 

11 Energy. 

12 MR. GINSBERG: I'm Mark Ginsberg, 

13 Department of Energy. 

14 MS. MILLER: Becky Miller, ICF Consulting. 

15 MR. STEINER: Richard Steiner, first 

16 company. 

17 MR. RABA: Up to the microphone, please. 

18 (Laughter. ) 

19 MR. RABA: Sure, come on. Just for the 

20 record. 

21 MS. EDWARDS-JONES: Brenda Edwards-Jones, 

22 Department of Energy. 

23 MR. RABA: Thank you. Good job. 

24 MS. FORD: Debbie Ford, temporary 

25 Department of Energy. 

(202) 234-4433 

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8

1 MS. MURPHY: Sandy Beale, sitting down,

2 Department of Energy. Maureen Murphy, Department of

3 Energy.

4 MR. RIVEST: Mike Rivest, standing up,

5 Department of Energy.

6 (Laughter.)

7 MR. RABA: Arthur Deale.

8 (Laughter.)

9 MR. NISAIR: Saddis Nisair (phonetic),

10 Department of Energy.

11 MR. ROBINSON: Thomas Robinson, also with

12 DOE.

13 MR. RAYNOLDS: Ned Raynolds, Northeast

14 Energy Efficiency Partnerships.

15 MR. STOOPS: John Stoops, Lawrence

16 Berkeley National Lab.

17 MR. JARNAGIN: Ron Jarnagin, Pacific

18 Northwest National Laboratory.

19 MR. WINIARSKI: Dave Winiarski, Northwest

20 National Laboratory.

21 MR. ENDER: Mark Ender (phonetic), Arthur

22 D. Little.

23 MR. RABA: That was well done everybody.

24 Thank you very much.

* ~ 25 Does everybody have a copy of today's

NEAL R. GROSS

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EE-RM-STD-01-375 COMMENT 02EE

8 

1 MS. MURPHY: Sandy Beale, sitting down, 

2 Department of Energy. Maureen Murphy, Department of 

3 Energy. 

4 MR. RIVEST: Mike Rivest, standing up, 

5 Department of Energy. 

6 (Laughter.) 

7 MR. RABA: Arthur Deale. 

8 (Laughter. ) 

9 MR. NISAIR: Saddis Nisair (phonetic), 

10 Department of Energy. 

11 MR. ROBINSON: Thomas Robinson, also with 

12 DOE. 

13 MR. RAYNOLDS: Ned Raynolds, Northeast 

14 Energy Efficiency Partnerships. 

15 MR. STOOPS: John Stoops, Lawrence 

16 Berkeley National Lab. 

17 MR. JARNAG IN: Ron Jarnagin, Pacific 

18 Northwest National Laboratory. 

19 MR. WINIARSKI: Dave Winiarski, Northwest 

20 National Laboratory. 

21 MR. ENDER: Mark Ender (phonetic), Arthur 

22 D. Little. 

23 MR. RABA: That was well done everybody. 

24 Thank you very much. 

25 

(202) 234-4433 

Does everybody have a copy of today's 

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9

1 agenda and the handouts that are on the back table?

2 Did you all sign in, too, when you came in? Everybody

3 is prepared? Good, good, good.

4 A couple of things before we begin. Many

5 of you that are here have been here before so you kind

6 of know how things operate for these public workshops.

7 We've talked about ground rules. I've come to know as

8 norms of behavior to really make sure the process

9 moves forward for your benefit so that everybody is

10 heard.

11 Just some things to review. Bring

12 positives to the workshop, and we're going to move

13 towards solutions. In the process, discuss how that

14 operates. Listen as an ally.

15 We'll go around one by one. Certainly

16 there will be some comments to be made. So I would

17 like to recognize each one of you by show of hand,

18 recognize you, be sure you're in the queue, and that

19 way you get a chance to speak and be listened to.

20 One person speak at a time. Respect each

21 other, and we'll discuss the issues, the issues being,

22 again, the process of how to move forward with a rule

23 making process. Avoid side conversations, and be

24 concise.

25 Those are kind of standard ones. Bryan.

NEAL R. GROSS

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EE-RM-STD-01-375 COMMENT 02EE

9 

1 agenda and the handouts that are on the back table? 

2 Did you all sign in, too, when you came in? Everybody 

3 is prepared? Good, good, good. 

4 A couple of things before we begin. Many 

5 of you that are here have been here before so you kind 

6 of know how things operate for these public workshops. 

7 We've talked about ground rules. I've come to know as 

8 norms of behavior to really make sure the process 

9 moves forward for your benefit so that everybody is 

10 heard. 

11 Just some things to review. Bring 

12 positives to the workshop, and we're going to move 

13 towards solutions. In the process, discuss how that 

14 operates. Listen as an ally. 

15 We'll go around one by one. Certainly 

16 there will be some comments to be made. So I would 

17 like to recognize each one of you by show of hand, 

18 recognize you, be sure you're in the queue, and that 

19 way you get a chance to speak and be listened to. 

20 One person speak at a time. Respect each 

21 other, and we'll discuss the issues, the issues being, 

22 again, the process of how to move forward with a rule 

23 making process. Avoid side conversations, and be 

24 concise. 

25 

(202) 234-4433 

Those are kind of standard ones. Bryan. 

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1 MR. BERRINGER: Why don't we go --

2 MR. RABA: Yes, indeed. I'm sorry.

3 Forgive me.

4 We also have some call-ins today. So to

5 invite those on the telephone, go ahead. Please

6 introduce yourself and your organization.

7 DR. GOLDSTEIN: David Goldstein, Natural

8 Resources Defense Council.

9 MS. POULIN: Beth Poulin, National Grid.

10 MR. PHAM: Hung Pham, Copeland

11 Corporation.

12 MR. RABA: Okay. Thank you.

13 We expect one other call-in. We'll just

14 wait until that person checks in.

15 Thank you very much for being with us

16 either in person or virtually. I'm sure we'll all

17 share in the discussion equally.

18 Today we're going to talk about the

19 framework document, and that describes how the

20 Department of Energy intends to work on the updated

21 energy efficiency standards for commercial unitary air

22 conditioners and heat pumps, and this is about the

23 shape of the analysis.

24 And we particularly want your input as to

25 how to proceed, how to do it. So this is your chance,

NEAL R. GROSS

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EE-RM-STD-01-375 COMMENT 02EE

10 

1 MR. BERRINGER: Why don't we go --

2 MR. RABA: Yes, indeed. I'm sorry. 

3 Forgive me. 

4 We also have some call-ins today. So to 

5 invi te those on the telephone, go ahead. Please 

6 introduce yourself and your organization. 

7 DR. GOLDSTEIN: David Goldstein, Natural 

8 Resources Defense Council. 

9 MS. POULIN: Beth Poulin, National Grid. 

10 MR. PHAM: Hung Pham, Copeland 

11 Corporation. 

12 MR. RABA: Okay. Thank you. 

13 We expect one other call-in. We'll just 

14 wait until that person checks in. 

15 Thank you very much for being with us 

16 either in person or virtually. I'm sure we'll all 

17 share in the discussion equally. 

18 Today we're going to talk about the 

19 framework document, and that describes how the 

20 Department of Energy intends to work on the updated 

21 energy efficiency standards for commercial unitary air 

22 conditioners and heat pumps, and this is about the 

23 shape of the analysis. 

24 And we particularly want your input as to 

25 how to proceed, how to do it. So this is your chance, 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

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11

1 your opportunity' to help shape and guide how the

2 Department of Energy does its business with your

3 interest in mind.

4 The general format will be that we have

5 experts to give presentations of their analyses and

6 how they intend to proceed. After each presentation,

7 there will be opportunity for comment and questions as

8 well.

9 I'm going to take a look at the agenda

10 quickly and do a quick review. If you have it with

11 you, you might want to follow through.

12 Bryan Berringer, the program manager, will

13 be giving you some more background, some of the

14 rulemakings, and some more substantive information for

15 you.

16 The market and technology assessment by

17 Mark Kendall of Arthur D. Little, and look at the

18 impact on the marketplace itself.

19 David Winiarski, Pacific Northwest

20 National Labs, will do the screening analysis

21 presentation, and this is to look at and possibly

22 eliminate efficiency options that might not be fully

23 developed or that might not be technologically

24 feasible.

25 The engineering analysis, Mark Kendall

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EE-RM-STD-01-375 COMMENT 02EE

11 

1 your opportunity' to help shape and guide how the 

2 Department of Energy does its business with your 

3 interest in mind. 

4 The general format will be that we have 

5 experts to give presentations of their analyses and 

6 how they intend to proceed. After each presentation, 

7 there will be opportunity for comment and questions as 

8 well. 

9 I'm going to take a look at the agenda 

10 quickly and do a quick review. If you have it with 

11 you, you might want to follow through. 

12 Bryan Berringer, the program manager, will 

13 be giving you some more background, some of the 

14 rulemakings, and some more substantive information for 

15 you. 

16 The market and technology assessment by 

17 Mark Kendall of Arthur D. Little, and look at the 

18 impact on the marketplace itself. 

19 David Winiarski, Pacific Northwest 

20 National Labs, will do the screening analysis 

21 presentation, and this lS to look at and possibly 

22 eliminate efficiency options that might not be fully 

23 developed or that might not be technologically 

24 feasible. 

25 

(202) 234-4433 

The engineering analysis, Mark Kendall 

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12

1 will be back up and look at the equipment as to the

*. ~ 2 tradeoffs of costs and efficiencies.

3 Then on.building energy use and electric

4 load shape characterization, David Winiarski from PNLL

5 will be back again to look at the peak demand savings

6 potential.

7 On the flip side, the life-cycle cost

8 analysis.

9 MR. STOOPS: John Stoops.

10 MR. RABA: John Stoops. Thank you very

11 much. I understand Jim is in Tahiti.

12 MR. STOOPS: Some disgusting place like

13 that, yes.

14 MR. RABA: Okay. Was he supposed to call

15 in today?

16 (Laughter.)

17 MR. RABA: The life-cycle cost analysis

18 will be looking at savings of operating costs of the

19 life of the product.

20 The consumer subgroup analysis, impact on

21 the consumers, a very important consideration.

22 The national energy savings and net

23 present value analysis, looking at a base case and

24 compare it with a standards case.

25 The manufacturer impact analysis, Mark

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EE-RM-STD-01-375 COMMENT 02EE

12 

1 will be back up and look at the equipment as to the 

2 tradeoffs of costs and efficiencies. 

3 Then on building energy use and electric 

4 load shape characterization, David Winiarski from PNLL 

5 will be back again to look at the peak demand savings 

6 potential. 

7 On the flip side, the life-cycle cost 

8 analysis. 

9 MR. STOOPS: John Stoops. 

10 MR. RABA: John Stoops. Thank you very 

11 much. I understand Jim is in Tahiti. 

12 MR. STOOPS: Some disgusting place like 

13 that, yes. 

14 MR. RABA: Okay. Was he supposed to call 

15 In today? 

16 (Laughter. ) 

17 MR. RABA: The life-cycle cost analysis 

18 will be looking at savings of operating costs of the 

19 life of the product. 

20 The consumer subgroup analysis, impact on 

21 the consumers, a very important consideration. 

22 The national energy savings and net 

23 present value analysis, looking at a base case and 

24 compare it with a standards case. 

25 

(202) 234-4433 

The manufacturer impact analysis, Mark 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

WASHINGTON, D.C. 20005-3701 www.nealrgross.com 
13

1 Kendall, economic and competitive issues that would

2 affect manufacturers.

3 Employment impact, John, yes, Stoops will

4 be looking at that as to employment figures.

5 Utility impact analysis, John again, and

6 estimate the effects on the supplies of electricity

7 and energy as well.

8 And the environmental analysis finally, to

9 look at CO2 emissions, nitrous oxides, and sulfur

10 dioxide, too.

11 Somewhere in there in the morning, if

12 you'd like, we can break maybe around 10:30, depending

13 on the discussion, how we're proceeding along. Plan

14 on a break around noontime for lunch, thereabouts, and

15 perhaps in the afternoon, too.

16 It should be a very full day, but we can

17 proceed very efficiently throughout.

18 As I said earlier, the purpose here is to

19 have the process presented to you and to gather your

20 comments and views on how that process should be

21 guided and what you see as issues in that process, as

22 well.

23 Is there anything else that should be

24 included on today's agenda? Anybody have any other

25 things to add to today's agenda?

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

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EE-RM-STD-01-375 COMMENT 02EE

13 

1 Kendall, economlC and competitive issues that would 

2 affect manufacturers. 

3 Employment impact, John, yes, Stoops will 

4 be looking at that as to employment figures. 

5 Utility impact analysis, John again, and 

6 estimate the effects on the supplies of electricity 

7 and energy as well. 

8 And the environmental analysis finally, to 

9 look at CO2 emissions, nitrous oxides, and sulfur 

10 dioxide, too. 

11 Somewhere in there in the morning, if 

12 you'd like, we can break maybe around 10: 30, depending 

13 on the discussion, how we're proceeding along. plan 

14 on a break around noontime for lunch, thereabouts, and 

15 perhaps in the afternoon, too. 

16 It should be a very full day, but we can 

17 proceed very efficiently throughout. 

18 As I said earlier, the purpose here is to 

19 have the process presented to you and to gather your 

20 comments and views on how that process should be 

21 guided and what you see as issues in that process, as 

22 well. 

23 Is there anything else that should be 

24 included on today's agenda? Anybody have any other 

25 things to add to today's agenda? 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

WASHINGTON, D.C. 20005-3701 www.nealrgross.com 
14

1 (No response.)

2 MR. RABA: Seeing none, any on the phone,

3 the call-ins?

4 (No response.)

5 MR. RABA: Okay. Thank you. None heard.

6 A couple of housekeeping items, too, if

7 you would, please. This is kind of a rerun of what

8 was to happen a couple of weeks ago, and so we're all

9 very sensitive to safety and security issues.

10 If for any reason we have to leave the

11 room immediately, there are emergency exits.

12 Certainly the main exit, you came in through the

13 lobby, to the right out of the door to the main lobby,

14 and the are exits left and right, both. But also at

15 the end of the passageway as you go either left or

16 right directly at the far ends are other doors

17 available for emergency exit.

18 If you have cell phones or pagers, we

19 request you turn them off for the time being so that

20 we can focus on our meeting today.

21 Does everybody know where the coffee shop

22 is? There's a coffee shop directly downstairs on the

23 ground level. You can go down the elevators to get

24 there.

25 The cafeteria, since you've been here

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

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EE-RM-STD-01-375 COMMENT 02EE

14 

1 (No response.) 

2 MR. RABA: Seeing none, any on the phone, 

3 the call-ins? 

4 (No response.) 

5 MR. RABA: Okay. Thank you. None heard. 

6 A couple of housekeeping items, too, if 

7 you would, please. This is kind of a rerun of what 

8 was to happen a couple of weeks ago, and so we're all 

9 very sensitive to safety and security issues. 

10 If for any reason we have to leave the 

11 room immediately, there are emergency exits. 

12 Certainly the main exit, you came in through the 

13 lobby, to the right out of the door to the main lobby, 

14 and the are exits left and right, both. But also at 

15 the end of the passageway as you go either left or 

16 right directly at the far ends are other doors 

17 available for emergency exit. 

18 If you have cell phones or pagers, we 

19 request you turn them off for the time being so that 

20 we can focus on our meeting today. 

21 Does everybody know where the coffee shop 

22 is? There's a coffee shop directly downstairs on the 

23 ground level. You can go down the elevators to get 

24 there. 

25 The cafeteria, since you've been here 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

WASHINGTON, D.C. 20005-3701 www.nealrgross.com 
15

1 before, you can leave -- the others who are here for

2 the, first time -- at the other building, the West

3 Building. Go downstairs to the ground level, proceed

4 through the tunnel about a block underground, and then

5 upstairs. Follow the signs and the escalators to the

6 cafeteria.

7 Restrooms, either end of the passageway.

8 The Freedom of Information Reading Room

9 for any of this material that supports the rulemaking

10 is just down the passageway to my right behind me here

11 where it's the second set of double glass doors on the

12 left. So you can pick up some of this information

13 later on. Stop by there and see what that has to

14 offer.

15 Public phones, besides cell phones, in the

16 lobby here by the elevators.

17 Some of you will have been carrying laptop

18 computers and other things into the building. You may

19 need -- well, you will need a property pass likely to

20 get them out of the building. So see myself or Brenda

21 Edwards-Jones at the end or during the break to get a

22 clearance pass for those machines.

23 One other note, too. There will be a

24 transcript available. Our court reporter will be

25 taking minutes of the meeting today. So it's

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

EE-RM-STD-01-375 COMMENT 02EE

15 

1 before, you can leave -- the others who are here for 

2 the. first time - - at the other building, the West 

3 Building. Go downstairs to the ground level, proceed 

4 through the tunnel about a block underground, and then 

5 upstairs. Follow the signs and the escalators to the 

6 cafeteria. 

7 Restrooms, either end of the passageway. 

8 The Freedom of Information Reading Room 

9 for any of this material that supports the rulemaking 

10 is just down the passageway to my right behind me here 

11 where it's the second set of double glass doors on the 

12 left. So you can pick up some of this information 

13 later on. Stop by there and see what that has to 

14 offer. 

15 Public phones, besides cell phones, in the 

16 lobby here by the elevators. 

17 Some of you will have been carrying laptop 

18 computers and other things into the building. You may 

19 need -- well, you will need a property pass likely to 

20 get them out of the building. So see myself or Brenda 

21 Edwards-Jones at the end or during the break to get a 

22 clearance pass for those machines. 

23 

24 

25 

One other note, too. There will be a 

transcript available. Our court reporter will be 

taking minutes of the meeting today. 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

WASHINGTON, D.C. 20005-3701 

So it's 

www.nealrgross.com 
16

1 imperative that you speak clearly into the

2 microphones. Introduce yourself each time, and a

3 transcript will be available for purchase about two

4 weeks, about two weeks, and the court reporter can

5 give you details on that.

6 Any questions so far?

7 (No response.)

8 MR. RABA: Should we invite people to

9 gather at the table or just wait a few more minutes?

10 Wait till the break?

11 Okay. We're going to hold these spaces

12 open now for the late comers, travel what it is, but

13 if these are not occupied, we'd invite you later on at

14 the break to have a seat at the table.

15 At this time Bryan Berringer, our program

16 manager, will take over and proceed with today's

17 public meeting.

18 MR. BERRINGER: Good morning. Thank you

19 all for being here.

20 Can everybody year me okay? I'll use this

21 mic. Okay, great.

22 I just want to again welcome everybody

23 here this morning to the commercial unitary air

24 conditioning and heat pump workshop today. I

25 appreciate everybody that was able to make it here,

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

EE-RM-STD-01-375 COMMENT 02EE

16 

1 imperative that you speak clearly into the 

2 microphones. Introduce yourself each time, and a 

3 transcript will be available for purchase about two 

4 weeks, about two weeks, and the court reporter can 

5 give you details on that. 

6 Any questions so far? 

7 (No response.) 

8 MR. RABA: Should we invite people to 

9 gather at the table or just wait a few more minutes? 

10 Wait till the break? 

11 Okay. We're going to hold these spaces 

12 open now for the late comers, travel what it is, but 

13 if these are not occupied, we'd invite you later on at 

14 the break to have a seat at the table. 

15 At this time Bryan Berringer, our program 

16 manager, will take over and proceed with today's 

17 public meeting. 

18 MR. BERRINGER: Good morning. Thank you 

19 all for being here. 

20 Can everybody year me okay? I'll use this 

21 mic. Okay, great. 

22 I just want to again welcome everybody 

23 here this morning to the commercial unitary air 

24 conditioning and heat pump workshop today. I 

25 appreciate everybody that was able to make it here, 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

WASHINGTON, D.C. 20005-3701 www.nealrgross.com 
17

1 especially from the West Coast and all of those

*~ 2 traveling today.

3 I apologize for incidences that were

4 beyond our control with what happened on September

5 11th, but I appreciate everybody that's here today.

6 I just want to reiterate some of the

7 people that are on our team also from the Building

8 Research and Standards Office, and that is Maureen

9 Murphy is also on the team, who helped coordinate the

10 workshop today.

11 We have Francine Pinto from the General

12 Counsel Office.

13 Mark Friedrichs (phonetic) is not here,

14 but he's also from the Policy Office, and he'll

15 probably be in and out today. So we'll introduce you

16 to him when he comes.

17 There, again, I appreciate everybody

18 coming to this. This is really the kickoff workshop.

19 A number of you have been involved in the residential

20 central air conditioning workshops before.

21 Again, how many people -- Jim asked, but

22 how many people is this the first time they've been

23 involved in a DOE workshop of this caliber before?

24 (Show of hands.)

Q ~25 MR. BERRINGER: Okay. A couple of you.

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

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EE-RM-STD-01-375 COMMENT 02EE

17 

1 especially from the West Coast and all of those 

2 traveling today. 

3 I apologize for incidences that were 

4 beyond our control with what happened on September 

5 11th, but I appreciate everybody that's here today. 

6 I just want to reiterate some of the 

7 people that are on our team also from the Building 

8 Research and Standards Office, and that is Maureen 

9 Murphy is also on the team, who helped coordinate the 

10 workshop today. 

11 We have Francine Pinto from the General 

12 Counsel Office. 

13 Mark Friedrichs (phonetic) is not here, 

14 but he's also from the Policy Office, and he'll 

15 probably be In and out today. So we'll introduce you 

16 to him when he comes. 

17 There, I appreciate everybody 

18 coming to this. This is really the kickoff workshop. 

19 A number of you have been involved in the residential 

20 central air conditioning workshops before. 

21 Again, how many people -- Jim asked, but 

22 ho~ many people is this the first time they've been 

23 involved in a DOE workshop of this caliber before? 

24 (Show of hands.) 

25 

(202) 234-4433 

MR. BERRINGER: Okay. A couple of you. 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

WASHINGTON, D.C. 20005-3701 www.nealrgross.com 
18

1 Okay, great.

2 Well, again, the purpose of the workshop

3 is to discuss and receive comments, issues that will

4 be addressed that will initiate data collection for

5 the commercial unitary air conditioning and heat pump

6 efficiency standards. The data collected will be used

7 either to adopt the ASHRAE standards, the 90.199, or

8 used to initiate amended efficiency standards for the

9 unitary commercial ACN heat pumps.

10 So we are looking for the input to see if

11 we need to proceed or not, what's the best route for

12 the department to take, the ASHRAE method that's

13 already been proposed or if there are more stringent

14 standards, we think that it would be actually

15 worthwhile to receive those.

16 So there's two things we're trying to look

17 at today. Again, the efforts are also based on the

18 May 2001 national energy policy report on the

19 appliance standards which supports the rulemaking

20 standards efforts that define technology that is

21 feasible and economically justified.

22 We also request if you don't fully discuss

23 your comments today, that you submit those in written

24 form. Those are in the Federal Register notice. You

25 can also see -- which are addressed to Brenda EdwardsNEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

EE-RM-STD-01-375 COMMENT 02EE

18 

1 Okay, great. 

2 Well, again, the purpose of the workshop 

3 lS to discuss and receive comments, issues that will 

4 be addressed that will initiate data collection for. 

5 the commercial unitary air conditioning and heat pump 

6 efficiency standards. The data collected will be used 

7 either to adopt the ASHRAE standards, the 90.199, or 

8 used to initiate amended efficiency standards for the 

9 unitary commercial ACN heat pumps. 

10 So we are looking for the input to see if 

11 we need to proceed or not, what's the best route for 

12 the department to take, the ASHRAE method that's 

13 already been proposed or if there are more stringent 

14 standards, we think that it would be actually 

15 worthwhile to receive those. 

16 So there's two things we're trying to look 

17 at today. Again, the efforts are also based on the 

18 May 2001 national energy policy report on the 

19 appliance standards which supports the rulemaking 

20 standards efforts that define technology that is 

21 feasible and economically justified. 

22 We also request if you don't fully discuss 

23 your comments today, that you submit those in written 

24 form. Those are in the Federal Register notice. You 

25 can also see 

(202) 234-4433 

0hich are addressed to Brenda EdwardsNEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE, NW 

WASHINGTON, D.C. 20005-3701 www.nealrgross.com 
19

1 Jones.

2 Again, the other thing, to facilitate this

3 process we had the framework document which hopefully

4 everybody has seen. We do have some limited copies in

5 the back. It's been on our Web site. The general Web

6 site is posted on the board. You got to stakeholder

7 information, product specific. Go to commercial air

8 conditioning and heat pumps. You'll find the agenda,

9 all of the slides that we are presenting today are

10 posted on that Web site, the agenda so that if you

11 need to come back for further reference or just so you

12 have an electronic copy.

13 I know this is sideways. This is also one

14 of the slides in your package, but if everybody will

15 tilt their heads 90 degrees like that, you can very

16 well see the process. It's in your opening slides

17 also, if you want to. It's about the fifth slide in

18 there.

19 But the reason I put this up is just to go

20 through. If we do proceed with an efficiency

21 rulemaking standard, this would be the procedure that

22 we would follow basically, and this diagram sort of

23 outlines the whole workshop. This is outlining your

24 framework document, and we go step by step, what

25 analysis that we'll be performing.

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

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EE-RM-STD-01-375 COMMENT 02EE

19 

1 Jones. 

2 Again, the other thing, to facilitate this 

3 process we had the framework document which hopefully 

4 everybody has seen. We do have some limited copies in 

5 the back. It's been on our Web site. The general Web 

6 site is posted on the board. You got to stakeholder 

7 information, product specific. Go to commercial air 

8 conditioning and heat pumps. You'll find the agenda, 

9 all of the slides that we are presenting today are 

10 posted on that Web site, the agenda so that if you 

11 need to come back for further reference or just so you 

12 have an electronic copy. 

13 I know this is sideways. This is also one 

14 of the slides in your package, but if everybody will 

15 tilt their heads 90 degrees like that, you can very 

16 well see the process. It's in your opening slides 

17 also, if you want to. It's about the fifth slide in 

18 there. 

19 But'the reason I put this up is just to go 

20 through. If w~ do proceed with an efficiency 

21 rulemaking standard, this would be the procedure that 

22 we would follow basically, and this diagram sort of 

23 outlines the whole workshop. This is outlining your 

24 framework document, and we go step by step, what 

25 analysis that we'll be performing. 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

WASHINGTON, D.C. 20005-3701 www.nealrgross.com 
20

1 So it follows your agenda exactly. This

2 was the basis of the agenda today. Now, what we do is

3 the first step, for those who have not been involved.

4 The first step, the first break is the advanced notice

5 of proposed rulemaking. We haven't got to that. This

6 is sort of the stage we're at now where we're looking

7 at the screening analysis area, the market and

8 technology assessment, engineering analysis, your

9 life-cycle costs, and then your national impacts.

10 So we're trying to get as much under the

11 process improvement rule that we established in the

12 department to sort of get all of the information up

13 front, more of the analysis out to the stakeholders so

14 we can get their comments and their views.

15 So, again, this is a kickoff to sort of

16 outline that process. Again, these are also -- this

17 workshop was originally scheduled and noticed in the

18 August 17th Federal Register notice, then readvertised

19 September 27th. The framework document, again, is on

20 the Web. It's dated June 13th, 2000. It's been

21 posted. Again, the slides and so forth are on the Web

22 site also.

23 Anybody attending, the reason we need to

24 make sure we have your E-mail address, phone numbers

25 so that we can get you on the E-mail mailing list.

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

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EE-RM-STD-01-375 COMMENT 02EE

20 

1 So it follows your agenda exactly. This 

2 was the basis of the agenda today. Now, what we do is 

3 the first step, for those who have not been involved. 

4 The first step, the first break is the advanced notice' 

5 of proposed rulemaking. We haven't got to that. This 

6 is sort of the stage we're at now where we're looking 

7 at the screening analysis area, the market and 

8 technology assessment, engineering analysis, your 

9 life-cycle costs, and then your national impacts. 

10 So we're trying to get as much under the 

11 process improvement rule that we established in the 

12 department to sort of get all of the information up 

13 front, more of the analysis out to the stakeholders so 

14 we can get their comments and their views. 

15 So, again, this is a kickoff to sort of 

16 outline that process. Again, these are also -- this 

17 workshop was originally scheduled and noticed in the 

18 August 17th Federal Register notice, then readvertised 

19 September 27th. The framework document, again, is on 

20 the Web. It's dated June 13th, 2000. It's been 

21 posted. Again, the slides and so forth are on the Web 

22 site also. 

23 Anybody attending, the reason we need to 

24 make sure we have your E-mail address, phone numbers 

25 so that we can get you on the E-mail mailing list. 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., NW 

WASHINGTON, D.C. 20005-3701 www.nealrgross.com 
21

1 This is the first really commercial air conditioning

Istw 2 workshop and heat pump workshop. So we want to make

3 sure that we keep you people informed of what's going

4 on up to date and if there's any changes in meetings

5 and so forth. So it's very important to make sure you

6 have signed in and we have your E-mail address and

7 it's up to date.

8 Basically the comments we received today

9 and those submitted in writing will be used for the

10 department developing a position to either accept the

11 ASHRAE or proceed with an advanced notice of proposed

12 rulemaking, would be the first step. If we continue

13 on that route, the next step in the slide talks about

14 the notice of proposed rulemaking where the analysis

15 is refined, again.

16 Then we look at consumer impacts,

17 manufacturing impacts, and then we look at the

18 utility, the employment, and the environmental, and

19 those would all be to the NOPR stage.

20 That's pretty much final. We would

21 propose a certain level, efficiency level. So that

22 would be up front, and then so we try and get buyer

23 and stakeholder input to that.

24 Then we would proceed to final rule. So

25 hopefully the final rule is a truncated time schedule,

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

EE-RM-STD-01-375 COMMENT 02EE

21 

1 This is the first really commercial air conditioning 

2 workshop and heat pump workshop. So we want to make 

3 sure that we keep you people informed of what's going 

4 on up to date and if there's any changes in meetings 

5 and so forth. So it's very important to make sure you 

6 have signed in and we have your E-mail address and 

7 it's up to date. 

8 Basically the comments we received today 

9 and those submitted in writing will be used for the 

10 department developing a position to either accept the 

11 ASHRAE or proceed with an advanced notice of proposed 

12 rulemaking, would be the first step. If we continue 

13 on that route, the next step in the slide talks about 

14 the notice of proposed rulemaking where the analysis 

15 is refined, again. 

16 Then we look at consumer impacts, 

17 manufacturing impacts, and then we look at the 

18 utility, the employment, and the environmental, and 

19 those would all be to the NOPR stage. 

20 That's pretty much final. We would 

21 propose a certain level, efficiency level. So that 

22 would be up front, and then so we try and get buyer 

23 and stakeholder input to that. 

24 Then we would proceed to final rule. So 

25 hopefully the final rule is a truncated time schedule, 

NEAL R. GROSS 

(202) 234-4433 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

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22

1 and hopefully there's no major issues by the time the

2 NOPR is published so that we could go to a final rule.

3 Again, I'm the presiding officer today

4 over the workshop. Jim Raba is our facilitator. He's

5 already gone through the agenda review and the

6 guidelines.

7 The transcript should be available in

8 about two weeks. You can see the court reporter if

9 you'd like to purchase that. Also, information will

10 be available in the Freedom of Information Room down

11 the hall in Room 1E-190, as Jim had mentioned.

12 Okay. Again, we like to hear as many

13 views as possible. So we have Jim here to facilitate,

14 to make sure -- we want to make sure everybody's views

15 are heard. We have specific questions that we put in

16 the framework document that we want to get your

17 response to, how you think we should proceed. So we

18 want to make sure everybody gets a chance to speak and

19 be heard.

20 Okay. Again, we're going to be looking at

21 the analytical tools in the process today that we used

22 in the rulemaking process.

23 Again, I think Jim has gone through all of

24 the items as far as the housekeeping.

25 Again, the meeting is scheduled to go

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

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EE-RM-STD-01-375 COMMENT 02EE

22 

1 and hopefully there's no major issues by the time the 

2 NOPR is published so that we could go to a final rule. 

3 Again, I'm the presiding officer today 

4 over the workshop. Jim Raba is our facilitator. He's 

5 already gone through the agenda review and the 

6 guidelines. 

7 The transcript should be available in 

8 about two weeks. You can see the court reporter if 

9 you'd like to purchase that. Also, information will 

10 be available in the Freedom of Information Room down 

11 the hall in Room 1E-190, as Jim had mentioned. 

12 Okay. Again, we like to hear as many 

13 views as possible. So we have Jim here to facilitate, 

14 to make sure -- we want to make sure everybody's views 

15 are heard. We have specific questions that we put in 

16 the framework document that we want to get your 

17 response to, how you think we should proceed. So we 

18 want to make sure everybody gets a chance to speak and 

19 be heard. 

20 Okay. Again, we're going to be looking at 

21 the analytical tools in the process today that we used 

22 in the rulemaking process. 

23 Again, I think Jim has gone through all of 

24 the items as far as the housekeeping. 

25 

(202) 234-4433 

Again, the meeting is scheduled to go 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

WASHINGTON, D.C. 20005-3701 www.nealrgross.com 
23

1 until five o'clock. We may finish earlier than that,

2 and if for any reason you don't have a chance to

3 present your views, you will have an opportunity to do

4 that in writing.

5 MR. RABA: Yes, go ahead, please.

6 MR. SACKS: Please just remind us of the

7 deadline -- Harvey Sacks -- please remind us of the

8 deadline for written comments.

9 MR. BERRINGER: Yeah, I think it's 30 days

10 after the workshop. I have it at my -- I think it was

11 in the original notice, but we'll see if I have that

12 here.

13 MR. ROSENSTOCK: Steve Rosenstock, EEI.

14 In your handouts, page 8, it says the

15 comments are due October 12th.

16 MR. BERRINGER: Okay. Yeah, so it would

17 be 30 days after this. If we look at the calendar we

18 can --

19 PARTICIPANT: November 1st.

20 MR. BERRINGER: November 1st? Okay, all

21 right. November 1st. Thank you.

22 MR. RABA: Did all of you get the deadline

23 for written comments is November 1st?

24 MR. BERRINGER: If for any reason you need

25 to call the Freedom of Information Room, the number is

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

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EE-RM-STD-01-375 COMMENT 02EE

23 

1 until five o'clock. We may finish earlier than that, 

2 and if for any reason you don't have a chance to 

3 present your views, you will have an opportunity to do 

4 that in writing. 

5 MR. RABA: Yes, go ahead, please. 

6 MR. SACKS: Please just remind us of the 

7 deadline Harvey Sacks -- please remind us of the 

8 deadline for written comments. 

9 MR. BERRINGER: Yeah, I think it's 30 days 

10 after the workshop. I have it at my -- I think it was 

11 in the original notice, but we'll see if I have that 

12 here. 

13 MR. ROSENSTOCK: Steve Rosenstock, EEl. 

14 In your handouts, page 8, it says the 

15 comments are due October 12th. 

16 MR. BERRINGER: Okay. Yeah, so it would 

17 be 30 days after this. If we look at the calendar we 

18 can --

19 PARTICIPANT: November 1st. 

20 MR. BERRINGER: November 1st? Okay, all 

21 right. November 1st. Thank you. 

22 MR. RABA: Did all of you get the deadline 

23 for written comments is November 1st? 

24 MR. BERRINGER: If for any reason you need 

25 to call the Freedom of Information Room, the number is 

(202) 234-4433 

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24

1 (202) 586-6020.

2 What we ask is if you have written

3 comments, that you submit ten copies of that, the

4 copies, the original signed . If you have it

5 electronically, that would be great. If you have it

6 in Word Perfect, we can read Word. So we just ask

7 that no faxed copies be sent in.

8 You can send the comments electronically

9 to Brenda Edwards-Jones. Her address is in the

10 Federal Register notice. What we ask is if you submit

11 electronic copies or comments that you provide a hard

12 copy signed so that we know that it originated from

13 you and that we can have that for our records.

14 The other thing is that we talk about in

15 accordance with 10 CFR 1004.11, is if you have

16 confidential information, the department will review

17 that to make a determination whether the information

18 should be accepted for public disclosure.

19 What you should do is if you think

20 something is confidential, you send an original to us,

21 and any information you think is confidential to the

22 public, you basically mark out, and that information

23 then could be place in the Freedom of Information

24 Room. So if you have any questions about that, you

25 can see Francine.

NEAL R. GROSS

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EE-RM-STD-01-375 COMMENT 02EE

24 

1 (202) 586-6020. 

2 what we ask is if you have written 

3 comments, that you submit ten copies of that, the 

4 copies, the original signed If you have it 

5 electronically, that would be great. If you have it 

6 in Word Perfect, we can read Word. So we just ask 

7 that no 'faxed copies be sent in. 

8 You can send the comments electronically 

9 to Brenda Edwards-Jones. Her address is in the 

10 Federal Register notice. What we ask is if you submit 

11 electronic copies or comments that you provide a hard 

12 copy signed so that we know that it originated from 

13 you and that we can have that for our records. 

14 The other thing is that we talk about in 

15 accordance with 10 CFR 1004.11, is if you have 

16 confidential information, the department will review 

17 that to make a determination whether the information 

18 should be accepted for public disclosure. 

19 What you should do is if you think 

20 something is confidential, you send an original to us, 

21 and any information you think is confidential to the 

22 public, you basically mark out, and that information 

23 then could be place in the Freedom of Information 

24 Room. So if you have any questions about that, you 

25 can see Francine. 

(202) 234-4433 

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25

1 Okay. All right. The only other thing

2 that we have that Jim had as far as housekeeping was

3 obviously this is a no smoking facility in this room

4 or in the building. at all. So if you do, please

5 during a break you can go out to the front area.

6 Again, I'd just like to thank everybody

7 for coming today just so that we can hear your

8 comments on the process and analytical tools. Again,

9 we want to make sure that we have the right tools and

10 the right process to proceed, the right information to

11 use throughout this rulemaking process.

12 And, again, thank you. And I will turn it

13 back over.

14 I guess since we've done the agenda

15 review, are there any questions regarding the agenda

16 or the purpose of today's meeting?

17 (No response.)

18 MR. BERRINGER: All right. So no

19 questions. I'm going to go ahead and proceed. I have

20 some opening slides before we go into the specific

21 analysis.

22 Again, my name is Bryan Berringer.

23 Introduced ourselves.

24 This is just a brief summary of the

25 statutes. I am not going to go into any detail.

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25 

1 Okay. All right. The only other thing 

2 that we have that Jim had as far as housekeeping was 

3 obviously this is a no smoking facility in this room 

4 or In the building. at all. So if you do, please 

5 during a break you can go out to the front area. 

6 Again, I'd just like to thank everybody 

7 for coming today just so that we can hear your 

8 comments on the process and analytical tools. Again, 

9 we want to make sure that we have the right tools and 

10 the right process to proceed, the right information to 

11 use throughout this rulemaking process. 

12 And, again, thank you. And I will turn it 

13 back over. 

14 I guess since we've done the agenda 

15 review, are there any questions regarding the agenda 

16 or the purpose of today's meeting? 

17 (No response.) 

18 MR. BERRINGER: All right. So no 

19 questions. I'm going to go ahead and proceed. I have 

20 some opening slides before we go into the specific 

21 analysis. 

22 Again, my name is Bryan Berringer. 

23 Introduced ourselves. 

24 

25 statutes. 

(202) 234-4433 

This is just a brief summary of the 

I am not going to go into any detail. 

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26

1 These are basically where it was established.

2 Again, we look at -- the original statute

3 looked at ASHRAE 90.1 as far as October 24th, 1992,

4 was the original requirement. ASHRAE then amended

5 those standards. When that happens, the department

6 can either adopt those standards or they have to

7 justify going to a higher level.

8 So this is sort of where we're at in the

9 process, and so are there any questions about the

10 statute or background as far as the authority?

11 (No response.)

12 MR. BERRINGER: We talk in the framework

13 document the definition of both small and large

^*' 14 commercial air conditioning and heat pump covered

15 products. Again, EPCA set the initial standards, and

16 these are basically the definitions of what we're

17 looking at as far as small and large commercial air

18 conditioning and heat pumps.

19 So, again, when we get into the product

20 class discussion, we want to look to see if there's

21 any other classes that you think might be necessary,

22 any subcategories of classes to discuss.

23 What I've done is what the EPCA original

24 requirements were, I've put on there, and what they

25 ASHRAE 90.199 standards are for those products.

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26 

1 These are basically where it was established. 

2 Again, we look at the original statute 

3 looked at ASHRAE 90.1 as far as October 24th, 1992, 

4 was the original requirement. ASHRAE then amended 

5 those standards. When that happens, the department 

6 can either adopt those standards or they have to 

7 justify going to a higher level. 

8 So this is sort of where we're at in the 

9 process, and so are there any questions about the 

10 statute or background as far as the authority? 

11 (No response.) 

12 MR. BERRINGER: We talk in the framework 

13 document the definition of both small and large 

14 commercial air conditioning and heat pump covered 

15 products. Again, EPCA set the initial standards, and 

16 these are basically the definitions of what we're 

17 looking at as far as small and large commercial air 

18 conditioning and heat pumps. 

19 So, again, when we get into the product 

20 class discussion, we want to look to see if there's 

21 any other classes that you think might be necessary, 

22 any subcategories of classes to discuss. 

23 What I've done is what the EPCA original 

24 requirements were, I've put on there, and what they 

25 ASHRAE 90.199 standards are for those products. 

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27

1 Again, we won't be looking at water source. We're

is- 2 mainly looking at air source products today for this

3 rulemaking.

4 Again, just internally for FY 2000, we

5 assigned a number of the commercial products a high

6 priority, this being one of them. If you need a copy

7 of this, the January 12, 2001 requirement where we did

8 adopt the number of ASHRAE equipment, one of the ones

9 we said we further evaluate was the commercial unitary

10 and heat pump, one of the reasons for the meeting;

11 again, also recommendations for standards were

12 proposed in the National Energy Policy of May 2001.

13 MR. RABA: Jim?

14 MR. MULLEN: Jim Mullen, Lennox.

15 Bryan, could you maybe just take a second

16 and bring some of us up to date a little bit? When

17 you decided and announced back on January 12th, 2001,

18 that you wanted to continue to evaluate commercial

19 equipment, what were the prime driving reasons for

20 that?

21 MR. BERRINGER: Well, we looked at all of

22 them. I mean, we looked at -- I guess we did a

23 preliminary screening analysis, and Dave maybe or Ron

24 probably can help me out a little bit on this, but we

25 just looked at some of the criteria we looked at,

NEAL R. GROSS

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27 

1 Again, we won't be looking at water source. We're 

2 mainly looking at air source products today for this 

3 rulemaking. 

4 Again, just internally for FY 2000, we 

5 assigned a number of the commercial products a high 

6 priority, this being one of them. If you need a copy 

7 of this, the January 12, 2001 requirement where we did 

8 adopt the number of ASHRAE equipment, one of the ones 

9 we said we further evaluate was the commercial unitary 

10 and heat pump, one of the reasons for the meeting; 

11 again, also recommendations for standards were 

12 proposed in the National Energy Policy of May 2001. 

13 MR. RABA: Jim? 

14 MR. MULLEN: Jim Mullen, Lennox. 

15 Bryan, could you maybe just take a second 

16 and bring some of us up to date a little bit? When 

17 you decided and announced back on January 12th, 2001, 

l8 that you wanted to continue to evaluate commercial 

19 equipment, what were the prime driving reasons for 

20 that? 

21 MR. BERRINGER: Well, we looked at all of 

22 them. I mean, we looked at I guess we did a 

23 preliminary screening analysis, and Dave maybe or Ron 

24 probably can help me out a little bit on this, but we 

25 just looked at some of the criteria we looked at, 

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28

1 mainly what the energy savings would be potentially if

2 we would go higher than ASHRAE.

3 So it is not a refined study. That's why

4 we want to try to do a data collect, to make sure that

5 we have better information out there. So I did a

6 preliminary analysis for energy savings and sort of

7 said there might be potential for, you know, higher

8 levels. So I think that was the main driving force

9 for us examining it further.

10 But, again, we want to make sure that we

11 have better information, you know, work with the

12 manufacturers to make sure that we have good data that

13 everybody can agree on.

14 MR. MULLEN: Jim Mullen, Lennox again.

15 I think you could have said that about any

16 of the categories that you chosen to accept. You

17 could have always picked the levels that would have

18 been higher efficiency and more energy savings. It

19 seems there must have been some more detail that drove

20 you to say we need to look further at commercials, and

21 that's really what I was looking for.

22 MR. BERRINGER: If you could go up to the

23 mic, Dave, and just introduce yourself.

24 MR. WINIARSKI: Dave Winiarski, Pacific

25 Northwest National Laboratory.

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28 

1 mainly what the energy savings would be potentially if 

2 we would go higher than ASHRAE. 

3 So it is not a refined study. That's why 

4 we want to try to do a data collect, to make sure that 

5 we have better information out there. So I did a 

6 preliminary analysis for energy savings and sort of 

7 said there might be potential for, you know, higher 

8 levels. So I think that was the main driving force 

9 for us examining it further. 

10 But, again, we want to make sure that we 

11 have better information, you know, work with the 

12 manufacturers to make sure that we have good data that 

13 everybody can agree on. 

14 MR. MULLEN: Jim Mullen, Lennox again. 

15 I think you could have said that about any 

16 of the categories that you chosen to accept. You 

17 could have always picked the levels that would have 

18 been higher efficiency and more energy savings. It 

19 seems there must have been some more detail that drove 

20 you to say we need to look further at commercials, and 

21 that's really what I was looking for. 

22 MR. BERRINGER: If you could go up to the 

23 mic, Dave, and just introduce yourself. 

24 MR. WINIARSKI: Dave Winiarski, Pacific 

25 Northwest National Laboratory. 

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29

1 I believe that the department's decision

2 on this equipment over other equipment types was

3 primarily based on the magnitude of potential energy

4 savings. Obviously this is a very broad category of

5 equipment with significant energy in the U.S., and it

6 was clear that there was at least the potential for

7 large energy savings in this country.

8 MR. AMRANE: He'll remember when we're

9 there, right?

10 However, if I'm not mistaken, the

11 screening analysis showed that a piece for the

12 products between 65,000 BTUs and 135,000 BTUs, that

13 the. ASHRAE levels were justified, correct?

14 MR. BERRINGER: I would say that's

15 correct. There wasn't a large level. I think some of

16 it had to do with coordinating with what the

17 residential to make sure that, you know, we were on

18 the same level there. I think that was some of the

19 consideration, but most of the analysis showed there

20 was only very little increase. So it was mainly the

21 large commercial that we saw a potential increase.

22 But I guess the decision was made to keep

23 it as a package.

24 MR. RABA: In the back, please, and come

25 to the microphone.

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29 

1 I believe that the department's decision 

2 on this equipment over other equipment types was 

3 primarily based on the magnitude of potential energy 

4 savings. Obviously this is a very broad category of 

5 equipment with significant energy in the U.S., and it 

6 was clear that there was at least the potential for 

7 large energy savings in this country. 

8 MR. AMRANE: He'll remember when we're 

9 there, right? 

10 However, if I'm not mistaken, the 

11 screening analysis showed that a piece for the 

12 products between 65,000 BTUs and 135,000 BTUs, that 

13 the. ASHRAE levels were justified, correct? 

14 MR. BERRINGER: I would say that's 

15 correct. There wasn't a large level. I think some of 

16 it had to do with coordinating with what the 

17 residential to make sure that, you know, we were on 

18 the same level there. I think that was some of the 

19 consideration, but most of the analysis showed there 

20 was only very little increase. So it was mainly the 

21 large commercial that we saw a potential increase. 

22 But I guess the decision was made to keep 

23 it as a package. 

24 MR. RABA: In the back, please, and come 

25 to the microphone. 

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1 MR. HOLLOMAN: Brad Holloman, Pacific

1*3 2 Northwest National Laboratory.

3 I was involved a little bit in that

4 rulemaking. I believe by way of clarification some of

5 the -- there was information offered by way of

6 comments at that rulemaking to the effect that this

7 smaller category also bore looking into further. It

8 was not part of the screening analysis, but I believe

9 from the American Council for Energy Efficient Economy

10 and others that provided data on efficiency in sales

11 prices.

12 MR. RABA: I see a hand. Jim Crawford, go

13 ahead.

14 MR. CRAWFORD: Jim Crawford, Trane

15 Company.

16 Let me pick up Jim Mullen's question and

17 address it from a slightly different angle. Let's be

18 very clear that DOE has not been kept in the dark

19 about the ASHRAE proceedings. They have been more

20 actively involved in that process than any other

21 single organization and specifically through their

22 contractor.

23 Therefore, we find it very disappointing

24 that after some nine years and almost as many years

25 working on 90.1, with a national consensus presumably,

NEAL R. GROSS

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30 

1 MR. HOLLOMAN : Brad Holloman, Pacific 

2 Northwest National Laboratory. 

3 I was involved a little bit in that 

4 rulemaking. I believe by way of clarification some of 

5 the there was information offered by way of 

6 comments at that rulemaking to the effect that this 

7 smaller category also bore looking into further. It 

8 was not part of the screening analysis, but I believe 

9 from the American Council for Energy Efficient Economy 

10 and others that provided data on efficiency in sales 

11 prices. 

12 MR. RABA: I see a hand. Jim Crawford, go 

13 ahead. 

14 MR. CRAWFORD: Jim Crawford, Trane 

15 Company. 

16 Let me pick up Jim Mullen's question and 

17 address it from a slightly different angle. Let's be 

18 very clear that DOE has not been kept in the dark 

19 about the ASHRAE proceedings. They have been more 

20 actively involved in that process than any other 

21 single organization and specifically through their 

22 contractor. 

23 Therefore, we find it very disappointing 

24 that after some nine years and almost as many years 

25 working on 90.1, with a national consensus presumably, 

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31

1 that we need to plow this same field all over again.

2 Certainly we can talk about conservation

3 of this and conservation of that. One of the things

4 that could be conserved by a more rational streamlined

5 approach of taking that which we've all already agreed

6 to would be the savings of considerable amounts of

7 federal expenditures and expenditures in state

8 organizations, as well as in the private sector, and

9 we're talking about several million dollars if it's

10 going to be anything like what we've just gone

11 through.

12 We're disappointed.

13 MR. RABA: Thank you, Jim.

14 Bill and then Michael.

15 MR. PRINDLE: Bill Prindle, Alliance to

16 Save Energy.

17 I'm a member of the 90.1 committee and

18 I've sat through the deliberations for the '99

19 standard, and I think I have a little bit of insight

20 of that process into this process.

21 I think it's important for the department

22 to remember that the processes we're talking about are

23 fundamentally different. The ASHRAE process is not

24 driven by any statutory requirements. It's a

25 voluntary consensus process driven, if anything, by

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31 

1 that we need to plow this same field allover again. 

2 Certainly we can talk about conservation 

3 of this and conservation of that. One of the things 

4 that could be conserved by a more rational streamlined 

5 approach of taking that which we've all already agreed 

6 to would be the savings of considerable amounts of 

7 federal expenditures and expenditures In state 

8 organizations, as well as in the private sector, and 

9 we're talking about several million dollars if it's 

10 going to be anything like what we've just gone 

11 through. 

12 We're disappointed. 

13 MR. RABA: Thank you, Jim. 

14 Bill and then Michael. 

15 MR. PRINDLE: Bill Prindle, Alliance to 

16 Save Energy. 

17 I'm a member of the 90.1 committee and 

18 I've sat through the deliberations for the '99 

19 standard, and I think I have a little bit of insight 

20 of that process into this process. 

21 I think it's important for the department 

22 to remember that· the processes we're talking about are 

23 fundamentally different. The ASHRAE process is not 

24 driven by any statutory requirements. It's a 

25 voluntary consensus process driven, if anything, by 

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32

1 ANSI requirements for what constitutes the consensus

O*k 2 process.

3 There are no economic standards to which

4 the ASHRAE analysis is held. I mean, voluntarily

5 certain kinds of methods have been developed, scaler

6 ratios and so on, but what you find if you look at the

7 scaler ratio that was applied in the case of the '99

8 standard is it equates to something like a seven or

9 eight year payback.

10 The department is required by statute and

11 by process rule to look at minimizing life-cycle

12 costs. Now, that's a fundamentally different economic

13 framework in which to analyze standards.

14 Also, the ASHRAE process does not benefit

15 from the presence of a lot of the independent analysis

16 that DOE is able to provide. You know, most of the

17 analysis in ASHRAE is done on kind of a pro bono

18 basis.

19 Similarly, for cost data ASHRAE had no

20 independent way to make determinations on equipment

21 cost data. So on some of the fundamental analytical

22 issues, it's important to realize and remember as we

23 go through this that the DOE process is fundamentally

24 different answers to different statutory requirements,

25 different analytical requirements, and you know, I

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32 

1 ANSI requirements for what constitutes the consensus 

2 process. 

3 There are no economic standards to which 

4 the ASHRAE analysis is held. I mean, voluntarily 

5 certain kinds of methods have been developed, scaler 

6 ratios and so on, but what you find if you look at the 

7 scaler ratio that was applied in the case of the '99 

8 standard is it equates to something like a seven or 

9 eight year payback. 

10 The department is required by statute and 

11 by process rule to look at minimizing life-cycle 

12 costs. Now, that's a fundamentally different economic 

13 framework in which to analyze standards. 

14 Also, the ASHRAE process does not benefit 

15 from the presence of a lot of the independent analysis 

16 that DOE is able to provide. You know, most of the 

17 analysis in ASHRAE is done on kind of a pro bono 

18 basis. 

19 Similarly, for cost data ASHRAE had no 

20 independent way to make determinations on equipment 

21 cost data. So on some of the fundamental analytical 

22 issues, it's important to realize and remember as we 

23 go through this that the DOE process is fundamentally 

24 different answers to different statutory requirements, 

25 different analytical requirements, and you know, I 

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33

1 think that's why we're here, because we have a

*t 2 slightly different set of criteria to meet.

3 MR. RABA: Michael Martin.

4 MR. MARTIN: I yield to the Trane Company.

5 It's on the same subject.

6 MR. RABA: Okay. Jim Crawford.

7 MR. CRAWFORD: Yes. Jim Crawford.

8 MR. RABA: Thank you.

9 MR. CRAWFORD: Point of order relative to

10 EPAC (phonetic), and I certainly don't have that thing

11 memorized, but I doubt whether the call is to minimize

12 life-cycle cost. I suspect it is to examine life13 cycle cost as one factor to be considered. The

14 distinction is non-trivial, and in examining scaler

15 ratio, that wonderful invention of somebody years ago,

16 you are, in effect, examining life-cycle costs because

17 when you deal with paybacks, you are in the life-cycle

18 cost domain. You're measuring a different parameter

19 in that domain, but you're still in that domain.

20 And if we're going to quote the law, let's

21 quote it right.

22 MR. RABA: Ed Pollack was up, then Beth

23 and Michael.

24 MR. POLLOCK: Yeah, Ed Pollock from

*V ~25 Department of Energy.

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33 

1 think that's why we're here, because we have a 

2 slightly different set of criteria to meet. 

3 MR. RABA: Michael Martin. 

4 MR. MARTIN: I yield to the Trane Company. 

5 It's on the same subject. 

6 MR. RABA: Okay. Jim Crawford. 

7 MR. CRAWFORD: Yes. Jim Crawford. 

8 MR. RABA: Thank you. 

9 MR. CRAWFORD: Point of order relative to 

10 EPAC (phonetic), and I certainly don't have that thing 

11 memorized, but I doubt whether the call is to minimize 

12 life-cycle cost. I suspect it is to examine life13 cycle cost as one factor to be considered. The 

14 distinction is non-trivial, and in examining scaler 

15 ratio, that wonderful invention of somebody years ago, 

16 you are, in effect, examining life-cycle costs because 

17 when you deal with paybacks, you are in the life-cycle 

18 cost domain. You're measuring a different parameter 

19 in that domain, but you're still in that domain. 

20 And if we're going to quote the law, let f s 

21 quote it right. 

22 MR. RABA: Ed Pollack was up, then Beth 

23 and Michael. 

24 MR. POLLOCK: Yeah, Ed Pollock from 

25 Dep~rtment of Energy. 

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1 On the previous slide, Bryan, on this

2 discussion about economics, it's not minimum life3 cycle costs that we're required to evaluate. It's the

4 maximum level of efficiency that's technologically

5 feasible and economically justified, the bottom

6 sentence there.

7 That may and probably will take you beyond

8 the normal life-cycle cost point. So I'm not sure

9 exactly where the scaler takes you.

10 I will point out, because I was active in

11 the committee when this analysis was first begun, that

12 different from some of the other products, ARI

13 submitted the 90th percentile, which means all of the

14 economics were based on the most expensive designs on

15 the market at each efficiency level. That's one of

16 the reasons we're taking a look at this.

17 Finally, I want to point out that when we

18 issued the termination, we said that we recognized

19 there may not be sufficient improvement for some of

20 these sizes of product to justify going forward with

21 full rulemaking, and that we have the right to make a

22 determination at any point in this analysis that,

23 yeah, the ASHRAE committee made the right decision, at

24 which point we can always go back and adopt that level

25 of efficiency.

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1 On the previous slide, Bryan, on this 

2 discussion about economics, it's not minimum life3 cycle costs that we're required to evaluate. It's the 

4 maximum level of efficiency that's technologically 

5 feasible and economically justified, the bottom 

6 sentence there. 

7 That may and probably will take you beyond 

8 the normal life-cycle cost point. So I' m not sure 

9 exactly where the scaler takes you. 

10 I will point out, because I was active in 

11 the committee when this analysis was first begun, that 

12 different from some of the other products, ARI 

13 submitted the 90th percentile, which means all of the 

14 economics were based on the most expensive designs on 

15 the market at each efficiency level. That's one of 

16 the reasons we're taking a look at this. 

17 Finally, I want to point out that when we 

18 issued the termination, we said that we recognized 

19 there may not be sufficient improvement for some of 

20 these sizes of product to justify going forward with 

21 full rulemaking, and that we have the right to make a 

22 determination at any point in this analysis that, 

23 yeah, the ASHRAE committee made the right decision, at 

24 which point we c·an always go back and adopt that level 

25 of efficiency. 

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1 Because of the comments we got, we will do

^*0 2 some analysis, and we will still continue to look for

3 that decision point at various stages in this

4 analysis.

5 MR. RABA: Thank you, Ed.

6 Back to you, Michael.

7 MR. MARTIN: Yes. Michael Martin.

8 I had the privilege of being the

9 mechanical subcommittee chair of 90.1 when we went

10 through the adoption, and I would like to point out

11 that in my experience in voluntary consensus

12 standards, I have never come across a standard that

13 had so many unresolved comments. And quite a number

14 of them were related to this particular aspect.

15 I was not a member when the original

16 forecast of costs were produced by ARI, but I was

17 present at the meetings, and there was a great deal of

18 question as to just how meaningful this was, and we

19 were unable to look into in detail just how this was.

20 This was, after all, about ten years ago,

21 and things have changed quite a lot in ten years, and

22 the other thing that is very key to me is that the

23 California Energy Commission has already adopted more

24 stringent standards for these air conditioners, and we

* 25 are going to be filing a petition for exemption from

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1 Because of the comments we got, we will do 

2 some analysis, and we will still continue to look for 

3 that decision point at various stages in this 

4 analysis. 

5 MR. RABA: Thank you, Ed. 

6 Back to you, Michael. 

7 MR. MARTIN: Yes. Michael Martin. 

8 I had the privilege of being the 

9 mechanical subcommittee chair of 90.1 when we went 

10 through the adoption, and I would like to point out 

11 that in my experience in voluntary consensus 

12 standards, I have never come across a standard that 

13 had so many unresolved comments. And quite a number 

14 of them were related to this particular aspect. 

15 I was not a member when the original 

16 forecast of costs were produced by ARI, but I was 

17 present at the meetings, and there was a great deal of 

18 question as to just how meaningful this was, and we 

19 were unable to look into in detail just how this was. 

20 This was, after all, about ten years ago, 

21 and things have changed quite a lot in ten years, and 

22 the other thing that is very key to me is that the 

23 California Energy Commission has already adopted more 

24 stringent standards for these air conditioners, and we 

25 are going to be filing a petition for exemption from 

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1 preemption, and it would be exceedingly helpful if you

2 were to go ahead and do what you're planning to do now

3 so that when you have to judge on this petition, you

4 will have in front of you data that's produced by

5 these excellent contractors that you have that has

6 been subject to public review.

7 So I would urge you to go ahead and do

8 what you are planning to do, and recognizing that it

9 may come out with some results that are totally

10 different from what I expect, but you definitely

11 should go ahead and continue with your plan of what

12 you're planning to do here.

13 Thank you.

14 MR. RABA: Thank you.

15 Other comments? In the back, please.

16 MR. HUNT: Marshall Hunt, Pacific Gas and

17 Electric Company.

18 I support Mike Martin's comment.

19 Sometimes we are overtaken by events, as we all have

20 discovered, and the fact that it was ten years ago and

21 longer, and the fact that these standards won't take

22 an impact or won't take effect for years to come mean

23 that we need to relook at everything and need to have

24 an open public process.

25 Our customers are looking down at a

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1 preemption, and it would be exceedingly helpful if you 

2 were to go ahead and do what you're planning to do now 

3 so that when you have to judge on this petition, you 

4 will have in front of you data that's produced by 

5 these excellent contractors that you have that has 

6 been subject to public review. 

7 So I would urge you to go ahead and do 

8 what you are planning to do, and recognizing that it 

9 may come out with some results that are totally 

10 different from what I expect, but you definitely 

11 should go ahead and continue with your plan of what 

12 you're planning to do here. 

13 Thank you. 

14 MR. RABA: Thank you. 

15 Other comments? In the back, please. 

16 MR. HUNT: Marshall Hunt, Pacific Gas and 

17 Electric Company. 

l8 I support Mike Martin's comment. 

19 Sometimes we are overtaken by events, as we all have 

20 discovered, and the fact that it was ten years ago and 

21 longer, and the fact that these standards won't take 

22 an impact or won't take effect for years to come mean 

23 that we need to relook at everything and need to have 

24 an open public process. 

25 

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1 surcharge that was passed by the Public Utilities

AM% 2 Commission that raises rate on commercial customers by

3 about 50 percent and have a time of use impact that is

4 tremendous, and we must get that kind of analysis into

5 the forefront of the economics of the situation, and

6 I think we'd find that when we begin to look at the

7 true economics of efficiency in the commercial sector

8 equipment, we would find that new standards should be

9 must stricter than has been proposed under an old set

10 of standards and an old set of situations where the

11 economics look much different.

12 And I know that the industry has been very

13 responsive. They've come out with fine equipment that

14 has responded, and we need to look at that again. So

15 I would definitely support relooking at this

16 equipment, the zero to 65,000 for sure, and also 65 to

17 135.

18 Thank you.

19 MR. RABA: Thank you.

20 I'll get to you. Jim first and Michael.

21 But to our call-in participants, have you been able to

22 hear the comments thus far?

23 MS. POULIN: Yes, fine. Thank you.

24 MR. RABA: Okay. Do you have any comments

25 yourselves perhaps?

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37 

1 surcharge that was passed by the Public Utilities 

2 Commission that raises rate on commercial customers by 

3 about 50 percent and have a time of use impact that is 

4 tremendous, and we must get that kind of analysis into 

5 the forefront of the economics of the situation, and 

6 I think we'd find that when we begin to look at the 

7 true economics of efficiency in the commercial sector 

8 equipment, we would find that new standards should be 

9 must stricter than has been proposed under an old set 

10 of standards and an old set of situations where the 

11 economics look much different. 

12 And I know that the industry has been very 

13 responsive. They've come out with fine equipment that 

14 has responded, and we need to look at that again. So 

15 I would definitely support relooking at this 

16 equipment, the zero to 65,000 for sure, and also 65 to 

17 135. 

18 Thank you. 

19 MR. RABA: Thank you. 

20 I'll get to you. Jim first and Michael. 

21 But to our call-in participants, have you been able to 

22 hear the comments thus far? 

23 MS. POULIN: Yes, fine. Thank you. 

24 MR. RABA: Okay. Do you have any comments 

25 yourselves perhaps? 

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1 MS. POULIN: Not right now.

2 MR. RABA: David? Hung?

3 MR. PHAM: No, I don't have any. I'm

4 sorry.

5 MR. RABA: Okay.

6 DR. GOLDSTEIN: This is David Goldstein.

7 I wanted to echo the last two commenters.

8 The ASHRAE process was very flawed. There were some

9 500 commenters just on this one particular issue of

10 air conditioner standards, and one of the reasons for

11 nonresolution is that the data on which the cost

12 analysis was based wasn't released to us in response

13 to comments. So we have no idea; no one has any idea

14 what went into the ASHRAE numbers.

15 That may be fine for ASHRAE's process, but

16 if you require comparison of robust models for the DOE

17 proceeding, we'll need some new data on what the costs

18 are, not to mention the fact that ten years later

19 they're probably somewhat different than they were

20 before.

21 MR. RABA: Thank you, David.

22 Now, I saw Jim Crawford.

23 MR. CRAWFORD: Let me first respond to one

24 point that David Goldstein has just made.

25 The figures that were submitted from ARI

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1 MS. POULIN: Not right now. 

2 MR. RABA: David? Hung? 

3 MR. PHAM: No, I don't have any. I'm 

4 sorry. 

5 MR. RABA: Okay. 

6 DR. GOLDSTEIN: This lS David Goldstein. 

7 I wanted to echo the last two commenters. 

8 The ASHRAE process was very flawed. There were some 

9 500 commenters just on this one particular issue of 

10 air conditioner standards, and one of the reasons for 

11 nonresolution is that the data on which the cost 

12 analysis was based wasn't released to us in response 

13 to comments. So we have no idea; no one has any idea 

14 what went into the ASHRAE numbers. 

15 That may be fine for ASHRAE' s process, but 

16 if you require comparison of robust models for the DOE 

17 proceeding, we'll need some new data on what the costs 

18 are, not to mention the fact that ten years later 

19 they're probably somewhat different than they were 

20 before. 

21 MR. RABA: Thank you, David. 

22 Now, I saw Jim Crawford. 

23 MR. CRAWFORD: Let me first respond to one 

24 point that David Goldstein has just made. 

25 The figures that were submitted from ARI 

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1 to DOE were public record -- excuse me -- to ASHRAE,

2 they were public record six years ago, seven years

3 ago. I don't remember exactly, and if I recall

4 correctly, I would think that in a meeting in

5 Portland, Oregon, chaired by Mr. Jarnagin, that David

6 Goldstein was there when those numbers were discussed.

7 I may be mistaken on that point.

8 The second point I would like to make --

9 DR. GOLDSTEIN: -- the committee's

10 response to me, to the DOE record concerning not

11 releasing the cost data. The final results were all

12 that was released.

13 MR. CRAWFORD: Well, those were costs,

14 David.

15 The second point that I would like to make

16 is that there have been two interventions here talking

17 about things that were ten years ago. If I'm not

18 mistaken, ASHRAE 90.199 states ASHRAE's position as of

19 1999. That's roughly two years ago.

20 So I think that we ought not be talking

21 about ten years ago. EPAC was ten years ago. The '99

22 ASHRAE rules were two years ago.

23 MR. RABA: Michael.

24 MR. MARTIN: I was at that meeting in

25 Portland, and we did get data from ARI. They

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1 to DOE were public record -- excuse me -- to ASHRAE, 

2 they were public record SlX years ago, seven years 

3 ago. I don't remember exactly, and if I recall 

4 correctly, I would think that in a meeting in 

5 Portland, Oregon, chaired by Mr. Jarnagin, that David 

6 Goldstein was there when those numbers were discussed. 

7 I may be mistaken on that point. 

8 The second point I would like to make --

9 DR. GOLDSTEIN: the committee's 

10 response to me, to the DOE record concerning not 

11 releasing the cost data. The final results were all 

12 that was released. 

13 MR. CRAWFORD: Well, those were costs, 

14 David. 

15 The second point that I would like to make 

16 is that there have been two interventions here talking 

17 about things that were ten years ago. If I'm not 

18 mistaken, ASHRAE 90.199 states ASHRAE' s position as of 

19 1999. That's roughly two years ago. 

20 So I think that we ought not be talking 

21 about ten years ago. EPAC was ten years ago. The '99 

22 ASHRAE rules were two years ago. 

23 

24 

25 

MR. RABA: Michael. 

MR. MARTIN: I was at that meeting in 

Portland, and we did get data from ARI. They 

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1 explained how they put it together, and the individual

2 data from manufacturers was not provided. Some of it

3 they had run into difficulties because there were so

4 many manufacturers that made particular sizes, and it

5 was the best that ARI felt that they could provide,

6 but it really wasn't that complete.

7 MR. CRAWFORD: Individual data from

8 responsible manufacturers will never be released.

9 That's proprietary information, and if we were to

10 release it, we would be very much in danger of

11 significant difficulties with the Department of

12 Justice because we would be disclosing to each other

13 our costs of operation, and we're not allowed to do

14 that. That's against the law, sir.

15 MR. RABA: That was Jim Crawford, Trane.

16 Comments again, please. Michael.

17 MR. MARTIN: Yeah, there is also an

18 enormous difference between what you have to do here

19 when you're coming up with the most stringent standard

20 technologically feasible and economically justified

21 and what ASHRAE is coming up with where the key is to

22 get consensus. And there may well be big differences

23 between those two.

24 MR. RABA: Thank you.

25 A gentleman just entered the room. For

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1 explained how they put it together, and the individual 

2 data from manufacturers was not provided. Some of it 

3 they had run into difficulties because there were so 

4 many manufacturers that made particular sizes, and it 

5 was the best that ARI felt that they could provide, 

6 but it really wasn't that complete. 

7 MR. CRAWFORD: Individual data from 

8 responsible manufacturers will never be released. 

9 That's proprietary information, and if we were to 

10 release it, we would be very much in danger of 

11 significant difficulties with the Department of 

12 Justice because we would be disclosing to each other 

13 our costs of operation, and we're not allowed to do 

14 that. That's against the law, sir. 

15 MR. RABA: That was Jim Crawford, Trane. 

16 Comments again, please. Michael. 

17 MR. MARTIN: Yeah, there 1S also an 

18 enormous difference between what you have to do here 

19 when you're coming up with the most stringent standard 

20 technologically feasible and economically justified 

21 and what ASHRAE is coming up with where the key is to 

22 get consensus. And there may well be big differences 

23 between those two. 

24 

25 

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MR. RABA: Thank you. 

A gentleman just entered the room. For 

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1 the record, sir, please introduce yourself to the

2 group at the microphone. State your name and

3 organization for the court reporter.

4 MR. WOLF: Okay. I'm Jim Wolf with

5 American Standard and also the Trane Company.

6 MR. RABA: Welcome.

7 MR. AMRANE: Karim Amrane with ARI.

8 To my understanding, I believe that the

9 Pacific Northwest Lab, when it conducted a screening

10 analysis, has reviewed some of the data that were used

11 by the 19.1 committee. So I'm not sure if that's ten

12 years old that is being claimed here.

13 It has been reviewed slightly, and of

14 course, the argument that everything is ten years old,

15 then why did DOE adopt the efficiency level for some

16 products? The data was also ten years old.

17 MR. RABA: Other comments? Yes, please.

18 MR. MULLEN: Jim Mullen, Lennox.

19 A comment and a question, I guess. The

20 comment is that probably 80 percent of the reasons

21 that were just given were reviewing the commercial

22 standard as with respect to 90.1 would apply to any of

23 the categories that were accepted under 90.1, if you

24 look back at them in light of today. So the question

25 is: does DOE have to go through the full process as

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1 the record, sir, please introduce yourself to the 

2 group at the microphone. State your name and 

3 organization for the court reporter. 

4 MR. WOLF: Okay. I'm Jim Wolf with 

5 American Standard and also the Trane Company. 

6 MR. RABA: Welcome. 

7 MR. AMRANE: Karim Amrane with ARI. 

8 To my understanding, I believe that the 

9 Pacific Northwest Lab, when it conducted a screening 

10 analysis, has reviewed some of the data that were used 

11 by the 19.1 committee. So I'm not sure if that's ten 

12 years old that is being claimed here. 

13 It has been reviewed slightly, and of 

14 course, the argument that everything is ten years old, 

15 then why did DOE adopt the efficiency level for some 

16 products? The data was also ten years old. 

17 MR. RABA: Other comments? Yes, please. 

18 MR. MULLEN: Jim Mullen, Lennox. 

19 A comment and a question, I guess. The 

20 comment is that probably 80 percent of the reasons 

21 that were just given were reviewing the commercial 

22 standard as with respect to 90.1 would apply to any of 

23 the categories that were accepted under 90.1, if you 

24 look back at them in light of today. So the question 

25 is: does DOE have to go through the full process as 

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1 though you were starting a fresh rulemaking or is it

2 possible to focus on those things that were the prime

3 reasons that 90.1 was not accepted?

4 And inherent in that would be making a

5 good definition of why 90.1 wasn't accepted.

6 MR. RABA: Would anybody care to comment

7 on that?

8 MR. STEPHENS: Charlie Stephens, Oregon

9 Energy Office.

10 I think, if I can just go back to the

11 Federal Register notice that DOE published, where they

12 published the findings from the preliminary analysis,

13 it basically lays out in some detail there why some

14 things were accepted and why some weren't. Some of

15 them had significant additional savings that looked to

16 be possible and cost effective. Others did not.

17 In some cases there were no levels

18 technologically feasible above the level that ASHRAE

19 set, as it happened, or the savings were very small,

20 but I think the reasons are all pretty well laid out,

21 and the categories that were accepted were defined,

22 and the categories that weren't were defined, and the

23 reasons for that I thought were fairly clear in the

24 Federal Register notice.

25 I concurred with it then, and I still do,

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1 though you were starting a fresh rulemaking or is it 

2 possible to focus on those things that were the prime 

3 reasons that 90.1 was not accepted? 

4 And inherent in that would be making a 

5 good definition of why 90.1 wasn't accepted. 

6 MR. RABA: Would anybody care to comment 

7 on that? 

8 MR. STEPHENS: Charlie Stephens, Oregon 

9 Energy Office. 

10 I think, if I can just go back to the 

11 Federal Register notice that DOE published, where they 

12 published the findings from the preliminary analysis, 

13 it basically lays out ln some detail there why some 

14 things were accepted and why some weren't. Some of 

15 them had significant additional savings that looked to 

16 be possible and cost effective. Others did not. 

17 In some cases there were no levels 

l8 technologically feasible above the level that ASHRAE 

19 set, as it happened, or the savings were very small, 

20 but I think the reasons are all pretty well laid out, 

21 and the categories that were accepted were defined, 

22 and the categories that weren't were defined, and the 

23 reasons for that I thought were fairly clear in the 

24 Federal Register notice. 

25 I concurred with it then, and I still do, 

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1 and I think we need to proceed. Many, many things

2 have changed, and many, many things will be different

3 five years from now as we approach the time, whenever

4 we decide it will go into effect.

5 MR. MARTIN: I'd like to agree with what

6 Charlie said. I think you did a great job in that

7 January notice explaining what you did and why you did

8 it.

9 MR. RABA: That was Michael Martin,

10 California Energy Commission.

11 Other comments?

12 (No response.)

13 MR. RABA: Well, I hear views on both

14 sides, equally valid. I think in the process of

15 today's public workshop we'll get some more of these

16 issues on the table for further consideration and what

17 you think of later on, please submit in written

18 comments as well.

19 Are there any further before we proceed

20 on? James -- I mean Michael. I'm sorry.

21 MR. MARTIN: Yeah. Marshall made a

22 comment about air conditioners less than 65,000 BTU

23 per hour, but I understand that's not within the scope

24 of today's discussion. You know, there are those

25 three-phase units that have kind of fallen between the

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1 and I think we need to proceed. Many, many things 

2 have changed, and many, many things will be different 

3 five years from now as we approach the time, whenever 

4 we decide it will go into effect. 

5 MR. MARTIN: I'd like to agree with what 

6 Charlie said. I think you did a great job in that 

7 January notice explaining what you did and why you did 

8 it. 

9 MR. RABA: That was Michael Martin, 

10 California Energy Commission. 

11 Other comments? 

12 (No response.) 

13 MR. RABA: Well, I hear views on both 

14 sides, equally valid. I think in the process of 

15 today's public workshop we'll get some more of these 

16 issues on the table for further consideration and what 

17 you think of later on, please submit in written 

18 comments as well. 

19 Are there any further before we proceed 

20 on? James -- I mean Michael. I'm sorry. 

21 MR. MARTIN: Yeah. Marshall made a 

22 comment about air conditioners less than 65,000 BTU 

23 per hour, but I understand that's not within the scope 

24 of today's discussion. You know, there are those 

25 three-phase units that have kind of fallen between the 

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1 cracks, less than 65,000.

2 MR. BERRINGER: Right. You're correct,

3 Michael. Those aren't part of the discussion today.

4 MR. MARTIN: Right. So presumably we

5 would be discussing that as we discussed the single

6 phased units under 65,000 tomorrow.

7 MR. BERRINGER: I'm not sure if we're

8 going to talk about the commercial side about that,

9 but those levels are tied into that, and there would

10 be a separate rulemaking on those products.

11 MR. MARTIN: Okay, good. As long as we

12 understand.

13 MR. BERRINGER: And just to reiterate what

14 Jim. Mullen was asking, we are at a decision point.

15 That's why we put in a Federal Register notice. You

16 know, as Ed Pollock said, we can go back and adopt

17 ASHRAE, you know, or proceed with the rulemaking. So

18 we're trying to make a determination based on the --

19 obviously you have two sides to this that we're trying

20 to decipher.

21 You know, we want to make the best

22 judgment that we can. So we want to make sure we

23 have, you know, the best information that we can make

24 our decision and to move forward, and it may be after

25 we do this initial data collection, engineering

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1 cracks, less than 65,000. 

2 MR. BERRINGER: Right. You're correct, 

3 Michael. Those aren't part of the discussion today. 

4 MR. MARTIN: Right. So presumably we 

5 would be discussing that as we discussed the single 

6 phased units under 65,000 tomorrow. 

7 MR. BERRINGER: I'm not sure if we're 

8 going to talk about the commercial side about that, 

9 but those levels are tied into that, and there would 

10 be a separate rulemaking on those products. 

11 MR. MARTIN: Okay, good. As long as we 

12 understand. 

13 MR. BERRINGER: And just to rei terate what 

14 Jim Mullen was asking, we are at a decision point. 

15 That's why we put in a Federal Register notice. You 

16 know, as Ed Pollock said, we can go back and adopt 

17 ASHRAE, you know, or proceed with the rulemaking. So 

18 we're trying to make a determination based on the 

19 obviously you have two sides to this that we're trying 

20 to decipher. 

21 You know, we want to make the best 

22 judgment that we can. So we want to make sure we 

23 have, you know, the best information that we can make 

24 our decision and to move forward, and it may be after 

25 we do this initial data collection, engineering 

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1 analysis, preliminary stuff, that we say, okay, we go

2 to ASHRAE or that we feel that, yes, there is.

3 I mean there are very many tradeoffs that

4 we have to look at. If you look at the schedule, you

5 just proceed with that. If we do proceed with the

6 rulemaking portion, it would take a longer process.

7 So obviously those savings would have to be great

8 enough to warrant going to, as we're showing here,

9 about a final rule in August of 2004. If we do a

10 NOPR, it would be January of 2003 and a NOPR in -- I'm

11 sorry -- 2004.

12 So we do have to weigh as far as going to,

13 you know, adopting ASHRAE as soon as possible versus

14 pushing the rulemaking, which is usually typically a

15 three-year process. So those are major concerns, and

16 that is what we're looking for out of this workshop.

17 So I do appreciate comments from both sides.

18 MR. RABA: Go ahead, sir.

19 MR. WOLF: Yeah, I apologize for coming in

20 late, but I --

21 MR. RABA: Your name again, sir?

22 MR. WOLF: Jim Wolf with American Standard

23 and the Trane Company.

24 MR. RABA: Thank you.

O~ 2f25 MR. WOLF: I'm not sure that you discussed

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1 analysis, preliminary stuff, that we say, okay, we go 

2 to ASHRAE or that we feel that, yes, there is. 

3 I mean there are very many tradeoffs that 

4 we have to look at. If you look at the schedule, you 

5 just proceed with that. If we do proceed with the 

6 rulemaking portion, it would take a longer process. 

7 So obviously those savings would have to be great 

8 enough to warrant going to, as we're showing here, 

9 about a final rule in August of 2004. If we do a 

10 NOPR, it would be January of 2003 and a NOPR in -- I'm 

11 sorry 2004. 

12 So we do have to weigh as far as going to, 

13 you know, adopting ASHRAE as soon as possible versus 

14 pushing the rulemaking, which is usually typically a 

15 three-year process. So those are major concerns, and 

16 that is what we're looking for out of this workshop. 

17 So I do appreciate comments from both sides. 

18 MR. RABA: Go ahead, sir. 

19 MR. WOLF: Yeah, I apologize for coming in 

20 late, but I 

21 MR. RABA: Your name again, sir? 

22 MR. WOLF: Jim Wolf with American Standard 

23 and the Trane Company. 

24 

25 

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MR. WOLF: I'm not sure that you discussed 

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1 one aspect of the rulemaking that has changed over the

2 years since the law was passed. As I understand, the

3 law is that ASHRAE sets the standard. You evaluate

4 it, make a determination of whether you're going to go

5 through rulemaking or accept ASHRAE.

6 What has changed, and I'm sure you are all

7 aware of it, is the continuous maintenance process.

8 One of the problems you have in evaluating a standard

9 that's set by ASHRAE is that there's always a time

10 delay. The data that was developed and considered by

11 ASHRAE has a year or two on it, or more, by the time

12 it reaches you for evaluation because the ASHRAE

13 process naturally takes a while.

14 The continuous maintenance process,

15 however, solves that problem. The proper approach in

16 the letter of or not the letter of the law, but the

17 spirit of the law with these changing conditions, I

18 would think, would be for you to submit to ASHRAE

19 after your evaluation what those appropriate levels

20 should be through a continuous maintenance process

21 rather than going through a full rulemaking, and you

22 can get a very fast action there.

23 Now, maybe you've already discussed that,

24 but I know ASHRAE is very receptive to considering

25 that input, and that would solve some of the problems

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1 one aspect of the rulemaking that has changed over the 

2 years since the law was passed. As I understand, the 

3 law is that ASHRAE sets the standard. You evaluate 

4 it, make a determination of whether you're going to go 

5 through rulemaking or accept ASHRAE. 

6 What has changed, and I'm sure you are all 

7 aware of it, is the continuous maintenance process. 

8 One of the problems you have in evaluating a standard 

9 that's set by ASHRAE lS that there's always a time 

10 delay. The data that was developed and considered by 

11 ASHRAE has a year or two on it, or more, by the time 

12 it reaches you for evaluation because the ASHRAE 

13 process naturally takes a while. 

14 The continuous maintenance process, 

15 however, solves that problem. The proper approach in 

16 the letter of or not the letter of the law, but the 

17 spirit of the law with these changing conditions, I 

18 would think, would be for you to submit to ASHRAE 

19 after your evaluation what those appropriate levels 

20 should be through a continuous maintenance process 

21 rather than going through a full rulemaking, and you 

22 can get a very fast action there. 

23 Now; maybe you've already discussed that, 

24 but I know ASHRAE is very receptive to considering 

25 that input, and that would solve some of the problems 

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1 that exist because of timing, and I wasn't sure that

2 you discussed that. So I hope that that's one of your

3 options, that it's not merely accept ASHRAE which is

4 based on some what, old data now, and/or go through

5 your own rulemaking.

6 I think the proper middle ground and more

7 efficient way time-wise and consideration of what

8 would be a good standard would be to go through a

9 continuous maintenance process.

10 So I would hope that you include that in

11 your options. Thank you.

12 MR. RABA: Thank you.

13 Ed Pollock, Department of Energy.

14 MR. POLLOCK: Ed Pollock, Department of

15 Energy.

16 In our determination notice which we

17 published and in the discussions which we've had, we

18 several times talked about several different off

19 ramps, and to respond to Jim's comment, that is an

20 option which we continue to consider as we develop new

21 data and have some indication of levels that we think

22 are appropriate.

23 We certainly will be sharing that data

24 with the ASHRAE committee. Perhaps at some point we

0 ~~25 may even submit a change proposal. That certainly is

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1 that exist because of timing, and I wasn't sure that 

2 you discussed that. So I hope that that's one of your 

3 options, that it's not merely accept ASHRAE which is 

4 based on some what, old data now, and/or go through 

5 your own rulemaking. 

6 I think the proper middle ground and more 

7 efficient way time-wise and consideration of what 

8 would be a good standard would be to go through a 

9 continuous maintenance process. 

10 So I would hope that you include that in 

11 your options. Thank you. 

12 MR. RABA: Thank you. 

13 Ed Pollock, Department of Energy. 

14 MR. POLLOCK: Ed Pollock, Department of 

15 Energy. 

16 In our determination notice which we 

17 published and in the discussions which we've had, we 

18 several times talked about several different off 

19 ramps, and to respond to Jim's comment, that is an 

20 option which we continue to consider as we develop new 

21 data and have some indication of levels that we think 

22 are appropriate. 

23 We certainly will be sharing that data 

24 with the ASHRAE committee. Perhaps at some point we 

25 may even submit a change proposal. That certainly is 

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1 an option which we recognize might expedite the

2 process for us and conserve some of our precious

3 resources in the rulemaking. We can then focus on

4 some other products.

5 So, yes, thank you for bringing that up,

6 Jim because that is part of the process as we've laid

7 it out in our determination.

8 The other point I wanted to make is the

9 issue was raised on the under 65K. The ASHRAE

10 committee chose to set aside any action on those

11 products until we had completed our residential

12 rulemaking, and so for that reason, there's some

13 question about our ability to act on those products

14 legally until ASHRAE has made a change.

15 The EPAC working implies that or states

16 that ASHRAE 90.1 action then triggers an action by us

17 to either adopt or set more stringent standards. So

18 it's our belief that the committee probably will adopt

19 the commercial standards being the same as what we

20 have come to adopt in the case of our residential

21 products of those same sizes, the single phase versus

22 a three-phase.

23 That is by no means a foregone conclusion,

24 but expect at least that there will be some action

25 after we issue our final rule, and then we will then

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1 an option which we recognize might expedite the 

2 process for us and conserve some of our precious 

3 resources in the rulemaking. We can then focus on 

4 some other products. 

5 So, yes, thank you for bringing that up, 

6 Jim because that is part of the process as we've laid 

7 it out in our determination. 

8 The other point I wanted to make is the 

9 issue was raised on the under 65K. The ASHRAE 

10 committee chose to set aside any action on those 

11 products until we had completed our residential 

12 rulemaking, and so for that reason, there's some 

13 question about our ability to act on those products 

14 legally until ASHRAE has made a change. 

15 The EPAC working implies that or states 

16 that ASHRAE 90.1 action then triggers an action by us 

17 to either adopt or set more stringent standards. So 

18 it's our belief that the committee probably will adopt 

19 the commercial standards being the same as what we 

20 have come to adopt in the case of our residential 

21 products of those same sizes, the single phase versus 

22 a three-phase. 

23 That 1S by no means a foregone conclusion, 

24 but expect at least that there will be some action 

25 after we issue our final rule, and then we will then 

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1 pick up those products for consideration after that

*g ~ 2 happens.

3 MR. RABA: Thank you, Ed.

4 Go ahead.

5 MR. AMRANE: Karim Amrane with ARI.

6 Let's assume for a minute after all of

7 this analysis you end up finding that the levels set

8 by ASHRAE are appropriate. Then what you would have

9 done here is' wasted a few years, and our

10 recommendation would be that you should be adopting

11 ASHRAE 90.1 right now which have levels ten to 20

12 percent more stringent than what you have currently in

13 the federal minimum requirements.

14 And then as Jim Wolf mentioned, if during

15 these analyses it shows that you can raise the level

16 further, then submit an addendum to the ASHRAE 90.1

17 committee. In that case you wouldn't have wasted all

18 of those years with lower ratios.

19 MR. RABA: Harvey.

20 MR. SACKS: Although the --

21 MR. RABA: It's Harvey Sacks, ACEEE.

22 MR. SACKS: Harvey Sacks.

23 Although the probability level may

24 resemble that of all the molecules rushing out of the

25 room, I believe the record should show that there is

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1 pick up those products for consideration after that 

2 happens. 

3 MR. RABA: Thank you, Ed. 

4 Go ahead. 

5 MR. AMRANE: Karim Amrane with ARI. 

6 Let's assume for a minute after all of 

7 this analysis you end up finding that the levels set 

8 by ASHRAE are appropriate. Then what you would have 

9 done here is wasted a few years, and our 

10 recommendation would be that you should be adopting 

11 ASHRAE 90.1 right now which have levels ten to 20 

12 percent more stringent than what you have currently in 

13 the federal minimum requirements. 

14 And then as Jim Wolf mentioned, if during 

15 these analyses it shows that you can raise the level 

16 further, then submit an addendum to the ASHRAE 90.1 

17 committee. In that case you wouldn't have wasted all 

18 of those years with lower ratios. 

19 MR. RABA: Harvey. 

20 MR. SACKS: Although the - -

21 MR. RABA: It's Harvey Sacks, ACEEE. 

22 MR. SACKS: Harvey Sacks. 

Although the probability level 

24 resemble that of all the molecules rushing out of the 

25 room, I believe the record should show that there is 

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1 another hurry-up process available, which is

C*~ 2 negotiate an agreement among the parties.

3 MR. MARTIN: I would like to agree with

4 Jim Wolf about his proposal that when you have data

5 that you submit it to ASHRAE standard project

6 committee 90.1, and if you decide not to -- and it's

7 public information -- the California Energy Commission

8 staff will certainly do so.

9 However, you need to bear in mind that

10 they may or may not decide this is what they want to

11 adopt, and if they can't get consensus on doing it

12 within the committee, it won't happen.

13 So you need to head off in both of those

14 directions, but if everybody is working together,

15 that's certainly a good way to go.

16 It also does strengthen your position to

17 come up with the data that you're planning to do not

18 only to support your program, but to support ASHRAE's,

19 but I'm happy to agree with Jim because I don't always

20 agree with him.

21 (Laughter.)

22 MR. RABA: That was Michael Martin,

23 California Energy Commission.

24 MR. MARTIN: I'm not doing very well in

25 identifying myself.

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1 another hurry-up process available, which is 

2 negotiate an agreement among the parties. 

3 MR. MARTIN: I would like to agree with 

4 Jim Wolf about his proposal that when you have data 

5 that you submit it to ASHRAE standard project 

6 committee 90.1, and if you decide not to -- and it's 

7 public information - - the California Energy Commission 

8 staff will certainly do so. 

9 However, you need to bear in mind that 

10 they mayor may not decide this is what they want to 

11 adopt, and if they can't get consensus on doing it 

12 within the committee, it won't happen. 

13 So you need to head off in both of those 

14 directions, but if everybody is working together, 

15 that's certainly a good way to go. 

16 It also does strengthen your position to 

17 come up with the data that you're planning to do not 

18 only to support your program, but to support ASHRAE' s, 

19 but I'm happy to agree with Jim because I don't always 

20 agree with him. 

21 (Laughter. ) 

22 MR. RABA: That was Michael Martin, 

23 California Energy Commission. 

24 MR. MARTIN: I'm not doing very well ln 

25 identifying myself. 

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1 MR. RABA: Steve Rosenstock.

2 MR. ROSENSTOCK: Steve Rosenstock, Edison

3 Electric Institute.

4 Just in kind of a response from the person

5 from California, it's filing an exemption to -- I

6 forgot what the proper phrase for filing is.

7 MR. MARTIN: Petition for an exemption

8 from preemption.

9 MR. ROSENSTOCK: Thank you.

10 After filing one of those --

11 (Laughter.)

12 MR. ROSENSTOCK: -- and basically when

13 they file that, again, in terms of consensus process,

14 you're going above and beyond ASHRAE and might be

15 going above and beyond what DOE says. So one state

16 could literally possibly, again, throw a huge wild

17 card into both processes in terms of achieving any

18 sort of a national type of standard.

19 I don't know analytically how you would

20 deal with that, but again, based on what happens with

21 that petition, that could have a huge impact on

22 everything else that we're going to be talking about

23 today.

24 MR. RABA: An interesting twist. Thank

* 25 you.

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1 MR. RABA: Steve Rosenstock. 

2 MR. ROSENSTOCK: Steve Rosenstock, Edison 

3 Electric Institute. 

4 Just in kind of a response from the person 

5 from California, it's filing an exemption to I 

6 forgot what the proper phrase for filing is. 

7 MR. MARTIN: Petition for an exemption 

8 from preemption. 

9 MR. ROSENSTOCK: Thank you. 

10 After filing one of those --

11 (Laughter. ) 

12 MR. ROSENSTOCK: - - and basically when 

13 they file that, again, in terms of consensus process, 

14 you're going above and beyond ASHRAE and might be 

15 going above and beyond what DOE says. So one state 

16 could literally possibly, again, throw a huge wild 

17 card into both processes in terms of achieving any 

18 sort of a national type of standard. 

19 I don't know analytically how you would 

20 deal with that, but again, based on what happens with 

21 that petition, that could have a huge impact on 

22 everything else that we're going to be talking about 

23 today. 

24 

25 you. 

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1 Charlie and then Jim.

2 MR. STEPHENS: Charlie Stephens from the

3 Oregon Energy Office.

4 Just adding to what Steve said, one of the

5 best ways you can deal with that is to have data, good

6 data. So I think we need to get on with it.

7 MR. MULLEN: Jim Mullen, Lennox.

8 I'm not sure if I understood Karim's

9 earlier comment, but I'm not sure if he asked the

10 question or if the question appeared over here, but is

11 there a process whereby DOE could adopt 90.1, begin to

12 realize the energy savings in the short term, and then

13 continue to look at the levels, or does adoption of

14 90.1 lock DOE out of making any changes until the next

15 change in 90.1?

16 MR. POLLOCK: Ed Pollock, DOE.

17 The statement that Karim made, I believe,

18 was that we would then work through ASHRAE to make the

19 amendments. Jim, you're right for raising that. If

20 we adopt the standard, we can't go back and readjust

21 it until after ASHRAE has acted. So it does limit our

22 options if we were to do that.

23 The way we see it as being better use of

24 our time, as I said, and we laid out in the

25 determination, was go ahead and collect the data,

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1 Charlie and then Jim. 

2 MR. STEPHENS: Charlie Stephens from the 

3 Oregon Energy Office. 

4 Just adding to what Steve said, one of the 

5 best ways you can deal with that is to have data, good 

6 data. So I think we need to get on with it. 

7 MR. MULLEN: Jim Mullen, Lennox. 

8 I'm not sure if I understood Karim's 

9 earlier comment, but I'm not sure if he asked the 

10 question or if the question appeared over here, but is 

11 there a process whereby DOE could adopt 90.1, begin to 

12 realize the energy savings in the short term, and then 

13 continue to look at the levels, or does adoption of 

14 90.1 lock DOE out of making any changes until the next 

15 change in 90.1? 

16 MR. POLLOCK: Ed Pollock, DOE. 

17 The statement that Karim made, I believe, 

18 was that we would then work through ASHRAE to make the 

19 amendments. Jim, you're right for raising that. If 

20 we adopt the standard, we can't go back and readjust 

21 it until after ASHRAE has acted. So it does limit our 

22 options if we were to do that. 

23 The way we see it as being better use of 

24 our time, as I said, and we laid out in the 

25 determination, was go ahead and collect the data, 

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1 begin the analysis, share that as we go with the

2 committee. If the committee can act -- and I will

3 point out it took ten years to get this one out --

4 before we get a final rule out, great. Then we've

5 saved our resources.

6 But we will continue in our rulemaking at

7 the same time, and I think that makes sense as far as

8 trying to get the quickest action.

9 I do appreciate Karim's statement on the

10 issue of adopting does perhaps save us some time in

11 getting these standards together, and certainly we

12 need to be very cautious to continue to look and say

13 are we going to get significant savings or is the time

14 effect going to negate those savings in the long run.

15 And will be looking at that.

16 MR. RABA: Thank you, Ed.

17 Further comments.

18 MR. PHAM: Can I have a comment?

19 MR. RABA: Yes, please do. And state your

20 name, please.

21 MR. PHAM: Hung Pham.

22 MR. RABA: Hung Pham, yes. Thank you.

23 MR. PHAM: Copeland Corporation.

24 I am a little bit confused about this

25 timing involved. So I hope somebody could help

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1 begin the analysis, share that as we go with the 

2 committee. If the committee can act -- and I will 

3 point out it took ten years to get this one out --

4 before we get a final rule out, great. Then we've 

5 saved our resources. 

6 But we will continue in our rulemaking at 

7 the same time, and I think that makes sense as far as 

8 trying to get the quickest action. 

9 I do appreciate Karim's statement on the 

10 issue of adopting does perhaps save us some time in 

11 getting these standards together, and certainly we 

12 need to be very cautious to continue to look and say 

13 are we going to get significant savings or is the time 

14 effect going to negate those savings in the long run. 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

And will be looking at that. 

MR. RABA: Thank you, Ed. 

Further comments. 

MR. PHAM: Can I have a comment? 

MR. RABA: Yes, please do. And state your 

name, please. 

MR. PHAM: Hung Pham. 

MR. RABA: Hung Pham, yes. Thank you. 

MR. PHAM: Copeland Corporation. 

I am a little bit confused about this 

timing involved. So I hope somebody could help 

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1 clarify here. What Ron's talking about is the fact

Ark 2 that the states could adopt 90.199. The time frame

3 we're talking about, anywhere possibly next year

4 maybe, until 2006, somewhere in that time frame, while

5 DOE -- the end is not until 2008.

6 I'm not clear on what the process involved

7 here relative to DOE versus the state, and perhaps

8 maybe California and some of the leading states that

9 have examples going beyond 90.1 could let us get a

10 little bit better idea on how this can evolve.

11 It's getting very difficult to know how to

12 design equipment in this fuzzy time frame here because

13 we don't know how long this is.

14 MR. RABA: That's a good point.

15 Who would like to comment on that?

16 Michael.

17 MR. MARTIN: Michael Martin, California

18 Energy Commission.

19 It is complicated. Since ASHRAE's

20 Standard 90.1 is a building standard, it would have

21 made no sense in the legislation to have a building

22 standard with an effective date preempted, and

23 therefore, the federal law does not preempt a state

24 adopting the current ASHRAE levels as a building

25 standard, which is strictly for installation in new

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54 

1 clarify here. What Ron's talking about is the fact 

2 that the states could adopt 90.199. The time frame 

3 we're talking about ,anywhere possibly next year 

4 maybe, until 2006; somewhere in that time frame, while 

5 DOE -- the end is not until 2008. 

6 I'm not clear on what the process involved 

7 here relative to DOE versus the state, and perhaps 

8 maybe California and some of the leading states that 

9 have examples going beyond 90.1 could let us get a 

10 little bit better idea on how this can evolve. 

11 It's getting very difficult to know how to 

12 design equipment :Ln this fuzzy time frame here because 

13 we don't know how long this is. 

14 MR. RABA: That's a good point. 

15 Who would like to comment on that? 

16 Michael. 

17 MR. MARTIN: Michael Martin, California 

18 Energy Commission. 

19 It is complicated. Since ASHRAE's 

20 Standard 90.1 is a building standard, it would have 

21 made no sense in the legislation to have a building 

22 standard with an effective date preempted, and 

23 therefore, the federal law does not preempt a state 

24 adopting the current ASHRAE levels as a building 

25 standard, which is strictly for installation in new 

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55

1 buildings.

2 We have, indeed, adopted that, and it

3 becomes effective on the 29th of this month, and so

4 from the building regulation point of view, you can go

5 ahead and adopt these standards.

6 The other aspect is what we refer to as

7 appliance efficiency standards, which is a restriction

8 on the selling and offering for sale, which will cover

9 any kind of sale whether it's new buildings or not,

10 and for those the states are preempted unless they

11 file and are granted a petition for exemption from

12 preemption.

13 And nobody has done that yet, and exactly

14 how it would work out is not very clear, but that's

15 where we stand at the moment.

16 MR. PHAM: This is Hung Pham again.

17 That's why I'm wondering if we're going

18 through this process and maybe it's just a waste of

19 time because the states can adopt this anyway, whether

20 it is 90.199 or something higher on their own. So, I

21 mean, why go through eight years? Maybe it's not

22 going to show any different than that. The state is

23 going to do it.

24 MR. MARTIN: This is Mike Martin again.

25 I don't think you ought to bank on too

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55 

1 buildings. 

2 We have, indeed, adopted that, and it 

3 becomes effective on the 29th of this month, and so 

4 from the building regulation point of view, you can go 

5 ahead and adopt these standards. 

6 The other aspect is what we refer to as 

7 appliance efficiency standards, which is a restriction 

8 on the selling and offering for sale, which will cover 

9 any kind of sale whether it's new buildings or not, 

10 and for those the states are preempted unless they 

11 file and are granted a petition for exemption from 

12 preemption. 

13 And nobody has done that yet, and exactly 

14 how it would work out is not very clear, but that's 

15 where we stand at the moment. 

16 MR. PHAM: This is Hung Pham again. 

17 That's why I'm wondering if we're going 

18 through this process and maybe it's just a waste of 

19 time because the states can adopt this anyway, whether 

20 it is 90.199 or something higher on their own. So, I 

21 mean, why go through eight years? Maybe it's not 

22 going to show any different than that. The state is 

23 going to do it. 

24 

25 

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MR. MARTIN: This is Mike Martin again. 

I don't think you ought to bank on too 

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1 many states petitioning for exemption from a

AWe 2 preemption. It's a hard thing to do.

3 MR. RABA: Thank you, Michael.

4 Does that help, Hung?

5 MR. PHAM: I hope that was helpful because

6 I wasn't clear until Michael said that because I

7 thought all the states were going to go ahead with it.

8 MR. MARTIN: They can on building

9 regulations, but not on restrictions on sale and

10 offering for sale.

11 MR. PHAM: Okay. Thank you.

12 MR. RABA: I see some hands now. First

13 Charlie Stephens and then Harvey Sacks.

14 MR. STEPHENS: Charlie Stephens, Oregon

15 Energy Office.

16 Hung Pham should also remember that

17 there's a time line for the state's petition also.

18 Doe can take up to a year to make a decision on that,

19 and the earliest date after that that whatever the

20 state adopts can go into effect is three years, and

21 DOE in granting a petition, if they were to grant the

22 petition, could actually make that period longer.

23 So we're still looking at four to five

24 years potentially before these states could adopt

25 something, which means that your process in theory

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56 

1 many states petitioning for exemption from a 

2 preemption. It's a hard thing to do. 

3 MR. RABA: Thank you, Michael. 

4 Does that help, Hung? 

5 MR. PHAM: I hope that was helpful because 

6 I wasn't clear until Michael said that because I 

7 thought all the states were going to go ahead with it. 

8 MR. MARTIN: They can on building 

9 regulations, but not on restrictions on sale and 

10 offering for sale. 

11 MR. PHAM: Okay. Thank you. 

12 MR. RABA: I see some hands now. First 

13 Charlie Stephens and then Harvey Sacks. 

14 MR. STEPHENS: Charlie Stephens, Oregon 

15 Energy Office. 

16 Hung pham should also remember that 

17 there's a time line for the state's petition also. 

18 Doe can take up to a year to make a decision on that, 

19 and the earliest date after that that whatever the 

20 state adopts can go into effect is three years, and 

21 DOE in granting a petition, if they were to grant the 

22 petition, could actually make that period longer. 

23 So we're still looking at four to five 

24 years potentially before these states could adopt 

25 something, which means that your process in theory 

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57

1 should be over by then, and we should all have the

2 data, and we should all know what we're doing.

3 and so I think the best outcome would be

4 it would all kind of converge on the same numbers.

5 MR. RABA: Thank you. Go ahead, please.

6 MR. SACKS: Harvey Sacks.

7 I'd just like to stress part of Mike

8 Martin's response that the building standard will

9 affect new construction installations, it may in some

10 states affect major retrofits, which are variously

11 defined as 25 percent of the value of the building.

12 It will not reflect routine replacements of equipment,

13 and thus will be a significant minority of equipment

14 sales.

15 So the building standards route actually

16 bears the jeopardy of fractionating the market with

17 two different standards within the same state, and I

18 believe that that is a matter of real concern to the

19 manufacturers.

20 MR. RABA: Where are we now? Are there

21 further comments or would you like to take a short

22 break or proceed on with the first presentation?

23 MR. BERRINGER: I have a couple more. Let

24 me just finish this up.

25 I just want to thank you because, I mean,

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57 

1 should be over by then, and we should all have the 

2 data, and we should all know what we're doing. 

3 and so I think the best outcome would be 

4 it would all kind of converge on the same numbers. 

5 MR. RABA: Thank you. Go ahead, please. 

6 MR. SACKS: Harvey Sacks. 

7 I'd just like to stress part of Mike 

8 Martin's response that the building standard will 

9 affect new construction installations, it may in some 

10 states affect major retrofits, which are variously 

11 defined as 25 percent of the value of the building. 

12 It will not reflect routine replacements of equipment, 

13 and thus will be a significant minority of equipment 

14 sales. 

15 So the building standards route actually 

16 bears the jeopardy of fractionating the market with 

17 two different standards within the same state, and I 

l8 believe that that is a matter of real concern to the 

19 manufacturers. 

20 MR. RABA: Where are we now? Are there 

21 further comments or would you like to take a short 

22 break or proceed on with the first presentation? 

23 MR. BERRINGER: I have a couple more. Let 

24 me just finish this up. 

25 I just want to thank you because, I mean, 

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58

1 you've pretty much summarized all of the options. I

2 mean, one of the things we did back in 1976 was the

3 process improvement rule and the options talking about

4 negotiations, about alternative ways as far as the

5 ASHRAE maintenance programs. All of these options

6 that were brought up, yeah, we're looking at that we

7 want to make sure we hear you on those because we are

8 aware of them.

9 But we want to go, number one, the best

10 route, easiest route, and the quickest route. As Jim

11 Wolf had mentioned, if we can go ASHRAE and it can be

12 done quickly, you know, it's that much better. If it

13 can be negotiated, as we did with ballast in clothes

N1W 14 washers, that would be great also. It makes the

15 process go a lot quicker, and we're not looking at so

16 far down the road as far as getting these things.

17 And that uncertainty is obviously for the

18 manufacturers, for everybody, is known as far as what

19 needs to be produced.

20 Let me just go through the rest of these

21 slides, and then we'll take a break, and we'll go to

22 the engineering analysis.

23 We talked about this a little bit earlier

24 again. You've got to turn your head a little bit, but

25 this is sort of what we're looking at, the process for

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58 

1 you've pretty much summarized all of the options. I 

2 mean, one of the things we did back in 1976 was the 

3 process improvement rule and the options talking about 

4 negotiations, about· alternative ways as far as the 

5 ASHRAE maintenance programs. All of these options 

6 that were brought up, yeah, we're looking at that we 

7 want to make sure we hear you on those because we are 

8 aware of them. 

9 But we want to go, number one, the best 

10 route, easiest route, and the quickest route. As Jim 

11 Wolf had mentioned, if we can go ASHRAE and it can be 

12 done quickly, you know, it's that much better. If it 

13 can be negotiated, as we did with ballast in clothes 

14 washers, that would be great also. It makes the 

15 process go a lot quicker, and we're not looking at so 

16 far down the road as far as getting these things. 

17 And that uncertainty is obviously for the 

l8 manufacturers, for everybody, is known as far as what 

19 needs to be produced. 

20 Let me just go through the rest of these 

21 slides, and then we'll take a break, and we'll go to 

22 the engineering analysis. 

23 We talked about this a little bit earlier 

24 again. You've got to turn your head a little bit, but 

25 thi~ is sort of what we're looking at, the process for 

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59

1 the rulemaking if we were to decide to go this route.

2 Again, this is just an outline, again,

3 laying it out. It sort of outlines the agenda. It

4 outlines the process. The first step is market

5 technology assessment, looking at product class and

6 baseline, where our starting point is.

7 Again, do a screening analysis to see what

8 products are out there. Look at prototypes. If

9 there's a prototype out there, other items, we're

10 going to go into this in detail, but further with the

11 presentations.

12 Again, the engineering analysis, you know,

13 trying to get some better data for the efficiency and

14 cost analysis and the building energy use and electric

15 load shape characteristics.

16 And, again, the other analysis that will

17 go into more detail is the life-cycle costs, consumer

18 subgroup, national energy savings, net present value,

19 manufacturing impact, employment, utility, and

20 environmental.

21 Again, that is November 1st this should

22 be. This is 30 days from that. So we talked about

23 the deadline for comments for this workshop would be

24 November 1st. The next steps would be data collection

*O 25 and determine -- obviously what we've been talking

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59 

1 the rulemaking if we were to decide to go this route. 

2 Again, this is just an outline, again, 

3 laying it out. It sort of outlines the agenda. It 

4 outlines the process. The first step lS market 

5 technology assessment, looking at product class and 

6 baseline, where our starting point is. 

7 Again, do a screening analysis to see what 

8 products are out there. Look at prototypes. If 

9 there's a prototype out there, other items, we're 

10 going to go into this in detail, but further with the 

11 presentations. 

12 Again, the engineering analysis, you know, 

13 trying to get some better data for the efficiency and 

14 cost analysis and the building energy use and electric 

15 load shape characteristics. 

16 And, again, the other analysis that will 

17 go into more detail is the life-cycle costs, consumer 

18 subgroup, national ~nergy savings, net present value, 

19 manufacturing impact, employment, utility, and 

20 environmental. 

21 Again, that is November 1st this should 

22 be. This is 30 days from that. So we talked about 

23 the. deadline for comments for this workshop would be 

24 November 1st. The next steps would be data collection 

25 and determine obviously what we've been talking 

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1 about is determine whether to go with ASHRAE, initiate

*D ~ 2 rulemaking standards.

3 And, again, the possible schedule. We

4 want to do an ANOPR about January 2003, a NOPR January

5 2004, a final rule will be August 2008, and then an

6 effective date four years from that. So you talking

7 about a rulemaking process out to 2008.

8 Obviously if these other options work out

9 as far as the maintenance with ASHRAE, negotiations,

10 those things could actually be a better, more quicker,

11 presentable alternative.

12 Thank you very much.

13 MR. RABA: Thank you.

14 All good comments heard this morning. I

15 certainly appreciate everything.

16 There it is, hiding back there.

17 Yeah, all good comments this morning.

18 Thank you very much.

19 This is very vital to the process we go

20 through to get these issues on the table, get your

21 thought processes going, and to come out with a good

22 decision for all concerned.

23 So there's a long way to go. We're just

24 beginning. We expect many more comments and some

25 discussion as we go throughout the day.

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60 

1 about is determine whether to go with ASHRAE, initiate 

2 rulemaking standards. 

3 And, again, the possible schedule. We 

4 want to do an ANOPR about January 2003, a NOPR January 

5 2004, a final rule will be August 2008, and then an 

6 effective date four years from that. So you talking 

7 about a rulemaking process out to 2008. 

8 Obviously if these other options work out 

9 as far as the maintenance with ASHRAE, negotiations, 

10 those things could actually be a better, more quicker, 

11 presentable alternative. 

12 Thank you very much. 

13 MR. RABA: Thank you. 

14 All good comments heard this morning. I 

15 certainly appreciate everything. 

16 There it is, hiding back there. 

17 Yeah, all good comments this morning. 

18 Thank you very much. 

19 This is very vital to the process we go 

20 through to get these issues on the table, get your 

21 thought processes going, and to come out with a good 

22 decision for all concerned. 

23 So there's a long way to go. We're just 

24 beginning. We expect many more comments and some 

25 discussion as we go throughout the day. 

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61

1 So thank you all. A good job so far.

2 How long would you like to take the break

3 for? Say we come back, say -- I beg your pardon?

4 PARTICIPANT: A good half hour.

5 MR. RABA: A good half hour? No, no, no,

6 no. How about we make it, say, come back when the big

7 hand is on the eight? That's 20 minutes.

8 Too long? Fifteen minutes, on the seven,

9 big hand is on the seven. I'm glad you're so

10 enthusiastic.

11 (Whereupon, the foregoing matter went off

12 the record at 10:23 a.m. and went back on

13 the record at 10:42 a.m.)

14 MR. RABA: As the big hand approaches the

15 eight, did everybody get a chance to sign in?

16 We had a request earlier that a list of

17 names of the attendees be provided before you all

18 leave today. We'll see that that's done so that you

19 can have a record to take home with you as to who's

20 been here.

21 Also we have some seats available that

22 just opened up the front row, no extra charge. One

23 more here and one more here, if you'd like to move

24 forward to the table and get a better view.

25 Mark Kendall of Arthur D. Little,

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61 

1 So thank you all. A good job so far. 

2 How long would you like to take the break 

3 for? Say we come back, say I beg your pardon? 

4 PARTICIPANT: A good half hour. 

5 MR. RABA: A good half hour? No, no, no, 

6 no. How about we make it, say, come back when the big 

7 hand is on the eight? That's 20 minutes. 

8 Too long? Fifteen minutes, on the seven, 

9 big hand is on the seven. I'm glad you're so 

10 enthusiastic. 

11 (Whereupon, the foregoing matter went off 

12 the record at 10:23 a.m. and went back on 

13 the record at 10:42 a.m.) 

14 MR. RABA: As the big hand approaches the 

15 eight, did everybody get a chance to sign in? 

16 We had a request earlier that a list of 

17 names of the attendees be provided before you all 

18 leave today. We'll see that that's done so that you 

19 can have a record to take home with you as to who's 

20 been here. 

21 Also we have some seats available that 

22 just opened up the front row, no extra charge. One 

23 more here and one more here, if you'd like to move 

24 forward to the table and get a better view. 

25 

(202) 234-4433 

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62

1 Incorporated, will be making a presentation on the

2 engineering analysis process, things to be examined,

3 and afterward we would invite your comments.

4 Mark, any technology?

5 Yeah, excuse me. On the agenda, we'll do

6 the market and technology assessment first.

7 MR. KENDALL: Microphone working?

8 MR. RABA: Yes, it is.

9 MR. KENDALL: Okay. Thanks.

10 MR. RABA: And to our call-in guests,

11 we're starting again. We still have two places

12 available at the table if anybody would like to come

13 up here and get a better view.

14 MR. KENDALL: All right. Thank you.

15 The first analytical topic on the agenda

16 is the market and technology assessment. We'll try to

17 pace ourselves here for each these components of the

18 analysis so that we finish on time and maybe a little

19 bit early. This one I would expect to take about 15

20 minutes, depending on questions, 20. So feel free to

21 jump in if you have any questions or comments.

22 The market and technology assessment is

23 basically a data gathering phase, as well as a phase

24 where we try to define what product classes we'll be

25 considering as separately in the analysis.

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62 

1 Incorporated, will be making a presentation on the 

2 engineering analysis process, things to be examined, 

3 and afterward we would invite your comments. 

4 Mark, any technology? 

5 Yeah, excuse me. On the agenda, we'll do 

6 the market and technology assessment first. 

7 MR. KENDALL: Microphone working? 

8 MR. RABA: Yes, it is. 

9 MR. KENDALL: Okay. Thanks. 

10 MR. RABA: And to our call-in guests, 

11 we're starting again. We still have two places 

12 available at the table if anybody would like to come 

13 up here and get a better view. 

14 MR. KENDALL: All right. Thank you. 

15 The first analytical topic on the agenda 

16 is the market and technology assessment. We'll try to 

17 pace ourselves here for each these components of the 

18 analysis so that we finish on time and maybe a little 

19 bit early. This one I would expect to take about 15 

20 minutes, depending on questions, 20. So feel free to 

21 jump in if you have any questions or comments. 

22 The market and technology assessment is 

23 basically a data gathering phase, as well as a phase 

24 where we try to define what product classes we'll be 

25 considering as separately in the analysis. 

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63

1 So I'm going to page 1 of the

Go 2 presentation.

3 All right. The market and technology

4 assessment feeds into several downstream analyses.

5 There's the screening analysis, the national energy

6 savings, manufacturing impact analysis. Through the

7 market and technology assessment, we're gathering data

8 on firms and industry structure, product

9 characteristics, historical shipments, non-regulatory

10 incentives, regional differences, and others.

11 Now, this is the first rulemaking that the

12 department has done for products that are intended for

13 use in the commercial sector. Most of the materials

14 you are going to see today have been developed

15 throughout DOE's background in residential products.

16 The market and technology assessment will

17 pick up on these differences between the residential

18 markets and the commercial markets. One of them we

19 know very clearly is that commercial air conditioners

20 and heat pumps for commercial markets are not mass

21 produced to the extent that residential products are.

22 There's not as much uniformity between products.

23 There's not as much uniformity between manufacturers,

24 and there's many more manufacturers in that market

* 25 producing products that in the residential sector we

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----~--------

63 

1 So I'm going to page 1 of the 

2 presentation. 

3 All right. The market and technology 

4 assessment feeds into several downstream analyses. 

5 There's the screening analysis, the national energy 

6 savings, manufacturing impact analysis. Through the 

7 market and technology assessment, we're gathering data 

8 on firms and industry structure, product 

9 characteristics, historical shipments, non-regulatory 

10 incentives, regional differences, and others. 

11 Now, this is the first rulemaking that the 

12 department has done for products that are intended for 

13 use in the commercial sector. Most of the materials 

14 you are going to see today have been developed 

15 throughout DOE's background in residential products. 

16 The·market and technology assessment will 

17 pick up on these differences between the residential 

18 markets and the commercial markets. One of them we 

19 know very clearly is that commercial air conditioners 

20 and heat pumps for commercial markets are not mass 

21 produced to the extent that residential products are. 

22 There's not as much uniformity between products. 

23 There's not as much uniformity between manufacturers, 

24 and there's many more manufacturers in that market 

25 producing products that in the residential sector we 

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64

1 may consider niche products because they're designed

2 for specific applications or specific end uses or

3 things like that.

4 So the market and technology assessment

5 will attempt to lay out these unique characteristics

6 of the commercial market and begin to formulate how

7 the department will consider those in the analysis.

8 So turning to Slide 2, Slide 2 lists some

9 of the data sources that we've come across so far.

10 These are sources that relate to definitions of

11 products, shipment information, pricing information,

12 financial information on manufacturers, contractors,

13 distributors engaged in the industry.

14 And the questions that relate to this list

15 of data, which you can throw some of these ideas out

16 or just wait for your written comments to provide

17 them, but if you're aware of any other sources of data

18 that aren't listed here that you think would be useful

19 for the department's understanding of the industry,

20 please provide that to the department, and we'll look

21 into those data.

22 Okay. If no comments on that, I'll turn

23 to Slide 3.

24 MR. SACKS: Excuse me, please.

25 MR. RABA: In the back, yes.

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64 

1 may consider niche products because they're designed 

2 for specific applications or specific end uses or 

3 things like that. 

4 So the market and technology assessment 

5 will attempt to layout these unique characteristics 

6 of the commercial market and begin to formulate how 

7 the department will consider those in the analysis. 

8 So turning to Slide 2, Slide 2 lists some 

9 of the data sources that we've come across so far. 

10 These are sources that relate to definitions of 

11 products, shipment information, pricing information, 

12 financial information on manufacturers, contractors, 

13 distributors engaged in the industry. 

14 And the questions that relate to this list 

15 of data, which you can throw some of these ideas out 

16 or just wait for your written comments to provide 

17 them, but if you're aware of any other sources of data 

18 that aren't listed here that you think would be useful 

19 for the department's understanding of the industry, 

20 please provide that to the department, and we'll look 

21 into those data. 

22 

23 to Slide 3. 

24 

25 

(202) 234-4433 

Okay. If no comments on that, I'll turn 

MR. SACKS: Excuse me, please. 

MR. RABA: In the back, yes. 

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1 MR. SACKS: Harvey Sacks. I'm not sure

2 this is the right place, but in terms of information

3 from sources, we certainly are interested in revealed

4 cost data for incremental efficiency.

5 MR. KENDALL: And could you repeat that?

6 MR. SACKS: Revealed cost data both from

7 sales of higher efficiency units in areas where they

8 have relatively high market penetration, and from

9 comparable technologies in the historical record, such

10 as the revealed costs moving to the ten SEER standard.

11 MR. KENDALL: Okay. Thank you.

12 MR. CRAWFORD: Mark? Jim Crawford.

13 The first point I'd like to make is that

14 you might find annual reports a lot handier than the

15 SEC 10(k). I sure do when I'm looking for

16 information, and they will be very enlightening on

17 some very important points to be dealt with in the

18 economics and manufacturing impact analysis.

19 The other point that I would like to make

20 I didn't want to make until Harvey made his point, and

21 I'm not familiar with the "revealed cost" phrase, but

22 all too often the industry is condemned for

23 productivity improvements that have been realized in

24 the past, and the activation as well.

25 You said that it was going to cost X

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1 MR. SACKS: Harvey Sacks. I'm not sure 

2 this is the right place, but in terms of information 

3 from sources, we certainly are interested in revealed 

4 cost data for incremental efficiency. 

5 MR. KENDALL: And could you repeat that? 

6 MR. SACKS: Revealed cost data both from 

7 sales of higher efficiency units in areas where they 

8 have relatively high market penetration, and from 

9 comparable technologies in the historical record, such 

10 as the revealed costs moving to the ten SEER standard. 

11 MR. KENDALL: Okay. Thank you. 

12 MR. CRAWFORD: Mark? Jim Crawford. 

13 The first point I'd like to make is that 

14 you might find annual reports a lot handier than the 

15 SEC 10 (k) . I sure do when I'm looking for 

16 information, and they will be very enlightening on 

17 some very important points to be dealt with in the 

18 economics and manufacturing impact analysis. 

19 The other point that I would like to make 

20 I didn't want to make until Harvey made his point, and 

21 I'm not familiar with the "revealed cost" phrase, but 

22 all too often the industry is condemned for 

23 productivity improvements that have been realized in 

24 the past, and the activation as well. 

25 

(202) 234-4433 

You said that it was going to cost X 

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1 dollars, and downstream it didn't cost X dollars. You

2 get the new system for about what the old system cost.

3 You can look at numbers and decide whether

4 or not that's true, but the important point is if

5 you're looking at, for example, an eight versus a ten,

6 if you're looking at an eight versus a ten in year X

7 and then you look at it five years later, the numbers

8 may be different, but the difference between the eight

9 and the ten does not change very much.

10 To upgrade efficiency in any time span

11 costs money. You don't get it for nothing, never.

12 MR. RABA: Charlie Stephens.

13 MR. STEPHENS: That's only true -- Charlie

14 Stephens, Oregon Energy Office -- that's only true in

15 one respect. It's widely analyzed and reported in

16 industrial data in this country anyway that a

17 cumulative doubling of production volume typically

18 produces a ten to 30 percent lowering in the price.

19 It just has to do with production volume, and you can

20 look at almost any industry you want in the country,

21 and those numbers hold, and it has to do with volume.

22 And obviously the higher efficiency stuff

23 is in a much lower volume right now.

24 MR. CRAWFORD: And it lowers the

25 efficiency -- excuse me -- the cost to make an eight

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1 dollars, and downstream it didn't cost X dollars. You 

2 get the new system for about what the old system cost. 

3 You can look at numbers and decide whether 

4 or not that's true, but the important point is if 

5 you're looking at, for example, an eight versus a ten, 

6 if you're looking at an eight versus a ten in year X 

7 and then you look at it five years later, the numbers 

8 may be different, but the difference between the eight 

9 and the ten does not change very much. 

10 To upgrade efficiency in any time span 

11 costs money. Yo~ don't get it for nothing, never. 

12 MR. RABA: Charlie Stephens. 

13 MR. STEPHENS: That's only true Charlie 

14 Stephens, Oregon Energy Office -- that's only true in 

15 one respect. It's widely analyzed and reported in 

16 industrial data in this country anyway that a 

17 cumulative doubling of production volume typically 

18 produces a ten to 30 percent lowering in the price. 

19 It just has to do with production volume, and you can 

20 look at almost any industry you want in the country, 

21 and those numbers hold, and it has to do with volume. 

22 And obviously the higher efficiency stuff 

23 is in a much lower volume right now. 

24 MR. CRAWFORD: And it lowers the 

25 efficiency -- excuse me -- the cost to make an eight 

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1 versus -- just as it would lower the cost to make a

2 ten. The whole scale comes down, not just the higher

3 efficiency product.

4 MR. RABA: And that was Jim Crawford.

5 Thank you, Jim.

6 Charlie.

7 MR. STEPHENS: Charlie.

8 Except right now the eight is the low, is

9 the production volume. Its costs already are lowered

10 by production volumes because it's, by far, the larger

11 part of the column in a commodity market. It's the

12 commodity product.

13 MR. RABA: First Harvey and then back to

14 Jim, please.

15 MR. SACKS: This is Harvey Sacks again,

16 and I apologize for opening Pandora's box. I ask that

17 the issue be looked at. I did not prescribe a

18 particular outcome in this. I would conclude my

19 statements just that I still have enormous confidence

20 in the ability of the manufacturers to continue

21 improvements.

22 MR. RABA: Did you get that?

23 THE REPORTER: Yes.

24 MR. RABA: Jim, please.

25 MR. CRAWFORD: I certainly agree with

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1 versus -- just as it would lower the cost to make a 

2 ten. The whole scale comes down, not just the higher 

3 efficiency product. 

4 MR. RABA: And that was Jim Crawford. 

5 Thank you, Jim. 

6 Charlie. 

7 MR. STEPHENS: Charlie. 

8 Except right now the eight is the low, is 

9 the production volume. Its costs already are lowered 

10 by production volumes because it's, by far, the larger 

11 part of the column in a commodity market. It's the 

12 commodity product. 

13 MR. RABA: First Harvey and then back to 

14 Jim, please. 

15 MR. SACKS: This lS Harvey Sacks again, 

16 and I apologize for opening Pandora's box. I ask that 

17 the issue be looked at. I did not prescribe a 

18 particular outcome in this. I would conclude my 

19 statements just that I still have enormous confidence 

20 In the ability of the manufacturers to continue 

21 improvements. 

22 

23 

24 

25 

(202) 234-4433 

MR. RABA: Did you get that? 

THE REPORTER: Yes. 

MR. RABA: Jim, please. 

MR. CRAWFORD: I certainly agree with 

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1 Harvey on that.

2 (Laughter.)

3 MR. CRAWFORD: But, you know, I don't know

4 if my friend Morgan is being intentionally obtuse or

5 I'm just being very inept at expressing the point, but

6 the fact remains that as you're looking forward to

7 establish some standard level, the volume doesn't yet

8 exist out there, and anybody can produce the less

9 efficient product for significantly less money than a

10 significantly more efficient product, and that will

11 not change.

12 It takes more material, and that will not

13 change, and if you figure some way of reducing

14 material content, you reduce material content on both.

15 If you figure some way of reducing labor content, you

16 reduce labor content on both.

17 Improved efficiency costs money. That's

18 the only point I'm trying to make.

19 MR. RABA: Okay. Thank you.

20 Mark.

21 MR. KENDALL: Okay. We're on Slide 3.

22 The three questions listed on Slide 3 have to do with

23 some of the questions that the analytical team are

24 asking ourselves right now based on what looking we've

25 done at the market.

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1 Harvey on that. 

2 (Laughter.) 

3 MR. CRAWFORD: Bu t, you know, I don't know 

4 if my friend Morgan is being intentionally obtuse or 

5 I'm just being very inept at expressing the point, but 

6 the fact remains that as you're looking forward to 

7 establish some standard level, the volume doesn't yet 

8 exist out there, and anybody can produce the less 

9 efficient product for significantly less money than a 

10 significantly more efficient product, and that will 

11 not change. 

12 It takes more material, and that will not 

13 change, and if you figure some way of reducing 

14 material content, you reduce material content on both. 

15 If you figure some way of reducing labor content, you 

16 reduce labor content on both. 

17 Improved efficiency costs money. That's 

18 the only point I'm trying to make. 

19 MR. RABA: Okay. Thank you. 

20 Mark. 

21 MR. KENDALL: Okay. We're on Slide 3. 

22 The three questions listed on Slide 3 have to do with 

23 some of the questions that the analytical team are 

24 asking ourselves right now based on what looking we've 

25 done at the market. 

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1 The first question is: should the

2 department consider regional differences in product

3 distribution use or installation? If so, which ones?

4 As a cooling and heating product,

5 obviously different parts of the country have

6 different needs, and we are wondering now to the

7 extent that we should consider those differences in

8 the analysis.

9 The second question is: what assumptions

10 regarding the impact of non-regulatory initiatives

11 should the department use in the analysis?

12 The idea there is ASHRAE 90.199 is being

13 phased in. States will begin to adopt it for new

14 buildings. That process in itself will create demand

15 for products that have efficiency levels that meet or

16 exceed the ASHRAE levels.

17 The same with Energy Star. There's a

18 proposal right now out for Energy Star levels for

19 commercial air conditioning products and utility

20 rebates if they exist. They can create pull for

21 products that are more efficient than today's

22 baseline, and in the market assessment, we would like

23 to capture that information to include maybe in

24 shipment projections downstream in the analysis.

25 MR. CRAWFORD: A quick question. Jim

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1 Th~ first question is: should the 

2 department consider regional differences in product 

3 distribution use or installation? If so, which ones? 

4 As a cooling and heating product, 

5 obviously different parts of the country have 

6 different needs, and we are wondering now to the 

7 extent that we should consider those differences in 

8 the analysis. 

9 The second question is: what assumptions 

10 regarding the impact of non-regulatory initiatives 

11 should the department use in the analysis? 

12 The idea there is ASHRAE 90.199 is being 

13 phased In. States· will begin to adopt it for new 

14 buildings. That process in itself will create demand 

15 for products that have efficiency levels that meet or 

16 exceed the ASHRAE levels. 

17 The same with Energy Star. There's a 

18 proposal right now out for Energy Star levels for 

19 commercial air conditioning products and utility 

20 rebates if they exist. They can create pull for 

21 products that are more efficient than today's 

22 baseline, and in the market assessment, we would like 

23 to capture that information to include maybe in 

24 shipment projections downstream in the analysis. 

25 

(202) 234-4433 

MR. CRAWFORD: A quick question. Jim 

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1 Crawford.

2 To your first question there, I don't know

3 the answer, and one reason I don't know the answer is

4 I don't know what information you think you would

5 extract from the answer, and I think you have to

6 identify where you think it might lead you, and then

7 I think we can together look at whether or not we

8 think the database that might exist out there would

9 help you get there.

10 MR. RABA: Steve Rosenstock.

11 MR. ROSENSTOCK: Steve Rosenstock, EEI.

12 I guess I would refer to one of the

13 previous slides from the introduction in terms of the

14 EPCA versus ASHRAE 90.1, 1999 levels, and obviously

15 the key is obviously, okay, which levels are you going

16 to use for your baseline analysis, and then as you're

17 doing the market assessment, those numbers go, in

18 fact, October 29th, 2001.

19 So, again, you don't have historical --

20 again, I don't know how you would try to integrate the

21 historical market data into post October 29th.

22 Somehow that has to be done, but obviously what

23 baseline you use is going to obviously make a big

24 difference in some of your analytical results.

25 MR. KENDALL: All right. Two slides from

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70 

1 Crawford. 

2 To your first question there, I don' t know 

3 the answer, and one reason I don't know the answer is 

4 I don't know what information you think you would 

5 extract from the answer, and I think you have to 

6 identify where you think it might lead you, and then 

7 I think we can together look at whether or not we 

8 think the database that might exist out there would 

9 help you get there. 

10 MR. RABA: Steve Rosenstock. 

11 MR. ROSENSTOCK: Steve Rosenstock, EEl. 

12 I guess I would refer to one of the 

13 previous slides from the introduction In terms of the 

14 EPCA versus ASHRAE 90.1, 1999 levels, and obviously 

15 the key is obviously~ okay, which levels are you going 

16 to use for your baseline analysis, and then as you're 

17 doing the market assessment, those numbers go, in 

18 fact, October 29th, 2001. 

19 So, again, you don't have historical --

20 again, I don't know how you would try to integrate the 

21 historical market data into post October 29th. 

22 Somehow that has to be done, but obviously what 

23 baseline you use is going to obviously make a big 

24 difference in some of your analytical results. 

25 

(202) 234-4433 

MR. KENDALL: All right. Two slides from 

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1 now, two or three we'll be talking about the baseline

2 specifically.

3 MR. RABA: Go ahead.

4 MR. ECKMAN: Tom Eckman with the Power

5 Council.

6 Certainly with respect to regional

7 differences I don't know whether the products are

8 significantly different, but there are clearly

9 different design parameters that have to be dealt with

10 in areas with high latent load versus low latent load

11 and in areas that have high peaking temperatures and

12 that's the problem versus that have a constant

13 temperature.

14 The West Coast has a different phenomenon

15 to deal with than the Southwest and the Southeast, and

16 areas that have a high use of economizers because of

17 low humidity and low nighttime temperatures relative

18 to other areas that don't, those are big operating

19 parameter differences that probably relate to

20 engineering optimization as well. They all need to be

21 considered.

22 MR. BRUNDAGE: Don Brundage Southern

23 Company.

24 I'd like to agree completely with what

25 Charlie said. One of our big complaints from the

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1 now, two or three we'll be talking about the baseline 

2 specifically. 

3 MR. RABA: Go ahead. 

4 MR. ECKMAN: Tom Eckman with the Power 

5 Council. 

6 Certainly with respect to regional 

7 differences I don't know whether the products are 

8 significantly different, but there are clearly 

9 different design parameters that have to be dealt with 

10 in areas with high latent load versus low latent load 

11 and in areas that have high peaking temperatures and 

12 that's the problem versus that have a constant 

13 temperature. 

14 The West Coast has a different phenomenon 

15 to deal with than the Southwest and the Southeast, and. 

16 areas that have a high use of economizers because of 

17 low humidity and low nighttime temperatures relative 

18 to other areas that doni t I those are big operating 

19 parameter differences that probably relate to 

20 engineering optimization as well. They all need to be 

21 considered. 

22 MR. BRUNDAGE: Don Brundage Southern 

23 Company. 

24 I I d like to agree completely with what 

25 Charlie said. 

(202) 234-4433 

One of our big complaints from the 

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1 residential study was inadequate consideration of

2 latent loads in that study. I would hope that the

3 studies done here from the outset would consider

4 latent loads more seriously.

5 MR. RABA: Jim.

6 MR. MULLEN: Jim Mullen.

7 Two things that I may be a little ahead

8 here. The ventilation standards under 62.1, ASHRAE

9 62.1 become very vital in trying to decide what to do

10 with this equipment, and in fact several of the folks

11 here have mentioned.

12 The other one that I think is probably a

13 major impact if this project goes full term is the

14 implementation of an alternate refrigerant.

15 Commercial equipment today has barely scratched the

16 surface, I think, in applying alternate refrigerant

17 and packaged equipment up to 20 tons, and in a lot of

18 cases the hardware is not even there to do it. That

19 has to be in place in 2010.

20 So there's a major issue out there, I

21 think, design-wise, not just what to do with the

22 efficiency, but the efficiency, if it's going to be

23 mandated in 2008, almost needs to be with the

24 alternate refrigerant.

25 MR. KENDALL: And I think we do plan to

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1 residential study was inadequate consideration of 

2 latent loads in that study. I would hope that the 

3 studies done here from the outset would consider 

4 latent loads more seriously. 

5 MR. RABA: Jim. 

6 MR. MULLEN: Jim Mullen. 

7 Two things that I may be a little ahead 

8 here. The ventilation standards under 62.1, ASHRAE 

9 62.1 become very vital in trying to decide what to do 

10 with this equipment, and in fact several of the folks 

11 here have mentioned. 

12 The other one that I think is probably a 

13 major impact if this project goes full term is the 

14 implementation of an alternate refrigerant. 

15 Commercial equipment today has barely scratched the 

16 surface, I think, in applying alternate refrigerant 

17 and packaged equipment up to 20 tons, and in a lot of 

18 cases the hardware is not even there to do it. That 

19 has to be in place In 2010. 

20 So there's a maj or issue out there, I 

21 think, design-wise, not just what to do with the 

22 efficiency, but the efficiency, if it's going to be 

23 mandated in 2008, almost needs to be with the 

24 alternate refrigerant. 

25 

(202) 234·4433 

MR .. KENDALL: And I think we do plan to 

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1 talk about alternate refrigerants later on today.

2 MR. RABA: And back to you, Jim. Go

3 ahead.

4 MR. CRAWFORD: If we are to get into

5 climatological issues and latent capacity and all of

6 that, I urge you to look very carefully at the

7 performance tables of any air conditioner. The latent

8 sensible split of an air conditioner is not an

9 intrinsic property of the machinery. It's a property

10 of a given set of machinery and the current ambient

11 conditions indoors.

12 When the latent load indoors goes up, the

13 latent capacity increases to try to handle it. That's

14 one of the things an air conditioner works just the

15 way you'd like it to.

16 I mean, here you are pushing heat uphill,

17 which Mother Nature doesn't like, but Mother Nature

18 works with you very well on handling latent capacity

19 to a fair degree, which is one of the reasons we don't

20 have a lot more trouble than we do on a national

21 basis.

22 MR. KENDALL: Okay. Comments on

23 differences in climate, geography.

24 Jim Crawford asked what we would do with

25 that information, and these are some of the things we

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1 talk about alternate refrigerants later on today. 

2 MR. RABA: And back to you, Jim. Go 

3 ahead. 

4 MR. CRAWFORD: If we are to get into 

5 climatological issues and latent capacity and all of 

6 that, I urge you to look very carefully at the 

7 performance tables of any air conditioner. The latent 

8 sensible split of an air conditioner is not an 

9 intrinsic property of the machinery. It's a property 

10 of ~ given set of machinery and the current ambient 

11 conditions indoors. 

12 When the latent load indoors goes up, the 

13 latent capacity increases to try to handle it. That's 

14 one of the things an air conditioner works just the 

15 way you'd like it to. 

16 I mean, here you are pushing heat uphill, 

17 which Mother Nature doesn't like, but Mother Nature 

18 works with you very well on handling latent capacity 

19 to a fair degre~, which is one of the reasons we don't 

20 have a lot more trouble than we do on a national 

21 basis. 

22 MR. KENDALL: Okay. Comments on 

23 differences in climate, geography. 

24 Jim Crawford asked what we would do with 

25 that information, and these are some of the things we 

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1 would be considering.

2 Okay. The third bullet point on Slide 3

3 was are there any impending changes in the market of

4 which the department should be aware so that our

5 analysis is as much prospective as it can be rather

6 than retrospective.

7 Okay. Comments on that?

8 MR. RABA: Go ahead, Jim.

9 MR. WOLF: Jim Wolf.

10 Could we back up a little bit to bullet

11 number two?

12 MR. KENDALL: Sure.

13 MR. WOLF: As I think this through, and I

14 may be confused, I'm a little bit concerned because it

15 seems as though if you took the impact of non16 regulatory initiatives, for example, 90.1 in new

17 building construction being implemented during the

18 process from now to 2008, the Energy Star, you're

19 doing futuristic analysis, and you're obviously going

20 to come up with a different answer than was done in

21 ASHRAE 90.1 levels.

22 And so it seems as though you're actually

23 entering into a new rulemaking rather than evaluating

24 90.1 because you've changed the whole base of

25 reference.

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74 

1 would be considering. 

2 Okay. The third bullet point on Slide 3 

3 was are there any impending changes in the market of 

4 which the department should be aware so that our' 

5 analysis is as much prospective as it can be rather 

6 than retrospective. 

7 Okay. Comments on that? 

8 MR. RABA: Go ahead, Jim. 

9 MR. WOLF: Jim Wolf. 

10 Could we back up a little bit to bullet 

11 number two? 

12 MR. KENDALL: Sure. 

13 MR. WOLF: As I think this through, and I 

14 may be confused, I'm a little bit concerned because it 

15 seems as though if you took the impact of non16 regulatory initiatives, for example, 90.1 ln new 

17 building construction being implemented during the 

18 process from now to 2008, the Energy Star, you're 

19 doing futuristic analysis, and you're obviously going 

20 to come up with a different answer than was done in 

21 ASHRAE 90.1 levels. 

22 And so it seems as though you're actually 

23 entering into a new rulemaking rather than evaluating 

24 90.1 because you've changed the whole base of 

25 reference. 

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1 So I think it would be a legal question on

2 whether you could do that in your evaluation in their

3 comparative analysis. Maybe it isn't, but I would

4 certainly wonder whether or not that's consistent with

5 the intent of what you're supposed to be doing.

6 MR. KENDALL: Well, I'm tempted to answer

7 that, but since I'm not a lawyer, I know I can

8 probably be arrested.

9 (Laughter.)

10 MR. WOLF: And again, if it isn't a legal

11 question, at least from a procedural analytical, it

12 seems an inconsistency. It would be helpful, yes, for

13 a change to ASHRAE that would satisfy you, but not

14 consistent with an evaluation of ASHRAE of what's been

15 done.

16 So I have a concern about using that. I

17 would say use today's data when you do the analysis.

18 MR. KENDALL: I don't think that there's

19 any requirement in the law for DOE to use the same

20 methodology, the same process, the same assumptions

21 that ASHRAE used in their analysis.

22 Your comment is well taken. Definitely as

23 we're starting the analysis, we'll be interested in

24 knowing what the differences are between what we're

25 doing and what ASHRAE did, and we'll be able to, you

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1 So I think it would be a legal question on 

2 whether you could do that in your evaluation in their 

3 comparative analysis. Maybe it isn't, but I would 

4 certainly wonder whether or not that's consistent with 

5 the intent of what you're supposed to be doing. 

6 MR. KENDALL: Well, I'm tempted to answer 

7 that, but since I'm not a lawyer, I know I can 

8 probably be arrested. 

9 (Laughter.) 

10 MR. WOLF: And again, if it isn't a legal 

11 question, at least from a procedural analytical, it 

12 seems an inconsistency. It would be helpful, yes, for 

13 a change to ASHRAE that would satisfy you, but not 

14 consistent with an evaluation of ASHRAE of what's been 

15 done. 

16 So I have a concern about using that. I 

17 would say use today's data when you do the analysis. 

18 MR. KENDALL: I don't think that there's 

19 any requirement in the law for DOE to use the same 

20 methodology, the same process, the same assumptions 

21 that ASHRAE used in their analysis. 

22 Your comment is well taken. Definitely as 

23 we're starting the analysis, we'll be interested in 

24 knowing what the differences are between what we're 

25 doing and what ASHRAE did, and we'll be able to, you 

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1 know, based on understanding those differences weigh

2 the pros and cons of making different decisions.

3 So thank you for making that point.

4 MR. ECKMAN: Tom Eckman, Northwest Power

5 Council.

6 With respect to that issue, I think, in

7 particular, the adoption of the ASHRAE 90.1 standard

8 in state regulatory building codes and the impact

9 that's going to have on the production capabilities

10 and potential production costs of various

11 manufacturers, that does need to be taken into account

12 in the manufacturing analysis, impact analysis,

13 because part of the retooling is already underway to

14 meet that requirement, and that cost shouldn't be

15 included in any standard setting process because

16 that's already embodied in the ASHRAE standard.

17 MR. RABA: All right. So Harvey Sacks

18 first, then Charlie Stephens.

19 Charlie.

20 MR. STEPHENS: Charlie Stephens, Oregon

21 Energy Office.

22 That raises another kind of important

23 issue here, and that is that 90.1 is only going to be

24 adopted as a building standard in states that have

25 standards. There are a large number of states and

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1 know, based on understanding those differences weigh 

2 the pros and cons of making different decisions. 

3 So thank you for making that point. 

4 MR. ECKMAN: Tom Eckman, Northwest Power 

5 Council. 

6 with respect to that issue, I think, in 

7 particular, the adoption of the ASHRAE 90.1 standard 

8 in state regulatory building codes and the impact 

9 that's going to have on the production capabilities 

10 and potential production costs of various 

11 manufacturers, that does need to be taken into account 

12 in the manufacturing analysis, impact analysis, 

13 because part of the retooling is already underway to 

14 meet that requirement, and that cost shouldn't be 

15 included In any standard setting process because 

16 that's already embodied in the ASHRAE standard. 

17 MR. RABA: All right. So Harvey Sacks 

18 first, then Charlie Stephens. 

19 Charlie. 

20 MR. STEPHENS: Charlie Stephens, Oregon 

21 Energy Office. 

22 That raises another kind of important 

23 issue here, and that is that 90.1 is only going to be 

24 adopted as a building standard in states that have 

25 standards. 

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1 jurisdictions in the country that don't have any

2 standards in which to place 90.1. So there's going to

3 be a very big difference between what DOE could

4 potentially do in a rulemaking in setting a standard

5 for equipment efficiency that applies across the

6 country everywhere and what ASHRAE has done, which is

7 a voluntary standard to be adopted in some

8 jurisdictions across the country.

9 And you're going to have to take some of

10 that into account as you try to figure out who has any

11 standards for 90.1 and who doesn't.

12 MR. RABA: Thank you.

13 MR. KENDALL: Yes. Probably the biggest

14 impact on the analysis from these assumptions in

15 bullet two, if you assume that many states,

16 jurisdictions aggressively adopt 90.1 or when an

17 Energy Star level comes out, many jurisdictions adopt

18 that or some incentive programs, then the impact of

19 federal standards that are more stringent than ASHRAE

20 is diminished. Those are the implications of that.

21 MR. RABA: First Jim and then Harvey.

22 MR. MULLEN: At the risk of being ahead of

23 your schedule here, the commercial market is complex

24 in the different forms that product goes to market.

25 There's a design-build market. There's a two minute

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1 jurisdictions in the country that don't have any 

2 standards in which to place 90.1. So there's going to 

3 be a very big difference between what DOE could 

4 potentially do in a rulemaking in setting a standard 

5 for equipment efficiency that applies across the 

6 country everywhere and what ASHRAE has done, which is 

7 a voluntary standard to be adopted in some 

8 jurisdictions across the country. 

9 And you're going to have to take some of 

10 that into account as you try to figure out who has any 

11 standards for 90.1 and who doesn't. 

12 MR. RABA: Thank you. 

13 MR. KENDALL: Yes. Probably the biggest 

14 impact on the analysis from these assumptions in 

15 bullet two, if you assume that many states, 

16 jurisdictions aggressively adopt 90.1 or when an 

17 Energy Star level comes out, many jurisdictions adopt 

18 that or some incentive programs, then the impact of 

19 federal standards that are more stringent than ASHRAE 

20 is diminished. Those are the implications of that. 

21 MR. RABA: First Jim and then Harvey. 

22 MR. MULLEN: At the risk of being ahead of 

23 your schedule here, the commercial market is complex 

24 in the different forms that product goes to market. 

25 There's a design-build market. There's a two minute 

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1 market. There's a national counts market.

2 How do you intend to weigh all of those

3 into a single decision assessment?

4 MR. RABA: That was Jim Mullen.

5 MR. KENDALL: We're not prepared to answer

6 that now. That will be something we'll be coming

7 up -- anything you see this morning, we've put enough

8 thinking into this point to be able to put this

9 presentation together, formulate some plans, and we

10 documented those in the framework document. So there

11 will be some of these questions that we're just not

12 going to be prepared to answer today. Sorry.

13 But, you know, please include your

14 thinking on those and your comments, and those will be

15 some of the things that are going to influence how we

16 move forward.

17 MR. RABA: I think Harvey and then Jim

18 Crawford.

19 MR. SACKS: Mark, this is Harvey Sacks.

20 I find bullet two a bit muddled. I guess

21 your bottom line question is: is this stuff, 90.1 and

22 voluntary programs such as Energy Star, going to

23 change the shipment weighted average?

24 MR. KENDALL: That's correct.

25 MR. SACKS: Okay. Let me please just for

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1 market. There's a national counts market. 

2 How do you intend to weigh all of those 

3 into a single decision assessment? 

4 MR. RABA: That was Jim Mullen. 

5 MR. KENDALL: We're not prepared to answer 

6 that now. That will be something we'll be coming 

7 up -- anything you see this morning, we've put enough 

8 thinking into this point to be able to put this 

9 presentation together, formulate some plans, and we 

10 documented those in the framework document. So there 

11 will be some of these questions that we're just not 

12 going to be prepared to answer today. Sorry. 

13 But, you know, please include your 

14 thinking on those and your comments, and those will be 

15 some of the things that are going to influence how we 

16 move forward. 

17 MR. RABA: I think Harvey and then Jim 

18 Crawford. 

19 MR. SACKS: Mark, this 1S Harvey Sacks. 

20 I find bullet two a bit muddled. I guess 

21 your bottom line question is: is this stuff, 90.1 and 

22 voluntary programs such as Energy Star, going to 

23 change the shipment weighted average? 

24 

25 

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MR. KENDALL: That's correct. 

MR. SACKS: Okay. Let me please just for 

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1 those who aren't here from EPA remind folks that

2 Energy Star is not intended as any kind of a

3 regulatory program that could be adopted like a

4 building code by any jurisdiction. I don't want to

5 let that slide through.

6 MR. KENDALL: Yes, sorry. I thought I had

7 corrected myself at the end of that sentence, but

8 apparently not clearly.

9 MR. CRAWFORD: Jim Crawford, and to pick

10 up on what Harvey and Charlie have just said, the

11 nature of the market is that some significant

12 percentage of people who have a tenant who pays a

13 utility bill will buy the least expensive thing that

14 they can get in the market. There will be a full

15 range of product available from the regulated minimum

16 on up to the most cost effective maximum efficiency.

17 That will not change.

18 And we know that there will be many, many

19 jurisdictions that will not adopt informally Energy

20 Star or more formally 90.1, and if that were not the

21 case, we'd all be wasting a lot of time here this

22 morning.

23 I mean, what we're here for is to talk

24 about a uniform national standard and a baseline for

25 which is the current product. It's not what might

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1 those who aren't here from EPA remind folks that 

2 Energy Star is not intended as any kind of a 

3 regulatory program that could be adopted like a 

4 building code by any jurisdiction. I don't want to 

5 let that slide through. 

6 MR. KENDALL: Yes, sorry. I thought I had 

7 corrected myself at the end of that sentence, but 

8 apparently not clearly. 

9 MR. CRAWFORD: Jim Crawford, and to pick 

10 up on what Harvey and Charlie have just said, the 

11 nature of the market is that some significant 

12 percentage of people who have a tenant who pays a 

13 utility bill will buy the least expensive thing that 

14 they can get In the market. There will be a full 

15 range of product available from the regulated minimum 

16 on up to the most cost effective maximum efficiency. 

17 That will not change. 

18 And we know that there will be many, many 

19 jurisdictions that will not adopt informally Energy 

20 Star or more formally 90.1, and if that were not the 

21 case, we'd all be wasting a lot of time here this 

22 morning. 

23 I mean, what we're here for is to talk 

24 about a uniform national standard and a baseline for 

25 which is the current product. It's not what might 

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1 come out under ASHRAE or something else. It's the

2 current product. .That's the baseline, and that

3 baseline will continue to sell in the market until

4 such time as there is some minimum at a higher level

5 than that, which precludes its being sold.

6 MR. KENDALL: Okay. One question I have

7 which we may be able to answer right now. Do we know

8 the shipment weighted efficiency for commercial air

9 conditioners?

10 I don't believe that type of data is

11 public.

12 MR. CRAWFORD: Well, who's "we"?

13 (Laughter.)

14 MR. KENDALL: For the transcript "we"

15 included the people whose eyes I was making contact

16 with at that point.

17 (Laughter.)

18 MR. RABA: Karim.

19 MR. AMRANE: I think I can respond to

20 that. Yes, we know the shipment and something that

21 you might be able to tell the members.

22 MR. KENDALL: Right. I have to qualify

23 that. Thank you.

24 MR. CRAWFORD: Jim Crawford.

25 I would anticipate that the members would

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1 come out under ASHRAE or something else. It's the 

2 current product. That's the baseline, and that 

3 baseline will continue to sell in the market until 

4 such time as there is some minimum at a higher level 

5 than that, which precludes its being sold. 

6 MR. KENDALL: Okay. One question I have 

7 which we may be able to answer right now. Do we know 

8 the shipment weighted efficiency for commercial air 

9 conditioners? 

10 I don' t believe that type of data is 

11 public. 

12 MR. CRAWFORD: Well, who's "we"? 

13 (Laughter. ) 

14 MR. KENDALL: For the transcript II we II 

15 included the people whose eyes I was making contact 

16 with at that point. 

17 (Laughter. ) 

18 MR. RABA: Karim. 

19 MR. AMRANE: I think I can respond to 

20 that. Yes, we know the shipment and something that 

21 you might be able to tell the members. 

22 MR. KENDALL: Right. I have to qualify 

23 that. Thank you. 

24 

25 

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MR. CRAWFORD: Jim Crawford. 

I would anticipate that the members would 

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1 not resist sharing that information.

2 MR. KENDALL: All right. We'll move to

3 slide four. Slide four lays out the product classes

4 as they are defined in ASHRAE 90.1 for the products

5 we're considering today. I don't know whether we've

6 determined whether DOE has any flexibility in changing

7 the definition of those classes for the federal

8 standards, but for the residential products, the

9 classes that existed previously aren't by necessity

10 the ones that may show up in the next standard. So

11 there's an option which is the second bullet point

12 here.

13 We asked the question: are there other

14 features that would warrant breaking out different

15 classes, split versus packaged, for example, where it

16 may be possible to get higher efficiency out of one

17 subset than another?

18 MR. CRAWFORD: Jim Crawford.

19 Certainly you want to distinguish gas20 electrics from the all electric product, a totally

21 different animal, different market, and it takes a lot

22 of space to squeeze all of that gas heater in there.

23 MR. RABA: Ted Doyle, Mestek.

24 MR. DOYLE: Yeah, I think there is, you

25 know. To me these classes that they -- I've forgotten

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81 

1 not resist sharing that information. 

2 MR. KENDALL: All right. We'll move to 

3 slide four. Slide four lays out the product classes 

4 as they are defined in ASHRAE 90.1 for the products 

5 we're considering today. I don't know whether we've 

6 determined whether DOE has any flexibility in changing 

7 the def ini tion of those classes for the federal 

8 standards, but for the residential products, the 

9 classes that existed previously aren't by necessity 

10 the ones that may show up in the next standard. So 

11 there's an option which is the second bullet point 

12 here. 

13 We asked the question: are there other 

14 features that would warrant breaking out different 

15 classes, split versus packaged, for example, where it 

16 may be possible to get higher efficiency out of one 

17 subset than another? 

18 MR. CRAWFORD: Jim Crawford. 

19 Certainly you want to distinguish gas20 electrics from the all electric product, a totally 

21 different animal, different market, and it takes a lot 

22 of space to squeeze all of that gas heater in there. 

23 MR. RABA: Ted Doyle, Mestek. 

24 MR. DOYLE: Yeah, I think there lSI you 

25 know. To me these classes that they -- I've forgotten 

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1 my biology terms, but it's more like invertebrate2 vertebrae. You know, these are very vague and wide

3 open, and you know, our particular piece of equipment

4 that we manufacture is installed indoors, and that's

5 being lumped together with something that would be

6 installed on a rooftop.

7 MR. RABA: Good point.

8 Karim.

9 MR. AMRANE: Karim Amrane with ARI.

10 I concur with Jim Crawford that you have

11 to distinguish between gas and electric, and ASHRAE

12 90.1 makes that distinction.

13 MR. RABA: Jim Mullen.

14 MR. MULLEN: Jim Mullen.

15 Probably at least one thing you need to

16 look at is units are designed for 100 percent outdoor

17 air use, which are becoming available in the tonnage

18 range. They may or may not be recoverable under

19 current classes, but they are certainly different.

20 The other is I believe there are some gas

21 engine driven equipment in this tonnage size, and the

22 question is: is it covered?

23 MR. KENDALL: Okay. Thanks.

24 MR. RABA: Back to you, Jim.

25 MR. CRAWFORD: Jim Crawford.

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1 my biology terms, but it's more like invertebrate2 vertebrae. You know, these are very vague and wide 

3 open, and you know, our particular piece of equipment 

4 that we manufacture is installed indoors, and that's 

5 being lumped together with something that would be 

6 installed on a rooftop. 

7 MR. RABA: Good point. 

8 Karim. 

9 MR. AMRANE: Karim Amrane with ARl. 

10 I concur with Jim Crawford that you have 

11 to distinguish between gas and electric, and ASHRAE 

12 90.1 makes that distinction. 

13 MR. RABA: Jim Mullen. 

14 MR. MULLEN: Jim Mullen. 

15 Probably at least one thing you need to 

16 look at is units are designed for 100 percent outdoor 

17 air use, which are becoming available in the tonnage 

18 range. They mayor may not be recoverable under 

19 current classes, but they are certainly different. 

20 The other is I believe there are some gas 

21 engine driven equipment in this tonnage size, and the 

22 question is: 

23 

24 

25 

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is it covered? 

MR. KENDALL: Okay. Thanks. 

MR. RABA: Back to you, Jim. 

MR. CRAWFORD: Jim Crawford. 

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1 Just a question to which I don't have the

2 answer, and that is whether or not we are going to

3 bump into high velocity ducts and other niche

4 products, and I don't know, but I think we need to

5 watch out for it.

6 MR. RABA: Noted. Thank you.

7 Michael Martin.

8 MR. MARTIN: Yeah, Karim mentioned the

9 differences between the gas heating and electric

10 cooling unit in ASHRAE 90.1, and I turned back to the

11 original page 2, and it doesn't indicate that.

12 MR. CRAWFORD: That's because it's not

13 complete.

1 B ~ 14 MR. MARTIN: I think you're right. Is it

15 a .2 difference? Is that the one?

16 MR. RABA: I hear some side conversation.

17 With the microphone, please. Say your name and who

18 you're with.

19 MR. JARNAGIN: Ron Jarnagin, Pacific

20 Northwest National Lab.

21 Yes, the ASHRAE standard does

22 differentiate in the efficiency between units with

23 electric resistant heating elements versus all others.

24 Unfortunately, up until the previous reprinting of the

25 standard, which is underway right now, that was a

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1 Just a question to which I don't have the 

2 answer, and that is whether or not we are going to 

3 bump into high velocity ducts and other niche 

4 products, and I don't know, but I think we need to 

5 watch out for it. 

6 MR. RABA: Noted. Thank you. 

7 Michael Martin. 

8 MR. MARTIN: Yeah, Karim mentioned the 

9 differences between the gas heating and electric 

10 cooling unit in ASHRAE 90.1, and I turned back to the 

11 original page 2, and it doesn't indicate that. 

12 MR. CRAWFORD: That's because it's not 

13 complete. 

14 MR. MARTIN: I think you're right. Is it 

15 a .2 difference? Is that the one? 

16 MR. RABA: I hear some side conversation. 

17 with the microphone, please. Say your name and who 

18 you're with. 

19 MR. JARNAGIN: Ron Jarnagin, Pacific 

20 Northwest National Lab. 

21 Yes, the ASHRAE standard does 

22 differentiate in the efficiency between units with 

23 electric resistant heating elements versus all others. 

24 Unfortunately, up until the previous reprinting of the 

25 standard, which is underway right now, that was a 

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1 requirement that was contained in a footnote.

2 Those tables have been revised to make

3 that much more explicit so that it's obvious to

4 people, and in the new tables, which we've developed,

5 you will see a differentiation between those two

6 units.

7 MR. CRAWFORD: I have the unfortunate

8 tables in hand if somebody from DOE would like to make

9 copies for the attendees.

10 MR. MARTIN: Well, I wasn't questioning --

11 Michael Martin here. It's just you gave us a handout

12 that didn't have the full details and which they

13 appear to get right.

14 MR. RABA: Thank you for the copies of the

15 tables, Jim Crawford, and we'll make copies right

16 away.

17 MR. CRAWFORD: They came off the Web. So

18 you can't guarantee anything.

19 MR. KENDALL: At this stage of the

20 analysis, it's not too early to let the department

21 know of any products that you want to make sure aren't

22 overlooked as special cases.

23 Okay. I'll move on to slide five.

24 All right. Now, we're getting to the

25 discussion of the baseline models. Slide five

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84 

1 requirement that was contained in a footnote. 

2 Those tables have been revised to make 

3 that much more explicit so that it's obvious to 

4 people, and in the new tables, which we've developed, 

5 you will see a differentiation between those two 

6 units. 

7 MR. CRAWFORD: I have the unfortunate 

8 tables in hand if somebody from DOE would like to make 

9 copies for the attendees. 

10 MR. MARTIN: Well, I wasn't questioning--

11 Michael Martin here. It's just you gave us a handout 

12 that didn't have the full details and which they 

13 appear to get right. 

14 MR. RABA: Thank you for the copies of the 

15 tables, Jim Crawford, and we'll make copies right 

16 away. 

17 MR. CRAWFORD: They came off the Web. So 

18 you can't guarantee anything. 

19 MR. KENDALL: At this stage of the 

20 analysis, it's not too early to let the department 

21 know of any products that you want to make sure aren't 

22 overlooked as special cases. 

23 

24 

25 

Okay. I'll move on to slide five. 

All right. Now, we're getting to the 

discussion of the baseline models. Slide five 

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1 describes what we mean when we use that term. So the

* 2 first bullet point is that a baseline model includes

3 a capacity configuration, efficiency, and features as

4 the description of a product. It's usually based on

5 the most common sold minimum efficiency product in

6 each product class.

7 So once you've got the product defined,

8 you look and see of those variations which are the

9 most common, and when we say minimum efficiency,

10 that's because the new standards would ratchet up the

11 efficiency. The baseline then would be the minimum

12 against which all future changes in efficiency are

13 made.

14 And third bullet point is that it serves

15 as the basis for cost and performance estimates that

16 are intended to represent the typical product, if

17 there is such a thing that can be defined in the

18 commercial market.

19 The analysis that we'll talk about for the

20 rest of the day is complex at times, and adding more

21 and more variations of products to it increases the

22 complexity exponentially. So the attempt is to strike

23 a good balance between understanding the impacts of

24 the new standards on the products and the markets and

CB ~25 on energy use on the full range of products, and being

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1 describes what we mean when we use that term. So the 

2 first bullet point is that a baseline model includes 

3 a capacity configuration, efficiency, and features as 

4 the description of a product. It's usually based on 

5 the most common sold minimum efficiency product in 

6 each product class. 

7 So once you've got the product defined, 

8 you look and see of those variations which are the 

9 most common, and when we say minimum efficiency, 

10 that's because the new standards would ratchet up the 

11 efficiency. The baseline then would be the minimum 

12 against which all future changes in efficiency are 

13 mad·e. 

14 And third bullet point is that it serves 

15 as the basis for cost and performance estimates that 

16 are intended to represent the typical product, if 

17 there is such a thing that can be defined in the 

18 commercial market. 

19 The analysis that we'll talk about for the 

20 rest of the day is complex at times, and adding more 

21 and more variations of products to it increases the 

22 complexi ty exponentially. So the at tempt is to strike 

23 a good balance between understanding the impacts of 

24 the new standards on the products and the markets and 

25 on energy use on the full range of products, and being 

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86

1 able to get the analysis through in a timely fashion

2 and understood by the people who are trying to

3 interpret it.

4 So if you'll flip to slide six, slide six

5 we took a stab at showing what we would mean by a

6 baseline product, and these aren't determined at this

7 point. We're waiting for your input.

8 So this is a packaged year round system,

9 cooling only. If it's year round, it may have gas

10 heat, but we don't distinguish that here. But for

11 less than 135,000 BTUs, you see the type of things

12 that we have to define.

13 So in this case, we chose seven and a half

14 tons, 8.9 EER, 3 COP, and 8.0 IPLV, which I'll talk

15 about in a second, and single compressor, which my be

16 important if we do some sort of cost analysis or for

17 trying to understand how that equipment reacts to

18 changes in load.

19 And then for the over 135 class, you see

20 there the parameters that we have listed.

21 So once we've defined the classes, which

22 were the previous couple of slides, and understood

23 what baseline product we would consider in each class,

24 then we have to flesh out the details of what that

25 product is for the purposes of the analysis.

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86 

1 able to get the analysis through in a timely fashion 

2 and understood by the people who are trying to 

3 interpret it. 

4 So if you'll flip to slide six, slide six 

5 we took a stab at showing what we would mean by a 

6 baseline product, and these aren't determined at this 

7 point. We're waiting for your input. 

8 So this is a packaged year round system, 

9 cooling only. If it's year round, it may have gas 

10 heat, but we don't distinguish that here. But for 

11 les's than 135,000 BTUs, you see the type of things 

12 that we have to define. 

13 So in this case, we chose seven and a half 

14 tons, 8.9 EER, 3 COP, and 8.0 IPLV, which I'll talk 

15 about in a second, and single compressor, which my be 

16 important if we do some sort of cost analysis or for 

1 7 trying to understand how that equipment reacts to 

18 changes in load. 

19 And then for the over 135 class, you see 

20 there the parameters that we have listed. 

21 So once we've defined the classes, which 

22 were the previous couple of slides, and understood 

23 what baseline product we would consider in each class, 

24 then we have to flesh out the details of what that 

25 product is for the purposes of the analysis. 

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1 Provide us with your input on what you

2 think those things should be, please. So the first

3 bullet point, are these features' levels appropriate?

4 Should other features be added?

5 So that's the question. Tonnage, EER,

6 COP, IPLV, and some design related things; that

7 question asks whether those are appropriate or whether

8 there's other factors we should consider.

9 Latent heat was something we heard.

10 Should we be considering some ratios, sensible heat or

11 latent heat ratio there?

12 MR. RABA: Jim or Jim, who'd like to go

13 first?

14 MR. CRAWFORD: Jim Crawford.

15 I'd just comment. I would encourage ADL

16 to elicit from ARI, and I would encourage them to

17 cooperate on the disclosure on a confidential basis of

18 the sales statistics by capacity.

19 And the reason I say on a confidential

20 basis, we really don't want to do market research for

21 those companies who aren't in this current part of the

22 market.

23 MR. MULLEN: Jim Mullen.

24 It would be our recommendation that the

25 baseline units be a ten ton unit and a 20 ton unit.

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87 

1 Provide us with your input on what you 

2 think those things should be, please. So the first 

3 bullet point, are these features' levels appropriate? 

4 Should other features be added? 

5 So that's the question. Tonnage, EER, 

6 COP, IPLV, and some design related things; that 

7 question asks whether those are appropriate or whether 

8 there's other factors we should consider. 

9 Latent heat was something we heard. 

10 Should we be considering some ratios, sensible heat or 

11 latent heat ratio there? 

12 MR. RABA: Jim or Jim, who'd like to go 

13 first? 

14 MR. CRAWFORD: Jim Crawford. 

15 I'd just comment. I would encourage ADL 

16 to elicit from ARI, and I would encourage them to 

17 cooperate on the disclosure on a confidential basis of 

18 the sales statistics by capacity. 

19 And the reason I say on a confidential 

20 basis, we really don't want to do market research for 

21 those companies who aren't in this current part of the 

22 market. 

23 MR. MULLEN: Jim Mullen. 

24 It would be our recommendation that the 

25 baseline units be a ten ton unit and a 20 ton unit. 

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1 There are a couple of reasons for that.

2 The largest tonnage is always the hardest

3 to upgrade and will drive you to the largest cabinet

4 to accommodate all of the parts that go inside.

5 You'll generally find in the commercial business that

6 seven and a half ton units are built off of the ten

7 ton cabinet, and 15 ton units are built off of the 20

8 ton cabinet. So the largest unit really drives the

9 action.

10 MR. RABA: I saw Michael Martin's hand.

11 MR. MARTIN: Yes. I'm a little confused

12 by this slide here. In one play you say for cooling

13 only systems. Year around to me implies that it's got

14 heating.

15 MR. RABA: A little bit louder, please.

16 MR. MARTIN: Huh?

17 MR. RABA: Speak up for the microphone.

18 MR. MARTIN: I'm sorry.

19 MR. RABA: Thank you.

20 MR. MARTIN: You say, "Packaged," comma,

21 "year round," parentheses, "for cooling only systems,"

22 and you show a COP, which makes it look like its a

23 heat pump. What was the intent of this?

24 MR. KENDALL: There is no intent. It's an

* 25 error.

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88 

1 There are a couple of reasons for that. 

2 The largest tonnage is always the hardest 

3 to upgrade and will drive you to the largest cabinet 

4 to accommodate all of the parts that go inside. 

5 You'll generally find in the commercial business that 

6 seven and a half ton units are built off of the ten 

7 ton cabinet, and 15 ton units are built off of the 20 

8 ton cabinet. So the largest unit really drives the 

9 action. 

10 MR. RABA: I saw Michael Martin's hand. 

11 MR. MARTIN: Yes. I'm a little confused 

12 by this slide here. In one play you say for cooling 

13 only systems. Year around to me implies that it's got 

14 heating. 

15 MR. RABA: A little bit louder, please. 

16 MR. MARTIN: Huh? 

17 MR. RABA: Speak up for the microphone. 

18 MR. MARTIN: I'm sorry. 

19 MR. RABA: Thank you. 

20 MR. MARTIN: You say, II Packaged, " comma, 

21 "year round, " parentheses, "for cooling only systems, " 

22 and you show a COP, which makes it look like its a 

23 heat pump. What was the intent of this? 

24 

25 error. 

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1 MR. MARTIN: Oh.

2 MR. KENDALL: So the intent is that you

3 ignore what's in the parentheses there, "for cooling

4 only systems," and I apologize for that.

5 MR. MARTIN: So we're looking at a package

6 system with gas heating and electric cooling?

7 MR. KENDALL: The intent of this section

8 here is to illustrate the types of parameters that we

9 would have to define when defining a baseline product.

10 So unfortunately we've included every possible thing,

11 regardless of what the equipment is.

12 MR. MARTIN: Okay.

13 MR. KENDALL: So, yes, you're right. If

14 it's COP, it's a heat pump. If it's year round, it's

15 probably gas heat. And if it's cooling only, it can't

16 be either of those.

17 MR. MARTIN: So we strike the whole line?

18 MR. KENDALL: Well, don't strike anything,

19 but --

20 MR. MARTIN: Okay.

21 MR. MULLEN: -- but apply these to

22 whatever product you're thinking of, and pick the

23 appropriate parameters.

24 Thanks.

25 Okay. Now that everyone is stunned

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89 

1 MR. MARTIN: Oh. 

2 MR. KENDALL: So the intent is that you 

3 ignore what's in the parentheses there, "for cooling 

4 only systems, II and I apologize for that. 

5 MR. MARTIN: So we're looking at a package 

6 system with gas heating and electric cooling? 

7 MR. KENDALL: The intent of this section 

8 here is to illustrate the types of parameters that we 

9 would have to define when defining a baseline product. 

10 So unfortunately we've included every possible thing, 

11 regardless of what the equipment is. 

12 MR. MARTIN: Okay. 

13 MR. KENDALL: So, yes, you're right. If 

14 it's COP, it's a heat pump. If it's year round, it's 

15 probably gas heat~ And if it's cooling only, it can't 

16 be either of those. 

17 MR. MARTIN: So we strike the whole line? 

18 MR. KENDALL: Well, don't strike anything, 

19 but --

20 MR. MARTIN: Okay. 

21 MR. MULLEN: but apply these to 

22 whatever product you're thinking of, and pick the 

23 appropriate parameters. 

24 Thanks. 

25 Okay. Now that everyone is stunned 

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90

1 wondering what the next mistake is going to be.

2 MR. SACKS: Harvey Sacks.

3 I'm a bit embarrassed, but does the

4 omission imply that the gas heating efficiency is not

5 of concern in this hearing for combined appliances?

6 MR. KENDALL: Are you talking about the --

7 MR. SACKS: The gas-electric combined.

8 MR. KENDALL: -- for gas-heat, the rating?

9 MR. SACKS: We will not be concerned at

10 all with the efficiency of the gas side?

11 This would bother Steve, I know. I'd like

12 to help him those few times I can.

13 MR. KENDALL: I can't speak to that.

14 MR. RABA: To the microphone, please.

15 MR. WINIARSKI: If I understand your --

16 MR. RABA: State your name.

17 MR. WINIARSKI: Dave Winiarski, Northwest

18 Laboratory.

19 If I understand your question is whether

20 the efficiencies of furnaces are going to be included

21 in this rulemaking. If that's correct, I don't think

22 that's the case. I think we're looking at air

23 conditioning or heat pump sizes.

24 MR. SACKS: I only asked it with respect

25 to packaged units, such as rooftop combined electric

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90 

1 wondering what the next mistake is going to be. 

2 MR. SACKS: Harvey Sacks. 

3 I'm a bit embarrassed, but does the 

4 omission imply that the gas heating efficiency is not 

5 of concern in this hearing for combined appliances? 

6 MR. KENDALL: Are you talking about the --

7 MR. SACKS: The gas-electric combined. 

8 MR. KENDALL: for gas-heat, the rating? 

9 MR. SACKS: We will not be concerned at 

10 all with the efficiency of the gas side? 

11 This would bother Steve, I know. I'd like 

12 to help him those few times I can. 

13 MR. KENDALL: I can't speak to that. 

14 MR. RABA: To the microphone, please. 

15 MR. WINIARSKI: If I understand your --

16 MR. RABA: State your name. 

17 MR. WINIARSKI: Dave Winiarski, Northwest 

18 Laboratory. 

19 If I understand your question is whether 

20 the efficiencies of furnaces are going to be included 

21 in this rulemaking. If that's correct, I don't think 

22 that's the case. I think we're looking at air 

23 conditioning or heat pump sizes. 

24 MR. SACKS: I only asked it with respect 

25 to packaged units, such as rooftop combined electric 

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91

1 gas units, such as Mr. Crawford has identified as

2 posing some challenges.

3 MR. WINIARSKI: Again, and, Bryan, correct

4 me if I'm stepping over my bounds here, but I believe

5 that the efficiencies of the furnaces in those --

6 MR. RABA: Louder, please.

7 MR. WINIARSKI: The efficiencies of the

8 furnaces in those equipments would not be subject to

9 this rulemaking.

10 MR. RABA: That was Harvey Sacks and Dave

11 Winiarski speaking.

12 Michael Martin, and reminding everybody

13 please to speak closer to the microphone for the

14 transcript.

15 Thank you. Go ahead, Michael.

16 MR. MARTIN: Michael Martin.

17 The furnace efficiencies were efficiency

18 levels that DOE accepted in January. So they are

19 already adopted. So they would not be included in

20 here, but there's certainly implications of having a

21 furnace within the cabinet that need to be taken care

22 of.

23 MR. RABA: Don Brundage.

24 MR. BRUNDAGE: Don Brundage, Southern

25 Company.

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91 

1 gas units, such as Mr. Crawford has identified as 

2 posing some challenges. 

3 MR. WINIARSKI: Again, and, Bryan, correct 

4 me if I'm stepping over my bounds here, but I believe 

5 that the efficiencies of the furnaces in those --

6 MR. RABA: Louder, please. 

7 MR. WINIARSKI: The efficiencies of the 

8 furnaces in those equipments would not be subject to 

9 this rulemaking. 

10 MR. RABA: That was Harvey Sacks and Dave 

11 Winiarski speaking. 

12 Michael Martin, and reminding everybody 

13 please to speak closer to the microphone for the 

14 transcript. 

15 Thank you. Go ahead, Michael. 

16 MR. MARTIN: Michael Martin. 

17 The furnace efficiencies were efficiency 

18 levels that DOE accepted in January. So they are 

19 already adopted. So they would not be included in 

20 here, but there's certainly implications of having a 

21 furnace within the cabinet that need to be taken care 

22 of. 

23 

24 

25 Company. 

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92

1 I think I can pretty much speak for the

Aok. 2 industry on this in that the main thing we're looking

3 at here is that DOE should be to all extent possible

4 looking to the 90.1 committee and not looking at a

5 separate rulemaking.

6 So the question of gas, even without the

7 issue here of whether it had already been approved is

8 a little bit irrelevant. If the mechanism for doing

9 this provides a way to provide better research and

10 information to the 90.1 committee so they can make a

11 better standard, I think what's being done here is

12 very, very productive.

13 So I don't look at this as a gas versus

14 electric issue here.

15 MR. KENDALL: The answer to the question

16 depends on the definition of the product, how ASHRAE

17 defines it, and what DOE adopted in January, and that

18 would be something we would clarify in the next thing

19 we publish.

20 MR. RABA: Continue on, Mark.

21 MR. KENDALL: Yeah. Okay. Continuing

22 down slide six, the last two bullet points are

23 encompassed by the same concept which is if you've got

24 a product class defined, if you've got a baseline unit

25 defined within that class, it could be possible to

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1 I think I can pretty much speak for the 

2 industry on this in that the main thing we're looking 

3 at here is that DOE should be to all extent possible 

4 looking to the 90.1 committee and not looking at a 

5 separate rulemaking. 

6 So the question of gas, even without the 

7 issue here of whether it had already been approved is 

8 a little bit irrelevant. If the mechanism for doing 

9 this provides a way to provide better research and 

10 information to the 90.1 committee so they can make a 

11 better standard, I think what's being done here is 

12 very, very productive. 

13 So I don't look at this as a gas versus 

14 electric issue here. 

15 MR. KENDALL: The answer to the question 

16 depends on the definition of the product, how ASHRAE 

17 defines it, and what DOE adopted in January, and that 

l8 would be something we would clarify in the next thing 

19 we publish. 

20 MR. RABA: Continue on, Mark. 

21 MR. KENDALL: Yeah. Okay. Continuing 

22 down slide six, the last two bullet points are 

23 encompassed by the same concept which is if you've got 

24 a product class defined, if you've got a baseline unit 

25 defined within that class, it could be possible to 

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1 define more than one baseline unit within that class

2 if it's needed to capture the full range of

3 differences within that class.

4 So the second bullet point gets to that

5 point. The third I've mentioned before.

6 So that takes me to the end of the

7 prepared slides. The two that are attached as back8 up, back-up usually means they don't use them unless

9 the topic comes up. It did come up a little earlier.

10 These are topography maps, if you will, by

11 manufacturer, how many models are available in the ARI

12 catalogue for that manufacturer particular EER level.

13 Just so you can see on both of these that

14 what was mentioned earlier about ARI's difficulty in

15 getting data from a quorum of manufacturers at each

16 efficiency level is illustrated by this slide; that

17 the range of products on the market aren't uniform

18 across this whole range. So if you're trying to

19 define the cost, for example, of a product at 9.9 EER,

20 there might only be two or three manufacturers with

21 that product listed.

22 The second one relates to split systems

23 which are --

24 MR. CRAWFORD: While you're on that, if I

25 may. Jim Crawford.

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93 

1 define more than one baseline unit within that class 

2 if it's needed to capture the full range of 

3 differences within that class. 

4 So the second bullet point gets to that 

5 point. The third I've mentioned before. 

6 So that takes me to the end of the 

7 prepared slides. The two that are attached as back8 up, back-up usually means they don't use them unless 

9 the topic comes up. It did come up a little earlier. 

10 These are topography maps, if you will, by 

11 manufacturer, how many models are available in the ARI 

12 catalogue for that manufacturer particular EER level. 

13 Just so you can see on both of these that 

14 what was mentioned earlier about ARI's difficulty in 

15 getting data from a quorum of manufacturers at each 

16 efficiency level is illustrated by this slide; that 

17 the range of products on the market aren't uniform 

18 across this whole range. So if you're trying to 

19 define the cost, for example, of a product at 9.9 EER, 

20 there might only be two or three manufacturers with 

21 that product listed. 

22 The second one relates to split systems 

23 which are 

24 MR. CRAWFORD: While you're on that, if I 

25 may. Jim Crawford. 

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1 Two points. One is that the number of the

2 models does not necessarily correlate very well to

3 what the sales volume are at that capacity, and also

4 it isn't a matter of trying to strive for a quorum.

5 The issue is that if the number of manufacturers

6 producing in a given range, however you define that

7 range, capacity-efficiency combination; if the number

8 of manufacturers producing in that is so low that the

9 data once made public discloses to manufacturers too

10 well where their competitors are, then we are, again,

11 in that antitrust issue.

12 The obvious case, if there are two of them

13 and you get the average, you can figure out exactly

14 what the other guy's costs are, and that is

15 telegraphing price, telegraphing cost, and that is

16 illegal.

17 So the last time around on residential we

18 tried to say if we didn't -- I think we said if we

19 didn't have at least five people in the database, that

20 we wouldn't report that data because it tended to

21 telegraph too much.

22 MR. RABA: A good point you're making,

23 Jim.

24 Marshall you were up.

25 MR. HUNT: Marshall Hunt, City Gas and

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94 

1 Two points. One is that the number of the 

2 models does not necessarily correlate very well to 

3 what the sales volume are at that capacity, and also 

4 it isn't a matter of trying to strive for a quorum. 

5 The issue is that if the number of manufacturers 

6 producing in a given range, however you define that 

7 range, capacity-efficiency combination; if the number 

8 of manufacturers producing in that is so low that the 

9 data once made public discloses to manufacturers too 

10 well where their competitors are, then we are, again, 

11 in that antitrust issue. 

12 The obvious case, if there are two of them 

13 and you get the average, you can figure out exactly 

14 what the other guy's costs are, and that is 

15 telegraphing price, telegraphing cost, and that is 

16 illegal. 

17 So the last time around on residential we 

18 tried to say if we didn't -- I think we said if we 

19 didn't have at least five people in the database, that 

20 we wouldn't report that data because it tended to 

21 telegraph too much. 

22 MR. RABA: A good point you're making, 

23 Jim. 

24 Marshall you were up. 

25 

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1 Electric Company.

2 I need to step back one step. If we were

3 looking at a ten ton as the 130, 135K unit, maybe, Jim

4 Mullen, you can answer this. Would it still be a

5 single compressor?

6 MR. MULLEN: The answer is I don't know.

7 MR. RABA: Jim Mullen.

8 MR. MULLEN: I'd go back and look at our

9 product. Some of the other folks probably would, too,

10 to answer that.

11 MR. MULLEN: Mike Ray says the answer is

12 no..

13 MR. RABA: Ted?

14 MR. DOYLE: Yeah, I just wanted to add

15 that I think by November 1st of this year, in

16 anticipation of 90.1 already being adopted by states,

17 such as Oregon, California, that you'll see a big

18 change in the way this lays out.

19 We, for one, are expecting to have our

20 90.1 units coming off the assembly line this month.

21 MR. KENDALL: Okay. Thank you.

22 MR. RABA: Back to Jim Mullen.

23 MR. MULLEN: Jim Mullen.

24 Unless I misunderstand this graph or have

25 overlooked something, the title says that efficiency

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95 

1 Electric Company. 

2 I need to step back one step. If we were 

3 looking at a ten ton as the 130, 135K unit, maybe, Jim 

4 Mullen, you can answer this. Would it still be a 

5 single compressor? 

6 MR. MULLEN: The answer is I don't know. 

7 MR. RABA: Jim Mullen. 

8 MR. MULLEN: I'd go back and look at our 

9 product. Some of the other folks probably would, too, 

10 to answer that. 

11 MR. MULLEN: Mike Ray says the answer is 

12 no.· 

13 MR. RABA: Ted? 

14 MR. DOYLE: Yeah, I just wanted to add 

15 that I think by November 1st of this year, in 

16 anticipation of 90.1 already being adopted by states, 

17 such as Oregon, California, that you'll see a big 

18 change in the way this lays out. 

19 We, for one, are expecting to have our 

20 90.1 units coming off the assembly line this month. 

21 MR. KENDALL: Okay. Thank you. 

22 MR. RABA: Back to Jim Mullen. 

23 MR. MULLEN: Jim Mullen. 

24 Unless I misunderstand this graph or have 

25 overlooked something, the title says that efficiency 

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1 very -- you might get something that looks like this

2 graph, but for a 20 ton unit, you would get something

3 that was considerably on the EER scale.

4 MR. KENDALL: Yes, that's true. We have

5 those plots. We didn't include them, but you're

6 exactly right.

7 MR. RABA: Karim.

8 MR. AMRANE: Karim Amrane, ARI.

9 Also, Mark, you are making reference to

10 the 2000 ARI database, and we update this database

11 every six months or so. So, you know, we have a July

12 2001 and probably will have one in December.

13 MR. KENDALL: Thanks.

14 Okay. That's the end of my presentation.

15 MR. RABA: Any further comments or

16 questions for Mark?

17 MR. PHAM: This is Hung Pham. I have a

18 question.

19 MR. RABA: Yes, go ahead, Hung.

20 MR. PHAM: I think it's regarding that

21 other question also I just heard about what if it is

22 a ten ton. Is it single or two compressors? I think

23 we've seen quite a few at ten two that are two

24 compressors.

25 The other question is related to the

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1 very -- you might get something that looks like this 

2 graph, but for a 20 ton unit, you would get something 

3 that was considerably on the EER scale. 

4 MR. KENDALL: Yes, that's true. We have 

5 those plots. We didn't include them, but you're 

6 exactly right. 

7 MR. RABA: Karim. 

8 MR. AMRANE: Karim Amrane, ARI. 

9 Also, Mark, you are making reference to 

10 the 2000 ARI database, and we update this database 

11 every six months or so. So, you know, we have a July 

12 2001 and probably will have one in December. 

13 MR. KENDALL: Thanks. 

14 Okay. That's the end of my presentation. 

15 MR. RABA: Any further comments or 

16 questions for Mark? 

17 MR. PHAM: This is Hung Pham. I have a 

18 question. 

19 MR. RABA: Yes, go ahead, Hung. 

20 MR. PHAM: I think it's regarding that 

21 other question also I just heard about what if it is 

22 a ten ton. Is it single or two compressors? I think 

23 we've seen quite a few at ten two that are two 

24 compressors. 

25 

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The other question is related to the 

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1 single versus dual compressors. I guess there is this

*dB 2 EER and IPLV also listed, but I don't know what DOE's

3 intention is because today in EPAC, as far as I know

4 for less than 20 tons, there is no regulation in IPLV.

5 Are we talking about analyzing both and possibly

6 regulating both?

7 MR. KENDALL: I did say that I was going

8 to come back to that, although I thought it was in

9 this presentation, but even if it's in a later one,

10 you're correct that IPLV isn't included in EPACT or

11 the ASHRAE standards for certain products, and the

12 department doesn't intend now to establish a

13 regulation based on IPLV, but is interested in

14 understanding the impact that that more stringent EER

15 standards have on IPLV.

16 So at this point IPLV is part of the

17 analysis, and results will be produced with IPLV in

18 mind, but based on comments and suggestions, the

19 department can decide, I think, to establish IPLV or

20 not.

21 So the baseline IPLV here, IPLVs are

22 listed in the ARI database. This baseline is pretty

23 much the minimum. There may be one or two models

24 listed that have lower IPLV ratings than that, but

* 25 this gets the bulk of them.

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1 single versus dual compressors. I guess there is this 

2 EER and IPLV also listed, but I don't know what DOE's 

3 intention is because today in EPAC, as far as I know 

4 for less than 20 tons, there is no regulation in IPLV. 

5 Are we talking about analyzing both and possibly 

6 regulating both? 

7 MR. KENDALL: I did say that I was going 

8 to come back to that, although I thought it was in 

9 this presentation, but even if it's in a later one, 

10 you're correct that IPLV isn't included in EPACT or 

11 the ASHRAE standards for certain products, and the 

12 department doesn't intend now to establish a 

13 regulation based on IPLV, but is interested in 

14 understanding the impact that that more stringent EER 

15 standards have on IPLV. 

16 So at this point IPLV is part of the 

17 analysis, and results will be produced with IPLV in 

18 mind, but based on comments and suggestions, the 

19 department can decide, I think, to establish IPLV or 

20 not. 

21 So the baseline IPLV here, IPLVs are 

22 listed in the ARI database. This baseline is pretty 

23 much the minimum. There may be one or two models 

24 listed that have lower IPLV ratings than that, but 

25 this gets the bulk of them. 

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1 MR. RABA: Hung, does that address your

2 question, your comment?

3 MR. PHAM: So I guess I -- let me confirm

4 and make sure I heard correctly, that it is only for

5 informational purposes. There's no intent to

6 regulate.

7 MR. KENDALL: That's correct.

8 MR. PHAM: Okay. Thank you.

9 MR. RABA: You're welcome, sir.

10 Michael Martin.

11 MR. MARTIN: I would encourage you to

12 continue this research into IPLVs. They were added

13 into the ASHRAE standard in 1989, and then when EPACT

14 was negotiated, the discussion from the industry was

15 that there wasn't enough meaningful data to include

16 them in there, and we were disappointed not to see

17 them back in the 1999 edition, but having information

18 on which to make a sensible decision is certainly a

19 very worthwhile thing to do.

20 MR. RABA: Thank you.

21 MR. PHAM: This is Hung Pham again.

22 The reason I asked that, because it's very

23 important in terms of some of the decisions, I think,

24 related to whether you might employ one compressor or

25 two compressors there, but I think maybe that's

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1 MR. RABA: Hung, does that address your 

2 question, your comment? 

3 MR. PHAM: So I guess I -- let me confirm 

4 and make sure I heard correctly, that it is only for 

5 informational purposes. There's no intent to 

6 regulate. 

7 MR. KENDALL: That's correct. 

8 MR. PHAM: Okay. Thank you. 

9 MR. RABA: You're welcome, sir. 

10 Michael Martin. 

11 MR. MARTIN: I would encourage you to 

12 continue this research into IPLVs. They were added 

13 into the ASHRAE standard in 1989, and then when EPACT 

14 was' negotiated, the discussion from the industry was 

15 that there wasri't enough meaningful data to include 

16 them in there, and we were disappointed not to see 

17 them back in the 1999 edition, but having information 

18 on which to make a sensible decision 1S certainly a 

19 very worthwhile thing to do. 

20 MR. RABA: Thank you. 

21 MR. PHAM: This is Hung Pham again. 

22 The reason I asked that, because it's very 

23 important in terms of some of the decisions, I think, 

24 related to whether you might employ one compressor or 

25 two compressors there, but I think maybe that's 

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1 something some of our system manufacturers would be

A*MON2 able to comment on better.

3 MR. RABA: Anyone care to response?

4 Did you get that for the record? We'll

5 take a look at that. Thank you very much.

6 Mark, are you done?

7 Okay. The next presenter on screening

8 analysis, Dave Winiarski of Pacific Northwest National

9 Laboratory.

10 For those of you who can't see or call11 ins, they're getting set up for the next slides.

12 (Pause in proceedings.)

13 MR. WINIARSKI: Is this on?

^ )14 My name is David Winiarski. I'm a

15 research engineer for Pacific Northwest Laboratory and

16 was involved early on with some of -- can you hear?

17 MR. RABA: Up on the top. Yeah, way up.

18 MR. WINIARSKI: It's not on. I've got one

19 of many red lights going on here.

20 Again, my name is Dave Winiarski. I'm a

21 research engineer at Pacific Northwest Laboratory, and

22 was involved early on both in the development of the

23 ASHRAE levels that we've been talking about, as well

24 as some follow-up analysis by DOE on evaluating those

* 25 levels.

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1 something some of our system manufacturers would be 

2 able to comment on better. 

3 MR. RABA: Anyone care to response? 

4 Did you get that for the record? We'll 

5 take a look at that. Thank you very much. 

6 Mark, are you done? 

7 Okay. The next presenter on screening 

8 analysis, Dave Winiarski of Pacific Northwest National 

9 Laboratory. 

10 For those of you who can't see or call11 ins, they're getting set up for the next slides. 

12 (Pause in proceedings.) 

13 MR. WINIARSKI: Is this on? 

14 My name is David Winiarski. I'm a 

15 research engineer for Pacific Northwest Laboratory and 

16 was involved early on with some of -- can you hear? 

17 MR. RABA: Up on the top. Yeah, way up. 

18 MR. WINIARSKI: It's not on. I've got one 

19 of many red lights going on here. 

20 Again, my name is Dave Winiarski. I'm a 

21 research engineer at Pacific Northwest Laboratory, and 

22 was involved early on both in the development of the 

23 ASHRAE levels that we've been talking about, as well 

24 as some follow-up analysis by DOE on evaluating those 

25 levels. 

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1 What I'm going to talk about here is the

2 screening analysis for different efficiency levels or

3 design options for this type of equipment.

4 The screening analysis is a very pragmatic

5 idea developed by DOE so that they don't spend a lot

6 of time evaluating options that are not likely to end

7 up in final products or final standards for any

8 product.

9 It was developed originally for

10 residential rulings, but DOE is basically adopting the

11 same principles for these commercial products.

12 And let's see. As I said, the screening

13 analysis is used to eliminate from further analysis

14 options or efficiency levels that are not sufficiently

15 developed or which the department does not think will

16 have characteristics suitable for their use in a

17 national standards.

18 In the process improvement rule that we

19 talked about published in '96, they outlined some very

20 specific criteria that would be used for screening.

21 Among these are the technological feasibility of any

22 given design option or standard level; certainly

23 impacts on health or safety. Again, these are

24 negative impacts that they're concerned with for

25 screening. Practicability to manufacture the

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1 What I'm going to talk about here is the 

2 screening analysis for different efficiency levels or 

3 design options for this type of equipment. 

4 The screening analysis is a very pragmatic 

5 idea developed by DOE so that they don't spend a lot 

6 of time evaluating options that are not likely to end 

7 up in final products or final standards for any 

8 product. 

9 It was developed originally for 

10 residential rulings, but DOE is basically adopting the 

11 same principles for these commercial products. 

12 And let's see. As I said, the screening 

13 analysis is used to eliminate from further analysis 

14 options or efficiency levels that are not sufficiently 

15 developed or which the department does not think will 

16 have characteristics suitable for their use in a 

17 national standards. 

18 In the process improvement rule that we 

19 talked about published in '96, they outlined some very 

20 specific criteria that would be used for screening. 

21 Among these are the technological feasibility of any 

22 given design option or standard level; certainly 

23 impacts on health or safety. Again, these are 

24 negative impacts· that they're concerned with for 

25 screening. 

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101

1 products, install and service the products, and the

*0 2 installation and service not only deal with the

3 installation and service of a particular product, but

4 also the development of an infrastructure within the

5 time frame as required by the rule such that you can

6 get products serviced or installed if those products

7 require new, innovative technologies.

8 Lastly, certainly not least in importance,

9 is the impacts on product utility, how well that

10 product will serve the intended use as a final

11 efficiency level or product availability. The

12 department is certainly not interested in restricting

13 the availability of products that are currently out

14 there.

15 In the framework document, the department

16 has outlined a couple of specific issues where we're

17 requesting to get input from stakeholders. Some of

18 those have been discussed earlier in Mark's

19 presentation, and you will probably notice the

20 reoccurring themes going on throughout this.

21 Among those are this issue that's brought

22 up in the first bullet here. Should the department

23 consider other factors in its development of potential

24 design options or are there specific ideas

25 incorporated in those design options that we really

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101 

1 products, install and service the products, and the 

2 installation and service not only deal with the 

3 installation and service of a particular product, but 

4 also the development of an infrastructure within the 

5 time frame as required by the rule such that you can 

6 get products serviced or installed if those products 

7 require new, innovative technologies. 

8 Lastly, certainly not least in importance, 

9 is the impacts on product utility, how well that 

10 product will serve the intended use as a final 

11 efficiency level or product availability. The 

12 department is certainly not interested in restricting 

13 the availability of products that are currently out 

14 there. 

15 In the framework document, the department 

16 has outlined a couple of specific issues where we're 

17 requesting to get input from stakeholders. Some of 

18 those have been discussed earlier in Mark's 

19 presentation, and you will probably notice the 

20 reoccurring themes going on throughout this. 

21 Among those are this issue that's brought 

22 up in the first bullet here. Should the department 

23 consider other factors in its development of potential 

24 design options or are there specific ideas 

25 incorporated in those design options that we really 

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1 want to flesh out in this discussion and in future

Q* 2 rulemaking?

3 An example of that is should increases in

4 EER be limited by the latent heat removal capability

5 of the equipment in order to make products suitable

6 for high humidity areas of the country. I know Trane

7 has issued some comments on that. I know that in the

8 development of the ASHRAE standard, we had a number of

9 comments on the latent heat capability of these

10 products, and we continue to solicit more information

11 on that, particularly from manufacturers.

12 Yes?

13 MR. CRAWFORD: Jim Crawford, Trane.

14 I'd like to elaborate just a little bit.

15 It is possible to make bad equipment, and bad

16 equipment would be equipment that does not handle

17 humidity, and it isn't just the humid parts of the

18 country. It is almost any part of the country. I

19 suspect that even up in Oregon State they have

20 humidity problems from what I've heard tell.

21 So when you're talking about an EER as

22 distinguished from an SEER, you very much must

23 consider the latent capacity implications in any

24 standard that you set.

25 MR. WINIARSKI: Thank you.

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1 want to flesh out In this discussion and in future 

2 rulemaking? 

3 An example of that is should increases in 

4 EER be limited by the latent heat removal capability 

5 of the equipment in order to make products suitable 

6 for high humidity areas of the country. I know Trane 

7 has issued some comments on that. I know that in the 

8 development of the ASHRAE standard, we had a number of 

9 comments on the latent heat capability of these 

10 products, and we continue to solicit more information 

11 on that, particularly from manufacturers. 

12 Yes? 

13 MR. CRAWFORD: Jim Crawford, Trane. 

14 I'd like to elaborate just a little bit. 

15 It is possible to make bad equipment, and bad 

16 equipment would be equipment that does not handle 

17 humidity, and it isn't just the humid parts of the 

18 country. It is almost any part of the country. I 

19 suspect that even up In Oregon State they have 

20 humidity problems from what I've heard tell. 

21 So when you're talking about an EER as 

22 distinguished from an SEER, you very much must 

23 consider the latent capacity implications In any 

24 standard that you set. 

25 

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1 MR. RABA: Don Brundage.

2 MR. BRUNDAGE: Don Brundage, Southern

3 Company.

4 I would agree with that, that you need to

5 consider that. You also need to be aware, although

6 ASHRAE has to move very slowly with new committees,

7 ASHRAE is starting a new task group to look at

8 humidity issues and the interaction between the

9 different standards, ventilation and efficiency. So

10 you should be aware of that.

11 It has not really fully started yet, but

12 ASHRAE is making an effort on addressing that issue.

13 MR. RABA: Thank you.

14 MR. WINIARSKI: The second bullet here

15 discusses what assumptions should the department make

16 regarding designs for specific capacities of

17 equipment. As I said, there's some reoccurring

18 themes. One of them here might be the issue of single

19 versus dual compressor equipment, and is that already

20 incorporated into the baseline or is that a future

21 design option that we're going to be looking at?

22 And then, again, the follow-up of that is

23 how should the department address the different

24 capacity control measures. There's obviously

25 different ways of controlling capacity. It doesn't

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1 MR. RABA: Don Brundage. 

2 MR. BRUNDAGE: Don Brundage, Southern 

3 Company. 

4 I would agree with that, that you need to 

5 consider that. You also need to be aware, although 

6 ASHRAE has to move very slowly with new committees, 

7 ASHRAE is starting a new task group to look at 

8 humidity issues and the interaction between the 

9 different standards, ventilation and efficiency. So 

10 you should be aware of that. 

11 It has not really fully started yet, but 

12 ASHRAE is making an effort on addressing that issue. 

13 MR. RABA: Thank you. 

14 MR. WINIARSKI: The second bullet here 

15 discusses what assumptions should the department make 

16 regarding designs for specific capacities of 

17 equipment. As I said, there's some reoccurring 

18 themes. One of them here might be the issue of single 

19 versus dual compressor equipment, and is that already 

20 incorporated into the baseline or is that a future 

21 design option that we're going to be looking at? 

22 And then, again, the follow-up of that is 

23 how should the department address the different 

24 

25 

capacity control measures. There's 

different ways of controlling capacity. 

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1 have to be single versus dual compressor, and so are

*^^ 2 there other measures that we should evaluate?

3 MR. CRAWFORD: Jim Crawford again.

4 Again, the distinction between EER and

5 SEER is vital when you look at this point of

6 modulation. Modulation, whether it's variable speed,

7 multiple compressors or some other form, does

8 essentially nothing for you on EER. It may do

9 something for you on IPLV.

10 MR. WINIARSKI: The next bullet really

11 discusses what's in the framework document. In the

12 framework document, I believe, on page 16 or 18, there

13 is a list, a preliminary list of different design

O- ~14 options that could potentially be evaluated for new

15 products or potentially be screened out for new

16 products.

17 For those of you who don't have it, I

18 think I have a copy in the back-up slides that list

19 basically the same list of technology choice

20 considerations, and we would be looking to get

21 whatever input we could get at this meeting or in

22 follow-up comments on whether, one, any of these

23 should not be included or should be screened out of

24 further rulemaking, and, two, are there other

~* 25 technologies that you folks know of that should be

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104 

1 have to be single versus dual compressor, and so are 

2 there other measures that we should evaluate? 

3 MR. CRAWFORD: Jim Crawford again. 

4 Again·, the distinction between EER and 

5 SEER is vital when you look at this point of 

6 modulation. Modulation, whether it's variable speed, 

7 multiple compressors or some other form, does 

8 essentially nothing for you on EER. It may do 

9 something for you on IPLV. 

10 MR. WINIARSKI: The next bullet really 

11 discusses what's in the framework document. In the 

12 framework document, I believe, on page 16 or 18, there 

13 is a list, a preliminary list of different design 

14 options that could potentially be evaluated for new 

15 products or potentially be screened out for new 

16 products. 

17 For those of you who don't have it, I 

18 think I have a copy in the back-up slides that list 

19 basically the same list of technology choice 

20 considerations, and we would be looking to get 

21 whatever input we could get at this meeting or in 

22 follow-up comments on whether, one, any of these 

23 should not be included or should be screened out of 

24 further rulemaking, and, two, are there other 

25 technologies that you folks know of that should be 

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1 included on this list?

2 And, again, back to the reoccurring theme

3 issue, a number of these products will have

4 considerably or options would have considerably

5 different effect with regard to part load performance

6 versus full load performance.

7 As we discussed, the department is

8 definitely interested in understanding the real world

9 energy impact, which gets into evaluating part load

10 performance in terms of doing its energy analysis, but

11 in setting the rules, the final rule as it sits right

12 now or the final rule, the existing method of rating

13 the equipment that we regulate is basically at full

14 load conditions, and so there's an issue there in

15 terms of evaluating the design options, whether we go

16 through something that incorporates only the full load

17 or design options that impact full load efficiency

18 versus those that impact real world performance.

19 Yes?

20 MR. MULLEN: Jim Mullen.

21 About two thirds of the way down the list

22 there's heat pipes for high latent load.

23 MR. WINIARSKI: Yes.

24 MR. MULLEN: That would probably more

25 properly be heat recovery devices. You can do it with

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1 included on this list? 

2 And, again, back to the reoccurring theme 

3 issue, a number of these products will have 

4 considerably or options would have considerably 

5 different effect with regard to part load performance 

6 versus full load performance. 

7 As we discussed, the department is 

8 definitely interested in understanding the real world 

9 energy impact, which gets into evaluating part load 

10 performance in terms of doing its energy analysis, but 

11 in setting the rules, the final rule as it sits right 

12 now or the final rule, the existing method of rating 

13 the equipment that we regulate is basically at full 

14 load conditions, and so there's an issue there in 

15 terms of evaluating the design options, whether we go 

16 through something that incorporates only the full load 

17 or design options that impact full load efficiency 

18 versus those that impact real world performance. 

19 Yes? 

20 MR. MULLEN: Jim Mullen. 

21 About two thirds of the way down the list 

22 there's heat pipes for high latent load. 

23 MR. WINIARSKI: Yes. 

24 MR. MULLEN: That would probably more 

25 properly be heat recovery devices. You can do it with 

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1 means other than heat pipe.

2 MR. WINIARSKI: That's actually right.

3 There's a -- I don't know if it's up here, but

4 certainly enthalapy (phonetic) wheels or heat wheels.

5 MR. MULLEN: Well, you have both sensible

6 and latent.

7 MR. WINIARSKI: Right.

8 MR. MULLEN: And probably some other forms

9 of it also.

10 MR. WINIARSKI: Right.

11 MR. MULLEN: The other question is you've

12 got a nice list of things that may be available. Are

13 you going to evaluate those for which refrigerant?

14 MR. WINIARSKI: If there are particular

15 technologies which you feel have markedly different

16 possibility for improving the performance based on the

17 type of refrigerant, I think that would be important

18 input into this process.

19 MR. MULLEN: Saying it a different way,

20 since there probably isn't a compressor out there that

21 will fit all sizes of this equipment or 407(c)

22 refrigerant, are you going to guess what the

23 compressor is going to be and then guess what the

24 efficiency change will be, or how do you intend to

25 handle all of the unknowns in that?

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106 

1 means other than heat pipe. 

2 MR. WINIARSKI: That's actually right. 

3 There's a I don't know if it's up here, but 

4 certainlyenthalapy (phonetic) wheels or heat wheels. 

5 MR. MULLEN: Well, you have both sensible 

6 and latent. 

7 MR. WINIARSKI: Right. 

8 MR. MULLEN: And probably some other forms 

9 of it also. 

10 MR. WINIARSKI: Right. 

11 MR. MULLEN: The other question is you've 

12 got a nice list of things that may be available. Are 

13 you going to evaluate those for which refrigerant? 

14 MR. WINIARSKI: If there are particular 

15 technologies which you feel have markedly different 

16 possibility for improving the performance based on the 

17 type of refrigerant, I think that would be important 

18 input into this process. 

19 MR. MULLEN: Saying it a different way, 

20 since there probably isn't a compressor out there that 

21 will fit all sizes of this equipment or 407 (c) 

22 refrigerant, are you going to guess what the 

23 compressor is going to be and then guess what the 

24 efficiency change will be, or how do you intend to 

25 handle all of the unknowns in that? 

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1 MR. WINIARSKI: In the screening analysis,

Aw 2 that actually is an issue for later on where we're

3 trying to assess the performance of the equipment. In

4 the screening analysis what we would be concerned with

5 might be the availability or potential availability of

6 those compressors for 407(c).

7 And I think that's it for the screening,

8 if there's any other questions. Yes.

9 MR. STEPHENS: Charlie Stephens.

10 Last I knew, I think you've got a little

11 star there on stuff that's currently in use. Last I

12 knew there's at least one manufacturer doing micro

13 channel evaporator coils.

14 MR. WINIARSKI: I don't know that they

15 exist for this type, for this class of equipment. I

16 would stand corrected in that.

17 MR. STEPHENS: I think up to 15 ton.

18 MR. WINIARSKI: Okay. Do you know -- if

19 you. could submit that manufacturer's name into the

20 record, that would be good.

21 MR. STEPHENS: Their name tag is gone from

22 the other side of the table at the moment.

23 MR. PHAM: This is Hung Pham. Can I have

24 a comment?

OP 25 MR. RABA: Go ahead.

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107 

1 MR. WINIARSKI: In the screening analysis, 

2 that actually is an issue for later on where we're 

3 trying to assess the performance of the equipment. In 

4 the screening analysis what we would be concerned with 

5 might be the availability or potential availability of 

6 those compressors for 407(c). 

7 And I think that's it for the screening, 

8 if there's any other questions. Yes. 

9 MR. STEPHENS: Charlie Stephens. 

10 Last I knew, I think you've got a little 

11 star there on stuff that's currently in use. Last I 

12 knew there's at least one manufacturer doing micro 

13 channel evaporator coils. 

14 MR. WINIARSKI: I don't know that they 

15 exist for this type, for this class of equipment. I 

16 would stand corrected in that. 

17 MR. STEPHENS: I think up to 15 ton. 

18 MR. WINIARSKI: Okay. Do you know -- if 

19 you, could submit that manufacturer's name into the 

20 record, that would be good. 

21 MR. STEPHENS: Their name tag is gone from 

22 the other side of the table at the moment. 

23 

24 a comment? 

25 

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MR. PHAM: This is Hung Pham. Can I have 

MR. RABA: Go ahead. 

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1 MR. WINIARSKI: Yes, Hung.

.90 2 MR. PHAM: Under high efficiency

3 compressors and multiple compressors you listed, for

4 example, EG scrolls of twin single technology. I

5 would like to make a comment that we do have modulated

6 scroll technology available also, and I Don't know if

7 you meant it to be implied in there. I wasn't sure

8 what EG scrolls means.

9 We certainly would like modulated scroll

10 to be part of it.

11 MR. WINIARSKI: Okay. Thank you.

12 MR. PHAM: One second question I have is

13 just for my clarification. I didn't understand what's

14 being referred to as sub-coolers. What particular

15 cycle are we referring to?

16 MR. WINIARSKI: Ah, the sub-coolers here,

17 I think we're talking about cooling after it leaves

18 the condenser. There's different technologies for

19 further cooling the refrigerant before it goes into

20 the evaporation.

21 MR. PHAM: We have a technology. We've

22 been looking at that. That refers to the fact that we

23 can do sub-cooling via vapor injection into the scroll

24 compressor.

25 I certainly would like to know if that is

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1 MR. WINIARSKI: Yes, Hung. 

2 MR. PRAM: Under high efficiency 

3 compressors and multiple compressors you listed, for 

4 example, EG scrolls of twin single technology. I 

5 would like to make a comment that we do have modulated 

6 scroll technology available also, and I Don't know if 

7 you meant it to be implied in there. I wasn't sure 

8 what EG scrolls means. 

9 We certainly would like modulated scroll 

10 to be part of it. 

11 MR. WINIARSKI: Okay. Thank you. 

12 MR. PHAM: One second question I have is 

13 jus.t for my clarification. I didn't understand what's 

14 being referred to as sub-coolers. What particular 

15 cycle are we referring to? 

16 MR. WINIARSKI: Ah, the sub-coolers here, 

17 I think we're talking about cooling after it leaves 

18 the condenser. There I s different technologies for 

19 further cooling the refrigerant before it goes into 

20 the evaporation. 

21 MR. PRAM: We have a technology. We've 

22 been looking at that. That refers to the fact that we 

23 can do sub-cooling via vapor injection into the scroll 

24 compressor. 

25 I certainly would like to know if that is 

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1 part of it or are you talking about sub-coolers by

2 different means?

3 MR. WINIARSKI: We're actually not

4 limited. So if there's a technology, again, that you

5 feel ought to be included on this list, please provide

6 further information on. Sub-cooling is more a generic

7 class or capability in the equipment more than it is

8 a particular design that we're discussing.

9 MR. PHAM: Okay. This last comment here

10 is there is an item on the right side, third bullet

11 down. I wasn't clear there. It refers to a

12 compressor and condenser and indoor. I'm a little bit

13 confused. Maybe you could clarify. Perhaps it's a

14 mixed piping or something. Is it fans maybe?

15 MR. WINIARSKI: You're talking about the

16 bullet that says "invertor driven variable speed

17 indoor condenser compressors"?

18 MR. PHAM: Yes.

19 MR. WINIARSKI: Yeah, that does sound sort

20 of all inclusive here. I think the point was that

21 we're looking at variable speed compressors typically

22 through some sort of pulse modulation of the

23 electrical input into them.

24 The indoor, I think what they were

25 referring to here was either indoor fan or the outdoor

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109 

1 part of it or are you talking about sub-coolers by 

2 different means? 

3 MR. WINIARSKI: We're actually not 

4 limited. So if there's a technology, again, that you 

5 feel ought to be included on this list, please provide 

6 further information on. Sub-cooling is more a generic 

7 class or capability in the equipment more than it is 

8 a particular design that we're discussing. 

9 MR. PRAM: Okay. This last comment here 

10 is there is an item on the right side, third bullet 

11 down. I wasn't clear there. It refers to a 

12 compressor and condenser and indoor. I'm a little bit 

13 confused. Maybe you could clarify. Perhaps it's a 

14 mixed piping or something. Is it fans maybe? 

15 MR. WINIARSKI: You're talking about the 

16 bullet that says " invertor driven variable speed 

17 indoor condenser compressors"? 

18 MR. PHAM: Yes. 

19 MR. WINIARSKI: Yeah, that does sound sort 

20 of all inclusive here. I think the point was that 

21 we're looking at variable speed compressors typically 

22 through some sort of pulse modulation of the 

23 electrical input into them. 

24 The indoor, I think what they were 

25 referring to here was either indoor fan or the outdoor 

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1 fan or compressors.

2 MR. PHAM: Okay. Thanks.

3 MR. RABA: Further comments for David?

4 MR. HUNT: Marshall Hunt for the Gas and

5 Electric Company.

6 Any time we have variable speed units, we

7 ought to be careful to include some kind of signal

8 conditioning so that we don't get a bad power factor,

9 and that might be a slight cost increase OEM, but we

10 definitely need to watch out for that problem.

11 MR. WINIARSKI: Okay.

12 MR. CRAWFORD: Jim Crawford.

13 Depending upon how stringent the standard

14 is on power factor and form factor, that slight

15 increase could cost more than the compressor does.

16 MR. RABA: Noted. Thank you.

17 Further questions for David or comments?

18 Yes, in the back, please.

19 MR. RAY: Mike Ray with Trane Company.

20 I guess in a screening factor I'd like to

21 find out are you taking into account any of the cost

22 feasibility of doing this because the market will only

23 bear to a certain point. As we look at the

24 technologies that are available, you have to look at

25 also the costs associated with those things and figure

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110 

1 fan or compressors. 

2 MR. PHAM: Okay. Thanks. 

3 MR. RABA: Further comments for David? 

4 MR. HUNT: Marshall Hunt for the Gas and 

5 Electric Company. 

6 Any time we have variable speed units, we 

7 ought to be careful to include some kind of signal 

8 conditioning so that we don't get a bad power factor, 

9 and that might be a slight cost increase OEM, but we 

10 definitely need to watch out for that problem. 

11 MR. WINIARSKI: Okay. 

12 MR. CRAWFORD: Jim Crawford. 

13 Depending upon how stringent the standard 

14 is on power factor and form factor, that slight 

15 increase could cost more than the compressor does. 

16 MR. RABA: Noted. Thank you. 

17 Further questions for David or comments? 

18 Yes, in the back, please. 

19 MR. RAY: Mike Ray with Trane Company. 

20 I guess in a screening factor I'd like to 

21 find out are you taking into account any of the cost 

22 feasibility of doing this because the market will only 

23 bear to a certain point. As we look at the 

24 technologies that are available, you have to look at 

25 also the costs associated with those things and figure 

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1 out, you know, will this customer buy that million

is^ 2 dollar unit that's over there or realistically are we

3 more into the range of where the true market is.

4 MR. WINIARSKI: If I can respond, in the

5 process improvement rule, that again was, I believe,

6 directed towards the residential client standards.

7 Cost was explicitly not included in the screening

8 assessments. The primary reason for that is that

9 there are other steps in the process that would

10 analyze cost impacts, and it wasn't deemed necessary.

11 It is not clear that for this ruling that

12 the screening criteria that are set here are the only

13 ones that might be used for screening

14 MR. MULLEN: Jim Mullen.

15 Continuing down the list, what does double

16 skin add to the technology improvement?

17 MR. WINIARSKI: The double skin cabinets

18 here, I believe, are looking at reduction of heat

19 gains to the cabinet.

20 MR. MULLEN: I don't think the double skin

21 has much to do with that.

22 MR. WINIARSKI: Versus? I'm sorry.

23 Versus like simple insulating?

24 MR. MULLEN: The insulation.

_ ~25 MR. WINIARSKI: Yeah.

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111 

1 OUtl you know l will this customer buy that million 

2 dollar unit that/s over there or realistically are we 

3 more into the range of where the true market is. 

4 MR .. WINIARSKI: If I can respond l in the 

5 process improvement rulel that again wasl I believel 

6 directed towards the residential client standards. 

7 Cost was explicitly not included in the screening 

8 assessments. The primary reason for that is that 

9 there are other steps in the process that would 

10 analyze cost impacts I and it wasn/t deemed necessary. 

11 It is not clear that for this ruling that 

12 the screening criteria that are set here are the only 

13 ones that might be used for screening 

14 MR. MULLEN: Jim Mullen. 

15 Continuing down the list I what does double 

16 skin add to the technology improvement? 

17 MR. WINIARSKI: The double skin cabinets 

18 here I I believe I are looking at reduction of heat 

19 gains to the cabinet. 

20 MR. MULLEN: I don/t think the double skin 

21 has much to do with that. 

22 MR. WINIARSKI: Versus? 

23 Versus like simple insulating? 

24 

25 

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MR. WINIARSKI: Yeah. 

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1 MR. MULLEN: The insulation probably has

*l, 2 a lot bigger impact in this. I think the double skin

3 is generally associated with indoor air quality

4 applications.

5 MR. WINIARSKI: Okay.

6 MR. MULLEN: So you're really looking

7 at --

8 MR. WINIARSKI: That insulated cabinet.

9 MR. MULLEN: -- cabinet insulation.

10 MR. WINIARSKI: Okay.

11 MR. RABA: All right, David. Thank you

12 very much.

13 On the next steps to proceed for the

14 agenda, note that the engineering analysis and a lot

15 of these issues, having commented on it earlier, and

16 might invite some additional lengthy discussion, which

17 we'd like to make the best use of your time.

18 So the question to the audience, the

19 group, those concerned: would you like to press on or

20 take a break for lunch?

21 PARTICIPANTS: Press on.

22 MR. CRAWFORD: Press a little bit?

23 Jim Crawford.

24 I just want to come back to the last sheet

Q ~25 of David's presentation. The question is: should the

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112 

1 MR. MULLEN: The insulation probably has 

2 a lot bigger impact in this. I think the double skin 

3 is generally associated with indoor air quality 

4 applications. 

5 MR. WINIARSKI: Okay. 

6 MR. MULLEN: So you're really looking 

7 at --

8 MR. WINIARSKI: That insulated cabinet. 

9 MR. MULLEN: cabinet insulation. 

10 MR. WINIARSKI: Okay. 

11 MR. RABA: All right, David. Thank you 

12 very much. 

13 On the next steps to proceed for the 

14 agenda, note that the engineering analysis and a lot 

15 of these issues, having commented on it earlier, and 

16 might invite some additional lengthy discussion, which 

17 we'd like to make the best use of your time. 

18 So the question to the audience, the 

19 group, those concerned: would you like to press on or 

20 take a break for lunch? 

21 PARTICIPANTS: Press on. 

22 MR. CRAWFORD: Press a little bit? 

23 Jim Crawford. 

24 I just want to come back to the last sheet 

25 of David's presentation. The question is: should the 

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1 department consider other factors, and the answer is,

2 yes, cost. I mean cost is the ultimate determinant,

3 the ultimate determinant of feasibility. I mean, that

4 and the law of physics.

5 So you have to consider the cost, and cost

6 does impact several of those or at least two or three

7 of those four parameters, but explicitly cost needs to

8 be considered.

9 MR. RABA: Indeed. Thank you, Jim.

10 Bryan first and the Karim.

11 MR. BERRINGER: Just to respond to that,

12 Bryan Berringer.

13 The reason, again, we looked at it in

14 later analysis, in the life-cycle cost analysis and

15 the major impact analysis. Now, those things are

16 there. We just were trying to look at things that

17 were, you know -- obviously that could not physically

18 be done. You know, in some instances it's health and

19 safety and just technology and practice for the

20 market.

21 So that's why cost was not --

22 MR. CRAWFORD: Let me safe you a lot of

23 money then. The screening analysis is complete. It

24 can all be done. All those things can be done. So

* 25 the screening analysis is now complete.

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113 

1 department consider other factors, and the answer is, 

2 yes, cost. I mean cost is the ultimate determinant, 

3 the ultimate determinant of feasibility. I mean, that 

4 and the law of physics. 

5 So you have to consider the cost, and cost 

6 does impact several of those or at least two or three 

7 of those four parameters, but explicitly cost needs to 

8 be considered. 

9 MR. RABA: Indeed. Thank you, Jim. 

10 Bryan first and the Karim. 

11 MR. BERRINGER: Just to respond to that, 

12 Bryan Berringer. 

13 The reason, again, we looked at it in 

14 later analysis, in the life-cycle cost analysis and 

15 the maj or impact analysis. Now, those things are 

16 there. We just were trying to look at things that 

17 were, you know -- obviously that could not physically 

18 be done. You know, in some instances it's health and 

19 safety and just technology and practice for the 

20 market. 

21 So that's why cost was not 

22 MR. CRAWFORD: Let me safe you a lot of 

23 money then. The screening analysis is complete. It 

24 can all be done. All those things can be done. So 

25 the screening analysis is now complete. 

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1 I just saved you several hundred thousand

2 dollars. You know, feasibility means is it cost

3 effective, not just is it possible to do it. I mean,

4 we could have a prize here of the person with the best

5 idea is going to be sent to the moon. Now, we know

6 that we know how to do that as a country, but it's not

7 feasible for us to consider that with your budget.

8 And cost is the determinant.

9 MR. RABA: I have conferred with Mark

10 Kendall. He is willing to press on, as you would

11 like. He's comfortable with that because he brought

12 his lunch with him.

13 (Laughter.)

14 MR. RABA: So he may eat and talk at the

15 same time.

16 MR. AMRANE: Did he bring enough for all

17 of us?

18 MR. KENDALL: There's one chip for each of

19 you, one Frito.

20 MR. RABA: The feeding of the 50.

21 MR. KENDALL: Okay. Speaking of cost, the

22 engineering analysis presentation is devoted to the

23 understanding of what a more stringent standard --

24 what the impact of a more stringent standard would be

25 on the cost of the equipment and ultimately to the

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114 

1 I just saved you several hundred thousand 

2 dollars. You know, feasibility means is it cost 

3 effective, not just is it possible to do it. I mean, 

4 we could have a prize here of the person with the best 

5 idea is going to be sent to the moon. Now, we know 

6 that we know how to do that as a country, but it's not 

7 feasible for us to consider that with your budget. 

8 And cost is the determinant. 

9 MR. RABA: I have conferred with Mark 

10 Kendall. He is willing to press on, as you would 

11 like. He's comfortable with that because he brought 

12 his lunch with him. 

13 (Laughter. ) 

14 MR. RABA: So he may eat and talk at the 

15 same time. 

16 MR. AMRANE: Did he bring enough for all 

17 of us? 

18 MR. KENDALL: There's one chip for each of 

19 you, one Frito. 

20 MR. RABA: The feeding of the 50. 

21 MR. KENDALL: Okay. Speaking of cost, the 

22 engineering analysis presentation is devoted to the 

23 understanding of what a more stringent standard 

24 what the impact of a more stringent standard would be 

25 on the cost of the equipment and ultimately to the 

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115

1 price to the consumer.

2 I will move to slide one and spend a bit

3 of time there discussing this very simple draft, but

4 hopefully it will help down the road.

5 On the left-hand side, there's a line

6 relating production costs to product deficiency. Now,

7 in this standard, we haven't decided yet how we'll

8 proceed. There's a procedure that we've historically

9 called the design option approach, where you would

10 take each one of these, acknowledge these in the

11 screening analysis, and assess the impact that each

12 one of those technologies would have on the cost of

13 producing the equipment and the performance of the

*^ ~ 14 equipment.

15 And then there's the efficiency level

16 approach, which is that you look at the efficiency

17 rating of equipment independent of the technologies

18 that are used, that are employed in that equipment,

19 and then there's blends of the two, and we'll be

20 discussing some of those differences throughout the

21 next few slides.

22 On slide one, this graph is -- since the

23 department sets the standard based on the efficiency

24 level, not based on the technologies in the equipment,

25 everything has to be converted to this efficiency

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115 

1 price to the consumer. 

2 I will move to slide one and spend a bit 

3 of time there discussing this very simple draft, but 

4 hopefully it will help down the road. 

5 On the left-hand side, there's a line 

6 relating production costs to product deficiency. Now, 

7 in this standard, we haven't decided yet how we'll 

8 proceed. There's a procedure that we've historically 

9 called the design option approach, where you would 

10 take each one of these, acknowledge these in the 

11 screening analysis, and assess the impact that each 

12 one of those technologies would have on the cost of 

13 producing the equipment and the performance of the 

14 equipment. 

15 And then there's the efficiency level 

16 approach, which is that you look at the efficiency 

17 rating of equipment independent of the technologies 

18 that are used, that are employed in that equipment, 

19 and then there's blends of the two, and we'll be 

20 discussing some of those differences throughout the 

21 next few slides. 

22 On slide one, this graph is -- since the 

23 department sets the standard based on the efficiency 

24 level, not based on the technologies in the equipment, 

25 everything has to be converted to this efficiency 

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1 level approach at the end. So this graph shows just

2 a hypothetical situation where the cost of the

3 equipment is going up as efficiency goes up.

4 Now, what we're talking about here is if

5 you took a snapshot of today's equipment, you would be

6 able to go out, observe it, and talk to the

7 manufacturers. They'd be able to give you the cost of

8 producing each model that they sell to a pretty high

9 degree of certainty at each efficiency level on this

10 chart.

11 What we're talking about incorporating

12 into this analysis is some understanding of what the

13 cost of that product would be when the standard level

14 is more stringent. That topic came up earlier.

15 So we can infer some of that based on

16 equipment that we observed today. There might be an

17 element of engineering expertise that has to go into

18 decide how that equipment may change in the future

19 under more stringent standards or how some of these

20 technologies that are listed in the screening analysis

21 would be employed in the future under more stringent

22 standards even though they may not be today.

23 So this graph captures all of that in one

24 graph, which is this sort of outward looking, what

25 would the cost be to produce equipment under more

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1 level approach at the end. So this graph shows just 

2 a hypothetical situation where the cost of the 

3 equipment is going up as efficiency goes up. 

4 Now, what we're talking about here is if 

5 you took a snapshot of today' s equipment, you would be 

6 able to go out, observe it, and talk to the 

7 manufacturers. They'd be able to give you the cost of 

8 producing each model that they sell to a pretty high 

9 degree of certainty at each efficiency level on this 

10 chart. 

11 What we're talking about incorporating 

12 into this analysis is some understanding of what the 

13 cost of that product would be when the standard level 

14 is more stringent. That topic came up earlier. 

15 So we can infer some of that based on 

16 equipment that we observed today. There might be an 

17 element of engineering expertise that has to go into 

18 decide how that equipment may change in the future 

19 under more stringent standards or how some of these 

20 technologies that are listed in the screening analysis 

21 would be employed in the future under more stringent 

22 standards even though they may not be today. 

23 So this graph captures all of that in one 

24 graph, which is this sort of outward looking, what 

25 would the cost be to produce equipment under more 

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1 stringent standards, and what would the slope and

*& ~ 2 shape of that curve be?

3 The results of that --

4 MR. RABA: Go ahead, Harvey.

5 MR. SACKS: Harvey Sacks, ACEEE.

6 Going back to my first comment earlier

7 this morning, I greatly respect this as, in your

8 terms, a snapshot. However, the goal of this is to

9 look at consumer prices were the standard to be

10 changed. For that this must be complemented by a

11 graph which shows efficiency as a function of time.

12 MR. KENDALL: Right. You raised this at

13 the --

14 MR. SACKS: I raised this at the --

15 MR. KENDALL: -- residential furnace and

16 boiler workshop, which is why I tried to explain this

17 a little bit better this time.

18 MR. SACKS: Well, I'm asking that we --

19 (Laughter.)

20 MR. SACKS: No, I'm pleased that we all

21 understand it. I'm just saying that if we present the

22 one without the other, it does affect the way we think

23 about these things. I just want to make sure the

24 record reflects our concern about the historical

25 record and predictive capabilities in terms of

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1 stringent standards, and what would the slope and 

2 shape of that curve be? 

3 The results of that --

4 MR. RABA: Go ahead, Harvey. 

5 MR. SACKS: Harvey Sacks, ACEEE. 

6 Going back to my first comment earlier 

7 this morning, I greatly respect this as, in your 

8 terms, a snapshot. However, the goal of this is to 

9 look at consumer prices were the standard to be 

10 changed. For that this must be complemented by a 

11 graph which shows efficiency as a function of time. 

12 MR. KENDALL: Right. You raised this at 

13 the --

14 MR. SACKS: I raised this at the --

15 MR. KENDALL: -- residential furnace and 

16 boiler workshop, which is why I tried to explain this 

17 a little bit better this time. 

18 MR. SACKS: Well, I'm asking that we --

19 (Laughter. ) 

20 MR. SACKS: No, I'm pleased that we all 

21 understand it. I'm just saying that if we present the 

22 one without the other, it does affect the way we think 

23 about these things. I just want to make sure the 

24 record reflects our concern about the historical 

25 record and predictive capabilities in terms of 

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1 efficiency as a function of time and, for that matter,

2 market share.

3 Thank you.

4 MR. KENDALL: Okay.

5 MR. MULLEN: Jim Mullen.

6 I'm glad Harvey said that because it

7 brought to mind a question that we had as we read

8 this. The document talks about consumer. Who do you

9 define as the consumer in the commercial business

10 because of so many different facets to the business

11 and applications and whatever? Who is this life-cycle

12 cost analysis really being done for? Is it for the

13 person that owns the unit, the person that owns the

14 building, the person that leases the building, the

15 school district?

16 MR. KENDALL: Right. That's a question

17 that we've asked as well, and we haven't resolved.

18 That will come up, I'm sure, maybe in your next

19 presentation and maybe again in life-cycle costs. So

20 at that time we can discuss the merits of making any

21 of those selections, any or all of them.

22 That's an important difference between

23 commercial and the residential, is who owns the

24 equipment, who pays the utility bills.

25 MR. BRUNDAGE: Don Brundage, Southern

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1 efficiency as a function of time and, for that matter, 

2 market share. 

3 Thank you. 

4 MR. KENDALL: Okay. 

5 MR. MULLEN: Jim Mullen. 

6 I'm glad Harvey said that because it 

7 brought to mind a question that we had as we read 

8 this. The document talks about consumer. Who do you 

9 define as the consumer in the commercial business 

10 because of so many different facets to the business 

11 and applications and whatever? Who is this life-cycle 

12 cost analysis really being done for? Is it for the 

13 person that owns the unit, the person that owns the 

14 building, the person that leases the building, the 

15 school district? 

16 MR. KENDALL: Right. That's a question 

17 that we've asked as well, and we haven't resolved. 

18 That will come up, I'm sure, maybe in your next 

19 presentation and maybe again in life-cycle costs. So 

20 at that time we can discuss the merits of making any 

21 of those selections, any or all of them. 

22 That's an important difference between 

23 commercial and the residential, 1S who owns the 

24 equipment, who pays the utility bills. 

25 

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1 Company.

2 One of my complaints in the residential

3 rulemaking is not considering consumer issues enough,

4 and I think there are some analogies in the commercial

5 markets. When you have somebody who's putting a five6 year roof on a building, he's not looking at life7 cycle costs, and that needs to be included someplace

8 in the analysis.

9 There are segments that have very short

10 payback orientations and others that have very long

11 payback orientation within the commercial class.

12 MR. KENDALL: Thanks for that insight.

13 The life-cycle cost discussion will be later this

*^ ~ 14 afternoon and will be much more complete.

15 MR. CRAWFORD: Jim Crawford.

16 I'm by no means a market expert. I

17 suspect and I'm trying to pick up on the point that

18 Don made here; I suspect that in the light commercial

19 market we're going to find a short or immediate

20 payback kind of mentality as contrasted to someone who

21 builds a 40 story building and goes for chillers and

22 things of this sort; that the people who use light

23 commercial tend to be all too often people who pay the

24 bills are often not the people who buy the equipment.

25 And so there is no life cycle cost

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1 Company. 

2 One of my complaints in the residential 

3 rulemaking is not considering consumer issues enough, 

4 and I think there are some analogies in the commercial 

5 markets. When you have somebody who's putting a five6 year roof on a building, he's not looking at life7 cycle costs, and that needs to be included someplace 

8 in the analysis. 

9 There are segments that have very short 

10 payback orientations and others that have very long 

11 payback orientation within the commercial class. 

12 MR. KENDALL: Thanks for that insight. 

13 The life-cycle cost discussion will be later this 

14 afternoon and will be much more complete. 

15 MR. CRAWFORD: Jim Crawford. 

16 I'm by no means a market expert. I 

17 suspect and I'm trying to pick up on the point that 

18 Don made here; I suspect that in the light commercial 

19 market we're going to find a short or immediate 

20 payback kind of mentality as contrasted to someone who 

21 builds a 40 story building and goes for chillers and 

22 things of this sorti that the people who use light 

23 commercial tend to be all too often people who pay the 

24 bills are often not the people who buy the equipment. 

25 

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1 relative to a consumer because there are two different

o ®2 consumers.

3 MR. KENDALL: Okay. So the curve on the

4 left-hand side of slide one feeds into several of the

5 downstream analyses, consumer life-cycle costs, which

6 again we'll talk about later; manufacturer impact.

7 Well, life-cycle costs, the input is price, not cost.

8 I'm going to talk about that difference several slides

9 down from here in this section.

10 Manufacturer impact does consider cost to

11 manufacture when we consider the impact that more

12 stringent standards would have on manufacturers, and

13 employment impact, one of the components of that is

14 direct employment impacts, which are we have to

15 understand the labor content that goes into producing

16 equipment. As the standard changes, the labor content

17 may change, and that could affect employment at

18 manufacturing facilities.

19 Slide two. Slide two talks about some of

20 the characteristics that the department would like to

21 see in whatever cost information that it uses as the

22 basis for the analysis.

23 The four main bullet points are credible,

24 transparent, specific, and timely. You can see the

* 25 sub-points there.

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120 

1 relative to a consumer because there are two different 

2 consumers. 

3 MR. KENDALL: Okay. So the curve on the 

4 left-hand side of slide one feeds into several of the 

5 downstream analyses, consumer life-cycle costs, which 

6 again we'll talk about later; manufacturer impact. 

7 Well, life-cycle costs, the input is price, not cost. 

8 I'm going to talk about that difference several slides 

9 down from here in this section. 

10 Manufacturer impact does consider cost to 

11 manufacture when we consider the impact that more 

12 stringent standards would have on manufacturers, and 

13 employment impact, one of the components of that is 

14 direct employment impacts, which are we have to 

15 understand the labor content that goes into producing 

16 equipment. As the standard changes, the labor content 

17 may change, and that could affect employment at 

18 manufacturing facilities. 

19 Slide two. Slide two talks about some of 

20 the characteristics that the department would like to 

21 see in whatever cost information that it uses as the 

22 basis for the analysis. 

23 The four main bullet points are credible, 

24 transparent, specific, and timely. You can see the 

25 sub-points there. 

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1 The idea is this is a public process.

D 2 It's for the public's interest. All of these

3 characteristics are important to the department and to

4 the preservation of the integrity of the process.

5 So there are many different schemes,

6 techniques, methodologies that we could brainstorm on,

7 discuss and choose from in collecting, developing,

8 estimating cost information.

9 At the bottom, on the bottom line, we

10 would hope that anyone we select for the analysis

11 could be described by these bullets. I think you can

12 read them. Unless you want me to clarify something,

13 I'll just move to slide three.

14 Okay. Slide three. When we're talking

15 about drawing that curve on slide one, that's

16 efficiency versus cost. There's two types of data we

17 need to collect. One is efficiency data. The other

18 is cost data.

19 So slide three lists some of the sources

20 of efficiency data that we've identified and describes

21 some of the advantages and disadvantages associated

22 with those.

23 Manufacturers and suppliers are clearly a

24 source of data on the performance of the equipment

25 they produce and may produce in the future. Testing,

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1 The idea is this is a public process. 

2 It's for the public's interest. All of these 

3 characteristics are important to the department and to 

4 the preservation of the integrity of the process. 

5 So there are many different schemes, 

6 techniques, methodologies that we could brainstorm on, 

7 discuss and choose from in collecting, developing, 

8 estimating cost information. 

9 At the bot tom, on the bot tom 1 ine , we 

10 would hope that anyone we select for the analysis 

11 could be described by these bullets. I think you can 

12 read them. Unless you want me to clarify something, 

13 I'll just move to slide three. 

14 Okay. Slide three. When we're talking 

15 about drawing that curve on slide one, that's 

16 efficiency versus cost. There's two types of data we 

17 need to collect. One is efficiency data. The other 

18 is cost data. 

19 So slide three lists some of the sources 

20 of efficiency data that we've identified and describes 

21 some of the advantages and disadvantages associated 

22 with those. 

23 Manufacturers and suppliers are clearly a 

24 source of data on the performance of the equipment 

25 they produce and may produce in the future. Testing, 

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1 rating, again, the ARI directory, any ratings that are

iP 2 published or not published could be used to identify

3 performance of equipment.

4 Technical literature, engineering. So

5 technical literature falls into the same category.

6 Engineering estimates, this is more along the lines of

7 if a piece of equipment is being produced or would be

8 produced possibly in the future and ratings aren't

9 available, engineers could -- experienced engineers

10 could look at that system and compare it against other

11 equipment and make judgments as to the performance of

12 that system using their engineering expertise.

13 The next line down from there is a bit

14 more refined, which would be simulation modeling.

15 There are simulation models available that are listed

16 a couple of slides from now. This would be in the

17 cases f existing equipment simulation models could

18 represent the performance of that equipment and then

19 changes to the design of that equipment could be

20 modeled to determine the impacts on the efficiency.

21 For equipment that's not yet produced in

22 the market, an engineer could develop a prototypical

23 product using a simulation model.

24 Then the last point is prototyping where

V 25 you would actually building a piece of equipment or

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1 rating, again, the ARI directory, any ratings that are 

2 published or not published could be used to identify 

3 performance of equipment. 

4 Technical literature, engineering. So 

5 technical literature falls into the same category. 

6 Engineering estimates, this is more along the lines of 

7 if a piece of equipment is being produced or would be 

8 produced possibly in the future and ratings aren' t 

9 available, engineers could -- experienced engineers 

10 could look at that system and compare it against other 

11 equipment and make judgments as to the performance of 

12 that system using their engineering expertise. 

13 The next line down from there is a bit 

14 more refined, which would be simulation modeling. 

15 There are simulation models available that are listed 

16 a bouple of slides from now. This would be in the 

17 cases f existing equipment simulation models could 

18 represent the performance of that equipment and then 

19 changes to the design of that equipment could be 

20 modeled to determine the impacts on the efficiency. 

21 For equipment that's not yet produced in 

22 the market, an engineer could develop a prototypical 

23 product using a simulation model. 

24 Then the last point is prototyping where 

25 you would actually building a piece of equipment or 

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1 take a piece of equipment and swap out components to

2 test the performance of that equipment utilizing

3 different design options.

4 These are all possible sources of

5 efficiency/performance information that we would be

6 evaluating and selecting from in order to conduct the

7 analysis.

8 Slide four then talks about the other side

9 of the coin. Slide three was efficiency data. Slide

10 four is cost data. You see some of the same sources

11 listed here on the left. Manufacturers and suppliers;

12 tear-down analysis would be physical examination of

13 equipment to produce an estimate of direct costs,

14 indirect costs, or you could, as we did in the

15 residential, we obtained data from certain

16 manufacturers that looked like bills of materials that

17 we then, rather than tearing down all of that piece of

18 equipment, we started with the bills of materials and

19 costed those up.

20 List prices, published prices, or

21 nonpublished prices for products on today's market,

22 that then we would have to decide how we would alter

23 those prices, if at all, to represent products based

24 on their future standards, and public data, which

25 typically are pretty highly aggregated, but since this

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123 

1 take a piece of equipment and swap out components to 

2 test the performance of that equipment utilizing 

3 different design options. 

4 These are all possible sources of 

5 efficiency/performance information that we would be 

6 evaluating and selecting from in order to conduct the 

7 analysis. 

8 Slide four then talks about the other side 

9 of the coin. Slide three was efficiency data. Slide 

10 four is cost data. You see some of the same sources 

11 listed here on the left. Manufacturers and suppliers; 

12 tear-down analysis would be physical examination of 

13 equipment to produce an estimate of direct costs, 

14 indirect costs, or you could, as we did in the 

15 residential, we obtained data from certain 

16 manufacturers that looked like bills of materials that 

17 we then, rather than tearing down all of that piece of 

18 equipment, we started with the bills of materials and 

19 costed those up. 

20 List prices, published prices, or 

21 nonpublished prices for products on today's market, 

22 that then we would have to decide how we would alter 

23 those prices, if at all, to represent products based 

24 on their future standards, and public data, which 

25 typically are pretty highly aggregated, but since this 

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1 department publishes information on value and quantity

2 shipped, that you could infer some pricing information

3 from.

4 MR. RABA: Bill Prindle.

5 MR. PRINDLE: Question and perhaps a

6 comment. There's check marks placed by some of these

7 methods which seem to be somewhat determinative that

8 these sources allow you to predict future costs, and

9 I think that the term had to be future -- well,

10 okay -- future costs, and the other two methods don't

11 allow you to predict future costs.

12 I just don't see the black and white

13 distinction between the two. For example, well, you

14 know, I mean, if you want market data as far as

15 consumer products are concerned, you need to go to

16 market sources.

17 So I'm just wondering what's the rationale

18 between the check marks, and is that somehow

19 determinative as far as which sources you will or

20 won't use in the analysis.

21 MR. KENDALL: That's not determinative of

22 which sources we will and won't use, and that's a good

23 question because it allows me to explain how all of

24 these things would fit together.

25 I think the key word in the footnote next

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1 department publishes information on value and quantity 

2 shipped, that you could infer some pricing information 

3 from. 

4 MR. RABA: Bill Prindle. 

5 MR. PRINDLE: Question and perhaps a 

6 comment. There's check marks placed by some of these 

7 methods which seem to be somewhat determinative that 

8 these sources allow you to predict future costs, and 

9 I think that the term had to be future well, 

10 okay -- future costs, and the other two methods don't 

11 allow you to predict future costs. 

12 I just don't see the black and white 

13 distinction between the two. For example, well, you 

14 know, I mean, if you want market data as far as 

15 consumer products are concerned, you need to go to 

16 market sources. 

17 So I'm just wondering what's the rationale 

18 between the check marks, and is that somehow 

19 determinative as far as which sources you will or 

20 won't use in the analysis. 

21 MR. KENDALL: That's not determinative of 

22 which sources we will and won't use, and that's a good 

23 question because it allows me to explain how all of 

24 these things would fit together. 

25 I think the key word In the footnote next 

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1 to the check marks is direct insights. So rather than

2 having to -- for example, the first one that's not

3 checked here is list prices. So we could get a very

4 clear brochure that describes prices for different

5 models in the manufacturer's line.

6 That directly doesn't allow us to say how

7 those prices would change under more stringent

8 standards, though we would then have to apply some

9 theory to that or we would use that information with

10 another way of developing cost or price information to

11 sort of triangulate list prices may serve as an upper

12 bound for what we would expect to see in the future

13 under more stringent standards.

14 So all of this information can be used,

15 and must of it probably will be used. It will just

16 have to be used in different ways depending on what

17 it's best suited for.

18 MR. RABA: Jim Crawford.

19 MR. CRAWFORD: A couple of points. One,

20 on the identification of list prices, there may be

21 price lists. There may even be something that has a

22 heading that says list prices, but there are no such

23 things. They simply do not exist, and they do not

24 exist for very good reasons.

25 So these are not things that you go into

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125 

1 to the check marks is direct insights. So rather than 

2 having to -- for example, the first one that's not 

3 checked here is list prices. So we could get a very 

4 clear brochure that describes prices for different 

5 models in the manufacturer's line. 

6 That directly doesn't allow us to say how 

7 those prices would change under more stringent 

8 standards, though we would then have to apply some 

9 theory to that or we would use that information with 

10 another way of developing cost or price information to 

11 sort of triangulate list prices may serve as an upper 

12 bound for what we would expect to see in the future 

13 under more stringent standards. 

14 So all of this information can be used, 

15 and must of it probably will be used. It will just 

16 have to be used in different ways depending on what 

17 it's best suited for. 

l8 MR. RABA: Jim Crawford. 

19 MR. CRAWFORD: A couple of points. One, 

20 on the identification of list prices, there may be 

21 price lists. There may even be something that has a 

22 heading that says list prices, but there are no such 

23 things. They simply do not exist, and they do not 

24 exist for very gobd reasons. 

25 So these are not things that you go into 

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1 Sears Roebuck to buy, you know. There is no such

2 thing as a list price or a sticker price on the

3 window.

4 Flipping back to the preceding page for a

5 moment, if industry felt that there was a pool of

6 expertise in air conditioning modeling, in air

7 conditioning design and prototyping within one of the

8 laboratories, we'd hire them. We know what it takes

9 to develop that expertise, and we have yet after a

10 decade of doing business with the laboratories to see

11 the level of expertise that leads to precision in

12 costing.

13 MR. STEPHENS: Charlie Stephens, Oregon

14 Energy Office.

15 On the other hand, maybe that's a good

16 rationale for using real data, and we probably can

17 extract about 22 years' worth of data on some of this

18 out of our database for real installed invoice prices

19 on this stuff, and to the extent we can, we will.

20 MR. MULLEN: One question. Jim Mullen.

21 First a comment.

22 You have to be very careful, I think,

23 specifically with commercial equipment because of the

24 many different facets of the market to make sure that

25 you understand each one of those, and whatever answer

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126 

1 Sears Roebuck to buy, you know. There is no such 

2 thing as a list price or a sticker price on the 

3 window. 

4 Flipping back to the preceding page for a 

5 moment, if industry felt that there was a pool of 

6 expertise In air conditioning modeling, in air 

7 conditioning design and prototyping within one of the 

8 laboratories, we'd hire them. We know what it takes 

9 to develop that expertise, and we have yet after a 

10 decade of doing business with the laboratories to see 

11 the level of expertise that leads to precision in 

12 costing. 

13 MR. STEPHENS: Charlie Stephens, Oregon 

14 Energy Office. 

15 On the other hand, maybe that's a good 

16 rationale for using real data, and we probably can 

17 extract about 22 years' worth of data on some of this 

l8 out of our database for real installed invoice prices 

19 on this stuff, and to the extent we can, we will. 

20 MR. MULLEN: One question. Jim Mullen. 

21 First a comment. 

22 You have to be very careful, I think, 

23 specifically with commercial equipment because of the 

24 many different facets of the market to make sure that 

25 you understand each one of those, and whatever answer 

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1 you arrive at is representative and each segment of

2 the market can live with it.

3 And then the second question, this is just

4 a question because of my lack of knowledge. What is

5 the basis of the data, the census data? And does it

6 cover commercial size equipment? How is that data

7 derived?

8 MR. KENDALL: I think I can talk about how

9 that's derived. Typically they'll survey the

10 companies engaged in the production of that equipment.

11 The companies will then provide the Department of

12 Labor -- I guess that's who collects census

13 information -- with quantities shipped within a given

Q*' 14 class and value shipped at the end of their factory

15 dock.

16 That's typically how it's done. I haven't

17 looked specifically. I don't know if anybody at NL or

18 LBNL has looked specifically at these products, but

19 those two quantity values are published in the census

20 data.

21 MR. DOYLE: I have one question. Ted

22 Doyle.

23 On your simulation modeling, are you

24 taking into consideration the whole system or just the

25 equipment itself?

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1 you arrive at is representative and each segment of 

2 the market can live with it. 

3 And then the second question, this is just 

4 a question becauie of my lack of knowledge. What is 

5 the basis of the data, the census data? And does it 

6 cover commercial size equipment? How is that data 

7 derived? 

8 MR. KENDALL: I think I can talk about how 

9 that's derived. Typically they'll survey the 

10 companies engaged in the production of that equipment. 

11 The companies will then provide the Department of 

12 Labor I guess that's who collects census 

13 information with quantities shipped within a given 

14 class and value shipped at the end of their factory 

15 dock. 

16 That's typically how it's done. I haven't 

17 looked specifically. I don't know if anybody at NL or 

18 LBNL has looked specifically at these products, but 

19 those two quantity values are published in the census 

20 data. 

21 MR. DOYLE: I have one question. Ted 

22 Doyle. 

23 On your simulation modeling, are you 

24 taking into consideration the whole system or just the 

25 equipment itself? 

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1 MR. KENDALL: Well, both actually. In the

2 next presentation, it will be about the whole system.

3 Two or three slides down I will talk about just the

4 equipment itself a little bit.

5 MR. SACKS: Harvey Sacks.

6 With respect to census, I'm not quite sure

7 where the lines are, but I have at times found the

8 difference between the industrial product census data

9 and the PPI components of the cost of living, which

10 are fare more disaggregated, to be quite useful. I

11 have not checked what those data look like for these

12 product categories.

13 MR. KENDALL: Right. PPI, I doubt if

14 there will be a PPI for commercially sized, light

15 commercial air conditioners, but if there is, PPI has

16 indexed price trends, historical price trends.

17 MR. SACKS: Continuing that, it's not only

18 a question of whether it does for light commercial air

19 conditioners, but whether it has trend data for

20 analogous compression based product, which may be

21 indicative. They will not be as precise as we would

22 all like and which Jim Crawford has warned us about,

23 but the trends may be indicative.

24 MR. RABA: That was Harvey Sacks.

25 MR. KENDALL: All right. I'm moving now

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1 MR. KENDALL: Well, both actually. In the 

2 next presentation, it will be about the whole system. 

3 Two or three slides down I will talk about just the 

4 equipment itself a little bit. 

5 MR. SACKS: Harvey Sacks. 

6 wi th respect to census, I'm not quite sure 

7 where the lines are, but I have at times found the 

8 difference between the industrial product census data 

9 and the PPI components of the cost of living, which 

10 are fare more disaggregated, to be quite useful. I 

11 have not checked what those data look like for these 

12 product categories. 

13 MR. KENDALL: Right. PPI, I doubt if 

14 there will be a PPI for commercially sized, light 

15 commercial air conditioners, but if there is, PPI has 

16 indexed price trends, historical price trends. 

17 MR. SACKS: Continuing that, it's not only 

18 a question of whether it does for light commercial air 

19 conditioners, but whether it has trend data for 

20 analogous compression based product, which may be 

21 indicative. They will not be as precise as we would 

22 all like and which Jim Crawford has warned us about, 

23 but the trends may be indicative. 

24 MR. RABA: That was Harvey Sacks. 

25 

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MR. KENDALL: All right. 

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1 to slide five. So based on the previous few slides,

2 we thought we'd put together a strawman approach.

3 Some of the things we heard this morning, especially

4 early this morning, talked about what level of

5 analysis that the department would need to conduct in

6 order to then make a decision of whether to adopt the

7 ASHRAE levels or continue on.

8 That type of thing would be something we

9 would be conscious of as proceeding along this path

10 because if you look at this path, you can envision a

11 great deal of work, especially if many, many, many

12 product classes are'created.

13 .So the first bullet point I think we would

14 all agree would be done regardless of what we chose to

15 do downstream, which is gather the information that we

16 have available to us now and see what it says.

17 The second bullet point would be something

18 we would hope could occur, and that's to work with the

19 manufacturers in some way to provide another estimate

20 of the cost of the equipment that falls under this

21 standard.

22 The third bullet point talks about based

23 on that graph I showed earlier with the holes at

24 different efficiency levels and different

25 manufacturers, in order to get a good understanding of

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129 

1 to slide five. So based on the previous few slides, 

2 we thought we'd put together a strawman approach. 

3 Some of the things we heard this morning, especially 

4 early this morning, talked about what level of 

5 analysis that the department would need to conduct in 

6 order to then make a decision of whether to adopt the 

7 ASHRAE levels or continue on. 

8 That type of thing would be something we 

9 would be conscious of as proceeding along this path 

10 because if you look at this path, you can envision a 

11 great deal of work, especially if many, many, many 

12 product classes are created. 

13 So the first bullet point I think we would 

14 all agree would be done regardless of what we chose to 

15 do downstream, which is gather the information that we 

16 have available to us now and see what it says. 

17 The second bullet point would be something 

18 we would hope could occur, and that's to work with the 

19 manufacturers in some way to provide another estimate 

20 of the cost of the equipment that falls under this 

21 standard. 

22 The third bullet point talks about based 

23 on that graph I showed earlier with the holes at 

24 different efficiency levels and different 

25 manufacturers, in order to get a good understanding of 

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1 the continuous range of products on the market we feel

Is 2 like we may have to employ some sort of computer

3 simulation to simulate the performance and attach

4 costs to those equipment to fill in some of the gaps.

5 The fourth bullet point is reviews by

6 stakeholders. It's always an important part,

7 especially since the process rule has been issued that

8 the public be encouraged to evaluate the analysis and

9 provide comments.

10 And the fifth bullet point is reconcile

11 results and characterize uncertainty. The more

12 sources of information you use the more difficult it

13 is to make sure that they all relate to each other

14 properly and that you can explain any sources of

15 disagreement.

16 And in this particular product in this

17 market, we would pay particular attention to the size

18 and locations of uncertainties in the analysis.

19 So those five that we've laid out are

20 still very much up for discussion, and we'd appreciate

21 your insights into each of those and all of them

22 together.

23 MR. MULLEN: Jim Mullen.

24 Mark, the thing that I don't see on your

I 25 list is that ARI is part of this equation, and I think

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130 

1 the continuous range of products on the market we feel 

2 like we may have to employ some sort of computer 

3 simulation to simulate the performance and attach 

4 costs to those equipment to fill in some of the gaps. 

5 The fourth bullet point is reviews by 

6 stakeholders. It's always an important part, 

7 especially since the process rule has been issued that 

8 the public be encouraged to evaluate the analysis and 

9 provide comments. 

10 And the fifth bullet point is reconcile 

11 results and characterize uncertainty. The more 

12 sources of information you use the more difficult it 

13 is to make sure that they all relate to each other 

14 properly and that you can explain any sources of 

15 disagreement. 

16 And in this particular product in this 

17 market, we would pay particular attention to the size 

18 and locations of uncertainties in the analysis. 

19 So those five that we've laid out are 

20 still very much up for discussion, and we'd appreciate 

21 your insights into each of those and all of them 

22 together. 

23 MR. MULLEN: Jim Mullen. 

24 Mark, the thing that I don't see on your 

25 list is that ARI is part of this equation, and I think 

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1 you'll find most of the manufacturers will choose to

*1 2 ask ARI to be involved in working with you on the

3 cost.

4 MR. KENDALL: Okay. That's not to slight

5 ARI. Manufacturers there includes the trade

6 organization and associates.

7 MR. BERRINGER: Bryan Berringer, DOE.

8 Well, at this particular point from ARI or

9 the manufacturers are the site, is there a preference

10 as far as the design option as opposed to the

11 efficiency option? Has it been thought about?

12 I guess that's one of the things, one of

13 the first steps to decide. I mean, the two methods

14 are different.

15 MR. RABA: Speak up, please. We can't

16 hear.

17 MR. BERRINGER: I'll repeat it. Bryan

18 Berringer. Can you hear now? Bryan Berringer, DOE.

19 I guess my question would be if there's a

20 preference from the stakeholders on whether the design

21 option approach or the efficiency option approach

22 should be taken. It's a major step as far as moving

23 forward also.

24 MR. ECKMAN: Tom Eckman.

25 I personally don't have a preference at

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131 

1 you'll find most of the manufacturers will choose to 

2 ask ARI to be involved in working with you on the 

3 cost. 

4 MR. KENDALL: Okay. That's not to slight 

5 ARI. Manufacturers there includes the trade 

6 organization and associates. 

7 MR. BERRINGER: Bryan Berringer, DOE. 

8 Well, at this particular point from ARI or 

9 the manufacturers are the site, is there a preference 

10 as far as the design option as opposed to the 

11 efficiency option? Has it been thought about? 

12 I guess that's one of the things, one of 

13 the' first steps to decide. I mean, the two methods 

14 are different. 

15 MR. RABA: Speak up, please. We can't 

16 hear. 

17 MR. BERRINGER: I'll repeat it. Bryan 

18 Berringer. Can you hear now? Bryan Berringer, DOE. 

19 I guess my question would be if there's a 

20 preference from the stakeholders on whether the design 

21 

22 

23 

24 

25 

option approach or the efficiency option approach 

should be taken. It's a major step as 

forward also. 

(202) 234-4433 

MR. ECKMAN: Tom Eckman. 

I personally don't have a 

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1 this stage because I think it's too early to decide

2 which approach is more appropriate. I think the

3 criteria that I would judge either approach by is

4 whether it's transparent.

5 That is, regardless of whether we do a

6 design option approach or an energy efficiency

7 performance based approach, we have some idea what's

8 behind the numbers.

9 The difficulty we've had in prior

10 rulemaking is understanding and being able to judge

11 independently submissions either by manufacturers or

12 advocates of what's behind the numbers, and so

13 transparency of the numbers is far more important than

14 the specific approach selected.

15 MR. MULLEN: Jim Mullen.

16 Just, you know, a couple of thoughts on

17 that issue. Jim Crawford made the point fairly well

18 that the marketplace seeks the most efficient way to

19 get to an efficiency level through its own means and

20 studying the products that are there today at

21 different efficiency levels gives you a pretty good

22 idea of what's cost effective.

23 The hardest part of your task is to decide

24 in 2008 or whenever this would be done what's the cost

*V ~ 25 effectiveness of any of those items on the technology

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132 

1 this stage because I think it's too early to decide 

2 which approach is more appropriate. I think the 

3 cri teria that I would judge either approach by is 

4 whether it's transparent. 

5 That is, regardless of whether we do a 

6 design option approach or an energy efficiency 

7 performance based approach, we have some idea what's 

8 behind the numbers. 

9 The difficulty we've had in prior 

10 rulemaking is understanding and being able to judge 

11 independently submissions either by manufacturers or 

12 advocates of what's behind the numbers, and so 

13 transparency of the numbers is far more important than 

14 the specific approach selected. 

15 MR. MULLEN: Jim Mullen. 

16 Just, you know, a couple of thoughts on 

17 that issue. Jim Crawford made the point fairly well 

18 that the marketplace seeks the most efficient way to 

19 get to an efficiency level through its own means and 

20 studying the products that are there today at 

21 different efficiency levels gives you a pretty good 

22 idea of what's cost effective. 

23 The hardest part of your task is to decide 

24 in 2008 or whenever this would be done what's the cost 

25 effectiveness of any of those items on the technology 

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1 list as opposed to the level that they're at today,

2 and it means you have to have a crystal ball that is

3 magnificent.

4 We'd love to benefit from that, but I

5 think it's sort of an unenviable task, and I think I

6 would say it's very, very difficult to bring any of

7 those items to a considerably higher level of product

8 efficiency cost effectively with what's known today.

9 MR. CRAWFORD: Jim Crawford.

10 I hate to disagree with Jim Mullen. It

11 just --

12 MR. MULLEN: It never stopped you before.

13 (Laughter.)

14 MR. CRAWFORD: first, if we were to look

15 at the list of technologies, 15, 20 items, whatever

16 there are, there's nothing on there I don't think that

17 has not been in large scale prototype work and/or in

18 the market for at least 20 years, and the only thing

19 that would even be that short a time period would be

20 the invertor. Everything else has been around for,

21 oh, you know, 50, 75 years.

22 There have not been any radical changes in

23 the basic underlying technology inventory except

24 electronics for the last 75 years, and there's not

25 likely to be in the next three or four years.

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1 list as opposed to the level that they're at today, 

2 and it means you have to have a crystal ball that is 

3 magnificent. 

4 We'd love to benefit from that, but I 

5 think it's sort of an unenviable task, and I think I 

6 would say it's very, very difficult to bring any of 

7 those items to a considerably higher level of product 

8 efficiency cost effectively with what's known today. 

9 MR. CRAWFORD: Jim Crawford. 

10 I hate to disagree with Jim Mullen. It 

11 just --

12 MR. MULLEN: It never stopped you before. 

13 (Laughter. ) 

14 MR. CRAWFORD: first, if we were to look 

15 at the list of technologies, 15, 20 items, whatever 

16 there are, there's nothing on there I don't think that 

17 has not been in large scale prototype work and/or in 

18 the market for at least 20 years, and the only thing 

19 that would even be that short a time period would be 

20 the invertor. Everything else has been around for, 

21 oh, you know, 50, 75 years. 

22 There have not been any radical changes in 

23 the basic underlying technology inventory except 

24 electronics for the last 75 years, and there's not 

25 likely to be in the next three or four years. 

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1 So we know pretty well what inventory of

2 technology is available to us. All of it is mature,

3 even the electronics, although it might not be mature

4 in terms of penetration. It is mature in terms of

5 pricing, and that's because in order to get it into

6 the market they had to drive it down to a mature level

7 and sell it at whatever mark-up they could get if they

8 wanted to see it ever grow.

9 So there are not going to be any major

10 imbalances.

11 Now, if we got some squirrely thing that

12 said, you know, the price of copper relative to steel

13 would change -- the relative price would change by a

14 factor of ten, yeah, that would change some things,

15 but to forecast what it's going to cost to do the

16 kinds of things that you're likely to be able to do,

17 you're going to be able to do that reasonably well,

18 and you did it reasonably well last time.

19 The problem is once you got close enough

20 to confirm our numbers, you said, "Well, yours are

21 right and ours are wrong," you know, and we're going

22 to have that all over again. We're headed down the

23 same road, and that's exactly where we're going to

24 wind up. I'll guarantee it.

25 The most valid numbers are the ones that

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1 So we know pretty well what inventory of 

2 technology is available to us. All of it is mature, 

3 even the electronics, although it might not be mature 

4 in terms of penetration. It is mature in terms of 

5 pricing, and that's because in order to get it into 

6 the market they had to drive it down to a mature level 

7 and sell it at whatever mark-up they could get if they 

8 wanted to see it ever grow. 

9 So there are not going to be any major 

10 imbalances. 

11 Now, if we got some squirrely thing that 

12 said, you know, the price of copper relative to steel 

13 would change -- the relative price would change by a 

14 factor of ten, yeah, that would change some things, 

15 but to forecast what it's going to cost to do the 

16 kinds of things that you're likely to be able to do, 

17 you're going to be able to do that reasonably well, 

18 and you did it reasonably well last time. 

19 The problem is once you got close enough 

20 to confirm our numbers, you said, "Well, yours are 

21 right and ours are wrong," you know, and we're going 

22 to have that allover again. We're headed down the 

23 same road, and that's exactly where we're going to 

24 wind up. 

25 

(202) 234-4433 

I'll guarantee it. 

The most valid numbers are the ones that 

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1 Charlie talked about before. If you can get good,

2 solid numbers for what things have been selling for in

3 the market, that really tells you something.

4 And what I said before about differentials

5 for different efficiency levels needs to be kept in

6 mind when you do that. You know, in our view, the

7 last time around, which may be still -- well, we're

8 still not through with that obviously or we wouldn't

9 be here tomorrow, but the basic prices, there were

10 significant discrepancies, not huge, but significant.

11 Mark-ups were significant, and significant means big

12 enough to sway the outcome of the analysis, and unless

13 we find a better way, we're headed down the same path.

*' ~ 14 Relative to where cost information might

15 come from, any manufacturer who gives you any cost

16 information ought to have his hands slapped. It's

17 just a foolish thing for them to do, for them to

18 disclose to you their disaggregated data. Any data

19 that this company supplies will come through

20 aggregated data, through ARI with a large enough base

21 of suppliers so that it does not disclose what is

22 absolutely the most sensitive information in any

23 company in this manufacturing industry.

24 MR. RABA: Good point, Jim. Thank you.

25 First Jim Mullen and then back to Harvey

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1 Charlie talked about before. If you can get good, 

2 solid numbers for what things have been selling for in 

3 the market, that really tells you something. 

4 And what I said before about differentials 

5 for different efficiency levels needs to be kept in 

6 mind when you do that. You know, in our view, the 

7 last time around, which may be still well, we're 

8 still not through with that obviously or we wouldn't 

9 be here tomorrow, but the basic prices, there were 

10 significant discrepancies, not huge, but significant. 

11 Mark-ups were significant, and significant means big 

12 enough to sway the outcome of the analysis, and unless 

13 we find a better way, we're headed down the same path. 

14 Relative to where cost information might 

15 come from, any manufacturer who gives you any cost 

16 information ought to have his hands slapped. It's 

17 just a foolish thing for them to do, for them to 

18 disclose to you their disaggregated data. Any data 

19 that this company supplies will come through 

20 aggregated data, through ARI with a large enough base 

21 of suppliers so that it does not disclose what is 

22 absolutely the most sensitive information in any 

23 company in this m'anufacturing industry. 

24 

25 

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MR. RABA: Good point, Jim. Thank you. 

First Jim Mullen and then back to Harvey 

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1 Sacks.

2 MR. MULLEN: Just so it doesn't get lost

3 in the conversation, the alternate refrigerant issue

4 may well be a big part of the cost efficiency equation

5 because I don't think manufacturers have decided which

6 refrigerant it's going to be, and obviously the

7 components aren't there. So we'll look forward to

8 what comes out of your crystal ball on that.

9 MR. RABA: Harvey.

10 MR. SACKS: Harvey Sacks, ACEEE.

11 I have the advantage or disadvantage of

12 having to remain in the stratosphere in discussions of

13 cost. I can't see inside either Jim's factory, and

14 it's probably best for all concerned.

15 What strikes me though is that for all of

16 these people most of the cost in the product is bought

17 components, pressers and heat exchangers and controls.

18 Most of those are, as Jim Crawford has said, mature

19 products.

20 In that context, price changes within the

21 realm of product continuity, not requiring major new

22 technologies, such as modulating compressors, is a

23 pretty straightforward exercise, but we have to keep

24 in mind that the most efficiently produced product

25 will be that product which is produced in the largest

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1 Sacks. 

2 MR. MULLEN: Just so it doesn't get lost 

3 in the conversation, the alternate refrigerant issue 

4 may well be a big part of the cost efficiency equation 

5 because I don't think manufacturers have decided which 

6 refrigerant it's going to be, and obviously the 

7 components aren't there. So we'll look forward to 

8 what comes out of your crystal ball on that. 

9 MR. RABA: Harvey. 

10 MR. SACKS: Harvey Sacks, ACEEE. 

11 I have the advantage or disadvantage of 

12 having to remain in the stratosphere in discussions of 

13 cost. I can't see inside either Jim's factory, and 

14 it's probably best for all concerned. 

15 What strikes me though is that for all of 

16 these people most of the cost in the product is bought 

17 components, pressers and heat exchangers and controls. 

18 Most of those are, as Jim Crawford has said, mature 

19 products. 

20 In that context, price changes within the 

21 realm of product continuity, not requiring major new 

22 technologies, such as modulating compressors, is a 

23 pretty straightforward exercise, but we have to keep 

24 in mind that the most efficiently produced product 

25 will be that product which is produced in the largest 

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1 volume on the most productive assembly line, and

2 that's likely to be the baseline equipment.

3 I can't predict; I can't jump directly

4 from today's price for a niche product what that niche

5 product would be as the standard.

6 And the final point I'd want to make here

7 is that some of the interesting things, despite my

8 respect for Jim and his having been here throughout

9 the 75 years of these technologies --

10 (Laughter.)

11 MR. SACKS: -- there are a couple of

12 things related to electronics for which there are

13 going to be discontinuities, but that also means that

14 their learning curves are not yet exhausted. We need

15 to be cognizant of that.

16 MR. CRAWFORD: Jim Crawford.

17 We'll debate that over lunch. I don't

18 want to drag that out.

19 I do want to point out, however, that your

20 assumption of these air conditioners being made from

21 bought components may look to be true, but in fact,

22 it's not. The largest single item on the cost of an

23 air conditioning system is the compressor, and there's

24 no surprise about that, and I don't think that's a

25 secret. I don't think I'm letting secrets out.

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137 

1 volume on the most productive assembly line, and 

2 that's likely to be the baseline equipment. 

3 I can't predict; I can't jump directly 

4 from today' s price for a niche product what that niche 

5 product would be as the standard. 

6 And the final point I'd want to make here 

7 is that some of the interesting things, despite my 

8 respect for Jim and his having been here throughout 

9 the 75 years of these technologies 

10 (Laughter. ) 

11 MR. SACKS: there are a couple of 

12 things related to electronics for which there are 

13 going to be discontinuities, but that also means that 

14 their learning curves are not yet exhausted. We need 

15 to be cognizant of that. 

16 MR. CRAWFORD: Jim Crawford. 

17 We'll debate that over lunch. I don't 

18 want to drag that out. 

19 I do want to point out, however, that your 

20 assumption of these air conditioners being made from 

21 bought components may look to be true, but in fact, 

22 it's not. The largest single item on the cost of an 

23 air conditioning system is the compressor, and there's 

24 no .surprise about that, and I don't think that's a 

25 secret. 

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I don't think I'm letting secrets out. 

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1 The two companies that are present here

2 today, two large unitary companies that are present

3 here today and two others all own either exclusively

4 or a major interest in a compressor manufacturer.

5 I don't know anything about compressor

6 pricing, but I'd be awful unhappy if I found out that

7 we were paying the street price for the compressors

8 that come out of a factory that we partially own.

9 MR. KENDALL: Okay. Based on the

10 facilitator's nod, I will move to slide six. This

11 discussion will go on a little farther now because

12 harkening back to the five step approach that I just

13 discussed, but these four bullets on slide six apply

14 to several different options of approaches we could

15 use.

16 The first bullet point is the role of

17 manufacturers/ARI and other stakeholders in providing

18 data and review. We'd like to know before we start

19 what that level of participation is going to be.

20 The second bullet point is the performance

21 modeling tools. I've listed -- there's three models

22 listed here, and then the fourth, which is just simply

23 called spread sheets, which is capturing engineering

24 expertise in a simpler way.

25 And I personally can't speak to either of

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1 The two companies that are present here 

2 today, two large unitary companies that are present 

3 here today and two others all own either exclusively 

4 or a major interest in a compressor manufacturer. 

5 I don't know anything about compressor 

6 pricing, but I'd be awful unhappy if I found out that 

7 we were paying the street price for the compressors 

8 that come out of a factory that we partially own. 

9 MR. KENDALL: Okay. Based on the 

10 facilitator's nod, I will move to slide six. This 

11 discussion will go on a little farther now because 

12 harkening back to the five step approach that I just 

13 discussed, but these four bullets on slide six apply 

14 to several different options of approaches we could 

15 use. 

16 The first bullet point is the role of 

17 manufacturers/ARI and other stakeholders in providing 

18 data and review. We'd like to know before we start 

19 what that level of participation is going to be. 

20 The second bullet point is the performance 

21 modeling tools. I've listed -- there's three models 

22 listed here, and then the fourth, which is just simply 

23 called spread sheets, which is capturing engineering 

24 expertise in a simpler way. 

25 And I personally can't speak to either of 

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1 these first three models. So if you have questions on

^^ ~2 those, there may be somebody in here who can answer

3 them, but that person won't be me.

4 The third bullet point I had mentioned

5 before, drawing from multiple sources of information,

6 how should we reconcile and integrate them. The point

7 I had skipped over from slide two is the integrating

8 them into a single set of cost efficiency data.

9 As Jim Crawford mentioned about going down

10 the same road we went before, that road was not only

11 a single road. It was two roads because we had two

12 sets of data to work with.

13 The department would like to make a

Q ~ 14 serious effort this time to have one set of data on

15 which the analysis will be based.

16 The fourth bullet point is what we

17 mentioned before. How should the department consider

18 improvements that impact part load efficiency, but not

19 EER, given that the standard would be based on EER?

20 But we're interested in seeing how that would affect

21 IPLV or other performance related parameters.

22 There's a question about how we should go

23 about doing that. So a lot of these questions are for

24 the team. The team will have to answer all of them,

*) ~25 and that holds true for any of the questions in this

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139 

1 these first three models. So if you have questions on 

2 those, there may be somebody in here who can answer 

3 them, but that person won't be me. 

4 The third bullet point I had mentioned 

5 before, drawing from multiple sources of information, 

6 how should we reconcile and integrate them. The point 

7 I had skipped over from slide two is the integrating 

8 them into a single set of cost efficiency data. 

9 As Jim Crawford mentioned about going down 

10 the same road we went before, that road was not only 

11 a single road. It was two roads because we had two 

12 sets of data to work with. 

13 The department would like to make a 

14 serious effort this time to have one set of data on 

15 which the analysis will be based. 

16 The fourth bullet point is what we 

17 mentioned before. How should the department consider 

18 improvements that impact part load efficiency, but not 

19 EER, given that the standard would be based on EER? 

20 But we're interested in seeing how that would affect 

21 IPLV or other performance related parameters. 

22 There's a question about how we should go 

23 about doing that. So a lot of these questions are for 

24 the team. The team will have to answer all of them, 

25 and that holds true for any of the questions in this 

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1 packet, and your input is welcome and encouraged on

g* 2 all of them as well.

3 MR. CRAWFORD: Jim Crawford.

4 Relative to models, and this is another

5 area where I'm not an expert, however, I believe that

6 both the first two models and probably all three of

7 them are more than a little bit dated. I'm not aware

8 of any intensive level of effort at Oak Ridge or the

9 NIST in the last shall we say ten, 15 years, or is it

10 20 years?

11 And that being the case, I would suspect

12 that they are, in fact, not very good contemporary

13 models. They were excellent models. they were

14 outstanding models. They were the platform on which

15 industry built their own models many, many years ago

16 and which we continue to refine, and I don't think

17 they're doing that.

18 MR. KENDALL: Okay.

19 MR.-RABA: Keep going.

20 MR. KENDALL: All right. Slide seven is,

21 I believe, the last slide in this presentation. Now

22 we move out of the world of cost into the world of

23 price. This is always a lively discussion.

24 Live-cycle cost analysis takes as an input

25 not the cost of the product, but the price of the

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1 packet, and your input is welcome and encouraged on 

2 all of them as well. 

3 MR. CRAWFORD: Jim Crawford. 

4 Relative to models, and this is another 

5 area where I'm not an expert, however, I believe that 

6 both the first two models and probably all three of 

7 them are more than a little bit dated. I'm not aware 

8 of any intensive level of effort at Oak Ridge or the 

9 NIST in the last shall we say ten, 15 years, or is it 

10 20 years? 

11 And that being the case, I would suspect 

12 that they are, in fact, not very good contemporary 

13 models. They were excellent models. they were 

14 outstanding models. They were the platform on which 

15 industry built their own models many, many years ago 

16 and which we continue to refine, and I don't think 

17 they're doing that. 

18 MR. KENDALL: Okay. 

19 MR.·RABA: Keep going. 

20 MR. KENDALL: All right. Slide seven is, 

21 I believe, the last slide in this presentation. Now 

22 we move out of the world of cost into the world of 

23 price. This is always a lively discussion. 

24 Li ve - cycle cost analysis takes as an input 

25 not the cost of the product, but the price of the 

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1 product, and since for other reasons we will have done

2 a lot of work to determine the cost of the product,

3 this slide tries to explain how we have in the past

4 related that to the price of the product.

5 There are other ways of doing it that we

6 can also discuss. Most of this is related to the

7 mark-up approach whereby we apply mark-ups to the

8 manufacturer's cost. We track the product through the

9 different channels of distribution and apply mark-ups

10 at each stage based on information that we get from

11 public reports 'or surveys or a number of different

12 sources.

13 And at the end we would get then a marked

14 up cost, which would equate to the price that the

15 purchaser pays for that piece of equipment with some

16 range of uncertainty associated with that.

17 The alternate method of identifying prices

18 has been surveys of existing prices or products.

19 These products that are sold as systems, like air

20 conditioners, furnaces, are more difficult to

21 determine the price through a survey than for products

22 like, say, residential clothes washers, which are sold

23 through Sears.

24 So these issues we struggle with every

25 time. Mark-ups that exist today may not exist in the

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141 

1 product, and since for other reasons we will have done 

2 a lot of work to determine the cost of the product, 

3 this slide tries to explain how we have in the past 

4 related that to the price of the product. 

5 There are other ways of doing it that we 

6 can also discuss. Most of this is related to the 

7 mark-up approach whereby we apply mark-ups to the 

8 manufacturer's cost. We track the product through the 

9 different channels of distribution and apply mark-ups 

10 at ~ach stage based on information that we get from 

11 public reports 'or surveys or a number of different 

12 sources. 

13 And at the end we would get then a marked 

14 up 'cost, which would equate to the price that the 

15 purchaser pays for that piece of equipment with some 

16 range of uncertainty associated with that. 

17 The alternate method of identifying prices 

18 has been surveys of existing prices or products. 

19 These products' that are sold as systems, like air 

20 conditioners, furnaces, are more difficult to 

21 determine the price through a survey than for products 

22 like, say, residential clothes washers, which are sold 

23 through Sears. 

24 So these issues we struggle with every 

25 time. Mark-ups that exist today may not exist ln the 

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1 same way in the future under more stringent standards.

2 So we have to be aware of that as well.

3 Harking back to my first presentation this

4 morning when I asked are there any pending changes in

5 the market, one of the things that an answer of yes to

6 that question could lead to is the difference in the

7 way we estimate prices for this analysis.

8 So I sort of captured all of the bullet

9 points in those'comments. I guess at this point I'd

10 ask for your comments in return.

11 MR. CRAWFORD: Jim Crawford.

12 On the second bullet, in the most recent

13 exercise in this industry you significantly

14 underestimated the mark-ups. When that was brought to

15 your attention you further reduced them. That did not

16 lay a good foundation for us to be very comfortable

17 with mark-ups as a tool to be used this time around.

18 MR. KENDALL: Hopefully, I don't know if

19 tomorrow this topic will come up, but I do want to

20 state that I don't believe that a lot of people

21 understood what we did with mark-ups in that analysis,

22 and it would be worthwhile to review the technical

23 literature that went behind the mark-ups there, and I

24 think you'll see that we weren't, as you characterize,

*W ~ 25 far off from what you think the real result is.

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142 

1 same way in the future under more stringent standards. 

2 So we have to be aware of that as well. 

3 Harking back to my first presentation this 

4 morning when I asked are there any pending changes in 

5 the market, one of the things that an answer of yes to 

6 that question could lead to is the difference in the 

7 way we estimate prices for this analysis. 

8 So I sort of captured all of the bullet 

9 points in those' comments. I guess at this point I'd 

10 ask for your comments in return. 

11 MR. CRAWFORD: Jim Crawford. 

12 On the second bullet, in the most recent 

13 exercise in this industry you significantly 

14 underestimated the mark-Ups. When that was brought to 

15 your attention you further reduced them. That did not 

16 lay a good foundation for us to be very comfortable 

17 with mark-ups as a tool to be used this time around. 

18 MR. KENDALL: Hopefully, I don't know if 

19 tomorrow this topic will come up, but I do want to 

20 state that I don' t believe that a lot of people 

21 understood what we did with mark-ups in that analysis, 

I 22 and it would be worthwhile to review the technical 

23 literature that went behind the mark-Ups there, and I 

24 think you'll see that we weren' t, as you characterize, 

25 far off from what you think the real result is. 

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1 We might have presented it in a way that

^*h. 2 was not easy to understand, and as you first looked at

3 it, you would misunderstand totally what we did.

4 MR. CRAWFORD: If you were saying that you

5 were grossly inept at putting together the story that

6 was published in the Federal Register, I can't

7 disagree with you.

8 (Laughter.)

9 MR. CRAWFORD: But if you're saying that

10 I can't multiply three numbers together and figure out

11 what the product of three numbers is that are

12 published in the Federal Register, I would be inclined

13 to take exception with that.

14 MR. KENDALL: Okay. This time around you

15 are very welcomed and encouraged to provide

16 information to the department at an early stage of the

17 analysis so that that can be considered and

18 incorporated.

19 MR. CRAWFORD: We did, and you reduced the

20 mark-ups.

21 MR. RABA: Your comments are noted for the

22 record. Thank you, Jim.

23 Does this conclude the presentation?

24 MR. KENDALL: A question.

Q ~25 MR. RABA: Oh, I'm sorry. I didn't see

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143 

1 We might have presented it in a way that 

2 was not easy to understand, and as you first looked at 

3 it, you would misunderstand totally what we did. 

4 MR. CRAWFORD: If you were saying that you 

5 were grossly inept at putting together the story that 

6 was published In the Federal Register, I can't 

7 disagree with you. 

8 (Laughter.) 

9 MR. CRAWFORD: But if you're saying that 

10 I can't multiply three numbers together and figure out 

11 what the product of three numbers is that are 

12 published in the Federal Register, I would be inclined 

13 to take exception with that. 

14 MR. KENDALL: Okay. This time around you 

15 are very welcomed and encouraged to provide 

16 information to the department at an early stage of the 

17 analysis so that that can be considered and 

18 incorporated. 

19 MR. CRAWFORD: We did, and you reduced the 

20 mark-ups. 

21 MR. RABA: Your comments are noted for the 

22 record. Thank you, Jim. 

23 

24 

25 

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Does this conclude the presentation? 

MR. KENDALL: A question. 

MR. RABA: Oh, I'm sorry. 

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144

1 you back there. Go ahead.

2 MR. SACKS: Harvey Sacks, ACEEE.

3 I don't have very many answers. I would

4 have a couple of questions.

5 One, as you're thinking about mark-up

6 analysis for higher efficiency equipment under a

7 standards environment, the appropriate multiplier,

8 oddly enough, would be as a ceiling, the installation,

9 the mark-ups, I mean, the price mark-ups for base

10 level equipment today, not for the premium

11 differentiated product because that's where the

12 competition is the greatest.

13 I say I think it's the ceiling because I

14 would expect the manufacturers to continue and the

15 installers to continue looking for ways to be more

16 productive in the most competitive sector with their

17 installation.

18 MR. RABA: Charlie Stephens.

19 MR. STEPHENS: Charlie Stephens.

20 Along those same lines, I think earlier

21 rulemakings -- I'll use an example that doesn't

22 involve this industry just so that we don't have any

23 further argument over it -- but we actually have some

24 markets that are relatively mature for some products,

25 and when we see manufacturer costs, the derivation of

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144 

1 you back there. Go ahead. 

2 MR. SACKS: Harvey Sacks, ACEEE. 

3 I don't have very many answers. I would 

4 have a couple of questions. 

5 One, as you're thinking about mark-up 

6 analysis for higher efficiency equipment under a 

7 standards environment, the appropriate multiplier, 

8 oddly enough, would be as a ceiling, the installation, 

9 the mark-ups, I mean, the price mark-ups for base 

10 level equipment today, not for the premium 

11 differentiated product because that's where the 

12 competition is the greatest. 

13 I say I think it's the ceiling because I 

14 would expect the manufacturers to continue and the 

15 installers to continue looking for ways to be more 

16 productive in the most competitive sector with their 

17 installation. 

18 MR. RABA: Charlie Stephens. 

19 MR. STEPHENS: Charlie Stephens. 

20 Along those same lines, I think earlier 

21 rulemakings I'll use an example that doesn't 

22 involve this industry just so that we don't have any 

23 further argument over it -- but we actually have some 

24 markets that are relatively mature for some products, 

25 and when we see manufacturer costs, the derivation of 

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1 which we're unfamiliar with, on the table and we see

2 them pretty much equal to retail price in our market,

3 we know that something is a little off, and we tend to

4 trust the retail market prices in a market that's

5 semi-mature.

6 And to the extent that we have those, I

7 think you're always going to have some argument. If

8 I see manufacturer costs that look like retail prices,

9 I'm not going to believe that nobody between the

10 manufacturer and the consumer is making any money.

11 MR. RABA: Another comment? Ted.

12 MR. DOYLE: Ted Doyle.

13 Was there any differentiation as far as

14 installation cost as to new installation, as to

15 retrofit or replacement of which probably 75 percent

16 of this market is?

17 MR. KENDALL: Rather than speaking in the

18 past tense, let's talk about what we plan to do.

19 (Laughter.)

20 MR. KENDALL: At this point, we have not

21 made any decisions along those lines, and if there are

22 significant differences between the installation cost

23 of new construction versus retrofit replacement, then

24 we would try to capture those.

25 MR. DOYLE: Yeah, I think the point to be

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145 

1 which we're unfamiliar with, on the table and we see 

2 them pretty much equal to retail price in our market, 

3 we know that something is a little off, and we tend to 

4 trust the retail market prices in a market that's 

5 semi-mature. 

6 And to the extent that we have those, I 

7 think you're always going to have some argument. If 

8 I see manufacturer costs that look like retail prices, 

9 I'm not going to believe that nobody between the 

10 manufacturer and the consumer is making any money. 

11 MR. RABA: Another comment? Ted. 

12 MR. DOYLE: Ted Doyle. 

13 Was there any differentiation as far as 

14 installation cost as to new installation, as to 

15 retrofit or replacement of which probably 75 percent 

16 of this market is? 

17 MR. KENDALL: Rather than speaking in the 

18 past tense, let's talk about what we plan to do. 

19 (Laughter. ) 

20 MR. KENDALL: At this point, we have not 

21 made any decisions along those lines, and if there are 

22 significant differences between the installation cost 

23 of new construction versus retrofit replacement, then 

24 we would try to capture those. 

25 

(202) 234-4433 

MR. DOYLE: Yeah, I think the point to be 

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1 made now, as 90.1 is adopted by these other states,

2 that it also considers the duct system and the

3 efficiency of that, where in some of our -- 80 percent

4 of our installations might be tying into, you know, a

5 1960s duct system, and you know, how much of that

6 energy is being lost in a wall cavity somewhere.

7 MR. RABA: Anyone else? That's it?

8 MR. CRAWFORD: Jim Crawford.

9 MR. RABA: One more. Jim, go ahead.

10 MR. CRAWFORD: To the last point raised,

11 we need to focus more on the effect of efficiency

12 level on the installation cost than we do on the type

13 of installation because whether it's new construction

14 or old construction, if we're talking about putting in

15 Level X versus Level Y, that's what we've got to look

16 at in either case. The numbers may be different in

17 the two cases, but that's the only way in which you'd

18 have to look at it, but it's installation cost versus

19 efficiency is the first thing you've got to look at.

20 MR. DOYLE: Yeah, I was just suggesting

21 the weight.

22 MR. RABA: And that was Ted Doyle.

23 Karim.

24 MR. AMRANE: This is Karim Amrane.

25 I would like to second what Jim just said.

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1 made now, as 90.1 is adopted by these other states, 

2 that it also considers the duct system and the 

3 efficiency of that, where in some of our -- 80 percent 

4 of our installations might be tying into, you know, a 

5 1960s duct system, and you know, how much of that 

6 energy is being lost in a wall cavity somewhere. 

7 MR. RABA: Anyone else? That's it? 

8 MR. CRAWFORD: Jim Crawford. 

9 MR. RABA: One more. Jim, go ahead. 

10 MR. CRAWFORD: To the last point raised, 

11 we need to focus more on the effect of efficiency 

12 level on the installation cost than we do on the type 

13 of installation because whether it's new construction 

14 or old construction, if we're talking about putting in 

15 Level X versus Level Y, that's what we've got to look 

16 at in either case. The numbers may be different in 

17 the two cases, but that's the only way in which you'd 

18 have to look at it, but it's installation cost versus 

19 efficiency is the first thing you've got to look at. 

20 

21 the weight. 

22 

23 

24 

25 

(202) 234-4433 

MR. DOYLE: Yeah, I was just suggesting 

MR.' RABA: And that was Ted Doyle. 

Karim. 

MR. AMRANE: This is Karim Amrane. 

I would like to second what Jim just said. 

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1 I mean, the residential analysis, for example, that

2 was not in the calculation. Installation cost was

3 almost identical with the NCO (phonetic).

4 MR. RABA: Did you get all of that?

5 THE REPORTER: No.

6 MR. RABA: We have a microphone problem.

7 Could you just restate that, please? Try that one.

8 MR. AMRANE: I said that I think

9 efficiency should be taken into consideration when you

10 -- with installation cost. That varies

11 simultaneously. I mean, you cannot assume a constant

12 installation cost for different issues.

13 MR. RABA: Much better. Thank you.

14 MR. CRAWFORD: Just to come back to the

15 question of new versus replacement, where that

16 probably plays the greatest role is in whether or not

17 you can stick this new piece of equipment on the

18 existing curve, and if you have to start tearing up

19 the roof and making a larger curve and perhaps saying,

20 "Gee, this thing also weighs 30 percent more," then

21 maybe I've got to do additional bracing in the roof

22 trusses.

23 That may bear more on the question of

24 feasibility for a decision factor rather than the

O 25 price differential. The price differential will be

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1 I mean, the residential analysis, for example, that 

2 was not in the calculation. Installation cost was 

3 almost identical with the NCO (phonetic). 

4 MR.' RABA: Did you get all of that? 

5 THE REPORTER: No. 

6 MR. RABA: We have a microphone problem. 

7 Could you just restate that, please? Try that one. 

8 MR. AMRANE: I said that I think 

9 efficiency should be taken into consideration when you 

10 with installation cost. That varies 

11 simultaneously. I mean, you cannot assume a constant 

12 installation cost for different issues. 

13 MR. RABA: Much better. Thank you. 

14 MR. CRAWFORD: Just to corne back to the 

15 question of new versus replacement, where that 

16 probably plays the greatest role is in whether or not 

17 you can stick this new piece of equipment on the 

18 existing curve, and if you have to start tearing up 

19 the roof and making a larger curve and perhaps saying, 

20 11 Gee, this thing also weighs 30 percent more, 11 then 

21 maybe I've got to do additional bracing in the roof 

22 trusses. 

23 That may bear more on the question of 

24 feasibility for a decision factor rather than the 

25 price differential. The price differential will be 

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1 there, but it's the feasibility that may be the

2 determining factor.

3 MR. RAY: Mike Ray with Trane.

4 One point that we're focusing our efforts

5 on packaged units here or it appears that packaged

6 units are the major focus of our discussion. I want

7 to point out and emphasize that we cannot ignore the

8 commercial split systems as well, and in addition,

9 there's some other niche markets. I believe there are

10 some other markets that I believe the gentleman from

11 Mestek has as well.

12 As we go through this process, we can't

13 ignore those products, and I think in the residential

14 rulemaking we did ignore the packaged products in the

15 process. This time, since split systems are an

16 important piece of the market, we can't ignore the

17 split systems there, and we need to do due diligence

18 of reviewing those products as well.

19 MR. RABA: Thank you.

20 Final thoughts for now?

21 Thank you very much, Mark. A very

22 interesting discussion this morning, a lot of good

23 issues brought up on the table that we need to

24 consider throughout the process and expect more input

25 from each person in the written comments as well.

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1 there, but it's the feasibility that may be the 

2 determining factor. 

3 MR. RAY: Mike Ray with Trane. 

4 One point that we're focusing our efforts 

5 on packaged units here or it appears that packaged 

6 units are the major focus of our discussion. I want 

7 to point out and emphasize that we cannot ignore the 

8 commercial split systems as well, and in addition, 

9 there's some other niche markets. I believe there are 

10 some other markets that I believe the gentleman from 

11 Mestek has as well. 

12 As we go through this process, we can't 

13 ignore those products, and I think in the residential 

14 rulemaking we did ignore the packaged products in the 

15 process. This time, since split systems are an 

16 important piece of the market, we can't ignore the 

17 split systems there, and we need to do due diligence 

18 of reviewing those products as well. 

19 MR. RABA: Thank you. 

20 Final thoughts for now? 

21 Thank you very much, Mark. A very 

22 interesting discussion this morning, a lot of good 

23 issues brought up on the table that we need to 

24 consider throughout the process and expect more input 

25 from each person in the written comments as well. 

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1 I'm certain the department looks forward

2 to your written comments. Any facts and data, I would

3 invite you -- entertain that we probably break for

4 lunch at this time, and then come back, say, at 1:30.

5 Is that too long? Do you want to make it shorter?

6 PARTICIPANT: Tell us where the big hand

7 will be.

8 (Laughter.)

9 MR. RABA: The big hand on the six.

10 Well, we'll start promptly at 1:30, if you

11 would, please.

12 Thank you very much. We made some good

13 progress.

14 (Whereupon, at 12:47 p.m., the meeting was

15 recessed for lunch, to reconvene at 1:30 p.m., the

16 same day.)

17

18

19

20

21

22

23

24

25

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1 I'm certain the department looks forward 

2 to your written comments. Any facts and data, I would 

3 invite you -- entertain that we probably break for 

4 lunch at this time, and then come back, say, at 1:30. 

5 Is that too long? Do you want to make it shorter? 

6 PARTICIPANT: Tell us where the big hand 

7 will be. 

8 (Laughter.) 

9 MR. RABA: The big hand on the six. 

10 Well, we'll start promptly at 1: 30, if you 

11 would, please. 

12 Thank you very much. We made some good 

13 progress. 

14 (Whereupon, at 12: 47 p. m., the meeting was 

15 recessed for lunch, to reconvene at 1:30 p.m., the 

16 same day.) 

17 

18 

19 

20 

21 

22 

23 

24 

25 

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1 A-F-T-E-R-N-O-O-N S-E-S-S-I-O-N

2 (1:46 p.m.)

3 MR. RABA: It looks like we're all back

4 again. We'll pick up where we left off this morning

5 and get started again for the afternoon session.

6 A couple of things to mention. There's a

7 list of attendees at the back desk there, the check-in

8 desk. So if you want to know who your colleagues are,

9 you might want to pick that up and take a look at

10 that.

11 Also, you will find a blue sheet and

12 evaluation form for this public workshop today. We

13 request that you fill these out before you leave and

14 just drop them off with Debbie at the desk on the way

15 out.

16 One other item, too. We've been having

17 some difficulty with some of the microphones and beg

18 your indulgence to make the effort to lean a little

19 farther forward, speak a little more loudly, enunciate

20 more clearly just a bit for our court reporter so when

21 you purchase a transcript you get your money's worth.

22 We had quite a lively discussion this

23 morning. Indeed, I didn't realize the framework

24 document process was going to be that way, and

25 certainly this is a good start. I think there's been

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1 A-F-T-E-R-N-O-O-N S-E-S-S-I-O-N 

2 (1:46 p.m.) 

3 MR. RABA: It looks like we're all back 

4 again. We'll pick up where we left off this morning 

5 and get started again for the afternoon session. 

6 A couple of things to mention. There's a 

7 list of attendees at the back desk there, the check-in 

8 desk. So if you want to know who your colleagues are, 

9 you might want to pick that up and take a look at 

10 that. 

11 Also, you will find a blue sheet and 

12 evaluation form for this public workshop today. We 

13 request that you fill these out before you leave and 

14 just drop them off with Debbie at the desk on the way 

15 out. 

16 One other item, too. We've been having 

17 some difficulty with some of the microphones and beg 

18 your indulgence to make the effort to lean a little 

19 farther forward, speak a little more loudly, enunciate 

20 more clearly just a bit for our court reporter so when 

21 you purchase a transcript you get your money's worth. 

22 We had quite a lively discussion this 

23 morning. Indeed, I didn't realize the framework 

24 document process was going to be that way, and 

25 certainly this is a good start. I think there's been 

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1 a lot of good issues raised, and we need to keep our

is^ 2 sensitivity toward that as we go into this afternoon's

3 session, that the department is, of course, exploring

4 your ideas.

5 We want to receive them for the record so

6 that we can be sure all of your comments and issues

7 are addressed throughout this whole process. It kind

8 of gives the department guidance as to the thinking,

9 and certainly written comments are most welcome after

10 all is said and done here today.

11 I believe it was the 30th, was it? What

12 was the date for comments?

13 PARTICIPANT: November 1st.

14 MR. RABA: November 1st. Sorry. November

15 1st was the deadline for written comments also.

16 We're going to pick up this afternoon with

17 David Winiarski of Pacific Northwest National

18 Laboratories. He will continue with the

19 presentations, this time building energy use and

20 electric load shape characterization.

21 To our callers on the phone, would you

22 just kind of let us know you're there? Elizabeth, I

23 think you're there.

24 DR. GOLDSTEIN: David Goldstein is here.

25 MR. RABA: David Goldstein.

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151 

1 a lot of good issues raised, and we need to keep our 

2 sensitivity toward that as we go into this afternoon's 

3 session, that the department is, of course, exploring 

4 your ideas. 

5 We want to receive them for the record so 

6 that we can be sure all of your comments and issues 

7 are addressed throughout this whole process. It kind 

8 of gives the department guidance as to the thinking, 

9 and certainly written comments are most welcome after 

10 all is said and done here today. 

11 I believe it was the 30th, was it? What 

12 was the date for comments? 

13 PARTICIPANT: November 1st. 

14 MR. RABA: November 1st. Sorry. November 

15 1st was the deadline for written comments also. 

16 We're going to pick up this afternoon with 

17 David Winiarski of Pacific Northwest National 

18 Laboratories. He will continue with the 

19 presentations, this time building energy use and 

20 electric load shape characterization. 

21 To our callers on the phone, would you 

22 just kind of let us know you're there? Elizabeth, I 

23 think you're there. 

24 

25 

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DR. GOLDSTEIN: David Goldstein is here. 

MR. RABA: David Goldstein. 

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1 PARTICIPANT: This is Maya

2 (unintelligible) for Energy Efficiency.

3 MR. RABA: Thank you.

4 Is Hung Pham there also?

5 (No response.)

6 MR. RABA: Perhaps he'll call in in just

7 a bit. Welcome back, all.

8 DR. GOLDSTEIN: Thank you.

9 MR. RABA: Proceed, David.

10 MR. WINIARSKI: Is that working? Okay.

11 All right. Is that better?

12 MR. RABA: There you go.

13 MR. WINIARSKI: For this part of the

14 presentation I'd like to talk a little bit about

15 building energy use and electric load shape

16 characterization. For this analysis, one of the

17 complicating issues is that these products are used in

18 a wide variety of commercial buildings, and they're

19 used basically anywhere in the U.S. So there's a lot

20 of climate variation in loads. There's a lot of

21 variation in internal loads, and there's some other

22 complicating factors that deal with how the equipment

23 is generally interfaced with the rest of the building

24 mechanical system.

25 So what I'd like to talk about is quickly

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1 PARTICIPANT: This is Maya 

2 (unintelligible) for Energy Efficiency. 

3 MR. RABA: Thank you. 

4 Is Hung Pham there also? 

5 (No response.) 

6 MR. RABA: Perhaps he'll call ln in just 

7 a bit. Welcome back, all. 

8 DR. GOLDSTEIN: Thank you. 

9 MR. RABA: Proceed, David. 

10 MR. WINIARSKI: Is that working? Okay. 

11 All right. Is that better? 

12 MR. RABA: There you go. 

13 MR. WINIARSKI: For this part of the 

14 presentation I' d like to talk a little bit about 

15 building energy use and electric load shape 

16 characterization. For this analysis, one of the 

17 complicating issues is that these products are used in 

18 a wide variety of commercial buildings, and they're 

19 used basically anywhere in the u.S. So there's a lot 

20 of climate variation in loads. There's a lot of 

21 variation in internal loads, and there's some other 

22 complicating factors that deal with how the equipment 

23 is generally interfaced with the rest of the building 

24 mechanical system. 

25 So what I'd like to talk about is quickly 

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1 what's sort of the process that we're envisioning for

*te ~ 2 carrying out this analysis both of the thermal loads

3 that are being presented to the equipment, and after

4 that, the energy use that the equipment presents, and

5 also another aspect that we need to touch on here is

6 what's going to be the impact in terms of the electric

7 load the building presents and the effect on building

8 demand and energy use because of that.

9 Again, the basic purpose is to analyze the

10 building energy use and characterize the load shapes

11 that are faced by this equipment at different

12 efficiency levels.

13 We also need to analyze the entire

14 building electric load shape, characterize the effect

15 of peak demand obviously in commercial buildings. The

16 different rate schedules tend to be heavily influenced

17 by the effect of energy or peak demand on billed

18 electric cost.

19 And, again, we have to cover different

20 buildings and climates.

21 To start off with, basically there's three

22 steps in the analysis. One is a characterization of

23 the building stock that would typically use this

24 equipment. Possible data sources for that are shown

25 here.

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153 

1 what's sort of the process that we're envisioning for 

2 carrying out this analysis both of the thermal loads 

3 that are being presented to the equipment, and after 

4 that, the energy use that the equipment presents, and 

5 also another aspect that we need to touch on here is 

6 what's going to be the impact in terms of the electric 

7 load the building presents and the effect on building 

8 demand and energy use because of that. 

9 Again, the basic purpose is to analyze the 

10 building energy use and characterize the load shapes 

11 that are faced by this equipment at different 

12 efficiency levels. 

13 We also need to analyze the entire 

14 building electric load shape, characterize the effect 

15 of peak demand obviously in commercial buildings. The 

16 different rate schedules tend to be heavily influenced 

17 by the effect of energy or peak demand on billed 

18 electric cost. 

19 And, again, we have to cover different 

20 buildings and climates. 

21 To start off with, basically there's three 

22 steps in the analysis. One is a characterization of 

23 the building stock that would typically use this 

24 equipment. 

25 here. 

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1 DOE Energy Information Agency's CBECS,

2 commercial building energy consumption survey, is

3 obviously going to be a key data source for a

4 characterization of the building stock.

5 Another possible data source is the MAISY

6 data set that's compiled by Jerry Jackson &

7 Associates. That's a commercially available product,

8 I think, primarily marketed toward utilities, but we

9 can think of that as an attempt to extend the CBECS

10 data set to a wider variety of building types and also

11 collect more information in that data set.

12 Finally, there is other data that we might

13 collect from utility surveys or industry shipment

14 information that might characterize where different

15 types of equipment go.

16 To that, I might add, we would rely as

17 much as possible on both comments submitted in the

18 record here, as well as characterizations that may

19 come out of discussions with consultants on how

20 equipment is used in buildings.

21 Once we've characterized the building

22 stock, the next step here is to somehow characterize

23 the energy use, well, actually the thermal loads

24 first, and then the energy use of equipment. We would

25 likely do that through the use of different building

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154 

1 DOE Energy Information Agency's CBECS, 

2 commercial building energy consumption survey, is 

3 obviously going to be a key data source for a 

4 characterization of the building stock. 

5 Another possible data source is the MArSY 

6 data set that's compiled by Jerry Jackson & 

7 Associates. That's a commercially available product, 

8 I think, primarily marketed toward utilities, but we 

9 can think of that as an attempt to extend the CBECS 

10 data set to a wider variety of building types and also 

11 collect more information in that data set. 

12 Finally, there is other data that we might 

13 collect from utility surveys or industry shipment 

14 information that might characterize where different 

15 types of equipment go. 

16 To that, I might add, we would rely as 

17 much as possible on both comments submitted in the 

l8 record here, as well as characterizations that may 

19 come out of discussions with consultants on how 

20 equipment is used in buildings. 

21 Once we've characterized the building 

22 stock, the next step here is to somehow characterize 

23 the energy use, well, actually the thermal loads 

24 first, and then the energy use of equipment. We would 

25 likely do that through the use of different building 

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1 simulation models.

2 I presented here three possible tools that

3 could be used. One is the BLAST software energy

4 analysis tool. It stands for building loads and

5 system thermodynamics. It's a tool that was developed

6 by the U.S. Army's Construction Engineering Research

7 Laboratory and has been primarily supported by DOE for

8 the last, I suppose, about ten years.

9 Another tool that people might be more

10 familiar with is the DOE2 energy analysis tool that

11 was developed, I believe, originally by LB&L and has

12 probably a wider commercial use of these tools.

13 And a third possible tool is DOE's new

14 Energy Plus software, which is really an attempt to

15 merge these two tools as well as add some new

16 capabilities.

17 We haven't made any formal decisions on

18 which of those tools that we might use for this

19 analysis. We welcome any input that we can get from

20 stakeholders.

21 After we've done the analysis of specific

22 buildings, we're going to develop a set of equipment

23 load profiles and whole building demand profiles that

24 will get fed further on into the life cycle cost

25 analysis for these equipment.

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1 simulation models. 

2 I presented here three possible tools that 

3 could be used. One is the BLAST software energy 

4 analysis tool. It stands for building loads and 

5 system thermodynamics. It's a tool that was developed 

6 by the U.S. Army's Construction Engineering Research 

7 Laboratory and has been primarily supported by DOE for 

8 the last, I suppose, about ten years. 

9 Another tool that people might be more 

10 familiar with is the DOE2 energy analysis tool that 

11 was developed, I believe, originally by LB&L and has 

12 probably a wider commercial use of these tools. 

13 And a third possible tool is DOE's new 

14 Energy Plus software, which is really an attempt to 

15 merge these two tools as well as add some new 

16 capabilities. 

17 We haven't made any formal decisions on 

18 which of those tools that we might use for this 

19 analysis. We welcome any input that we can get from 

20 stakeholders. 

21 After we've done the analysis of specific 

22 buildings, we're going to develop a set of equipment 

23 load profiles and whole building demand profiles that 

24 will get fed further on into the life cycle cost 

25 analysis for these equipment. 

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1 Briefly, the department would like to get

2 any stakeholder input on the tools that I've discussed

3 here or on other tools that might be made available or

4 on data sources that might be made available that

5 could help us proceed with this effort, and hopefully

6 we would be able to, after we leave this meeting, go

7 further into the analysis, share sort of what we

8 believe is the characterization of the existing use of

9 the equipment out with stakeholders for their review.

10 MR. MULLEN: Jim Mullen. Excuse me.

11 MR. WINIARSKI: Yeah.

12 MR. MULLEN: David, as you project forward

13 on equipment efficiency, it's easy to understand how

14 you handle that. How do you handle the varying

15 building loads, that the existing inventory of

16 buildings has some heat loss which may be as well

17 known from utility records, but how do you project

18 what the future brings for the building load, which

19 ought to be decreasing with new construction and

20 upgrades, whatever?

21 MR. WINIARSKI: I'll talk about that in a

22 second here. I've got a couple slides. The next

23 couple of slides really address some of what we

24 thought were some of the more important issues as how

25 you do that. But it's a real challenge.

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1 Briefly, the department would like to get 

2 any stakeholder input on the tools that I've discussed 

3 here or on other tools that might be made available or 

4 on data sources that might be made available that 

5 could help us proceed with this effort, and hopefully 

6 we would be able to, after we leave this meeting, go 

7 further into the analysis, share sort of what we 

8 believe is the characterization of the existing use of 

9 the equipment out with stakeholders for their review. 

10 MR. MULLEN: Jim Mullen. Excuse me. 

11 MR. WINIARSKI: Yeah. 

12 MR. MULLEN: David, as you proj ect forward 

13 on equipment efficiency, it's easy to understand how 

14 you handle that. How do you handle the varying 

15 building loads, that the existing inventory of 

16 buildings has some heat loss which may be as well 

17 known from utility records, but how do you project 

18 what the future brings for the building load, which 

19 ought to be decreasing with new construction and 

20 upgrades, whatever? 

21 MR. WINIARSKI: I'll talk about that in a 

22 second here. I've got a couple slides. The next 

23 couple of slides really address some of what we 

24 thought were some of the more important issues as how 

25 you do that. But it's a real challenge. 

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1 One option is you assert that new building

^^ ~2 or that existing building construction can be

3 characterized by these existing building data sets,

4 and that new building construction is characterized

5 partly by forward looking building codes, for

6 instance, and in states that don't have building

7 codes, we may have to make some strong assumptions as

8 to what we think it will look like, and we'd welcome

9 any feedback or ideas on how to do that.

10 MR. DOYLE: One question.

11 MR. WINIARSKI: Yeah.

12 MR. DOYLE: You've got a number of sources

13 there and some as old as ten years old, and I don't

14 know what the accuracy of those ways would be, but is

15 there any -- are you planning on doing any actual case

16 studies that would, you know -- an actual building,

17 going to look at it and see how that compares with

18 your, you know, computer generated data.

19 MR. RABA: That was Ted Doyle from Mestek.

20 MR. WINIARSKI: In general, probably not.

21 We might use some specific examples. As we have real

22 building data, we may try to examine how the loads

23 that we generate compare with whole building energy

24 consumption loads that are recorded in, for instance,

Is* 25 the bills that people who participate in this CBECS

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l57 

1 One option is you assert that new building 

2 or that existing building construction can be 

3 characterized by these existing building data sets, 

4 and that new building construction is characterized 

5 partly by forward looking building codes, for 

6 instance, and in states that don't have building 

7 codes, we may have to make some strong assumptions as 

8 to what we think it will look like, and we'd welcome 

9 any feedback or ideas on how to do that. 

10 MR. DOYLE: One question. 

II MR. WINIARSKI: Yeah. 

12 MR. DOYLE: You've got a number of sources 

13 there and some as old as ten years old, and I don't 

14 know what the accuracy of those ways would be, but is 

15 there any -- are you planning on doing any actual case 

16 studies that would, you know -- an actual building, 

l7 going to look at it and see how that compares with 

l8 your, you know, computer generated data. 

19 MR. RABA: That was Ted Doyle from Mestek. 

20 MR. WINIARSKI: In general, probably not. 

21 We might use some specific examples. As we have real 

22 building data, we may try to examine how the loads 

23 that we generate compare with whole building energy 

24 consumption loads that are recorded in, for instance, 

25 the bills that people who participate in this CBECS 

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1 survey actually produce. There are some options there

2 how to do it.

3 It's really hard to do, you know,

4 individual case studies unless you've got a whole

5 bunch of them and come back and say, yeah, these agree

6 or do not agree with our simulated results.

7 We would like to get, again, as much

8 feedback as possible where people can provide examples

9 of that.

10 MR. STOOPS: There are older data sets

11 that P&L (phonetic) has used in the past, the old LCAP

12 data sample. I personally did some --

13 MR. RABA: Would you get to the

14 microphone?

15 MR. STOOPS: I personally did some

16 metering here right in the Forrestal Building to

17 develop some profiles. We'll use those and apply

18 those as appropriate, but, again, those are old, you

19 know.

20 MR. WINIARSKI: Right.

21 MR. STOOPS: And to do empirical work is

22 just incredibly expensive. Now, if we had a great big

23 budget, I'd love to do the work, but I don't know that

24 that's going to be the reality.

25 MR. CRAWFORD: Jim Crawford.

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1 survey actually produce. There are some options there 

2 how to do it. 

3 It's really hard to do, you know, 

4 individual case studies unless you've got a whole 

5 bunch of them and come back and say, yeah, these agree 

6 or do not agree with our simulated results. 

7 We would like to get, again, as much 

8 feedback as possible where people can provide examples 

9 of that. 

10 MR. STOOPS: There are older data sets 

11 that P&L (phonetic) has used in the past I the old LCAP 

12 data sample. I personally did some --

13 MR. ·RABA: Would you get to the 

14 microphone? 

15 MR. STOOPS: I personally did some 

16 metering here right In the Forrestal Building to 

17 develop some profiles. We'll use those and apply 

18 those as appropriate, but, again, those are old, you 

19 know. 

20 MR. WINIARSKI: Right. 

21 MR. STOOPS: And to do empirical work is 

22 just incredibly expensive. Now, if we had a great big 

23 budget, I'd love to do the work, but I don't know that 

24 that's going to be the reality. 

25 

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1 I guess on case studies my observation in

O* ~ 2 this context is that the contributed value is somewhat

3 limited because if you haven't modeled this building

4 exactly, you probably modeled the one down the street,

5 and you know, we're still on a miles per gallon kind

6 of world here. What we're trying to do is define

7 what's the right threshold for a standard, and you

8 don't have to get into too many case studies to

9 address that sort of thing, I don't think.

10 One of the things you do need to do very

11 carefully is to define what you're going to use for

12 your peak environment, your peak external environment,

13 and what standards are you going to impose upon the

14 system for comfort level or whatever during peak

15 environment?

16 I live in a 97 degree design environment

17 location, and we had 113 degrees last year. If one

18 designed for 113 degrees, by some standards that would

19 be considered to be a severely oversized system. So

20 you need to articulate that up front, and that needs

21 to be a matter of discussion and hopefully consensus

22 in the group.

23 The third point I would make is if those

24 numbers are fairly high, then you need to come back to

25 the point that Jim Mullen has stressed two or three

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159 

1 I guess on case studies my observation in 

2 this context is that the contributed value is somewhat 

3 limited because if you haven't modeled this building 

4 exactly, you probably modeled the one down the street, 

5 and you know, we're still on a miles per gallon kind 

6 of world here. What we're trying to do is define 

7 what's the right threshold for a standard, and you 

8 don't have to get into too many case studies to 

9 address that sort of thing, I don't think. 

10 One of the things you do need to do very 

11 carefully is to define what you're going to use for 

12 your peak environment, your peak external environment, 

13 and what standards are you going to impose upon the 

14 system for comfort level or whatever during peak 

15 environment? 

16 I live in a 97 degree design environment 

17 location, and we had 113 degrees last year. If one 

18 designed for 113 degrees, by some standards that would 

19 be considered to be a severely oversized system. So 

20 you need to articulate that up front, and that needs 

21 to be a matter of discussion and hopefully consensus 

22 in the group. 

23 The third point I would make is if those 

24 numbers are fairly high, then you need to come back to 

25 the point that Jim Mullen has stressed two or three 

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1 times, and that's refrigerant. What happens in the

*) ~ 2 elevated temperatures is different with some of the

3 new refrigerants than it is with our 22 with respect

4 to capacity, with respect to load, what have you. The

5 performance is not the same.

6 MR. RABA: Thank you.

7 Don.

8 MR. BRUNDAGE: Don Brundage, Southern

9 Council.

10 Modeling of commercial buildings and

11 commercial load in total is something that's being

12 done countless times by countless people around the

13 country, and I would encourage you to if not buy

14 something from the RDIs of the world or whatever, be

15 very careful about using things like case studies in

16 talking about something like this because case studies

17 almost by definition are well engineered, well thought

18 out, efficient systems, which is not the norm in the

19 real world.

20 In the real world, people start with

21 safety margins, and then everyone every step of the

22 way adds more safety margins, and you end up with 50

23 percent too large a system because you make more money

24 on the commission that way, et cetera, et cetera.

25 And there's other assumptions to go in

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160 

1 times, and that's refrigerant. What happens in the 

2 elevated temperatures is different with some of the 

3 new refrigerants than it is with our 22 with respect 

4 to capacity, with respect to load, what have you. The 

5 performance is not the same. 

6 MR. RABA: Thank you. 

7 Don. 

8 MR. BRUNDAGE: Don Brundage, Southern 

9 Council. 

10 Modeling of commercial buildings and 

11 commercial load in total is something that's being 

12 done countless times by countless people around the 

13 country, and I would encourage you to if not buy 

14 something from the RDIs of the world or whatever, be 

15 very careful about using things like case studies in 

16 talking about something like this because case studies 

17 almost by definition are well engineered, well thought 

18 out, efficient systems, which is not the norm in the 

19 real world. 

20 In the real world, people start with 

21 safety margins, and then everyone every step of the 

22 way adds more safety margins, and you end up with 50 

23 percent too large a system because you make more money 

24 on the commission that way, et cetera, et cetera. 

25 

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And there's other assumptions to go in 

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1 there, like commercial building load is not really

2 decreasing in most of the states I've seen. It's

3 increasing because of increased plug load and computer

4 intensity.

5 You don't need to reinvent the wheel on

6 all of this. I would encourage you to try to see what

7 canned stuff there is from EIA or other forecasting

8 outfits that you can use. I think case studies and

9 trying to look at things like that is probably going

10 to lead you to a distorted answer.

11 Thank you.

12 MR. RABA: Thank you.

13 I saw Harvey Sacks' hand. Pass? Thank

14 you.

15 Thank you, Don.

16 MR. WINIARSKI: Thank you.

17 Although there's a whole bunch of

18 different modeling concerns here, I think there's

19 about four of them that really came out when we were

20 putting together the framework document that I wanted

21 to make sure we tried to address in this meeting or at

22 least bring up so that people could produce some

23 comments on.

24 The first of them I've listed here is how

25 do we deal with economized reusage in commercial

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161 

1 there, like commercial building load is not really 

2 decreasing in most of the states I've seen. It's 

3 increasing because of increased plug load and computer 

4 intensity. 

5 You don't need to reinvent the wheel on 

6 all of this. I would encourage you to try to see what 

7 canned stuff there is from EIA or other forecasting 

8 outfits that you can use. I think case studies and 

9 trying to look at things like that is probably going 

10 to lead you to a distorted answer. 

11 Thank you. 

12 MR. RABA: Thank you. 

13 I saw Harvey Sacks' hand. Pass? Thank 

14 you. 

15 Thank you, Don. 

16 MR. WINIARSKI: Thank you. 

17 Although there's a whole bunch of 

18 different modeling concerns here, I think there's 

19 about four of them that really came out when we were 

20 putting together the framework document that I wanted 

21 to make sure we tried to address in this meeting or at 

22 least bring up so that people could produce some 

23 comments on. 

24 The first of them I've listed here is how 

25 do we deal with economized reus age in commercial 

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162

1 buildings and in new versus existing construction.

2 For those who aren't familiar, the economizer

3 basically uses cool outdoor air when possible to

4 reduce the cooling load or eliminate the cooling load

5 on a piece of equipment, and they tend to be used in

6 certain areas of the country. They tend to be used in

7 larger systems. They are under most building

8 standards at least to try to address the subject.

9 There's a bunch of different ways we could

10 look at economizers. We could look at what's

11 reported, for instance, in the CBEC survey as typical,

12 but that may not be what gets put in in the future.

13 We can look at what a particular building

14 code suggests, like 90.1 suggests, for the future, but

15 that may not be what's actually put in.

16 We welcome comments as to the frequency of

17 use of economizers, as well as the control strategies

18 that might be applied to those economizers in

19 different areas of the country.

20 MR. STEPHENS: Charlie Stephens, Oregon

21 Energy Office.

22 Perhaps more important than what is likely

23 to go in, which you can probably come to some

24 assumptions about based on what's being sold out

25 there, and you know, either it has it or it doesn't.

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162 

1 buildings and in new versus existing construction. 

2 For those who aren't familiar, the economizer 

3 basically uses cool outdoor air when possible to 

4 reduce the cooling load or eliminate the cooling load 

5 on a piece of equipment, and they tend to be used in 

6 certain areas of the country. They tend to be used in 

7 larger systems. They are under most building 

8 standards at least to try to address the subject. 

9 There's 'a bunch of different ways we could 

10 look at economlzers. We could look at what's 

11 reported, for instance, in the CBEC survey as typical, 

12 but that may not be what gets put in in the future. 

13 We can look at what a particular building 

14 code suggests, like 90.1 suggests, for the future, but 

15 that may not be what's actually put in. 

16 We welcome comments as to the frequency of 

17 use of economizers, as well as the control strategies 

l8 that might be applied to those economizers in 

19 different areas of the country. 

20 MR. STEPHENS: Charlie Stephens, Oregon 

21 Energy Office. 

22 Perhaps more important than what is likely 

23 to go in, which you can probably come to some 

24 assumptions about based on what's being sold out 

25 there, and you know, either it has it or it doesn't. 

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1 I think the bigger issue might be how long it works.

2 You might just truncate economizer use altogether at

3 about seven years based on our research and just

4 assume that after that it doesn't work at all.

5 But something along those lines might be

6 more important in your effort than trying to decide

7 what has an economizer and what doesn't.

8 MR. WINIARSKI: Right, and that's

9 certainly an issue that's been brought up before, is

10 really what's the persistence of savings when they put

11 in economizers in commercial buildings.

12 A second comment or the second bullet down

13 here addresses what Jim Crawford brought up, which was

14 how do we deal with sizing of commercial equipment in

15 buildings.

16 For lots of various reasons commercial

17 equipment that gets put in will tend to be oversized

18 in terms of design load condition at some level, and

19 how much it's oversized is going to significantly

20 affect the part loading of the unit, and obviously the

21 part load performance weighs in here.

22 So getting information as to what you

23 folks believe is appropriate sizing assumptions for

24 this analysis is sort of vital. That will also play

25 into what gets used in the life-cycle cost analysis

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163 

1 I think the bigger issue might be how long it works. 

2 You might just truncate economizer use altogether at 

3 about seven years based on our research and just 

4 assume that after that it doesn't work at all. 

5 But something along those lines might be 

6 more important in your effort than trying to decide 

7 what has an economizer and what doesn't. 

8 MR. WINIARSKI: Right, and that's 

9 certainly an issue that's been brought up before, is 

10 really what's the persistence of savings when they put 

11 in economizers in commercial buildings. 

12 A second comment or the second bullet down 

13 here addresses what Jim Crawford brought up, which was 

14 how do we deal with sizing of commercial equipment in 

15 buildings. 

16 For lots of various reasons commercial 

17 equipment that gets put in will tend to be oversized 

18 in terms of design load condition at some level, and 

19 how much it's oversized is going to significantly 

20 affect the part loading of the unit, and obviously the 

21 part load performance weighs in here. 

22 So getting information as to what you 

23 folks believe 1S appropriate sizing assumptions for 

24 this analysis is sort of vital. That will also play 

25 into what gets used in the life-cycle cost analysis 

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1 later on.

ish 2 Another particularly thorny issue that

3 comes up with modeling is how do we deal with coming

4 up with assumptions with regard to fan static

5 pressures in the analysis. I think that got brought

6 up earlier, is that there's a wide variety of

7 differences in fan static pressures or in this case

8 external static pressure that's faced with, depending

9 on the building type and the duct construction, and

10 will probably also vary somewhat depending on the age

11 of the building.

12 And so we'd like to somehow come up with

13 some characterization of what might be typical fan

14 statics and how much they might range for given

15 building types.

16 And then the fourth bullet that I've got

17 down here is how do we deal with when the supply fans

18 are operating simply to provide ventilation air in the

19 building. In most cases at least with existing

20 buildings, the construction is such that these

21 packaged systems will also be used to provide the

22 ventilation air for the building, and that's not going

23 to be true in all cases. In some cases a separate

24 ventilation system may be used, particularly if the

'Q ~25 equipment is used in conjunction with other pieces of

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164 

1 later on. 

2 Another particularly thorny issue that 

3 comes up with modeling is how do we deal with coming 

4 up with assumptions with regard to fan static 

5 pressures ln the analysis. I think that got brought 

6 up earlier, is that there's a wide variety of 

7 differences in fan static pressures or ln this case 

8 external static pressure that's faced with, depending 

9 on the building type and the duct construction, and 

10 will probably also vary somewhat depending on the age 

11 of the building. 

12 And so we'd like to somehow come up with 

13 some characterization of what might be typical fan 

14 statics and how much they might range for given 

15 building types. 

16 And then the fourth bullet that I've got 

17 down here is how do we deal with when the supply fans 

18 are operating simply to provide ventilation air in the 

19 building. In most cases at least with existing 

20 buildings, the construction is such that these 

21 packaged systems will also be used to provide the 

22 ventilation air for the building, and that's not going 

23 to be true in all cases. In some cases a separate 

24 ventilation system may be used, particularly if the 

25 equipment is used in conjunction with other pieces of 

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165

1 equipment, like a packaged unit used in conjunction

2 with maybe a central chiller system.

3 So that's going to be an issue, and it

4 will also deal with when we are sort of projecting

5 energy savings. This gets into sort of the

6 differences between the efficiency level assumptions

7 and maybe a design option approach where we would

8 actually have some idea of what the efficiency of the

9 fan might be in that model.

10 That may not exist if we're dealing with

11 simply an efficiency level approach, and we may have

12 to either ask for estimates of that from manufacturers

13 for each different efficiency level or make some

14 assumptions about what's going to be typical through

15 all efficiency levels.

16 Those are four of the principal ones that

17 we came up with when we were sort of debating this

18 issue as a team. I'm sure there's other ones,

19 particularly modeling issues, that need to get brought

20 up, but one of them that I think we really need to

21 bring up is really how much detail do we need to put

22 into this level of the analysis.

23 Obviously there's tremendous variation in

24 the loads that can be faced by this equipment because

25 of the variation in all of these parameters, and we'd

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165 

1 equipment, like a packaged unit used in conjunction 

2 with maybe a central chiller system. 

3 So that's going to be an issue, and it 

4 will also deal with when we are sort of projecting 

5 energy savings. This gets into sort of the 

6 differences between the efficiency level assumptions 

7 and maybe a design option approach where we would 

8 actually have some idea of what the efficiency of the 

9 fan might be in that model. 

10 That may not exist if we're dealing with 

11 simply an efficiency level approach, and we may have 

12 to either ask for estimates of that from manufacturers 

13 for each different efficiency level or make some 

14 assumptions about what's going to be typical through 

15 all efficiency levels. 

16 Those are four of the principal ones that 

17 we came up with when we were sort of debating this 

18 issue as a team. I'm sure there's other ones, 

19 particularly modeling issues, that need to get brought 

20 up, but one of them that I think we really need to 

21 bring up is really how much detail do we need to put 

22 into this level of the analysis. 

23 Obviously there I s tremendous variation in 

24 the loads that can be faced by this equipment because 

25 of the variation in all of these parameters, and we'd 

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1 like to get some idea of how much variation is

g*~ 2 necessary for this analysis.

3 Yes.

4 MR. STEPHENS: In your modeling are you

5 going to produce load shapes that are then usable

6 combined with pricing, electricity pricing?

7 MR. WINIARSKI: Charlie, could you say it

8 again?

9 MR. RABA: Charlie Stephens, yeah.

10 MR. WINIARSKI: Go to the microphone,

11 please.

12 MR. STEPHENS: Are you going to be

13 producing load shapes out of your modeling that are

14 then translatable into a pricing scheme that can be

15 used to model what happens to pricing when load shapes

16 vary in one shape versus another?

17 MR. RABA: Go ahead.

18 MR. STOOPS: John Stoops, LB&L.

19 Hopefully we can cover a little bit in

20 subsequent discussions, but, yes, that's our

21 intention, is to come up with a method to do exactly

22 that, our successes to be determined, but that's our

23 intent.

24 If you have suggestions to help us do it

25 better, I mean, that's why we're here.

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166 

1 like to get some idea of how much variation is 

2 necessary for this analysis. 

3 Yes. 

4 MR. STEPHENS: In your modeling are you 

5 going to produce load shapes that are then usable 

6 combined with pricing, electricity pricing? 

7 MR. WINIARSKI: Charlie, could you say it 

8 again? 

9 MR. RABA: Charlie Stephens, yeah. 

10 MR. WINIARSKI: Go to the microphone, 

11 please. 

12 MR. STEPHENS: Are you going to be 

13 producing load shapes out of your modeling that are 

14 then translatable into a pricing scheme that can be 

15 used to model what happens to pricing when load shapes 

16 vary in one shape versus another? 

17 MR. RABA: Go ahead. 

18 MR. STOOPS: John Stoops, LB&L. 

19 Hopefully we can cover a little bit in 

20 subsequent discussions, but, yes, that's our 

21 intention, is to come up with a method to do exactly 

22 that, our successes to be determined, but that's our 

23 intent. 

24 If you have suggestions to help us do it 

25 better, I mean, that's why we're here. 

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1 MR. WINIARSKI: Right. As with a lot of

2 steps here, these early steps are somewhat predicated

3 on what are going to be the requirements of later

4 steps in the analysis.

5 Yes.

6 MR. CRAWFORD: Jim Crawford.

7 Kind of a general -- Jim Crawford -- a

8 general point. I think that in many of these modeling

9 areas, a smaller workshop is needed, and perhaps the

10 people who ought to attend that are not necessarily

11 people that are in the room. For example, from the

12 manufacturers' standpoint, I'd want to see us have

13 some application engineers here, perhaps other than

14 some of the people that are here now.

15 And I think that relative to the point

16 that Charlie raised about economizers, that's a very

17 troubling question that he raises. We believe that

18 most economizers certainly can be made to work after

19 seven years, and we need to -- I think the regulatory

20 community here needs to address if they're not being

21 used why they're not being used and how to go about

22 getting them used because certainly in terms of total

23 energy conservation, you know, that should be your

24 first, second, and third priority, is to get the

*V ~ 25 economizers used and used properly.

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167 

1 MR. WINIARSKI: Right. As with a lot of 

2 steps here, these early steps are somewhat predicated 

3 on what are going to be the requirements of later 

4 steps in the analysis. 

5 Yes. 

6 MR. CRAWFORD: Jim Crawford. 

7 Kind of a general -- Jim Crawford -- a 

8 general point. I think that in many of these modeling 

9 areas, a smaller workshop is needed, and perhaps the 

10 people who ought to attend that are not necessarily 

11 people that are in the room. For example, from the 

12 manufacturers' standpoint, I'd want to see us have 

13 some application engineers here, perhaps other than 

14 some of the people that are here now. 

15 And I think that relative to the point 

16 that Charlie raised about economizers, that's a very 

17 troubling question that he raises. We believe that 

18 most economizers certainly can be made to work after 

19 seven years, and we need to -- I think the regulatory 

20 community here needs to address if they're not being 

21 used why they're not being used and how to go about 

22 getting them used because certainly in terms of total 

23 energy conservation, you know, that should be your 

24 first, second, and third priority, is to get the 

25 economizers used and used properly. 

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168

1 I mean, it's a free ride, and they get

2 turned off maybe because people don't like the way

3 they perform or something else, but we shouldn't just

4 walk away from them and say, well, they're good for

5 seven years, and then they don't work.

6 MR. MULLEN: Jim Mullen.

7 A couple of random thoughts. You know,

8 one is you've got a top four list of things to be

9 concerned about. I think there's probably a fifth

10 one, which is the ventilation load and whether or not

11 62.1 is adopted universally, whether you have demand

12 controls or continuous ventilation.

13 The second thing is I think there are more

14 and more buildings today that don't operate strictly

15 off defensible requirements. A lot of schools today,

16 you actually are running cooling in order to

17 dehumidify, and that somehow needs to be fit into the

18 analysis.

19 And then the third one is, as I recall, in

20 the residential analysis, there was a certain amount

21 of energy consumption built in for commercial use or

22 from commercial buildings due to residential equipment

23 being applied to those buildings at the NOPR level,

24 and so there is some data and some characterization

25 set of buildings.

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168 

1 I mean, it's a free ride, and they get 

2 turned off maybe because people don't like the way 

3 they perform or something else, but we shouldn't just 

4 walk away from them and say, well, they're good for 

5 seven years, and then they don't work. 

6 MR. MULLEN: Jim Mullen. 

7 A couple of random thoughts. You know, 

8 one is you've got a top four list of things to be 

9 concerned about. I think there's probably a fifth 

10 one, which is the ventilation load and whether or not 

11 62.1 is adopted universally, whether you have demand 

12 controls or continuous ventilation. 

13 The second thing is I think there are more 

14 and more buildings today that don't operate strictly 

15 off defensible requirements. A lot of schools today, 

16 you actually are running cooling In order to 

17 dehumidify, and that somehow needs to be fit into the 

18 analysis. 

19 And then the third one is, as I recall, in 

20 the residential analysis, there was a certain amount 

21 of energy consumption built in for commercial use or 

22 from commercial buildings due to residential equipment 

23 being applied to those buildings at the NOPR level, 

24 and so there is some data and some characterization 

25 set of buildings. 

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1 MR. ECKMAN: Tom Eckman.

2 I would say overlying all of these

3 specific modeling concerns, I may agree with Jim that

4 it may take a special workshop with a limited set of

5 folks or a different set of folks to deal with these

6 issues, but as Jim just raised, the whole concept that

7 you can take and boil this all down to one building

8 type, given the variation in load shape and the

9 operational characteristics of schools versus medical

10 facilities, versus retail, hairdresser shops, versus

11 something else that use this equipment, it's a bit

12 daunting, and the applications of this equipment and

13 the duty cycles that they face and the control

14 strategies that they face or the equipment faces, each

15 one of these is a specific problem by building

16 category and the load shaped barriers, and their rate

17 structures will probably vary accordingly.

18 So while I don't envy you, I think it's

19 much more complex than boiling it down to a single

20 parameter kind of this is the aggregate load shape

21 because I think you're going to mask a lot of the

22 detail that's necessary to decide what to do and which

23 kinds of application.

24 MR. WINIARSKI: I hope I didn't give the

25 wrong impression. Basically we have no intention of

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1 MR. ECKMAN: Tom Eckman. 

2 I would say overlying all of these 

3 specific modeling concerns, I may agree with Jim that 

4 it may take a special workshop with a limited set of 

5 folks or a different set of folks to deal with these 

6 issues, but as Jim just raised, the whole concept that 

7 you can take and boil this all down to one building 

8 type , given the variation In load shape and the 

9 operational characteristics of schools versus medical 

10 facilities, versus retail, hairdresser shops, versus 

11 something else that use this equipment, it's a bit 

12 daunting, and the applications of this equipment and 

13 the duty cycles that they face and the control 

14 strategies that they face or the equipment faces, each 

15 one of these is a specific problem by building 

16 category and the load shaped barriers, and their rate 

17 structures will probably vary accordingly. 

l8 So while I don't envy you, I think it's 

19 much more complex than boiling it down to a single 

20 parameter kind of this is the aggregate load shape 

21 because I think you're going to mask a lot of the 

22 detail that's necessary to decide what to do and which 

23 kinds of application. 

24 MR. WINIARSKI: I hope I didn't glve the 

25 wrong impression. Basically we have no intention of 

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1 boiling this down to sort of a single prototype

2 building for the U.S. The goal, as is the goal in

3 most of the appliance analysis work that's been done

4 recently, is to -develop sort of a distribution of

5 energy use, energy loads, and later life cycle cost

6 impact such that we can characterize the entire

7 population at some level.

8 Ultimately the decisions have to be made

9 that boil down to essentially adopting one standard

10 level, and whether that's sort of at the average

11 level, which may reflect energy use in the country, or

12 whether it's at sort of the median life-cycle cost

13 level, which sort of impacts winners and losers, those

14 type of decisions are made later on in the analysis.

15 Yeah.

16 MR. HUNT: Marshall Hunt, Pacific Gas &

17 Electric Company.

18 In some research we did at our testing lab

19 on I think it was seven and a half ton units, we found

20 that it's particularly important what fan comes with

21 the unit, and sometimes you can choose one of three

22 fans, and the unit may have its efficiency rating

23 based on the lowest horsepower fan, and yet the unit

24 may often show up due to the conservatism on the part

25 of either the engineer or the design-build contractor

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1 boiling this down to sort of a single prototype 

2 building for the u.s. The goal, as is the goal in 

3 most of the appliance analysis work that's been done 

4 recently, is to develop sort of a distribution of 

5 energy use, energy loads, and later life cycle cost 

6 impact such that we can characterize the entire 

7 population at some level. 

8 Ultimately the decisions have to be made 

9 that boil down to essentially adopting one standard 

10 level, and whether that's sort of at the average 

11 level, which may reflect energy use in the country, or 

12 whether it's at sort of the median life-cycle cost 

13 level, which sort of impacts winners and losers, those 

14 type of decisions are made later on in the analysis. 

15 Yeah. 

16 MR. HUNT: Marshall Hunt, Pacific Gas & 

17 Electric Company. 

18 In some research we did at our testing lab 

19 on I think it was seven and a half ton units, we found 

20 that it's particularly important what fan comes with 

21 the unit, and sometimes you can choose one of three 

22 fans, and the unit may have its efficiency rating 

23 based on the lowest horsepower fan, and yet the unit 

24 may often show up' due to the conservatism on the part 

25 of either the engineer or the design-build contractor 

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1 with either the next size up fan or even higher, and

2 it may not even need that, and that's an example of

3 the oversizing that's occurring out there.

4 And with these equipment that are running

5 many, many hours, and the fan energy consumption is

6 swamped, the compressor energy consumption, and so I

7 think the supply fan issue is something we need to

8 look at and be particularly aware of the fact that

9 these units can come with a selection of fans.

10 And how to deal with that issue, I don't

11 have the answer, but it's real, and it needs to be

12 dealt with.

13 MR. WINIARSKI: Right, and I don't know if

14 that variation would be captured, for instance, in

15 ARI's different product ratings or not.

16 MR. AMRANE: Karim Amrane with ARI.

17 I'm confused by the statement because I

18 believe when we test products, we tested the specific

19 model number, and it's not shipped with different

20 packs, I mean, when it goes to the lab.

21 MR. HUNT: Maybe Michael Martin and the

22 Energy Commission could help me on this.

23 I think it is just with one fan and then

24 other fans to be shipped.

25 MR. MARTIN: I have a lot of people

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171 

1 with either the next size up fan or even higher, and 

2 it may not even need that, and that's an example of 

3 the oversizing that's occurring out there. 

4 And with these equipment that are running 

5 many, many hours, and the fan energy consumption is 

6 swamped, the compressor energy consumption, and so I 

7 think the supply fan issue is something we need to 

8 look at and be particularly aware of the fact that 

9 these units can come with a selection of fans. 

10 And how to deal with that issue, I don't 

11 have the answer, but it's real, and it needs to be 

12 dealt with. 

13 MR. WINIARSKI: Right, and I don't know if 

14 that variation would be captured, for instance, in 

15 ARI's different product ratings or not. 

16 MR. AMRANE: Karim Amrane with ARI. 

17 I'm confused by the statement because I 

18 believe when we test products, we tested the specific 

19 model number, and it's not shipped with different 

20 packs, I mean, when it goes to the lab. 

21 MR. HUNT: Maybe Michael Martin and the 

22 Energy Commission could help me on this. 

23 I think it is just with one fan and then 

24 other fans to be shipped. 

25 MR. MARTIN: I have a lot of people 

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1 interested in it, and the data I've got is strongly

2 conflicting and comes from a number of people in this

3 room and a number of other people, but the intent, as

4 I understand from ARI, is that a model that is listed

5 should have a particular fan with a particular motor

6 on it, and that alternatives are available, but they

7 should have different model numbers.

8 That's my understanding. Now, whether

9 they actually do in all cases or how changes get made

10 between the manufacturer and the site is a little hard

11 to tell.

12 MR. WINIARSKI: I know certainly the

13 products can be ordered with different horsepower

14 motors, often with the same product, but unless

15 there's a significant difference in motor efficiency,

16 that wouldn't affect the rating which is done at a

17 specific test static pressure.

18 MR. SACKS: Harvey Sacks, ACEEE.

19 I'd really have to put this to Karim more

20 as a question than a response. Certainly with the

21 residential standard -- thinking of mice and elephants

22 -- with the residential standard there's a default

23 energy consumption used in the SEER test, but you're

24 allowed to specify a particular air handler with a

25 different energy consumption in making particular

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172 

1 interested in it, and the data I've got is strongly 

2 conflicting and comes from a number of people in this 

3 room and a number of other people, but the intent, as 

4 I understand from ARI, is that a model that is listed 

5 should have a particular fan with a particular motor 

6 on it, and that alternatives are available, but they 

7 should have different model numbers. 

8 That's my understanding. Now, whether 

9 they actually do in all cases or how changes get made 

10 between the manufacturer and the site is a little hard 

11 to tell. 

12 MR. WINIARSKI: I know certainly the 

13 products can be ordered with different horsepower 

14 motors, often with the same product, but unless 

15 there's a significant difference in motor efficiency, 

16 that wouldn't affect the rating which is done at a 

17 specific test static pressure. 

18 MR. SACKS: Harvey Sacks, ACEEE. 

19 I'd really have to put this to Karim more 

20 as a question than a response. Certainly with the 

21 residential standard - - thinking of mice and elephants 

22 -- with the residential standard there's a default 

23 energy consumption used in the SEER test, but you're 

24 allowed to specify a particular air handler with a 

25 different energy consumption in making particular 

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1 claims about a particular model.

2 And that brings you to the issue of

3 whether, in fact, you do get into substantially

4 different efficiencies. The particular case would be

5 the ECM motors in the circulate mode may use a quarter

6 as much energy as a PSC in the same mode.

7 MR. CRAWFORD: Jim Crawford. I know I

8 don't look like Karim, but that's --

9 (Laughter.)

10 PARTICIPANT: He's handsome.

11 MR. CRAWFORD: Well, he's certainly

12 younger, anyway.

13 The residential thing, it is mice and

14 elephants, and this mouse doesn't have a trunk. In a

15 residential product the reason that you have that

16 whole thing about the default watts is the fact that

17 the actual numerical majority of air conditioners go

18 on top of the furnaces and, therefore, they don't have

19 a blower that comes along with them.

20 Whereas in the case of rooftop units, the

21 unit is complete. It contains its own blower. When

22 you have an ECM fan or blower versus an induction

23 motor blower, I think in everybody's product line it's

24 a different model number, as Mike Martin has said.

25 So some of the confounding that you may

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1 claims about a particular model. 

2 And tha.t brings you to the issue of 

3 whether, ln fact, you do get into substantially 

4 different efficiencies. The particular case would be 

5 the ECM motors in the circulate mode may use a quarter 

6 as much energy as a PSC in the same mode. 

7 MR. CRAWFORD: Jim Crawford. I know I 

8 don't look like Karim, but that's --

9 (Laughter.) 

10 PARTICIPANT: He's handsome. 

11 MR. CRAWFORD: Well, he's certainly 

12 younger, anyway. 

13 The residential thing, it is mice and 

14 elephants, and this mouse doesn't have a trunk. In a 

15 residential product the reason that you have that 

16 whole thing about the default watts is the fact that 

17 the actual numerical majority of air conditioners go 

18 on top of the furnaces and, therefore, they don't have 

19 a blower that comes along with them. 

20 Whereas in the case of rooftop units, the 

21 unit is complete. It contains its own blower. When 

22 you have an ECM fan or blower versus an induction 

23 motor blower, I think in everybody's product line it's 

24 a different model number, as Mike Martin has said. 

25 So some of the confounding that you may 

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1 think exists in residential products does not exist

2 here.

*

3 MR. WINIARSKI: Right, and that actually

4 gets into a little bit of the --

5 MR. CRAWFORD: The splits will come with

6 their own fans. The split commercial units will come

7 with their own fans built in. It's an air handler

8 situation. It's not an A coil or a flat coil.

9 MR. WINIARSKI: Right, and I was going to

10 say that gets into a little bit about building stock

11 characterization. If you look in the CBECS survey at

12 least, if we're going to -- certainly the

13 distribution, the regional distribution and possibly

ID 14 the building type distribution of heat pumps is

15 different than it would be for package systems.

16 It may be that the regional or there may

17 be a similar set of distribution for split systems,

18 but it's hard to pull out of the data. So when we

19 start to actually characterize the building stock, we

20 would like to get as much feedback, you know, on

21 whether it would be reasonable, for instance, to

22 simply examine the building stock characterization out

23 of CBECS for packing systems and assume that that

24 applies to splits or whether we try to tease out the

*O 25 data as best we can for what looks to be split systems

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1 think exists in residential products does not exist 

2 here. 

3 MR. WINIARSKI: Right, and that actually 

4 gets into a little bit of the --

5 MR. CRAWFORD: The splits will come with 

6 their own fans. The split commercial units will come 

7 with their own fans built In. It's an air handler 

8 situation. It's not an A coil or a flat coil. 

9 MR. WINIARSKI: Right, and I was going to 

10 say that gets into a little bit about building stock 

11 characterization. If you look in the CBECS survey at 

12 least, if we're going to certainly the 

13 distribution, the regional distribution and possibly 

14 the building type distribution of heat pumps is 

15 different than it would be for package systems. 

16 It may be that the regional or there may 

17 be a similar set of distribution for split systems, 

18 but it's hard to pullout of the data. So when we 

19 start to actually characterize the building stock, we 

20 would like to get as much feedback, you know, on 

21 whether it would be reasonable, for instance, to 

22 simply examine the building stock characterization out 

23 of CBECS for packing systems and assume that that 

24 applies to splits or whether we try to tease out the 

25 data as best we can for what looks to be split systems 

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1 as defined.

2 MR. CRAWFORD: Jim Crawford. I believe

3 that ARI can provide statistics on where different

4 types of equipment go geographically, and again, I

5 believe that the members would encourage them to make

6 that information available under confidentiality to

7 the contractor.

8 And as long as I've got the microphone,

9 relative to the diversity in buildings, if you get the

10 information on the diversity of types of buildings, an

11 office building being very different than a strip

12 commercial warehouse versus schools and hospitals, if

13 you get your various classes, you don't need to do

14 monstrous amounts of analysis on a diversity within

15 groups because a diversity between groups will give

16 you the diversity that you seek, and you should be

17 able to identify groups of these by some kind of a

18 spikiness (phonetic) measure, you know, total

19 consumption and spikiness, whatever you want to call

20 it that can be applied to the rate structures to let

21 you address the demand charge issue.

22 MR. STOOPS: John Stoops, LBL.

23 I'll ask another question about the

24 building types. From your knowledge of what you ship

25 to in the industry, are there classes of buildings

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175 

1 as defined. 

2 MR. CRAWFORD: Jim Crawford. I believe 

3 that ARI can provide statistics on where different 

4 types of equipment go geographically, and again, I 

5 believe that the members would encourage them to make 

6 that information available under confidentiality to 

7 the contractor. 

8 And as long as I've got the microphone, 

9 relative to the diversity in buildings, if you get the 

10 information on the diversity of types of buildings, an 

11 office building being very different than a strip 

12 commercial warehouse versus schools and hospitals, if 

13 you get your various classes, you don't need to do 

14 monstrous amounts of analysis on a diversity within 

15 groups because a diversity between groups will give 

16 you the diversity that you seek, and you should be 

17 able to identify groups of these by some kind of a 

18 spikiness (phonetic) measure, you know, total 

19 consumption and spikiness, whatever you want to call 

20 it that can be applied to the rate structures to let 

21 you address the demand charge issue. 

22 MR. STOOPS: John Stoops, LBL. 

23 I'll ask another question about the 

24 building types. From your knowledge of what you ship 

25 to in the industry, are there classes of buildings 

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1 that represent such an insignificant fraction that we

B*I 2 can afford to ignore them?

3 MR. CRAWFORD: When you've got as many

4 hundreds of thousands of buildings as you do, my guess

5 is you need not sweat that too much. The ones that

6 you shouldn't think of are probably the ones that you

7 won't.

8 (Laughter.)

9 MR. WINIARSKI: Another comment that I'll

10 bring up briefly here is in the issue of the

11 simulation. There are different ways in which we can

12 produce. We can do the thermal loads in the

13 simulations. We can do the energy savings estimates

14 within the simulations also, but that requires using

15 some estimates of the part load performance curves

16 that may or may not be appropriate. Most of those

17 have been around for a while. So that may be another

18 area where we would like to get some feedback from

19 industry members.

20 Obviously, I think the curves that are in

21 DOE2 have been around for ten years or maybe longer,

22 and I don't know if the market has changed since then,

23 but obviously issues like dual compressors being in

24 the baseline might be significant.

(* 25 Yes?

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176 

1 that represent such an insignificant fraction that we 

2 can afford to ignore them? 

3 MR. CRAWFORD: When you've got as many 

4 hundreds of thousands of buildings as you do, my guess 

5 is you need not sweat that too much. The ones that 

6 you shouldn't think of are probably the ones that you 

7 won't. 

8 (Laughter.) 

9 MR. WINIARSKI: Another comment that I'll 

10 bring up briefly here is In the issue of the 

11 simulation. There are different ways in which we can 

12 produce. We can do the thermal loads in the 

13 simulations. We can do the energy savings estimates 

14 within the simulations also, but that requires using 

15 some estimates of the part load performance curves 

16 that mayor may not be appropriate. Most of those 

17 have been around for a while. So that may be another 

18 area where we would like to get some feedback from 

19 industry members. 

20 Obviously, I think the curves that are in 

21 DOE2 have been around for ten years or maybe longer, 

22 and I don't know if the market has changed since then, 

23 but obviously issues like dual compressors being in 

24 the baseline might be significant. 

25 Yes? 

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1 MR. SACKS: I thought i understood until

2 just that last comment, and that was a question

3 whether part of the analysis is dealing with the

4 buildings or the equipment because if it's dealing

5 with the equipment, these questions like parasitics

6 become important. If it's dealing with the building,

7 I'm not sure where you're putting the duct system.

8 MR. WINIARSKI: This analysis sort of

9 spans both of those areas. Obviously, those two

10 issues, the equipment in the building interface, and

11 where we draw the line that separates the two

12 different parts of the analysis is not clear at this

13 point.

14 MR. SACKS: In that case, with all due

15 respect because I'm not a modeler as anyone here

16 probably knows, it's not clear to me that some of

17 these models have the ability to disaggregate to the

18 level that would be required. DOE2, in particular, is

19 particularly inhospitable toward components other than

20 major components in commercial buildings.

21 And as you start thinking about economizer

22 cycles and circulation as opposed to treatment, issues

23 like fan energy will become very important.

24 MR. WINIARSKI: Actually I was going to

25 comment that DOE2 and all of these tools will model

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177 

1 MR. SACKS: I thought i understood until 

2 just that last comment, and that was a question 

3 whe.ther part of the analysis is dealing with the 

4 buildings or the equipment because if it's dealing 

5 with the equipment, these questions like parasitics 

6 become important. If it's dealing with the building, 

7 I'm not sure where you're putting the duct system. 

8 MR. WINIARSKI: This analysis sort of 

9 spans both of those areas. Obviously, those two 

10 issues, the equipment in the building interface, and 

11 where we draw the line that separates the two 

12 different parts of the analysis is not clear at this 

13 point. 

14 MR. SACKS: In that case, with all due 

15 respect because I'm not a modeler as anyone here 

16 probably knows, it's not clear to me that some of 

17 these models have the ability to disaggregate to the 

18 level that would be required. DOE2, in particular, is 

19 particularly inhospitable toward components other than 

20 major components in commercial buildings. 

21 And as you start thinking about economizer 

22 cycles and circulation as opposed to treatment, issues 

23 like fan energy will become very important. 

24 MR. WINIARSKI: Actually I was going to 

25 comment that DOE2 and all of these tools will model 

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178

1 economizers fairly well. Where there may be other

2 issues, generally they resort to a performance curve

3 for the compressors, and in fact, the entire

4 condensing part of the system.

5 MR. SACKS: I'm not sure how appropriate

6 it is -- again, Harvey Sacks -- for these smaller

7 systems, but certainly recent work for DOE by A.D.

8 Little has pointed out the secondary loads of which I

9 think the fan is an analogue here, have historically

10 not been tracked well by the default values in DOE2.

11 And I wonder if this is a problem which at

12 the level you're describing requires a component based

13 approach, such as TRANSIS rather than the higher level

14 modeling efforts associated with DOE2.

15 Again, I may fundamentally misunderstand

16 that.

17 MR. WINIARSKI: Yeah, I think that's

18 again, for a separate meeting, sort of the details of

19 this. Briefly, the way DOE2 works, at least, is that

20 you apply -- the fan energy has to be initially

21 separated from the condensing unit, energy consumption

22 and analysis. The condensing unit is modeled using

23 estimates or for these part load performance curves

24 that I spoke of.

25 The fan energy typically is modeled with

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1 economizers fairly well. Where there may be other 

2 issues, generally they resort to a performance curve 

3 for the compressors, and in fact, the entire 

4 condensing part of the system. 

5 MR. SACKS: I'm not sure how appropriate 

6 it is again, Harvey Sacks for these smaller 

7 systems, but certainly recent work for DOE by A.D. 

8 Little has pointed out the secondary loads of which I 

9 think the fan is an analogue here, have historically 

10 not been tracked well by the default values in DOE2. 

11 And I wonder if this is a problem which at 

12 the level you're describing requires a component based 

13 approach, such as TRANSIS rather than the higher level 

14 modeling efforts associated with DOE2. 

15 Again, I may fundamentally misunderstand 

16 that. 

17 MR. WINIARSKI: Yeah, I think that's 

18 again, for a separate meeting, sort of the details of 

19 this. Briefly, the way DOE2 works, at least, is that 

20 you apply the fan energy has to be initially 

21 separated from the condensing unit, energy consumption 

22 and analysis. The condensing unit is modeled using 

23 estimates or for these part load performance curves 

24 that I spoke of. 

25 The fan energy typically is modeled with 

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1 some sort of constant KW per CFM type number or static

2 pressure type number.

3 You know, if we were assuming variable

4 speed fans, we'd have to figure out a way to deal with

5 that. One option is you use those tools to basically

6 pull out the thermal loads that would be assigned to

7 those equipment, and then use a separate tool like a

8 spreadsheet or something to produce energy consumption

9 data that would track that type of variation.

10 But, again, it's fairly complex, and

11 certainly something for another discussion, I think,

12 rather than this meeting.

13 One other thing I might bring up is that

14 I think all of the industry members probably have

15 tools internally developed to estimate basically cost

16 effectiveness or energy use of their products, and

17 they may be able to provide good information, again,

18 from the application engineering side about what

19 assumptions they've used in development of those

20 tools.

21 Any other questions? Yeah.

22 MR. CRAWFORD: Yeah, Jim Crawford.

23 Just a general observation. As we go

24 forward, and before we go forward, I want to step back

25 and count the number of people in this room today from

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1 some sort of constant KW per CFM type number or static 

2 pressure type number. 

3 You know, if we were assuming variable 

4 speed fans, we'd have to figure out a way to deal with 

5 that. One option is you use those tools to basically 

6 pullout the thermal loads that would be assigned to 

7 those equipment, and then use a separate tool like a 

8 spreadsheet or something to produce energy consumption 

9 data that would track that type of variation. 

10 But, again, it's fairly complex, and 

11 certainly something for another discussion, I think, 

12 rather than this meeting. 

13 One other thing I might bring up is that 

14 I think all of the industry members probably have 

15 tools internally developed to estimate basically cost 

16 effectiveness or energy use of their products, and 

17 they may be able to provide good information, again, 

18 from the application engineering side about what 

19 assumptions they've used in development of those 

20 tools. 

21 Any other questions? Yeah. 

22 MR. CRAWFORD: Yeah, Jim Crawford. 

23 Just a general observation. As we go 

24 forward, and before we go forward, I want to step back 

25 and count the number of people in this room today from 

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1 the major manufacturers and the number of people

2 where from the Department of Energy and its

3 laboratories. We cannot shadow you on this analysis.

4 We don't have that kind of manpower.

5 And, of course, all of your guys can get

6 in one room, you know, and say, "Well, we agree on

7 this," or that and the other thing. We're much more

8 constrained on that. I can't give half of an analysis

9 to Mike and half of it Jim and half of it to Carey --

10 well, there are not that many halves anyway.

11 You know, we can't do that, and so I

12 almost hate to say this, but to a very significant

13 degree we are at your mercy, and that's one of the

14 reasons that we're so adamant about some of these

15 fundamental things, because, you know, we can build

16 this just like has been done in the past so that

17 you've got this huge analytical mountain that nobody

18 outside of the analyst knows what in the hell is in

19 there.

20 And, you know, it was reported on the last

21 program that 20 man-months was spent addressing the

22 issue of the difference between average and marginal

23 utility rates. Well, you know, you certainly don't

24 think anybody in this industry is going to shadow 20

25 man-months worth of effort.

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1 the maj or manufacturers and the number of people 

2 where from the Department of Energy and its 

3 laboratories. We cannot shadow you on this analysis. 

4 We don't have that kind of manpower. 

5 And, of course, all of your guys can get 

6 in one room, you know, and say, "Well, we agree on 

7 this," or that and the other thing. We're much more 

8 constrained on that. I can't give half of an analysis 

9 to Mike and half of it Jim and half of it to Carey 

10 well, there are not that many halves anyway. 

11 You know, we can't do that, and so I 

12 almost hate to say this, but to a very significant 

13 degree we are at your mercy, and that's one of the 

14 reasons that we're so adamant about some of these 

15 fundamental things, because, you know, we can build 

16 this just like has been done in the past so that 

17 you've got this huge analytical mountain that nobody 

18 outside of the analyst knows what in the hell is in 

19 there. 

20 And, you know, it was reported on the last 

21 program that 20 man-months was spent addressing the 

22 issue of the difference between average and marginal 

23 utility rates. Well, you know, you certainly don't 

24 think anybody in this industry is going to shadow 20 

25 man-months worth of effort. 

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1 And, by the way, the answer was: big

2 deal. It didn't make a heck of a lot of difference.

3 MR. WINIARSKI: Yeah, I would invite

4 people to review what was provided for the screening

5 analysis of all these ASHRAE equipment, and there's a

6 discussion, and maybe we need to flesh that out a

7 little bit more about what we had proposed for that

8 level.

9 That was sort of an intermediary level, I

10 think, of analysis between a fairly simple analysis

11 like what was originally done to set the ASHRAE

12 levels, and something more complicated like what is

13 typically done for the appliance rulemakings.

14 MR. CRAWFORD: But, again, you're not

15 trying to design a building. You're trying to get a

16 reasonable characterization of the building stock in

17 the United States. So on any given building or any

18 given group of buildings, if you're off by 15 percent,

19 it doesn't make any difference, assuming that you're

20 able to make errors in both directions.

21 You know, when you throw it all in the big

22 pot, it all comes out in the wash.

23 MR. RABA: Other comments for Dave? Go

24 ahead, Don.

25 MR. BRUNDAGE: Don Brundage, Southern

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1 And, .by the way, the answer was: big 

2 deal. It didn't make a heck of a lot of difference. 

3 MR. WINIARSKI: Yeah, I would invite 

4 people to review what was provided for the screening 

5 analysis of all these ASHRAE equipment, and there's a 

6 discussion, and maybe we need to flesh that out a 

7 little bit more about what we had proposed for that 

8 level. 

9 That was sort of an intermediary level, I 

10 think, of analysis between a fairly simple analysis 

11 like what was originally done to set the ASHRAE 

12 levels, and something more complicated like what is 

13 typically done for the appliance rulemakings. 

14 MR. CRAWFORD: But, again, you're not 

15 trying to design a building. You're trying to get a 

16 reasonable characterization of the building stock in 

17 the United States. So on any given building or any 

18 given group of buildings, if you're off by 15 percent, 

19 it doesn't make any difference, assuming that you're 

20 able to make errors in both directions. 

21 You know, when you throw it all in the big 

22 pot, it all comes out in the wash. 

23 

24 ahead, Don. 

25 

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1 Company.

2 I would agree with Jim, and I think

3 modeling -- I've had a lot of experience with

4 modeling, and I think it would be useful for doing

5 things like defining improvements. It's not going to

6 be useful in this context to define the population.

7 To try to define the population using

8 modeling across all of the varying types and climates

9 would be an impossible task even with the amount of

10 money you have to throw at it. I think modeling

11 aspects of it in coming up with some ideas on how the

12 differences might be between different types of

13 options and using it to supplement a more general type

14 commercial class would be useful, but I would question

15 the value of trying to model everything in all

16 possible ways, which I think is what you're doing.

17 MR. RABA: Tom?

18 MR. ECKMAN: Just to echo or maybe take

19 off on that a little bit, ultimately this boils down

20 to the duration of the duty cycle that the equipment

21 is going to face and the cost of that, and at some

22 point it's basically how many load hours this thing is

23 working an dhow much it saves when it's working at

24 higher efficiencies during those same load hours.

25 So you can probably parameterize it as

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1 Company. 

2 I would agree with Jim, and I think 

3 modeling I've had a lot of experience with 

4 modeling, and I think it would be useful for doing 

5 things like defining improvements. It's not going to 

6 be useful in this context to define the population. 

7 To try to define the population using 

8 modeling across all of the varying types and climates 

9 would be an impossible task even with the amount of 

10 money you have to throw at it. I think modeling 

11 aspects of it in coming up with some ideas on how the 

12 differences might be between different types of 

13 options and using it to supplement a more general type 

14 commercial class would be useful, but I would question 

15 the value of trying to model everything in all 

16 possible ways, which I think is what you're doing. 

17 MR. RABA: Tom? 

18 MR. ECKMAN: Just to echo or maybe take 

19 off on that a little bit, ultimately this boils down 

20 to the duration of the duty cycle that the equipment 

21 is going to face and the cost of that, and at some 

22 point it's basically how many load hours this thing is 

23 working an dhow much it saves when it's working at 

24 higher efficiencies during those same load hours. 

25 

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So you can probably parameterize it as 

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1 long as you have the load shape correct so that you

2 get the right rate, but it's everywhere from 1,000 a

3 year to 6,000 a year duty cycle, and somewhere in

4 there it's cost effective and somewhere it isn't.

5 And the question of how many buildings and

6 building types are below that category and above that

7 break line.

8 MR. RABA: Okay. Thank you.

9 MR. WINIARSKI: Thank you.

10 MR. RABA: Thank you very much, David.

11 Next up we're going to talk about life12 cycle cost analysis. John Stoops from Lawrence

13 Berkeley National Laboratories.

14 MR. STOOPS: Okay. This is going to say

15 I'm Jim McMahon, which I'm not. Jim clearly has much

16 more experience in this particular set of rulemaking

17 activities, a lot more history than I do. He's off at

18 Tahiti. So we'll have to all have envy for him in

19 such a bum place.

20 And an analogy a bit, and I think that

21 we're all kind of struggling with how ill defined part

22 of this is. If I bring an analogy from the building

23 industry where you have a conceptual design, a Title

24 I, a Title II, and actual construction documents, I

25 think this workshop is really in the conceptual design

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183 

1 long as you have the load shape correct so that you 

2 get the right rate, but it's everywhere from 1,000 a 

3 year to 6,000 a year duty cycle, and somewhere in 

4 there it's cost effective and somewhere it isn't. 

5 And the question of how many buildings and 

6 building types are below that category and above that 

7 break line. 

8 MR. RABA: Okay. Thank you. 

9 MR. WINIARSKI: Thank you. 

10 MR. RABA: Thank you very much, David. 

11 Next up we're going to talk about life12 cycle cost analysis. John Stoops from Lawrence 

13 Berkeley National Laboratories. 

14 MR. STOOPS; Okay. This is going to say 

15 I'm Jim McMahon, which I'm not. Jim clearly has much 

16 more experience in this particular set of rulemaking 

17 activities, a lot more history than I do. He's off at 

18 Tahiti. So we'll have to all have envy for him in 

19 such a bum place. 

20 And an analogy a bit, and I think that 

21 we're all kind of struggling with how ill defined part 

22 of this is. If I bring an analogy from the building 

23 industry where you have a conceptual design, a Title 

24 I, a Title II, and actual construction documents, I 

25 think this workshop is really in the conceptual design 

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1 phase.

2 We've sort of laid out a framework of how

3 we want to approach this, and we're really gathering

4 that feedback from the audience about the particular

5 details. We really do appreciate the input and the

6 responses that we're receiving. Where we all end up

7 I'm not sure.

8 If we look at the actual language of life9 cycle cost analysis to try to describe exactly what it

10 is, from the governing documents, it is to analyze the

11 savings and operating costs throughout the average

12 life of the covered product in the type or class

13 compared to any increase in the price of or in the

14 initial charges for or maintenance expenses of the

15 covered products which are likely to result from the

16 imposition of standards.

17 I don't know how Francine can cope with

18 being an attorney sometimes with some of these

19 languages, but in legal sense, that's what it's trying

20 to say. In a graphical sense and in an equation

21 sense, if you're a mathematician, that's another way

22 to try to say what it is, where we're looking at the

23 initial cost, the operating expenses, and because

24 money has time value, we try to discount it. So

25 that's a couple of other ways to look at it.

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184 

1 phase. 

2 We've sort of laid out a framework of how 

3 we want to approach this, and we're really gathering 

4 that feedback from the audience about the particular 

5 details. We really do appreciate the input and the 

6 responses that we're receiving. Where we all end up 

7 I'm not sure. 

8 If we look at the actual language of life9 cycle cost analysis to try to describe exactly what it 

10 is, from the governing documents, it is to analyze the 

11 savings and operating costs throughout the average 

12 life of the covered product in the type or class 

13 compared to any increase In the price of or In the 

14 initial charges for or maintenance expenses of the 

15 covered products which are likely to result from the 

16 imposition of standards. 

17 I don't know how Francine can cope with 

18 being an attorney sometimes with some of these 

19 languages, but in legal sense, that's what it's trying 

20 to say. In a graphical sense and in an equation 

21 sense, if you're a mathematician, that's another way 

22 to try to say what it is, where we're looking at the 

23 initial cost, the operating expenses, and because 

24 money has time value, we try to discount it. So 

25 that's a couple of other ways to look at it. 

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1 We have lots of uncertainties associated.

2 We have the product life. We have the discount rate

3 itself, how that initial cost varies, and those are

4 all challenges we have to try to determine.

5 So we want from you responses about

6 whether or not these approaches are reasonable. We've

7 had some discussions about regional variations in

8 climate. We haven't really talked yet much about

9 energy price. That's been alluded to.

10 We've had quite a bit of discussion about

11 all of the different kinds of data sources, equipment

12 lifetimes. Should that depend on operating hours,

13 climate, or other application specific variables?

14 As we look at the life-cycle cost stage of

15 the analysis, it's really the first step in the

16 analysis that's really jamming a bunch of the stuff

17 that we've done together, that we've done before

18 together. So we are trying to look at the buildings

19 and the utilities and the equipment, and then trying

20 to bring it all in the same bounds of valuing it in

21 terms of dollars.

22 If we look at the inputs that we're

23 dealing with, we've got the installed cost, and we

24 could talk a lot about what that really means because

*V ~ 25 we know that that's a difficult thing to come up with,

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185 

1 We have lots of uncertainties associated. 

2 We have the product life. We have the discount rate 

3 itself, how that initial cost varies, and those are 

4 all challenges we have to try to determine. 

5 So we want from you responses about 

6 whether or not these approaches are reasonable. We've 

7 had some discussions about regional variations in 

8 climate. We haven't really talked yet much about 

9 energy price. That's been alluded to. 

10 We've had quite a bit of discussion about 

11 all of the different kinds of data sources, equipment 

12 lifetimes. Should that depend on operating hours, 

13 climate, or other application specific variables? 

14 As we look at the life-cycle cost stage of 

15 the analysis, it's really the first step In the 

16 analysis that's really jamming a bunch of the stuff 

17 that we've done together, that we've done before 

18 together. So we are trying to look at the buildings 

19 and the utilities and the equipment, and then trying 

20 to bring it all in the same bounds of valuing it in 

21 terms of dollars. 

22 If we look at the inputs that we're 

23 dealing with, we've got the installed cost, and we 

24 could talk a lot about what that really means because 

25 we know that that's a difficult thing to come up with, 

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1 but we still have to come up with data. We have to

2 drive this process.

3 And so we could look at current or recent

4 purchases. We could calculate it from mark-ups and

5 manufacturer, dealer, and distributor. We have this

6 problem. Yes, it's uncertain about exactly how it's

7 going to be approached, but we have to make a

8 decision, and we have to proceed and do this kind of

9 analysis.

10 We've got operating expenses with energy,

11 maintenance cost. We have to know what the lifetime

12 is. We have to make a decision about what the most

13 appropriate discount rate it.

14 How could we go about that? Well, we've

15 already talked about we could use CBEC's data. We

16 could go through this other set of simulations to come

17 up with that. We need additional information about

18 energy prices. So we could go to EIA and try to come

19 up with that. We could look at the relative

20 importance of marginal prices, gather and analyze data

21 about lifetime discount rates, do a survey of

22 commercials, all of these different approaches that,

23 indeed, we're looking at and considering. How do we

24 go about doing it?

25 We want to come up with something that's

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186 

1 but we still have to come up with data. We have to 

2 drive this process. 

3 And so we could look at current or recent 

4 purchases. We could calculate it from mark-ups and 

5 manufacturer, dealer, and distributor. We have this 

6 problem. Yes, it's uncertain about exactly how it's 

7 going to be approached, but we have to make a 

8 decision, and we have to proceed and do this kind of 

9 analysis. 

10 We've got operating expenses with energy, 

11 maintenance cost. We have to know what the lifetime 

12 is. We have to make a decision about what the most 

13 appropriate discount rate it. 

14 How could we go about that? Well, we've 

15 already talked about we could use CBEC's data. We 

16 could go through this other set of simulations to come 

17 up with that. We need additional information about 

18 energy prices. So we could go to ErA and try to come 

19 up with that. We could look at the relative 

20 importance of marginal prices, gather and analyze data 

21 about lifetime discount rates, do a survey of 

22 commercials, all of these different approaches that, 

23 indeed, we're looking at and considering. How do we 

24 go about doing it? 

25 We want to come up with something that's 

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1 really as relatively simple an expression as this,

2 where we have a baseline -- can't even decide what

3 that is necessarily -- and then a series of options

4 that might have variations in installed costs,

5 variations in operating and maintenance costs that's

6 going to then be discounted and come back with

7 variations in life-cycle costs.

8 And then ultimately we need to make a

9 decision in the ultimate rule based upon this life10 cycle cost analysis.

11 But rather than talk about just points,

12 we're really talking about ranges. So we want to look

13 at the variability among these applications, these

14 different operating conditions, climate building

15 characteristics. How many building samples do we

16 need? How many climates do we need? How many

17 different kinds of equipment?

18 That's the problem that we're facing, and

19 we need to make decisions about how we actually

20 capture that variation.

21 To do this in a way that's going to be

22 acceptable to everyone, we need to use commercially

23 available software, use some distribution, make it

24 publicly available, make it as transparent and as easy

*F ~ 25 to understand as possible even though by its very

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187 

1 really as relatively simple an expression as this, 

2 where we have a baseline -- can't even decide what 

3 that is necessarily -- and then a series of options 

4 that might have variations in installed costs, 

5 variations in operating and maintenance costs that's 

6 going to then be discounted and come back with 

7 variations in life-cycle costs. 

8 And then ultimately we need to make a 

9 decision in the ultimate rule based upon this life10 cycle cost analysis. 

11 But rather than talk about just points, 

12 we're really talking about ranges. So we want to look 

13 at the variability among these applications, these 

14 different operating conditions, climate building 

15 characteristics. How many building samples do we 

16 need? How many climates do we need? How many 

17 different kinds of equipment? 

18 That's the problem that we're facing, and 

19 we need to make decisions about how we actually 

20 capture that variation. 

21 To do this in a way that's going to be 

22 acceptable to everyone, we need to use commercially 

23 available software, use some distribution, make it 

24 publicly available, make it as transparent and as easy 

25 to understand as possible even though by its very 

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1 nature this is a very complex problem.

is 2 So it's this tension of being technically

3 as good as we can make it, yet as visible and

4 transparent to a wide range of interesting parties.

5 It's a challenge.

6 How do I go back? I went two.

7 These are just some random issues that in

8 addition to all of that other things, we have another

9 set of analysis issues that cause us to scratch our

10 head and wonder exactly how to proceed.

11 We've talked a little bit. We've referred

12 to owner and user perspectives. That's an issue. How

13 do we deal with it?

14 We haven't really talked directly about

15 how to capture demand charges. There's been some

16 references that it's really no big deal. Yet for

17 residential that's probably true. I'm not sure if

18 it's going to be completely true for the commercial

19 market.

20 And then if we look at utility

21 deregulation, based upon the experiences that we've

22 had in California and elsewhere, I mean, how are we

23 going to predict the future when the future is as

24 uncertain as it seems to be?

25 Ultimately we come up with some results

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1 nature this is a very complex problem. 

2 So it's this tension of being technically 

3 as good as we can make it, yet as visible and 

4 transparent to a wide range of interesting parties. 

5 It's a challenge. 

6 How do I go back? I went two. 

7 These are just some random issues that in 

8 addition to all of that other things, we have another 

9 set of analysis issues that cause us to scratch our 

10 head and wonder exactly how to proceed. 

11 We've talked a little bit. We've referred 

12 to owner and user perspectives. That's an issue. How 

13 do we deal with it? 

14 We haven't really talked directly about 

15 how to capture demand charges. There's been some 

16 references that it's really no big deal. Yet for 

17 residential that's probably true. I'm not sure if 

18 it's going to be completely true for the commercial 

19 market. 

20 And then if we look at utility 

21 deregulation, based upon the experiences that we've 

22 had in California and elsewhere, I mean, how are we 

23 going to predict the future when the future is as 

24 uncertain as it seems to be? 

25 Ultimately we come up with some results 

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1 where we summarize them. We look at the average or

2 some median life-cycle cost, and we look at some

3 percentage of consumers with net savings or with net

4 costs.

5 And likewise we do an importance analysis

6 to try to focus on issues that will really try to say,

7 well, what really matters the most. What contributes

8 the most to the uncertainty and the variability?

9 And then I think it's just a bunch of

10 back-up slides. I don't think there's any of those

11 individual ones that anyone in the audience would like

12 to discuss.

13 Yes, sir.

14 MR. CRAWFORD: Jim Crawford.

15 Those who went through the last analysis

16 together will not be surprised at what I have to say

17 here. On discount rate, the discount rates that are

18 typically used are far, far too low for consumers or

19 for small business. For small business you have to

20 look at what is their highest marginal rate that

21 they're paying, and you know, it may be for floor

22 stock. It may be a line of credit, whatever, but

23 interests in the ten percent and above are not at all

24 uncommon in business today. There's a whole bunch of

25 stuff called junk bonds which describes that whole

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1 where we summarize them. We look at the average or 

2 some median life-cycle cost, and we look at some 

3 percentage of consumers with net savings or with net 

4 costs. 

5 And likewise we do an importance analysis 

6 to try to focus on issues that will really try to say, 

7 well, what really matters the most. What contributes 

8 the most to the uncertainty and the variability? 

9 And then I think it's just a bunch of 

10 back-up slides. I don't think there's any of those 

11 individual ones that anyone in the audience would like 

12 to discuss. 

13 Yes, sir. 

14 MR. CRAWFORD: Jim Crawford. 

15 Those who went through the last analysis 

16 together will not be surprised at what I have to say 

17 here. On discount rate, the discount rates that are 

18 typically used are far, far too low for consumers or 

19 for small business. For small business you have to 

20 look at what is their highest marginal rate that 

21 they're paying, and you know, it may be for floor 

22 stock. It may be a line of credit, whatever, but 

23 interests in the ten percent and above are not at all 

24 uncommon in business today. There's a whole bunch of 

25 stuff called junk bonds which describes that whole 

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1 classification.

2 So interest rates probably ought to be in

3 -- I don't know the commercial field that well, but I

4 would guess probably in the 12 to 15 percent bracket,

5 not the five or three or seven percent like we used

6 last time.

7 One of the justifications used in the past

8 for bringing down the discount rate, you say, well,

9 you've got the effect of taxes, you know, and they're

10 paying with pre-tax dollars and all of that. If you

11 want to play that game, then you have to go back and

12 make the purchase also adjusted for the tax rate.

13 So if my tax rate is 50 percent and I've

14 got a 1,000 purchase, it costs me $2,000, and I've not

15 seen any of that done here.

16 Demand, I'm going to guess that that's

17 highly variable, and I would hope that Edison Electric

18 Institute or EPRI or somebody can shed -- or perhaps

19 some of the utilities -- can shed some light on what

20 constitute typical profiles if there is such a thing.

21 And I think the biggest factor is going to

22 be whether or not it has a ratchet built into it. If

23 it's got a 12 month ratchet, it's going to be a very

24 significant thing.

25 MR. STOOPS: Well, and we are out looking

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1 classification. 

2 So interest rates probably ought to be in 

3 -- I don't know the commercial field that well, but I 

4 would guess probably in the 12 to 15 percent bracket, 

5 not the five or three or seven percent like we used 

6 last time. 

7 One of the justifications used ln the past 

8 for bringing down the discount rate, you say, well, 

9 you've got the effect of taxes, you know, and they're 

10 paying with pre-tax dollars and all of that. If you 

11 want to play that game, then you have to go back and 

12 make the purchase also adjusted for the tax rate. 

13 So if my tax rate is 50 percent and I've 

14 got a 1,000 purchase, it costs me $2,000, and I've not 

15 seen any of that done here. 

16 Demand, I'm going to guess that that's 

17 highly variable, and I would hope that Edison Electric 

18 Institute or EPRI or somebody can shed -- or perhaps 

19 some of the utilities -- can shed some light on what 

20 con·stitute typical profiles if there is such a thing. 

21 And I think the biggest factor is going to 

22 be whether or not it has a ratchet built into it. If 

23 it's got a 12 month ratchet, it's going to be a very 

24 significant thing. 

25 

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1 at gathering a host of different rates. We'd have to

2 make some decisions about how to distribute those

3 rates just like we're distributing the building size,

4 the equipment size across the sample of the analyses.

5 MR. CRAWFORD: But I think as we go

6 forward, or maybe not "but," but "and"; as we go

7 forward, it's important that there be, again, some

8 small workshops of the analysts and the people who are

9 expert in this field so that that information comes

10 from the field of expertise into the analysts, and

11 there's a meeting of the minds there rather than

12 coming around after the fact and having the analysts

13 say, "Well, this is how we got our results."

14 MR. STOOPS: Some of your prior comments

15 about not dealing with that particular subject, but in

16 dealing with shipment data and other information,

17 there was a concern about confidentiality you

18 expressed, and the desire to lump stuff together or

19 have large enough samples that could be passed through

20 ARI.

21 How would you handle these working

22 meetings? Would they have to be handled through ARI

23 or can we work individually? Can we develop a list of

24 target individuals?

25 MR. CRAWFORD: Well, on utility rates ARI

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1 at gathering a host of different rates. We'd have to 

2 make some decisions about how to distribute those 

3 rates just like we're distributing the building size, 

4 the equipment size across the sample of the analyses. 

5 MR . CRAWFORD: But I think as we go 

6 forward, or maybe not "but," but "and"; as we go 

7 forward, it's important that there be, again, some 

8 small workshops of the analysts and the people who are 

9 expert in this field so that that information comes 

10 from the field of expertise into the analysts, and 

11 there's a meeting of the minds there rather than 

12 coming around after the fact and having the analysts 

13 say, "Well, this is how we got our results." 

14 MR. STOOPS: Some of your prior comments 

15 about not dealing with that particular subj ect, but in 

16 dealing with shipment data and other information, 

17 there was a concern about confidentiality you 

18 expressed, and the desire to lump stuff together or 

19 have large enough samples that could be passed through 

20 ARl. 

21 How would you handle these working 

22 meetings? Would they have to be handled through ARl 

23 or can we work individually? Can we develop a list of 

24 target individuals? 

25 

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1 is not the right outfit.

2 MR. STOOPS: Well, not utility rates,

3 but --

4 MR. CRAWFORD: Well, but there's a --

5 MR. STOOPS: -- the general area.

6 MR. CRAWFORD: There's a significant

7 difference here in that I think that almost all of the

8 utilities and probably all of them have published

9 tariff schedules --

10 MR. STOOPS: Right, right.

11 MR. CRAWFORD: -- that tell you exactly

12 what you pay.

13 MR. STOOPS: No, and we're gathering that,

14 but you had also --

15 MR. CRAWFORD: Now, when you're talking

16 about shipment information; when you're talking about

17 what quantities go into a given geographic area; when

18 you're talking about anything in the statistical area

19 on ARI, if you're talking about prices of the

20 products, of ARI products, then I would hope that

21 every manufacturer is going to refer you to ARI for

22 aggregated data.

23 MR. STOOPS: But it's more of the working

24 group question that says how are we making some of

25 these decisions vis-a-vis the model. What models for

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1 is not the right outfit. 

2 MR. STOOPS: Well, not utility rates, 

3 but --

4 MR. CRAWFORD: Well, but there's a 

5 MR. STOOPS: the general area. 

6 MR. CRAWFORD: There's a significant 

7 difference here in that I think that almost all of the 

8 utilities and probably all of them have published 

9 tariff schedules --

10 MR. STOOPS: Right, right. 

11 MR. CRAWFORD: -- that tell you exactly 

12 what you pay. 

13 MR. STOOPS: No, and we're gathering that, 

14 but you had also --

15 MR. CRAWFORD: Now, when you're talking 

16 about shipment information; when you're talking about 

17 what quantities go into a given geographic area; when 

18 you're talking about anything in the statistical area 

19 on ARI, if you're talking about prices of the 

20 products, of ARI products, then I would hope that 

21 every manufacturer is going to refer you to ARI for 

22 aggregated data. 

23 MR. STOOPS: But it's more of the working 

24 group question that says how are we making some of 

25 these decisions vis-a-vis the model. What models for 

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1 HVAC modeling do individual manufacturers have?

2 You made the suggestion that we have a

3 working group to deal with some of those issues.

4 MR. CRAWFORD: Yeah, yeah.

5 MR. STOOPS: How do we gather that working

6 group?

7 MR. CRAWFORD: Through ARI.

8 MR. STOOPS: That one should be done

9 through ARI?

10 MR. CRAWFORD: Well, relative to the

11 industry participation. They will coordinate industry

12 participation, and one of the things I thought of

13 earlier that I didn't mention was, you know, we're

14 talking about -- we're all thinking about how much you

15 have to disaggregate the building stock. Well, one

16 answer to that is you do not have to disaggregate it

17 any further than the statistics that you can get on

18 how many square feet of each of those types of

19 buildings there are out there.

20 Because if I can't figure out how much of

21 it is out there to put into the national load, to put

22 into the national energy savings calculations, it

23 doesn't do me any good to have this group or that

24 group of the buildings.

25 MR. STOOPS: Don?

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1 HVAC modeling do individual manufacturers have? 

2 You made the suggestion that we have a 

3 working group to deal with some of those issues. 

4 MR. CRAWFORD: Yeah, yeah. 

5 MR. STOOPS: How do we gather that working 

6 group? 

7 MR. CRAWFORD: Through ARl. 

8 MR. STOOPS: That one should be done 

9 through ARl? 

10 MR. CRAWFORD: Well, relative to the 

11 industry participation. They will coordinate industry 

12 participation, and one of the things I thought of 

13 earlier that I didn't mention was, you know, we're 

14 talking about -- we're all thinking about how much you 

15 have to disaggregate the building stock. Well, one 

16 answer to that is you do not have to disaggregate it 

17 any further than the statistics that you can get on 

18 how many square feet of each of those types of 

19 buildings there are out there. 

20 Because if I can't figure out how much of 

21 it is out there to put into the national load, to put 

22 into the national energy savings calculations, it 

23 doesn' t do me any good to have this group or that 

24 group of the buildings. 

25 

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1 MR. BRUNDAGE: Don Brundage, Southern

2 Company.

3 A comment on the utility and marginal

4 costs and rates issue, and this is probably different

5 from what I or some of the other in the industry have

6 said in the past. Every assumption that's been made

7 on where deregulation is going that's been made in the

8 past five years has been wrong and badly wrong, and

9 there's really not much consensus either on where

10 rates are going.

11 One of my arguments says --

12 MR. STOOPS: You don't have a good crystal

13 ball that you can tell us?

14 MR. BRUNDAGE: Jim has got a lot better

15 one, what his future shipments are.

16 (Laughter.)

17 MR. CRAWFORD: You're in trouble.

18 MR. BRUNDAGE: And the other thing is,

19 which I have tried to tell people on, in a truly

20 deregulated market, the prices customers -- the prices

21 and rate structures customers see tend to be very

22 simple. You don't do real time prices and marginal

23 this, that, and the other in the loan market to

24 consumers. They do nickel a minute and dime a minute

25 things.

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1 MR. BRUNDAGE: Don Brundage, Southern 

2 Company. 

3 A comment on the utility and marginal 

4 costs and rates issue, and this is probably different 

5 from what I or some of the other in the industry have 

6 said in the past. Every assumption that's been made 

7 on where deregulation is going that's been made in the 

8 past five years has been wrong and badly wrong, and 

9 there's really not much consensus either on where 

10 rates are going. 

11 One of my arguments says --

12 MR. STOOPS: You don't have a good crystal 

13 ball that you can tell us? 

14 MR. B'RUNDAGE: Jim has got a lot better 

15 one, what his future shipments are. 

16 (Laughter. ) 

17 MR. CRAWFORD: You're in trouble. 

18 MR. BRUNDAGE: And the other thing is, 

19 which I have tried to tell people on, in a truly 

20 deregulated market, the prices customers - - the prices 

21 and rate structures customers see tend to be very 

22 simple. You don't do real time prices and marginal 

23 this, that, and the other in the loan market to 

24 consumers. They do nickel a minute and dime a minute 

25 things. 

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1 If you get less complexity, you're in a

2 truly deregulated market. So I guess my point is

3 maybe we're spending too much time and effort on some

4 of these sort of pricing issues, and we need not spend

5 excessive amounts of time on it.

6 MR. STOOPS: Okay. Thanks.

7 Charlie Stephens, then Tom.

8 MR. ECKMAN: Not to be contrary, but at

9 least in our neck of the woods at the moment, one of

10 the major public or private utilities, Tucson Energy,

11 is as we speak placing all of its commercial customers

12 on automated meter reading system and doing real time

13 pricing with those customers. They have a service

14 territory, and it's not restructured, and so it is the

15 incumbent utility and has utility responsibility.

16 So it's different than California used to

17 be but now is rapidly going back to, having utility

18 responsibility. So given the advent of that

19 technology and the deployment of that technology, it's

20 quite possible that significant numbers of this scale

21 of customer will be seeing something like market

22 prices on an hourly basis or four time a day basis.

23 Puget is putting 250 to 300,000 commercial

24 customers on. They already have --

25 MR. STOOPS: That many?

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1 If you get less complexity, you're in a 

2 truly deregulated market. So I guess my point is 

3 maybe we're spending too much time and effort on some 

4 of these sort of pricing issues, and we need not spend 

5 excessive amounts of time on it. 

6 MR. STOOPS: Okay. Thanks. 

7 Charlie Stephens, then Tom. 

8 MR. ECKMAN: Not to be contrary, but at 

9 least in our neck of the woods at the moment, one of 

10 the major public or private utilities, Tucson Energy, 

11 is as we speak placing all of its commercial customers 

12 on automated meter reading system and doing real time 

13 pricing with those customers. They have a service 

14 territory, and it's not restructured, and so it is the 

15 incumbent utility and has utility responsibility. 

16 So it's different than California used to 

17 be but now is rapidly going back to, having utility 

18 responsibility. So given the advent of that 

19 technology and the deployment of that technology, it's 

20 quite possible that significant numbers of this scale 

21 of customer will be seeing something like market 

22 prices on an hourly basis or four time a day basis. 

23 Puget is putting 250 to 300,000 commercial 

24 customers on. They already have --

25 

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1 MR. ECKMAN: They already have 400,000

* 2 residential customers on that rate schedule.

3 MR. STOOPS: Okay.

4 MR. ECKMAN: So this is not a small

5 deployment.

6 In addition to that, and this is going

7 back to the earlier comment or earlier issue of load

8 shapes, since they are building on that basis and are

9 collecting a significant amount of load shape

10 information, you'll have that available. So it may be

11 possible to get some of that.

12 MR. STOOPS: Do you have contacts that you

13 could share with us?

14 MR. ECKMAN: Yes.

15 MR. STOOPS: Please let us know.

16 MR. RABA: Thank you, Tom.

17 I think Charlie was up and then Don.

18 MR. STEPHENS: Charlie Stephens.

19 I was going to add just on the general

20 picture out on our side of the country you have the

21 additional problem I think unlike previous rulemakings

22 where you actually have an interaction between the

23 overall demand or lessening of demand created by

24 various levels of efficiency being considered for an

*V 25 end use that has a dramatic impact on the overall

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1 MR. ECKMAN: They already have 400,000 

2 residential customers on that rate schedule. 

3 MR. STOOPS: Okay. 

4 MR. ECKMAN: So this is not a small 

5 deployment. 

6 In addition to that, and this is going 

7 back to the earlier comment or earlier issue of load 

8 shapes, since they are building on that basis and are 

9 collecting a significant amount of load shape 

10 information, you'll have that available. So it may be 

11 possible to get some of that. 

12 MR. STOOPS: Do you have contacts that you 

13 could share with us? 

14 MR. ECKMAN: Yes. 

15 MR. STOOPS: Please let us know. 

16 MR. RABA: Thank you, Tom. 

17 I think Charlie was up and then Don. 

18 MR. STEPHENS: Charlie Stephens. 

19 I was going to add just on the general 

20 picture out on our side of the country you have the 

21 additional problem I think unlike previous rulemakings 

22 where you actually have an interaction between the 

23 overall demand or lessening of demand created by 

24 various levels of efficiency being considered for an 

25 end use that has a dramatic impact on the overall 

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1 system load, and at critical times.

2 And it interacts with price. It's not

3 just a matter of accounting for demand charges

4 anymore. It actually --

5 MR. STOOPS: No, no. That's right.

6 MR. STEPHENS: -- changes the price.

7 MR. STOOPS: And we are talking stabs at

8 looking at that marginal price relationship, and we're

9 not sure. We're more than willing to share as we

10 proceed, but we're gathering other suggestions.

11 MR. STEPHENS: Yeah, and I think there is

12 data being gathered, I think, in a lot of places where

13 these impacts are already being felt, and it's not

14 trivial, and I don't think you can pay too little

15 attention to it or too much attention to it based on

16 what the billions of dollars that's at stake in

17 California.

18 It's expensive to be wrong in that market,

19 and that's what's happened. It may not be over time

20 as dramatic as it has been, but we're still talking

21 hundreds of millions of dollars for demand avoided in

22 most places in a marketplace that only puts its most

23 expensive generation on the line when demand reaches

24 those high levels.

IO 25 So I think that you're going to have to

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1 system load, and at critical times. 

2 And it interacts with price. It's not 

3 just a matter of accounting for demand charges 

4 anymore. It actually --

5 MR. STOOPS: No, no. That's right. 

6 MR. STEPHENS: -- changes the price. 

7 MR. STOOPS: And we are talking stabs at 

8 looking at that marginal price relationship, and we're 

9 not sure. . We're more than willing to share as we 

10 proceed, but we're gathering other suggestions. 

11 MR. STEPHENS: Yeah, and I think there is 

12 data being gathered, I think, in a lot of places where 

13 these impacts are already being felt, and it's not 

14 trivial, and I don't think you can pay too little 

15 attention to it or too much attention to it based on 

16 what the billions of dollars that's at stake in 

17 California. 

18 It' s expensive to be wrong in that market, 

19 and that's what's happened. It may not be over time 

20 as dramatic as it has been, but we're still talking 

21 hundreds of millions of dollars for demand avoided in 

22 most places in a marketplace that only puts its most 

23 expensive generation on the line when demand reaches 

24 those high levels. 

25 So I think that you're going to have to 

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1 take into account all of those things, but you may be

2 able to do it at a very aggregated level based on data

3 that's probably been gathered now for about 18 months

4 and will continue to be gathered over the next year in

5 places like Puget Sound, California, and places that

6 are trying to deal with those situations, and you'll

7 connect dollars and load doing that.

8 MR. STOOPS: We're making that effort.

9 MR. BRUNDAGE: Don Brundage again, a

10 follow-up to an earlier comment.

11 We've had quite a few thousand customers,

12 a couple hundred KW and above, on real time pricing

13 for the last, oh, at least the last four or five

14 years, probably more customers longer than most

15 utilities.

16 MR. STOOPS: Okay.

17 MR. BRUNDAGE: And we have had to respond

18 to customer complaints about the unstable nature of

19 the pricing and unpredictability of how much revenue

20 we'd be demanding out of them to provide some more

21 simplified rate options.

22 I'm not trying to minimize the West Coast

23 problems, which are severe, but there are different

24 issues in other parts of the country, and --

25 MR. STOOPS: No, and I think the points

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1 take into account all of those things, but you may be 

2 able to do it at a very aggregated level based on data 

3 that's probably been gathered now for about 18 months 

4 and will continue to be gathered over the next year in 

5 places like Puget Sound, California, and places that 

6 are trying to deal with those situations, and you'll 

7 connect dollars and load doing that. 

8 MR. STOOPS: We're making that effort. 

9 MR. BRUNDAGE: Don Brundage again, a 

10 follow-up to an earlier comment. 

11 We've had quite a few thousand customers, 

12 a couple hundred KW and above, on real time pricing 

13 for the last, oh, at least the last four or five 

14 years, probably more customers longer than most 

15 utilities. 

16 MR. STOOPS: Okay. 

17 MR. BRUNDAGE: And we have had to respond 

18 to customer complaints about the unstable nature of 

19 the. pricing and unpredictability of how much revenue 

20 we'd be demanding out of them to provide some more 

21 simplified rate options. 

22 I'm not trying to minimize the West Coast 

23 problems, which are severe, but there are different 

24 issues in other parts of the country, and 

25 

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1 we're getting really illustrate the fact that our

2 analysis must, at a minimum, have some regional

3 differences, some regional variation as we go about

4 it.

5 MR. BRUNDAGE: Right. There are a lot of

6 conflicting ways things are pulled, whether you're

7 demand constrained or whether you're not.

8 MR. CRAWFORD: Jim Crawford.

9 One of the saving graces where is the fact

10 that the variability, uncertainty and diversity of all

11 this increases as you get into the out years in your

12 analysis period. If you use a realistic discount

13 rate, it will desensitize your analysis results to a

14 fair degree to variations in the out years.

15 MR. RABA: Jim Miller please.

16 MR. STOOPS: Jim Mullen.

17 MR. RABA: Excuse me.

18 MR. MULLEN: Jim Mullen.

19 A couple of comments. One, I think more

20 and more this equipment is leased as opposed to being

21 purchased, and that needs to be factored into your

22 analysis.

23 MR. STOOPS: Thanks.

24 MR. MULLEN: And then secondly, you talked

25 about a lot of effort going into forecasting electric

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1 we're getting really illustrate the fact that our 

2 analysis must, at a minimum, have some regional 

3 differences, some regional variation as we go about 

4 it. 

5 MR. BRUNDAGE: Right. There are a lot of 

6 conflicting ways things are pulled, whether you're 

7 demand constrained or whether you're not. 

8 MR. CRAWFORD: Jim Crawford. 

9 One of the saving graces where is the fact 

10 that the variability, uncertainty and diversity of all 

11 this increases as you get into the out years in your 

12 analysis period. If you use a realistic discount 

13 rate, it will desensitize your analysis results to a 

14 fair degree to variations in the out years. 

15 MR. RABA: Jim Miller please. 

16 MR. STOOPS: Jim Mullen. 

17 MR. RABA: Excuse me. 

18 MR. MULLEN: Jim Mullen. 

19 A couple of comments. One, I think more 

20 and more this equipment is leased as opposed to being 

21 purchased, and that needs to be factored into your 

22 analysis. 

23 MR. STOOPS: Thanks. 

24 MR. MULLEN: And then secondly, you talked 

25 about a lot of effort going into forecasting electric 

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1 prices and things like that. Is that redundant to

2 this Energy Information Administration Energy Outlook?

3 MR. STOOPS: They're somewhat different

4 and hopefully complementary. We work directly with

5 them, but as far as looking at some of the marginal

6 issues, historically that really hasn't done a good

7 job at coupling, and within our own analysis, we

8 really need to couple the variations within this

9 rather specific and the load specific variations.

10 So we think that this coupling needs to

11 occur, and we can't envision how to do it by using the

12 EIA aggregated data. We really need to get in at the

13 disaggregated way and disaggregated at the same time

14 within the analysis. That's our current thought

15 process anyway.

16 MR. CRAWFORD: Jim Crawford.

17 However, if the aggregate of your energy

18 price future forecast is inconsistent with the energy

19 price forecast of the EIA, then I think DOE has a

20 credibility problem.

21 MR. STOOPS: Okay.

22 MR. RABA: I've got a point of order here.

23 This is a curiosity from my point of view. I

24 associate the letters EIA with Electronics Industry

25 Association. I assume we're all -- really we've all

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1 prices and things like that. Is that redundant to 

2 this Energy Information Administration Energy Outlook? 

3 MR. STOOPS: They're somewhat different 

4 and hopefully complementary. We work directly with 

5 them, but as far as looking at some of the marginal 

6 issues, historically that really hasn't done a good 

7 job at coupling, and within our own analysis, we 

8 really need to couple the variations within this 

9 rather specific and the load specific variations. 

10 So we think that this coupling needs to 

11 occur, and we can't envision how to do it by using the 

12 EIA aggregated data. We really need to get in at the 

13 disaggregated way and disaggregated at the same time 

14 wi thin the analysis. That's our current thought 

15 process anyway. 

16 MR. CRAWFORD: Jim Crawford. 

17 However, if the aggregate of your energy 

18 price future forecast is inconsistent with the energy 

19 price forecast of the EIA, then I think DOE has a 

20 credibility problem. 

21 MR. STOOPS: Okay. 

22 MR. RABA: I've got a point of order here. 

23 This is a curiosity from my point of view. I 

24 associate the letters EIA with Electronics Industry 

25 Association. 

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1 been doing this. We're really talking about Edison

*O g2 Electric Institute, right?

3 MR. CRAWFORD: Energy Information Agency,

4 which is part of the Department of Energy.

5 MR. RABA: Thank you. I understand now.

6 Appreciate that.

7 Harvey.

8 MR. SACKS: Harvey Sacks.

9 I've been listening to Jim's comments on

10 realistic interest rates and would just offer the

11 observation that to some extent the technologies we're

12 talking about are demand reducing technologies which

13 at the margin compete with augmented generation for

14 capital.

15 To the extent that's true, then the retail

16 customers' discount rate is not the only rate to be

17 considered. The country as a whole and the utilities

18 are stakeholders in that decision making, and various

19 long run discount rates are entirely appropriate while

20 we're talking about demand reduction.

21 MR. RABA: Marshall and then Jim Crawford.

22 MR. HUNT: Marshall Hunt, PG&E.

23 I'm not an economist, and in our comments

24 we will respond on the discount rate issue because

* 25 there has got to be a way that we can factor in the

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1 been doing this. We're really talking about Edison 

2 Electric Institute, right? 

3 MR. CRAWFORD: Energy Information Agency, 

4 which is part of the Department of Energy. 

5 MR. RABA: Thank you. I understand now. 

6 Appreciate that. 

7 Harvey. 

8 MR. SACKS: Harvey Sacks. 

9 I've been listening to Jim's comments on 

10 realistic interest rates and would just offer the 

11 observation that to some extent the technologies we're 

12 talking about are demand reducing technologies which 

13 at the margin compete with augmented generation for 

14 capital. 

15 To the extent that's true, then the retail 

16 customers' discount rate is not the only rate to be 

17 considered. The country as a whole and the utilities 

18 are stakeholders in that decision making, and various 

19 long run discount rates are entirely appropriate while 

20 we're talking about demand reduction. 

21 MR. RABA: Marshall and then Jim Crawford. 

22 MR.·HUNT: Marshall Hunt, PG&E. 

23 I'm not an economist, and in our comments 

24 we will respond on the discount rate issue because 

25 there has got to be a way that we can factor in the 

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1 kind of issues that are raised by the fact that I as

2 a tenant in office space have no say in what air

3 conditioner gets put up there, and yet I am faced with

4 the surcharge that was passed in California by the

5 Public Utilities Commission that in small commercial

6 raised our rates from 12.2 cents a kilowatt hour to

7 16.7 cents a kilowatt hour, and in large commercial,

8 which has a lot of time of use rates, on average

9 raised it from 11 cents a kilowatt hour to over 15

10 cents.

11 And these rates, while they're called

12 surcharges, shouldn't be confused with real increased

13 tariffs that we'll have for a very long time, and PG&E

14 is a regulated distribution utility which is a new

15 beast in the world, which I hope none of the rest of

16 you get to experience, but it's quite an experience,

17 and, yes, the customers are looking frantically for

18 ways out of this, and one of the ways that they are

19 finding is higher efficiency equipment, and we

20 desperately need more of it.

21 And this kind of analysis would look into

22 the availability of it. So we definitely need to look

23 at these kinds of price structures, and I suspect that

24 we're going to see this happening in other areas.

25 I hear from other folks around the country

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1 kind of issues that are raised by the fact that I as 

2 a tenant in office space have no say in what air 

3 conditioner gets put up there, and yet I am faced with 

4 the surcharge that was passed in California by the 

5 Public Utilities Commission that in small commercial 

6 raised our rates from 12.2 cents a kilowatt hour to 

7 16.7 cents a kilowatt hour, and in large commercial, 

8 which has a lot of time of use rates, on average 

9 raised it from 11 cents a kilowatt hour to over 15 

10 cents. 

11 And these rates, while they're called 

12 surcharges, shouldn't be confused with real increased 

13 tariffs that we'll have for a very long time, and PG&E 

14 is a regulated distribution utility which is a new 

15 beast in the world, which I hope none of the rest of 

16 you get to experience, but it's quite an experience, 

17 and, yes, the customers are looking frantically for 

18 ways out of this, and one of the ways that they are 

19 finding is higher efficiency equipment, and we 

20 desperately need more of it. 

21 And this kind of analysis would look into 

22 the availability of it. So we definitely need to look 

23 at these kinds of price structures, and I suspect that 

24 we're going to see this happening in other areas. 

25 I hear from other folks around the country 

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1 that rates have gone up also. I hope it doesn't

2 happen everywhere, but definitely in our world it has

3 happened throughout the state.

4 MR. RABA: Jim.

5 MR. CRAWFORD: Jim Crawford.

6 Harvey made reference to demand reducing

7 technologies. Clearly if we increase the EER that's

8 a demand reducing activity, whatever technology you

9 used might be called a demand reducing technology, but

10 we had a list of technologies before, some 15 or 20

11 items, and to the degree that those are the way in

12 which we increase EER, which most of them won't, there

13 is no -- in that list, there is no uniquely demand

14 reducing technology independent of whatever you do

15 with EER, and there are a couple of them that are

16 going to increase demand very dramatically.

17 There's not a black box out there.

18 There's not this magic fufu juice out there that's

19 going to reduce the demand while we do nothing other

20 than just reduce demand. I mean, it doesn't exist.

21 The laws of physics say it never will exist.

22 MR. RABA: Tom.

23 MR. ECKMAN: This is more a point on the

24 data collection and relationship to the EIA forecast

25 of commercial rates and what have you.

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1 that· rates have gone up also. I hope it doesn't 

2 happen everywhere, but definitely in our world it has 

3 happened throughout the state. 

4 MR. RABA: Jim. 

5 MR. CRAWFORD: Jim Crawford. 

6 Harvey made reference to demand reducing 

7 technologies. Clearly if we increase the EER that's 

8 a demand reducing activity, whatever technology you 

9 used might be called a demand reducing technology, but 

10 we had a list of technologies before, some 15 or 20 

11 items, and to the degree that those are the way ln 

12 which we increase EER, which most of them won't, there 

13 is no in that list, there is no uniquely demand 

14 reducing technology independent of whatever you do 

15 with EER, and there are a couple of them that are 

16 going to increase demand very dramatically. 

17 There's not a black box out there. 

18 There's not this magic tutu juice out there that's 

19 going to reduce the demand while we do nothing other 

20 than just reduce demand. I mean, it doesn't exist. 

21 The laws of physics say it never will exist. 

22 MR .. RABA: Tom. 

23 MR. ECKMAN: This is more a point on the 

24 data collection and relationship to the EIA forecast 

25 of commercial rates and what have you. 

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1 I think it's incumbent upon the analysis

2 to basically stay current with that. Tomorrow we'll

3 be dealing with the residential analysis --

4 MR. STOOPS: Right, right.

5 MR. ECKMAN: -- you know.

6 MR. STOOPS: And EIA is our primary data

7 source. I mean, so clearly we have to use their

8 information as much as possible.

9 MR. ECKMAN: And the issue there is that

10 they don't -- and the CBECS data is not contemporary.

11 It's collected every few years.

12 MR. STOOPS: Hopefully every few years,

13 right.

14 MR. ECKMAN: And recent events on the West

15 Coast have dramatically changed the price structures

16 at least in our neck of the woods. Seattle, which

17 represents about 50 percent of the commercial building

18 stock in the entire Northwest, has a tail block rate

19 for commercial customers now. It's 18 cents. That's

20 a little bit different than a year ago, like 100 and

21 some percent.

22 MR. STOOPS: Yeah. Well, historically,

23 especially if you look at the Pacific Northwest where

24 it's, you know, two and a half, three and a half, four

25 and a half in parts of the region, and still within

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1 I think it's incumbent upon the analysis 

2 to basically stay current with that. Tomorrow we'll 

3 be dealing with the residential analysis 

4 MR. STOOPS: Right, right. 

5 MR. ECKMAN: -- you know. 

6 MR. STOOPS: And EIA is our primary data 

7 source. I mean, so clearly we have to use their 

8 information as much as possible. 

9 MR. ECKMAN: And the issue there is that 

10 they don't -- and the CBECS data is not contemporary. 

11 It's collected every few years. 

12 MR. STOOPS: Hopefully every few years, 

13 right. 

14 MR. ECKMAN: And recent events on the West 

15 Coast have dramatically changed the price structures 

16 at least in our neck of the woods. Seattle, which 

17 represents about 50 percent of the commercial building 

18 stock in the entire Northwest, has a tail block rate 

19 for commercial customers now. It's 18 cents. That's 

20 a little bit different than a year ago, like 100 and 

21 some percent. 

22 MR. STOOPS: Yeah. Well, historically, 

23 especially if you look at the Pacific Northwest where 

24 it's, you know, two and a half, three and a half, four 

25 and a half in parts of the region, and still within 

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1 the region you can still go to Grant County and have

2 ridiculously low rates.

3 So, I mean, it's a challenge.

4 MR. ECKMAN: Well, and you know, Grant

5 County doesn't have half of the building stock.

6 MR. STOOPS: No, no. That's right.

7 MR. ECKMAN: They may have two cents a

8 kilowatt hour, but, you know, they have one tenth of

9 the building stock. So in terms of who's paying 18

10 cents and facing that price, 50 percent of the

11 commercial building stock is in that service

12 territory, and they will now care about EER.

13 MR. RABA: Karim.

14 MR. AMRANE: Karim Amrane, ARI.

15 You said in your life cycle cost analysis

16 that you will determine the percent of consumers with

17 net savings or with net costs. What's the definition

18 of consumer in this case?

19 MR. STOOPS: That is a question. Can you

20 help us define who the consumers are? I mean, well,

21 that's right. I had another slide that addressed the

22 issue about is it the owner; is it the user; how do we

23 define each of those? Is it leased equipment; is it

24 owned equipment? I mean, even that to the level of

25 disparity, in addition to who's actually paying the

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1 the region you can still go to Grant County and have 

2 ridiculously low rates. 

3 So, I mean, it's a challenge. 

4 MR. ECKMAN: Well, and you know, Grant 

5 County doesn't have half of the building stock. 

6 MR. STOOPS: No, no. That's right. 

7 MR. ECKMAN: They may have two cents a 

8 kilowatt hour, but, you know, they have one tenth of 

9 the building stock. So in terms of who's paying 18 

10 cents and facing that price, 50 percent of the 

11 commercial building stock is ln that service 

12 territory, and they will now care about EER. 

13 MR. RABA: Karim. 

14 MR. AMRANE: Karim Amrane, ARI. 

15 You said in your life cycle cost analysis 

16 that you will determine the percent of consumers with 

17 net savings or with net costs. What's the definition 

18 of consumer in this case? 

19 MR. STOOPS: That is a question. Can you 

20 help us define who the consumers are? I mean, well, 

21 that's right. I had another slide that addressed the 

22 issue about is it the ownerj is it the userj how do we 

23 define each of those? Is it leased equipmentj is it 

24 owned equipment? I mean, even that to the level of 

25 disparity, in addition to who's actually paying the 

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1 bill.

2 So it is a challenge, and if you have any

3 suggestions, we certainly welcome those suggestions.

4 MR. RABA: Is that all for John?

5 MR. STOOPS: Except I think I need to go

6 this way. In the meantime, go ahead, Jim.

7 MR. CRAWFORD: To the last question, I

8 want to just throw something out for us to all think

9 about, and that is do we have any choice other than to

10 assume that in this case that the building is owner

11 occupied. I mean, if we make any other assumption,

12 you're going to wind up with silly results. You're

13 going to wind up having to put owners against

14 occupants because clearly from an occupant's

15 standpoint, what I as an occupant want is can you make

16 it as efficient as possible.

17 I mean, you know, go to whatever the

18 limits of technology. From an owner's standpoint, I

19 want to say, well, let's get the least efficient.

20 Just give me the cheapest thing you can get, and so

21 you've got the competition of interest here, and I

22 don't see how you're going to get around that

23 competition of interest without pooling them.

24 MR. STOOPS: Well, and you just really

25 gave me a lead-in because we are really now trying to

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1 bill. 

2 So it is a challenge, and if you have any 

3 suggestions, we certainly welcome those suggestions. 

4 MR. RABA: Is that all for John? 

5 MR. STOOPS: Except I think I need to go 

6 this way. In the meantime, go ahead, Jim. 

7 MR. CRAWFORD: To the last question, I 

8 want to just throw something out for us to all think 

9 about, and that is do we have any choice other than to 

10 assume that in this case that the building is owner 

11 occupied. I mean, if we make any other assumption, 

12 you're going to wind up with silly results. You're 

13 going to wind up having to put owners against 

14 occupants because clearly from an occupant's 

15 standpoint, what I as an occupant want is can you make 

16 it as efficient as possible. 

17 I mean, you know, go to whatever the 

18 limits of technology. From an owner's standpoint, I 

19 want to say, well, let's get the least efficient. 

20 Just give me the cheapest thing you can get, and so 

21 you've got the competition of interest here, and I 

22 don't see how you're going to get around that 

23 competition of interest without pooling them. 

24 MR. STOOPS: Well, and you just really 

25 gave me a lead-in because we are really now trying to 

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1 look at consumer subgroup, which is how do we really

2 deal --

3 MR. CRAWFORD: Did you get it right?

4 MR. STOOPS: -- with this issue?

5 (Laughter.)

6 MR. STOOPS: And we have. WE have

7 direction of how we're supposed to do this. The

8 department will use regional analysis and sensitivity

9 analysis tools as appropriate to evaluate the

10 potential distribution of impacts of candidate

11 standard levels on consumers. It doesn't define

12 consumers for us.

13 The department will consider impacts on

(* ~ 14 significant segments of society in determining

15 standards levels. Where there are significant

16 negative impacts on identifiable subgroups, DOE will

17 consider the efficacy of voluntary approaches as a

18 means to achieve potential energy savings.

19 So really we're directed to do this

20 analysis, but we're really not even sure in the

21 commercial products how to go about it. I mean, what

22 subgroups should be considered for this? Is it owner23 occupant? Is it tenant leased? Is it public sector?

24 Do we have suggestions about how we really should be

*V 25 approaching this?

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1 look at consumer subgroup I which is how do we really 

2 deal 

3 MR. CRAWFORD: Did you get it right? 

4 MR. STOOPS: -- with this issue? 

5 (Laughter. ) 

6 MR. STOOPS: And we have. WE have 

7 direction of how we I re supposed to do this. The 

8 department will use regional analysis and sensitivity 

9 analysis tools as appropriate to evaluate the 

10 potential distribution of impacts of candidate 

11 standard levels on consumers. It doesn It def ine 

12 consumers for us. 

13 The department will consider impacts on 

14 significant segments of society in determining 

15 standards levels. Where there are significant 

16 negative impacts on identifiable subgroups I DOE will 

17 consider the efficacy of voluntary approaches as a 

18 means to achieve potential energy savings. 

19 So really we/re directed to do this 

20 analysis I but we I re really not even sure in the 

21 commercial products how to go about it. I mean l what 

22 subgroups should be considered for this? Is it owner23 occupant? Is it tenant leased? Is it public sector? 

24 Do we have suggestions about how we really should be 

25 approaching this? 

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1 I think there's clearly been individuals

2 in the room today who have identified issues that we

3 need to deal with, and we're here to try to gather

4 some additional information to help us make some

5 decisions.

6 MR. RABA: I saw Mark Friedrichs first.

7 MR. FRIEDRICHS: Hi.

8 MR. RABA: Mark Friedrichs, Department of

9 Energy.

10 MR. FRIEDRICHS: Yes, Mark Friedrichs,

11 Department of Energy.

12 On this point, it's a question about how

13 we treat the passthrough of costs for new equipment by

14 owners when that space is rented. Usually in life15 cycle cost analyses, leased space is treated very much

16 like owned space. In other words, the cost of new

17 equipment is assumed to be passed on to the lessors.

18 And I'm not sure that that's the best way

19 of treating those costs, but one question is how

20 should we distinguish between the impact on owners of

21 leased space, users of leased space versus users of

22 space that is owned by the occupants.

23 MR. RABA: Thank you, Mark.

24 Charlie Stephens.

25 MR. STEPHENS: Charlie Stephens.

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1 I think there's clearly been individuals 

2 in the room today who have identified issues that we 

3 need to deal with, and we're here to try to gather 

4 some additional information to help us make some 

5 decisions. 

6 MR. RABA: I saw Mark Friedrichs first. 

7 MR. FRIEDRICHS: Hi. 

8 MR. RABA: Mark Friedrichs, Department of 

9 Energy. 

10 MR. FRIEDRICHS: Yes, Mark Friedrichs, 

11 Department of Energy. 

12 On this point, it's a question about how 

13 we treat the passthrough of costs for new equipment by 

14 owners when that space is rented. Usually in life15 cycle cost analyses, leased space is treated very much 

16 like owned space. In other words, the cost of new 

17 equipment is assumed to be passed on to the lessors. 

l8 And I'm not sure that that's the best way 

19 of treating those costs, but one question is how 

20 should we distinguish between the impact on owners of 

21 leased space, users of leased space versus users of 

22 space that is owned by the occupants. 

23 

24 

25 

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Charlie Stephens. 

MR. STEPHENS: Charlie Stephens. 

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1 We've wrestled with this for a while, and

2 it was nice of Jim to sort of encapsulate it so well

3 and sort of explain why we have standards. It's for

4 those situations where the people paying the bill for

5 the operation of the equipment aren't the people who

6 get to make the decision about what equipment goes in.

7 And it's a matter of shifting the costs

8 from the owner of the equipment to the person who pays

9 the bill to operate the equipment. It's not been our

10 experience at all that the costs are directly passed

11 on. The space in a building which comes with its

12 cooling and heating equipment and all of the lighting

13 in some cases, not in others, comes at a price per

14 square foot, and that price per square foot I

15 guarantee you will be absolutely the highest price

16 that the market will bear, and it bears no relation

17 whatsoever to the cost of the building, the cost of

18 the equipment in the building or on the building or

19 anything else. It is the highest price that that

20 office space of that quality and that location will

21 bear regardless of the building itself.

22 And that changes pretty regularly. As

23 neighborhoods change, as the condition of the building

24 changes, as the nature of the occupants change, as the

25 real estate market and the economy go up and down; so

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1 We've wrestled with this for a while, and 

2 it was nice of Jim to sort of encapsulate it so well 

3 and sort of explain why we have standards. It's for 

4 those situations where the people paying the bill for 

5 the operation of the equipment aren't the people who 

6 get to make the decision about what equipment goes in. 

7 And it's a matter of shifting the costs 

8 from the owner of the equipment to the person who pays 

9 the bill to operate the equipment. It's not been our 

10 experience at all that the costs are directly passed 

11 on. The space in a building which comes with its 

12 cooling and heating equipment and all of the lighting 

13 in some cases, not in others, comes at a price per 

14 square foot, and that price per square foot I 

15 guarantee you will be absolutely the highest price 

16 that the market will bear, and it bears no relation 

17 whatsoever to the cost of the building, the cost of 

18 the equipment in the building or on the building or 

19 anything else. It is the highest price that that 

20 office space of that quality and that location will 

21 bear regardless of the building itself. 

22 And that changes pretty regularly. As 

23 neighborhoods change, as the condition of the building 

24 changes, as the nature of the occupants change, as the 

25 real estate market and the economy go up and down; so 

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1 there is no assumption, I don't believe, to be made

2 about passing on the costs of this particular

3 equipment to whoever is operating it.

4 But there is a very direct relationship

5 between what equipment you own and if you're paying

6 the electric bill and the operating bill. You are

7 going to get hit with that, and I think we've already

8 discussed how.

9 But I think as subgroups, you know, you

10 may have to look at different groups impacted at some

11 sort of blend of discount rates and interest rates and

12 everything else to come up with an overall answer to

13 the question.

14 If you look at this on a grand scale, it's

15 a matter of how much cost will be shifted from the

16 people who avoid cost at purchase to the people who

17 will pay the bill for operating that stuff over the

18 long haul, and I don't know how you're going to get at

19 that on a policy level, but you have that problem to

20 solve in order to come to a rational answer.

21 MR. STOOPS: Well, we need to come up with

22 a model that illustrates it. Hopefully it's

23 reasonably rational.

24 MR. STEPHENS: We'll help you do that.

25 MR. STOOPS: Thanks, thanks.

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1 there is no assumption, I don't believe, to be made 

2 about passing on the costs of this particular 

3 equipment to whoever is operating it. 

4 But there is a very direct relationship 

5 between what equipment you own and if you're paying 

6 the electric bill and the operating bill. You are 

7 going to get hit with that, and I think we've already 

8 discussed how. 

9 But I think as subgroups, you know, you 

10 may have to look at different groups impacted at some 

11 sort of blend of discount rates and interest rates and 

12 everything else to come up with an overall answer to 

13 the question. 

14 If you look at this on a grand scale, it's 

15 a matter of how much cost will be shifted from the 

16 people who avoid cost at purchase to the people who 

17 will pay the bill for operating that stuff over the 

18 long haul, and I don't know how you're going to get at 

19 that on a policy level, but you have that problem to 

20 solve in order to come to a rational answer. 

21 MR. STOOPS: Well, we need to come up with 

22 a model that illustrates it. Hopefully it's 

23 reasonably rational. 

24 

25 

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1 MR. BRUNDAGE: Don Brundage, Southern

2 Company.

3 I'm going to take sort of a different

4 approach on commercial than I have on some of the

5 residential groups because I think commercial is

6 fundamentally different.

7 I've complained on some of the residential

8 appliances that you didn't pay enough attention to

9 consumers, especially to low income consumers.

10 Actually what Charlie said, yeah, the

11 price of the rent is going to be the price based on

12 competition and what the price given all the

13 characteristics of that piece of property as compared

14 to competing ones. What the competing property's

15 price will be is going to include electricity prices

16 in structure of their cost.

17 And commercial is kind of unique in that

18 in general, not in all cases, the competitors to those

19 commercial customers is someone local, providing a

20 similar service that is probably going to be paying

21 similar electricity prices from a similar or identical

22 supplier.

23 It's like when I've seen some interviews

24 from the utilities raising prices to commercial

25 customers. It says I go out of business. I can't

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1 MR. BRUNDAGE: Don Brundage, Southern 

2 Company. 

3 I'm going to take sort of a different 

4 approach on commercial than I have on some of the 

5 residential groups because I think commercial is 

6 fundamentally different. 

7 I've complained on some of the residential 

8 appliances that you didn't pay enough attention to 

9 consumers, especially to low income consumers. 

10 Actually what Charlie said, yeah, the 

11 price of the rent is going to be the price based on 

12 competition and what the price given all the 

13 characteristics of that piece of property as compared 

14 to competing ones. What the competing property's 

15 price will be is going to include electricity prices 

16 in structure of their cost. 

17 And commercial is kind of unique in that 

18 in general, not in all cases, the competitors to those 

19 commercial customers is someone local, providing a 

20 similar service that is probably going to be paying 

21 similar electricity prices from a similar or identical 

22 supplier. 

23 It's like when I've seen some interviews 

24 from the utilities raising prices to commercial 

25 customers. 

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1 afford it.

2 Well, his competitors for that grocery

3 store or that minimart are going to be paying the same

4 additional prices for their suppliers. so as far as

5 competitiveness, it's neutral. They're paying the

6 same thing.

7 So I think there is some appeal to what

8 Jim has said, that you could look at it as owner

9 occupied or another way to look at it is ignore the

10 boundaries between owner and whatever and look at it

11 from a societal point of view, what the total cost

12 benefit is if everyone -- the same person owned

13 everything.

14 MR. STOOPS: From the experience of the

15 audience is there sufficient knowledge, sufficient

16 information transfer within the marketplace so that a

17 person in Office A knows how his utility per square

18 foot price relates to a person in Office B?

19 MR. BRUNDAGE: He doesn't have to know it.

20 Whoever is offering that space out for lease knows

21 what his costs are, and that goes into what he's

22 willing to offer in the marketplace. He's not going

23 to go out there and offer space for rent that he's

24 going to intend to lose money for every month that

O*r 25 it's out there.

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1 afford it. 

2 Well, his competitors for that grocery 

3 store or that minimart are going to be paying the same 

4 additional prices for their suppliers. so as far as 

5 competitiveness, it's neutral. They're paying the 

6 same thing. 

7 So I think there is some appeal to what 

8 Jim has said, that you could look at it as owner 

9 occupied or another way to look at it is ignore the 

10 boundaries between owner and whatever and look at it 

11 from a societal point of view, what the total cost 

12 benefit is if everyone the same person owned 

13 everything. 

14 MR. STOOPS: From the experience of the 

15 audience is there sufficient knowledge, sufficient 

16 information transfer within the marketplace so that a 

17 person in Office A knows how his utility per square 

18 foot price relates to a person in Office B? 

19 MR. BRUNDAGE: He doesn't have to know it. 

20 Whoever is offering that space out for lease knows 

21 what his costs are, and that goes into what he's 

22 willing to offer in the marketplace. He's not going 

23 to go out there and offer space for rent that he's 

24 going to intend to lose money for every month that 

25 it's out there. 

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1 He's going to have a strong tendency

2 towards at least covering his cash flow even in a bad

3 market.

4 MR. RABA: Harvey.

5 MR. SACKS: Harvey Sacks.

6 This is not a response to Don, but a

7 general reflection on our conversation. I'm not sure

8 if I'm more reminded of the blind men and the elephant

9 or of Alice talking about verdict first, trial later.

10 To some extent as you gather data on the building from

11 stock, we will see that it ranges from rooftop

12 equipment, that school boards operate in schools in

13 Mississippi to developer built strip malls, to a

14 variety of other applications, some of which are

15 predominantly owned by people who have low discount

16 rates and many of which are people who have high

17 discount rates, some of which are occupant paid.

18 Why don't we get some data, see what it

19 looks like, and then see what the blend is and how we

20 handle it in sensitivity analysis?

21 MR. STOOPS: Our expectation is that we

22 will see some obvious subgroups emerge. We're asking

23 the audience if from their prior knowledge that there

24 are subgroups that we definitely need to look at.

25 MR. RABA: Francine Pinto, Department of

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1 He's going to have a strong tendency 

2 towards at least covering his cash flow even in a bad 

3 market. 

4 MR. RABA: Harvey. 

5 MR. SACKS: Harvey Sacks. 

6 This is not a response to Don, but a 

7 general reflection on our conversation. I'm not sure 

8 if I'm more reminded of the blind men and the elephant 

9 or of Alice talking about verdict first, trial later. 

10 To some extent as you gather data on the building from 

11 stock, we will see that it ranges from rooftop 

12 equipment, that school boards operate in schools in 

13 Mississippi to developer built strip malls, to a 

14 variety of other applications, some of which are 

15 predominantly owned by people who have low discount 

16 rates and many of which are people who have high 

17 discount rates, some of which are occupant paid. 

18 Why don't we get some data, see what it 

19 looks like, and then see what the blend is and how we 

20 handle it in sensitivity analysis? 

21 MR. STOOPS: Our expectation is that we 

22 will see some obvious subgroups emerge. We're asking 

23 the audience if from their prior knowledge that there 

24 are subgroups that we definitely need to look at. 

25 

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MR .. RABA: Francine Pinto, Department of 

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1 Energy.

2 MS. PINTO: Francine Pinto, Department of

3 Energy.

4 One question we can also look at is is the

5 consumer subgroup analysis actually appropriate.

6 Remember in the framework document we said we would

7 use the process rule to the extent it was appropriate

8 because the process rule was based upon the

9 residential equipment.

10 So we can always step back and say, "Well,

11 in this case as to commercial equipment, is this

12 useful to do?"

13 So I think we should also be looking from

*D ~ 14 that point of view as well.

15 MR. RABA: Tom Eckman.

16 MR. ECKMAN: I think just to take a little

17 different tact on this one, I have a suspicion,

18 although it probably won't be revealed by real data,

19 but I have a suspicion that the subgroups we're

20 talking about here that are more or less advantaged or

21 disadvantaged are going to be driven more by the

22 building occupancy type since we can't really define

23 ownership.

24 You're going to have schools that operate

25 with a certain building characteristic, but as schools

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1 Energy. 

2 MS. PINTO: Francine Pinto, Department of 

3 Energy. 

4 One question we can also look at is is the 

5 consumer subgroup analysis actually appropriate. 

6 Remember in the framework document we said we would 

7 use the process rule to the extent it was appropriate 

8 because the process rule was based upon the 

9 residential equipment. 

10 So we can always step back and say, "Well, 

11 in this case as to commercial equipment, is this 

12 useful to do? II 

13 So I think we should also be looking from 

14 that point of view as well. 

15 MR. RABA: Tom Eckman. 

16 MR. ECKMAN: I think just to take a little 

17 different tact on this one, I have a suspicion, 

18 although it probably won't be revealed by real data, 

19 but I have a suspicion that the subgroups we're 

20 talking about here that are more or less advantaged or 

21 disadvantaged are going to be driven more by the 

22 building occupancy type since we can't really define 

23 ownership. 

24 You're going to have schools that operate 

25 with a certain building characteristic, but as schools 

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1 versus a hair salon, versus a strip mall that have

2 different characteristics in terms of operating hours

3 and load cycle on this equipment.

4 And you're going to have locations, north,

5 south, east, and west, that have varying loads, and I

6 think the load duration curve will define populations

7 that are more or less advantaged, and that will be

8 unrelated to ownership.

9 MR. CRAWFORD: Jim Crawford again.

10 I guess there's one group of people not

11 represented here which should be, and that's BOMA,

12 Building Owners-Managers Association. They should

13 definitely be brought into this discussion.

14 And I don't know of a comparable group of

15 tenants, but the other thing that strikes me is that

16 if you do the analysis two ways, and it should be a

17 trivial exercise to do it the second way, if you do it

18 owner occupied, you do it owner-tenant, and then you

19 look at the percentage of people that are advantaged

20 or disadvantaged by different efficiency levels as

21 you're going to do anyway, and you see what the

22 differences are, and you know the direction they're

23 going to be.

24 Then you say, okay, now these two outcomes

25 are different. How do I adjudicate between those two

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1 versus a hair salon, versus a strip mall that have 

2 different characteristics in terms of operating hours 

3 and load cycle on this equipment. 

4 And you're going to have locations, north, . 

5 south, east, and west, that have varying loads, and I 

6 think the load duration curve will define populations 

7 that are more or less advantaged, and that will be 

8 unrelated to ownership. 

9 MR. CRAWFORD: Jim Crawford again. 

10 I guess there's one group of people not 

11 represented here which should be, and that's BOMA, 

12 Building Owners-Managers Association. They should 

13 definitely be brought into this discussion. 

14 And I don't know of a comparable group of 

15 tenants, but the other thing that strikes me is that 

16 if you do the analysis two ways, and it should be a 

17 trivial exercise to do it the second way, if you do it 

18 owner occupied, you do it owner-tenant, and then you 

19 look at the percentage of people that are advantaged 

20 or disadvantaged by different efficiency levels as 

21 you're going to do anyway, and you see what the 

22 differences are, and you know the direction they're 

23 going to be. 

24 Then you say, okay, now these two outcomes 

25 are different. How do I adjudicate between those two 

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1 outcomes? You say, well, what percentage of buildings

2 are owner occupied, and if you weight those

3 appropriately based on the percentage of buildings or

4 percentage of floor space that is owner occupied, you

5 will have a balanced answer.

6 MR. STOOPS: Thanks.

7 MR. RABA: Thank you, Jim.

8 Other comments? Charlie Stephens.

9 MR. STEPHENS: Charlie Stephens.

10 Just a quick observation. I think based

11 on the BOMA folks that I know, and I guess I can ask

12 them next week when I talk to them, they're big

13 building guys. They own chillers for the most part.

14 The folks that I know that are running the

15 unitary equipment are more Wendy's, Coldwell Banker,

16 people who own, you know, strip malls, fast food

17 restaurants, the kinds of markets that are using the

18 rooftop stuff, other than, of course, the public

19 sector folks that are obviously owner occupied unless

20 the taxpayers are considered the owners. But they are

21 paying the bills.

22 I think if we can get to it, a societal

23 perspective might just help us wash all of this over.

24 I kind of side with Don a little bit that, you know,

25 eventually a societal thing will help us all.

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1 outcomes? You say, well, what percentage of buildings 

2 are owner occupied, and if you weight those 

3 appropriately based on the percentage of buildings or 

4 percentage of floor space that is owner occupied, you 

5 will have a balanced answer. 

6 MR. STOOPS: Thanks. 

7 MR. RABA: Thank you, Jim. 

8 Other comments? Charlie Stephens. 

9 MR. STEPHENS: Charlie Stephens. 

10 Just a quick observation. I think based 

lIon the BOMA folks that I know, and I guess I can ask 

12 them next week when I talk to them, they're big 

13 building guys. They own chillers for the most part. 

14 The folks that I know that are running the 

15 unitary equipment are more Wendy's, Coldwell Banker, 

16 people who own, you know, strip malls, fast food 

17 restaurants, the kinds of markets that are using the 

18 rooftop stuff, other than, of course, the public 

19 sector folks that are obviously owner occupied unless 

20 the taxpayers are considered the owners. But they are 

21 paying the bills. 

22 I think if we can get to it, a societal 

23 perspective might just help us wash all of this over. 

24 I kind of side with Don a little bit that, you know, 

25 eventually a societal thing will help us all. 

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1 MR. STOOPS: That's just -- I mean, you

2 guys are good because that's the next topic.

3 MR. CRAWFORD: Okay. Just societal and

4 owner occupied wind up analytically the same thing.

5 MR. STOOPS: We really do need to put on

6 a different hat. What we've been looking at so far,

7 even though -- I mean, the problems are pretty broad,

8 pretty multi-headed beasts. They're still micro or

9 maybe amesa (phonetic) scale. We're going to now step

10 into a real macro scale and look at a set of national

11 issues, and some of these can go fairly quickly.

12 The first one to look at is the national

13 energy savings and net present value analysis, and

14 basically we're going to, once we've taken the step of

15 -- I mean, we talked this morning about the

16 engineering analysis, the equipment analysis. We're

17 building this beast up. We're doing the life-cycle

18 cost analysis.

19 Well, eventually we need to do the whole

20 national analysis, and the national analysis that we

21 talked about briefly is really looking at the base

22 case and the different standard cases, looking at that

23 difference which represents hopefully energy savings,

24 not energy increases, and we're going to report the

25 results in physical units so that they all make some

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1 MR. STOOPS: That's just -- I mean, you 

2 guys are good because that's the next topic. 

3 MR. CRAWFORD: Okay. Just societal and 

4 owner occupied wind up analytically the same thing. 

5 MR. STOOPS: We really do need to put on 

6 a different hat. what we've been looking at so far, 

7 even though -- I mean, the problems are pretty broad, 

8 pretty multi-headed beasts. They're still micro or 

9 maybe amesa (phonet ic) scale. We're going to now step 

10 into a real macro scale and look at a set of national 

11 issues, and some of these can go fairly quickly. 

12 The first one to look at is the national 

13 energy savings and net present value analysis, and 

14 basically we're going to, once we've taken the step of 

15 I mean, we talked this morning about the 

16 engineering analysis, the equipment analysis. We're 

17 building this beast up. We're doing the life-cycle 

18 cost analysis. 

19 Well, eventually we need to do the whole 

20 national analysis, and the national analysis that we 

21 talked about briefly is really looking at the base 

22 case and the different standard cases, looking at that 

23 difference which represents hopefully energy savings, 

24 not energy increases, and we're going to report the 

25 results in physical units so that they all make some 

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1 sense, kilowatt hours, site energy, or quadrillion BTU

2 source energy, economic units, dollars for each year,

3 and cumulative.

4 And we're going to look at it for about 30

5 years, and actually we have a bit of a difference

6 here. Probably it should be 2030, not 2040. That

7 doesn't quite --

8 MR. RABA: Marshall, I see your hand.

9 MR. STOOPS: Yes, Marshall already.

10 MR. HUNT: Yes, I felt it went too fast

11 last time. So let me just butt in here.

12 I think we should have a bullet here about

13 KW and, therefore, power plants.

14 MR. STOOPS: And power plants, yeah.

15 MR. HUNT: Because I see no peak here.

16 MR. STOOPS: Okay, okay.

17 MR. HUNT: I looked ahead, and I didn't

18 find one.

19 MR. STOOPS: Right, right. That's not

20 expressed here. We will be looking at it. Thank you

21 for nothing that.

22 So how are we going to forecast shipments?

23 We've got a couple of ways. We could use an

24 accounting model or we could extrapolate from time

25 series.

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1 sense, kilowatt hours, site energy, or quadrillion BTU 

2 source energy, economic units, dollars for each year, 

3 and cumulative. 

4 And we're going to look at it for about 30 

5 years, and actually we have a bit of a difference 

6 here. Probably it should be 2030, not 2040. That 

7 doesn't quite --

8 MR. RABA: Marshall, I see your hand. 

9 MR. STOOPS: Yes, Marshall already. 

10 MR. HUNT: Yes, I felt it went too fast 

11 last time. So let me just butt in here. 

12 I think we should have a bullet here about 

13 KW and, therefore, power plants. 

14 MR. STOOPS: And power plants, yeah. 

15 MR. HUNT: Because I see no peak here. 

16 MR. STOOPS: Okay, okay. 

17 MR. HUNT: I looked ahead, and I didn't 

18 find one. 

19 MR. STOOPS: Right, right. That's not 

20 expressed here. We will be looking at it. Thank you 

21 for nothing that. 

22 So how are we going to forecast shipments? 

23 We've got a couple of ways. We could use an 

24 accounting model or we could extrapolate from time 

25 series. 

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1 If we extrapolate from time series, there

Q*~ 2 really isn't an explicit accounting function for

3 number of buildings, percent owning equipment, changes

4 of installed costs or operating expenses. So that's

5 going to be a challenge.

6 Forecasting using accounting model, we

7 have new buildings and present by equipment type,

8 hopefully available within these models that we've

9 been using to build this up. We have to come up with

10 something about replacement, and then try to add on

11 impacts from existing nonregulatory efforts, based on

12 efficiencies in future years. For example,

13 refrigerant change-out and maybe other issues as well.

14 If we look at this input, are there other

15 kinds of inputs that we should use? Are there other

16 information sources on past shipment data by

17 efficiency level?

18 Apparently there is some information

19 available from the appliance industry that hopefully

20 -- I'm not sure exactly what will be shared, and what

21 other non-regulatory initiatives should be considered

22 within the base case itself, other items that we

23 should consider.

24 Lost everyone. A silent crowd. I can't

25 believe it.

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1 If we extrapolate from time series, there 

2 really isn't an explicit accounting function for 

3 number of buildings, percent owning equipment, changes 

4 of installed costs or operating expenses. So that's 

5 going to be a challenge. 

6 Forecasting using accounting model, we 

7 have new buildings and present by equipment type, 

8 hopefully available within these models that we've 

9 been using to build this up. We have to come up with 

10 something about replacement, and then try to add on 

11 impacts from existing nonregulatory efforts, based on 

12 efficiencies in future years. For example, 

13 refrigerant change-out and maybe other issues as well. 

14 If we look at this input, are there other 

15 kinds of inputs that we should use? Are there other 

16 information sources on past shipment data by 

17 efficiency level? 

18 Apparently there is some information 

19 available from the appliance industry that hopefully 

20 -- I'm not sure exactly what will be shared, and what 

21 other non-regulatory initiatives should be considered 

22 within the base case itself, other items that we 

23 should consider. 

24 Lost everyone. A silent crowd. I can't 

25 believe it. 

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1 Go ahead, Marshall.

2 MR. HUNT: Marshall Hunt, PG&E.

3 Is our CEE person still on board here?

4 MS. POULIN: Yes, I am.

5 MR. HUNT: Because I was thinking that we

6 do have some data with especially PG&E with our

7 express efficiency program that's been going on for

8 some years that's been incentivizing higher efficiency

9 commercial equipment, and that data might be helpful.

10 And I think CEE might have access to other

11 utilities data.

12 MS. POULIN: Yes, we do.

13 MR. HUNT: Okay. That would be helpful.

14 MR. STOOPS: Okay.

15 MR. HUNT: That's the kind of data you're

16 looking for?

17 MR. STOOPS: Yeah, well. I mean, we could

18 move on and sort of look explicitly by consumer

19 economic factors. I mean, what sort of specific data

20 for operating expenses and purchase expenses can we

21 get to try to drive the models and tools that we'll be

22 using?

23 Not that any of it is going to be real

24 easy to get because we do want to look ultimately at

25 something like this equipment class distribution where

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1 Go ahead, Marshall. 

2 MR. HUNT: Marshall Hunt, PG&E. 

3 Is our CEE person still on board here? 

4 MS. POULIN: Yes, I am. 

5 MR. HUNT: Because I was thinking that we 

6 do have some data with especially PG&E with our 

7 express efficiency program that's been going on for 

8 some years that's been incentivizing higher efficiency 

9 commercial equipment, and that data might be helpful. 

10 And I think CEE might have access to other 

11 utilities data. 

12 MS. POULIN: Yes, we do. 

13 MR. HUNT: Okay. That would be helpful. 

14 MR. STOOPS: Okay. 

15 MR. HUNT: That's the kind of data you're 

16 looking for? 

17 MR. STOOPS: Yeah, well. I mean, we could 

18 move on and sort of look explicitly by consumer 

19 economic factors. I mean, what sort of specific data 

20 for operating expenses and purchase expenses can we 

21 get to try to drive the models and tools that we'll be 

22 using? 

23 Not that any of it is going to be real 

24 easy to get because we do want to look ultimately at 

25 something like this equipment class distribution where 

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1 we're looking at the differences in total shipments by

2 size, by whether they're split or packaged, different

3 kinds of analysis.

4 This is from census data in 1997. For

5 this specific rule, we need to come up with the best

6 data we can, and hopefully, I think ARI has some data

7 that can help with that.

8 MR. AMRANE: Yes, we do have some data we

9 will share.

10 MR. CRAWFORD: What you don't have is by

11 building type.

12 MR. STOOPS: Yeah, and that's going to be

13 a challenge.

14 MR. CRAWFORD: You ought to be able to

15 pull that out of the hat.

16 MR. STOOPS: Well, we have to make some

17 assumptions.

18 MR. CRAWFORD: You know you've got 10,000

19 buildings that are air conditioned, and you've got

20 some idea what the building activity is. Now, again,

21 you don't have to pin down detailed analysis on every

22 building in the world.

23 MR. STOOPS: That's correct. Ultimately

24 because we do want to look at the net present value to

25 try to bring it all into comparable numbers, but for

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1 we're looking at the differences in total shipments by 

2 size, by whether they're split or packaged, different 

3 kinds of analysis. 

4 This is from census data in 1997. For 

5 this specific rule, we need to come up with the best 

6 data we can, and hopefully, I think ARI has some data 

7 that can help with that. 

8 MR. AMRANE: Yes, we do have some data we 

9 will share. 

10 MR. CRAWFORD: What you don't have is by 

11 building type. 

12 MR. STOOPS: Yeah, and that's going to be 

13 a challenge. 

14 MR. CRAWFORD: You ought to be able to 

15 pull that out of the hat. 

16 MR. STOOPS: Well, we have to make some 

17 assumptions. 

l8 MR. CRAWFORD: You know you've got lO,OOO 

19 buildings that are air conditioned, and you've got 

20 some idea what the building activity is. Now, again, 

2l you don't have to pin down detailed analysis on every 

22 building in the world. 

23 MR. STOOPS: That's correct. Ultimately 

24 because we do want to look at the net present value to 

25 try to bring it all into comparable numbers, but for 

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1 each year analyzed, we'll calculate the difference in

2 installed cost and operating cost between the base

3 case and each of the standard cases and then discount

4 those future cash flows all to the present and some

5 over the years to get net present value, and the

6 present value exceeds -- if the present value of

7 savings exceed cost, then the net present value is

8 positive, and the converse is also true.

9 Basically the approach that we're using,

10 is this the appropriate approach? Are there other

11 suggestions about how to come up with these numbers?

12 Yeah.

13 MR. STEPHENS: Charlie Stephens.

14 One thing I would observe here is that you

15 do have historical shipments, right?

16 MR. STOOPS: To a certain degree.

17 MR. STEPHENS: To some extent. I mean,

18 you know --

19 MR. STOOPS: Right, right.

20 MR. STEPHENS: -- aggregated. That means

21 depending on what level of sale goes to replacement

22 and what is new construction, you might be able to tie

23 historical to a significant fraction of shipments in

24 the future just because they are replacements.

25 MR. STOOPS: Right, right.

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1 each year analyzed, we'll calculate the difference in 

2 installed cost and operating cost between the base 

3 case and each of the standard cases and then discount 

4 those future cash flows all to the present and some 

5 ove'r the years to get net present value, and the 

6 present value exceeds if the present value of 

7 savings exceed cost, then the net present value is 

8 positive, and the converse is also true. 

9 Basically the approach that we're using, 

10 lS this the appropriate approach? Are there other 

11 suggestions about how to come up with these numbers? 

12 Yeah. 

13 MR. STEPHENS: Charlie Stephens. 

14 One thing I would observe here is that you 

15 do have historical shipments, right? 

16 MR. STOOPS: To a certain degree. 

17 MR. STEPHENS: To some extent. I mean, 

18 you know --

19 MR. STOOPS: Right, right. 

20 MR. STEPHENS: -- aggregated. That means 

21 depending on what level of sale goes to replacement 

22 and what is new construction, you might be able to tie 

23 historical to a significant fraction of shipments in 

24 the future just because they are replacements. 

25 

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MR. STOOPS: Right, right. 

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1 MR. STEPHENS: And so you can correlate

2 those pretty well, and the only thing that's really

3 uncertain after that is new construction and the

4 lifetime of whatever is out there installed.

5 MR. STOOPS: How far back does the ARI

6 data go?

7 MR. AMRANE: I don't know.

8 MR. STOOPS: Because the lifetime of some

9 of this equipment is pretty long. So ultimately it

10 would be nice to have data that went back 30 years.

11 MR. AMRANE: I don't think we have 30

12 years.

13 MR. STOOPS: Okay.

14 MR. CRAWFORD: Jim Crawford.

15 You probably have it somewhere between ten

16 and 20 years.

17 MR. STOOPS: That would be great though.

18 MR. CRAWFORD: But if we can come up with

19 a mutually agreed estimate of life expectancy of the

20 equipment and a model for what that means, then you

21 can back the rest of it out from knowing what your

22 current market is and what your market has been for

23 the last 15 years.

24 MR. STOOPS: Yeah, yeah. We should be

25 quite close.

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1 MR. STEPHENS: And so you can correlate 

2 those pretty well, and the only thing that's really 

3 uncertain after that is new construction and the 

4 lifetime of whatever is out there installed. 

5 MR. STOOPS: How far back does the ARI 

6 data go? 

7 MR. AMRANE: I don't know. 

8 MR. STOOPS: Because the lifetime of some 

9 of this equipment is pretty long. So ultimately it 

10 would be nice to have data that went back 30 years. 

11 MR. AMRANE: I don't think we have 30 

12 years. 

13 MR. STOOPS: Okay. 

14 MR. CRAWFORD: Jim Crawford. 

15 You probably have it somewhere between ten 

16 and 20 years. 

17 MR. STOOPS: That would be great though. 

18 MR. CRAWFORD: But if we can come up with 

19 a mutually agreed estimate of life expectancy of the 

20 equipment and a model for what that means, then you 

21 can back the rest of it out from knowing what your 

22 current market is and what your market has been for 

23 the last 15 years. 

24 

25 quite close. 

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MR. STOOPS: Yeah, yeah. 

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1 MR. RABA: David?

2 MR. WINIARSKI: I'd just like to --

3 MR. RABA: Speak into the microphone,

4 please.

5 MR. WINIARSKI: Dave Winiarski.

6 I would just like to make a comment that

7 one of the things that we ought to be considering

8 there or getting input from industry on is whether

9 there would be any reason to develop different

10 lifetimes for equipment used in different building

11 types or circumstances, and I don't know that there

12 would be, but I think that's something that you guys

13 would be the experts in providing.

14 MR. STOOPS: Silence, yes.

15 MR. BRUNDAGE: Don Brundage, Southern

16 Company.

17 One comment on this. This is a

18 measurement method, not a presumption of what points

19 that you're choosing as the appropriate one for

20 evaluating alternatives. It's not necessarily -- like

21 some of the discussions at the start of the day, it's

22 not necessarily that you're saying minimizing net

23 present value as always the best solution.

24 This is just a description of the

25 measurement method.

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1 MR. RABA: David? 

2 MR. WINIARSKI: I'd just like to --

3 MR. RABA: Speak into the microphone, 

4 please. 

5 MR. WINIARSKI: Dave Winiarski. 

6 I would just like to make a comment that 

7 one of the things that we ought to be considering 

8 there or getting input from industry on is whether 

9 there would be any reason to develop different 

10 lifetimes for equipment used In different building 

11 types or circumstances, and I don't know that there 

12 would be, but I think that's something that you guys 

13 would be the experts in providing. 

14 MR. STOOPS: Silence, yes. 

15 MR. BRUNDAGE: Don Brundage, Southern 

16 Company. 

17 One comment on this. This is a 

18 measurement method, not a presumption of what points 

19 that you're choosing as the appropriate one for 

20 evaluating alternatives. It's not necessarily - - like 

21 some of the discussions at the start of the day, it's 

22 not necessarily that you're saying minimizing net 

23 present value as always the best solution. 

24 This is just a description of the 

25 measurement method. 

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1 MR. STOOPS: And then a decision will be

2 made based up some of those measurements. This is not

3 the only national measurement to be made as well

4 because there's manufacturer impact, employment

5 impact, utility impact.

6 MR. RABA: Ted Doyle.

7 MR. DOYLE: One comment about the life

8 cycle is that as the efficiency goes up, you know, we

9 need bigger coils, move more air, and that sort of

10 thing, and we have control over building the equipment

11 up to the standard that the DOE sets forward, but not

12 to the installation in which it's installed into, and

13 that directly affects the life cycle of the equipment.

14 MR. STOOPS: Is there any -- from your

15 experience, I mean, there's no correlation between

16 life of equipment and efficiency level, is there?

17 Have you noted within the manufacturing is

18 there any correlation between efficiency level and

19 lifetime?

20 MR. DOYLE: At this point I couldn't tell

21 you.

22 MR. CRAWFORD: Jim Crawford.

23 Let me address that in a somewhat

24 different way. If we collectively set the next

25 efficiency standard too high, you will find that it

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1 MR. STOOPS: And then a decision will be 

2 made based up some of those measurements. This is not 

3 the only national measurement to be made as well 

4 because there's manufacturer impact, employment 

5 impact, utility impact. 

6 MR. RABA: Ted Doyle. 

7 MR. DOYLE: One comment about the life 

8 cycle is that as the efficiency goes up, you know, we 

9 need bigger coils, move more air, and that sort of 

10 thing, and we have control over building the equipment 

11 up to the standard that the DOE sets forward, but not 

12 to the installation in which it's installed into, and 

13 that directly affects the life cycle of the equipment. 

14 MR. STOOPS: Is there any -- from your 

15 experience, I mean, there's no correlation between 

16 life of equipment and efficiency level, is there? 

17 Have you noted within the manufacturing is 

18 there any correlation between efficiency level and 

19 lifetime? 

20 MR. DOYLE: At this point I couldn't tell 

21 you. 

22 MR. CRAWFORD: Jim Crawford. 

23 Let me address that in a somewhat 

24 different way. If we collectively set the next 

25 efficiency standard too high, you will find that it 

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1 will have a remarkable effect on the longevity of the

2 existing inventory.

3 (Laughter.)

4 MR. CRAWFORD: And that's very, very real,

5 and that's something that none of us should want. We

6 set those numbers too high. People are going to just

7 keep the old equipment in service, and we're not going

8 to achieve any of the objectives that we're all here

9 about.

10 MR. BRUNDAGE: A quick comment. Don

11 Brundage, Southern Company.

12 The particular effect that Jim is talking

13 about seems to have been modeled in fairly good detail

14 in some of the residential equipment. So I'm

15 confident that you'll handle it well this time.

16 MR. STOOPS: Okay, okay. Karim.

17 MR. AMRANE: Karim Amrane, ARI.

18 Could you tell us how you can define in

19 the life-cycle cost losers and winners?

20 MR. STOOPS: We haven't fully defined

21 losers and winners at this stage. We're still looking

22 at relative issues about -- I mean, if we look at the

23 different standard levels and look at a particular

24 subgroup, there's going to be a difference as we look

25 at each of those, and as far as threshold values,

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1 will have a remarkable effect on the longevity of the 

2 existing inventory. 

3 (Laughter.) 

4 MR. CRAWFORD: And that's very, very real, 

5 and that's something that none of us should want. We 

6 set those numbers too high. People are going to just 

7 keep the old equipment in service, and we're not going 

8 to achieve any of the objectives that we're all here 

9 about. 

10 MR. BRUNDAGE: A quick comment. Don 

11 Brundage, Southern Company. 

12 The particular effect that Jim is talking 

13 about seems to have been modeled in fairly good detail 

14 in some of the residential equipment. So I'm 

15 confident that you'll handle it well this time. 

16 MR. STOOPS: Okay, okay. Karim. 

17 MR. AMRANE: Karim Amrane, ARI. 

18 Could you tell us how you can define in 

19 the life-cycle cost losers and winners? 

20 MR. STOOPS: We haven't fully defined 

21 los~rs and winners at this stage. We're still looking 

22 at relative issues about -- I mean, if we look at the 

23 different standard levels and look at a particular 

24 subgroup, there's going to be a difference as we look 

25 at each of those, and as far as threshold values, 

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1 those that are making more or those that are -- it has

2 a net cost that exceeds -- you know, a negative net

3 present value versus a positive, about the relative

4 sense; we have not made any of those decisions yet.

5 We expect that there will be variations,

6 and one could characterize those as winners and losers

7 and neutrals, but we certainly haven't set any

8 thresholds or bounds about that yet.

9 Do you have any suggestions?

10 MR. AMRANE: No, I guess I just -- you

11 know, for the residential rulemaking, DOE has changed

12 the definition of winners and losers along the way.

13 In the ANOPR, it was something. In the NOPR it was

14 something else, and we would like to know in advance.

15 I mean, on what basis will you --

16 MR. STOOPS: Yeah, yeah, yeah.

17 MR. AMRANE: -- will you decide?

18 MR. STOOPS: By the time we get to the

19 ANOPR, I think that we'll have a decision. We'll have

20 something. Maybe it won't change again.

21 MR. RABA: Well, your endurance is,

22 indeed, praiseworthy. Would you all like to take a

23 break, 15 minutes?

24 Let's do that. Thank you very much, John.

25 Good job.

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1 those that are making more or those that are -- it has 

2 a net cost that exceeds -- you know, a negative net 

3 pre~ent value versus a positive, about the relative 

4 sense; we have hot made any of those decisions yet. 

5 We expect that there will be variations, 

6 and one could characterize those as winners and losers 

7 and neutrals, but we certainly haven't set any 

8 thresholds or bounds about that yet. 

9 Do you have any suggestions? 

10 MR. AMRANE: No, I guess I just -- you 

11 know, for the residential rulemaking, DOE has changed 

12 the definition of winners and losers along the way. 

13 In the ANOPR, it was something. In the NOPR it was 

14 something else, and we would like to know in advance. 

15 I mean, on what basis will you 

16 MR. STOOPS: Yeah, yeah, yeah. 

17 MR. AMRANE: -- will you decide? 

18 MR. STOOPS: By the time we get to the 

19 ANOPR, I think that we'll have a decision. We'll have 

20 something. Maybe it won't change again. 

21 MR. RABA: Well, your endurance is, 

22 indeed, praiseworthy. Would you all like to take a 

23 break, 15 minutes? 

24 

25 Good job. 

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1 (Whereupon, the foregoing matter went off

Aa.g 2 the record at 3:29 p.m. and went back on

3 the record at 3:49 p.m.)

4 MR. RABA: We're all set to start.

5 Mark Kendall is returning now for the

6 presentation of manufacturer impact analysis.

7 MR. KENDALL: Okay. If you could take a

8 brief look at the beginning of your packet from this

9 morning, there was the flow chart in Bryan Berringer's

10 presentation that described the whole process. I just

11 wanted to let you know where we are now.

12 We've gone all the way through to the

13 first double line here that says ANOPR. So everything

14 you've heard so far today has dealt with things that

15 would appear in an ANOPR, which would be about 18

16 months from now.

17 From this point on, you're going to hear

18 things that we won't even really begin until after

19 that ANOPR occurs. So we're presenting these. You'll

20 notice that there may be one or two slides in each

21 topic, presenting these just so that you'll know

22 what's planned in the future near the end of the

23 analysis so that in case you're wondering, well,

24 aren't they going to consider manufacture impacts,

25 yes, we are, but that's scheduled for after the ANOPR

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1 (Whereupon, the foregoing matter went off 

2 the record at 3:29 p.m. and went back on 

3 the record at 3:49 p.m.) 

4 MR. RABA: We're all set to start. 

5 Mark Kendall is returning now for the 

6 presentation of manufacturer impact analysis. 

7 MR. KENDALL: Okay. If you could take a 

8 brief look at the beginning of your packet from this 

9 morning, there was the flow chart in Bryan Berringer's 

10 presentation that described the whole process. I just 

11 wanted to let you know where we are now. 

12 We've gone all the way through to the 

13 first double line here that says ANOPR. So everything 

14 you've heard so far today has dealt with things that 

15 would appear in an ANOPR, which would be about 18 

16 months from now. 

17 From this point on, you're going to hear 

18 things that we won't even really begin until after 

19 that ANOPR occurs. So we're presenting these. You'll 

20 notice that there may be one or two slides in each 

21 topic, presenting these just so that you'll know 

22 what's planned in the future near the end of the 

23 analysis so that in case you're wondering, well, 

24 aren't they going to consider manufacture impacts, 

25 yes, we are, but that's scheduled for after the ANOPR 

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1 is published.

2 So my presentation will be specifically on

3 manufacturer impact analysis, and if I flip to slide

4 one, the manufacturer impact analysis, once the

5 department has narrowed down the range of efficiency

6 levels that it would like to consider, it attempts to

7 identify what the financial impacts mostly would be on

8 manufacturers and different groups of manufacturers.

9 So the first bullet lists some of those

10 things that the department has looked at in the past:

11 cash flows and net present value, product flow,

12 manufacturing capacity, employment levels, and

13 competition. Some of these things are called out in

14 statute, and some of these things have been brought up

15 by stakeholders.

16 So if there are aspects of manufacture

17 impact that are specific to commercial air

18 conditioners that you would like the department to

19 consider, please include those in your comments.

20 The second'bullet discusses products or

21 subgroups particularly sensitive to the impacts of new

22 standards.

23 The third is other regulations that

24 contribute to cumulative burden. The statute

25 recognizes that there are other regulations at the

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1 is published. 

2 So my presentation will be specifically on 

3 manufacturer impact analysis, and if I flip to slide 

4 one, the manufacturer impact analysis, once the 

5 department has narrowed down the range of efficiency 

6 levels that it would like to consider, it attempts to 

7 identify what the financial impacts mostly would be on 

8 manufacturers and different groups of manufacturers. 

9 So the first bullet lists some of those 

10 things that the department has looked at in the past: 

11 cash flows and net present value, product flow, 

12 manufacturing capacity, employment levels, and 

13 competition. Some of these things are called out in 

14 statute, and some of these things have been brought up 

15 by stakeholders. 

16 So if there are aspects of manufacture 

17 impact that are specific to commercial air 

18 conditioners that you would like the department to 

19 consider, please include those in your comments. 

20 The second·bullet discusses products or 

21 subgroups particularly sensi ti ve to the impacts of new 

22 standards. 

23 The third is other regulations that 

24 contribute to cumulative burden. The statute 

25 recognizes that there are other regulations at the 

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1 federal level, state level that are imposed upon

2 manufacturers, and the department has considered the

3 extent to which those build up over time and make the

4 business environment more difficult.

5 So that would be one of the things we

6 would plan to consider here, as well, and the last

7 bullet point just leaves it open to what I said

8 before: other things that aren't listed here that

9 manufacturers would think would be important to

10 consider. Those are certainly the department is able

11 to consider those ideas.

12 So that would end the manufacturer impact

13 presentation. If anybody has any comments, I can take

14 those. Otherwise I would turn it back over to John

15 Stoops.

16 MR. RABA: Jim Crawford.

17 MR. CRAWFORD: Very quickly, you have

18 dropped your question at the end the cash flows and

19 net present value, which are very important.

20 MR. RABA: Excuse the interruption, Jim.

21 We're trying to beam our callers in.

22 MR. CRAWFORD: All I'm saying is pick up

23 your first bullet in your question.

24 MR. KENDALL: Okay. Is there any other

25 comments? Yes.

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1 federal level, state level that are imposed upon 

2 manufacturers, and the department has considered the 

3 extent to which those build up over time and make the 

4 business environment more difficult. 

5 So that would be one of the things we 

6 would plan to consider here, as well, and the last 

7 bullet point just leaves it open to what I said 

8 before: other things that aren't listed here that 

9 manufacturers would think would be important to 

10 consider. Those are certainly the department is able 

11 to consider those ideas. 

12 So that would end the manufacturer impact 

13 presentation. If anybody has any comments, I can take 

14 those. Otherwise I would turn it back over to John 

15 Stoops. 

16 MR. RABA: Jim Crawford. 

17 MR . CRAWFORD: Very quickly, you have 

18 dropped your question at the end the cash flows and 

19 net present value, which are very important. 

20 MR. RABA: Excuse the interruption, Jim. 

21 We're trying to beam our callers in. 

22 MR. CRAWFORD: All I'm saying is pick up 

23 your first bullet in your question. 

24 MR. KENDALL: Okay. Is there any other 

25 comments? Yes. 

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1 MR. MULLEN: Jim Mullen.

2 Just a couple of general comments. This

3 is becoming a much more difficult business for

4 manufacturers. If you think about it, a manufacturer

5 used to have one line of commercial equipment that was

6 at a fixed efficiency level that he sold throughout

7 the U.S. and Canada.

8 Now, you need to have two, probably a low

9 cost line that sold into one market, a 90.1 line that

10 sold into another market, and maybe even a level of

11 efficiencies above 90.1 for areas where there are

12 rebates.

13 So what's going from a process of having

14 to engineer one line of equipment is now nearly to

15 three, and we'd certainly appreciate not having a

16 fourth.

17 Another part of that is that it becomes

18 almost a nightmare with all of the jumble of

19 regulations and localities now as to where you stock

20 what equipment and what you can sell and can't sell.

21 As 90.1 becomes implemented in different states or

22 adopted in certain states with similar or various

23 effective dates, you have a huge process of trying to

24 decide which inventory, what product to build, where

25 you can inventory it, and where you can sell it.

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1 MR. MULLEN: Jim Mullen. 

2 Just a couple of general comments. This 

3 is becoming a much more difficult business for 

4 manufacturers. If you think about it, a manufacturer 

5 used to have one line of commercial equipment that was 

6 at a fixed efficiency level that he sold throughout 

7 the U.S. and Canada. 

8 Now, you need to have two, probably a low 

9 cost line that sold into one market, a 90.1 line that 

10 sold into another market, and maybe even a level of 

11 efficiencies above 90.1 for areas where there are 

12 rebates. 

13 So what's going from a process of having 

14 to engineer one line of equipment is now nearly to 

15 three, and we'd certainly appreciate not having a 

16 fourth. 

17 Another part of that is that it becomes 

18 almost a nightmare with all of the jumble of 

19 regulations and localities now as to where you stock 

20 what equipment and what you can sell and can't sell. 

21 As 90.1 becomes implemented in different states or 

22 adopted in certain states with similar or various 

23 effective dates, you have a huge process of trying to 

24 decide which inventory, what product to build, where 

25 you can inventory it, and where you can sell it. 

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1 And so the commercial business as a whole,

2 I think, is probably struggling a little bit today

3 with a larger inventory than it used to have for all

4 of those reasons, plus an addition of engineering

5 costs to try and get the design work done, if you

6 track all of the additional bills of materials and

7 make all of the changes as you have to to keep up with

8 UL or whomever else.

9 MR. KENDALL: Thank you.

10 MR. CRAWFORD: A small please, I guess.

11 MR. KENDALL: You reminded me of something

12 that hasn't come up today, but that I should mention.

13 A very important part of this manufacture impact

14 analysis is the visits that the department and we

15 undertake to discuss one on one with individual

16 companies what some of their important issues are, as

17 well as those that pertain to the whole industry.

18 In the past we've scheduled a round of

19 interviews during the MIA. We've also scheduled a

20 round of interviews early in the process during the

21 ANOPR phase, and those would be something that we

22 would, of course, like the opportunity to do again,

23 and that would occur over the next couple of months.

24 So somebody will probably be contacting

25 ARI to discuss setting up these visits and discussing

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1 And so the commercial business as a whole, 

2 I think, is probably struggling a little bit today 

3 with a larger inventory than it used to have for all 

4 of those reasons, pI us an addition of engineering 

5 costs to try and get the design work done, if you 

6 track all of the additional bills of materials and 

7 make all of the changes as you have to to keep up with 

8 UL or whomever else. 

9 MR. KENDALL: Thank you. 

10 MR. CRAWFORD: A small please, I guess. 

11 MR. KENDALL: You reminded me of something 

12 that hasn't come up today, but that I should mention. 

13 A very important part of this manufacture impact 

14 analysis is the visits that the department and we 

15 undertake to discuss one on one with individual 

16 companies what some of their important issues are, as 

17 well as those that pertain to the whole industry. 

18 In the past we've scheduled a round of 

19 interviews during the MIA. We've also scheduled a 

20 round of interviews early in the process during the 

21 ANOPR phase, and those would be something that we 

22 would, of course, like the opportunity to do again, 

23 and that would occur over the next couple of months. 

24 So somebody will probably be contacting 

25 ARI to discuss setting up these visits and discussing 

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1 these issues more in depth with individual companies.

is* 2 MR. RABA: Harvey Sacks, please.

3 MR. SACKS: Harvey Sacks.

4 Jim Mullen, we very much sympathize with

5 the problem with stocking at three different levels.

6 I think I would speak for most of the advocacy

7 community in wanting to work very hard to maintain a

8 differentiated level, which you refer to as rebate

9 level, and to roll together into a single sensible

10 level something that's above 90.1 and the present base

11 model.

12 So we would be trying very hard to help

13 differentiation, but we may not agree on the details

14 of what the baseline model ought to be.

15 Thank you.

16 MR. RAY: Mike Ray with Trane.

17 To play off of what Jim Mullen has said,

18 the complexity of building the products, it's very

19 difficult having three different lines like he was

20 saying, but not only that. The suppliers that provide

21 us with components work on operation, and they have to

22 provide us these components as we go down the line.

23 That adds another level of complexity as

24 well not only for us, but for our supplies upstream

* 25 from us that did have to provide us those components.

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1 these issues more In depth with individual companies. 

2 MR. RABA: Harvey Sacks, please. 

3 MR. SACKS: Harvey Sacks. 

4 Jim Mullen, we very much sympathize with 

5 the problem with stocking at three different levels. 

6 I think I would speak for most of the advocacy 

7 community in wanting to work very hard to maintain a 

8 differentiated level, which you refer to as rebate 

9 level, and to roll together into a single sensible 

10 level something that's above 90.1 and the present base 

11 model. 

12 So we would be trying very hard to help 

13 differentiation, but we may not agree on the details 

14 of what the baseline model ought to be. 

15 Thank you. 

16 MR. RAY: Mike Ray with Trane. 

17 To playoff of what Jim Mullen has said, 

18 the complexity of building the products, it's very 

19 difficult having three different lines like he was 

20 saying, but not only that. The suppliers that provide 

21 us with components work on operation, and they have to 

22 provide us these components as we go down the line. 

23 That adds another level of complexity as 

24 well not only for us, but for our supplies upstream 

25 from us that did have to provide us those components. 

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1 So that adds to the problems as well.

2 MR. KENDALL: Thank you.

3 MR. RABA: I understand those manufacturer

4 visits are very important and very helpful to all

5 concerned, too, and they do bring out a lot of good

6 issues and facts on the table as well, and they're

7 usually very well handled.

8 Does that conclude the manufacturer impact

9 analysis part, Mark?

10 MR. KENDALL: Yes.

11 MR. RABA: Thank you very much.

12 Any other ideas on that? I missed it.

13 Michael Martin.

14 MR. MARTIN: Michael Martin, California

15 Energy Commission.

16 I look at our goal here to get down to

17 reducing the numbers rather than increasing the

18 numbers. If we increase the efficiency, we will get

19 rid of those that fail to meet the 90.1 level, and if

20 we increase it beyond the 90.1 level, we're still

21 getting rid of the 90.1 level.

22 So I'm looking from the current three to

23 two. I tend to agree with Harvey, having some super

24 good one that aimed for the future is a good idea.

25 MR. RAY: To respond to that, Mike Ray

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234 

1 So that adds to the problems as well. 

2 MR. KENDALL: Thank you. 

3 MR. RABA: I understand those manufacturer 

4 visits are very important and very helpful to all 

5 concerned, too, and they do bring out a lot of good 

6 issues and facts on the table as well, and they're 

7 usually very well handled. 

8 Does that conclude the manufacturer impact 

9 analysis part, Mark? 

10 MR. KENDALL: Yes. 

11 MR. RABA: Thank you very much. 

12 Any other ideas on that? I missed it. 

13 Michael Martin. 

14 MR. MARTIN: Michael Martin, California 

15 Energy Commission. 

16 I look at our goal here to get down to 

17 reducing the numbers rather than increasing the 

18 numbers. If we increase the efficiency, we will get 

19 rid of those that fail to meet the 90.1 level, and if 

20 we increase it beyond the 90.1 level, we're still 

21 getting rid of the 90.1 level. 

22 So I'm looking from the current three to 

23 two. I tend to agree with Harvey, having some super 

24 go04 one that aimed for the future is a good idea. 

25 

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1 with Trane again.

2 That might be a good goal to have as long

3 as everybody can agree to what that super level is,

4 but if California decides that the level is one thing,

5 Oregon decides it's another, perhaps Wisconsin chooses

6 another, Florida a different one, that adds complexity

7 of, okay, which one do we build to.

8 And so I agree it would be good to reduce

9 the number, and that's our goals, but you see one of

10 the things that we face as a manufacturer. We want to

11 try to address the markets where we can.

12 MR. MARTIN: I agree with you entirely.

13 The reason we've got to understand is because we did

14 satisfy with the federal standards, and if we come up

15 with a level that we can live with, that would be just

16 great.

17 MR. SACKS: Harvey Sacks.

18 These two shy gentlemen sitting back here,

19 Mr. Raynolds and Mr. Linn, represent Northeast

20 Efficiency Partnerships, which is one of a number of

21 organizations we provide a little technical support

22 for; working very hard to establish coordinated levels

23 for utility incentives and other forms of recognition,

24 working with EPA and the Energy Star program to try to

i 25 support as well as we can the level of differentiated

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1 with Trane again. 

2 That might be a good goal to have as long 

3 as everybody can agree to what that super level is, 

4 but if California decides that the level is one thing, 

5 Oregon decides it's another, perhaps Wisconsin chooses 

6 another, Florida a different one, that adds complexity 

7 of, okay, which one do we build to. 

8 And so I agree it would be good to reduce 

9 the number, and that's our goals, but you see one of 

10 the things that we face as a manufacturer. We want to 

11 try to address the markets where we can. 

12 MR. MARTIN: I agree with you entirely. 

13 The reason we've got to understand is because we did 

14 satisfy with the federal standards, and if we come up 

15 with a level that we can live with, that would be just 

16 great. 

17 MR. SACKS: Harvey Sacks. 

18 These two shy gentlemen sitting back here I 

19 Mr. Raynolds and Mr. Linn, represent Northeast 

20 Efficiency Partnerships, which is one of a number of 

21 organizations we provide a little technical support 

22 for i working very hard to establish coordinated levels 

23 for utility incentives and other forms of recognition, 

24 working with EPA and the Energy Star program to try to 

25 support as well as we can the level of differentiated 

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1 products and hope that they will be profitable for all

B*~ 2 of the manufacturers.

3 Did you want to comment on that? Please.

4 MR. RAYNOLDS: Ned Raynolds, Northeast

5 Energy Efficiency Partnerships.

6 Harvey is right, of course. Northeast

7 Energy Efficiency Partnerships was founded five years

8 ago and has had a fair amount of success in helping

9 utilities across the Northeast establish coordinated

10 programs for promoting high efficiency equipment.

11 We're also this fall in the process, just

12 have recently launched a project that we are calling

13 the Northeast equipment standards project, which is

14 aimed at getting policy makers across the Northeast to

15 get together and take a look at the potential for new

16 or increased standards along the lines of what

17 California is doing.

18 It is our intent to coordinate across the

19 region and with other things that are going on across

20 the country to something that should be taken into

21 account.

22 MR. RABA: Thank you very much for making

23 us aware of that.

24 MR. STEPHENS: Charlie Stephens, Oregon

25 Energy Office.

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1 products and hope that they will be profitable for all 

2 of the manufacturers. 

3 Did you want to comment on that? Please. 

4 MR. RAYNOLDS: Ned Raynolds, Northeast 

5 Energy Efficiency Partnerships. 

6 Harvey is right, of course. Northeast 

7 Energy Efficiency Partnerships was founded five years 

8 ago and has had a fair amount of success in helping 

9 utilities across the Northeast establish coordinated 

10 programs for promoting high efficiency equipment. 

11 We're also this fall in the process, just 

12 have recently launched a project that we are calling 

13 the Northeast equipment standards project, which 1S 

14 aimed at getting policy makers across the Northeast to 

15 get together and take a look at the potential for new 

16 or increased standards along the lines of what 

17 California is doing. 

18 It is our intent to coordinate across the 

19 region and with other things that are going on across 

20 the country to something that should be taken into 

21 account. 

22 MR. RABA: Thank you very much for making 

23 us aware of that. 

24 MR. STEPHENS: Charlie Stephens, Oregon 

25 Energy Office. 

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1 I'd also add that those of us who

2 occasionally find ourselves from states who are back

3 in the energy codes and standards business do try to

4 coordinate for the reasons mentioned. We aren't

5 trying to complicate the lives of manufacturers.

6 We're just pursuing efficiency as best we can.

7 MR. RABA: Thank you, Charlie.

8 Further comments?

9 (No response.)

10 MR. RABA: Let's go on then. John Stoops

11 will present the economic impact analysis or introduce

12 us to --

13 MR. STOOPS: Employment.

14 MR. RABA: -- those issues.

15 MR. STOOPS: Yes, right.

16 MR. RABA: Thank you very much.

17 MR. STOOPS: There are a few other related

18 issues. We should have them all here together sort of

19 at the end. It's very much at the end. It's after

20 the ANOPR. As was stated before, it's really just an

21 outline of what we think.

22 There is a new standard, and there is an

23 expectation that there will be some impact, potential

24 impact on employment. There's potentially two, direct

*V ~ 25 as well as indirect.

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1 I'd also add that those of us who 

2 occasionally find ourselves from states who are back 

3 in the energy codes and standards business do try to 

4 coordinate for the reasons mentioned. We aren' t 

5 trying to complicate the lives of manufacturers. 

6 We're just pursuing efficiency as best we can. 

7 MR. RABA: Thank you, Charlie. 

8 Further comments? 

9 (No response.) 

10 MR. RABA: Let's go on then. John Stoops 

11 will present the economic impact analysis or introduce 

12 us to 

13 MR. STOOPS: Employment. 

14 MR. RABA: -- those issues. 

15 MR. STOOPS: Yes, right. 

16 MR. RABA: Thank you very much. 

17 MR. STOOPS: There are a few other related 

18 issues. We should have them all here together sort of 

19 at the end. It's very much at the end. It's after 

20 the ANOPR. As was stated before, it's really just an 

21 outline of what we think. 

22 There is a new standard, and there is an 

23 expectation that there will be some impact, potential 

24 impact on employment. There's potentially two, direct 

25 as well as indirect. 

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1 If you have -- from the manufacturer

2 impact analysis, we should be able to extract

3 information that looks about the direct impact on the

4 employed people within the industry, and hopefully we

5 could also extract indirect employment impacts from

6 shifting consumer expenditures among goods, the

7 substitution effect, or the income effect by the

8 change in the equipment in energy costs.

9 So that's information to feed this

10 analysis will come out of previous analyses, is how we

11 currently have it envisioned, but are there any

12 suggestions for other specific approaches? Any

13 specific methods to deal with the employment impact,

14 or is it so far in the future that no one wants to

15 think about it for a year and you'll get back to me

16 when you have that all solved?

17 (Laughter.)

18 MR. STOOPS: Harvey?

19 MR. SACKS: Harvey Sacks.

20 The one thing that I've missed in prior

21 analyses, and I think you've alluded to some

22 alternatives in other parts of the proposed analysis

23 for sensitivity, is you have produced numbers, numbers

24 specifically in five figures as net employment

25 impacts, manufacturer employee impacts. I have not

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238 

1 If you have from the manufacturer 

2 impact analysis, we should be able to extract 

3 information that looks about the direct impact on the 

4 emp10yed people within the industry, and hopefully we 

5 could also extract indirect employment impacts from 

6 shifting consumer expenditures among goods, the 

7 substitution effect, or the income effect by the 

8 change in the equipment in energy costs. 

9 So . that's information to feed this 

10 analysis will come out of previous analyses, is how we 

11 currently have it envisioned, but are there any 

12 suggestions for other specific approaches? Any 

13 specific methods to deal with the employment impact, 

14 or is it so far in the future that no one wants to 

15 think about it for a year and you'll get back to me 

16 when you have that all solved? 

17 (Laughter. ) 

18 MR. STOOPS: Harvey? 

19 MR. SACKS: Harvey Sacks. 

20 The one thing that I've missed in prior 

21 analyses, and I think you've alluded to some 

22 alternatives in other parts of the proposed analysis 

23 for sensi ti vi ty, is you have produced numbers, numbers 

24 specifically in five figures as net employment 

25 impacts, manufacturer employee impacts. 

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I have not 

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239

1 been able to judge whether these are significant of

Is 2 themselves, not to the families involved, but if these

3 are numbers which within your method would be assumed

4 to be significant changes or part of the inherent

5 variability to be expected in the analysis.

6 So I would ask for that, and I would ask

7 for the employment analysis to the extent it's

8 considered significant to be trended against

9 manufacturing trends in the industry over the last

10 several decades as they've moved to more and more

11 automated processes for assembly.

12 MR. STOOPS: Okay. We'll think about

13 that.

14 MR. RABA: First Charlie, then Jim

15 Crawford.

16 MR. STEPHENS: Charlie Stephens.

17 I'd also be interested in this particular

18 analysis to see some numbers for the whole industry,

19 including the people who sell and service and

20 otherwise deal with the equipment. Because, you know,

21 it's been said that in a lot of different

22 manufacturing situations, that group of people is much

23 larger than the people doing the manufacturing, and

24 you are going to do the whole picture, I presume; is

O ~ 25 that correct?

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1 been able to judge whether these are significant of 

2 themselves, not to the families involved, but if these 

3 are numbers which within your method would be assumed 

4 to be significant changes or part of the inherent 

5 variability to be expected in the analysis. 

6 So I would ask for that, and I would ask 

7 for the employment analysis to the extent it's 

8 considered significant to be trended against 

9 manufacturing trends in the industry over the last 

10 several decades as they've moved to more and more 

11 automated processes for assembly. 

12 MR. STOOPS: Okay. We'll think about 

13 that. 

14 MR. RABA: First Charlie, then Jim 

15 Crawford. 

16 MR. STEPHENS: Charlie Stephens. 

17 I'd also be interested in this particular 

18 analysis to see some numbers for the whole industry, 

19 including the people who sell and service and 

20 otherwise deal with the equipment. Because, you know, 

21 it's been said that in a lot of different 

22 manufacturing situations, that group of people is much 

23 larger than the people doing the manufacturing, and 

24 you are going to do the whole picture, I presume; is 

25 that correct? 

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1 MR. STOOPS: Yes, we expect to do that.

2 MR. CRAWFORD: Jim Crawford.

3 We have currently a situation that may

4 enable you to get a finger on the pulse of the

5 sensitivity of this industry to a perturbation. Our

6 industry is in a state of perturbation right now due

7 to several factors I won't go into. September 11th

8 may be one of them.

9 And the industry is taking time out in the

10 fourth quarter. Different manufacturers have

11 different ways in which they will approach that. In

12 the course of your visits to manufacturers, you may

13 want to discuss this issue. This is one that should

14 be discussed one on one with manufacturers and not

15 through ARI because aggregated doesn't tell you

16 anything, and it's information that none of us are

17 going to seek a press agent to put on the front page

18 of the paper, but they're not really big, big secrets.

19 If a number of people get furloughed from

20 a given manufacturing site, it's a little bit

21 difficult to keep that under your hat, but it will

22 give you some idea of the sensitivity. You may find

23 it's a good deal more sensitive; there are fairly

24 minor perturbations than you would anticipate.

25 MR. STOOPS: I know that I've briefly

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1 MR. STOOPS: Yes, we expect to do that. 

2 MR. CRAWFORD: Jim Crawford. 

3 We have currently a situation that may 

4 enable you to get a finger on the pulse of the 

5 sensitivity of this industry to a perturbation. Our 

6 industry is in a state of perturbation right now due 

7 to several factors I won't go into. September 11th 

8 may be one of them. 

9 And the industry is taking time out In the 

10 fourth quarter. Different manufacturers have 

11 different ways in which they will approach that. In 

12 the course of your visits to manufacturers, you may 

13 want to discuss this issue. This is one that should 

14 be discussed one on one with manufacturers and not 

15 through ARI because aggregated doesn't tell you 

16 anything, and it's information that none of us are 

17 going to seek a press agent to put on the front page 

18 of the paper, but they're not really big, big secrets. 

19 If a number of people get furloughed from 

20 a given manufacturing site, it's a little bit 

21 difficult to keep that under your hat, but it will 

22 give you some idea of the sensitivity. You may find 

23 it's a good deal more sensitive; there are fairly 

24 minor perturbations than you would anticipate. 

25 

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1 mentioned that I spent some time in Europe. One of my

2 issues in Europe was associated with Volvo, the Volvo

3 manufacturing plant, and I was astounded at a certain

4 nature of the degree of automation within that plant

5 and how significant fractions of the line, for

6 example, just wouldn't -- I mean, is this industry

7 heading in similar kinds of trends or even where is it

8 now?

9 MR. CRAWFORD: I would say that the

10 principal evolution/revolution of this industry in the

11 last 20, 30, 40, 50 years probably has been the just

12 in time manufacturing.

13 MR. STOOPS: Okay.

14 MR. CRAWFORD: You don't find -- at the

15 unit level you don't find large numbers of robotic

16 operations I don't think. You may in some of the

17 component operations, but of course, you know, if

18 you've been watching manufacturing in North America

19 for the last 30 or 40 years, there was a great surge

20 of enthusiasm years ago, and I think it has died back

21 quite a bit for practical reasons, some of which may

22 have to do with maquilladora plants. I'm not sure.

23 MR. RABA: Any further comments on the

24 employment part of this? I see that John is preparing

*) ~ 25 on the next presentation on utility impact analysis,

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1 mentioned that I spent some time in Europe. One of my 

2 issues in Europe was associated with Volvo, the Volvo 

3 manufacturing plant, and I was astounded at a certain 

4 nature of the degree of automation within that plant 

5 and how significant fractions of the line, for 

6 example, just wouldn' t -- I mean, is this industry 

7 heading in similar kinds of trends or even where is it 

8 now? 

9 MR. CRAWFORD: I would say that the 

10 principal evolution/revolution of this industry in the 

11 last 20, 30, 40, 50 years probably has been the just 

12 in time manufacturing. 

13 MR. STOOPS: Okay. 

14 MR. CRAWFORD: You don't find -- at the 

15 unit level you don't find large numbers of robotic 

16 operations I don't think. You may in some of the 

17 component operations, but of course, you know, if 

18 you've been watching manufacturing in North America 

19 for the last 30 or 40 years, there was a great surge 

20 of enthusiasm years ago, and I think it has died back 

21 quite a bit for practical reasons, some of which may 

22 have to do with maquilladora plants. I'm not sure. 

23 MR. RABA: Any further comments on the 

24 employment part of this? I see that John is preparing 

25 on the next presentation on utility impact analysis, 

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1 not economic utility, but utility because there could

2 be a bit of confusion.

3 MR. STOOPS: The purpose. Estimate the

4 effects on electric supplies of reduced energy sales

5 due to these energy efficiency standards. Again,

6 we're assuming that these standards are going to work

7 and reduce the energy consumption.

8 I suppose there could be increases back in

9 the plants, but I don't think we're going to consider

10 that.

11 We're going to use the NEMS, another

12 acronym, National Energy Model -- National Energy

13 Method -- no, what is it? NEMS, please. Modeling

14 System, there we are. Thank you.

15 It is an integrated model of the U.S.

16 energy sector, including supply and demand. It is

17 reasonably publicly available, although any of these

18 models, tools, databases, they may be available

19 publicly, but they're not necessarily user friendly.

20 Trying to use these can be a challenge.

21 Hopefully our documentation and processes

22 and combinations'and fairly simplified spreadsheets

23 will help bring some transparency to the whole

24 process, but the basic models, the basic data is not

25 that easy to use necessarily.

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1 not economic utility, but utility because there could 

2 be a bit of confusion. 

3 MR. STOOPS: The purpose. Estimate the 

4 effects on electric supplies of reduced energy sales 

5 due to these energy efficiency standards. Again, 

6 we're assuming that these standards are going to work 

7 and reduce the energy consumption. 

8 I suppose there could be increases back in 

9 the plants, but I don't think we're going to consider 

10 that. 

11 We're going to use the NEMS, another 

12 acronym, National Energy Model National Energy 

13 Method -- no, what is it? NEMS, please. Modeling 

14 System, there we are. Thank you. 

15 It is an integrated model of the U. S. 

16 energy sector, including supply and demand. It is 

17 reasonably publicly available, although any of these 

18 models, tools, databases, they may be available 

19 publicly, but they're not necessarily user friendly. 

20 Trying to use these can be a challenge. 

21 Hopefully our documentation and processes 

22 and combinations and fairly simplified spreadsheets 

23 will help bring some transparency to the whole 

24 process, but the basic models, the basic data is not 

25 that easy to use necessarily. 

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1 So we're going to extrapolate beyond 2020

is* 2 as need be or as these models are updated, we'll

3 clearly use the most current one. So we'll use the

4 EIA annual Energy Outlook. We'll see what their

5 update looks like and use the latest one when it's

6 available, depending on how it relates to where we are

7 in the analysis process.

8 And then that will come into the national

9 energy savings spreadsheet. We'll actually extract

10 that, which is a tool that LBL has developed, which I

11 think because this is a very inside crowd, so I'm sure

12 you folks are somewhat familiar with that.

13 There will have to be some modifications

*B 14 and customization made for this particular product

15 class, but that will be the basic issue. All the

16 other inputs are from EIA.

17 MR. RABA: We have a hand raised over

18 here, John.

19 MR. STOOPS: Yes, yes.

20 MR. RABA: Pause a moment. Marshall.

21 MR. HUNT: Marshall Hunt again.

22 On the demand side, I do notice it's

23 mentioned, but do you feel that there will need to be

24 any upgrading of the spreadsheet or the analysis to

25 capture this better, the demand impacts?

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1 So we're going to extrapolate beyond 2020 

2 as need be or as these models are updated, we'll 

3 clearly use the most current one. So we'll use the 

4 EIA annual Energy Outlook. We'll see what their 

5 update looks like and use the latest one when it's 

6 available, depending on how it relates to where we are 

7 in the analysis process. 

8 And then that will come into the national 

9 energy savings spreadsheet. We'll actually extract 

10 that, which is a tool that LBL has developed, which I 

11 think because this is a very inside crowd, so I'm sure 

12 you folks are somewhat familiar with that. 

13 There will have to be some modifications 

14 and customization made for this particular product 

15 class, but that will be the basic issue. All the 

16 other inputs are from EIA. 

17 MR. RABA: We have a hand raised over 

18 here, John. 

19 MR. STOOPS: Yes, yes. 

20 MR. RABA: Pause a moment. Marshall. 

21 MR. HUNT: Marshall Hunt again. 

22 On the demand side, I do notice it's 

23 mentioned, but do you feel that there will need to be 

24 any upgrading of the spreadsheet or the analysis to 

25 capture this better, the demand impacts? 

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1 MR. STOOPS: We're looking at that. We

*g 2 expect there will be some updates. At a minimum we

3 want to try to capture some of the marginal impacts a

4 little bit better than we have in the past. We're not

5 absolutely certain of the precise approaches we're

6 making. We are doing some exploratory analyses,

7 trying to look at that.

8 Again, these sponges saying what specific

9 suggestions do you have, can you point us in the

10 direction of another tool, another algorithm that we

11 can incorporate into it. We'd gladly accept that

12 suggestion and try to follow up on it.

13 So we've got all of this data, hopefully

14 all of these conclusions. We punch it through NEMS.

15 We look at the change, and as the output we have the

16 change in energy sales, and it actually goes beyond

17 electricity because there is an assumption about

18 generation mix, and so we can even see some gas and

19 oil impacts by region. We can look at that change in

20 the mix. We do have some plant impacts as well, as

21 far as that, as well as the need for new capacity

22 construction. So it really tries to come back and

23 capture that.

24 And then we've got -- yeah, there is

25 another one here -- and then the general invitation to

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1 MR. STOOPS: We're looking at that. We 

2 expect there will be some updates. At a minimum we 

3 want to try to capture some of the marginal impacts a 

4 little bit better than we have in the past. We're not 

5 absolutely certain of the precise approaches we're 

6 making. We are doing some exploratory analyses, 

7 trying to look at that. 

8 Again, these sponges saying what specific 

9 suggestions do you have, can you point us In the 

10 direction of another tool, another algorithm that we 

11 can incorporate into it. We'd gladly accept that 

12 suggestion and try to follow up on it. 

13 So we've got all of this data, hopefully 

14 all of these conclusions. We punch it through NEMS. 

15 We look at the change, and as the output we have the 

16 change in energy sales, and it actually goes beyond 

17 electrici ty because there is an assumption about 

18 generation mix, and so we can even see some gas and 

19 oil impacts by region. We can look at that change in 

20 the mix. We do have some plant impacts as well, as 

21 far as that, as well as the need for new capacity 

22 construction. So it really tries to come back and 

23 capture that. 

24 And then we've got yeah, there is 

25 another one here - - and then the general invitation to 

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1 suggest additional inputs, additional methods should

2 you have any particular suggestions.

3 Yes.

4 MR. CRAWFORD: Jim Crawford, Trane

5 Company.

6 One overall observation is that the

7 incremental change in the capacity demand will be lost

8 in the population changes in most regions, and if you

9 just go through the numbers of what one EER unit

10 means, for example, and what percentage gets changed

11 in a year, and then what percentage is air conditioned

12 of the total load of the utility and some of those

13 simple things that you can grab out of the air and get

14 reasonably close, you'll find that you're down in the

15 neighborhood of maybe one to .2 of a percent of the

16 capacity will be influenced in any given year by this,

17 and the population shifts going on in the country,

18 both shifts as well as growth or decrease, if you're

19 in the Northeast, totally overwhelm this.

20 So this really doesn't deserve a whole lot

21 of great depth of analysis.

22 The other observation that I would make is

23 when you do as you inevitably will, run this up to how

24 many hundred thousand gigawatt power plants will be

Q a25 eliminated, also give an honest rule of thumb like,

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1 suggest additional inputs, additional methods should 

2 you have any particular suggestions. 

3 Yes. 

4 MR. CRAWFORD: Jim Crawford, Trane 

5 Company. 

6 One overall observation is that the 

7 incremental change in the capacity demand will be lost 

8 in the population changes in most regions, and if you 

9 just go through the numbers of what one EER unit 

10 means, for example, and what percentage gets changed 

11 in a year, and then what percentage is air conditioned 

12 of the total load of the utility and some of those 

13 simple things that you can grab out of the air and get 

14 reasonably close, you'll find that you're down in the 

15 neighborhood of maybe one to .2 of a percent of the 

16 capacity will be influenced in any given year by this, 

17 and the population shifts going on in the country, 

18 both shifts as well as growth or decrease, if you're 

19 in the Northeast, totally overwhelm this. 

20 So this really doesn't deserve a whole lot 

21 of great depth of analysis. 

22 The other observation that I would make is 

23 when you do as you inevitably will, run this up to how 

24 many hundred thousand gigawatt power plants will be 

25 eliminated, also give an honest rule of thumb like, 

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1 you know, how many quads are saved if everybody just

2 turns off one 50 watt bulb for over a 30 year period.

3 A 50 watt bulb is worth a little over a quad.

4 And it's important to do that because any

5 time you talk about the American society, you've got

6 big numbers and big numbers. People are, "Owee, look

7 at the big numbers," and when you multiply by 30

8 years, you get bigger numbers.

9 MR. STOOPS: Don?

10 MR. BRUNDAGE: Don Brundage, Southern

11 Company.

12 I'm sure you're going to do it, but a lot

13 of the efficiency improvement things that were on your

14 earlier list improve total energy consumption, but not

15 necessarily EER. That's what Jim said earlier.

16 And for the impact on utilities, a lot of

17 those sort of things are not really going to help us

18 on peak demand, and if you do something that doesn't

19 help us on peak demand and cuts energy sales in most

20 markets, that's going to hurt utilities. It's going

21 to lower load factor, raise cost for everyone else.

22 MR. STOOPS: Okay, okay. Are there other

23 factors or other parts of the analysis that you think

24 we should consider, like distribution or transmission?

25 Is there any way to approach those issues?

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1 you know, how many quads are saved if everybody just 

2 turns off one 50 watt bulb for over a 30 year period. 

3 A 50 watt bulb is worth a little over a quad. 

4 And it's important to do that because any 

5 time you talk about the American society, you've got 

6 big numbers and big numbers. People are, "Owee, look 

7 at the big numbers," and when you multiply by 30 

8 years, you get bigger numbers. 

9 MR. STOOPS: Don? 

10 MR. BRUNDAGE: Don Brundage, Southern 

11 Company. 

12 I'm sure you're going to do it, but a lot 

13 of the efficiency improvement things that were on your 

14 earlier list improve total energy consumption, but not 

15 necessarily EER. That's what Jim said earlier. 

16 And for the impact on utilities, a lot of 

17 those sort of things are not really going to help us 

18 on peak demand, and if you do something that doesn't 

19 help us on peak demand and cuts energy sales in most 

20 markets, that's going to hurt utilities. It's going 

21 to lower load factor, raise cost for everyone else. 

22 MR. STOOPS: Okay, okay. Are there other 

23 factors or other parts of the analysis that you think 

24 we should consider, like distribution or transmission? 

25 Is there any way to approach those issues? 

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1 MR. BRUNDAGE: That's going to be very

ist 2 regional. I know that some areas have problems on

3 siting transmission. On the other hand, on one of our

4 states, I looked up on the list of what regulations

5 are in putting in transmission, and the only thing

6 they listed was Department of Transportation standards

7 on making them safe for vehicles running into them.

8 MR. STOOPS: Good.

9 MR. BRUNDAGE: So it's basically put them

10 wherever you want to.

11 MR. STOOPS: Yeah, yeah.

12 MR. BRUNDAGE: That's not true in a lot of

13 places. We recognize that.

14 MR. STOOPS: No, no, no. NMBI (phonetic),

15 NMBI.

16 MR. CRAWFORD: If DOE wanted to fund it,

17 it might be interesting to tack onto this an estimate

18 of what various load leveling techniques would do.

19 They're going to do great things for the utilities.

20 They're not going to do very much for saving of energy

21 because they all use more energy than they save.

22 MR. STOOPS: But they may make sense from

23 other perspectives though.

24 MR. CRAWFORD: Well, I mean, they may be

~* 25 beneficial depending upon what your energy sources

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1 MR. BRUNDAGE: That's going to be very 

2 regional. I know that some areas have problems on 

3 siting transmission. On the other hand, on one of our 

4 states, I looked up on the list of what regulations 

5 are in putting in transmission, and the only thing 

6 they listed was Department of Transportation standards 

7 on making them safe for vehicles running into them. 

8 MR. STOOPS: Good. 

9 MR. BRUNDAGE: So it's basically put them 

10 wherever you want to. 

11 MR. STOOPS: Yeah, yeah. 

12 MR. BRUNDAGE: That's not true ln a lot of 

13 places. We recognize that. 

14 MR. STOOPS: No, no, no. NMBI (phonetic), 

15 NMBI. 

16 MR. CRAWFORD: If DOE wanted to fund it, 

17 it might be interesting to tack onto this an estimate 

18 of what various load leveling techniques would do. 

19 They're going to do great things for the utilities. 

20 They're not going to do very much for saving of energy 

21 because they all use more energy than they save. 

22 MR. STOOPS: But they may make sense from 

23 other perspectives though. 

24 MR. CRAWFORD: Well, I mean, they may be 

25 beneficial depending upon what your energy sources 

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1 are.

Am* 2 MR. STOOPS: Right, right.

3 MR. CRAWFORD: If you can eliminate

4 peaking or reduce peaking, it may be beneficial to

5 society, and you know, the energy measure today almost

6 ought to be carbon dioxide instead of quads.

7 MR. STOOPS: Jim is just really good

8 about --

9 MR. RABA: He's a good segue.

10 MR. STOOPS: Isn't he? He's just wonder.

11 MR. RABA: He's great. He knows the

12 script.

13 MR. STOOPS: Yeah, he must because the

~^ Q14 final one that we need to look at --

15 MR. RABA: The taxpayers appreciate it.

16 MR. CRAWFORD: As long as I'm picking

17 cudos, and we are in the home stretch, let me make one

18 general observation. I think all of us who are

19 participating in this process today came with the

20 understanding that if we were active in a discussion,

21 as some of us have been, that we didn't need to write

22 every word that we have said down on a piece of paper,

23 that that's why a transcript is being taken.

24 MR. STOOPS: Speaking for myself, I mean,

Q ~25 clearly we're going to look at this, as well as the

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1 are. 

2 MR. STOOPS: Right, right. 

3 MR. CRAWFORD: If you can eliminate 

4 peaking or reduce peaking, it may be beneficial to 

5 society, and you know, the energy measure today almost 

6 ought to be carbon dioxide instead of quads. 

7 MR. STOOPS: Jim is just really good 

8 about --

9 MR. RABA: He's a good segue. 

10 MR. STOOPS: Isn't he? He's just wonder. 

11 MR. RABA: He's great. He knows the 

12 script. 

13 MR. STOOPS: Yeah, he must because the 

14 final one that we need to look at --

15 MR. RABA: The taxpayers appreciate it. 

16 MR. CRAWFORD: As long as I'm picking 

17 cudos, and we are in the home stretch, let me make one 

18 general observation. I think all of us who are 

19 participating in this process today came with the 

20 understanding that if we were active in a discussion, 

21 as some of us have been, that we didn't need to write 

22 every word that we have said down on a piece of paper, 

23 that that's why a transcript is being taken. 

24 MR.·STOOPS: Speaking for myself, I mean, 

25 clearly we're going to look at this, as well as the 

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1 written information, wherever it comes from. That's

2 a very sizable job over the next several weeks.

3 So it's too bad that it's a month before

4 we have the real deadline for the written one, but

5 that's what we need to allow.

6 Finally, the environmental, the CO2

7 issues. The purpose is to estimate the impacts of

8 these new energy efficiency standards so we'll have,

9 again, the baseline and the various options. There

10 may be a specific recommendation.

11 We actually use the NEMS model, again,

12 because it does allow us to look at the impacts from

13 carbon dioxide, NOx compounds, and even some issues

14 about the trading price of SO2 , and should things

15 change within the framework, the time framework of

16 when this goes, then you know, we might even look at

17 other issues because the whole world is looking at

18 different issues. The United States is looking at

19 different issues about how it's responding to the

20 different kinds of issues.

21 So we know that that's a big uncertain

22 about exactly what it will be. We're looking out in

23 the future for quite a while. Based upon what we have

24 now, this is what we're going to look at, but it might

25 slightly change based upon responding to what the

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~-~-~~---

249 

1 written information, wherever it comes from. That's 

2 a very sizable job over the next several weeks. 

3 So it's too bad that it's a month before 

4 we have the real deadline for the written one, but 

5 that's what we need to allow. 

6 Finally, the environmental, the 

7 issues. The purpose is to estimate the impacts of 

8 these new energy efficiency standards so we'll have, 

9 again, the baseline and the various options. There 

10 may be a specific recommendation. 

11 We actually use the NEMS model, again, 

12 because it does allow us to look at the impacts from 

13 carbon dioxide, NOx compounds, and even some issues 

14 about the trading price of S02' and should things 

15 change within the framework, the time framework of 

16 when this goes, then you know, we might even look at 

17 oth~r issues because the whole world is looking at 

18 different issues. The United States is looking at 

19 different issues about how it's responding to the 

20 different kinds of issues. 

21 So we know that that's a big uncertain 

22 about exactly what it will be. We're looking out in 

23 the future for quite a while. Based upon what we have 

24 now, this is what we're going to look at, but it might 

25 slightly change based upon responding to what the 

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1 current rules are and laws are.

*WL 2 Are there other environmental factors that

3 the department should consider? I mean, that menu,

4 that list could get really long. I don't know.

5 One of the things we're not looking at is

6 energy security as well. I mean that's not an

7 environmental issue, but it's another issue. I don't

8 think it's mandated legislatively, but -- yes?

9 MR. HUNT: Marshall Hunt, PG&E.

10 I understand there's trading issues with

11 the other pollutants also. So --

12 MR. STOOPS: Yeah. We should look at

13 those as those markets develop, and we will.

14 MR. HUNT: Thank you.

15 MR. BRUNDAGE: Don Brundage, Southern

16 Company.

17 Are you choosing the environmental factors

18 to look at based on which ones are controlled under

19 current government laws and regulations or how are you

20 determining which environmental factors to include?

21 MR. STOOPS: Francine or Bryan, I'm going

22 to have to punt on that one because I'm ignorant.

23 MS. PINTO: I do not know the answer to

24 that.

b ~25 MR. POLLOCK: Ed Pollock, Department of

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1 current rules are and laws are. 

2 Are there other environmental factors that 

3 the department should consider? I mean, that menu, 

4 that list could get really long. I don't know. 

5 One of the things we're not looking at is 

6 energy security as well. I mean that's not an 

7 environmental issue, but it's another issue. I don't 

8 think it's mandated legislatively, but -- yes? 

9 MR. HUNT: Marshall Hunt, PG&E. 

10 I understand there's trading issues with 

11 the' other pollutants also. So --

12 MR. STOOPS: Yeah. We should look at 

13 those as those markets develop, and we will. 

14 MR. HUNT: Thank you. 

15 MR. BRUNDAGE: Don Brundage, Southern 

16 Company. 

17 Are you choosing the environmental factors 

18 to look at based on which ones are controlled under 

19 current government laws and regulations or how are you 

20 determining which environmental factors to include? 

21 MR. STOOPS: Francine or Bryan, I'm going 

22 to have to punt on that one because I'm ignorant. 

23 

24 that. 

25 

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MR. POLLOCK: Ed Pollock, Department of 

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1 Energy.

2 The way we look at some of these in terms

3 of savings will depend on the laws that regulate it.

4 So we will be looking at basically the ones that are

5 commonly considered. The way you look at them, the

6 discussion of can you trade them and other things, the

7 impact and the benefit from the standards will be

8 different depending on what law is regulating those.

9 MR. BRUNDAGE: Don Brundage again.

10 I have no problems with for informational

11 purposes including estimates, any sorts of things that

12 are not regulated, but unless they are regulated or

13 has something like a trading price related to it, I

14 mean, at this point the value of reducing carbon

15 emissions is very problematic from this point of view

16 because there's no United States regulation concerning

17 it.

18 And I realize there may be something in

19 the future for mercury and air toxics and all of these

20 other sorts of things, but it's not really mature at

21 this point.

22 MR. RABA: Jim Mullen first, and then Jim

23 Crawford. Excuse me.

24 MR. MULLEN: Oh, that's okay.

25 I wanted to follow up on a point Don was

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251 

1 Energy. 

2 The way we look at some of these in terms 

3 of savings will depend on the laws that regulate it. 

4 So we will be looking at basically the ones that are 

5 commonly considered. The way you look at them, the 

6 discussion of can you trade them and other things, the 

7 impact and the benefit from the standards will be 

8 different depending on what law is regulating those. 

9 MR. BRUNDAGE: Don Brundage again. 

10 I have no problems with for informational 

11 purposes including estimates, any sorts of things that 

12 are not regulated, but unless they are regulated or 

13 has something like a trading price related to it, I 

14 mean, at this point the value of reducing carbon 

15 emissions is very problematic from this point of view 

16 because there's no Uni ted States regulation concerning 

17 it. 

18 And I realize there may be something in 

19 the future for mercury and air toxics and all of these 

20 other sorts of things, but it's not really mature at 

21 this point. 

22 MR. RABA: Jim Mullen first, and then Jim 

23 Crawford. Excuse me. 

24 

25 

(202) 234-4433 

MR. MULLEN: Oh, that's okay. 

I wanted to follow up on a point Don was 

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1 making. In Texas, for example, I think the power

2 plant emissions of nitrous oxides go down about 90

3 percent in the next six or seven years, and the direct

4 question is: is that factor -- are things like the

5 Texas rule factored into the future NOx reduction

6 estimates.

7 MR. STOOPS: Yes, we'll have to do that.

8 MR. CRAWFORD: Okay. Well, of course, on

9 carbon dioxide, there's been a great deal of talk

10 about the Kyoto Protocol, and although we haven't

11 ratified it, and we may or may not ratify it, we did,

12 in fact, sign up to some commitments when the protocol

13 was drafted in Kyoto a few years ago, and I would

14 assume that we intend to try to honor something in the

15 ballpark of what we committed to, which is a net

16 reduction of about 30 percent from business as usual

17 emissions by the end of the decade.

18 So if we're going to try to find peace

19 with the world on all fronts, which we need to do, we

20 need to be very concerned about carbon dioxide

21 emissions to the point that Jim Mullen was referring

22 to the NOx.

23 We've got lots of parts of this country

24 that are in nonattainment or near nonattainment on

25 ozone, and NOx is probably the number one villain

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1 making. In Texas, for example, I think the power 

2 plant emissions of nitrous oxides go down about 90 

3 percent in the next six or seven years, and the direct 

4 question is: is that factor -- are things like the 

5 Texas rule factored into the future NOx reduction 

6 estimates. 

7 MR. STOOPS: Yes, we'll have to do that. 

8 MR. CRAWFORD: Okay. Well, of course, on 

9 carbon dioxide, there's been a great deal of talk 

10 about the Kyoto Protocol, and although we haven't 

11 ratified it, and we mayor may not ratify it, we did, 

12 in fact, sign up to some commitments when the protocol 

13 was drafted in Kyoto a few years ago, and I would 

14 assume that we intend to try to honor something in the 

15 ballpark of what we committed to, which is a net 

16 reduction of about 30 percent from business as usual 

17 emissions by the end of the decade. 

18 So if we're going to try to find peace 

19 with the world on all fronts, which we need to do, we 

20 need to be very concerned about carbon dioxide 

21 emissions to the point that Jim Mullen was referring 

22 to the NOx. 

23 We've got lots of parts of this country 

24 that are in nonattainment or near nonattainment on 

25 ozone, and NOx is probably the number one villain 

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1 there, and I think we all know the role of SOx

2 relative to acid rain as good reasons for addressing

3 all of them.

4 How they should be articulated or how they

5 should be used in the decision process, basically they

6 probably shouldn't because that's not part of this

7 law.

8 MR. POLLOCK: This is Ed Pollock,

9 Department of Energy.

10 If you've been following the White House

11 agenda, many of you will know that the White House

12 right now is developing a new environmental policy,

13 and so as we get to this point in the rulemaking,

14 which is a couple of years ago, some of those

15 conditions and criteria that are being applied, maybe

16 even the criteria on the rulemaking might be changed.

17 I don't know, but it will change the game plan a

18 little bit for us.

19 So this is just the beginning of asking,

20 you know, what factors should be considered based on

21 what we know today. As you have thoughts, as things

22 change, we certainly will be coming back to you and

23 asking you for continuing discussion on this topic

24 basically after we get the ANOPR out.

25 MR. BRUNDAGE: Final comment. Don

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1 there, and I think we all know the role of SOx 

2 relative to acid rain as good reasons for addressing 

3 all of them. 

4 How they should be articulated or how they 

5 should be used in the decision process, basically they 

6 probably shouldn't because that's not part of this 

7 law. 

8 MR. POLLOCK: This is Ed Pollock, 

9 Department of Energy. 

10 If you've been following the White House 

11 agenda, many of you will know that the White House 

12 right now is developing a new environmental policy, 

13 and so as we get to this point in the rulemaking, 

14 which is a couple of years ago, some of those 

15 conditions and criteria that are being applied, maybe 

16 even the criteria on the rulemaking might be changed. 

17 I don't know, but it will change the game plan a 

18 little bit for us. 

19 So this is just the beginning of asking, 

20 you know, what factors should be considered based on 

21 what we know today. As you have thoughts, as things 

22 change, we certainly will be coming back to you and 

23 asking you for continuing discussion on this topic 

24 basically after we get the ANOPR out. 

25 MR. BRUNDAGE: Final comment. Don 

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1 Brundage, again.

2 A final comment on pollution issues. The

3 regulations on pollution, especially for utilities are

4 insanely complicated and multi-level, and like Mr.

5 Mullen was talking about in Texas, there's an awful

6 lot of NOx reduction that's going to occur in this

7 country due to local nonattainment areas and things

8 that are not directly related to a single federal

9 bill, and I hope the actual reductions that are

10 planned -- my own company is currently spending over

11 $800 million on NOx reductions. They are included

12 within your forecast of the future and some good

13 source that puts all of these different types of

14 regulations together.

15 MR. RABA: Are there any comments from our

16 call-in attendees?

17 Okay. Jim Crawford.

18 MR. CRAWFORD: Yeah, if I may, I want to

19 pick up on what Don just said. If you do examine NOx,

20 in particular, then I would urge you to examine it

21 both in the business as usual and in the forecast

22 reduction of emissions per unit energy output so that

23 you highlight what the electric utilities are

24 undertaking relative to the environmental improvement.

25 I mean, if we're going to do it, let's do

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254 

1 Brundage, again. 

2 A final comment on pollution issues. The 

3 regulations on pollution, especially for utilities are 

4 insanely complicated and multi -level, and like Mr. 

5 Mullen was talking about in Texas, there's an awful 

6 lot of NOx reduction that's going to occur In this 

7 country due to local nonattainment areas and things 

8 that are not directly related to a single federal 

9 bill, and I hope the actual reductions that are 

10 planned -- my own company is currently spending over 

11 $800 million on NOx reductions. They are included 

12 wi thin your forecast of the future and some good 

13 source that puts all of these different types of 

14 regulations together. 

15 MR. RABA: Are there any comments from our 

16 call-in attendees? 

17 Okay. Jim Crawford. 

18 MR. CRAWFORD: Yeah, if I may, I want to 

19 pick up on what Don just said. If you do examine NOx, 

20 in particular, then I would urge you to examine it 

21 both in the business as usual and in the forecast 

22 reduction of emissions per unit energy output so that 

23 you highlight what the electric utilities are 

24 undertaking relative to the environmental improvement. 

25 

(202) 234-4433 

I mean, if we're going to do it, let's do 

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1 it and give these folks the credit that they deserve.

2 MR. RABA: All right. We're at a point

3 now in our agenda on a decision here. Are there any

4 further comments maybe overall on what's been

5 discussed today? Any parting thoughts or some general

6 remarks you'd like to leave for the record that we

7 could all consider later on?

8 Comments from the callers?

9 (No response.)

10 MR. RABA: I hear none.

11 It's been a long, full day, lively at

12 times, and certainly we've gotten a lot out of it.

13 Many issues have surfaced, some anticipated, some not,

14 but it's all good.

15 And these will be looked at very

16 thoroughly both in the oral testimony or for the

17 transcript rather and writing, and certainly your

18 comments as they come in throughout this, and

19 certainly to work closely with energy efficiency

20 advocates, utilities, consumer groups and

21 manufacturers and associations throughout the process

22 will make it much more transparent and much more

23 evaluable when a determination, a standard, whatever

24 comes out, does come out.

25 So we appreciate so much you all being

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1 it and give these folks the credit that they deserve. 

2 MR. RABA: All right. We're at a point 

3 now in our agenda on a decision here. Are there any 

4 further comments maybe overall on what's been 

5 discussed today? Any parting thoughts or some general 

6 remarks you'd like to leave for the record that we 

7 could all consider later on? 

8 Comments from the callers? 

9 (No response.) 

10 MR. RABA: I hear none. 

11 It's been a long, full day, lively at 

12 times, and certainly we've gotten a lot out of it. 

13 Many issues have surfaced, some anticipated, some not, 

14 but it's all good. 

15 And these will be looked at very 

16 thoroughly both in the oral testimony or for the 

17 transcript rather and writing, and certainly your 

18 comments as they come in throughout this, and 

19 certainly to work closely with energy efficiency 

20 advocates, utilities, consumer groups and 

21 manufacturers and associations throughout the process 

22 will make it much more transparent and much more 

23 evaluable when a determination, a standard, whatever 

24 comes out, does come out. 

25 

(202) 234-4433 

So we appreciate so much you all being 

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1 here today and traveling this far for these workshops

2 today and tomorrow, if you're going to stay.

3 I invite any concluding comments or

4 remarks from Bryan Berringer and Ed Pollock and

5 Department of Energy.

6 MR. BERRINGER: Yeah, Bryan Berringer.

7 Just if you turn back to your introductory

8 slides if you still have them out, on page 8, I just

9 want to go over the-next steps so that we're sort of

10 clear and make a correction on that. Again, it's page

11 8 at the very front.

12 So we're looking at if people want to do

13 additional comments, respond to some of the questions

14 we had today. I thought today's discussion was very

15 good.

16 The comment period will be November 1st.

17 So about 30 days, and a lot of your comments or

18 concerns today were ones we were aware of, and it

19 sounds like we still need to come to some conclusions.

20 So if people have suggestions on how we can do the

21 analysis or what information we should use to do the

22 analysis and how to proceed, we'd appreciate it.

23 Then obviously the next steps would be

24 working with the manufacturers and ARI to set up some

25 manufacturer interviews to just sort of step through,

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256 

1 here today and traveling this far for these workshops 

2 today and tomorrow, if you're going to stay. 

3 I invite any concluding comments or 

4 remarks from Bryan Berringer and Ed Pollock and 

5 Department of Energy. 

6 MR. BERRINGER: Yeah, Bryan Berringer. 

7 Just if you turn back to your introductory 

8 slides if you still have them out, on page 8, I just 

9 want to go over the next steps so that we're sort of 

10 clear and make a correction on that. Again, it's page 

11 8 at the very front. 

12 So we're looking at if people want to do 

13 additional comments, respond to some of the questions 

14 we had today. I thought today's discussion was very 

15 good. 

16 The comment period will be November 1st. 

17 So about 30 days, and a lot of your comments or 

18 concerns today were ones we were aware of, and it 

19 sounds like we still need to come to some conclusions. 

20 So if people have suggestions on how we can do the 

21 analysis or what information we should use to do the 

22 analysis and how to proceed, we'd appreciate it. 

23 Then obviously the next steps would be 

24 working with the manufacturers and ARI to set up some 

25 manufacturer interviews to just sort of step through, 

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1 you know, the data so we can do some more detailed

^*^ 2 analysis so that then we can make a decision whether

3 it makes sense to go ahead and adopt ASHRAE or if it

4 makes sense to, you know, move to a

5 rulemaking/standard process, or some of the other

6 options that were reached today that talk about

7 negotiations, ASHRAE, continual maintenance, a number

8 of avenues that we can take.

9 So obviously there's no foregone

10 conclusions, but we would appreciate if you have

11 additional comments to send them to us, E-mail them to

12 us. Call me up, let me know what you think, and we'll

13 proceed from there.

14 So, again, I just want to thank everybody

15 for coming today. I appreciate the good input. I

16 think this is -- you know, part of the process

17 improvement was to have this more open conversation

18 and to have it up front so we don't get tied into any

19 one analysis or any one problem.

20 So again, I appreciate it, and I'll see if

21 Ed Pollock would like to make any closing remarks.

22 MR. POLLOCK: Thank you, Bryan.

23 Only just to thank all of you for

24 participating today. It was a good discussion, and to

Is 25 emphasize the plug that Bryan put here at the end.

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257 

1 you know, the data so we can do some more detailed 

2 analysis so that then we can make a decision whether 

3 it makes sense to go ahead and adopt ASHRAE or if it 

4 makes sense to, you know, move to a 

5 rulemaking / standard process, or some of the other 

6 options that were reached today that talk about 

7 negotiations, ASHRAE, continual maintenance, a number 

8 of ~venues that we can take. 

9 So obviously there's no foregone 

10 conclusions, but we would appreciate if you have 

11 additional comments to send them to us, E-mail them to 

12 us. Call me up, let me know what you think, and we'll 

13 proceed from there. 

14 So, again, I just want to thank everybody 

15 for coming today. I appreciate the good input. I 

16 think this is you know, part of the process 

17 improvement was to have this more open conversation 

18 and to have it up front so we don't get tied into any 

19 one analysis or anyone problem. 

20 So again, I appreciate it, and I'll see if 

21 Ed Pollock would like to make any closing remarks. 

22 MR. POLLOCK: Thank you, Bryan. 

23 Only just to thank all of you for 

24 participating today. It was a good discussion, and to 

25 emphasize the plug that Bryan put here at the end. 

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1 We had quite a bit of discussion earlier

2 this morning about the use of ASHRAE. Certainly using

3 ASHRAE, using consensus outside of ASHRAE, all of

4 those are processes which can move us more quickly to

5 a final solution or a final decision on what the

6 standard level should be, are things that we would

7 encourage and support in any way that we can.

8 I recognize the problem of uncertainty

9 both on manufacturers, on utilities, and so if we

10 could find a way to come to a conclusion on this

11 rulemaking process more quickly to give you more

12 certainty in the future, we would want to support

13 that.

14 It also, of course, reduces our use of

15 resources which we can use on other areas, and given

16 what's going on right now on the Hill in terms of

17 budget, we need to be very conscious and conscientious

18 about the way we use the resources that are available

19 to this office.

20 Thank you.

21 MR. RABA: Please fill out your comment

22 sheets and turn them in at the back of the room.

23 No more comments. Give yourselves a round

24 of applause for a job well done today.

25 Thank you, ladies and gentlemen. Good

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258 

1 We had quite a bit of discussion earlier 

2 this morning about the use of ASHRAE. Certainly using 

3 ASHRAE, using consensus outside of ASHRAE, all of 

4 those are processes which can move us more quickly to 

5 a final solution or a final decision on what the 

6 standard level should be, are things that we would 

7 encourage and support in any way that we can. 

8 I recognize the problem of uncertainty 

9 both on manufacturers, on utilities, and so if we 

10 could find a way to come to a conclusion on this 

11 rulemaking process more quickly to give you more 

12 certainty in the future, we would want to support 

13 that. 

14 It also, of course, reduces our use of 

15 resources which we can use on other areas, and given 

16 what's going on right now on the Hill in terms of 

17 budget, we need to be very conscious and conscientious 

18 about the way we use the resources that are available 

19 to this office. 

20 Thank you. 

21 MR. RABA: Please fill out your comment 

22 sheets and turn them in at the back of the room. 

23 No more comments. Gi ve yourselves a round 

24 of applause for a job well done today. 

25 

(202) 234-4433 

Thank you, ladies and gentlemen. Good 

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1 job.

2 MR. BERRINGER: Thank you, Jim.

3 (Applause.)

4 (Whereupon, at 4:33 p.m., the meeting was

5 adjourned.)

6

7

8

9

10

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12

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18

19

20

21

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*O ~25

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1 job. 

2 MR. BERRINGER: Thank you, Jim. 

3 (Applause.) 

4 (Whereupon, at 4:33 p.m., the meeting was 

5 adjourned.) 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

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CERTIFICATE

This is to certify that the foregoing transcript in the

matter of: Public Workshop

Before: Office of Energy Efficiency and

Renewable Energy

Date: October 1, 2001

Place: Washington, DC

represents the full and complete proceedings of the

aforementioned matter, as reported and reduced to

typewriting.

EE-RM-STD-01-375 COMMENT 02EE

260 

CERTIFICATE 

This is to certify that the foregoing transcript in the 

matter of: 

Before: 

Date: 

Place: 

Public Workshop 

Office of Energy Efficiency and 

Renewable Energy 

October 1, 2001 

Washington, DC 

represents the full and complete proceedings of the 

aforementioned 

typewriting. 

matter, as reported and reduced to