Summary of the First Meeting of the Working Group on Liquid-Immersed and Medium Voltage Dry-Type Distribution Transformers of the Energy Efficiency and Renewable Energy Advisory Committee September 15-16, 2011

Richard W. Parker, Facilitator

Note: This meeting summary has been prepared fo r the convenience of the Working Group. It has not been approved by the Working Group and should not be construed or taken to represent the official position of the Working Group or any member as to what transpired at the meeting.

The Working Group on Liquid-Immersed and Medi um Voltage Dry-Type Distribution Transformers (“MV Group”) held its first mee ting on Sept. 15-16 in DOE Conference Room 8E-089. A list of

attendees is attached as Annex A.

The meeting began at 9:00 am with introductions, followed by a briefing by Mr. Charles Gordon of the DOE General Counsel’s office on the charge of the MV Group pursuant to the rules of the Federal Advisory Committee Act (FACA). He explained that the Medium-Voltage Transformer Working Group is a sub-group of the Energy Efficiency and Rene wable Energy Advisory Committee (ERAC). While the ERAC is not a rubber stamp for any Working Group c onsensus, the ERAC certainly will take account of the expertise and interests assembled in the room, as we ll as the delegation of authority to this group to develop consensus recommendations on transformer e fficiency standards, and would call an ad hoc meeting if necessary to review the Working Group ’s recommendations in time to meet statutory deadlines. It was also explained that under the FA CA rules a member of th e full ERAC committee needs to be present either physically or electronically at each Working Group meeting, and Mr. Art Rosenfeld

was introduced as a member of the ERAC. He announced that he or his alternate would attend Working Group meetings for the ERAC.

Mr. Parker then described the process of a ne gotiated rulemaking and the desired output of the process: a Term Sheet setting forth the basic terms of a proposed rule. Mr. Parker proposed an Agenda for the meeting (Annex B) which was adopted.

Mr. Cohen of the DOE General Counsel’s Office e xplained that the parties to the Ninth Circuit litigation on the distribution transformer standards had ag reed to ask the court for additional time to allow the negotiated rulemaking process to proceed, and that th e parties are optimistic that the court would grant a request by the parties to that litigation to postp one the court-ordered deadline for a DOE Notice of Proposed Rule-making (NOPR) from Oct. 1, 2011 to February 1, 2012.

Discussion then turned to a review of the draft Ground Rules circulated at the beginning of the meeting. The first issue was what would constitute consensus, remembering that the Department of Energy had committed to propose any rule or elements of a rule supported by a group consensus. After some discussion, it was agreed that consensus would be defined as “the unanimous concurrence of all parties to the negotiations present and voting. Concurrence will be assumed absent overt dissent, evidenced by a negative vote. Abstention sh all not be construed as a negative vote.”

The next issue concerned the obligations of the pa rties in respect of any consensus thus reached. After some discussion, the parties elected to refra in from committing to actively support any consensus recommendation, but did agree to forego actions th at would undermine the final adoption to any consensus position, and to refrain from taking positions in any forum that are materially inconsistent with the group consensus, for a period of one year.2

With regard to DOE’s obligations, there was di scussion about what would happen if the group was

able to reach consensus on standards for some but not all covered products. It was agreed that the DOE would reflect any consensus on such standards in its NOPR. Specifically, the Ground Rules were amended to stipulate that “DOE agrees to use the written statement and any recommended standards as the basis for a Notice of Proposed Rulemaking to th e maximum extent possible consistent with the Agency's legal obligations.” The provisions r esulting from all this discussion regarding Parties’

commitments are reflected in Art. 4 of the Final Ground Rules.

After further discussion the Ground Rules set forth in Annex C hereto were adopted. 1

Discussion then turned to timetable for further mee tings and the parties provisionally agreed on the schedule of meetings set forth in Annex D.

Presentation of the DOE engineering analysis bega n in the afternoon. Mr. Cymbalsky opened by explaining the Department’s “walk down” approach to energy efficiency st andard setting under its statute. It begins with the maximum efficiency that is technologically achievable for each equipment class (“Max Tech”) and then evaluates an array of options of decl ining efficiency in search of the standard that is “technologically feasible and economically justified.” He explained that economic justification requires considering such factors as national energy savings , consumer impact, manufacturing impact, technology uncertainty, etc.



### Presentation by Mr. Coffey of Engineering Analysis Results

Mr. Coffey of Navigant Consulting then presente d DOE’s approach to the Engineering Analysis being developed in su pport of the negotiated rulemaking process. He began by explaining that since there is a huge variety of different designs in the market DO E divides the universe of covered transformers into 10 Equipment Classes and 14 Design Lines and then an alyzes a “representative unit” within each Design Line. DOE examines a series of design option co mbinations for each representative unit.

Then DOE calculates cost inputs for building each design option, drawing on materials prices, labor costs and markups derived from manufacturer inputs. Optimized Program Services (OPS) then draws on this information to derive the optimum design based on over 500 combinations of A & B values, reflecting the present value of future core and winding losses, respectively, in the marketplace. After running all the A&B combinations, and removing desi gns below the current minimum efficiency level, DOE was left with roughly 2,500 unique designs for each of the 14 representative units, not including additional sensitivity cases. DOE then plots the sellin g prices and temperature-corrected efficiencies of the various designs as the output of the engineering an alysis, which then serves as an input for the LifeCycle Cost (LCC) and National Impacts Analysis (NIA) performed by Lawrence Berkeley National Lab (LBL) under contract to DOE.

Mr. Coffey also explained the relationship among diffe rent efficiency levels and the terminology used

to describe them. He noted that Candidate Standard Levels (CSLs) are efficiency levels that range from the current standard of efficiency (CSL 0) to Max Tech . They are chosen to divide that range into more

1 In response to a committee member’s request after the meeting, Mr. Parker offered to consider re-opening the ground rules for proposed modifications in the event that legal counsel at any Member’s organization were to identify objections or concerns with the rules that were not raised at the September meeting. However, no such concerns were advanced in any subsequent meeting, so the Ground Rules remain in place as adopted at the
September meeting



### .3

or less equal increments, with some adjustments ma de to reflect technologically significant inflection points. He noted that CSLs become ELs in the NOP R analysis. TSLs, by contrast, are aggregates of CSLs that correspond to policy-significant criteria, su ch as max tech, lowest life cycle cost, etc. TSLs may be defined by the working group to reflect key po ints of reference for analysis and possible decision.

DOE (or in this case the Negotiating Worki ng Group) then chooses from among these TSLs an efficiency level to propose for the representativ e unit associated with each Design Line, and the department then applies the appropriate scaling rule to adapt that standard to other KVA sizes in the same equipment class.

During the presentation of the Engi neering Analysis certain concerns were raised. One participant observed that the representative unit chosen by DOE for certain liquid immersed transformers reflected a single BIL that did not reflect the full range of BILs fo r that design line in the market place. Specifically, higher BIL units are less efficient than low BIL units of the same KVA rating. Moreover, the price increment required to increase efficiency by a given amount is higher for a high BIL transformer than for a low one. And the discrepancies are greater than any 3% bandwidth of equivalence.

Further concerns were raised with the conflati on of pole-mounted and pad-mounted transformers in the liquid-immersed transformer equipment classes (such that a single efficiency standard would be applied to both) and with the inclusion of network a nd vault transformers, which some parties maintained face unique design constraints, within an equipment cl ass that also includes transformers not subject to

such constraints.

Mr. Cohen pointed out that the law allows DOE to create equipment sub-classes but only on the basis of unique physical or performance characteristic, not on the basis of the identity of the purchaser or the use to which the covered product is put, and th ere was a discussion about whether network/vault transformers could meet this requirement.

Concerns also were raised about the variability of materials prices and uncertainty of future prices. Mr. Coffey replied that DOE had used 2010 prices as th e intermediate base case, with sensitivity analysis that explores the impact of varying prices from the lo w level reached in 2006 to the historically high

levels attained in 2008. However, concerns were advanced that raising efficiency standards might move the market towards amorphous metal or high-B steel to an unprecedented degree, which might raise the prices of those materials by considerably more than would be accounted for by historic data. Others questioned whether it is true that capacity increases necessarily imply price increases.

Concerns also were expressed about the variab ility of the CSLs, which tended to confuse company analyses, and a preference was expressed for keeping them constant going forward.

One industry participant raised the concern that the Engineering Analysis did not explore the option of not changing the standard at all, to which Mr. Co ffey replied that the no-change option is the base case

to which various standards options are compared, and the base case is fully analyzed in the report.

Mr. Cohen, Asst. General Counsel at DOE further explained that the Department’s enabling statute calls for a “walk-down” decision process under which the department begins with the highest efficiency level that is technologically feasible and determin es whether that “max tech” efficiency level is “economically justified” based on the factors set forth in the statute. If not, then the department may consider progressively weaker standards until a standa rd is reached that is economically justified.

Whereupon after a few concluding remarks the meeting adjourned for the day.4



## September 16

The meeting opened with a reminder to participan ts that the meeting was public and everything said and all exhibits displayed in the meeting are on the public record. However, DOE and its consultants, including the facilitator, are bound by nondisclosure agreements which require them to respect the confidentiality of documents or information conv eyed to the privately and clearly designated as confidential. Participants were reminded of the im portance of clearly marking any information for which confidentiality is requested.

One member raised the issue of compliance da tes, and asked whether the law governing this rulemaking allowed for variation in compliance dat es according to Equipment Class. Mr. Cohen of the DOE General Counsel’s office agreed to inquire and fu rnish an answer either prior to or at the next meeting. Mr. Cohen pointed out that the issue of whether there is au thority to “phase in” standards over time had also arisen in prior rulemakings on other products, with varying results that depended on the specific statutory language in question.

One member of the advocacy community also expr essed interest in seeing a separate analysis for pole and pad transformers, as suggested by industry representatives. With rega rd to the BIL issue, he opined that the question of whether a different standard is warranted turned on whether the price increment associated with a given unit of efficiency increase woul d be different for different BIL-rated transformers.



### Presentation by Ms. Coughlin of Life

‐ Cycle Cost and National Impact Assessment

After this discussion, Ms. Coughlin of LBNL revi ewed the methodology used to develop the Life Cycle Cost (LCC) analysis and National Impact Assessment (NIA).

She explained that the goal of the LCC is to simu late a large number of installations (roughly 10,000) of transformers for each Design Line, based upon the ch aracteristics of the represen tative unit specified in the Engineering Analysis. This is done by defining a number of characteristics of each installation – those associated with the owner of the transformer, with th e transformer load, and with the characteristics of the transformer itself. Once the owner and loading char acteristics are defined, they don’t change under different standard-level scenarios. Only th e transformer design characteristics change.

The owner characteristics include geographic location (which affects electricity prices), whether or not the owner is an evaluator (meaning that they a pply some valuation to load and no-load losses and calculate total owning cost over time, as opposed to buying simply on the basis of lowest first cost), electricity prices, discount rate, etc.

Ms. Coughlin observed that the assumption in the preliminary analysis was that 75 percent of liquid immersed owner evaluate, whereas only 10 percent of low-voltage transformer purchases do so.

One transformer manufacturer representative observed th at he did not believe that anywhere near 75 % percent of his customers evaluate. Other industry re presentatives agreed that the proportion of evaluators was in practice far smaller than 75%, and that res ponses to survey questions posed by DOE consultants might not accurately reflect actual buying behavior.

Ms. Coughlin concurred that the interview r esponses in the DOE database did not constitute a rigorous statistical sample, and that actual evaluation rates in the field might be much lower.5

Ms. Coughlin continued by observing that her te am had made a number of changes to the April analysis assumptions about owner characteristics based on comments received – including separating commercial from industrial buildings, adjusting the methodology for handling transformer loads, updating electricity price data – but that “none of th ese things end up having enormous impact.”

Ms. Coughlin then addressed the analysis of load ing factors. No-load losses are easy to model: a constant hourly rate given by design parameters multip lied by the number of hours in a year. Load losses, however, require further information about the shap e of the load on the transformer over time as correlated with the variation of electricity prices over time. For liquid-immersed transformers principally owned by utilities the load shape is determined on an hourly basis, whereas for MVDT transformers installed in buildings the load-price variation is analyzed on monthly data.

An industry representative observed that DOE used 2008 energy prices as the basis for its projections of energy prices, but that the run up of gas prices in 2008 caused electricity prices in that year to be abnormally high while the growth of renewables would cause the wholesale price of electricity in some regions to approach zero at certain times. Ms. Cough lin explained, in reply, that DOE did not use 2008 prices to predict absolute prices, but merely to estab lish the shape of the load loss valuation curve. The

central value of that curve was based on absolute price projections derived from AEO forecasts.

In response to a question about load-factor assu mptions, Ms. Coughlin noted that the updated LCC analysis assumed a median “RMS” load of 45% but that the model assumed a distribution of loads around that median. One industry member observed that th is value squared with his impression of actual load factors. Another thought it might be too high in that many utilities and coops are reporting much lower average load factors. A third opined it might be t oo low given the expected growth of electric cars.

The extensive discussion about the various assumptions/parameters built into the LCC analysis prompted the facilitator to inquire whether it woul d be possible to prepare a “cheat sheet” of key assumptions and parameters. The response was that th is would be very long. However, DOE offered to provide updated TSD chapters before the next meeting along with a short summary of key changes made to the analysis in response to public comments to date.

The next question posed was why LBNL based thei r LCC analysis on a cloud of designs, some of which were clearly interior to the price-efficiency frontier, rather than basing it solely on points along the frontier. The answer was there are two reasons for doing so: first, to reflect that fact that engineering optimizing software is an imperfect predictor of actua l market behavior (so a random fluctuation of up to 15% was allowed in purchase prices); and second, to reflect the fact that some purchasers may quite rationally choose a design that is more expensive than the cheapest design at an y efficiency level because their A and B factors may not correspond exactly to the assumed A and B factors around which the design is optimized in the engineering analysis. Mr. Coffey no ted that if the model is modified to greatly reduce the number of evaluators, this will have the effect of substantially reducing the scatter in the plots.

Several industry members opined that as a matter of logic the LNBL staff should use only the points on the highest efficiency curve to generate their LC C. However, another industry member pointed out that the reason scatterplots display multiple points re flecting a range of prices at any given level of efficiency is that they assume that buyers and se llers are basing purchase decisions on total owning cost evaluations and optimizing around a range of A&B factors and loading profiles.

Several industry members worried that the model as sumed infinite variability in the choice of design parameters and materials. However, Mr. Coffey r esponded that, in fact, the Engineering Analysis was constrained to use widely-available wire gauges.6

One transformer manufacture representative observed that the .75 scaling factor does not work very well at the more extreme ends of the kVA spectrum. Mr. Rivest noted that for outlying kVA classes that have very little sales volume, it may not have a large impact on energy savings if they are given a break

from the standard.

The facilitator noted the scaling issue raises a broade r point: that participants need to come forward quickly with any concerns with th e analysis, and communicate those c oncerns/requests to the appropriate analysts on the DOE team.

Ms. Coughlin then reviewed the chart showing the est imated LCC savings at various efficiency levels as probabilistic distributions, with boxes spanning the 25-75 % range, and bars extending from 5% to

95%.

Having completed the discussion of the LCC analysis she moved on to National Impacts Analysis. She explained that once the LCC savings for each desi gn line are calculated, the various design lines are grouped into three main bins: low-voltage, me dium-voltage dry type, and liquid-immersed, 2 and losses for each are calculated by scaling off the representa tive units, using actual data where available, and relying on the .75 scaling law only where data is not available.

Ms. Coughlin concluded her presentation by expl aining the process for generating Total Energy Savings, net benefit, and operating cost savings, sh ipments. Downstream from that the DOE calculates emissions reductions and benefits, incl uding social cost of carbon, etc.

The LCC/NIA analysis produces both a set of numbers and a set of criteria that might be used to generate TSLs (e.g. maximum Life Cycle Cost savings or max net present value) that can be used as salient points of analysis in discussion of which effi ciency level to choose. The TSLs are inputs into NIA, and one job for the working group is to define the TSLs of interest.

Some industry participants expressed concern that so me of the higher efficiency levels could only be achieved with amorphous cores, and that a whol esale shift to amorphous cores would have very significant manufacturing impacts. Committee members asked whether a manufacturing impact analysis (MIA) was going to be prepared for the talks. Th e reply was that such an alysis is analytically “downstream” from the LCC and NIA analysis and is normally done for the NOPR but that it might be possible to run the MIA might be run for the negotiating group if desired (p. 48).

With that Ms. Coughlin’s presentation ended and discussion turned to the choice of TSLs.



### Discussion of choice of Trial Standard Levels (TSLs)

Discussion began by referencing a Department of Energy powerpoint slide supplied by Mr. Cymbalksy which reviewed options for choosing and defining TSLs. He noted that TSLs are defined for Equipment Classes. Each TSL consists of the Ca ndidate Standard Level (CSL) from each equipment class that meets a specified criterion. The criteria include:

 Most energy efficient level (max tech – statutorily required reference point)

 Efficiency level with the greatest national en ergy savings that provide consumer savings

 Efficiency level with greatest life-cycle cost savings

2 One participant noted that there are actually 10 Equi pment Classes. Ms. Coughlin responded that for NIA purposes the design lines are grouped into the three large categories mentioned above.7

 Efficiency levels with noteworthy technologies

 Efficiency levels that fill in large ga ps between candidate standard levels

Although the “max tech” TSL is statutorily required the others are open to discussion by the group. One group member representing the public interest community expressed a preference for not diverging far from the criteria the Department w ould use absent this group coming to agreement. He said that the Max LCC savings (the third TSL above) is another impor tant TSL, as is the maximum efficiency which is attainable using metals other th an amorphous metal or ZDMH (which might be analyzed under the “Noteworthy Technologies” heading).

A question arose about the amortization period for “Life-Cycle Cost” and it was explained that LCC refers to Life-Cycle Cost over the life of the transformer.

After further discussion, there was unanimous consen t to adopt the first three TSLs listed above on a

non-exclusive basis. Discussion then turned to choosing additional TSLs for analysis.

Lowest Incremental Cost . One industry representative urged adoption of a “lowest incremental cost to manufacturers” TSL. Other participants responded that the lowest incremental cost would be zero cost, with no change, which is the baseline scenario. So the proposal was amended to call for a “lowest

incremental cost above the baseline” criterion. Anot her participant suggested modifying this to reflect the point at marginal net benefits are at a maximum.

Competitiveness TSL. In response to concerns that, depending on the level adopted, mandating higher efficiency standards might drive conventional silicon steel-makers out of the market, a public interest advocate expressed an interest in finding the effici ency levels that are “cost-effective but [can be achieved] short of a sole source supplier.”

Participants explored various way to define a technological breakpoint as well as economic inflection points. An industry participant noted that one might define an efficiency level at which conventional

steels would never be chosen, but that a step back [to the left ] of that line is a region in which an amorphous metal manufacturer could essentially co ntrol price because conventional steels though technologically feasible are commercially uncompetitive. There was strong agreement among transformer manufacturer representativeness in the group that they wanted an efficiency level that preserved their ability to use different types of steels. The question was how to define that point.

One industry participant urged adoption of a “ba nd of equivalence” criterion, which would examine efficiency levels at which different grades of core st eels can be made into transformers at a price within, say, 10 percent of each other.

A steel-maker participant suggested a “relative wo rth” analysis which would examine the size and relative prices of a transformer built to an efficien cy specification from one metal or another, so as to define the point at which transformers made with different metals are price competitive such that no particular steel supplier(s) could control the pri ce for the core material of those transformers.

One public interest participant suggested examini ng a TSL in relation to the capacity of the current amorphous metal supplier to the U.S. market to supply that market. However, the representative of that supplier indicated that his company is committed to s upplying the U.S. market and is fully prepared to add capacity to meet additional demand for amorphous metal resulting from any standard.

An industry participant suggested having Navigant sta ff consult with industry participants and define the point where silicon steel and amorphous metal compete. This participant noted, however, that in the8

current analysis the modeled transition from silicon steel to amorphous was very sudden and swift, raising questions about the reliability of the model. Anot her industry participant opined that prices of silicon steel appeared over-stated and amorphous prices und er-stated in the engineering analysis.

Ultimately, it was decided to charge a working group with the task of proposing a competitiveness TSL criterion that would be workable in the analysis.



### Next Steps

Mr. Parker emphasized the importance of moving swiftly to finalize the analysis as a basis for negotiations. He noted that DOE staff would circulat e short memos summarizing the principal changes in the Engineering and LCC/NIA analysis along with updat ed TSD chapters by September 23, and he asked industry participants to submit all concerns with the ex isting analysis to DOE staff no later than Sept. 30.

He proposed that the parties endeavor to reach consensus on analysis and specific criteria for TSLs prior to or at the next meeting on Oct. 12.9



## Annex A

U.S. DEPARTMENT OF ENERGY

+ + + + +

EFFICIENCIES AND RENEWABLES

ADVISORY COMMITTEE

+ + + + +

LIQUID-IMMERSED AND MEDIUM VOLTAGE

DRY-TYPE DISTRIBUTION TRANSFORMERS

NEGOTIATED RULEMAKING WORKING GROUP

+ + + + +

PUBLIC MEETING

+ + + + +

THURSDAY, SEPTEMBER 15, 2011

The Working Group met in Room 8E089, 1000 Independence Avenue, S.W., Washington, D.C., at 9:00 a.m., Richard Parker, Facilitator, presiding.

FACILITATOR:

RICHARD PARKER, University of Connecticut Law School

MEMBERS PRESENT:

RICHARD ANDERSON, Manager of Electrical Engineering, Fayetteville Public Works

Commission TIM BALLO, ESQ., Earthjustice SCOTT BECK, Product Engineering Manager,

Lakeview Metals JOHN CASKEY, Assistant Vice President of Industry Operations, National

Electrical Manufacturers Association JERRY CORKRAN, Staff Engineer, Cooper Power Systems MEMBERS PRESENT (Continued):

JOHN CYMBALSKY, Supervisory Operations Research Analyst, U.S. Department of Energy ANDREW DeLASKI, Executive Director,10

Appliance Standards Awareness Project THOMAS ECKMAN, Manager, Northwest Power and

Conservation Council CARLOS GAYTAN, Manager of Engineering,

Prolec GE ROBERT GREESON, Senior Electrical Design Engineer, Federal Pacific Company GERALD HODGE, Consulting Engineer, Howard

Industries MICHAEL HYLAND, Senior Vice President,

American Public Power Association DAVID MILLURE, Senior Vice President, Metglas, Inc. WES PATTERSON, Vice President of Technology, ABB, Inc. ERIC PETERSON, Director of Customer Services and Research, AK Steel Corporation RAY POLINSKI, General Manager of Grain- Oriented Electrical Steels, ATI- Allegheny Ludlum ART ROSENFELD, Ph.D., Lawrence Berkeley National Laboratory STEVE ROSENSTOCK, Manager of Energy Solutions, Edison Electric Institute ROBIN ROY, Director, National Resources

Defense Council ROBERT SAINT, Principal Transmission and Distribution Engineering, National Rural Electric Cooperative Association CHUCK SIMMONS, Senior Engineer, Progress Energy

ALSO PRESENT:

ROBERT BERMAN, Berman Economics DAVID FLATENFLATEN, Xcel Energy (via telephone) BRIAN COFFEY, Consultant, Navigant Consulting

PATRICIA CORKRAN KATIE COUGHLIN, Lead Analyst, Lawrence Berkeley National Laboratory GREG COULTER, Prolec GE JIM CREEVY, Director of Government Relations, National Electrical

Manufacturers Association CHARLIE DREXLER, Kentucky Association of Electric Co-ops CHUCK FOSTER, Edison Electric Institute JEREMIAH FREEMAN, Energy Analyst, New West Technologies PHIL HOPKINSON, HVOLT, Inc.11

ZHIMEI LUO, Consultant, Navigant Consulting BENJAMIN LONGSTRETH, ESQ., National

Resources Defense Council KEVIN LOOBY, President, Lakeview Metals AARON MEYERS, Cooper Power Systems (via telephone) EMILY MARCHETTI, Program Support Specialist, Energetics Incorporated MATTHEW NARDOTTI, Navigant Consulting TOM PETROSINO, Consultant, Prolec GE MIKE RIVEST, Managing Director, Navigant Consulting JOHN ROSSETTI, Memphis Light, Gas, and Water (via telephone) PAUL RYAN, Hitachi Metals America MAHESH SAMPAT, EMS Consulting JERRY SCHOEN, Principal Engineer, Product Research and Applications Engineering, AK Steel Corporation MEG WALTNER, Energy Efficiency Advocate,

Natural Resources Defense Council KENNETH WINDER, Manager of Engineering, Moon

Lake Electric Association DANIEL YOUNG, Consultant, Pacific Gas &

Electric

STAFF PRESENT:

BRENDA EDWARDS, Program Support Specialist, U.S. Department of Energy DAN COHEN, ESQ., U.S. Department of Energy WAYNE GORDON, ESQ., U.S. Department of Energy12



## ANNEX B

MV Working Group Draft Agenda (exact schedule may vary, depending on rate of progress through agenda items)



## Sept. 15

9:00 – Noon

Introductions

Agenda

Ground rules for Committee (see Attachment)

Discussion of schedule and location of meetings

Noon – 2:00

Lunch Break

2:00 - 5:00

Overview of Navigant/LBL Analysis

Identification of key issues and s ub-issues, data needs and capabilities



## Sept. 16

9:00 - Noon

Identification of key issues, data needs and capabilities (cont’d)

Discussion of order of discussion and schedule for decision on issues

Noon – 2:00

Lunch Break

2:00 – 3:30

Meeting wrap up

3:30 Adjourn13



## Annex C

U.S. DEPARTMENT OF ENERGY

LIQUID-IMMERSED AND MEDIUM VOLTATE DRY-TYPE

DISTRIBUTION TRANSFORMERS

NEGOTIATED RULEMAKIN G WORKING GROUP



## GROUNDRULES

1. Goal of the Liquid-Immersed and Medium Vo ltage Dry-Type Negotiated Rulemaking Working Group (“Committee”)

The goal of the Committee is to reach consensus on a recommended set of energy efficiency standards for liquid-immersed and medium-vo ltage dry-type distribution transformers.

2. Participants

a. Interests Represented. Any interest that would be significantly affected by the rule may be represented in the negotiations.

b. Parties to the Negotiations . The Committee consists of those individuals whom the Secretary appoints, as nominated by the affected interests. Each organization or interest caucus that is directly represented on the Committee shall be deemed a party to the negotiations.

c. Committee Members. Each committee member appointed by the Secretary agrees to serve until

the dissolution of the Committee unless that member becomes unable to serve, resigns, or ceases to maintain the representational requirements.

d. Alternates for Committee Members. Each party to the negotiati ons may designate an alternate Committee Member. Alternates may substitute fo r Committee Members in the event the Member cannot attend a session of the Committee. Only Committee Members may vote on any consensus recommendation, and any alternate casting a vote shall do so on behalf of the Committee Member, and not as a representative of their own organization’s interest, if different.

e. Additional Interests. Additional organizational interests may join the Committee after negotiations have begun only with the concurrence of the Committee.

f. Attendance and Participation at Meetings.

(1) Attendance. Each Committee Member agre es to make a good faith effort to attend every session of the Negotiating Committee. Attendance and voting may be by telephone or other

electronic means

. In addition, the Committee Member's alternate agrees to make a good faith14

effort to attend all Committee meetings and to re present the interest at any meeting that the

Member is unable to attend.

(2) Participation. Only Committee Members or th eir alternates have the privilege of sitting at the negotiating table and of speaking from the floor during the negotiations without Committee approval, except:

(a) any Committee Member may call upon another individual to elaborate on a relevant point,

(b) Committee Counsel may raise and address appropriate points, and

(c) any person attending the Committee meetings may address the Committee if time permits

or file statements with the Committee.

g. Constituents' Interests . Committee Members are expected to represent the concerns of their interest group to ensure that any agreement developed by the Committee is acceptable to the organization or caucus which the Committee Member represents.

3. Decisionmaking

a. Consensus . The Committee will operate by consensu s which, for these purposes, means the unanimous concurrence of all parties to the nego tiations present and voting. Concurrence will be assumed absent overt dissent, evidenced by a nega tive vote. Abstention shall not be construed as a negative vote. All agreements reached during the ne gotiations are tentative and may be made by the Members present at the meeting or their Altern ates who attend a meeting in their stead until the Committee reaches an agreement that is binding on the parties.

b. Workgroups.

(1) Workgroups may be formed to address specific issues and to develop information for, advise, and make recommendations to the Co mmittee. Although each party may designate a member of each workgroup, the membership of each workgroup should consist of no more than fifteen people. Other individuals who the Co mmittee believes would enhance the functioning of a workgroup or representatives of interests that would be significantly affected by the topics addressed by the workgroup but which are not otherwise represented on the Negotiating Committee may also serve on that workgroup. Not all organizations or interest caucuses represented on the Negotiating Committee need to participate in each workgroup.

(2) The Department of Energy (DOE) w ill provide appropriate support for the Committee and the Workgroups, including a senior economist, senior technical staff, clerical support, and so

forth.

(3) Workgroups are not authorized to make decisions for the Committee as a whole. Decisions to forward a report of a workgroup to the Negotiating Committee shall be made with the concurrence of all workgroup members who ar e present at the meeting where the decision is

made.15

(4) Workgroup meetings will be held betw een the full sessions and will be scheduled in the same location and time whenever possible. All Committee Members will be notified of all workgroup meetings.

c. Discontinue if Unproductive . The Committee may discontinue negotiations at any time if they do not appear productive.

d. Deadline for Negotiations. Negotiations will terminate by close of business December 22,

2011 unless the Committee decides to extend the deadline. Every reasonable effort shall be made to conclude negotiations and report a consensus Te rm Sheet to the DOE by December 16, 2011.

4. Agreement

a. Term Sheet and supporting analysis . Any agreement reached by the Committee on recommended standards for some or all covered prod ucts will take the form of a written statement that will be signed by all parties to the negotia tions. For purposes of this Agreement, the term “standard” or “rule” shall be deemed to include any determination that a revision of the standard is unnecessary for some or all covered products. It is anticipated that the agreement will include a written statement that includes (a) a Term Sheet ou tlining the significant terms of the Proposed Rule and (b) supporting analysis as needed to explain and justify the agreed terms from a legal, engineering and economic perspective. DOE staff will be r esponsible for translating this Term Sheet and analysis, into the language of a proposed rule, its supporting preamble, a Regulatory Impact Analysis, and all other appropriate materials necessary for th e publication of a Notice of Proposed Rulemaking.

b. Statement as Basis for NOPR . DOE agrees to use the written statement and any recommended

standards as the basis for a Notice of Proposed Rule making to the maximum extent possible consistent with the Agency's legal obligations.

c. No Negative Comments. Each party agrees not to file negative comments on the proposed standard or its preamble to the extent they have the same substance and effect as the Term Sheet.

d. Response to Public Comments . DOE will consider all relevant comments submitted concerning the Notice of Proposed Rulemaking and w ill make such modifications in the proposed standard and its preamble as are necessary when issuing a final standard.

e. No Adverse Action and Support . Each party agrees not to take any action to inhibit the adoption of the recommended proposed standard [NOP R] as a final standard to the extent the final standard and its preamble have the same substance and effect as the Term Sheet.

f. No Challenge. Each party agrees not to take a position ma terially inconsistent with the standard or determination in court or in any other forum to the extent that the final standard or determination and its preamble have the same s ubstance and effect as the Term Sheet, for a period of 1 year from

effective date of rule or rulemaking determination.

5. Facilitator

A neutral facilitator will work with all the parties to ensure that the process runs smoothly. The facilitator

serves at the will of the Committee.16

6. Meetings

a. FACA, NRA, and DOE Policy. The negotiations will be conducted under the Federal Advisory Committee Act (FACA), the Negotiated Rulemaking Act of 1990 (NRA), and the Department of Energy’s Negotiated Rulemaking Policy.

b. Open Meetings. Negotiating sessions will be announced in the Federal Register prior to the meeting and will be open to the public.

c. Meeting Summaries. The proceedings will not be electronically recorded, but summaries of Committee meetings will be prepared by the facilitato r for the convenience of the Committee. Such meeting summaries shall not be approved by the Committee and shall not be construed or taken to represent the official position of the Committee or any Member as to what transpired at Committee meetings

. In the absence of consensus, parties shall not be bound by positio ns taken or accepted during these negotiations. No photographs may be ta ken during meetings without the approval of the

Committee.

7. Future Amendments

Committee Members may propose modifications to this document, with due consideration given such proposals.17



## ANNEX D

Provisional Meeting Schedule

September 15-16 MV: Thursday, September 15 – Friday, September 16 (DOE Forrestal) LV: Wednesday, September 28 (DOE Forrestal)



### October 12-14 MV: Wednesday, October 12 – Thursday, Oct ober 13 (confirmed NRECA Meeting Space) LV: Thursday, October 13 – Friday, Oct ober 14 (confirmed NRECA Meeting Space)



### November 8-9 MV: Tuesday, November 8 – Wednesday, November 9 (Place TBD) LV: Wednesday, November 9 – Thursday, November 10 (Place TBD)



### November 30 – December 2 MV: Wednesday, November 30 – Thursday, December 1 (confirmed APPA Space) LV: Thursday, December 1 (confirmed APPA Space)

LV: Wednesday, December 2 (DOE Forrestal)



### December (TENTATIVE; FURTHER DISCUSSION NEEDED)

MV and LV: Wednesday, December 14 – Thursday, December 16



### EXTRA DAYS WITH DOE RE SERVED SPACE AVAILABLE

October 18-19 – Room 8E-089

November 21-23 – Room 8E-089

December 1-2 – Room 8E-089

December 20-22 and 27-29 – Room 8E-089