APPENDIX 5C. AVERAGE 2006 MATERIAL PRICING ANALYSIS TABLE OF CONTENTS 5C.1 MATERIAL PRICING TABLES .........................................5-1 5C.2 2006 MATERIAL PRICE ENGINEERING ANALYSIS RESULTS ..............5-3 5C.2.1 Design Line 1 Engineering Analysis Results .....................5-4 5C.2.2 Design Line 2 Engineering Analysis Results .....................5-6 5C.2.3 Design Line 3 Engineering Analysis Results .....................5-8 5C.2.4 Design Line 4 Engineering Analysis Results ....................5-10 5C.2.5 Design Line 5 Engineering Analysis Results ....................5-12 5C.2.6 Design Line 9 Engineering Analysis Results ....................5-14 5C.2.7 Design Line 10 Engineering Analysis Results ...................5-16 5C.2.8 Design Line 11 Engineering Analysis Results ...................5-18 5C.2.9 Design Line 12 Engineering Analysis Results ...................5-20 5C.2.10 Design Line 13 Engineering Analysis Results ...................5-22 LIST OF TABLES Table 5C.1.1 Liquid-Immersed Material Prices Used in the Engineering Analyses ........ 5-2 Table 5C.1.2 Dry-Type Material Prices Used in the Engineering Analyses ..............5-3

5C-iLIST OF FIGURES Figure 5C.2.1 Price and Efficiency for 2006 Material Sensitivity, Design Line 1 ..........5-4 Figure 5C.2.2 Material Price Scenario Comparison Plot, Design Line 1 .................5-5 Figure 5C.2.3 Price and Efficiency for 2006 Material Sensitivity, Design Line 2 ..........5-6 Figure 5C.2.4 Material Price Scenario Comparison Plot, Design Line 2 .................5-7 Figure 5C.2.5 Price and Efficiency for 2006 Material Sensitivity, Design Line 3 ..........5-8 Figure 5C.2.6 Material Price Scenario Comparison Plot, Design Line 3 .................5-9 Figure 5C.2.7 Price and Efficiency for 2006 Material Sensitivity, Design Line 4 .........5-10 Figure 5C.2.8 Material Price Scenario Comparison Plot, Design Line 4 ................5-11 Figure 5C.2.9 Price and Efficiency for 2006 Material Sensitivity, Design Line 5 .........5-12 Figure 5C.2.10 Material Price Scenario Comparison Plot, Design Line 5 ...............5-13 Figure 5C.2.11 Price and Efficiency for 2006 Material Sensitivity, Design Line 9 ........5-14 Figure 5C.2.12 Material Price Scenario Comparison Plot, Design Line 9 ...............5-15 Figure 5C.2.13 Price and Efficiency for 2006 Material Sensitivity, Design Line 10 .......5-16 Figure 5C.2.14 Material Price Scenario Comparison Plot, Design Line 10 ..............5-17 Figure 5C.2.15 Price and Efficiency for 2006 Material Sensitivity, Design Line 11 .......5-18 Figure 5C.2.16 Material Price Scenario Comparison Plot, Design Line 11 ..............5-19 Figure 5C.2.17 Price and Efficiency for 2006 Material Price Sensitivity, Design Line 12 ...5-20 Figure 5C.2.18 Material Price Scenario Comparison Plot, Design Line 12 ..............5-21 Figure 5C.2.19 Price and Efficiency for 2006 Material Sensitivity, Design Line 13 .......5-22 Figure 5C.2.20 Material Price Scenario Comparison Plot, Design Line 13 ..............5-23

5C -iiAPPENDIX 5C. AVERAGE 2006 MATERIAL PRICING ANALYSIS Core steel is one of the major cost drivers of a distribution transformer and is fundamentally linked to the efficiency of the finished transformer. When looking at energy conservation standards for distribution transformers, it is important to understand core steel pricing and influences on that pricing. The Department received several comments at the advance notice of proposed rulemaking (ANOPR) and the notice of proposed rulemaking (NOPR), stating that material prices, and particularly core steel, were experiencing a rapid increase. Therefore, in addition to its analysis on a five-year average material price (2002 through 2006), the Department conducted a current year material price sensitivity analysis, using the 2006 average material prices. The results of the five-year average are presented in Chapter 5 of the technical support document (TSD). The results of the 2006 material price sensitivity analysis are presented in this appendix. The life-cycle cost (LCC) results for the 2006 material price scenario can be found in TSD Appendix 8E, which presents the Department’s sensitivity analyses conducted on various LCC inputs, including material prices. In Chapter 8, the 2006 material price is referred to as the “high” price scenario and the 2002-2006 average price scenario is called the “medium” price scenario. The Department also created a “low” price scenario to establish a lower bound for the LCC sensitivity analysis. It based the low price scenario on material prices in 2002 (the calender year with the lowest $/pound for M6 core steel) and reduced all the material prices in that year by 15 percent. These material prices can be found in the material price tables in Chapter 5, and the low-price scenario manufacturer selling prices can be found in the LCC spreadsheets. 5C.1 MATERIAL P RICING TABLES The Department completed a supplementary engineering analysis using 2006 material prices. The following table presents the five-year average and the 2006 material prices used for liquid-immersed units.

5C -1Table 5C.1.1 Liquid-Immersed Material Prices Used in the Engineering Analyses Material 2006 $/lb. 5-yr Avg. 2006$/lb. M2 core steel $1.66 $1.16 M3 core steel $1.62 $1.06 M4 core steel $1.59 $1.02 M6 core steel $1.40 $0.92 ZDMH (mechanically-scribed core steel) $1.75 $1.63 SA1 (amorphous) - finished core, volume production $2.20 $2.14 Copper wire, formvar, round #10-20 $4.99 $2.58 Copper wire, enameled, round #7-10 flattened $5.28 $2.62 Copper wire, enameled, rectangular sizes $4.45 $2.80 Aluminum wire, formvar, round #9-17 $1.68 $1.53 Aluminum wire, formvar, round #7-10 $1.71 $1.55 Copper strip, thickness range 0.020-0.045 $3.15 $2.69 Copper strip, thickness range 0.030-0.060 $3.05 $2.61 Aluminum strip, thickness range 0.020-0.045 $2.01 $1.70 Aluminum strip, thickness range 0.045-0.080 $2.12 $1.67 Kraft insulating paper with diamond adhesive $1.66 $1.65 Mineral oil $1.82 $1.83 Tank steel $0.50 $0.44 Likewise, the Department used material prices from the 2006 sensitivity price analysis to conduct an additional engineering a nalysis for dry-type units. The following table presents the five-year average and 2006 material prices used in both engineering analyses for dry-type units.

5C -2Table 5C.1.2 Dry-Type Material Prices Used in the Engineering Analyses Material 2006 $/lb. 5-yr Avg. 2006$/lb. H-O DR core steel (domain-refined) $1.76 $1.27 M3 core steel $1.62 $1.07 M4 core steel $1.59 $1.02 M5 core steel $1.55 $0.97 M6 core steel $1.50 $0.95 M19 core steel (26 gauge) $0.73 $0.61 M36 core steel (29 gauge) $0.65 $0.56 M36 core steel (26 gauge) $0.60 $0.51 M43 core steel (26 gauge) $0.57 $0.48 Rectangular copper wire 0.1 x 0.2, Nomex $5.20 $2.87 Rectangular aluminum wire 0.1 x 0.2, Nomex $1.91 $2.06 Copper strip, thickness range 0.020-0.045 $4.74 $2.99 Aluminum strip, thickness range 0.020-0.045 $2.01 $1.70 Nomex insulation (per pound) $17.07 $18.14 Cequin insulation (per pound) $8.50 $11.07 Impregnation (per gallon) $21.35 $18.57 Winding combs (per pound) $7.56 $9.47 Enclosure Steel (per pound) $0.50 $0.44 The Department used the same markup percentages for both engineering analyses, including markups of 2.5 percent for the scrap factor, 4 percent for additional scrap due to the core steel mitering process, 12.5 percent for factory overhead, and 25 percent for non-production costs. 5C.2 2006 MATER IAL PRICE ENGINEERING ANALYSIS RESULTS This section provides a visual representation of the results of the 2006 material pricing analysis. The scatter plots in this section show the relationship between the manufacturer's selling price and efficiency relationships for each of the 10 design lines. Each dot on the plots represents one unique design created by the software at a given manufacturer's selling price and efficiency level. The placement of each dot (and the uniqueness of each design) is dictated by the design option combinations (core steel and windings), core shape, and combination of A and B factors (the capitalized cost per watt of no-load and load losses). Additional scatter plots within each subsection illustrate the manufacturer selling price delta between transformer desig ns using 2002–2006 average material prices and 2006 material
5C -3prices. Each scatter plot also visually presents the candidate standard levels chosen for consideration by the Department, for that particular design line. 5C.2.1 Design Line 1 Engineering Analysis Results Figure 5C.2.1 presents a plot of the 2006 manufacturer selling prices and efficiency levels for the full database of designs for the r epresentative unit from design line 1. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.1 Price and Efficiency for 2006 Material Sensitivity, Design Line 1

5C -4Figure 5C.2.2 presents a plot of the manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 1 using both 2002–2006 average material prices and 2006 material prices. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.2 Material Price Scenario Comparison Plot, Design Line 1

5C -55C.2.2 Design Line 2 Engineering Analysis Results Figure 5C.2.3 presents a plot of the 2006 manufacturer selling prices and efficiency levels for the full database of designs for the r epresentative unit from design line 2. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.3 Price and Efficiency for 2006 Material Sensitivity, Design Line 2

5C -6Figure 5C.2.4 presents a plot of the manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 2 using both 2002–2006 average material prices and 2006 material prices. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.4 Material Price Scenario Comparison Plot, Design Line 2

5C -75C.2.3 Design Line 3 Engineering Analysis Results Figure 5C.2.5 presents a plot of the 2006 manufacturer selling prices and efficiency levels for the full database of designs for the r epresentative unit from design line 3. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.5 Price and Efficiency for 2006 Material Sensitivity, Design Line 3

5C -8Figure 5C.2.6 presents a plot of the manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 3 using both 2002–2006 average material prices and 2006 material prices. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.6 Material Price Scenario Comparison Plot, Design Line 3

5C -95C.2.4 Design Line 4 Engineering Analysis Results Figure 5C.2.7 presents a plot of the 2006 manufacturer selling prices and efficiency levels for the full database of designs for the r epresentative unit from design line 4. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.7 Price and Efficiency for 2006 Material Sensitivity, Design Line 4

5C-10Figure 5C.2.8 presents a plot of the manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 4 using both 2002–2006 average material prices and 2006 material prices. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.8 Material Price Scenario Comparison Plot, Design Line 4

5C-115C.2.5 Design Line 5 Engineering Analysis Results Figure 5C.2.9 presents a plot of the 2006 manufacturer selling prices and efficiency levels for the full database of designs for the r epresentative unit from design line 5. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.9 Price and Efficiency for 2006 Material Sensitivity, Design Line 5

5C-12Figure 5C.2.10 presents a plot of the manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 5 using both 2002–2006 average material prices and 2006 material prices. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.10 Material Price Scenario Comparison Plot, Design Line 5

5C-135C.2.6 Design Line 9 Engineering Analysis Results Figure 5C.2.11 presents a plot of the 2006 manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 9. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.11 Price and Efficiency for 2006 Material Sensitivity, Design Line 9

5C-14Figure 5C.2.12 presents a plot of the manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 9 using both 2002–2006 average material prices and 2006 material prices. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.12 Material Price Scenario Comparison Plot, Design Line 9

5C-155C.2.7 Design Line 10 Engineering Analysis Results Figure 5C.2.13 presents a plot of the 2006 manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 10. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.13 Price and Efficiency for 2006 Material Sensitivity, Design Line 10

5C-16Figure 5C.2.14 presents a plot of the manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 10 using both 2002–2006 average material prices and 2006 material prices. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.14 Material Price Scenario Comparison Plot, Design Line 10

5C-175C.2.8 Design Line 11 Engineering Analysis Results Figure 5C.2.15 presents a plot of the 2006 manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 11. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.15 Price and Efficiency for 2006 Material Sensitivity, Design Line 11

5C-18Figure 5C.2.16 presents a plot of the manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 11 using both 2002–2006 average material prices and 2006 material prices. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.16 Material Price Scenario Comparison Plot, Design Line 11

5C-195C.2.9 Design Line 12 Engineering Analysis Results Figure 5C.2.17 presents a plot of the 2006 manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 12. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.17 Price and Efficiency for 2006 Material Price Sensitivity, Design Line 12

5C-20Figure 5C.2.18 presents a plot of the manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 12 using both 2002–2006 average material prices and 2006 material prices. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.18 Material Price Scenario Comparison Plot, Design Line 12

5C-215C.2.10 Design Line 13 Engineering Analysis Results Figure 5C.2.19 presents a plot of the 2006 manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 13. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.19 Price and Efficiency for 2006 Material Sensitivity, Design Line 13

5C-22Figure 5C.2.20 presents a plot of the manufacturer selling prices and efficiency levels for the full database of designs for the representative unit from design line 13 using both 2002–2006 average material prices and 2006 material prices. The efficiency levels shown in this plot represent transformers at 50 percent of nameplate load and are corrected for temperature.

Figure 5C.2.20 Material Price Scenario Comparison Plot, Design Line 13

5C-23