Date: March 27, 2015

Case: The Energy Conservation Standards For Residential Furnaces

Ace-Federal Reporters, Inc.

Phone: 202-347-3700

Fax: 202-737-3638

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 U.S. DEPARTMENT OF ENERGY PUBLIC MEETING 

 THE ENERGY CONSERVATION STANDARDS FOR 

 RESIDENTIAL FURNACES 

 U.S. Department of Energy 

 1000 Independence Ave. SW 

 Washington, DC 20585 

 Room No. 8E-089 

 Friday, March 27, 2015 

 9:00 A.M. 
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1 Appearances for Department of Energy Meeting 

2

3 John Cymbalsky, DOE 

4 Ashley Armstrong, DOE 

5 Dan Cohen, DOE 

6 Eric Stas, DOE 

7 Michael Kido, DOE 

8 Francine Pinto, DOE 

9 Johanna Hariharan, DOE 

10 Doug Brookman, Public Solutions, -- Moderator 

11 Timothy Ballo, Attorney, EarthJustice 

12 Donald M. Brundage, Southern Company 

13 Adam Darlington, Navigant 

14 Andrew deLaski, ASAP 

15 S. Craig Drumheller, NAHB 

16 Rachel Feinstein, HPBA 

17 Victor Franco, Lawrence Berkeley National Laboratory 

18 John Hodges, Wiley Rein 

19 Diane M. Jacobs, Rheem 

20 Rebecca Kern, Bloomberg 

21 Jeff Kleiss, Lochinvar 

22 Sue Kristjansson, Sempra 
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1 APPEARANCES (CONTINUED:) 

2

3 Daniel Lapato, American Public Gas Association 

4 Neil P. Leslie, GTI 

5 Frank V. Maisano, PRG 

6 Michael J. McCabe 

7 Samuel McClive, Navigant 

8 Charles McCrudden, ACCA 

9 Caroline McLean, AGL Resources 

10 Sarah A. Medepalli, ICF International 

11 Jonathan Melchi, HARDI 

12 Karen Meyers, Rheem 

13 William T. Miller, McCarter & English 

14 Michael Rivest, Navigant 

15 Steven J. Rosenstock, Edison Electric Institute 

16 Aniruddh Roy, Goodman 

17 Robin Roy, NRDC 

18 Harvey Sachs, ACEEE 

19 Dave Schryver, American Public Gas Association 

20 Amy Shepherd, AHRI 

21 Frank Stanonik, AHRI 

22 Rusty Tharp, Goodman 
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1 APPEARANCES (CONTINUED:) 

2

3 James T. VerShaw, Ingersoll Rand 

4 Peeter Vesik, ECCO 

5 Charles R. White, PHCC 

6 Dave Winningham, ALLIED Air Enterprises 

7 Kathryn Clay, American Gas Association 

8 Rosalyn Cochrane, NRCAN 

9 Chuck Foster, EEI 

10 Marshall Hunt, PG & E 

11 Mark Krebs, LACLEDE Group 

12 Douglas Rathbun, DOJ-ATR 

13 Gregory Rosenquist, LBNL 

14 David Schroeder 

15

16

17

18

19

20

21

22
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1 P R O C E E D I N G S 

2 (9:09 a.m.) 

3 MR. BROOKMAN: Okay please take your seats 

4 we are going to begin. Good morning, everyone. Welcome. 

5 Nice to see you here on a rainy day in Washington, 

6 D.C. This is an Energy Conservation Standards 

7 Workshop, a Notice of Proposed Rulemaking Meeting for 

8 Furnaces. Today is March 27, 2015 here in the 

9 Forrestal Building in Washington. Glad to have you 

10 here this morning, nice to see such a nice turn out. 

11 My name is Doug Brookman, Public Solutions, 

12 Baltimore. We are going to start this morning 

13 immediately with introductions. So looking to my 

14 immediate left, and we can get used to turning the 

15 microphones on and off, name and organizational 

16 affiliation. 

17 MR. MILLER: William Miller, General 

18 Counsel for the American Public Gas Association. 

19 MR. STANONIK: Frank Stanonik, Air 

20 Conditioning, Heating & Refrigeration Institute. 

21 MR. VERSHAW: Jim VerShaw, Ingersoll Rand. 

22 MR. WHITE: Chuck White, former contractor 
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1 working for the Plumbing, Heating and Cooling 

2 Contractors Association. 

3 MR. MEYERS: Karen Meyers, Rheem. 

4 MR. SCHROEDER: Dave Schroeder, consultant 

5 with GTI. 

6 MR. LESLIE: Neil Leslie, Gas Technology 

7 Institute. 

8 MR. HODGES: John Hodges, Wiley Rein for 

9 the National Propane Gas Association. 

10 MR. KREBS: Mark Krebs, the Laclede Group. 

11 MR. WINNINGHAM: Dave Winningham, Allied 

12 Air. 

13 MR. SCHRYVER: Dave Schryver, American 

14 Public Gas Association. 

15 MS. MCLEAN: Caroline McLean, AGL 

16 Resources. 

17 MR. ROSENSTOCK: Steve Rosenstock, Edison 

18 Electric Institute. 

19 MR. HUNT: Marshall Hunt, Pacific Gas and

20 Electric. 

21 MR. SACHS: Harvey Sachs, American Council 

22 for an Energy Efficient Economy. 
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1 MS. CLAY: Kathryn Clay, American Gas 

2 Association. 

3 MR. ROY: Robin Roy, Natural Resources 

4 Defense Council. 

5 MR. COHEN: Dan Cohen, General Counsel's 

6 Office, DOE. 

7 MS. ARMSTRONG: Ashley Armstrong, DOE. 

8 MR. CYMBALSKY: John Cymbalsky, DOE. 

9 MR. LAU: Christopher Lau, Navigant. 

10 MS. PINTO: Francine Pinto, General 

11 Counsel's Office. 

12 MS. HARIHARAN: Johanna Hariharan, General 

13 Counsel's Office. 

14 MR. STAS: Eric Stas, General Counsel's 

15 Office. 

16 MR. FRANCO: Victor Franco, Lawrence 

17 Berkeley National Laboratory. 

18 MR. ROSENQUIST: Greg Rosenquist, Lawrence 

19 Berkeley National Laboratory. 

20 MR. DARLINGTON: Adam Darlington, 

21 Navigant. 

22 MR. BROOKMAN: And we'd like to have 
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1 introductions from everyone else as well, starting 

2 with Mike Rivest. Just say your name out loud. As a 

3 matter of courtesy, I think we should all introduce 

4 ourselves. This will not be recorded, just stand and 

5 say your name please. 

6 (Introductions off mic) 

7 MR. BROOKMAN: Okay well thank you and 

8 welcome again, nice to see you here for an early 

9 start on the day. All of you I hope received a 

10 packet of information that will be our principal 

11 resource for both presentation and comment and 

12 organization as we go through the meeting today. If 

13 you look on slide 7 in your packet, there is kind of a 

14 general agenda. Immediately following this agenda 

15 review are some preliminary slides on the purpose of 

16 the meeting, regulatory history and the like. There is 

17 an opportunity for opening remarks, brief summary 

18 comments here at the outset, hopefully nothing too 

19 terribly extensive at the opening but brief opening 

20 remarks from anybody that wishes to do so. 

21 Moving on from there we will have some 

22 overview slides and from there engineering analysis, 
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1 and then we will take a break mid-morning around 

2 10:30 or so. Whenever we get to the break, we will take 

3 it; probably around about life-cycle cost 

4 analysis and subgroup analysis; somewhere in there. 

5 We will then proceed with the shipments model, 

6 NIA, and RIA. We will take lunch midday around about 

7 noon and then MIA, environmental, employment, and 

8 additional research, and then at the end of the day, 

9 closing remarks, another opportunity for anybody that 

10 wishes to make statements. 

11 This is your opportunity for comment to 

12 make sure everything you need to say gets covered 

13 during the course of the day today; so that's yet 

14 another opportunity for you to comment at the end of 

15 the day, okay? 

16 We are going to have some introductory 

17 slides and hear from John 

18 Cymbalsky. 

19 MR. CYMBALSKY: Thank you Doug; welcome 

20 everyone. I'm glad to see such a big turnout for 

21 this very important rule. We have been at this rule 

22 for a little bit. Just to give a little history on what 
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1 we have done up until this point: So back in September 

2 we released the analytical tools and a bunch of data 

3 that supported the numbers you see today in the 

4 proposal. We had a public meeting to increase the 

5 transparency of what we do in our analytical tools to 

6 show stakeholders how to use those tools, and I have 

7 to say, that meeting to me was very successful because 

8 the comments and the questions that we received ahead 

9 of this meeting, to me prove that that meeting was 

10 useful because whoever submitted the questions 

11 through AGA and APGA I think did a great job of 

12 understanding the spreadsheets and asking some very 

13 key questions. 

14 Those questions helped us actually frame 

15 our presentation today, so as we go through, we are 

16 going to do our best to flag these questions in the 

17 presentation, and I would ask those who submitted 

18 questions ahead of time to please make sure that when 

19 we are on that slide and we flag it that we answer your

20 question 

21 because clearly that is what we want to do here; we 

22 want to answer everybody's questions to the best of 
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1 our ability here. 

2 Some of the questions you know related to 

3 how this rule is different than the 2011 DFR 

4 [direct final rule]; we are going to show as much data 

5 and comparison as we can with that. 

6 For example, the furnace fan rule that was 

7 finalized last summer comes into play here because 

8 the performance of an X13 motor essentially will be 

9 in a baseline furnace come 2021 when this rule would 

10 need compliance. So things like that have a lot to 

11 do with the changes in the numbers and such, and we 

12 are going to go through all of that data as we go 

13 through the meeting. 

14 We also met over the past few years; we 

15 have had lots of ex parte meetings with lots of 

16 different stakeholders. Again, the transparency issues 

17 that I think we have addressed here today were 

18 brought up. Very complicated issues with this rule 

19 including installation cost, venting issues, fuel 

20 switching, and so based on that really good public 

21 comment, we actually, I think, did a great job in 

22 building models and analysis to deal with these very 
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1 important issues for this product. 

2 And so we are going to go through them 

3 today. We know AGA and others have done their own 

4 analysis; we are going to compare what we did with 

5 what you all did to try to understand those key 

6 differences as we go through. 

7 And then I would just like to add, and I 

8 know that there are remarks by AGA and APGA, you know, that

9 talk 

10 about efficiency and how important it is to both them 

11 and DOE. I'm happy to say in our research we found 

12 over 50 different gas utilities offering rebate 

13 programs to advance condensing furnaces into homes. 

14 There's over 150 different unique programs 

15 across the country that are doing this, and so we feel 

16 we are partnered in advancing energy efficiency, and 

17 we are happy that utilities and other organizations 

18 are pursuing the same goals as us, and so with that 

19 let's turn it over to opening remarks from whoever. 

20 I know we have received a few ahead of time, and I'm 

21 sure there're others, so we will pass it off. 

22 MR. BROOKMAN: There's one more small bit 
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1 of preliminary business. I would ask for your 

2 consideration. Please speak one at a time and say 

3 your name for the record as you need to. There will 

4 be a complete transcript of this meeting made 

5 available, so I think you know, if you could, share the 

6 air time and be concise. 

7 If you haven't turned your cell phones on 

8 silent mode, please do so, and webinar participants we 

9 welcome you. The Department of Energy is trying hard 

10 to make these meetings totally accessible via the 

11 web. Please leave your telephone on mute so we don't 

12 get feedback here in the room, and raise your hand to 

13 participate in this conversation here. We will 

14 unmute you. We should be able to hear you, and you 

15 can join in the conversation in real time. 

16 So now let's proceed with opening remarks. 

17 I have received a request to let Dave Schryver go 

18 first. Microphone on? 

19 MR. SCHRYVER: Okay, thank you. My name is 

20 Dave Schryver, I am the Executive Vice President of 

21 the American Public Gas Association. We appreciate 

22 this opportunity to make this brief opening 
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1 statement. APGA submitted its complete preliminary 

2 comments to DOE a week ago, and we request that those 

3 comments, including the questions appended thereto, be 

4 asserted into this record of this proceeding. 

5 My opening statement will simply highlight 

6 some of the points made in those comments. APGA is 

7 the national association for publicly-owned natural 

8 gas distribution systems. There are approximately 

9 1,000 public gas systems in 37 States, and over 700 of 

10 those systems are APGA members. Publicly-owned gas 

11 systems are not-for-profit, retail distribution 

12 entities owned by and accountable to the citizens 

13 they serve. 

14 They include municipal gas distribution 

15 systems, public utility districts, county districts, 

16 and other public agencies that have natural gas 

17 distribution facilities. APGA, whose members are 

18 predominantly located in southern tier States, is 

19 concerned that the NOPR, by eliminating non-condensing 

20 furnaces from the marketplace, is, among other things, 

21 taking away customer choice, discriminating against 

22 low-income persons, and participating in fuel switching 
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1 to less efficient energy alternatives, all to the 

2 detriment of the American public. 

3 By proposing a nationwide 92% efficiency 

4 standard for non-weatherized gas furnaces, our concern 

5 is that DOE has made many of the same errors that 

6 affected the 2011 direct final rule proceeding, 

7 including as examples: a lack of transparency, failure 

8 to recognize non-condensing furnaces as a separate 

9 product class, failure to account properly for fuel 

10 switching, reliance on proprietary data, data 

11 averaging, et cetera. 

12 Of course, until the transparency issue is 

13 satisfactorily addressed, APGA and the other 

14 interested parties that care about compliance with 

15 the Energy Policy and Conservation Act are precluded 

16 from meaningfully participating in this proceeding 

17 and from informing the record of the seriousness of 

18 the problems that may render the NOPR in 

19 contravention of the EPCA. 

20 While a prepared statement addresses each 

21 of the various shortcomings just noted, albeit in 

22 abbreviated fashion, since we currently do not have 
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1 sufficient information to do the necessary analysis 

2 of the NOPR, I want to focus my remarks on the 

3 transparency issue as that is really the key to 

4 understanding the errors that may underline the NOPR. 

5 I am accompanied by technical experts from 

6 the Gas Technology Institute, an independent 

7 non-profit technology organization engaged in 

8 research and development addressing energy issues. 

9 GTI has been engaged by APGA and the American Gas 

10 Association to assist in analyzing the NOPR and its 

11 technical underpinnings. 

12 The DOE, in its analysis of life-cycle costs 

13 and payback periods in the NOPR, relies on a 

14 spreadsheet model combined with Crystal Ball software 

15 to account for uncertainty and variability among the 

16 input variables. 

17 APGA's experience in the 2011 direct final 

18 rule proceeding taught us just how complex and opaque 

19 Crystal Ball software, as used by DOE and its 

20 contractors, can be. In an effort to understand the 

21 DOE's use of the Crystal Ball software and 

22 simplifications, we have, with the assistance of GTI, 
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1 submitted questions to DOE. 

2 Prior to the issuance of the NOPR, DOE 

3 declined to answer the most important of those 

4 questions on the ground that they were involved with the 

5 deliberative process and hence could not be answered 

6 until after the NOPR issued. The NOPR has issued, and 

7 our questions remain unanswered. Our concern is time 

8 to comment on the NOPR is quickly dissipating. 

9 We need answers to our questions as soon 

10 as possible; hopefully, those may be forthcoming today, 

11 but in any event no later than April 3rd so that 

12 meaningful analysis can proceed. Thank you for 

13 permitting APGA to express its preliminary views on 

14 the NOPR process. We are hopeful that a meaningful, 

15 substantive exchange will occur today between the DOE 

16 technical experts and the representatives from GTI, 

17 thank you. 

18 MR. BROOKMAN: Thank you. Other opening 

19 statements, comments here at the outset? John? 

20 MR. HODGES: Yes, John Hodges for the 

21 National Propane Gas Association, NPGA. NPGA is the 

22 national trade association representing the U.S. 
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1 propane industry. Its members include small businesses 

2 and large corporations engaged in the retail 

3 marketing of propane gas and appliances, producers 

4 and wholesalers of propane equipment, manufacturers 

5 and distributors of propane gas appliances and 

6 equipment, fabricators of propane gas cylinders and 

7 tanks, and propane transporters. 

8 With membership of approximately 2,800 

9 companies in all 50 States, 38 affiliated State or 

10 regional associations, and members of 19 foreign 

11 countries, NPGA represents every segment of the 

12 propane industry. NPGA appreciates DOE's desire to 

13 advance energy efficiency and conservation in 

14 relation to residential furnaces, but is concerned 

15 that the proposed rule may well have a negative 

16 impact on the residential furnace market, both for 

17 consumers and for fuel suppliers such as retail 

18 propane marketers. 

19 For example, furnaces with a required 92% 

20 AFUE would result in positive pressure in the venting 

21 systems, thus prohibiting direct replacement for an 

22 existing natural draft furnace or entered an existing 
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1 application such as when a furnace and gas water 

2 heater are commonly vented into a masonry chimney. A 

3 92% AFUE furnace would also need a dedicated vent 

4 discharged to an appropriate outside area that may 

5 not be within close proximity to an existing furnace. 

6 Any of these circumstances would add both 

7 cost to reconfigure the venting system and potential 

8 safety concerns if in the case of an orphaned water 

9 heater, the water heater vent is not properly sized. 

10 These could well be deemed unacceptable in the 

11 marketplace, and we are concerned that the proposal, if 

12 finalized, would result in a significant percentage of 

13 fuel switching by furnace owners. 

14 Suffice it to say, the propane industry 

15 shares many of the same concerns as the natural gas 

16 industry. NPGA continues to analyze the proposal and 

17 will provide more detailed written comments by the 

18 deadline. Thank you. 

19 MR. BROOKMAN: Additional comments here? 

20 Yes please, Kathryn? 

21 MS. CLAY: Good morning, my name is Kathryn 

22 Clay. I'm the Vice-President for Policy Strategy with 
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1 the American Gas Association, and we appreciate the 

2 opportunity to be here today to present our views on 

3 the Notice of Proposed Rulemaking on Energy 

4 Conservation Standards for Residential Furnaces. 

5 AGA and its member companies, as John noted, 

6 are strong advocates for energy efficiency in all 

7 direct use applications of natural gas. Nationally, 

8 natural gas utility-supported energy efficiency 

9 programs had investments exceeding 1.1 billion 

10 dollars in both 2012 and 2013, and AGA member 

11 companies reported budgets of 1.4 billion for energy 

12 efficiency programs in 2014. 

13 Through these energy efficiency 

14 investments, AGA members have helped customers save 

15 151 trillion BTU of energy, and offset 7.9 million 

16 metric tons of carbon dioxide in 2013 alone. AGA is 

17 concerned that the DOE proposal to adopt a national 

18 92% AFUE standard for non-weatherized natural gas 

19 furnaces will have serious negative unintended 

20 consequences. Our preliminary analysis of the 

21 information made available to date concerning the 

22 rule indicates that it will impose significant 
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1 economic burdens to American consumers while 

2 providing substantially lower actual energy savings than 

3 indicated by the DOE technical support documents. 

4 AGA is also deeply concerned by the 

5 Department's consistent lack of transparency 

6 throughout this rulemaking process. In a number of 

7 critical areas, the Department has obscured the 

8 assumptions, the data, and the methodologies contained 

9 in the technical documents in support of this rule. 

10 Despite written inquiries, questions submitted by AGA 

11 to the DOE have gone almost completely unanswered. 

12 This is particularly troubling given the immense 

13 complexity of the proposed rule and the reliance on 

14 highly sophisticated and opaque modeling 

15 methodologies. 

16 In particular, we are concerned that much 

17 of the DOE analysis has relied on the methodologies 

18 that are either proprietary or otherwise outside of 

19 the public domain, and the Department has failed to 

20 provide sufficient information needed by AGA due to 

21 all of these factors for AGA or any member of the 

22 public to develop a clear understanding of the technical 
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1 analysis behind this rulemaking, and, as a result, it is 

2 impossible to ascertain whether or not this proposed 

3 rule actually meets the criteria established by EPCA 

4 for establishing new or amended standards. 

5 AGA respectfully requests that the 

6 Department provide all information requested to date, 

7 especially that that had been previously withheld as 

8 deliberative, and in light of the complexity and the 

9 delay in access to the information, we also 

10 respectfully request an extension in the comment 

11 period to allow all parties to have suitable time to 

12 analyze the newly provided information in the context 

13 of this very complex and sophisticated rule. 

14 AGA, though, has moved forward to review the 

15 alluded information that has been made available in 

16 the work referred to by APGA, and we have worked in 

17 concert with APGA to hire GTI to help us make sense 

18 of these very complex technical documents, and based 

19 on our preliminary understanding from the work to 

20 date, we believe that DOE's economic analysis 

21 significantly underestimates the cost to consumers 

22 and the other adverse impacts that the amended 
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1 standards would impose. 

2 We are concerned that the 92% AFUE 

3 proposed standards would impose burdensome costs and 

4 potentially costs and in fact environmental negative 

5 consequences due to fuel switching and other factors. 

6 Even according to the Department's own analysis, the 

7 majority of affected households would see no benefit, 

8 some of them bearing higher net costs under the 

9 proposed rule. It is especially objectionable that 

10 this rule would place an undue burden on the low11 income consumers who will be unable to overcome the 

12 initial barriers presented by the higher unit costs 

13 of condensing furnaces or costs needed for renovations to 

14 retrofit a condensing furnace if at all possible. 

15 According to DOE's analysis, 20% of 

16 households nationwide would see a net life-cycle cost 

17 increase; 31% of consumers in the southern region 

18 would experience net life-cycle cost increases, and, in 

19 particular, again, low-income consumers would be 

20 disproportionately affected. For example, 39% of low21 income consumers in the south, according to DOE, would 

22 bear net life-cycle cost increases. EPCA is intended 
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1 to be a pro-consumer statute, and a proposed standard 

2 such as this that makes many consumers worse off 

3 should be reasonably reconsidered and should not be 

4 reasonably considered to be economically justified. 

5 I would like to note briefly some of the 

6 major areas in the technical analysis that we believe, 

7 with proper reconsideration, would actually make these 

8 numbers and impacts on consumers even worse. Working 

9 with GTI and our initial understanding to date of the 

10 technical impacts, we note the following deficiencies 

11 in the DOE analysis. 

12 First, DOE underestimates the adverse 

13 effects of fuel switching as consumers are forced 

14 away from natural gas options to less-efficient 

15 heating choices. 

16 Secondly, we are concerned that DOE 

17 overestimates product lifetime using significantly 

18 higher estimates of 21.5 years, significantly higher 

19 than industry-accepted estimates of 15 to 16 years. 

20 Also, the Department over-estimates the size of the 

21 affected market. The impact of this, of course, is 

22 that by over-estimating the size of the market, it 
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1 also tends to inflate the projected benefits of the 

2 rule. 

3 And, finally, DOE uses unexplained and 

4 inconsistent installation costs in its life-cycle cost 

5 analysis. Particularly troubling, these are, on their 

6 face, substantially different than some of the numbers 

7 used in 2011; no citations or explanations for such 

8 drastic changes in the numbers have been included -- 

9 why these numbers would change so dramatically over a 

10 3-year period. 

11 In closing, we hope that the Department 

12 will act quickly to address these needs and the needs 

13 of the public by supplying full access to its data 

14 assumptions and methodologies. This is foundational 

15 to our ability to assess the full implications of 

16 this proposed rule in any meaningful way. Thank you 

17 for the opportunity to comment, and I look forward to 

18 the discussion. 

19 MR. BROOKMAN: Thank you. Additional 

20 comments here at the outset? Andrew, Andrew deLaski. 

21 MR. DELASKI: Andrew deLaski, Appliance 

22 Standards Awareness Project. Based on the coalition 
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1 project, I know many of you. We work with a coalition 

2 of energy efficiency advocates, environmental groups, 

3 consumer groups, also with representatives from State 

4 government in the utility sector. We are active in 

5 many of these proceedings for advancing energy 

6 efficiency standards. 

7 We have been active in each of the prior 

8 steps of this rulemaking as well. I want to first in 

9 this opening comment, I want to thank DOE for sticking 

10 with the schedule outlined by the settlement in the 

11 APGA litigation, so DOE has, as far as I can tell, done 

12 a very nice job of proceeding with this process as 

13 anticipated by the requirements of the settlement and 

14 doing a working group last fall to give folks an early look 

15 at the analysis, holding a public workshop that was a 

16 very good and constructive step in publishing 

17 multiple analyses in support of the NOPR. 

18 I actually found it quite clear the 

19 material that has been published, and I think DOE has 

20 really gone beyond the usual steps to provide a level 

21 of transparency for stakeholders to be able to 

22 understand the analysis. Now, I understand people 
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1 have questions, and I hope the Department will answer 

2 those questions to the full extent that you are able 

3 to while complying with the law, and I expect that you 

4 will. 

5 I don't know if that was typically what 

6 you do, but I don't see why it would be different in 

7 this docket, and I hope that today we can continue the 

8 kind of frank exchange that we have been having to 

9 answer those questions, and I hope they can be 

10 answered because I think that will help everybody to 

11 understand what the analysis shows. 

12 I also want to thank all the stakeholders 

13 in the room. This has been a long process, and we have 

14 had a lot of public meetings over the years. This is 

15 the biggest one so far. I mean, it's not surprising to 

16 me to see a lot of folks from the gas industry here. 

17 This standard will save more natural gas 

18 than any other standard ever issued by the Department, 

19 so it is natural that the natural gas industry is 

20 here in force to participate because it is going to 

21 save a ton of gas. The closest rule is the water 

22 heater rule from 2000. 
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1 So it saves a ton of gas, that's a good 

2 thing for consumers; it's a good thing for the 

3 environment, and that is something that we support. I 

4 want to also say a couple of things about the process 

5 up until now. There has been a lot of collaboration, 

6 as everybody in this room knows. We, the advocates, and 

7 AHRI came up with a proposal for a joint 

8 recommendation for a standard that was adopted by the 

9 Department, and that collaboration, that was very 

10 constructive. 

11 It ultimately was overturned by litigation, 

12 but it was a good collaborative relationship, one that 

13 has been continued since then in open and frank 

14 discussions. So there also was good collaboration 

15 with AGA in developing an approach to address what 

16 was described to us as the small number of consumers 

17 who faced very high costs and certain specific 

18 circumstances, and we came up jointly with a proposal 

19 for waivers that we will share with the Department, 

20 but ultimately that process came up against the 

21 shoals of the litigation. 

22 So that collaboration, I thought, was quite 
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1 constructive and would have addressed some of the 

2 narrow concerns raised by the gas industry. So I 

3 hope that we can continue the kind of collaborative 

4 discussions both today and after today that have 

5 helped folks to wrap their minds creatively around 

6 the opportunity to achieve large savings with new 

7 natural gas furnace standards. 

8 It's my hope and my expectation that 

9 ultimately we will be able to arrive at a final 

10 standard, which is due I think next year, the end of 

11 next March, that will achieve at least the savings 

12 that are expected by the proposed rule, and I expect 

13 that by collaborating, working together, we can 

14 increase those savings. We can arrive at a solution 

15 that would be even more favorable, and precisely how 

16 that is to be done I think depends on the creativity 

17 and the goodwill and the ability of the folks in this 

18 room to work together to address and identify the 

19 narrow concerns and to address them. 

20 With respect to the proposed rule, we 

21 support it. We think it is a good solution. 92% 

22 AFUE nationally, as I said, it saves more natural gas 
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1 than any standard in the DOE's history. The net 

2 savings is 3.1 quads over a thirty-year analysis 

3 period, most of that in natural gas, but that includes the 

4

5 30 

6

7 standby electricity consumption savings, with a net 

8 present value that benefits consumers at 3.1 to 16.1 

9 billion dollars depending on the discount rate that 

10 you use. 

11 We know that the higher level of 95% would 

12 yield even more savings and also be more, more net 

13 savings economically for consumers. The net energy 

14 savings would rise to 4.4 quads, and the NPV would 

15 rise by 5 billion to almost 25 billion dollars in net 

16 present value savings to consumers over the analysis 

17 period. These are enormous savings, energy savings 

18 and economic savings. 

19 We have only begun our review of DOE's 

20 technical analysis. As I said earlier, we have found them 

21 to be clear, but we have found several items that 

22 concern us. It's our view that if these items are 
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1 corrected, we expect that DOE's analysis will show 

2 that the proposed standards save even more energy and are 

3 even more cost-effective than DOE has estimated in 

4 the NOPR documents. 

5 I'll outline briefly right now some items 

6 that we think need correction as DOE moves forward to 

7 a final rule. 

8 First of all, manufacturer impacts -- DOE 

9 justifies its decision to go with a 92% standard based 

10 on the cumulative regulatory burden on manufacturers. 

11 DOE essentially says in their walk down, if not for 

12 the cumulative regulatory burden we would go to this; 

13 95% looks pretty attractive. We think DOE 

14 over-estimated manufacturing impacts really in two 

15 ways. 

16 First is that the impacts on manufacturers 

17 are primarily driven by the decline in shipments, but 

18 where are those shipments going? They are going to 

19 heat pumps and to electric furnaces. The way DOE 

20 does the manufacturer impact analysis is that it 

21 looked at the furnace division of the manufacturers, 

22 but the manufacturers who make furnaces are the same 
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1 exact manufacturers who make heat pumps and electric 

2 furnaces. 

3 As we understand it, the economic analysis 

4 includes the impact on consumers who buy alternative 

5 equipment. We think the manufacturer impact analysis 

6 as well should look at the impact across the entire 

7 spectrum of equipment that is affected. 

8 The second point is fuel switching. We 

9 applaud the Department for including fuel switching 

10 in the analysis. It was something that AGA requested 

11 that was a priority for AGA, and we appreciate the 

12 Department has now included fuel switching in the 

13 analysis. 

14 We think that you have over-estimated the 

15 fuel switching, the rate of fuel switching. You use 

16 a model that depends on evaluating a payback. We 

17 think that the model is a good approach in terms of 

18 developing an economic basis for switching; however, 

19 we think we haven't really accounted for the 

20 stickiness, the inertia of consumer decision making. 

21 So if the model was adjusted to account 

22 for the consumer behavior that people tend to do what 
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1 they did before, inertia, we think that you will find 

2 that the results will show less switching than what 

3 you have estimated. We would note that the switching 

4 that has been estimated is about the same as the 

5 switching that GTI estimated in their materials 

6 submitted to the Department last fall. 

7 With that change in the analysis, you will 

8 see increased savings and also reduced impacts on 

9 manufacturers. 

10 Third is learning rates -- we believe the 

11 Department has understated some of the benefits of the 

12 learning rates for equipment, really for two reasons. 

13 First is that the learning rates are based on 

14 furnaces as a whole as opposed to condensing 

15 furnaces, and if you look at the learning rate for 

16 condensing furnaces, you are going to see that you are 

17 doubling the rate of condensing furnaces faster than 

18 you are doubling the rate of conventional furnaces or 

19 furnaces as a whole, so capturing the incremental 

20 learning rate is the key issue the Department needs 

21 to grab. 

22 And the second thing on learning rates is 
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1 that we think the data is compromised in the years in 

2 which there are Federal tax credits in effect. With 

3 that correction, you will find that the learning rates 

4 will actually increase. 

5 Fourth, installation costs are 

6 over-estimated. DOE does not account for new 

7 technologies; these technologies are described in an 

8 appendix to the TSD, polypropylene vents. 

9 Manufacturers like DuraVent and Centrotherm are in 

10 the market today providing products. These products 

11 are designed to provide venting solutions for some of 

12 the various hard-to-vent situations that the gas 

13 industry has highlighted, and they will have helped to 

14 reduce the costs for those consumers who face those 

15 tough installations. 

16 DOE also needs to apply learning to the 

17 venting technology and to the practice of venting. 

18 Fifth, this is a small point, but it 

19 relates to the stand-by. We think DOE has 

20 over-estimated the costs on standby. There is a 

21 discrepancy between the cost of the TSD and NOPR 

22 which needs to be resolved. 
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1 Sixth, we think DOE's baseline market 

2 shares for condensing furnaces are too high. We have 

3 data from a couple of States. We have compared those 

4 to the data the Department has published, and those 

5 costs -- the rate of condensing in existing States -- is 

6 not as high as the Department has shown it to be in 

7 the analysis. We have data from the northwest that 

8 shows it to be different than what you have shown. I 

9 am surprised to see West Virginia is projected at 95% 

10 condensing; that doesn't strike me as correct, 

11 particularly when bordering States are lower. 

12 We think the market continues to be first13 cost-driven in many States and that that will lead to 

14 a lower rate of condensing than what the Department has 

15 projected. 

16 And then, seventh and finally, we think the 

17 Department has not accurately estimated the 

18 distribution of efficiency post-standard. The 

19 Department has done a very nice job of showing the 

20 distribution of efficiency among condensing products 

21 today, and I was pleasantly surprised to see that the 

22 most common choice for a condensing furnace in 
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1 northern replacements is a 95% furnace; yet the 

2 Department assumes that everybody who would have 

3 bought something below the standard, buys precisely 

4 the standard, a roll-up scenario, is a common problem 

5 of these rulemakings. 

6 We think a more realistic assumption is 

7 that consumers will -- it will be a selection of 

8 condensing values above the standard that is 

9 ultimately selected and that results in a different 

10 estimate than what the Department has shown. The 

11 Department often does this type of scenario in its 

12 analyses, and we think it should be used as the 

13 default scenario in this project. 

14 So thanks for the opportunity to 

15 participate, I look forward to ongoing discussions, 

16 and I will continue to participate in this important 

17 rulemaking. 

18 MR. BROOKMAN: Thank you. Yes, Robin 

19 please. 

20 MR. ROY: Robin Roy, Natural Resource 

21 Defense Council. We have been long supporters from 

22 the very beginning of the Federal Energy Efficiency 
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1 Standards/Appliance Energy Standards. We have worked 

2 on a lot of them, and we continue to work on them, and 

3 we are really thankful for the program, and it's 

4 delivered for environmental and consumer outcomes. 

5 Great energy savings and great results 

6 generally -- this particular standard has been a long 

7 time coming. It's been almost a tortured path, and we 

8 are looking forward to an effective and as timely as 

9 possible resolution. I also say we work a lot on the 

10 other approaches, other tools in the portfolio for 

11 energy efficiency for consumer and environmental 

12 benefits, supporting State and utility programs for 

13 energy efficiency. 

14 We are very thankful of AGA and its 

15 members energy efficiency programs, the 1.4 billion 

16 dollars I think is very effective, and I would love to 

17 see it. It's a fantastic set of tools. Interesting 

18 in this case, there continues to be even with those 

19 programs, there continues to be an opportunity, actually 

20 a need for efficiency standards for furnaces. Only if 

21 we had had a few more of those utility programs, a 

22 bit more intensely funded, then maybe we wouldn't be 
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1 sitting here, but such is the case. 

2 There is a large amount of efficiency 

3 opportunity that is economic. We haven't heard 

4 anybody suggest otherwise. NRDC has been working 

5 very intensely on this particular rulemaking over 

6 these last few years. We had been talking to many 

7 stakeholders. We were very keen to work in that group 

8 that Andrew mentioned a moment ago to develop a 

9 waiver process that was really targeted to address 

10 this issue, which had been raised so many times in our 

11 discussions, of the most hardest effected small 

12 subset typically associated with difficult 

13 installation costs, and I am delighted to see some 

14 work and an opportunity to drive down some of those 

15 tough installation challenges, and that's very 

16 encouraging, and we continue to be really interested 

17 in that part of it. 

18 We recognize that there is a continued 

19 deep concern about households that may be worse off 

20 by several hundred dollars, and that's what it looks 

21 like from the analysis -- it's not in this package 

22 here today, but you would see it in the technical 
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1 support document in figure 8.5.1, for example, that 

2 shows 5% of households being worse off by several 

3 hundred dollars. 

4 We are very interested in what might be 

5 done to mitigate that and achieve even greater cost6 effectiveness from this rule. We are also interested 

7 in looking at tighter standards, for example a 95% 

8 might that be brought into effect for appropriate 

9 households. To those ends, we have been having lots 

10 of discussions with manufacturers, with utilities, 

11 with associations, with installers, with other 

12 efficiency and environment groups. The kinds of 

13 discussions, I think, that are probably hard for DOE to 

14 have by the nature of the rulemaking process. 

15 And those have been really quite 

16 productive. We have had one-on-one discussions. We 

17 have had small group discussions, and just a couple of 

18 weeks ago, we had a terrific meeting with, I don't know, 

19 about 35 parties from all over the place, and, for 

20 those in this room who didn't participate, please see 

21 us because we will continue to have these discussions. 

22 Let me know if you are interested to see what might 
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1 be done, particularly for the issues which have been 

2 raised before that continue to be raised and are a little 

3 challenging for this one. 

4 The 5% tail, I will just use as a shorthand for 

5 this hard-off -- these worse-off households. We also 

6 are recognizing, as Katheryn mentioned, that there is a 

7 moderately or a fairly large subset of households in 

8 the south for example, 40% or so, that will be worse 

9 off, maybe not by very much, but something. We are 

10 interested in seeing if something can be done there 

11 too, if it's small amounts of money that's 

12 unfortunate, and we would like to address it as soon 

13 as possible. 

14 So we are looking to see what might be 

15 done with, for lack of a better term, flexibility 

16 mechanisms. An example, the after-the-fact waiver and 

17 the enforcement rulemaking from a few years ago that 

18 several parties in this room proposed and even more 

19 of the parties in this room discussed and negotiated, 

20 not all coming to an agreement on it. 

21 We think it's interesting. We also see 

22 a regional standard as having some merit. It's a type 
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1 of flexibility which DOE has an opportunity to draw on. 

2 We are very keen on the full array of what might be 

3 done to make a more cost-effective standard that 

4 addresses the particular challenges for the worst5 affected households. We think there are some paths 

6 to that end, and we would love to get more discussion 

7 from DOE on what you might see as the legal or 

8 practical challenges to them. 

9 It would be, for example, great to see what 

10 your view was on the analog, the in-standards as 

11 opposed to post-standard waiver process. You could 

12 call it an exemption or something. I am sure there 

13 has been a fair amount of legal thinking at GC on 

14 those issues, but we can't glean that from anything in the 

15 NOPR or the TSD. 

16 But given the history, I am very 

17 concerned with those issues. I hope we will see more 

18 and be able to glean more of what you are thinking 

19 and see if we can work towards solutions that would 

20 fit within your view as being legal and enforceable 

21 and effective. 

22 Great work, we need to see this done. 
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1 There is too much energy opportunity, too much 

2 consumer savings, and too much environmental benefit to 

3 just let this go, so go as quickly as you can to get 

4 this thing done. 

5 MR. BROOKMAN: Steve Rosenstock? 

6 MR. ROSENSTOCK: Steve Rosenstock, Edison 

7 Electric Institute. Again I want to thank the 

8 Department for having this hearing today. I am going 

9 to really withhold most of my comments until we get 

10 to some of the issues that affect the electric 

11 industry, such as the issue of fuel switching and the 

12 emissions analysis and national impact analysis. 

13 But in opening, I just wanted to really say 

14 I think we are going to have to remember some of the 

15 context here in terms of competitive markets. Right 

16 now the standards for heat pumps have gone up twice 

17 in the last 9 years, the first time from 10 to 13 [SEER] in 

18 January of 2006, the second time as part of the court 

19 settlement from 13 to 14 [SEER] and then with corresponding 

20 level and the HSPF 6.8 to 7.7 in 2006 and now 7.7 to 

21 8.2 now. 

22 Any analysis that is done in terms of fuel 
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1 switching really needs to take that in account as 

2 well. The market has shifted, the costs have 

3 increased on the heat pump side, and by not even 

4 talking about that, the current analysis is incomplete, 

5 and I will provide more details later. I look 

6 forward to the discussion and thank you very much. 

7 MR. BROOKMAN: Thank you, additional 

8 comments before we launch into this detailed review. 

9 Frank Stanonik. 

10 MR. STANONIK: Frank Stanonik, AHRI. I 

11 haven't prepared comments but just a couple of things 

12 I do want to bring. First of all, yes, we have been 

13 involved with a lot of other people trying to find 

14 the, let's say, the appropriate solution that would be 

15 acceptable to all parties. I will tell you that the 

16 proposed level by DOE is not acceptable to AHRI's 

17 members, and I would also just remind everyone that we 

18 are looking at the solution that is both saving 

19 energy and economically justified, and we should not 

20 forget that second part. 

21 And the last point I want to raise is that 

22 we are also looking at the energy that might be saved 
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1 by a rule in comparison to what energy savings occurs 

2 in the absence of the rule, and you will see in slides 

3 and other places, it is, in this case, for a case of 

4 residential furnaces, unavoidable to notice that, first 

5 of all, as Steve might mention, there really hasn't 

6 been a change in the first rule, depending what you 

7 consider the 80% that comes in November -- if you 

8 consider that a change okay there's been a change 

9 coming in, but I would say there really hasn't been a 

10 change since NAECA, and yet without question, whatever 

11 the right number is today, certainly the current 

12 market is about one out of every two furnaces shipped 

13 to the United States and going into somebody's house 

14 is a condensing furnace. 

15 So there is a huge amount of savings that 

16 the industry has achieved without standards, or 

17 without changes in the standards, and so as we talk 

18 about this rule, we need to keep in mind we are 

19 looking at the savings the rule achieves as opposed 

20 to what will happen if the industry just goes along 

21 and deals with incentive programs, deals with getting 

22 the products where they need to be, where they make 
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1 the most economic sense. 

2 MR. BROOKMAN: Okay thank you, Susan 

3 Stantley joining us on online, Susan we are going to 

4 unmute your phone. Please speak. We haven't heard you 

5 yet okay. So then maybe she will join us in a 

6 moment. Additional opening remarks here before we 

7 get into the details? Okay let's then proceed with 

8 the slides and back to John Cymbalsky. 

9 MR. CYMBALSKY: Okay thanks Doug. John 

10 Cymbalsky, DOE. I am just throwing this up here, this 

11 is our usual slide that highlights the issues that we 

12 will be expressly asking for comment on. As we go 

13 through, you will see these issue boxes, and then we 

14 will pause at that point for comments from the 

15 stakeholders. 

16 Okay so let's get right into the content 

17 here starting with the regulatory authority. So EPCA of 

18 1975 established the Energy Conservation Program for 

19 Consumer Products Other Than Automobiles, which covers 

20 the furnaces that we will be discussing here today. 

21 NAECA 1987, as Frank just mentioned, amended EPCA to 

22 prescribe the first standards for furnaces, and it 
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1 directed DOE to conduct two further rulemakings to 

2 determine whether or not amended standards were 

3 warranted, and so here we are today. 

4 EISA 2007 amended EPCA to [require DOE to] review

5 standards every six years and also required that standards 

6 after July 1, 2010 look at standby and off mode. 

7 Okay, so per the history as I just mentioned, the initial 

8 standards were established by NAECA in 1987 except 

9 for small furnaces, and DOE published a final rule on 

10 November 17, 1989 to set initial standards for small 

11 furnaces, and you can see the Federal Register cite. 

12 DOE also published a final rule on 

13 November 19, 2007 that amended standards for most 

14 classes of furnaces manufactured on or after November 

15 19, 2015, and it did not update standards for mobile 

16 home oil-fired furnaces and weatherized oil-fired 

17 furnaces. 

18 DOE also published the direct final rule 

19 on June 27, 2011, and it amended the AFUE standards 

20 for non-weatherized gas furnaces, mobile home gas 

21 furnaces, and non-weatherized oil furnaces. It 

22 amended the compliance date but left the existing 
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1 standards in place for weatherized gas furnaces, and 

2 it established electrical standby and off mode 

3 standards for non-weatherized gas furnaces, 

4 non-weatherized oil furnaces, and electric furnaces. 

5 So following the 2011 DFR, we have already 

6 heard a little bit about this in Andrew's opening 

7 remarks. We went through, and DOE was remanded the rule. 

8 The court approved a DOE and APGA settlement on April 

9 24, 2014. Again, DOE was remanded the rule, and here we are 

10 in today's proceeding, and, as Andrew mentioned, we are 

11 proceeding on schedule with the Court's ruling. 

12 So the current standards for 

13 non-weatherized gas furnaces and mobile home gas 

14 furnaces were established by NAECA and were effective 

15 in 1992 and 1990 respectively. The November 2007 

16 final rule revised the final AFUE standards, and 

17 compliance is in November of 2015, and you could see 

18 those numbers below. 

19 We had a question from Mark Nayes from 

20 Southside Heating and Air Conditioning asking about 

21 what this standard we are talking about would do. So 

22 it's a manufacturing standard, and his question 
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1 related to how would people install 80 AFUE furnaces. 

2 The standard is on manufacturing, so they would -- the 

3 manufacturers would not be able to actually make 

4 those furnaces, so I hope that answers your question. 

5 The next slide talks about the criteria 

6 for setting standards, and a lot of people have 

7 already referred to a few of these in their opening 

8 remarks using words like technically feasible and 

9 economically justified, so you could see the 

10 difference factors in EPCA and how the different DOE 

11 analyses address each one of these, but just to hit on 

12 a few you know, there are issues of competition, 

13 utility, energy savings, operating costs, et cetera. 

14 So I think the slide deck does a good job 

15 of going through these today. There is a lot of 

16 content, a lot of pretty heavy-duty content, but 

17 hopefully, we will get through all of it. We are going to 

18 do our best to answer everybody's questions, and as I 

19 said in the opening, we are going to flag certain 

20 areas of concern as we go through. 

21 MR. BROOKMAN: Okay, thank you John. 

22 Suzanne Stantley I think has joined us again, and 
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1 Suzanne, we will now unmute your phone. Please say 

2 your organizational affiliation as well. 

3 MS. STANTLEY: Good morning, and I will. 

4 Thank you for the opportunity to speak today on the 

5 Department of Energy's proposed standard for minimum 

6 efficiency standards for natural gas furnaces. 

7 Again my name is Suzanne Stantley, I am the CEO of 

8 Contractor Advisors Business Development out of 

9 Chicago, Illinois. I am active in my community, 

10 working on a daily basis to find ways to increase 

11 economic viability for minority-owned businesses and 

12 consistently seeking solutions to create economic 

13 opportunity. 

14 I am speaking today on behalf of low15 income residents in my community that I believe would 

16 be hurt by the rule if it is allowed to go into 

17 effect. As I understand it, energy efficiency 

18 programs are supposed to help consumers save money on 

19 energy costs, but this rule will do the opposite, and 

20 it will impact low-income families hardest. 

21 The proposed furnace rule would force many 

22 low-income residents to either pay large amounts for 
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1 condensing furnaces or switch to more expensive 

2 electric heating when their existing non-condensing 

3 furnaces need to be replaced. Non-condensing 

4 furnaces are in most homes today. 

5 The Chicago area already suffers from 

6 higher than national average electricity costs, 

7 while the city has lower than average natural gas 

8 costs. Condensing furnaces cost about $350.00 more 

9 than non-condensing furnaces and can cost an 

10 additional $1,500 to $2,200 to be installed. Low- and 

11 moderate-income families throughout Chicago would be 

12 severely hurt by this rule if more of their household 

13 income would have to go to pay for basic heating. 

14 Many of these families will have to make 

15 hard choices. In addition, the cost increases would 

16 further deplete an already strained low-income home 

17 energy assistance program, LAHI funding. Nationally, 

18 LAHI funding has been reduced 34% from $5.1 billion in 

19 2010 to only $3.4 billion in 2015. 

20 The resulting allotment for Illinois has 

21 decreased 31% from $232.09 million in 2010 to only 

22 $165.5 million in 2015. This reduction in LAHI 
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1 funding has already denied over 89,000 former 

2 recipients of this desperately needed assistance. 

3 The new furnace standard proposed by DOE would push 

4 low-income families toward more costly and less5 energy-efficient options like electric resistance 

6 heating. 

7 That means heating costs will go up and 

8 LAHI assistance will be available to even fewer 

9 families than it is today, and so I am here to ask the 

10 Department of Energy not to move forward with this 

11 proposal, as I know the impact it will have on my 

12 community and those with whom I work on a daily 

13 basis. 

14 As an advocate for energy efficiency and 

15 an advocate for economic opportunity, I urge you to 

16 find the necessary solutions to achieve energy 

17 efficiency without causing residents in the 

18 communities I serve to pay more in monthly heating 

19 costs and, in the end, operate less-energy-efficient 

20 furnaces. 

21 Thank you again for this opportunity to 

22 speak today. 
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1 MR. BROOKMAN: Okay, thank you. Now let's 

2 proceed with the slides and go to the engineering 

3 analysis. 

4 MR. DARLINGTON: Good morning, everyone. 

5 I'm Adam Darlington with Navigant Consulting. I am 

6 going to go over the rulemaking scope and the 

7 engineering analysis. 

8 MR. BROOKMAN: Let me make a comment here. 

9 There's a lot of content in this package here today. 

10 We need to be, I think, disciplined in the discussion 

11 segment. We want to hear everything you have to say 

12 but let's keep a focus here. Okay, let's try and be 

13 concise with our comments as we go along. Do you 

14 wish to say something at the outset? 

15 UNIDENTIFIED SPEAKER: Is this available 

16 electronically with the DOE webinar? 

17 MR. CYMBALSKY: So we had that question, 

18 and I think Alex has emailed a few of them that asked 

19 for it, but it generally goes into the docket after 

20 the meeting, yeah. 

21 MR. BROOKMAN: Thank you, now we are going 

22 to proceed. 
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1 MR. DARLINGTON: All right, with that said, 

2 we have a lot of ground to cover, so I will go through 

3 this as quickly as I can, but do feel free to stop me 

4 if you need to ask any questions. 

5 So just briefly, the scope -- basically the 

6 scope of this rulemaking exercise is outlined by 

7 the definition in EPCA for residential furnace. The key 

8 points here we are looking at are single-phase electric 

9 units; I'm sorry -- for units that use electricity, we 

10 are looking at single-phase units, natural gas 

11 furnaces, and that have an input rate of 225,000 BTU 

12 per hour or less, and, I think as was alluded to 

13 earlier, as a result of the remand agreement, this 

14 analysis is covering two classes of furnaces and those 

15 are the non-weatherized gas furnaces and mobile home 

16 gas furnaces. 

17 So now I am moving to the engineering 

18 analysis. The purpose of the engineering analysis is 

19 to determine how manufacturer costs and selling price 

20 changes with increasing efficiency. For the analysis 

21 of AFUE standards, DOE has relied on an efficiency 

22 level approach, which means that the analysis was 
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1 focused on analyzing selected efficiency levels at 

2 which DOE estimated the manufacturer production costs 

3 and selling prices. 

4 DOE used a reverse engineering analysis 

5 which we will talk through in the coming slides and 

6 also relied on a variety of information as listed 

7 here on the slides. So this slide just shows an 

8 overview of the steps in the engineering analysis, 

9 starting with inputs from the market and technology 

10 assessment going from the selection of the efficiency 

11 levels that DOE is going to analyze all the way 

12 through to developing industry average, manufacturer 

13 selling prices, and so we will sort of talk through 

14 each of these steps in the coming slides, so I won't 

15 spend too much time here. 

16 So as mentioned, the first step is 

17 selecting the efficiency levels for analysis. And so 

18 this was informed by product efficiency data 

19 collected during the market assessment. DOE analyzed 

20 the baseline level, which is 80% for both the 

21 non-weatherized gas furnace and mobile home gas 

22 furnace equipment classes. 
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1 There is correspondence on the minimum 

2 standard that was adopted previously in the 2007 

3 final rule. DOE also analyzed the max-tech levels, 

4 which are the most efficient products available, and 

5 in between these levels, DOE looked at several 

6 intermediate levels, mainly at the most common 

7 efficiency levels available on the market, also at 

8 levels that represent a major change in technology, 

9 for example the 90% example for non-weatherized gas, 

10 a big jump from non-condensing to condensing. 

11 And so the table on this side shows all of 

12 the efficiency levels that were analyzed as part of 

13 this analysis. 

14 So this slide talks about the selection of 

15 units for the teardown analysis, which is the reverse 

16 engineering analysis. DOE selected quite a few units, 

17 as shown in this table at the bottom of the slide. 

18 The selections span the range of efficiency levels 

19 analyzed and were focused on the representative input 

20 capacity of 80,000 BTU per hour; so the models that 

21 were primarily selected at that input were 

22 as close as possible, but we did also look at 
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1 some units above and below that in order to get an 

2 idea of how the analysis would scale to large and 

3 smaller units. 

4 And so at each efficiency level, products 

5 from multiple manufacturers were chosen for tear down, 

6 and this allowed for the direct comparison of 

7 efficiency levels for a given manufacturer, and it 

8 sort of allowed DOE to key in on the differences in 

9 designs and the costs which will achieve the 

10 different efficiency levels. 

11 So we were able to look at the 

12 manufacturers specific matched pairs of products 

13 which represented the cost to increase fuel efficiency. And

14 so 

15 as this slide shows, you know, as I mentioned, quite a 

16 few units were selected. They were focused around the 

17 levels that DOE analyzed, so quite a few teardowns at 

18 80% which is the baseline, quite a few at 90%, quite 

19 a few at 92% and 95%,, and then at 98% (max-tech) we had two 

20 teardowns there, and basically, there were two 

21 manufacturers producing products there, so we looked 

22 at both of them at the representative capacity. 
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1 So then, for each teardown, basically what 

2 DOE does is they physically disassemble the unit 

3 into its components, log the parts along with the 

4 materials, dimensions, weights, and manufacturing 

5 processes to create a spreadsheet of building 

6 materials. DOE uses the building materials developed 

7 from the teardown to develop the cost estimate for 

8 each unit torn down. 

9 DOE also does manufacturer interviews and 

10 talks to the manufacturers about its cost estimates 

11 to get some feedback and get some help with 

12 calibrating some of these estimates. Yes? 

13 MR. BROOKMAN: Frank Stanonik? 

14 MR. STANONIK: Frank Stanonik, AHRI. Adam 

15 just a quick question. 

16 MR. DARLINGTON: Sure. 

17 MR. STANONIK: You said something about 

18 looking at pairs of something, so I just want to 

19 confirm that in all of these teardowns, let's say for 

20 every one of the -- obviously you looked at 8 models of 

21 rated units at 80%, and I'll just assume there was at 

22 least one from each major manufacturer. 
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1 Does that mean that you also looked at a 

2 higher condensing model from the same manufacturer as 

3 compared to the 80% to look at this pair situation? 

4 MR. DARLINGTON: Yeah, that's right, and 

5 that's what we set out to do in order to tell what 

6 the incremental difference is, so, and then you see a 

7 little bit of spread here, you know. Obviously, not 

8 all manufacturers are making the 92%, so for somebody 

9 with the 93% and compare that to their 80% instead of a 

10 92%, so yes, but yes to your question. 

11 MR. BROOKMAN: Mark? 

12 MR. KREBS: Mark Krebs with Laclede Group. 

13 MR. BROOKMAN: Is your mic on? 

14 MR. KREBS: Yeah, it is. Since I got here, 

15 I have always wondered a lot about this teardown 

16 stuff, you know, all of those units you bought and 

17 tore down. , I assume you purchased those, correct? 

18 MR. DARLINGTON: Yes. 

19 MR. KREBS: Okay, any idea what that cost 

20 and total amount of man-hours necessary for the tear 

21 down task? 

22 MR. DARLINGTON: No, I have never run the 
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1 numbers on that, so I couldn't give you an estimate. 

2 MR. BROOKMAN: Jim? 

3 MR. VERSHAW: Jim VerShaw, Ingersoll Rand. 

4 So you have purchased the furnaces. Did you take the 

5 purchase price that you paid for those furnaces and 

6 compare that with what you came up with as an 

7 estimate for the cost? Did you ever show that? 

8 MR. DARLINGTON: We don't show that, but it 

9 is done to sort of calibrate. 

10 MR. BROOKMAN: Mike Rivest? 

11 MR. RIVEST: This is Mike Rivest from 

12 Navigant. I'm the one who has to sign the purchase 

13 orders. You know, we are not an authorized 

14 distributor or reseller or Trane carrier, so we end up 

15 paying very different prices than I did when I was a 

16 contractor, for example. 

17 So the prices that we pay are not 

18 representative of what the distribution chain would 

19 pay, for example. There's a wide variation of what we 

20 pay, so we couldn't reasonably compare that to our 

21 manufacturing costs and make conclusions unless you 

22 guys would be willing to provide that. 
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1 MR. BROOKMAN: Back to Adam. 

2 MR. DARLINGTON: All right, so moving on. 

3 I just want to note here a very important part of 

4 this. An important issue to note is interplay with the 

5 furnace fans final rule, which I think John alluded to 

6 earlier. So as most of you I am sure are aware, DOE 

7 published the furnace fans final rule in 2014, and the 

8 compliance date for that is 2019. 

9 The expected compliance date from this 

10 rulemaking would be 2021, and so that furnace fan rule 

11 will already require compliance by the time this one 

12 would. So on the furnace fan final rule, DOE had 

13 assumed certain technologies would be needed to be 

14 implemented to meet those standards, and those are 

15 listed here on the slide for both product classes. 

16 And consistent with those assumptions, DOE 

17 assumed that those technologies were going to be 

18 implemented at the time this rule takes effect, and, as 

19 a result, DOE accounted for those costs in the 

20 baseline efficiency level and higher efficiency 

21 levels as needed. 

22 And so just going back to what John said 
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1 earlier about the questions APGA had submitted, I 

2 believe this one is a primary driver and the answer 

3 to priority question E which was related to the 

4 difference in total installed cost between the 2011 

5 analysis and this analysis, and a large factor in that 

6 was accounting for these technologies used. 

7 MR. CYMBALSKY: We think this also answers 

8 question 2, in the section "Questions asked previously and 

9 not answered by DOE. 

10 MR. BROOKMAN: And that document John -- 

11 MR. CYMBALSKY: Is in the docket. 

12 MR. BROOKMAN: Okay. It just seems like 

13 the key point here, so additional questions, comments 

14 related to this slide? Yes sir, please say your 

15 name. 

16 MR. SCHRODER: This is Dave Schroder. So 

17 you are saying that the larger difference between 

18 2011 and now is furnace fans? 

19 MR. DARLINGTON: Yes, that's right as far 

20 as the total installed costs for the consumer 

21 changing. I think there are smaller changes, but this 

22 is the primary driving factor. 
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1 MR. SCHRODER: And why is that change 

2 larger in the 80% case than in the higher condensing 

3 cases? 

4 MR. DARLINGTON: Well, so at the max-tech -- 

5 this applies equally to 80% to 90% and the 92% and 

6 the 95%, so as we talk through what we observed design 

7 changes were at each level, when we talk about that, 

8 the max-tech is a little bit different, so some of 

9 these didn't need to be applied there. 

10 As far as comparing the 80% to the 90% -- 

11 MR. RIVEST: Mike Rivest, Navigant. Adam, 

12 you can only speak to the manufacturer sales price, 

13 not installation costs. 

14 MR. DARLINGTON: I was going to say as to 

15 the specific differences for that, you know, if there 

16 are other differences, we will get to those in the 

17 installed costs later. 

18 MR. BROOKMAN: If you wish to comment, come 

19 to the microphone. Make sure it is turned on. Please 

20 say your name. 

21 MR. MURPHY: Rich Murphy, American Gas 

22 Association. Just a follow-up question to the tear 
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1 16 down and buildup of the equipment costs and 

2 ultimately the markups that are applied -- so Mike 

3 from Navigant had explained that they build-up with 

4 the manufacturer's cost and really don't have a 

5 comparison to see how that resonates with what the 

6 manufacturer's costs are, but that is what is used 

7 to build up the actual retail price of the 

8 equipment that having compared how that works against 

9 what you actually pay for the equipment. 

10 MR. BROOKMAN: Mike please speak up. 

11 MR. RIVEST: We will get to that. I mean, 

12 so we are building it up from the manufacturing cost. 

13 MR. BROOKMAN: That's a dead spot for that 

14 mic. 

15 MR. RIVEST: So we will be building this 

16 up from the manufacturing costs, literally the 

17 production costs to the manufacturing sales price, and 

18 then we will be taking it down the distribution chain 

19 all the way to retailer cost, installed cost, and that 

20 is -- that will take a few hours as we go through the 

21 presentation. 

22 And you know, this is not like a clothes 
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1 washer, for example where there is readily available 

2 retail pricing. Even online, a lot of these products 

3 are sold through dealer networks, and you can't just 

4 buy a gas furnace necessarily for a lot of these 

5 brands of things, and I see Karen Meyers has 

6 something to say about that. 

7 MS. MEYERS: So a lot of gas furnaces are 

8 sold through contractors at Home Depot. It is 

9 available to get pricing that is usually charged 

10 based upon the installed cost, so that is not an entirely 

11 accurate statement. 

12 MR. RIVEST: It's not, well, I don't think 

13 you can get all brands at Home Depot for example, so 

14 that would become useful perhaps. 

15 MS. MEYERS: You can get at least three or four 

16 brands. 

17 MR. BROOKMAN: Okay, thanks for the comment, 

18 Karen, okay. Frank Stanonik? 

19 MR. STANONIK: Frank Stanonik, AHRI. Adam, 

20 you indicate here that you are assuming it is going 

21 to be a two-stage product in the baseline, and for 

22 some of us who were here yesterday afternoon talking 
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1 about revised test procedure, there is certainly some -- 

2 I will say at this point, some uncertainty as to what 

3 kind of AFUE number you are going to get out of the 

4 revised test procedure for two-stage products. Is 

5 that factored into the analysis -- I mean let me 

6 rephrase that. 

7 How can you factor into the analysis what 

8 the AFUE of this two-stage product will be as the 

9 baseline when we have a test procedure that is right 

10 now a little bit fluid and certainly might have some 

11 effect on what value you get for that particular 

12 design? 

13 MR. DARLINGTON: In the test procedure, the 

14 conclusion was that the impact would be de minimis, so 

15 we went with that here. As far as the two-stage, I 

16 think yesterday we heard that sometimes it improves 

17 efficiency, but sometimes it would actually decrease 

18 efficiency. It just depends on how the manufacturers 

19 design it, so yeah, we really assumed that it would be 

20 the same efficiency. 

21 MS. ARMSTRONG: This is Ashley from DOE. 

22 I think this gets to our discussion largely yesterday 
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1 about that we believe ratings won't change and, 

2 generally speaking, I think we looked at the you know, 

3 left that at DOE did some testing. We are going to 

4 put additional details of that testing that 

5 underlines that conclusion in the docket as 

6 requested yesterday, but obviously, we welcome data if 

7 someone has it that shows that we need to relook at 

8 that conclusion, but generally speaking, we believe 

9 that the test procedure proposals that we have made 

10 will not change the rated values as you see them on 

11 the market today. 

12 MR. BROOKMAN: Keep going Adam. 

13 MR. DARLINGTON: So after developing the 

14 MPC estimates for the individual units that were torn 

15 down, the next step was to aggregate the individual 

16 teardown results into an industry cost-efficiency 

17 relationship, and at the baseline, DOE used the market18 share-weighted average for each manufacturer to come 

19 up with an industry average baseline cost. 

20 So based on publicly-available information 

21 and based on feedback during manufacturer interviews, 

22 DOE estimated the market shares, and you know, as Frank 
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1 mentioned earlier in his assumption, we tore down 

2 quite a few at the baseline and hit pretty much every 

3 major manufacturer, so we market-share-weighted them 

4 into an industry average baseline MPC. 

5 So then at the intermediate levels above 

6 the baseline, they start at 95% and go up to -- I'm 

7 sorry, they start at 90% and go to the 95%, and so to 

8 get to 95, DOE observed that manufacturers pretty much 

9 universally utilized the secondary condensing heat 

10 exchanger, and then within that range, typically the 

11 changes were the size increases to the heat exchanger 

12 as the driver of the increased efficiency and also 

13 the increased product costs. 

14 So within this range, DOE compared the teardown 

15 results between the intermediate level and the 

16 baseline for each manufacturer individually, to develop 

17 manufacturer-specific incremental costs of achieving 

18 each intermediate efficiency level, so it was almost 

19 like an individual cost-efficiency relationship for 

20 each manufacturer, which we then aggregated together to 

21 get the industry cost, and then at the max-tech, since 

22 we only had two and because the technology there was 
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1 a little bit different, so to get to the max-tech, we 

2 were looking at the products available on the market. 

3 It looked like they increased their size, 

4 and then they also switched to modulating, and so, 

5 looking at that, we compared the 98% teardowns for the 

6 two max-tech units to the 95% to see exactly what 

7 changed in that range as well. 

8 And we used an average of those two -- a 

9 weighted average, a market-share-weighted average of 

10 those two numbers, to come up with the MPC 

11 estimate at 98%. 

12 So then for the mobile home gas furnaces, 

13 DOE also did teardowns of several models to look at 

14 the differences. Mainly, we were looking for 

15 differences between the mobile home gas furnaces 

16 and the non-weatherized gas furnaces. So when we did the 

17 teardowns of mobile home gas furnaces, we had 

18 teardowns from manufacturers that made both mobile 

19 home gas furnaces and non-weatherized gas furnaces, so 

20 we were looking at comparing the same manufacturer 

21 with the same efficiency level to see the differences 

22 between the models and come up with cost estimates. 
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1 So generally, the incremental cost2 differences between efficiency levels and the cost 

3 efficiency trend and the design changes were fairly 

4 similar, so the differential costs at each level for a 

5 mobile home furnace as compared to a non-weatherized 

6 gas furnace were used along with the industry 

7 cost-efficiency estimates for the non-weatherized gas 

8 furnaces to come up with estimates for the mobile home 

9 gas furnaces. 

10 And the next step was to develop the 

11 estimate of the manufacturer selling price. So the 

12 manufacturer selling price is calculated as the 

13 manufacturer markup times the production cost plus 

14 the shipping cost. Shipping costs were calculated 

15 based on assumptions about typical trailer sizes and 

16 the furnace size at each efficiency level, and those 

17 are included in the TSD markups. 

18 Markups are calculated initially based on 

19 information from SEC 10-Ks for public companies, and 

20 then they are calibrated based on information provided 

21 in the manufacturer interviews. And so pretty much, 

22 the conclusion of this is that DOE estimated the 
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1 manufacturing markup to be 1.34 for non-weatherized 

2 gas [furnaces] and 1.27 for mobile home gas furnaces. 

3 And so from there, this is what results 

4 generally. So as I mentioned earlier, at 80% we have the 

5 baseline. From 80% to 90%,, you are basically 

6 adding the condensing secondary heat exchanger, and 

7 then within the range from 90% to 95%, increasing heat

8 exchanger 

9 size, and above that increasing the heat exchanger size 

10 even further and then adding modulation. 

11 And so that brings us to the request for 

12 comment about the analysis. 

13 MR. BROOKMAN: Ashley Armstrong? 

14 MS. ARMSTRONG: So this leaves -- and I'm 

15 going to turn it right over to you but you had asked 

16 a couple of questions, Mark from Laclede, regarding the 

17 engineering analysis that you submitted beforehand, 

18 and so we believe the slides that Adam just presented 

19 more or less answer those questions directly in terms 

20 of how we did our approach for the teardown 

21 analysis. 

22 We had a question as to what pricing 
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1 technology did DOE use for fan motors in the 

2 baselines, which was specifically on slide 19, so I 

3 just wanted to let you know that we answered your 

4 questions on the previous slide, but should you have 

5 more, please feel free to note that. 

6 MR. KREBS: Well thanks for that 

7 explanation. It really doesn't address my question, 

8 but I'll deal with that. I have a couple of other 

9 questions in regard to you, sir. You seem to be the 

10 guy I should ask about BOM spreadsheets and cost 

11 models that were referred to in the TSD, but we can't 

12 seem to locate them, can you help us out? 

13 MR. DARLINGTON: We don't make those 

14 publicly available. So when we do our BOM 

15 spreadsheets, which are the main input to our cost 

16 estimates, they contain a lot of sensitive 

17 manufacturing information, so we generally haven't 

18 made those public. In the TSD, what we try to do, and 

19 what I have tried to do here, is to sort of describe 

20 what the changes are and what is driving the cost. 

21 So if you need something more to feel 

22 comfortable with, you know, I guess the ability to 
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1 review this, we can talk about it or just -- we don't 

2 generally reveal that information. 

3 MR. KREBS: Would a FOIA request get it? 

4 MR. BROOKMAN: Mike Rivest? 

5 MR. RIVEST: I'm trying to be helpful. 

6 What is it you need it for? 

7 MR. KREBS: We need it to verify your 

8 costs to see how reasonable they are in our opinion 

9 and -- 

10 MR. RIVEST: Do you need to know like the 

11 cost of every component, because when we tear down 

12 these products, we literally have the cost of every 

13 single component, screw, nut, and these are real 

14 products from real manufacturers, and there is a lot 

15 of intellectual property and -- 

16 MR. KREBS: Let's cut to the chase here. 

17 You know my analyst who requested these, Jim Moore 

18 from the Laclede Group, is listening in on the webinar. 

19 Let's let him call in the question so I'm the 

20 interpreter of it, okay. 

21 MR. BROOKMAN: Are there any other 

22 questions while he is cuing up here? Any other 
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1 questions? We have a comment from Tom Archer from 

2 Carrier, and his comment is -- is the baseline cost 

3 utilized in the analysis a two-stage constant 

4 torque BPM non-condensing versus a two-stage 

5 constant torque BPM condensing? 

6 MR. DARLINGTON: Could you read that one 

7 more time Doug? 

8 MR. BROOKMAN: Yes, is the baseline cost 

9 utilized in the analysis a two-stage constant torque 

10 BPM non-condensing verses a two-stage constant torque 

11 BPM condensing? 

12 MR. DARLINGTON: Yes. 

13 MR. BROOKMAN: Okay, yes. Is your guy 

14 going to call in his questions? 

15 MR. KREBS: Yes. 

16 MR. BROOKMAN: Okay. Mark Nayes,yes you are 

17 now unmuted. Please speak. I haven't heard you yet. 

18 Okay, we are going to keep going, Adam, and maybe he can 

19 join us in a little bit. Kathryn, please? 

20 MS. CLAY: Maybe while we are waiting for 

21 Mark to join us, I can second the remarks made by the 

22 representative from Laclede. Obviously, this issue of 
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1 the cost of the units is absolutely foundational to 

2 an assessment of whether this rule is economically 

3 justified. We respectfully request that, given the 

4 central nature of this question, that all information 

5 pertaining to that decision simply has to be in the 

6 public domain for us to be able to reasonably assess 

7 the validity of that information. 

8 It seems unreasonable to us that the 

9 Department would not be willing to provide that. 

10 Without it, we are not able to assess the rule in a 

11 meaningful way. 

12 MR. BROOKMAN: Okay, thank you. Ashley 

13 Armstrong? No. We have a couple of additional -- 

14 I'll go back to Mark since we are on this stream and 

15 then to you, Andrew. 

16 MR. KREBS: Jim Moore has his hand up. I 

17 suggest you answer him. 

18 MS. ASHLEY: Well, why don't we let Karen 

19 speak for a second. 

20 MR. BROOKMAN: Go ahead, Karen, please. 

21 MS. MEYERS: Karen Meyers with Rheem, and 

22 we would highly object to all the parts and pieces of 
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1 our units being made available. However, should you 

2 wish to go purchase them and do your own teardown 

3 analysis, we will be happy to sell you a unit, but you 

4 cannot expect that a manufacturer is not going to 

5 object to a complete teardown analysis, essentially 

6 making our bill of materials available online, many 

7 of which is covered with patent protection and other 

8 things such as that. 

9 So that is to me a completely unreasonable 

10 request. 

11 MR. KREBS: Which raises the question, just 

12 how transparent is this supposed to be? 

13 MR. BROOKMAN: Okay, Mark, thank you. Now to 

14 Andrew, I think -- 

15 MR. DELASKI: Let me just weigh in 

16 briefly. DOE has published the manufacturer 

17 production cost. What else do you need to know? Do 

18 you need to know the cost of each screw? It doesn't 

19 strike me -- For being transparent, the manufacturer 

20 production cost is there. The retail price is there. 

21 That's what affects consumers. 

22 MR. BROOKMAN: Let's hear from Tom Archer. 
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1 Tom, you should now be able to speak. 

2 MR. ARCHER: The comparison was because if 

3 there is a two-stage non-condensing BPM product as 

4 the baseline, no manufacturer sells that today, so I'm 

5 wondering what teardown got us to the baseline cost 

6 of that furnace. 

7 MR. BROOKMAN: Adam. 

8 MR. DARLINGTON: I missed part of it. 

9 MR. BROOKMAN: Tom, you need to repeat the 

10 first half of your question, all of it in fact. 

11 MR. ARCHER: My question is, if the 

12 baseline utilized for the analysis is a two-stage 

13 non-condensing constant-torque BPM furnace, it's 

14 basically a two-stage X13 80% furnace. No 

15 manufacturer has that today, so I'm wondering what the 

16 baseline cost is in order to get from that two-stage 

17 constant-torque BPM or two-stage X13 80 to a two-stage 

18 X13 90, and at the same time, we said the minimum is 92, 

19 so if we go from a furnace that doesn't exist on a 

20 non-condensing two-stage X13 80 to a two-stage 

21 condensing 92 X13 that doesn't exist either, so the 

22 two furnaces that we are tearing down and getting a 
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1 cost analysis on are not existing by any of the 

2 manufacturers today. 

3 MR. BROOKMAN: Adam, can you address that? 

4 MR. DARLINGTON: Well, yes. So, I mean, the 

5 way the analysis was done, and I'm not 100% sure that 

6 that's totally true that no manufacturer makes those, 

7 but basically, yes, we do have adders, so we added the 

8 cost of swapping out the components, so basically, if 

9 you had a PSC motor, you know what's the cost and 

10 what's the changeover because we looked at 

11 specifically manufactured products with X13 motors 

12 and with fully ECM motors to determine the 

13 difference, not only to the motor but to the controls 

14 and other components as well. 

15 And so looking at that incremental cost 

16 allows us to tabulate the cost, if those components 

17 were present. 

18 MR. BROOKMAN: Karen, do you wish to 

19 comment here? 

20 MS. MEYERS: I just would like to comment 

21 that I disagree with the statement that none of those 

22 furnaces exist in the market today. 
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1 MR. BROOKMAN: Okay, thank you. You 

2 standing there, would you like to comment? Please say 

3 your name for the record. 

4 MS. SHEPHARD: My name is Amy Shephard 

5 from AHRI, but my comment is not directly on this 

6 point, so if we want to finish this 

7 MR. BROOKMAN: Okay thank you, Mike 

8 Rivest? 

9 MR. RIVIST: Mike Rivest, Navigant. Again 

10 I wanted to state that we want to be helpful. If the 

11 request can be scoped to focus on the information 

12 that is required to make the determination that the 

13 costs are reasonable -- so for example, the cost of 

14 the secondary heat exchanger in this case, which seems 

15 to be an important component, I mean, we can provide 

16 that in an aggregated way for different products that 

17 you know we do have serious concerns about -- the 

18 proprietary nature of the data. 

19 MR. BROOKMAN: Yes, Kathryn? 

20 MS. CLAY: I would strongly suggest that 

21 it undermines the integrity of the Department's 

22 process to be relying on proprietary data. There is 
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1 a solution here. If you are not able to release the 

2 data, don't rely on it for the assessment. 

3 MR. BROOKMAN: Okay, we have a comment from 

4 Mark Nayes who is joining us online. Mark, hopefully 

5 you will be unmuted now. 

6 MR. NAYES: Yes, as far as the cost 

7 analysis of the breakdown of the furnace, we don't buy 

8 broken down furnaces. We buy them all assembled 

9 together already, and our cost on an 80% PSC motor 

10 furnace can be as low as $350.00. For the 98% ECM 

11 furnace, it can be anywhere from $1,800.00 on up, 

12 depending on size. 

13 We buy from three different manufacturers, 

14 so we have got a pretty good analysis across the 

15 spectrum of who makes furnaces. 

16 MR. BROOKMAN: And Mark, who do you 

17 represent? 

18 MR. NAYES: We are Southside Heating and 

19 Air Conditioning, Incorporated, out of Bloomington, 

20 Minnesota. 

21 MR. BROOKMAN: Thank you. 

22 MR. RIVEST: This is Mike 
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1 Rivest. I think what's been lost in all of this, and 

2 the primary reason that we couldn't rely entirely on 

3 rebuild data, is that the volumes that we are talking 

4 about here shifts the entire market from the current 

5 minimum standard, so the market right now is a mix of 

6 80's and 92's and 95's, and so in this example, 98 

7 represent 2% of the market. 

8 In the world where if the minimum standard 

9 were 98, a 98% AFUE furnace would not cost $1,800.00. 

10 Everyone would be producing at high volume 98% AFUE. 

11 The production processes would be optimized, economies of 

12 scale would come in, so that $1,800.00 price point is 

13 no longer relevant, so we have to rely on an 

14 understanding of the technologies of the 

15 manufacturing processes. That's why this is the type 

16 of analysis that is required. 

17 Now, I think there could be useful retailer 

18 information where the volume's average could collect, 

19 you know, so Karen's idea of looking at Home Depot is 

20 certainly valid where there is significant sales 

21 volume but at 98. 

22 MR. BROOKMAN: Neil? 
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1 MR. LESLIE: It raises I guess one of the 

2 key questions I would have related to some of this, 

3 and that is at what point do you consider the 

4 different technology options to be at maturity? 

5 MR. BROOKMAN: Harvey Sachs? 

6 MR. SACHS: This is Harvey Sachs from 

7 ACEEE, and what I am sensing here is to force the 

8 discussion into a blind alley where nothing can be 

9 done because we are at the intersection of 

10 proprietary information and demand for increased 

11 public information and that's in some sort of a NDA, 

12 non-disclosure agreement. I am sensing, and I hope I 

13 am wrong, an effort to discredit the entire standard 

14 setting process for this and other products, rather than 

15 an effort to explore whether the end result is, 

16 Andrew's suggestion, the true MPC and the true average 

17 retail price for volume products, but that's really 

18 the issue. Thank you. 

19 MR. BROOKMAN: Ashley Armstrong? 

20 MS. ARMSTRONG: So we just have a question 

21 from the web, and so, Adam, I'm going to read it. It 

22 comes from Everett Shorey, and he wants to know, how 
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1 did you extrapolate from your 80,000 BTU unit to 

2 other sizes, and how did you deal with the larger 

3 capacities that come out of your further downstream 

4 analysis? So if you could explain your extrapolation a 

5 little bit, that would be great. 

6 MR. DARLINGTON: Yes, as I mentioned during 

7 the selection of teardowns, we selected units above 

8 and below our representative capacity as well, so we 

9 compared those units to the representative capacity -- 

10 what changed, how things changed, you know, how the 

11 heat exchanger sizes changed, how the components 

12 changed, you know, does it need a larger inducer, 

13 does it use the same inducer fan, et cetera. 

14 Does the cabinet get larger, and basically 

15 then what we did was we estimated the cost difference 

16 to change the size based on which components would 

17 change in larger and smaller units, so we accounted 

18 for, you know, if it has a larger cabinet or a smaller 

19 cabinet, if it has a larger heat exchanger, and which 

20 components are the same so that when you have a 

21 changing cost between sizes. So that was basically our 

22 methodology there to estimate those costs. 
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1 And then they were fed into the LCC so 

2 MR. BROOKMAN: I'm eager for us to keep 

3 going as you contemplate your next set of questions. 

4 Keep going, Adam. 

5 MS. ARMSTRONG: Do you want to bring up 

6 your -- 

7 MS. SHEPHARD: Yes, I will bring up a point, 

8 so I can just make it and then step back. And mine 

9 goes back to Frank's point about the test procedure. 

10 The DOE Process Rule has certain key elements in it, 

11 and one of them is the sequence in which the test 

12 procedures relate to the standards that are being 

13 developed. 

14 And in that Process Rule, it says that the 

15 test procedures will be determined before the NOPR 

16 stage of the standard, and that's so [that for] the analysis

17 that 

18 is used, we know how you are measuring it. You know 

19 what the effects are, and I appreciate the conversation/ 

20 discussion yesterday and additional information that 

21 is coming out, but when you don't have the measurement 

22 finalized and that's what you are using to develop 
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1 the standards, there's an increased level of 

2 uncertainty and, I think, unfairness to folks, and so I 

3 would encourage that the test procedure for this needs 

4 to be finalized in accordance with DOE's own Process 

5 Rule. 

6 And understanding that we have timelines 

7 and that those timelines are based on DOE's best 

8 efforts, we appreciate the work that is being done, 

9 but it is very important to have that process which 

10 has been broken down, and [there are] a lot of DOE rules

11 where you 

12 don't have the test procedures correlated in this 

13 manner. It needs to start now complying with the 

14 Process Rule where we have that done before we use it 

15 to analyze these standards. 

16 MR. BROOKMAN: Okay, thank you. Mark, do you 

17 want to follow on? 

18 MR. KREBS: First of all, what she said. 

19 Second of all, Jim Moore still has his hand up. I urge 

20 you to recognize him. 

21 MR. BROOKMAN: Yeah, I didn't receive that. 

22 Jim, go ahead and speak. I can't hear you. Here we go. 
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1 Now you go. 

2 MR. MOORE: Many people touched on most of 

3 my concerns. The one that I think originally was and 

4 Mark said a little, what mode of pricing did you 

5 assume? You tore this thing down with a PSC in it, 

6 and then you came up with some kind of a price for 

7 these more complicated motors which have maintenance 

8 issues and high costs, and I was just trying to figure 

9 out -- I don't even know the price variables -- I was 

10 trying to figure out what you assumed for the price 

11 of the fan motors [that] was my original question. 

12 MR. DARLINGTON: Yeah, Adam -- this is 

13 Adam, so we -- the prices that we assumed for the fan 

14 motors, they were based on some of the analysis that 

15 was done for the furnace fans rule. As I mentioned, 

16 the requirement for the X13 constant-torque BPM and 

17 that came out of the furnace fans rule, so those are 

18 actually available, both in that rule, and, I believe, 

19 we put a table in the TSD that shows what the cost 

20 difference would be, so that would be in chapter 5 of 

21 the TSD. 

22 MS. ARMSTRONG: So Mark, as a follow up, we 
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1 will get you the reference you need to look at the 

2 fan motor pricing to specifically address this 

3 question, and that should do it. 

4 MR. BROOKMAN: Harvey? 

5 MR. SACHS: Thank you. Harvey Sachs, ACEEE, 

6 and I have a question for Amy -- follow-up for Amy. For 

7 the manufacturers, would you all prefer that this 

8 rulemaking were to proceed with the old AFUE rating 

9 method with its own problems on these units? This is 

10 being proposed as a patch from the old rating 

11

12 86 

13

14 methods, like the water heater. 

15 MS. SHEPHARD: Well, I think the key is the 

16 process part of it. Yes, it should be fixed, and that's 

17 final, that is, what you use to analyze the standard 

18 and, I mean, I think that's why the Process Rule came 

19 out of a very similar situation in the 90's where you 

20 had a lot of these same issues going on, and I think 

21 that what we are feeling is that they are still here, 

22 and the Process Rule is the tool to address it. 
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1 MR. SACHS: This is Harvey again, and you 

2 are being very skillful at not answering the question 

3 that I asked. 

4 MS. SHEPHARD: It should be fixed, and it 

5 should be fixed for, well I -- as soon as we start 

6 talking about test procedures, it gets so technical. , I 

7 always defer to Frank so -- but what I am saying is 

8 if there are issues that need to be addressed, they 

9 are addressed. That is [made] final before the NOPR. That

10 is 

11 what is used in the analysis. 

12 MR. SACHS: It seems to me, and I really 

13 would -- I certainly don't ask for this now, but I 

14 really think that we are getting on in years since we 

15 have had a new gas furnace rule, and the questions 

16 were, is there something DOE could do that others 

17 might be happy with, like say, "Gee, we will give you a 

18 waiver to use the new one on the affected two-stage 

19 units." 

20 Is there something that could leave you 

21 all whole that would not require putting the whole 

22 rulemaking on hold for another year? 
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1 MR. BROOKMAN: Let's hear from Karen. 

2 MS. MEYERS: Karen Meyers with Rheem, and I 

3 think my answer at this point, Harvey, would be no. In 

4 my opinion, this rulemaking should be -- we should hit 

5 the pause button on it until the test procedure rule 

6 is finalized in accordance with what is in the 

7 statute, so that's the proper way to do it, and that is 

8 the way we Y,ou know, Rheem itself have several issues 

9 where this has caught us unaware in the past. 

10 So I'm speaking for Rheem, not necessarily 

11 the industry, but we would prefer to see test 

12 procedures finalized and then the analysis take 

13 place. 

14 MR. BROOKMAN: Jim, go ahead. 

15 MR. VERSHAW: Jim VerShaw, Ingersoll Rand. 

16 I think if you look at the test procedure and the 

17 discussions we had yesterday, a lot of work on what 

18 the difference with the AFUE between the new 

19 procedure and the old procedure. But when I ask 

20 questions about what it did to burner operating hours 

21 and blower run time hours, I didn't get an answer. I 

22 didn't calculate that, and if you look at life-cycle 
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1 costs analysis for this thing, especially looking in 

2 the south, a lot of air conditioning hours, what does 

3 that do? 

4 Do we really know what the new procedure 

5 and if that is more accurate, did they account for 

6 that when they did the analysis here, and I think we 

7 really don't have a good answer on that, and that's 

8 part of this discussion. 

9 MS. ARMSTRONG: So, I do want to follow up on 

10 one thing, because one of the things that we did 

11 clarify yesterday, and I think Victor is going to 

12 speak to it a little bit further when we get into the 

13 LCC specifically, was that we did account for it in 

14 this rule, so it is consistent, and we can provide you 

15 the information at least with what we assumed in this 

16 rule for those burner operating hours, and I think you 

17 noted even yesterday that's what we did in the 

18 previous rule too, just because it's a better 

19 reflection of what is currently happening than what 

20 is our current test procedure. 

21 So we will get into that a little bit 

22 later when we get into the LCC because there is a lot 
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1 of slides going on there and so, but the answer to 

2 your question is yes, and we did somewhat address that 

3 yesterday, and we are going to further and completely 

4 address it today. 

5 MR. BROOKMAN: Thank you, Ashley. Mark? 

6 MR. KREBS: Yeah, I have the same concerns 

7 about homes in the south, and in doing some research 

8 on that, I came across two papers from LBNL and the 

9 lead author, Victor Franco, was in the room, and 

10 he might be able to elaborate significantly on your 

11 questions and fill us all in on that issue. Thank 

12 you. 

13 MR. BROOKMAN: Okay, we are going. 

14 MR. DARLINGTON: All right, so we will move 

15 on. All right, another aspect of this rulemaking is 

16 the standby and off mode analysis. DOE analyzed a 

17 single standby mode and off mode standard, and the 

18 reason for this is that furnaces are typically used 

19 along with a cooling system during the non-heating 

20 season, so the furnace wouldn't be completely powered 

21 off, but it will remain in standby mode for a cooling 

22 demand, at least for the -- 
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1 MR. BROOKMAN: Steve Rosenstock? 

2 MR. ROSENSTOCK: Steve Rosenstock, Edison 

3 Electric Institute. Just a couple of quick questions, 

4 and if it was in the technical support document, 

5 please forgive me. For these components, what was 

6 the -- I know you are assuming that the numbers shown 

7 was energy consumptive combination, what was the 

8 range of values for the components? 

9 MR. DARLINGTON: I don't know off the top 

10 of my head. I could probably look at it and get back 

11 to you. 

12 MR. ROSENSTOCK: Okay, the 

13 second question I have was when we tested and what 

14 was the testing equipment accuracy? 

15 MR. DARLINGTON: I would again have to 

16 look at that. So we tested in accordance with 

17 whatever DOE's test procedure is, so I think it 

18 references the IEC standard, and we used equipment 

19 within the accuracy. 

20 MR. ROSENSTOCK: Steve Rosenstock, EEI. 

21 When we get to the next slide I will have some 

22 follow-ups because I think that's very important in 
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1 terms of some of the numbers. 

2 MS. ARMSTRONG: This is 

3 Ashley from DOE, and like Adam says, we can go back and 

4 look at those. Typically, we use Yokogawa,Yokogawa but we

5 can 

6 go back and see exactly what we used. 

7 MR. ROSENSTOCK: Steve Rosenstock, EEI. 

8 Thank you very much, but I really kind of wanted to 

9 focus in on what the accuracy of the equipment was so that 

10 I can plus or minus 5% of it or plus or minus -- 

11 MS. ARMSTRONG: If you look up that actual 

12 test equipment, it will give you those accuracies that 

13 will answer your question. 

14 MR. ROSENSTOCK: Steve Rosenstock, thank 

15 you, but okay, I'll make another comment when we get to 

16 the next slide. Thank you. 

17 MR. BROOKMAN: Okay, go ahead, Adam. 

18 MR. DARLINGTON: So going back to what I 

19 was saying, we did it as a design option approach. DOE 

20 established a baseline based on product test data 

21 along with manufacturer feedback, so currently there 

22 are no ratings, at least that I am aware of, for the 
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1 power consumption in standby mode. So the baseline 

2 efficiency levels were just defined as the most 

3 consumptive combination of electrical components for 

4 the tested furnaces, and then specific design options 

5 were applied to the baseline in the order of cost 

6 effectiveness, and here on the side, you can see what 

7 we found to be the key driver of the standby mode 

8 consumption, which were: the transformer, if a BPM 

9 blower motor is present, and, of course, that factors in, 

10 and then controls and just other standby consumption 

11 with the unit. 

12 So total baseline was 11 watts -- so here 

13 on this slide, we are representing our results 

14 basically at the baseline and the linear power 

15 supply and the standard 40 VA transformer. Efficiency 

16 level 1, adding in a low-loss transformer. 

17 Efficiency level 2, going to a switching mode power 

18 supply, and then at efficiency level 3, adding units 

19 switching on the power supply in the low-loss 

20 transformer, and that gives you the estimates here of 

21 what the standby/off mode power consumption would be 

22 as it compares to the baseline, along with the 
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1 estimates of what that would cost to implement. 

2 MR. BROOKMAN: Steve Rosenstock? 

3 MR. ROSENSTOCK: Steve Rosenstock, EEI, and 

4 here's my point. If whatever the standard test 

5 equipment accuracy is, let's say it's plus or minus 

6 five percent, well now we are down to tenths of a 

7 watt here for this efficiency standard. 9.5 plus or 

8 minus 5% is now .5 watts, so, and again it also depends 

9 on the range of products out there. 

10 You go from efficiency of that baseline to 

11 efficiency level 2 or 3, and based on the range of the 

12 accuracy of the test equipment, you may or may not be 

13 saving any watts whatsoever. Especially going from 

14 efficiency level 1 to 2, you are talking about a .3 

15 watt difference. 

16 And the testing equipment is plus or minus 

17 5%. Well, you might be saving electricity; you might not 

18 be, because there is going to be a range depending on 

19 the product and depending on the design, so again I 

20 think when you are talking about such miniscule 

21 savings, you know, you have to account for something, 

22 what's happening in the test equipment, and especially 
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1 if there is a lot of baseline equipment, when you talk 

2 about lost energy consumption, if the typical one on 

3 the market is already at 9 watts, you know, some people 

4 might be saying you are spending ten dollars to save 

5 0.0 watts, excuse me. Thank you. 

6 MR. BROOKMAN: Adam, to the comment box 

7 please. 

8 MR. DARLINGTON: So DOE is seeking your 

9 comment on basically any aspect of the standby mode 

10 analysis, and what fraction, if any, consumers shut off the 

11 furnace during the non-heating season. Your comments 

12 are welcome. 

13 MR. BROOKMAN: And then the second one 

14 relates to any other issues related to methodology, 

15 assumption, or results of the standby mode or off mode 

16 engineering analysis and all of the foregoing slides. 

17 This would be a good place to register any additional 

18 thoughts or concerns. Frank Stanonik? 

19 MR. STANONIK: Frank Stanonik, AHRI. And 

20 seeing that sentence, I can't tell you how many times 

21 about whether consumers shut off during the heating 

22 season, and I just have a new question. Aren't we 
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1 really just talking about furnaces that in fact are 

2 not also driving the air-conditioning system, the 

3 cooling system? 

4 Because if you have a furnace, whatever 

5 percentage of homes have both a furnace and an air 

6 conditioner, I would say that question doesn't even 

7 apply because the system will always be on 24/7 365. 

8 So I guess my point is, is that question really only 

9 looking at those installations where the household 

10 only has a furnace, heating and cooling? 

11 MR. DARLINGTON: So that's our thinking too, 

12 is that it should be on all the time to be on standby 

13 for a call for cooling. So the furnace fan standard, I 

14 don't think it addressed standby mode at all because 

15 DOE had already proposed back in the 2011 direct 

16 final rule to cover the standby of the entire furnace, 

17 so I guess it can be a little confusing because the 

18 active mode of the furnace fan was covered by the 

19 furnace fan and stated, whereas the standby mode is 

20 going to be covered by this. 

21 So this covers the entire furnace 

22 regardless of whether it is a furnace only or whether 
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1 it is installed with an AC, and the understanding is 

2 that almost all furnaces would be -- the vast 

3 majority at least, would be installed with an AC, so 

4 there would be no distinct off mode. It would be in 

5 standby mode year around, so that's kind of what we 

6 were -- 

7 MR. BROOKMAN: Frank, go ahead. 

8 MR. STANONIK: I think Adam just said they 

9 had them, and now I am asking, so why are we asking 

10 this question then? 

11 MR. DARLINGTON: Just to confirm to confirm 

12 our assumption. 

13 MR. ARMSTRONG: Frank, you can say you 

14 agree with the Department, it is okay. It is a rarity, 

15 but yesterday we agreed too. 

16 MR. BROOKMAN: Kathryn? 

17 MS. CLAY: As we leave the engineering 

18 analysis portion, I just wanted to circle back to our 

19 earlier discussion on costs, and I appreciate Harvey's 

20 framing of the issue as a balance between protecting 

21 proprietary information and protecting the right of 

22 the public to be able to analyze it. 
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1 Call me a crazy optimist, but I just 

2 can't help to believe that there is a way to solve 

3 that problem and find a middle ground. I can imagine 

4 ways of providing some intermediate level of 

5 information either by chunking components into 

6 systems so you obscure the individual component 

7 costs, or the ended averages across costs for 

8 manufacturers but something in between absolutely 

9 nothing -- this black box that we are looking at -- and 

10 full-on proprietary information data to the last 

11 screw. 

12 There's got to be some reasonable 

13 information sharing approach that we could come up 

14 with working together, and we just appreciate the 

15 chance to work with you all to find that solution. 

16 MR. BROOKMAN: Ashley Armstrong? 

17 MS. ARMSTRONG: Sorry, I think that's 

18 something that Mike alluded to earlier when he was 

19 speaking, so I think what would be helpful to the 

20 Department, or We are definitely willing to work with 

21 you. Obviously, we want to make our analysis as 

22 transparent as possible, and we are really in this to 
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1 get feedback and incorporate that feedback, so to the 

2 extent that there is certain information that you are 

3 seeking, like for example, they asked for -- Laclede 

4 asked for motor pricing, that kind of stuff that we 

5 used in our analysis on -- I think we would welcome 

6 that, and if you want to have a conversation further 

7 with some of the manufacturers about what level of 

8 aggregate DOE would be comfortable with, and we would 

9 do it on an aggregate industry basis not on a model 

10 basis by any means. 

11 I'm happy to have that conversation, and 

12 feel free to follow-up. 

13 MR. BROOKMAN: Okay. Additional comments? 

14 Here, Jim, please. 

15 MR. VERSHAW: Jim VerShaw, Ingersoll Rand. 

16 You know, I am looking at this switching mode power 

17 supply that adds $8.00 manufacturer's cost to save 23 

18 watts or that plus a low-loss transformer for another 

19 $9.67 to save a watt. As a standalone, would that make 

20 sense for the consumer? Because that is going to add, 

21 what, thirty dollars to the homeowner's cost to 

22 install the furnace, and it goes to a technology that 
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1 none of us have experience with in terms of putting 

2 it in our product. 

3 And if you have a furnace, the last thing 

4 you want is some kind of new technology that is going 

5 to go out when it is 30 below zero up in Minnesota or 

6 even 18 in Texas. I mean, there [are] a lot of unknowns 

7 in there to save, and it says it saves a lot but to 

8 Steve's point, it kind of overlaps. [Are] there really 

9 savings there, and is it really worth that kind of 

10 money with that kind of unknown or reliability to put 

11 that in? That's my feeling on it. 

12 MR. BROOKMAN: Thank you. We are due for a 

13 break, let's take a break. It's 10:55 by that watch 

14 up there. Let's take 15 minutes. Just to remind you, I 

15 think most of you are familiar, please wear your 

16 badge visible. The restrooms are on both ends of the 

17 hall. If you are going to go for coffee, it's on the 

18 ground floor. Go quickly. 

19 MR. BROOKMAN: Apologies for starting a 

20 few minutes later than scheduled. It was truly 

21 clogged up in the coffee shop. Just waiting to make 

22 sure everybody got back here before we commence. So 
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1 we are going to pick up where we left off and begin 

2 with the life-cycle cost analysis, and we are going to 

3 hear from Victor Franco. 

4 MR. FRANCO: Thank you, good afternoon. 

5 My name is Victor Franco. I am from Lawrence Berkeley 

6 National Laboratory, and I will be speaking about the 

7 life-cycle costs analysis and the subgroup analysis in 

8 this next section. 

9 So this slide shows the overall payback 

10 period and LCC analysis, a flow chart about the 

11 analysis. Obviously, the analysis is pretty complex 

12 because of all of the inputs, and I just want to go 

13 over it a little bit in detail to try to set up the 

14 discussion for the next few slides. 

15 So first of all, as we discussed earlier in 

16 the engineering analysis, we come up with a 

17 manufacturer cost. We have discussed that already. 

18 In chapter 6, we describe the markups to determine the 

19 product prices, and that's how we come up with a 

20 consumer price. We add this to the installation 

21 costs, which we will discuss later, to come up with the 

22 total installed cost. 
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1 In terms of the LCC and payback, we have to 

2 consider the differential between the base case and 

3 the standards cases, and that gives us these 

4 incremental costs, which is the slide above. In the 

5 bottom cells, we describe the operating costs. 

6 Chapter 7 describes the energy use characterization 

7 to determine the energy consumption. We then 

8 multiply those by the energy prices to come up with 

9 annual operating costs in terms of energy. 

10 We also consider repair and maintenance 

11 costs to come up with the annual operating costs. 

12 Again, we come up with these incrementals to come up 

13 with these annual operating cost savings between the 

14 standard cases and the base cases. Other inputs to 

15 the LCC analysis include lifetime discount rate and 

16 energy price trends. 

17 With this, we come up with a discounted 

18 lifetime operating cost. The total installed cost 

19 incrementals and the discounted lifetime operating 

20 costs are the main inputs into the life-cycle cost. 

21 The total installed cost and the annual operating cost are 

22 the main inputs to the payback period. 
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1 In addition to this, we have product 

2 switching that is incorporated into the LCC analysis. 

3 That's the box shown right above the payback period 

4 and life-cycle costs analysis, and we will be 

5 discussing all of these in subsequent slides. 

6 First, let me go over a little bit more 

7 about just the overall LCC calculation. So first, it 

8 is important to note that the LCC provides an 

9 economic evaluation from the consumer prospective, so 

10 that's why we are looking at this in terms of 

11 household by household or furnace by furnace. 

12 The life-cycle cost is a total consumer 

13 cost over the life of the product. This is shown in 

14 the equations that are shown below. The payback 

15 period is the time to recover the increased purchase 

16 price of the higer-efficiency products through reduced 

17 operating costs. We used a sample of households and 

18 we will be describing in more detail later [how] to do this 

19 analysis. 

20 The equations are shown here. The 

21 analysis models with the uncertainty and variability 

22 of inputs using the Monte Carlo approach and the 
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1 probability distributions using Excel spreadsheets 

2 which uses a Crystal Ball add-on. 

3 In the next slides, I will fully explain 

4 the approach applied to generate the inputs and the 

5 probability distributions. The spreadsheet inputs 

6 and the application method -- this will also be a 

7 good opportunity to answer any questions about the 

8 analysis methods in the LCC spreadsheet. 

9 This is next slide. I won't go through it 

10 in detail. It is just for the purpose of summarizing 

11 all the different inputs, and you can use this as 

12 notes as we go through the discussion. Basically, we 

13 will be going through all these different inputs in 

14 the order in which they are shown on this slide, so 

15 first, we will be describing the total installed cost 

16 which includes the consumer product price and the 

17 installation cost. 

18 Then we will be talking about the 

19 operating costs, which will include the energy use, 

20 energy prices, maintenance and repair costs. Then we 

21 will talk about the other inputs for the LCC analysis, 

22 including the discount rates, lifetime, base-case 
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1 efficiency distributions. 

2 For this analysis, the LCC tools include 

3 product switching, and that will be described further on 

4 as well. 

5 MR. CYMBALSKY: So this is John from DOE. 

6 If people want to pull this slide out from the rest 

7 of them because I think this is a good cheat sheet as 

8 we go through when Victor describes the different 

9 analyses. This is a good map -- key map for the 

10 concepts that will be discussed, so 

11 MR. FRANCO: Thank you, John. So this is 

12 Victor Franco again. First, then, we will be 

13 discussing the product price determination. The 

14 product prices are determined by multiplying the 

15 manufacturer cost by the markups, which will be fully 

16 described on the next few slides, and the price for 

17 manufacturer. 

18 As we discussed earlier in the engineering 

19 analysis, the manufacturer production costs are 

20 developed for each efficiency level. The markups are 

21 derived from company direct costs, expenses, and profit. 

22 The consumer price is based on MSP for the baseline and 
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1 higher-efficiency products. 

2 We characterized the non-weatherized gas 

3 furnace and mobile home gas furnace distribution 

4 channels, and we will be describing that in more 

5 detail in the next slide. 

6 The price trends on the historical PPI 

7 data are based on the historical PPI data and 

8 shipping data. The price trend is a decreasing -- it 

9 decreases about 16.5% over the 30-year analysis 

10 period. The 30-year analysis period starts in 2021 

11 and goes until 2050. We also consider sensitivity 

12 analyses of other trends: a high decreasing -- a higher 

13 decreasing rate and a constant trend, and those are 

14 provided. 

15 MR. BROOKMAN: Neil, please go ahead. 

16 MR. LESLIE: I'm going to try to re-ask a 

17 question. I'm sorry, I'm Neil Leslie with Gas 

18 Technology. Excuse me. , I apologize for that. So a 

19 little bit ago, I asked a question that related to at 

20 what level of shipment for a particular product, such 

21 as a 92% furnace, would it be considered a mature 

22 product, and so I'm going to re-ask this in context of 
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1 the default price trend which seemed to be 

2 decreasing, a decreasing price trend over time. 

3 And my question is, and I'm not sure who is 

4 going to be able to answer this question, how many of 

5 the products at the different trial standard levels 

6 are deemed to be mature products, such as the 80% 

7 product, whose market share has been declining over 

8 time remains considered a mature product? 

9 Does the 90%, does the 92%, does the 95%, 

10 and does the 98% furnace also qualify as a mature 

11 product? If so, what would the rationale be for a 

12 decreasing price trend, and if not, why not? 

13 MR. FRANCO: Thank you for that question. I 

14 would have to defer that to my colleagues. 

15 MR. CYMBALSKY: This is John from DOE. Let 

16 me just take a stab at the context of learning that 

17 you bring up here. So what we did here is we looked 

18 at furnaces generally, so I guess going back to 

19 Andrew's opening remarks, maybe we can rephrase your 

20 question in terms of is there -- do you believe there 

21 should be no learning for the whole market or do you 

22 believe that furnaces should be just aggregated by 
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1 the AFUE levels to pick out which ones could 

2 experience more learning relative to the others? 

3 So I guess when we put that back on to 

4 what your thinking is, and then we can better answer 

5 the question. 

6 MR. LESLIE: Ultimately it will go to -- 

7 this is Neil Leslie -- ultimately it will go to the 

8 price trend for the different trial standard levels 

9 for each of the individual trial standard levels, and 

10 so if indeed there is no distinction among the trial 

11 standard levels related to what I would call a 

12 learning curve, then my question is, and this is where 

13 I am back to it, would that imply then that DOE is 

14 assuming that these are all at fairly mature levels 

15 of shipments? 

16 MR. CYMBALSKY: No, so I think what we are 

17 saying is, based on the data that we had, we created 

18 one trend for all the whole furnace market, and so I 

19 guess to interpret your question, it sounds like if 

20 the level of shipments for say in 98 are much lower 

21 relative to an 80, we should have faster learning on 

22 the 98 than we should the 80, is that a yes? 
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1 MR. LESLIE: I'm not suggesting what is 

2 correct. I just wanted to know what you have. 

3 MR. CYMBALSKY: Right, so it's the same 

4 and we have been consistent with all of our rules 

5 that we applied the learning equally amongst all the 

6 technologies. We don't have faster learning in the 

7 lower shipment AFUEs in this example. Same for all 

8 of the products, but we understand where you are 

9 coming from. If we had the data that could support 

10 better disaggregation, we are all for taking it in. 

11 MR. BROOKMAN: Mark? 

12 MR. KREBS: Mark Krebs, the Laclede Group. 

13 John, as I recall from the DFR, you had a significantly 

14 faster learning for gas furnaces than you did for air 

15 conditioners, so you know, consider that that is a fact, 

16 and although this NOPR is just about furnaces you 

17 know, I would say that you haven't been consistent. 

18 MR. CYMBALSKY: No I think -- John 

19 Cymbalsky, DOE. The methodology has been consistent. 

20 The actual trends are different based on the data for 

21 each product, so I don't know off the top of my head 

22 what the air conditioner one was, but for example, we 
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1 have another rule where we look at the data -- same 

2 data source but for the different product category 

3 out of the data set -- and there was no learning. 

4 There was no observed learning. I'm not 

5 saying its air conditioners but so it all depends on 

6 the product. The methodology is consistent. 

7 MR. KREBS: Well, I would suggest that it 

8 is just another area of controversy that we should 

9 probably do without even attempting to factor in 

10 learning curves. 

11 MR. BROOKMAN: Andrew deLaski? 

12 MR. DELASKI: Well doing without it is 

13 doing without the data. I mean, it's based on a model 

14 and data, it's not based on just an opportunity -- 

15 from a hat and that's really -- I applaud the Department 

16 for coming up with a statistically-driven model that 

17 is based on economic literature that is used not just 

18 in DOE rulemakings but in other economic analysis for 

19 how products evolve over time. 

20 So I applaud DOE for having the data21 driven model. I think the challenge is what Neil put 

22 his finger on, which is how you apply it to the level 
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1 that the new standard will be and I encourage the 

2 Department to continue to explore approaches that 

3 will allow you to develop learning for the 

4 incremental technology. The learning concept is 

5 driven by for each doubling of production -- of 

6 cumulative production, there is a certain rate of 

7 learning. 

8 So doubling the cumulative production 

9 should be applied to the particular product at the 

10 level at which the standard is set, so yeah, I think a 

11 lot of learning -- 80% -- has been done but I don't think 

12 that as much learning has been done at the higher 

13 efficiency level, so the question is, how do you 

14 capture that in a statistically driven market? But 

15 let's not ignore the data, let's find out how we can 

16 use the data to answer that question which I think is 

17 a relative question from docket. 

18 We do have the data and it is in the TSD. 

19 There's a whole chapter that writes this up quite 

20 clearly over a pretty good time series data. I think, 

21 thanks to AHRI, I think it is the source on the data, 

22 one thing that's happening with that data is that the 
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1 tail end coincides with some pretty rich tax credits 

2 that were applied. 

3 And those tax credits were intended to 

4 distort the market, they were intended to try to 

5 change consumer behavior market distortion. And the 

6 tax credits, I would submit, likely had an effect on 

7 prices. Tax credits -- the benefits for tax credits -- 

8 are shared among consumers and manufacturers. Some 

9 of those costs are passed on to consumers in lower 

10 prices, but some of those costs, some of those credits 

11 end up in enabling prices to stay higher than they 

12 otherwise would. 

13 So I think DOE needs to think about how 

14 you disaggregate the effect of the tax credits from 

15 what the tax credits were in the learning rates on 

16 the price trends over time. I don't have an answer 

17 for you right now how to do that but I think it's 

18 something that we need to think about to get a better 

19 estimate of what the actual learning was. 

20 MR. BROOKMAN: Kimberly Swanson, who is 

21 joining us online, has a question or a comment. 

22 Kimberly you are now unmuted I think. Nothing from 
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1

2 113 

3

4 Kimberly. Maybe you can join us in a moment. 

5 We also have a comment from Everett Shorey, 

6 who is joining us online, actually a question. He 

7 says, figure 8J31 of the TSD seems to show that the 

8 price trend is flattening and is not consistent with 

9 the fitted curve. How have you factored that into 

10 your analysis? 

11 MR. FRANCO: Thank you for that question. 

12 We used that part to -- we fit basically, we do the 

13 best fit to that curve, and, as discussed earlier, part 

14 of those values are distorted by the market, but we 

15 use a longer period of time to come up with the 

16 learning rate that should wash out some of those 

17 distortion markets. 

18 MR. BROOKMAN: Harvey Sachs? 

19 MR. SACHS: Harvey Sachs, ACEEE, and Andrew, 

20 I believe the data that you referred to were not from 

21 AHRI but from the Census Bureau Producer Price Index, 

22 so a very small thing. The broader point that I feel 
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1 is important to bring up is that for the first couple 

2 of decades of these standards, the process DOE did not 

3 incorporate learning curves in any significant way 

4 that I can remember. 

5 It's been asked for, for the last decade, 

6 and has been incorporated. To me, the reason that it 

7 was necessary to include learning curves is that 

8 DOE's forecast of the retail prices of all sorts of 

9 things without that were consistently too high for 

10 almost every product analyzed retrospectively. 

11 DOE had predicted a higher price for what 

12 would after standards become the baseline product 

13 than was actually observed. So the learning curve 

14 approach can be argued about in the details but we 

15 feel it was an essential compensation reflecting the 

16 shift of what had been a niche product into one that 

17 was built on the best processes with the newest 

18 production processes, and it was a reflection of what 

19 actually happened in the market for a range of 

20 products, from dishwashers to whatever. 

21 MR. BROOKMAN: Thank you. Go ahead. 

22 MR. FRANCO: Thank you. This is Victor 
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1 Franco again. Let's move on now to more detail about 

2 the markups analysis. Markups are used to determine 

3 consumer prices for manufacturer's selling price for 

4 both baseline and high-efficiency equipment, as 

5 discussed earlier. The appropriate markups will 

6 determine the consumer equipment prices that depend 

7 on the type of distribution channels to which the 

8 equipment moves from manufacturers to purchasers. 

9 And on this slide you can see the 

10 different distribution channels. At each point in 

11 the distribution channel, companies mark up the price 

12 of the equipment to cover the business cost and 

13 profit margin. There is one primary type of 

14 distribution channel that is describing the way most 

15 products pass from manufacturers to consumers for 

16 furnace products, from manufacturer to wholesaler to 

17 mechanical contractor to consumer. 

18 DOE also distinguishes between new 

19 construction and replacement applications. The new 

20 construction applications are expected to include the 

21 general contract as shown in the diagram for 

22 non-weatherized gas furnaces and includes for mobile 
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1 home furnaces, mobile home manufacturers and mobile 

2 home dealers. 

3 Based on information provided from 

4 manufacturer interviews, there's another possible 

5 distribution channel that includes the retail store 

6 instead of the wholesaler -- in this case the 

7 manufacturer sells equipment to the retailer who in 

8 turn sells it to the mechanical contractor who in 

9 turn sells it to the consumer. 

10 However, DOE does not have enough 

11 information at this point to make a separate market 

12 estimate for this distribution channel. DOE assumed 

13 that the retail markup is similar to the wholesale 

14 markup. 

15 The table below provides the references 

16 used in the analysis. These references include 

17 information for the manufacturer markup as discussed 

18 earlier from the Security and Exchange Commission 10K 

19 report. This is discussed in the engineering analysis. 

20 The wholesaler markup comes from data from 

21 HARDI 2012 profit report. The mechanical contractor 

22 comes from two sources, ACCA data in the 2005 
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1 Financial Analysis and U.S. Census 2012 -- 2007 

2 Plumbing and HVAC Contractors sector. 

3 The general contractor comes from 2007 

4 Consumer -- Commercial Building Construction sector. For 

5 mobile home manufacturer and home dealer, both come 

6 from U.S. Census Bureau data. Sales taxes come from 

7 2013 Sales Tax Clearinghouse Data. 

8 MR. BROOKMAN: Yes please? 

9 MR. MCCRUDDEN: Charlie McCrudden, ACCA. 

10 Your depiction of the new construction -- you have 

11 the mechanical contractor come before the general 

12 contractor? Does that suggest that the wholesaler is 

13 providing it to the mechanical contractor and he is 

14 subbing the general contractor? I'm a little 

15 confused by that. 

16 MR. FRANCO: Yes, thank you. It is a little 

17 bit complex. Sometimes what happens is you go from 

18 the wholesaler to how you are describing to the 

19 contractor. The general contractor is the one that 

20 connects with the consumer which in many cases is the 

21 builder of the equipment so he would be the one that 

22 actually marks up the whole equipment. 
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1 In other cases, it could be the general 

2 contractor purchasing the equipment and then going 

3 through the mechanical contractor, so it could be 

4 either or. In terms of the actual value it would be 

5 similar because you are just multiplying the 

6 mechanical or the general contractor. 

7 MR. BROOKMAN: Frank Stanonik? 

8 MR. STANONIK: Frank Stanonik AHRI. I'm 

9 not exactly fond -- but the general contractor, you 

10 are using this Census Bureau commercial building 

11 construction and I am going to ask -- I mean is -- I 

12 understand those words to mean this is not a 

13 residential building and so my first question is, is 

14 that a correct assumption that this Census Bureau 

15 report is in fact not covering residential buildings? 

16 MR. FRANCO: Thank you. This is Victor 

17 Franco. I think that actually is a misprint I think 

18 that should say residential. 

19 MR. STANONIK: So you did, okay so you 

20 used the Census Bureau report on residential building 

21 general contractor? 

22 MR. FRANCO: That's correct, sorry about 
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1 that. 

2 MR. BROOKMAN: Do you have an additional 

3 question or comment? 

4 MR. CYMBALSKY: I think -- this is John 

5 from DOE. To address Charlie's question, to me, the GC 

6 on this is, like Victor said, is kind of the home 

7 builder in that case, right, so the home builder, if 

8 they are building a bunch of town homes, they contract 

9 with a mechanical HVAC guy to buy a bunch of them, 

10 right. That's the way I see it, but if the order seems 

11 backwards, we will take that comment, I think it's 

12 correct too. 

13 MR. BROOKMAN: Yes, Frank Stanonik? 

14 MR. STANONIK: Frank Stanonik AHRI. I 

15 think well, it is a little bit on point, I mean, and it 

16 gets back a little bit to maybe this discussion of 

17 price, and Andrew mentioned that in the case of 

18 something like tax incentives or tax credits or 

19 whatever distorts the market in both the -- or the 

20 idea at least is the manufacturer and the consumer 

21 shares on that. 

22 And this reminds me but in fact -- and the 
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1 analysis, does this -- we need to keep this in mind, 

2 okay, the ultimate cost the consumer pays they don't -- 

3 they, they don't buy the furnace from the furnace 

4 manufacturer, okay, they are paying this installing 

5 contractor and so the question -- let me rephrase this. 

6 So even if we talk about tax credits and 

7 the benefit of the tax credit, you really have to look 

8 at, okay, so how does the installing contractor deal 

9 with a tax-incentivized product? Does he in fact 

10 change -- does he or she change the overall price to 

11 the consumer? I mean, that's part of the equation, 

12 and I would say we cannot ignore that because, as we 

13 will see in many of the slides, that in fact, it is 

14 very possible that the cost added by the installing 

15 contractor is more than the cost of the product. 

16 MR. BROOKMAN: Okay, Kimberly Swanson is 

17 joining us online. Kimberly let's try it again, you 

18 should be unmuted. 

19 MS. SWANSON: Okay, am I coming through? 

20 MR. BROOKMAN: Yes. 

21 MR. SWANSON: I am Kimberly Swanson and I 

22 am a consumer, and the question actually gets at 
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1 whether its analysis at all took into consideration 

2 if the unit was going to be located in an area of the 

3 country that had a carbon trading market or a 

4 voluntary program within the market that the unit was 

5 going to be located that worked to reduce carbon 

6 emission. 

7 MR. CYMBALSKY: This is John from DOE. We 

8 are going to get to environmental impacts later, but 

9 yeah, I think that gets all baked into the cost of the 

10 fuel that it is in the EIA forecast, but we didn't get 

11 to that level of specificity in this analysis, okay. 

12 MR. BROOKMAN: Victor. 

13 MR. FRANCO: Thank you again. This is 

14 Victor Franco. Going further into the markup 

15 analysis, DOE uses baseline markups and incremental 

16 markups. The baseline markups relate the 

17 manufacturers selling price or baseline equivalent to 

18 consumer purchase price. DOE applied baseline 

19 markups to the MSP at the baseline level. 

20 Incremental markups relate to increase in 

21 MSP of more-efficient products in the increase of 

22 consumer purchase price. They cover only the 
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1 expenses that vary with MSP, such as operating 

2 expenses and profit. Fixed costs such as overhead 

3 and labor do not scale with increased efficiency. 

4 DOE applied the incremental markups to incremental 

5 difference in MSP at each level of the baseline. 

6 This slide shows the overall markups 

7 analysis, the average values. Obviously, we apply the 

8 distributional values for each household depending 

9 upon what region of the country they are located in. 

10 As you see here, the manufacturer markups are 1.34 as 

11 taken from the engineering analysis. The wholesaler 

12 markups vary as shown. The mechanical contractor is 

13 shown here as well, and then we have the general 

14 contractor. 

15 The average sales tax nationally is listed 

16 here as 7% and the overall markups from this are 

17 shown here. I just have here a correction there's a 

18 national account that is not part of this analysis on 

19 this table, just before questions the bottom shows 

20 the overall average markup that's applied in the 

21 analysis based on the fractional replacement and the 

22 construction. 
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1 MR. BROOKMAN: Another question from 

2 Everett Shorey online. Have you done any interviews 

3 or collected any data from contractors and/or 

4 wholesalers/distributors on their actual markup 

5 practices? 

6 MR. FRANCO: Thank you for that question. 

7 We use ACCA data, which is a contractor's association 

8 that gathers data from contractors and we also use 

9 HARDI data, which gathers information -- aggregate 

10 information from distributors. We have not contacted 

11 directly individual contractors or distributors. 

12 MR. BROOKMAN: Please follow on, say your 

13 name. 

14 MR. MURPHY: Yes. Rick Murphy, AGA. I would 

15 like to go back to an earlier question I had 

16 regarding the method of building up the retail price 

17 and the process that is used, if you do a 

18 reconciliation or a reasonable test to what your 

19 results are with what is actually happening in the 

20 market, in this case particularly on the market, I'm 

21 sure we will get into a similar discussion on the 

22 installation cost. 
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1 MR. FRANCO: Thank you so much for that 

2 question. In the past we have provided a comparison 

3 of retail prices that were found either online or 

4 from distributors to the cost. In the case of this 

5 analysis, it is a little bit more difficult because 

6 the baseline starts with a much higher -- because of 

7 the furnace fan standard, much higher, so it is hard 

8 to compare baseline prices right now on the market to 

9 the assumed baseline in this analysis because of the 

10 furnace fan standard. 

11 So we have done that in the past and our 

12 results are similar to those either through the 

13 retail prices kind of -- 

14 MR. MURPHY: So I believe in the TSD that 

15 that differential between 80 and 92 based upon this 

16 pricing is about $172.00 or so and so we haven't been 

17 able to determine how that relates to the actual 

18 market with what we are seeing in the market today. 

19 I'm not sure of the exact number but that is what I 

20 recall. 

21 MR. CYMBALSKY: I'm just looking at -- 

22 this is John from DOE -- so if my math is correct we 
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1 see the MSP markup at 1.21 and then to that you would 

2 apply these factors, so that gets me into the several 

3 hundred dollar, 350 -- 

4 MR. FRANCO: Yeah, this is Victor Franco. 

5 I'm just looking at the TSD right now, so it's in 

6 chapter 8, table 8.2.7, you can actually see the 

7 values rise, the incremental from going from 80 to 

8 90% is $163.00 it's around what we gave you before. 

9 MR. MURPHY: So we haven't been able to 

10 evaluate that against what we are actually seeing in 

11 the market for that increment? 

12 MR. FRANCO: No, and it's complicated 

13 because of the furnace standard. 

14 MR. BROOKMAN: Frank Stanonik. 

15 MR. STANONIK: Frank Stanonik, AHRI. Just 

16 a follow up on what you just said. Okay, so in this 

17 analysis, my baseline would still be the 80 with a, 

18 what do you call an advanced motor, okay I will just 

19 call it an advanced motor, and so also the 90 whatever 

20 product is also going to have an advanced motor, so in 

21 the analysis, in that case, for these markups other 

22 than the manufacturers, are you using the baseline 
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1 markup or the incremental relative to the motor? 

2 MR. FRANCO: So how we applied it in the 

3 analysis, we apply it to the whole baseline so it 

4 includes the furnace fan as part of the 80% level. 

5 The incremental, which is just the condensing going 

6 from non-condensing to condensing, is the incremental. 

7 MR. BROOKMAN: Another question from 

8 Everett Shorey. The question is -- I guess it's a 

9 comment - well, there is a question and a comment. A 

10 question from Everett Shorey -- so you have no data 

11 to show that the incremental markup concept is 

12 absolutely congruent with real practices in the 

13 field? 

14 MR. FRANCO: Thank you again for that 

15 question. In the past when the comparison has been 

16 more straight-forward, we have found that our analysis 

17 matches with real data. Again, in this case, because 

18 of the furnace fans the standard it is a little bit 

19 more complicated, but we do assume that because it has 

20 been consistent with the analysis in the past, our 

21 analysis is consistent now. We will look in that for 

22 more detail. Please provide comments. 
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1 MR. BROOKMAN: We also have a comment from 

2 Mark Nayes who says, the price of the installation of 

3 our furnaces are based on costs, of which a tax credit 

4 is not one. Our costs of installing a furnace is 

5 typically 2 to 6 times the cost of the furnace. 

6 Yes, Aniruddh? 

7 MR. ROY: Aniruddh Roy, Goodman. So to 

8 follow up on Frank's question, this analysis 

9 essentially on the markup side does not account for 

10 PSC motors. 

11 MR. FRANCO: Just to clarify we are mainly 

12 dealing with non-weatherized gas furnaces, that is 

13 correct for non-weatherized gas furnaces. For mobile 

14 home gas furnaces baseline, it is a PSC motor because 

15 of the furnace fan standard but for non-weatherized 

16 gas furnaces, you are correct. 

17 So let's move on if there are any other 

18 comments about the markup analysis or anything that 

19 we discussed. So now let's move on to installation 

20 costs. So this is obviously a part of the analysis 

21 which includes a lot of inputs so I will go through 

22 it as early as I can, please ask questions as we go 
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1 through this. 

2 This flow chart is supposed to serve as an 

3 introduction to the installation model. Again we 

4 start with household sample. From that household 

5 sample we determine location of that household and 

6 other characteristics of the household. Based on 

7 that, we use those characteristics to further 

8 determine the installation costs for that household 

9 individually as follows. 

10 So first for the installation costs we 

11 look at kind of starting for the right side of the 

12 part, there are basic costs, installation costs -- these 

13 are the green boxes -- venting installation costs, and 

14 condensate withdrawal installation costs. The 

15 condensate withdrawal would be mainly for condensing 

16 for this, only for condensing purposes, and the venting 

17 installation costs are related to non-condensing. We 

18 will go into more detail about the venting costs. I 

19 won't describe that area because I will describe it 

20 more in a couple of more slides. 

21 So these three components give us the 

22 individual household installation costs. Our data 
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1 sources included RS Means to come up with these 

2 costs, the Residential Cost Data Book from 2013 and 

3 we have done this analysis in the past -- we also 

4 reference 2011 DFR, the 2007 furnace and boiler final 

5 rule, and we have -- we used manufacturer literature 

6 as well. 

7 So because it is an important component of 

8 the installation cost, I will describe it a little 

9 detailed with this flow chart how we determine the 

10 location of the furnace. So first we have the RECS 

11 household. RECS does not provide directly where the 

12 furnace might be located, there is no question in 

13 RECS that gives us that answer, but it does provide 

14 what characteristics the household will have. 

15 For example, it asks whether the household 

16 has a basement, whether the household has an attic, 

17 what year it was built, whether it has a crawl space 

18 or a garage, so we use all of these characteristics 

19 to try to come up where we would think the furnace is 

20 located. 

21 If a furnace is in the basement for 

22 example it is assumed that if the household has a 
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1 basement for example we assume that the furnace is 

2 located in the basement. In that example we also 

3 have information from RECS that provides us whether 

4 it is a finished or an unfinished basement and then 

5 we use that information as well. 

6 As you can see, we have different criteria 

7 for the other parameters, indoor or a garage or crawl 

8 space. This slide provides the result -- we have a 

9 question? 

10 MR. SACHS: Harvey Sachs, ACEEE. On your 

11 attic bullet there is a term HH and I didn't catch 

12 its meaning. 

13 MR. FRANCO: Sorry about that, I tried to 

14 go quickly through that slide. The HH is supposed to 

15 represent household. 

16 MR. CYMBALSKY: So we think this might 

17 address question 4 in your installation question 

18 relating to how does it account for installations 

19 where more than one furnace is necessary. 

20 MR. SCHROEDER: Closets not separated out. 

21 MR. BROOKMAN: Dave, please say your name. 

22 MR. SCHROEDER: Sorry, Dave Schroeder. 
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1 MR. BROOKMAN: I will repeat the question. 

2 MR. SCHROEDER: So closet installations 

3 are just installations that there is no 

4 differentiation between closet and -- 

5 MR. FRANCO: That is correct, yes, for our 

6 analysis we just use indoor and that does include 

7 closet and other situations indoors. I just forgot 

8 to mention to respond to the comment that for 

9 households with multiple furnaces, a fraction of the 

10 time the same household will be analyzed with the 

11 furnace in the attic or indoors or in the closet in 

12 the second floor. And another fraction of the time 

13 the furnace will be analyzed as in the closet or 

14 indoor space on the first floor or in another 

15 location such as the garage. This would address that 

16 question from HH. 

17 MR. BROOKMAN: Charlie? 

18 MR. MCCRUDDEN: Charlie McCrudden, ACCA. 

19 What are the numbers in the blue sort of oval cells 

20 in the bottom? 

21 MR. FRANCO: Yes, the numbers, sorry, I went 

22 through this rather quickly because there are a lot 
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1 of details. The numbers that match the installation 

2 location key that is used in the LCC spreadsheet, so 

3 number one represents the condition basement, you go 

4 to the LCC spreadsheet and try to figure out what 

5 is one in terms of the installation location, what 

6 that means. 

7 MR. MCCRUDDEN: So that's the rank, the 

8 most? 

9 MR. CYMBAKSY: No, it just keys up to the 

10 spreadsheet, so if someone wanted to go and look at 

11 the numbers in the spreadsheet, you can go to one and 

12 that represents conditions B. It's just a mapping 

13 key for the spreadsheet. 

14 MR. FRANCO: We will go over the fractions 

15 in the next slide. This slide just presents the 

16 results that are also provided in the TSD in terms of 

17 the installation location. These results are just 

18 aggregated by region as well as national. As you can 

19 see there's differences in terms of a region which is 

20 incorporated into our analysis. 

21 So let's go into the installation costs. 

22 So we can consider basic installation costs as 
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1 installation costs that are applicable to all 

2 efficiency levels. This includes a trip charge, this 

3 includes removal of the existing furnace in the 

4 replacement case, putting in place and setting up the 

5 furnace, unit start up, checkup and clean up. Gas 

6 piping, electric hookup, removal or disposal fees, 

7 any additional labor required for attic installations, 

8 and the duct work costs. 

9 The duct work cost was accidentally 

10 removed in the basic installation costs while 

11 reformatting the spreadsheets; it is actually not 

12 included. This will be added back in the next phase 

13 of the analysis since the basic installation costs 

14 are the same for all efficiency levels and are also 

15 applicable for equipment switching options, electric 

16 furnace and the heat pump we will be discussing 

17 later. 

18 Adding this cost will not impact the 

19 difference in the final result between the efficiency 

20 levels. This addresses one of the questions from 

21 APGA. 

22 MR. CYMBALSKY: This would be question one 
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1 from the installation cost questions in Appendix 8D. 

2 MR. BROOKMAN: Do we have comments here? 

3 Jim, please? 

4 MR. VERSHAW: Jim VerShaw, Ingersoll Rand. 

5 So I'm looking at this, how many man hours are 

6 included in that typical installation? 

7 MR. FRANCO: Thank you for that question. 

8 This is Victor Franco. It depends on the input 

9 capacity. I believe it is on average either 4 or 5 

10 hours, that's the actual kind of unit startup, 

11 removing, replacing, and if it is in the replacement 

12 situation you have to have the removal of the 

13 existing furnace, so that is approximately half of 

14 that. 

15 MR. VERSHAW: So the 4 or 5 hours, Jim 

16 VerShaw again, includes removing the old furnace? 

17 MR. FRANCO: No it does not. I would -- 

18 MR. VERSHAW: 2 more for that, 2 or 3 more 

19 for that. 

20 MR. FRANCO: For that. Overall it 

21 probably takes about 10 hours. 

22 MR. VERSHAW: So it's interesting that the 
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1 north is so much more expensive than north -- national 

2 and rest of the country. What's the difference 

3 between national and rest of the country, that's 

4 another question, and why is the north so much more 

5 expensive on replacement than the other parts of the 

6 country? 

7 MR. FRANCO: Thank you for that question. 

8 MR. BROOKMAN: Do you live in the north? 

9 MR. VERSHAW: No, I used to. 

10 MR. CYMBALSKY: So the national is just 

11 the average of the two below it, so the north and the 

12 rest of the country -- not north, you weight the 

13 average and you get the top number. 

14 MR. VERSHAW: So is California north? 

15 MR. FRANCO: No that would be rest of 

16 country in this picture Frank. 

17 MR. VERSHAW: All right, so do you have 

18 listed somewhere the labor rates that you assumed? 

19 MR. FRANCO: Yes, these are listed in 

20 appendix 8D. 

21 MR. VERSHAW: If I read that right, it was 

22 like $60.00 an hour for a plumber and an electrician 
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1 and $50.00 an hour for a technician, something like 

2 that. Was this overhead profit? 

3 MR. FRANCO: That is correct, yes, and the 

4 rates are different between the -- for example in New 

5 York it is expensive, Georgia -- 

6 MR. VERSHAW: I have been doing a survey 

7 around the country for people that work for our 

8 equipment. It's higher than that, so we will do 

9 something on the comments for that, or we will do it 

10 through AHRI. 

11 Now to go back to what did you do to 

12 validate your number of hours are correct, and you 

13 took the dollar per hour from RS Means, right? 

14 MR. FRANCO: Yes, that is correct. 

15 MR. VERSHAW: What did you do to validate 

16 that that was actually real? Did anybody in Navigant 

17 or DOE have a furnace installed or get a quote just 

18 to see what you would see and then compare that with 

19 what this is to see if the real world matches up to 

20 this, because it's an awful lot of assumptions. 

21 Everything is based on the RS Means dollars for 

22 installation. 
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1 MR. FRANCO: That is correct, thank you so 

2 much for that comment. We do try to look at that 

3 kind of data. There are data sources that provide 

4 from either the homeowner or contractors what they 

5 have actually spent and there are national averages, 

6 so we try to look at that data and compare that data 

7 to our data. 

8 Obviously that's a mixture of high 

9 efficiency and lower efficiency so we try to weight 

10 that and compare it to our values and our values are 

11 comparable to those. 

12 MR. BROOKMAN: You are next, your name 

13 please? 

14 MR. MURPHY: Rick Murphy, AGA. I had a 

15 similar question and I appreciate that response. We 

16 are also in the process of trying to work with our 

17 members in their respective communities that they 

18 serve to get specific proposals from contractors in 

19 the area to have more intelligence, and hopefully, if 

20 that is a value to you, we can certainly share that. 

21 I do have a question and maybe it is not 

22 appropriate here, it may be for the product switching 
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1 section, but this approach here, is this assuming 

2 that every -- in the replacement market, every 

3 installation has an opportunity to install a 

4 condensing piece of equipment and it is just a matter 

5 of cost, or do you also take into consideration 

6 households or structures that it is almost impossible 

7 to install the equipment? 

8 MR. FRANCO: Great. Thank you so much for 

9 that question, but we will get into more details 

10 regarding the installation of condensing a little bit 

11 later. We do assume that you are able to install it 

12 even though the costs might be really, really high. 

13 MR. BROOKMAN: Mark Krebs, do you have a 

14 comment here? 

15 MR. KREBS: Well, just to answer the 

16 gentleman's question. Laclede people have gotten 

17 bids for actual replacements in their actual homes 

18 and we are going to -- we did that for the DFR, we 

19 commented upon that and we are going to be repeating 

20 that for this NOPR. 

21 We also have a huge database of appliance 

22 efficiency rebates that we have provided to people 
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1 who have done this and the results of those were also 

2 commented upon in the last DFR and to make a long 

3 story short, yeah, it seems like DOE kind of low-balled 

4 the total installed prices. 

5 MR. BROOKMAN: Okay, Mark Nayes online, 

6 Mark you are now unmuted. 

7 MR. NAYES: Okay. Yep, we are essentially in 

8 that northern zone, we are in Minnesota, and for a 

9 non-condensing furnace, our total installation cost, 

10 not including the furnace, is at least double that 

11 number. For a condensing furnace, we are looking at 

12 triple that number. We are kind of a middle of the 

13 road company. We are not the most expensive guys up 

14 here but we are not the cheapest, and that includes 

15 permits, materials, electrical, gassing, everything 

16 that is involved, the insurance overhead, both of 

17 those numbers we see as being low. 

18 MR. BROOKMAN: Okay, Mark, that's helpful, 

19 thank you. Okay, we are going to proceed. 

20 MR. FRANCO: Thank you so much. Let's 

21 proceed. So we've already discussed the basic 

22 installation costs. Now let's go into a little bit 
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1 more detail of the venting installation costs. So we 

2 do consider some situations where replacing a 

3 non-condensing furnace with a non-condensing furnace 

4

5 140 

6

7 requires some venting modifications. 

8 These could include chimney lining for the 

9 replacement, vent mount modification in case of 

10 replacement, and the new metal vent in the new 

11 construction, and we will go into more details in the 

12 next slide. 

13 For condensing furnaces, we have to 

14 consider installing a new PVC venting. Also, there are 

15 cases where you orphan the water heater in terms of 

16 the replacement, and we also consider the additional 

17 combustion air for direct vent and concealing vent 

18 pipe. I'll be discussing that in more detail in 

19 subsequent slides. 

20 Since one of the most important components 

21 are the vent length, this slide -- it's a little bit 

22 overwhelming -- does provide the methodology for 
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1 determining the vent length. I will go over it briefly 

2 and as carefully as I can, but essentially, we do take 

3 into account a lot of different factors in 

4 determining the vent length. 

5 For example, we take into account the floor 

6 height. Typical floor heights are about 8 feet -- 8 

7 to 9 feet. RECS provides us with whether there's a 

8 high ceiling or a cathedral ceiling, so we take that 

9 in account. Also, the number of floors are taken into 

10 account, so for example, if we assume that the furnace 

11 is in the basement and the house is two stories, then 

12 we assume that the venting has to go through two 

13 stories if it is vented vertically. 

14 In terms of horizontal installations, we 

15 also take into account the installation location's 

16 square footage so we need to know through what wall 

17 and how far the venting has to go to vent 

18 horizontally. So we take an average wall length and 

19 we have a distribution that accounts for the furnace 

20 being not by the wall that it is going to be vented 

21 through, but maybe in another location, so potentially 

22 the furnace is in a wall and maybe it is by the wall 
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1 but it can be vented through that wall. 

2 Maybe the situation might be that there is 

3 a -- it's sharing a wall with the neighbor or that 

4 wall is the wall that's the exterior wall. So we 

5 assume that on average the furnace is more or less in 

6 the middle of the building and then we assume a vent 

7 length. There is a distribution applied to that so 

8 there are some cases where the furnace does vent 

9 through that wall and there is to the furnace and it 

10 is the short length. 

11 There are other situations where it has to 

12 vent through the full building and those would 

13 require the greatest vent length. In terms of 

14 horizontal venting, there's an additional component 

15 which is the horizontal in terms of horizontal 

16 there's an -- horizontal and vertical, there are 

17 additional for horizontal and vertical distances that 

18 need to be taken into account and these are the last 

19 few boxes. So for example, if you are venting 

20 vertically, you need to account for some horizontal 

21 distance. We assume about three to six feet. 

22 In terms of the horizontal venting, we also 
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1 account, for example, if it is in the basement, you have 

2 to go at least three feet above ground and to vent 

3 horizontally, and that would be the vertical distance, 

4 well at least part of the vertical distance. 

5 So let's go into a little bit more detail 

6 about what we mean by non-condensing in the 

7 replacement cases venting installation costs. So 

8 first there are some masonry chimneys that require 

9 re-lining. There are a number of households, 

10 especially in the north, that have a chimney. The 

11 furnaces that were installed before 1995 were built 

12 before 1995 are assumed to not be applicable to the 

13 latest national gas code and might require relining 

14 of the masonry chimney. 

15 DOE does also consider vent resizing and 

16 vent connectors that are required. This is the case 

17 mostly of installations where you have a furnace that 

18 is a natural draft furnace that is installed in the 

19 household and so we assume that if the household has 

20 a natural draft and non-weatherized gas furnace that 

21 might fall into that category. 

22 We also consider whether the unit is going 
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1 to be replaced before the standard in 2021. Once it 

2 is replaced, obviously it will be a natural draft 

3 furnace and if the chimney has been relined. 

4 Here are the fractions of the existing 

5 masonry chimney and venting installations that come 

6 from GTI survey done in the 1990's. They are 

7 disaggregated by different regions. As you can see 

8 there's a significant regional variation. 

9 MR. BROOKMAN: Marshall Hunt? 

10 MR. HUNT: Yes, one of the things -- Marshall 

11 Hunt, Pacific Gas and Electric Company. One of the 

12 things we were looking at in California is there is a 

13 lot of tran-site asbestos-based sedimentacious flues 

14 out there so how -- where would you place them in 

15 this analysis? 

16 MR. FRANCO: I'm sorry I didn't catch the 

17 first part of your question? 

18 MR. HUNT: A lot of flues in the older 

19 homes are asbestos-based transite, that hard pipe, 

20 where would you include that in this analysis? 

21 MR. FRANCO: Well, it is currently not part 

22 of the analysis. Please submit any data that you might 
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1 have about that and we will definitely look into 

2 that, thank you so much for that comment. 

3 One thing that's important to know, and 

4 it's a part of this analysis but it is not here, is we 

5 also take into account the fraction of commonly 

6 vented water heater and furnace situations by region. 

7 It's a similar table to the one shown here, it's in 

8 the TSD, it's table 8D.2.8 and it is also based on the 

9 GTI study done in the '90s, and the results from that 

10 are about half of commonly vented installations -- 

11 those commonly vented installations becomes more 

12 important in condensing cost analysis. 

13 MR. MCCRUDDEN: This is Charlie with ACCA. 

14 Marshall I wanted to ask a follow-up. You mentioned 

15 the word asbestos pipe or something, I just heard 

16 asbestos. What are the implications of your question 

17 essentially on an installation? 

18 MR. HUNT: Our friends at So-Cal Gas are 

19 concerned about the added cost for installation. 

20 MR. MCCRUDDEN: So is there a remediation 

21 that is required, what's -- 

22 MR. HUNT: It's potential, so we will get 
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1 more data. 

2 MR. MCCRUDDEN: Okay thanks. 

3 MR. BROOKMAN: Yes Andrew deLaski? 

4 MR. DELASKI: Victor, you mentioned 

5 relining. Is there relining in the base case in some 

6 instances? 

7 MR. FRANCO: This is Victor Franco. That is 

8 the case, that is what we are trying to describe in 

9 this slide. So we are going from a non-condensing, 

10 maybe like a natural draft but it could be also a 

11 non-condensing current furnace to a baseline and 

12 non-condensing furnace, 80% furnace, so that is the 

13 baseline. 

14 MR. DELASKI: Okay, got it. Thank you. 

15 MR. BROOKMAN: Okay, Mark? 

16 MR. KREBS: Victor, Mark Krebs with 

17 Laclede Group again. I don't want to mess up your 

18 delivery here, but when would be a good time to talk 

19 about the ductwork issues that we discussed yesterday, 

20 you know, and the fact that typical duct work really 

21 means bad duct works because, commonly, more often than 

22 not, they are bad duct work -- they cause a lot of static 
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1 pressure that has a lot of implications for 

2 electricity consumption. 

3 When could we get into that or can we? 

4 MR. FRANCO: Yes, we do get into that in 

5 the electricity use. DOE does not assume in its 

6 analysis that there is any installation costs related 

7 to improving the duct work, it just assumes that there 

8 is an increased use if you have the situation of bad 

9 ducts in its analysis, similar to what we did for 

10 furnace fans and what we have done in the past. 

11 MR. KREBS: I tried to get a feeling, maybe 

12 if you would help me, if you guys could break out, you 

13 know, what portion of that electricity comes from the 

14 added static pressure of the condensing furnace 

15 compared to the remainder that comes from the duct 

16 work system, you know. 

17 If there is a way to break that out, I 

18 think we could have a better opportunity to dig into 

19 it and come back with some meaningful comments. 

20 MR. FRANCO: Thank you so much, we can go 

21 into that in electricity use in a little bit more 

22 detail. 
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1 MR. KREBS: Okay I'll hold you to it. 

2 MR. FRANCO: Thank you so much and remind 

3 me if I don't. 

4 MR. BROOKMAN: Jim VerShaw? 

5 MR. VERSHAW: Jim VerShaw. A quick 

6 question on the existing non-weatherized gas furnaces 

7 less than 75%, are you saying that in your analysis 

8 that 3/10ths of the installs would be that way? 

9 3/10ths of a percent, I don't understand the fraction 

10 impacted column. 

11 There's another column in the TSD that was 

12 probable and that had been impacted and they were two 

13 different numbers, I wasn't quite sure how you used 

14 that. Because, if you think about it, come 2021, that 

15 will be 29 years after we pretty much got rid of 

16 atmospheric furnaces, and I think furnaces are known 

17 to last 21 years, so they probably should be 

18 looked -- I would think that there would be almost 

19 none out there at that point. Is that what that 

20 says? 

21 MR. FRANCO: That is exactly true and 

22 that's why we take into account if there have been 
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1 installations, so just to clarify a little bit in more 

2 detail. RECS does provide the age of the furnace, 

3 so we know if the furnace, for example, has been 

4 installed after 1990 or 1995, and then we can assume 

5 whether those would be natural draft. But then we 

6 would have to assume what happens between 2009 when 

7 the survey was conducted to 2021 so obviously in 2009 

8 there's a larger fraction. 

9 By 2021 there's a much smaller fraction. 

10 This is what that represents, on natural draft 

11 furnaces. 

12 MR. BROOKMAN: Chuck? 

13 MR. WHITE: Chuck White with PHCC. So I 

14 don't know if it is going to be wrapped in here 

15 somewhere but first I would like to comment, the 

16 common water heater and furnace I think your 50% 

17 probably low, but PVC venting, do you have 

18 consideration for maximum point for piping 

19 equivalent, like fittings, in consideration of 

20 termination of where those can be: not over public 

21 right-of-ways, not related to open windows, forced 

22 air ventilation, going through multi-family, 
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1 multi-story buildings, traversing other property 

2 lines, exceeding maximum vent heights, going through 

3 multi-story buildings, I can go on. 

4 MR. FRANCO: Thank you so much for that 

5 comment. The next slide actually provides that and I 

6 will be going into that in more detail, and obviously 

7 if that is what you are more interested. Let me just 

8 point out before going to answer your question, the 

9 last thing on this slide, it does provide the average 

10 cost for all of these different situations and is 

11 noted the different fraction of impacted units. 

12 So let's go more into a big piece of the 

13 installation costs for condensing furnaces. So there 

14 is a situation where you would go from a 

15 non-condensing furnace, either potentially natural 

16 draft, but most likely currently available 80% 

17 

18 furnace to condensing furnace, and so we take a 

19 lot of the factors that you have described into 

20 account as much as we can for each individual 

21 household. 

22 So as described before we take into 
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1 account the furnace where it is actually an 

2 installation location. So as I tried to describe it 

3 before in that complicated flow chart we are trying 

4 to assess what would happen in each individual home 

5 which is pretty complicated. 

6 There is a situation that a fraction of 

7 the households where you could potentially have a 

8 furnace as I mentioned in the wall, the easiest would 

9 be to have the venting through that wall horizontally 

10 but for whatever reason you can't have that. So 

11 there is a situation where you might have to actually 

12 go through all the way as far as possible to say for 

13 example if you are in this corner diagonally all the 

14 way to the other diagonal. 

15 And in addition to that you might go 

16 through multiple walls because that might be a wall 

17 that's a room that you have to drill a hole through 

18 that and then go through another one and then you 

19 have to account for the verticals, you might have to 

20 drill holes through vertical floors potentially and 

21 then go horizontally. So it does take that into 

22 account in terms of installation and these are all 
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1 fractions obviously. 

2 There are fractions of installations where 

3 you can just drill through that wall. Maybe it's a 

4 closet and that's a perfectly good wall so that's why 

5 we do that because we understand that there are many 

6 situations where because you are going up for example 

7 from the basement that wall potentially has a lot of 

8 windows, and you can't go and drill a hole through a 

9 window or close to a window, you don't want to have 

10 those flue gasses going through there. 

11 MR. BROOKMAN: Yes, Neil? 

12 MR. LESLIE: Neil Leslie, GTI. Just to 

13 make sure that we understand the specific numbers 

14 that are used you said there were some average costs. 

15 Now when you get to an individual house in the 10,000 

16 runs you have incremental costs attached to that 

17 individual house configuration, is that right? 

18 MR. FRANCO: No, the cost to each 

19 individual house or the cost of that specific house 

20 installation so for example, lets go back to that very 

21 complicated installation household. So it's in the 

22 wall, kind of in the diagonal and you have to go 
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1 through multiple walls that cost is applied to the 

2 household installation cost. 

3 For another household potentially it just 

4 goes through to that wall and so it's a very small 

5 cost to do the venting so it is individual, household 

6 by household. 

7 So, I kind of described already some of 

8 these points, but just to reiterate, we do go and 

9 account for ceiling height, number of floors, the 

10 distance from the wall or roof, whether it can be 

11 vertical or horizontally installed, so there are some 

12 situations where you can actually have vertical 

13 installation and it might make the most sense for a 

14 condensing furnace. 

15 And finally we take into account the vent 

16 termination. There are a couple of points here for 

17 this that describe some comments that we have 

18 received, so I will go through those in a little bit 

19 more detail related to these two lasts points. 

20 In terms of wall penetration, there is no 

21 electrical work required in this PVC venting 

22 installation work. DOE estimated the cost of drilling 
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1 a hole into a wall to install PVC venting based on 

2 similar work required for drilling holes and for 

3 electrical work for our estimates, and this is common 

4 practice. Sometimes there are costs and ours means in 

5 one area or another, and it is assumed that the costs 

6 are similar to, for example, doing that electrical 

7 work. 

8 In the 2011 TSD, there was a $35.00 value 

9 that was added to the material costs associated with 

10 drilling a hole. This cost was incorrectly reported 

11 in the TSD itself. It did not exist in the 

12 spreadsheet analysis or in the analysis in 2011 or in 

13 this analysis in 2014, so that is related to a 

14 specific question we received. 

15 In terms of vent terminations this is 

16 addressing we were asked a specific question -- and this is 

17 related to the vent termination. How we deal with 

18 it. DOE assumed that, for all horizontal vent 

19 terminations for condensing furnaces, require adding a 

20 three feet of PVC above ground level and a 90 degree 

21 level elbow as a proxy toward the termination count, 

22 assuming that this was equivalent to an average 
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1 requirement for installation -- what is commonly called 

2 a snorkel type vent termination -- so you can imagine 

3 you going up vertically about three feet then 

4 horizontal and then you have a termination so it 

5 makes kind of like a snorkel, so that's what is meant 

6 by the snorkel termination. 

7 The venting termination takes into account 

8 the closest wall that might be appropriate to install, 

9 as we described earlier, so it takes into account the 

10 issues of the windows, doors, decks, overhangs, 

11 sharing of walls with other as we have described 

12 earlier. 

13 MR. CYBALSKY: So, this is John from DOE, 

14 so, the last two points were questions two and three 

15 from the APGA submittal under the installation costs 

16 section. 

17 MR. FRANCO: So I will very briefly go 

18 through these next few points because we will have 

19 subsequent slides. We do take into account 

20 combustion and air vent for direct vent installations 

21 and we will go through the fractions in the next 

22 slide. 
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1 We do go through concealing vent pipes for 

2 indoor installations, so this is the case where you 

3 might have your furnace installed in a closet, you 

4 have to go through some other part of the living area, 

5 and that might not be something that you want to do, 

6 so, you want to conceal that somehow so that it's 

7 architecturally not something that's not that 

8 beautiful, or good. 

9 The next thing is, we take into account 

10 orphaned water heaters. So there are some 

11 installations that require relining of the chimney or 

12 resizing for the condensing weatherized that replaces 

13 an existing non-condensing, non-weatherized furnace. 

14 In that case the orphaned -- what is called an orphaned 

15 water heater, might not have the appropriate venting 

16 to vent by itself, and so, in that case we do consider 

17 additional vented costs just for the water heater. 

18 MR. BROOKMAN: Mark Nayes has a question 

19 from online. He asked: have you taken into account 

20 gravity vent furnaces that are still found in old 

21 homes? 

22 MR. FRANCO: Yes, thank you so much for 
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1 that question. Yes, we do. Sometimes the terminology 

2 for that is natural draft but that is what we mean by 

3 natural draft gravity forced furnaces, thank you. 

4 MR. BROOKMAN: Harvey Sachs? 

5 MR. SACHS: Age before beauty. 

6 MR. BROOKMAN: Impetuousness before looks. 

7 MR. WHITE: I'm neither. This is Chuck 

8 White. I'm not sure, I think what your online caller 

9 might be referring to is gravity furnaces not gravity 

10 vent, not gravity draft where you don't have an 

11 indoor blower, you have large duct work and there is 

12 going to be significantly larger change out costs and 

13 I'm putting words in his mouth but I think that might 

14 be what he is talking about -- not natural draft. 

15 MR. BROOKMAN: Okay thank you. Harvey go 

16 ahead. 

17 MR. SACHS: I have followed industry work 

18 recently on the orphaned water heater issue. As I have 

19 done that I have tried to find unsuccessfully some 

20 simulations done in the report issued by GRI sometime 

21 I believe before 1990 and if I am remembering this 

22 correctly and I think it needs to be updated, there 
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1 were two things associated with it. 

2 One of them was that in the South was 

3 impossible or extremely unlikely to cool even an 

4 outlying chimney and they would likely have back 

5 drafting from gas water heater on very cold days in 

6 the orphaned situation and even as you move North it 

7 was much more likely to be a problem depending on the 

8 position of the chimney. 

9 If it was an external chimney, masonry 

10 chimney that is one three sides exposed, you have a 

11 lot more cooling effect than if it was a central chimney 

12 that descended through the center of the house and 

13 had the last few feet through an unconditioned attic. 

14 And I don't want to delay this but I think that we 

15 need to have this kind of granularity to handle the 

16 problem of orphaned water heaters. 

17 My own instinct is that it is a less 

18 frequent safety hazard than has been estimated in 

19 worst case efforts. Others may feel that we need to 

20 err on the side of safety, but I think that, in the 

21 absence of good field data, an updated simulation 

22 that breaks out locations in heating days is 
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1 important. 

2 MR. BROOKMAN: Jim? 

3 MR. VERSHAW: Well, there's been a lot of 

4 work done on venting of natural draft appliances and 

5 a lot of work was done and created the venting guide 

6 that's in the national fuel gas code and we all apply 

7 it to our products. I think that you could look at 

8 the type of product and look at the heating and 

9 firing rate is and tell you what size vents you need. 

10 And what happens is when you go from 

11 50,000 plus 100,000 to 50,000 it's so big they can't 

12 draft so it has got to get smaller. And then if you 

13 have single wall many times you have to go to double 

14 wall on the connector. 

15 MR. SACHS: I understand that, I have done 

16 the relining for orphan water heater according to 

17 code myself not often. 

18 MR. VERSHAW: I've never done it, so... 

19 MR. SACHS: I have more field experience 

20 then but I am just saying that this is an area, and 

21 you are absolutely right that quite often you will 

22 need at least a single wall vent but I think that we 
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1 need to understand the orphaned water heater problem a 

2 little better than I have and also look, and I hate to 

3 bring up -- no I enjoy bringing up the learning curve 

4 where again we have seen a fair amount of work based 

5 on international experience leading to the hypothesis 

6 that common venting solutions are quite likely to be 

7 available and I think we need to understand those 

8 better as well. 

9 MR. BROOKMAN: Thank you, we are going to 

10 press on. 

11 MR. VERSHAW: While you were talking I 

12 read ahead and I think I answered it so I think I'll 

13 wait on it. 

14 MR. FRANCO: Thank you so much. We will 

15 go through here are the more details about the direct 

16 vent, PVC venting. Here on this slide the motion 

17 points are the fractions that we are assuming for 

18 direct vent depending on the installation location so, 

19 as you can see, they vary from 100% in the garage to 

20 33% in unconditioned basement and crawl spaces. 

21 This comes from a consultant report that's 

22 available in Appendix 8B of the 2011 DFR. This whole 
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1 report is fully available in that appendix. This 

2 answers again a question. 

3 MR. CYMBALSKY: This is John from DOE. So 

4 there was in the section entitled questions not 

5 previously answered by DOE question 8 so that we 

6 point you to where you can get that consultant's 

7 report. We will also put it in the new docket, the 

8 current rulemaking docket. 

9 MR. FRANCO: Just the next few rows give 

10 you a sense of the fraction of installations by 

11 region or nationally of these different installation 

12 locations, so don't mix these two numbers up but if 

13 some products, for example, the fraction of direct 

14 venting installations by the North fractions of 

15 installations you would get the resulting 58.7%, that 

16 is direct vent. 

17 So that's in the North on average we have 

18 applied 58.7% of the installations we have applied 

19 direct vent. Again this cost is individual to the 

20 household and so if the household does have direct 

21 venting, the cost is applied, if it doesn't, it won't be 

22 applied. This number -- results for the rest of the 
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1 country and the national so about 60% of households 

2 are about roughly 59% of households have direct vent. 

3 This is -- 

4 MS. ARMSTRONG: This is Ashley from DOE 

5 and we have a question from online from John Gibbons. 

6 He wanted to know did you take into account freeze 

7 protection of condensate removal and how much did you 

8 include in the cost impact? Were you mindful of many 

9 municipal codes that do not allow condensate draining 

10 into simple sewer lines? 

11 MR. FRANCO: Thank you so much for that 

12 question. We will be addressing that in a couple 

13 more slides so I will just address that when we get 

14 there. 

15 MR. BROOKMAN: Frank Stanonik? 

16 MR. STANONIK: Frank Stanonik, AHRI. I 

17 guess I am just going to ask confirmation. So if the 

18 unit -- if it is in a basement, the assumption is that 

19 67% of those will be direct vent installation for a 

20 condensing product, right? 

21 MR. FRANCO: That's correct. 

22 MR. STANONIK: And you are assuming that 
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1 same percentage if it is installed essentially indoors - 

2 which might be a closet, alcove or utility room -- which 

3 I would venture in many cases is going to be I would 

4 say centrally located in the residence as opposed to 

5 anywhere near an outside wall or whatever. 

6 I guess I'm trying -- how did you come to 

7 the conclusion that it is likely that a condensing 

8 furnace installed in an indoor location like a closet, 

9 alcove, and so on is as likely to now be direct vent 

10 as one that is in a basement? To me, how did you get 

11 to the conclusion it has the same likelihood, I guess? 

12 MR. FRANCO: Yes, thank you for that 

13 question. Note that the basement has a conditioned 

14 space which is the 67% that they are referring to so 

15 this would be similar to an indoor location because 

16 you assume that it is conditioned so maybe it's like 

17 a game room or some other -- had some other use 

18 versus a basement that is in an unconditioned space 

19 which has a different fraction 33%. 

20 So the assumptions from the consultant was 

21 if this is in the space that is kind of the 

22 conditioned indoor space, the fraction would be a lot 
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1 higher so it would be 67% in those cases for example 

2 the condition a basement, or indoor or attic which 

3 are also in the conditioned attic. 

4 When it is in the unconditioned space, such 

5 as in a basement which is unconditioned, or crawl 

6 space of an attic which is unconditioned, the same 

7 fractions are 33% so we assume that is lower. 

8 And then the garage-- we assume that's 100% 

9 because of potentially the gas. 

10 MR. STANONIK: Frank Stanonik. But so the 

11 conditioned basement right, but again if well -- I 

12 think about conditioned basement and I still think of 

13 a fairly open space. At least most basements actually 

14 when you get down in the basement it is not for the 

15 compartmentalized, even conditioned ones into small 

16 rooms and stuff, and yet again the indoor installation 

17 of use as you have described it there, those are 

18 essentially, to a large degree, a confined space and so 

19 to me with that very simplistic view the likelihood 

20 of getting a direct vent installation into a confined 

21 space installation of sorts -- compared to this 

22 conditioned basement which I consider a wide open 
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1 space, I am still having a hard time saying that 

2 those would be the same. 

3 MR. FRANCO: Thank you for that no, we 

4 really appreciate your comments. Please provide 

5 detailed description of what you would think we could 

6 refine in terms of those fractions because that would 

7 be really helpful. Obviously, there aren't any 

8 surveys available for what these fractions should be 

9 and these are assumptions currently based on this 

10 consultant report so any feedback would be really, 

11 really appreciated, thank you so much. 

12 So, I will go kind of quickly through this 

13 one. This relates to the concealing of the vent 

14 pipes so we do take that into consideration. That 

15 impacts a fraction of the installations that are 

16 located in indoor locations. We assume that 50% of 

17 indoor locations would have this impact so the 

18 fraction impacted overall is 9%. The average cost is 

19 $360.00 obviously this is a distribution of costs 

20 depending on the vent length so if you have a short 

21 length that you have to conceal the costs would be 

22 much lower. 
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1 If you have a much larger space then the 

2 length they have to conceal, its cost would be much 

3 larger. 

4 This next slide summarizes the venting 

5 that's required both in the non-condensing and the 

6 non-condensing to condensing and to note that in the 

7 non-condensing to condensing this mainly just deals 

8 with the orphaned water heater. So let's go take a 

9 look first at the non-condensing to condensing. 

10 These are the fractions of installations 

11 which is fairly low that are impacted by having to 

12 redo or resize the venting going from non-condensing 

13 to non-condensing. So the fraction impacted is about 

14 total fraction is about 2.2% and is based on the 

15 assumptions we have described earlier. 

16 In terms of the fraction of the impact by 

17 orphaned water heaters the fractions and the 

18 differences are described here and the overall impact 

19 is close to 20%. Most of the impact is having to 

20 resize the orphan water heater or the last row and 

21 this is just an assumption that we are making that 

22 40% of the time that has to be done and that impacts 
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1 18% of installation. 

2 The costs are also provided. Again, these 

3 are average costs for the individual households. These 

4 costs can be very, very different. In the case just 

5 of the orphaned water heater, because this is vertically 

6 vented, these costs could be fairly large. If you 

7 are going through multiple floors, you have to do 

8

9 167 

10

11 potentially the relining of those. We also take into 

12 account the installation costs to new construction 

13 and new owners. New owners would be people that are 

14 potentially installing this equipment for the first 

15 time in their home, doing maybe a major remodel or 

16 people that are switching to another equipment that 

17 didn't have a gas furnace previously. 

18 These installation costs for 

19 non-condensing include adding the whole vent system, 

20 and if it is commonly vented then adding the vent -- 

21 the commonly venting from the orphan water heater 

22 from the commonly vented water heater. 
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1 For the condensing non-weatherized gas 

2 furnace we do account also for the PVC venting -- as we 

3 have described earlier -- and we account for the plan 

4 installation of the non-condensing commonly vented 

5 gas water heater that now needs to be orphaned. So 

6 we take into account that difference in cost. 

7 MR. BROOKMAN: We have a question from an 

8 individual on the line. I believe his name is Michael 

9 Strom. Michael asks, how does collect seal venting 

10 system fit in the analysis both in a configuration as 

11 relining on a b-vent with a liner and using the 

12 b-vent as air duct and a new pre-fab co-axial system? 

13 MR. FRANCO: So thank you for that 

14 comment. I believe that is something that we will be 

15 addressing later in the later slides so when we come 

16 to that point watch. 

17 MR. BROOKMAN: Okay, I'll pull this out and 

18 re-raise it later, keep going. 

19 MR. FRANCO: Thank you so much so let's go 

20 to the next slide. So now we are moving on to the 

21 last component of the installation cost. This only 

22 impacts condensing furnaces and this relates to 
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1 questions raised before about the condensate 

2 withdrawal. 

3 This flow chart represents our overall 

4 methodology again this is done for each household 

5 depending on different situations that occur. First 

6 we take into account where the household is located 

7 if it is location in a for example -- it's located in 

8 an attic we do take into account freeze protection in 

9 the case of a non-weatherized gas furnace. 

10 If it has a central air conditioner we 

11 take that into account in terms of whether we 

12 consider if it has a condensate pump or not. The 

13 central air conditioner might already have a 

14 condensate pump in that location and an additional 

15 one might not be required. 

16 In the case of a condensate pump or heat 

17 tape which is the case when we are dealing with 

18 condensate freezing we do also apply the cost of the 

19 electrical outlet. All of these different costs, 

20 including the condensate piping and the drip pan, are 

21 what are part of the condensate removal costs. 

22 To address one of the specific questions 
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1 that we had earlier, we do take into account the 

2 condensate neutralizer in terms of neutralizing the 

3 condensate acidity and this is applied a fraction at 

4 a time. Costs are also added and this deals with 

5 locations where this is a requirement by code. 

6 MR. BROOKMAN: Frank Stanonik? 

7 MR. STANONIK: Frank Stanonik, AHRI. All 

8 right, so if I am understanding your little flow chart 

9 there, the only time you are considering the cost of 

10 the condensate pump is if the house doesn't have air 

11 conditioning, central air conditioning? 

12 MR. FRANCO: That is correct, that was -- 

13 MR. STANONIK: And so that's a fundamental 

14 error. That's an error, okay. I'll tell you right 

15 now in this area where we live, where I live, where 

16 everybody living in this area okay -- my air 

17 conditioner the condensate is just drained outdoors 

18 because it can be, it's not going to freeze up in the 

19 summer. 

20 But my condensing furnace because it 

21 cannot take that condensate outdoors because it will 

22 freeze had to have a condensate pump so it could pump 
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1 it to a place where I could drain it. So the issue 

2 is not simply whether or not the house has a central 

3 AC, but it is an issue of whether a household is 

4 located in a climate zone where the condensate will 

5 freeze and so it cannot use the same line as the 

6 central AC might as you might incur in the South. 

7 So I think you are underestimating on the 

8 installation costs. 

9 MR. BROOKMAN: Harvey Sachs? 

10 MR. SACHS: This is Harvey Sachs and I 

11 happen to live in North Virginia as I believe you do 

12 and I do have a condensate pump which carries the 

13 condensate from both the air conditioner where the 

14 condensate drain is next to the furnace cabinet and 

15 from the condensing furnace. I believe that that 

16 will be typical for all houses for almost all houses 

17 which have the equipment in the basement because you 

18 have to pump it anyhow and in that case I don't know 

19 if it is code approved or not but that small amount 

20 of condensate is joined with the air conditioner 

21 condensate and it moves to the common sewer. I had 

22 to do the pump for the air conditioner so I am using 
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1 this end pump for the furnace. 

2 I suspect that that is far more common in 

3 basement-equipped houses than we are assuming from 

4 your remarks. 

5 MR. BROOKMAN: Frank? 

6 MR. STANONIK: Frank Stanonik. For a 

7 point of clarification, a point well taken. In fact 

8 my house you walk out and it's multi-level so I can 

9 walk out of my basement out the back so, in fact, I do 

10 have a free wall where my air conditioner does simply 

11 drain, the condensate does just go outside. 

12 But if it was totally a basement 

13 surrounded by earth on all walls you are correct. 

14 MR. BROOKMAN: We have questions and 

15 comments from, I believe, Jerome Ryan, and he says 

16 because of the complexities of installing high 

17 efficiency furnaces, has DOE contemplated the costs of 

18 contractor education needs associated with this 

19 ruling and how many contractors may need this 

20 training and continues -- were these overhead costs 

21 inputted into the model and can you comment about the 

22 efficiency gains lost with its poor installations? 
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1 MR. MCGRUDDEN: This is Charlie with ACCA 

2 and I am being looked at by Ashley and John but I 

3 think the question was to you so I would like to hear 

4 what you have to say first. 

5 MS. ARMSTRONG: Perhaps you can address 

6 the first part of the question which is more of a, you 

7 know, what kind of training do you have today with 

8 condensing furnaces and you know is there a need for 

9 further training because I'm guessing that you are 

10 currently giving training to your different 

11 contractors or at least providing them that 

12 opportunity so I guess what would be the differential 

13 or would there be one? 

14 MR. MCGRUDDEN: So this is Charlie, I 

15 think a lot of the manufacturers through their dealer 

16 networks, through the wholesalers provide a lot of 

17 training especially on new equipment and new 

18 technologies. We certainly do a lot of training for 

19 quality installation and that looks at more than just 

20 -- that looks at how to install the box properly duct 

21 ceiling, sizing and on the case of CAC and heat 

22 pumps, refrigerant charge and things like that. 
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1 So you know, again, that's what I was sort 

2 of looking to see what DOE had contemplated in terms 

3 of what might be the costs or how would training play 

4 into the analysis here because you may have a whole 

5 subset of contractors who have never touched a 

6 condensing furnace because they never had to. 

7 MR. BROOKMAN: Okay, I think we should keep 

8 moving on. For those of you that are interested, and 

9 probably all of you are, shortly we are going to pause 

10 for lunch in say ten minutes or so. 

11 MR. FRANCO: Okay thank you yes, we are 

12 almost finished with the installation costs so a few 

13 more slides. 

14 MS. ARMSTRONG: Just Charlie to your point, 

15 I mean, I think that we didn't account for any 

16 training that would be necessary, so I think what we 

17 would be looking for from you and/or the other 

18 contractors on the phone in and around the table 

19 today would be you know what if any that delta would 

20 be in terms of what is being done today versus what 

21 might need to be done in the future. 

22 MR. MCCRUDDEN: And this is Charlie with 
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1 ACCA again and we will certainly put something to 

2 that effect in our comments. 

3 MS. ARMSTRONG: Thank you. 

4 MR. BROOKMAN: Thanks Charlie, Harvey 

5 Sachs? 

6 MR. SACHS: This is Harvey and gee I'm 

7 looking around the room for John, he's assured me 

8 that a great deal of training on all sorts of 

9 products is being done by his members. 

10 MR. BROOKMAN: Okay again proceed here. 

11 MR. FRANCO: Thank you so much for all of 

12 those comments. We are going to now summarize. This 

13 simply summarizes the condensate removal in terms of 

14 the fraction impacted and the average cost of supply. 

15 Obviously there is a distribution. This is available 

16 in the TSD if you have any further comments please 

17 let me know right now. 

18 MR. BROOKMAN: Steve Rosenstock? 

19 MR. ROSENSTOCK: Steve Rosenstock, Edison 

20 Electric Institute. For the condensate pump you are 

21 saying 25 and this is in the replacement, 25% of 

22 installations without AC is that central AC is that 
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1 what you are referring to? 

2 MR. FRANCO: Yes, I can give that 

3 clarification that's central air conditioners. 

4 MR. ROSENSTOCK: And again thank you for 

5 that Steve Rosenstock, EEI and then are you assuming 

6 that number stays static over the next 20 - 30 years 

7 because most new homes are built with central AC so 

8 wouldn't that percentage go down over time? 

9 MR. FRANCO: We do segment our household 

10 sample between replacements and new construction. In 

11 terms of new construction, that fraction is already 

12 lower. In terms of the current stock, it would be 

13 higher so that is already taken into account, thank 

14 you for that comment. 

15 MR. ROSENSTOCK: Thank you. 

16 MR. MCGRUDDEN: Charlie with ACCA. On the 

17 -- some of these I guess - adders, you call them -- have an 

18 electric use implied themselves, is that factored 

19 into the analysis? 

20 MR. FRANCO: Thank you so much for that 

21 comment. I was actually going to bring that up, I 

22 forgot to bring that up earlier. For example heat 
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1 tape and the condensate pump do have in fact 

2 electrical components that we will be discussing 

3 later. They also have components in terms of 

4 actually doing repair and maintenance to them and 

5 those are accounted in the repair and maintenance as 

6 well, thank you for that comment. Let's move on to 

7 the next one. 

8 MR. BROOKMAN: Let's wait right there, we 

9 are moving on to a subject matter there so we should 

10 pause and we have a comment from or a question from 

11 Mark Nayes who asks, condensate pumps are far less 

12 common in Minnesota. Mostly the AC and furnace 

13 condensate drain to a floor drain, is there a worst 

14 case scenario for installation costs? 

15 MR. FRANCO: Thank you for that comment. 

16 MR. BROOKMAN: And Rick? 

17 MR. MURPHY: Victor thank you for this and 

18 I understand there is another phase of the life-cycle 

19 costs we haven't gone into but just thinking about 

20 what we have covered thus far, equipment costs, 

21 installation costs, and how this comes into play and 

22 the life-cycle cost analysis. I am looking at the 
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1 life-cycle cost spreadsheet that was provided by DOE. 

2 And the sensitivity that I think I'm 

3 drawing from this on how important this information 

4 is and good data, and it appears that installation 

5 costs are a sizeable component of the overall 

6 installed costs so when I look at the life-cycle cost 

7 savings of a 92% versus an 80% of $39.00 over the 

8 life of that piece of equipment increases in the 

9 installed costs and equipment costs by $39.00 could 

10 have a direct impact or additional savings or reduced 

11 costs in equipment or installation costs could 

12 actually increase that. 

13 I just want to make sure I'm following the 

14 logic here because to me that's a message to our 

15 industry to ensure that we get these installation -- 

16 these data on installation costs particularly right 

17 because it can have a really important change in the 

18 way the life-cycle costs actually comes out. 

19 MR. CYMBALSKY: This is John from DOE. 

20 Yeah, we agree. We think all the data that is part 

21 of this is important to get your feedback on so that 

22 is why we are here today. If you have comments on 
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1 the data, what the values should be please submit the 

2 data and we will consider. 

3 MR. MURPHY: Thank you John, Rich, Murphy 

4 again. I guess my point John, was with installation 

5 costs and equipment costs, those are zero dollars 

6 right so it is a wonderful impact to the life-cycle 

7 cost savings in the present value analysis is that 

8 correct? 

9 MR. CYMBALSKY: Right so they are upfront 

10 costs that's right and those time you get the savings 

11 back at a discounted format, that's correct. 

12 MR. BROOKMAN: Final comments on the 

13 foregoing slides? Mark? 

14 MR. KREBS: I was just wondering at what 

15 point would it be good to discuss the discount rates? 

16 MR. BROOKMAN: That's going to come later. 

17 MR. CYMBALSKY: If we click to the next 

18 slide you are going to see why we are going to take a 

19 break, so we are going to all eat and we are going to 

20 get ready for this one when we come back. 

21 MR. BROOKMAN: I am going to propose, we 

22 usually take an hour for lunch but we -- I'm worried 
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1 we are not going to get through all of this, I am 

2 going to propose we do this in 45 minutes. It's now 

3 1:00 which means we resume at 1:45. For those of you 

4 who are not familiar with the Forrestal Building 

5 please make sure you have a badge, this room will be 

6 secured. There are restrooms on both ends of the 

7 hall, there's a big cafeteria down to the ground 

8 floor. 

9 (Whereupon the meeting recessed for lunch to 

10 reconvene at 1:45 p.m.) 

11

12

13

14

15

16

17

18

19

20

21

22
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1 A F T E R N O O N S E S S I O N 

2 MR. BROOKMAN: So we are now by my 

3 reckoning on slide number 51 and we are going to 

4 proceed with Victor Franco life-cycle costs and 

5 payback period analysis, installation costs by market 

6 segments. 

7 MR. FRANCO: Thank you so much, this is 

8 Victor Franco again. Welcome back -- thank you. So 

9 I'll start this slide -- this slide is an eye sore 

10 obviously it is a little bit better in printed form 

11 hopefully you can read a little bit. It is not meant 

12 to go over all the details it is just meant to kind 

13 of be an overview of what we have discussed in terms 

14 of the installation costs for non-weatherized gas 

15 furnaces. 

16 The main purpose here is to -- 

17 MR. HUNT: Is that in the technical 

18 support document somewhere? 

19 MR. FRANCO: This is correct I was going 

20 to point that out. This chart is in appendix 8D. 

21 MR. HUNT: Thank you, Marshall Hunt. 

22 MR. FRANCO: And there is a further 
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1 description about what this all means and everything. 

2 I just wanted to point out a couple of things in this 

3 to kind of summarize installation costs. One main 

4 thing is that we disaggregate the cost between the 

5 different markets as I have described earlier, the 

6 building sample kind of has some of the 

7 disaggregation. 

8 So if we start from the REC sample which 

9 is the yellow box then we consider whether the house 

10 is going to be installing a condensing furnace. In 

11 terms of whether the condensing furnace is already in 

12 the house or not that's taken into account in these 

13 boxes and there are fractions that you can actually 

14 read and see what are the fractions that are the 

15 segmentation of these -- again this is very detailed 

16 and a lot of details is in Appendix 8D. 

17 So the main point is that we do have a new 

18 construction installation cost that is included, we 

19 have the new owners, fractions and we have 

20 replacements so it is all included in the analysis 

21 and the fractions are provided here. 

22 MR. CYMBALSKY: So this is John from DOE. 
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1 We are going to move on because in the interest of 

2 time but this is kind of take home homework for 

3 everybody where you can read it better and look at 

4 it. We tried to do I think of every type of 

5 installation possible and we have it on this flow 

6 chart so this is for your comment in the open comment 

7 period. 

8 MR. BROOKMAN: Mark? 

9 MR. KREBS: John Mark Krebs, did our end 

10 time get extended to 5? 

11 MR. CYMBALSKY: 5 o'clock, we have always 

12 had 5 o'clock. It's hard to stop at 5 though just so 

13 you know. 

14 MR. FRANCO: Thank you. So I'll move on. 

15 This is the mobile home gas furnace this explains the 

16 cost that we used. We did take into account venting 

17 and condensate removal where the condensing -- where 

18 the descriptions are in appendix 8D and show how we 

19 applied this for a mobile home, because this is 

20 further answers any questions? 

21 So now we are moving on to a new topic, 

22 this is the energy use characterization. Some of 
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1 these slides are moving a little bit quicker than 

2 others. This is just kind of the purpose and method 

3 so we are trying to determine the annual energy 

4 consumption of non-weatherized gas furnaces and 

5 mobile homes for the LCC analysis and payback period. 

6 This is the equation to focus on because we are going 

7 to be discussing these two parameters. 

8 So first the pool energy use is segregated 

9 between the fuel use and the electricity use so we 

10 will be discussing these separately in the next 

11 couple of slides. Before going into more detail 

12 about the fuel use and we have already discussed this 

13 a little bit, one of the most important components 

14 for the energy use is the building sample. 

15 RECS and c-becks which is also used in 

16 this analysis does provide the energy use of the 

17 building or the household and the -- we use that in 

18 our analysis. They actually provide the heating 

19 energy use. So to determine whether a household in 

20 this survey falls under our analysis we use this 

21 process. 

22 First we determine if the furnace is used 
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1 for space heating or the household uses a furnace for 

2 space heating. If it doesn't, it's out of the sample 

3 and we also see if the household is in a building or 

4 a residential household that is less than 10,000. 

5 That's our criteria for whether it is a commercial 

6 furnace or something else and a residential furnace 

7 at this time. 

8 Finally we take into account the fuel type -- 

9 whether it is gas or something else. Obviously, if it 

10 is gas, it falls into what's currently being analyzed 

11 and in terms of mobile home and non-mobile home RECS 

12 provides what type of household it is. So obviously 

13 the households are manufactured homes or mobile homes 

14 fall into the mobile home gas furnace. 

15 In terms of statistics, it is important to 

16 point out that RECS 2009 has a lot bigger sample 

17 size. It is about 12,000 households that are being 

18 sampled from. Out of these 12,000, 5,700 fall into 

19 households with a gas furnace and these are the 

20 statistics that you can see here and the number of 

21 buildings that represents. That represents almost 54 

22 million homes in terms of RECS. 
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1 This gives you a little bit more detail 

2 about how we do, in terms of adjustments to the 

3 building sample, so I'll go through this a little bit 

4 quickly because in the interest of time but 

5 essentially the one issue that we face is that 

6 obviously RECS 2009 was the building sample RECS in 

7 2009 and we wanted to adjust that for the conditions 

8 in 2021. 

9 So what would be the distribution of these 

10 furnaces in 2021 and also we are trying to adjust 

11 these in terms of shipments so we are more interested 

12 in terms of individual furnaces and where the 

13 distribution is. So we make adjustments to the 

14 building sample in terms of whether the household is 

15 sharing a furnace -- this is the first one. The 

16 buildings will -- multiple furnaces we take into account 

17 as I have described. 

18 Any growth in the market shares up to 2021 

19 and we match the historical shipments that we have. 

20 AHRI provided previously from 19 -- I believe it was 

21 1992 or '91 to 2003 shipments by state. So we used 

22 this data to -- kind of -- that's our basis. We don't have 
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1 any further shipments data segregated by state after 

2 that. 

3 We also take into account that there is a 

4 fraction of households that is reported in RECS that 

5 are actually weatherized gas furnaces which are not 

6 part of this analysis so we tried to take that out of 

7 the sample as well or weight them appropriately so we 

8 don't overestimate. 

9 And that's further discussed in -- 

10 actually this is in appendix 7A. So the next is kind 

11 of an overview of the whole energy use analysis. 

12 MR. BROOKMAN: And we have a question 

13 here. How did you handle the cost to remove a 

14 non-condensing MHGF and install a condensing MHGF 

15 with new venting and condensate removal? That's from 

16 Terri Emol. 

17 MR. FRANCO: Thank you so much for that 

18 comment. We actually passed that quickly just going 

19 back to that slide 52. As you can see there's the 

20 condensate removal that is taken into account. 

21 Further details about the venting which is a little 

22 bit different in mobile homes is described in the 
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1 appendix 8B which is described installation. 

2 Basically the venting in the mobile homes 

3 is very short. Usually it vents up through the roof, 

4 the condensing furnaces usually do the same thing 

5 except that it is classic PVC usually and it uses 

6 some type of concentric for the direct venting all 

7 mobile home furnaces to be directly vented so those 

8 are consideration that we are taking into account and 

9 they are fully described in the appendix 8D. 

10 So obviously I'll be describing this in 

11 the slides just to give you a sense of all the 

12 different factors that are taken into account and I 

13 will go through these all in detail. 

14 Again if we start from your right hand side there's a 

15 fuel use and an electricity use, which I will be 

16 describing separately. 

17 Just to note that we do have a separate 

18 standard for standby and we take that into account as 

19 well. That's part of the electricity use component 

20 and all of these different factors and data inputs 

21 are part of this model. One of the main inputs again 

22 is the RECS energy use data and we will be talking 
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1 about that in more detail in the coming slides. 

2 MR. BROOKMAN: Frank Stanonik? 

3 MR. STANONIK: Frank Stanonik, AHRI. I'm 

4 sorry Victor, can you go back just for a second to 

5 slide 55? So the very last bullet there are you 

6 saying that this fact that DOE multiplied RECS by 

7 weight of households so are you saying that for every 

8 household in the North that had a furnace you are 

9 assuming that 97% of those also had an air 

10 conditioner, is that what that means? 

11 MR. FRANCO: Yeah, I'm sorry. There's 

12 probably -- it's not very well written in terms of what 

13 that means. That is in relation to weatherized gas 

14 furnaces and that's supposed to represent is that in 

15 the North only 3% of furnaces are weatherized gas 

16 furnaces so it's 3% of furnaces that have central air 

17 conditioners.conditioners Based on shipments that AHRI has 

18 provided we kind of -- 

19 MR. STANONIK: Oh it's only weatherized? 

20 MR. FRANCO: Only weatherized. 

21 MR. STANONIK: Okay. 

22 MR. CYMBALSKY: What is says is that there 
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1 is all of these furnaces 97% are non-weatherized. 

2 MR. FRANCO: Correct yes and I'm sorry 

3 it's not -- 

4 MR. BROOKMAN: Dave please? 

5 MR. SCHROEDER: This is Dave Schroeder. 

6 On the flow chart you have the AFUE of existing 

7 furnace which looks like it is controlled by RECS 

8 and historical shipment data, can you describe how 

9 you make the determination on an individual home 

10 basis what the AFUE existing furnace will be? 

11 MR. FRANCO: That's actually a very good 

12 question and that's a very important detail actually 

13 from that analysis. So first, we actually have quite 

14 a bit of historical data provided by AHRI about 

15 historical shipments of condensing and non-condensing 

16 even by efficiency, different efficiency levels. 

17 Going back to I believe 1976, 1976-1977, 

18 we used that data to kind of tell us what the 

19 different levels would be of fraction of say in 1970 

20 it would be 65 AFUE types of homes that have 65% AFUE 

21 units. More recently we actually have segregated 

22 also between condensing and non-condensing by region. 
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1 So what we essentially do is we select the 

2 household and based on all of that data that's 

3 regional. We say, for example, you are in a region in 

4 the North and RECS says that your household furnace 

5 is 10 years old, so that would mean that it was 

6 purchased in 1999. So there's a lookup table it goes 

7 from 1999, and then it selects based on the likelihood 

8 that it would be one of those efficiency levels -- so 

9 say, 1999 -- 20% or 30% of furnaces are condensing. 

10 So then it would select 30% of the 

11 condensing, 70% at a time non-condensing. If it was 

12 in the South maybe it is only 10% condensing and 90% 

13 uncondensing. 

14 MR. SCHROEDER: So is that the same as the 

15 way the base case AFUE is assigned? With the 

16 exception of this is now not old furnaces -- this is 

17 current or future. 

18 MR. FRANCO: That is absolutely correct. 

19 Then in the base case which we will be describing 

20 later we are projecting those fractions to 2021 by 

21 region. 

22 MR. SCHROEDER: Okay thank you. 
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1 MR. FRANCO: Thank you for that question. 

2 Obviously, provide any more detailed questions in your 

3 comments as I said we are going through this very 

4 quickly. 

5 So fuel uses, obviously the most important 

6 component, this is our methodology. Basically we have 

7 multiplied burner operating hours by the input 

8 capacity. To determine the input capacity, we base that 

9 on the household characteristics, historical shipment 

10 data of the input capacity and the model availability 

11 in the AHRI directory. 

12 Essentially we size the household to 

13 different input capacity. To determine the burner 

14 operating hours we basically determined the 

15 building's heating load and divide that by the useful 

16 output. What we mean by useful output is in terms of 

17 the actual output that is the furnace in terms of the 

18 fuel. For those of the electrical components give 

19 off some heat and this is all based on the proposed 

20 federal standard that we discussed yesterday, all of 

21 these equations. 

22 Details about this can be found in 
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1 appendix 7B of the TSD. Let's go into more detail 

2 about the building heating load. So we are 

3 calculating this for 2021. Just focus the most 

4 important component is the actual what is listed here 

5 as QYR which is the energy use that is provided from 

6 RECS. 

7 Let's see the energy use of the heating 

8 component. We make adjustments to that later that I 

9 will be describing. 

10 We multiply that AFUE of the existing and 

11 we add the blower heat which is the main heat useful 

12 heat that is provided by the electrical components. 

13 We do some adjustments which I will be describing and 

14 we divided by the furnace count: some households have 

15 multiple furnaces, so say if a household has two 

16 furnaces their heating load is calculated to be 

17 serving -- 50 million BTUs, we assume that each 

18 furnace will be 25 million BTUs. 

19 And if we are in a case where the furnace 

20 is shared between multiple houses we multiply that by 

21 the number of units served. 

22 MR. BROOKMAN: Frank Stanonik? 
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1 MR. STANONKIK: Frank Stanonik, AHRI. 

2 Victor, I appreciate you might now be the RECS expert 

3 but so RECS actually surveys a certain number of 

4 households, actually surveys them right. Do you know 

5 does RECS ask the question as to whether the 

6 household has had significant, I'm going to call it, 

7 envelope improvements? 

8 MR. FRANCO: Thank you Frank for that 

9 question. It does actually. It has quite a 

10 significant, yeah, number of questions that I would ask, 

11 yep. 

12 MR. ROSENSTOCK: Steve Rosenstock, Edison 

13 Electric Institute. I guess especially kind of 

14 following up on that for the building shell 

15 efficiency especially for the new homes built between 

16 now and 2021, what assumptions are you making in terms 

17 of the improvement in terms of building shell 

18 efficiency for the new homes? 

19 MR. FRANCO: That is an excellent question 

20 that leads actually to the adjustment factors. So in 

21 addition to what I have described there are 

22 adjustment factors which is the adjustment factor. 
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1

2 194 

3

4 One of them is actually to the building shell 

5 efficiency which is the second bullet so if you go 

6 down to adjustment factors we adjust for the building 

7 shell efficiency which essentially comes from the AO 

8 2014 what they are assuming between what is in RECS 

9 2009 and what would it be in 2021 and so there is an 

10 adjustment and further details are on the TSD about 

11 how the magnitude of that. 

12 MR. ROSENSTOCK: What section of the TSD 

13 I'm sorry, I just wanted to double check. 

14 MR. FRANCO: This would be in chapter 7 

15 and the full actual information is in appendix 7B. 

16 MR. BROOKMAN: Yes, please? 

17 MR. WHITE: Chuck White, I just wanted 

18 clarification. You talk about shared units so we 

19 have multiple occupancies with a single furnace 

20 serving say two or three apartments so there are 

21 different occupancies. 

22 MR. FRANCO: That is correct, yes. The 
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1 RECS has a variable that says if the homeowner has 

2 knowledge about the building if the furnace is shared 

3 between multiple units that is very common in 

4 multi-family situations it could be two or three 

5 units. 

6 MR. BRUNDAGE: Don Brundage, Southern 

7 Company. Your line here says adjusted for changes in 

8 building shell efficiency and climate change in 2021. 

9 Is that the change in the climate zone maps from 

10 ASHRAE and ANSI or is it something different from 

11 that? 

12 MR. CYMBALSKY: This is John from DOE. So 

13 all it is doing is taking the AEO forecast for 

14 heating and cooling degree dates, well in this case 

15 heating degree days and it is tracking population 

16 migration over time. 

17 MR. BRUNDAGE: So it is adjusting for 

18 climate migration and percentage in each climate zone 

19 not changing climate? 

20 MR. CYMBALSKY: Correct. 

21 MR. BRUNDAGE: Okay, thank you. 

22 MR. BROOKMAN: Yes please. 
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1 MR. WHITE: One quick follow-up I've been 

2 encouraged to say. This is Chuck White, PHCC. I am 

3 pretty sure sitting here I don't have the books in 

4 front of me but the mechanical codes prohibit mixing 

5 return air from sleeping quarters from other 

6 occupancies so if you have multiple apartments with a 

7 common furnace then you are going to replace this 

8 according to code, then you are going to have to now 

9 put in three furnaces and three systems and I am 

10 pretty sure without my code books in front of me but 

11 I am pretty sure that is the case. 

12 MR. BROOKMAN: Okay thank you. 

13 MR. FRANCO: Thank you for that comment. 

14 So the last adjustment factor here to discuss is that 

15 we are adjusting the climate conditions in 2009 to 

16 average climate conditions which we basically assume 

17 to be the last or more recent 10 year from NOAA data 

18 climate based on the heating degree days so each 

19 RECS household has a heating degree days and we had 

20 just got on the region to the 10 year average. 

21 MR. ROSENSTOCK: Quick question Steve 

22 Rosenstock, EEI. So are you including 2014 -- the polar 
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1 vortex -- in this analysis? 

2 MR. BROOKMAN: Thanks for the question 

3 Steve. 

4 MR. FRANCO: This goes up to 2013, 2014 

5 wasn't available for this analysis. 

6 Okay so this slide actually summarizes the 

7 results that are coming in for the fuel use. So here 

8 I just wanted for you to see visually the comparison 

9 in the table between the RECS, CBECS data in terms 

10 of the fuel use that is reported there versus our 

11 calculated values in 2021 for the baseline. 

12 So this would be for the 80% furnace. So 

13 as you can see there is a significant difference 

14 decrease because of these adjustments that I 

15 described earlier including for example, building 

16 shell efficiency. I also provided the median in 

17 value to get a sense of the distribution but as you 

18 can see there is this distribution is pretty wide, 

19 kind of has a long tail, you can kind of get a sense 

20 of all we are dealing with a large building sample 

21 and it provides this distribution. 

22 MR. BROOKMAN: Paul Haydock from Carrier, 
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1 who is joining us online, asks a question and the 

2 question is how is blower heat determined? 

3 MR. FRANCO: I'll be addressing 

4 electricity, which will deal with a little bit the 

5 blower heat in the next -- so I just discuss that in 

6 the next slide. 

7 MR. BROOKMAN: Okay. 

8 MR. FRANCO: Thank you for that question. 

9 Blower heat in terms of -- basically we take into 

10 account the furnace fan electricity use. We assume 

11 that -- as well as the current test procedure assumes 

12 that all of the electricity use coming from the 

13 blower is useful heat so we incorporate that into the 

14 useful heat component of this calculation for the 

15 fuel use. 

16 Next we will be describing the electricity 

17 use. So there's two main components in terms of the 

18 electricity use. There's the active mode and the 

19 standby. So what this means is the active mode is 

20 when the furnace is on, the standby is when it is 

21 off. The standby component is important in terms of 

22 the other standby and off mode standard. 
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1 So let's separate those two. First we 

2 have the active mode. So we have three main 

3 components, we have the electrical components that 

4 are part of the furnace these include the blower, the 

5 inducer fan, the electronic condition, those 

6 components. We also include auxiliary components and 

7 this relates to the question that we had earlier. 

8 This is -- we include the heat -- the 

9 condensate pumps in here as well. Finally we take 

10 into account that there is differential electricity 

11 use of the fan during non-furnace operation. What 

12 this means is that if the fan is used during the 

13 cooling period or as a continuous fan or as kind of 

14 providing some air the circulating fan, it is also 

15 taken into account. 

16 We made the same assumptions as we did for 

17 the 2014 furnace fan final rule to determine this, so 

18 it is consistent. Going back to the electrical 

19 component because this was the question before -- in 

20 terms of the furnace fan, we make the same assumptions 

21 that we did in the 2014 furnace fan rule and we take 

22 into account that there are a lot of -- a significant 
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1 number of households that have high static pressure 

2 and their electricity use is significantly different 

3 than would be assumed if you would just use for 

4 example the test procedure assumptions about static 

5 pressure. 

6 So that's already taken into account and 

7 that is consistent with the 2014 furnace fan rule. 

8 MR. BROOKMAN: Victor we have a question 

9 and a comment from Mark Nayes who is joining us 

10 online. Mark, we probably have you unmuted at this 

11 point. 

12 MR. NAYES: Yes I was just going to make a 

13 comment again on the multiple -- the single furnace 

14 serving multiple occupancies. That is against code, 

15 it is a health safety issue that you are not ever 

16 going to see that. 

17 MR. BROOKMAN: Okay thank you, echoing 

18 Chuck's comment thank you. 

19 MR. NAYES: Yes he is absolutely correct. 

20 MR. BROOKMAN: Thanks, Frank Stanonik? 

21 MR. STANONIK: Frank Stanonik, AHRI. And 

22 again I am going to apologize, I am going back one or 
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1 two slides. So you did recognize that, if you will, 

2 that the heat coming off the blower is useful heat 

3 but I'll say certainly for a non-condensing furnace 

4 that's actually installed in the conditioned space 

5 shouldn't you be counting any of the electric 

6 consumption that occurs during operation as heat to 

7 the space? 

8 MR. FRANCO: That is correct, that is 

9 accounted for in the analysis that is further 

10 described in appendix 7B. 

11 MR. STANONIK: Oh okay, so okay, I can talk 

12 lower okay. 

13 MR. FRANCO: Yes sir, I just wanted to 

14 focus on the blower because it is the biggest 

15 component but you are correct. 

16 MR. VERSHAW: Victor, Jim VerShaw, 

17 Ingersoll Rand. I have been trying to figure out how 

18 -- what you used for blower power. I saw on the 

19 earlier flow chart it was average blower power and 

20 how you determined what it was in heating and cooling 

21 and standby. I couldn't quite figure it out. 

22 I looked at table 7B.3.1 that says furnace 
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1 fan motor consumption by product type and furnace fan 

2 size. Is that heating or is that cooling or what? 

3 MR. FRANCO: The furnace fan power has to 

4 be determined both for the heating use for the 

5 cooling, usually it is higher for the cooling and for 

6 the continuous fan so there is actually three 

7 operating modes that we are considering. We did the 

8 same assumptions as we did in the 2014 furnace fan 

9 rule so the -- we take into account the sizing of air 

10 conditioner, the sizing of the heating and what the 

11 power would be. 

12 MR. VERSHAW: So if you took a range of 

13 static pressure is that right? 

14 MR. FRANCO: That is correct. 

15 MR. VERSHAW: You took a range of static 

16 pressures and then you must have checked typical 

17 furnace that would give a certain blower, so if the 

18 cooling -- so how does 7B.3.1 -- how does that work 

19 into what you did? What are those powers? 

20 MR. FRANCO: Right, yes. Thank you for 

21 that clarification. These are just for the heating 

22 because -- 
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1 MR. VERSHAW: So these are heating. 

2 MR. FRANCO: These are just heating yes. 

3 MR. VERSHAW: Okay now we are talking 

4 about using the new AFUE test procedure which if you 

5 have a -- and that's for 2-stage if you have got more 

6 than the 58% ratio, you are only testing low speeds 

7 so it should only be low speed. There's no way in 

8 the world that a 5 ton can almost have a thousand 

9 watts at low speed heating. 

10 Is this what you used for heating? I 

11 think we can get a lot, lot, lot, lot, lot lower than 

12 that. Longer hours but a lot lower. 

13 MR. FRANCO: I appreciate it and it is 

14 actually -- it should be listed they are both the 

15 high fire and low fire. What's listed here and it is 

16 not quickly labeled, it is just the high fire. The 

17 low fire would be -- 

18 MR. VERSHAW: High fire doesn't make any 

19 difference. 

20 MR. FRANCO: It would be significantly 

21 less in the X13. 

22 MR. VERSHAW: Well what went into the 
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1 analysis? 

2 MR. FRANCO: So similar to what we did in 

3 the 2014 analysis we have two values, we have the 

4 high fire and low fire. 

5 MR. VERSHAW: Is there any way we can get 

6 that? 

7 MR. FRANCO: That's up to -- 

8 MR. VERSHAW: I have another. Now, you 

9 guys are saying that there is a 5% higher power usage 

10 by condensing furnaces over non-condensing furnaces, 

11 but yet the FER rule says it's 7% or 8% if you look 

12 at the two curves, you know the intercepts are about 

13 8% apart and I am wondering why you chose 5% here. 

14 MR. FRANCO: That's the -- I would have to 

15 look at what you are comparing to. 

16 MR. VERSHAW: Remember the rule is FER is 

17 equal to .44 times something plus a number and the 

18 other one was non-condensing and the condensing was 

19 .44 times capacity plus a different number, so these 

20 same slopes, the curves are apart by 8% -- 7 or 8%, 

21 but you just said it was 5% more for condensing and 

22 these are supposed to be kind of averages, I don't 
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1 understand though how those two are different. 

2 MR. FRANCO: I really appreciate that. 

3 What we need to do is we need to clarify that section 

4 a little bit more. It's very condensed so we can 

5 provide other details. Everything is consistent with 

6 the 2014 if you go to that rule you will see all of 

7 the numbers actually the actual values of what we 

8 used for different -- 

9 MR. VERSHAW: And those are actually in 

10 the technical document? 

11 MR. FRANCO: In the technical document -- 

12 MR. VERSHAW: In the technical document 

13 spreadsheets? 

14 MR. FRANCO: No it is in the technical 

15 documentation but we could provide that. 

16 MS. ARMSTRONG: We'll get it back to you. 

17 MR. FRANCO: We will get that back to you. 

18 MR. BROOKMAN: Mark Krebs? 

19 MR. KREBS: Yeah this is the one I told 

20 you I was going to hold you too Victor remember, okay 

21 I'm holding you to it. So in order to answer the 

22 question basically we have to bring in the whole 
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1 furnace fan rule which I guess I just want to express 

2 at this point you know how frustrating that is. 

3 It is no longer bifurcated it is 

4 trifurcated or maybe it is quadrifurated I don't 

5 know, something like that. But it certainly, you know, 

6 the complexity of this rule is just, you know, 

7 compounded because of those factors and just for the 

8 record and in that record for the furnace fan rule 

9 AGA submitted testimony that shows comparison to 80% 

10 furnace and a 93% furnace okay, that's not 92 it's 93 

11 so you know a little difference there so what they 

12 are saying is that electric uses and kilowatt hours 

13 for the 80% was up 191 and the 93% it was 687. 

14 Now that's a little bit more than 5% I 

15 estimate without breaking out my calculator but you 

16 know and I'm not saying this is a typical case. They 

17 are not saying it either what they are saying is it 

18 came out of the AHRI's database and you know and on 

19 top of that is this whole issue of static pressure 

20 and the duct work, the typical duct work as you call 

21 them that really you know reads crumby duct work 

22 because typically they are crumby. 
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1 And so what is that impact you know if you 

2 could lay it on a table, what would in some average 

3 worst case average and best case maybe as far as the 

4 static pressure component from the condensing furnace 

5 itself that is additive to that static pressure 

6 component of the duct work you know and your papers 

7 you did you know good, average and typical or 

8 something like that. 

9 You know something similar where it is 

10 laid out to where people can see what is happening so 

11 we don't get frustrated, having to resort back to the 

12 furnace rule and that TSD, you know, I think 957 pages 

13 of TSD is sufficient in my opinion so I would like to 

14 keep it there. 

15 MR. FRANCO: Thank you for that comment, 

16 we will definitely clarify that. 

17 MR. BROOKMAN: Steve Rosenstock? 

18 MR. ROSENSTOCK: Steve Rosenstock, Edison 

19 Electric Institute. I am also looking at table 

20 7D.3.1. There is a part that says furnace fan size 

21 ton I think you are saying that is really the air 

22 conditioners size that's combined with it so three 
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1 tons is typical kind of shipment weighted average. 

2 You are saying 467 watts for non-condensing, not 

3 weatherized gas furnace and then 490 watts for the 

4 condensing, that's at the high value right, that's at 

5 the maximum heating load? 

6 MR. FRANCO: That is correct. 

7 MR. ROSENSTOCK: And for the low speed or 

8 the low load what are the values, half of that, 

9 one-quarter of that, what are we talking about just 

10 in terms of relative and then I will have a follow up 

11 question. 

12 MR. FRANCO: Okay, they are almost half 

13 they are about 60% of that. If you had access to the 

14 spreadsheet there is just to point out if anybody has 

15 access there's a worksheet that is called Energy Use 

16 Calcs and in that sheet there is a table that lists 

17 those values. 

18 MR. ROSENSTOCK: And then I just want for 

19 point of comparison for the fans that they are 

20 replacing, for the older fans you know for the -- 

21 I'll say the floor standards, what percentage savings 

22 are we talking about in terms of wattage for both 
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1 high and or low you know? How much of a reduction 

2 already for -- I know you are talking about fuel 

3 switching but even this rule itself is significant 

4 reduction in electricity uses so I am just kind of 

5 curious of a general ballpark percentage. 

6 MR. FRANCO: Just to clarify, you are 

7 comparing a furnace with a PSC motor currently on 

8 the market compared to the 2014 standard? 

9 MR. ROSENSTOCK: Yeah I'll say a 2019 

10 motor versus a 2015 motor, what would be the relative 

11 savings about 20%? 

12 MR. FRANCO: On average it was between 30 

13 and 40%. 

14 MR. ROSENSTOCK: 30 and 40%, thank you. 

15 So these values are already down, thank you. 

16 MR. FRANCO: Yes, correct. 

17 MR. BROOKMAN: We have a comment from Paul 

18 Haddock, maybe it's a question. How are the blower 

19 on and off delays handled between non-condensing and 

20 condensing furnaces? The 103 standard designs 

21 shutter off delay for condensing that it does for 

22 non-condensing. 
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1 MR. FRANCO: Yes we do have blower on/off. 

2 I'm trying to take a look if I can answer the 

3 question. We will get back to that in the future. 

4 So here are the standby and the standby 

5 takes into account the burner operating hours, 

6 according to operating hours and also the continuous 

7 fan operating hours as well. So here in terms of the 

8 non-weatherized gas furnaces AFUE standards this is 

9 the overall result in terms of fuel use and 

10 electricity use. We have decided the results between 

11 the national North and rest of country. 

12 So I'll stop a little bit in case there is 

13 any questions because this is kind of the conclusion 

14 to the energy use. 

15 MR. BROOKMAN: Jim? 

16 MR. DELASKI: I don't understand why 

17 things go down like they do and then back up but I 

18 think that I don't know enough about what went into 

19 it and so once you get me that maybe I will 

20 understand it or I will be able to ask a smarter 

21 question. 

22 MR. FRANCO: Yeah let me point out one 
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1 that might be an obvious -- you can see 98 there's a 

2 negative value there. That's a different technology. 

3 We are assuming that that is already at kind of the 

4 max tech ECM multi-stage modulating that usually more 

5 operating hours associated with electricity and 

6 that's why you see a negative value on that one. 

7 We will try to clarify so you can provide 

8 comments. 

9 MR. BROOKMAN: Frank Stanonik? 

10 MR. STANONIK: Well, this particular slide 

11 this will be the first opportunity so I am going to 

12 raise the question. So in the NOPR in the description 

13 of the trial standard levels as presented there is 

14 identified at the trial standard levels 1 and 2 

15 looked at the North and rest of the country 

16 separately and then when you get to trial level 

17 standards 3, 4 and 5 it appears that it only looked 

18 at national average. 

19 And yet, if you look at this slide, the rest 

20 of the country which I will choose to call the South 

21 the estimated consumption of just the fuel use is 

22 about 70% of what is the national average and so I 
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1 guess I am trying to understand why trial, well 

2 basically based on the way the trial standard levels 

3 are presented why didn't DOE do the separate analysis 

4 of the effect of condensing furnace requirement on 

5 the South? 

6 MR. CYMBALSKY: They did. 

7 MR. STANONIK: But that is not what the 

8 standard levels are. 

9 MR. CYMBALSKY: Frank it is a national 

10 standard but it is evaluated you know North, South 

11 and everything but it is a national 92 it is not an 

12 80/92. 

13 MS. ARMSTRONG: This is Ashley from DOE. 

14 So it's just how we are talking about the levels 

15 right, it is the difference between the first couple 

16 that you mentioned there's a regional standard in 

17 there which would have different requirements for 

18 different regions of the country versus a national 

19 standard. 

20 It doesn't necessarily mean that national 

21 averages were used, they are still built off the same 

22 fundamental analysis but it is the difference between 
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1 the TSL considering your regional standard versus a 

2 national standard. 

3 MR. FRANCO: This is Victor Franco. 

4 MR. BROOKMAN: Michael McCabe? 

5 MR. MCCABE: Michael McCabe. Victor is 

6 there any rebound effect build into the life-cycle 

7 cost analysis that is the different efficiency 

8 levels, the building heating load the same? 

9 MR. FRANCO: Thank you for that question 

10 and in the LCC analysis we do consider rebound 

11 effect. We assume that the economic benefit of the 

12 increased comfort is equivalent to the energy 

13 consumption so we don't think in terms of economics, 

14 that into account when we go to the NIA analysis we 

15 do take into account the rebound effect and we will 

16 talk about the magnitude of that when we talk about 

17 the national impact analysis. 

18 MR. MCCABE: Would you repeat again what 

19 is central to life-cycle costs? Because when you 

20 start talking about the economic benefit -- 

21 MR. FRANCO: Thank you, what I mean by that 

22 is a consumer is using the furnace longer to provide 
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1 greater comfort. One way to actually put it in 

2 economic terms what that consumer benefit is, is just 

3 to say that it is equivalent to the actual energy 

4 cost. 

5 MR. CYMBALSKY: So this is John from DOE -- 

6 let me step in. I think what Michael is asking is 

7 will people adjust their thermostats if they buy a 

8 more efficient piece of equipment is that your 

9 question? The rebound you are looking for? 

10 MR. MCCABE: Yes. 

11 MR. CYMBALSKY: Did you use an adjustment 

12 factor? 

13 MR. FRANCO: Not for the LCC but the NIA. 

14 MR. CYMBALSKY: So not in the LCC. 

15 MR. MCCABE: Thank you. 

16 MR. BROOKMAN: Dave? 

17 MR. WINNINGHAM: This is Dave Willingham 

18 with Allied Air. Just to clarify on the electrical 

19 consumption -- until you get to TSL4, electrical 

20 consumption appears to be going down as given the 

21 fact that fan energy goes up with higher efficiency 

22 and you have condensate pumps and heat tape on 90% 
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1 can you explain that? 

2 MR. FRANCO: Yes, thank you and I will be 

3 clarifying that in the documentation but that is an 

4 important question. What actually happens is that we 

5 are assuming that the input capacity of the furnace 

6 is constant for all of the efficiency levels, so the 

7 actual operating hours decrease once you get to 

8 higher efficiencies so just to put that in more 

9 concrete. 

10 Say you have an 80% efficient furnace and 

11 you are 80 million BTUs, your output is 64. Once you 

12 go to a non-condensing we are assuming that you are 

13 using the same input capacity. In this analysis and 

14 that is the reason why you kind of see this effect. 

15 MR. WINNINGHAM: This is Dave with Allied. 

16 Just a follow up question -- you know the load is the 

17 load is the load and wouldn't you size it according 

18 to output capacity not input capacity to -- I mean if 

19 your heat load is whatever it is you will size it 

20 according to the output that is needed to maintain 

21 the load not the input. 

22 MR. FRANCO: Thank you and please submit 
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1 comments in that regard. We would really appreciate 

2 that. What is happening in this analysis we have 

3 gotten some contractor feedback from the stakeholder 

4 input that contractors what they do is they generally 

5 just size based on what's the product so please put 

6 your comments that so if we need to correct it we 

7 will correct that. 

8 MR. BROOKMAN: Neil go ahead. 

9 MR. LESLIE: Neil Leslie, GTI. I would 

10 like to get a little more clarification on that last 

11 item related to the use of a rebound effect in the 

12 NIA but not in the LCC. Could you explain -- first 

13 of all, do I have it correct that there is no rebound 

14 effect included in the LCC analysis spreadsheet is 

15 that -- I just want to make sure I'm hearing it 

16 correctly. 

17 MR. FRANCO: That is correct yes. 

18 MR. LESLIE: And there is a rebound effect 

19 17% I don't remember what it is exactly, whatever 

20 that rebound effect would be somewhere in that part 

21 of town in the national impact analysis, I just want 

22 to make sure I have all of that exactly correct, 
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1 right? 

2 MR. FRANCO: That is correct, yes. 

3 MR. LESLIE: Okay whatever that number is, 

4 I don't necessarily care exactly what it is but so I 

5 would like to know why it is in the NIA but not in 

6 the LCC? 

7 MR. CYMBALSKY: Let me try to tackle the 

8 consumer choice here. So if I am a consumer and I am 

9 evaluating an efficiency of 80 and an efficiency of 

10 92 and I'm comparing what the energy use of those two 

11 will be, I don't think I'm factoring in the fact of I 

12 am going to adjust my thermostat higher, around 92 

13 versus 80 when I do the math in my head, so I think 

14 fundamentally that's why you would separate that. 

15 Now once the unit is in your house you 

16 could react to the fact that your marginal cost of 

17 heating your home has changed and then mentally you 

18 will go and say wow it's a lot cheaper, maybe I'll 

19 inch it up a degree or two. So fundamentally that's 

20 why you would do it that way. 

21 MR. BROOKMAN: We have a question from 

22 Everett Shorey from online. His question is why is 
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1 the mean electricity use in the ELs 1 through 4 727 

2 to 957 kilowatt hours per year while the median is 

3 330 to 355 and the mean for EL0 is also 349 

4 (referring to the numbers in the LCC model on the 

5 website). 

6 MR. FRANCO: I didn't fully get the first 

7 part, could you just repeat that? 

8 MR. BROOKMAN: John Cymbalsky is saying we 

9 need to get back on that one and then another 

10 question from Paul Haddock. Is the blower power 

11 consumption of 90% the same as 92 the same as 95% or 

12 does DOE add additional power needed for higher AFUE 

13 levels? 

14 MR. FRANCO: So that's a great question. 

15 We do have higher power use in terms of going from 

16 non-condensing to condensing. We don't have in terms 

17 of going from say 90 to 92 a difference in the 

18 electricity consumption but it is higher between 

19 non-condensing and condensing. 

20 MR. BROOKMAN: Thank you. Frank Stanonik? 

21 MR. STANONIK: Frank Stanonik, AHRI. I'm 

22 going to follow up Neil's question and I understand 
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1 what John said but if in I would say in just the same 

2 way and I don't disagree with this that DOE is 

3 looking at RECS data to kind of see okay what is 

4 consumption that actually occurs in the field, I 

5 think that in terms of life-cycle cost if in fact that 

6 consumer when they do get a more efficient furnace 

7 decide that they want to have their house warmer they 

8 in fact have changed what they will pay on a monthly 

9 basis for the fuel they have changed the relationship 

10 of the benefit in cost of reduced energy cost 

11 compared to what they paid for that product and I 

12 disagree with the conclusion that well that increase 

13 comfort has a monetary value which we will just 

14 assume totally balances what they have accepted as a 

15 higher bill. 

16 I think that's a little bit subterfuging 

17 the life-cycle cost analysis because that consumer in 

18 fact whether they knew it or not they just extended 

19 out how long it is going to take them to pay back 

20 what they paid for their new furnace, the higher 

21 efficient product. 

22 MR. BROOKMAN: Andrew deLaski? 
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1 MR. DELASKI: I disagree with you Frank. 

2 If a consumer chooses to pay $10.00 for something it 

3 is because they value that something at $10.00. In 

4 fact economic theory will suggest that that is the 

5 minimum they value it at. In fact if we are able to 

6 do some willingness to pay evaluation I would find 

7 this is a very conservative number. 

8 People turn their thermostat up because 

9 they value that. If Gary Fernstrom was here who has 

10 been at many of these proceedings, he has made this 

11 point time and time again in these proceedings that 

12 when a consumer chooses to use something more because 

13 it is more efficient because the consumer values 

14 that. 

15 And for us to say well in the consumer 

16 economic analysis say well we are just going to throw 

17 that out and ignore that value would be a disservice 

18 to the consumer for getting a value. Now as an 

19 energy efficiency advocate I wish we were getting the 

20 energy savings but the fact is that consumers when 

21 things are more efficient they use them more. 

22 We can debate the rebound effect. It exists 
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1 undoubtedly. The size of it is widely debated. The 

2 Department says 15% in this proceeding. I think it's 

3 probably too high. Steve Nadel's work says it should 

4 be 1 to 12% is the range that is discussed in the TSD 

5 but to say that that has no value to consumers, 

6 because they are now warmer you know that's just 

7 ignoring the practice of consumers and I also think 

8 it's ignoring the fact that it is probably a very 

9 conservative estimate because they probably evaluate 

10 more but they didn't have to pay more. 

11 MR. BROOKMAN: Jim? 

12 MR. VERSHAW: Jim VerShaw. I guess the 

13 reason it comes up is we are looking at energy 

14 savings that we know aren't exactly right because of 

15 the rebound effect whether it is whatever and -- 

16 MR. DELASKI: And that's why I think that 

17 it is proper that the government accounts for it in 

18 the NIA. So when we talk about the quad saved we are 

19 not counting it. 

20 MR. VERSHAW: So when you do the simple 

21 payback or the payback for the home owners, does that 

22 include the rebound effect or not? I was making a 
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1 point by asking a question, so it's not in there so 

2 if you look at that, if I remember right we are in 

3 the 7 to 8 year payback for this rule not including 

4 the rebound effect. So it's really 1 to 15% longer 

5 than that, whatever that would be. 

6 MR. DELASKI: I disagree because they are 

7 getting value right, they are getting a value in 

8 improved warmth. They are choosing to select. 

9 MR. VERSHAW: Show another column with how 

10 much they are spending more. 

11 MR. DELASKI: And some consumers think 

12 that's election and some don't so this is an average 

13 value. 

14 MR. VERSHAW: And they have a Crystal Ball 

15 attachment for this thing they can do that. 

16 MR. BROOKMAN: Yes Steve Rosenstock? 

17 MR. ROSENSTOCK: Steve Rosenstock, Edison 

18 Electric Institute. I'll just looking at EL2 for the 

19 national number going into this. We talk about on 

20 the fuel use side 55 million BTUs for natural gas at 

21 a dollar a therm that's $55.00 a year. On the 

22 electricity side 13.9 kilowatt hours that's about 12 
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1 cents, national average it is about $1.74 per year. 

2 So you add those up it is about $56.00 a 

3 year. What percentage will consumers give back in 

4 terms of rebound effect, that's a question I don't 

5 know. I am sure there are a lot of studies that show 

6 numbers all over the map like Andrew was saying but 

7 in terms of will it make energy savings, cost 

8 savings? No. Will it vent it? Yes. 

9 How should it be accounted for? Right now 

10 and in other rulemakings you know again I don't think 

11 they accounted for rebound effect for like heat pumps 

12 so you know to account for it here and not know their 

13 products doesn't make, it's not really analytically 

14 consistent. 

15 MR. BROOKMAN: Yes, Aniruddh? 

16 MR. ROY: Aniruddh Roy, Goodman. Victor, 

17 on this table with the 80's, are they all using the 

18 BPM, the constant torque BPM motors? 

19 MR. FRANCO: This would be actually X13. 

20 MR. ROY: X13? 

21 MR. FRANCO: X13 yes, okay. So moving on, 

22 this is I think we had sufficient discussion. 
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1 MR. BROOKMAN: I think we have covered 

2 these materials sufficiently we are going to move on. 

3 MR. FRANCO: So there are three slides, in 

4 terms of energy prices. If we could limit the 

5 questions to the last slide in terms of energy prices 

6 that would be good but let me know if you have any 

7 questions. So basically this first slide provides 

8 the references that we are using in terms of this 

9 aggregated energy prices that we are using in the 

10 analysis. 

11 What I mean by that, is we have energy 

12 prices for each household based on the region of the 

13 country they are at and by month. The energy prices 

14 that we use in terms of calculating energy savings 

15 are marginal in terms of electricity and natural gas 

16 and the values will be described later. 

17 All the references in terms of getting 

18 these values come from EIA data as it says here and 

19 it is also in the TSD and the baseline -- the year 

20 that we are using to start with is 2012 that's the 

21 latest data that is aggregated by state for all of 

22 these prices. Next after we have that disaggregated 
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1 we use EO 2014 data to project the values into the 

2 future from 2020 to 2040. 

3 Then we use trends after that to project 

4 the values after 2040. 

5 MR. ROSENSTOCK: Can we comment? 

6 MR. BROOKMAN: Please. 

7 MR. ROSENSTOCK: Steve Rosenstock, Edison 

8 Electric Institute. For all the people here in the 

9 room, this chart is showing an estimate of the real 

10 prices, not the nominal prices. These are in 2013 

11 dollars, so it is assuming that prices are going to 

12 increase above inflation from 2015 to 2040 and I have 

13 issues with that, that's another story. 

14 MR. FRANCO: Thank you for that comment. 

15 MR. BROOKMAN: Mark? 

16 MR. KREBS: Yeah I have issues with that 

17 too. 

18 MR. CYMBALSKY: This is John from DOE. So 

19 these are straight from the AEO, so you know we are 

20 not forecasting prices that's not what we do in the 

21 shop so you know this is the government projections 

22 on energy prices which is what we use. 
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1 MR. BROOKMAN: So anybody that had 

2 additional thoughts on this or their own projections 

3 they can send them forward, Mark? 

4 MR. KREBS: Yeah, well, you know the issue 

5 is marginal costs, you know, these are marginal costs 

6 and what you call marginal costs really aren't 

7 marginal costs either. You know Steve Rosenstock and 

8 I were in the room along with the President of APGA 

9 Bert Kalisch when in 1998 when the whole concept of 

10 consumer marginal energy rates was first hatched. 

11 DOE draft report was issued and never 

12 really published. LBNL has a web page on marginal 

13 energy rates and you are still not doing it right. 

14 It's tail block rates we are talking about okay, they 

15 are mentioned in some of these papers that Victor 

16 helped to offer but that is the right way to do it 

17 and I understand it is difficult to do, you know to 

18 track real tariff filings and look at the tail block 

19 rates and how a change in consumption is -- comes 

20 across to consumers in their utility bills but that 

21 is the way to do it. 

22 You know you have time to tear down 30 
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1 furnaces I think you have time to do this. 

2 MR. BROOKMAN: Harvey Sachs? 

3 MR. SACHS: Mark, this is Harvey Sachs. I 

4 certainly understand where you are coming from. Your 

5 advocates have chafed with the AEO forecast for many 

6 years and I guess we sort of became reconciled to the 

7 fact that they are on average equally detrimental to 

8 everybody and that it is sort of -- well one of the 

9 rules of the game like it is not 90 feet along the 

10 baseline. 

11 MR. KREBS: We had an advisory committee 

12 you know that I was on and Steve was on it and you 

13 know this is one of the things that we actually 

14 concluded you know and came across you know all in 

15 favor of doing this and it hasn't been done, you know 

16 and that was 1998. I think it is time to start doing 

17 it. 

18 MR. SACHS: Its past is so mundane. 

19 MR. KREBS: I appreciate you trying to 

20 inject some humor in this but what I am talking about 

21 is looking after my customer's best interest, okay it 

22 is a big deal you know. We are talking you know 
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1 marginal true tail block rates are about 50% of what 

2 DOE has forecast and then those get inflate for 21.5 

3 years, it is a major impact okay and I don't think 

4 it's doing consumers any favors at all. 

5 MR. SACHS: I understand that but I want 

6 to make one other comment. This is Harvey. We have 

7 seen some major churn in how rates and tariffs are 

8 set, particularly on the electric side over the last 

9 couple of decades and that is the inherent 

10 uncertainty as we try to look forward to those two 

11 decades and we have been comfortable and I am happy 

12 to look at that analysis and would appreciate the 

13 chance to read it because I know it has changed my 

14 life. 

15 MR. BROOKMAN: Okay, we are moving on now. 

16 MR. FRANCO: Thank you for all of those 

17 comments. So just one to go to the next slide. This 

18 is the average prices applied in the analysis. As 

19 you can see the average is very different for the 

20 marginal cost and appendix the energy price of -- 

21 which I believe is appendix 8E we do provide 

22 comparison between tariffs analysis we did get from 
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1 APGA some tariffs and we do a comparison of those to 

2 our analysis so if you want to read on that please 

3 provide comments in that regard. 

4 Next we will be discussing repair and 

5 maintenance costs of repairing different components 

6 in the furnace. You do this by different components 

7 for example the fan blower is one of the components 

8 we consider, failing during the lifetime of the 

9 furnace. The cost and frequencies come from various 

10 sources including RS means, manufacturer literature 

11 and a survey from American Comfort. 

12 MR. BROOKMAN: Yes Jim VerShaw? 

13 MR. VERSHAW: Jim VerShaw. So Victor, are 

14 the 2252 for a 90% for all the 90's 90 plus furnaces, 

15 that's the adder each year that you just assume this 

16 furnace will have for 21 years? 

17 MR. FRANCO: That is correct. 

18 MR. VERSHAW: So it's $22.52 a year times 

19 21 and that is what they will spent on the air? 

20 MR. FRANCO: And this is an average value 

21 again, some households, if for example, their furnace 

22 fan fails and that is a significant cost. Some 
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1 others -- 

2 MR. VERSHAW: What would the failure rate 

3 that you assume for the furnace fan and for the 

4 controls and all of that, do you have that, is that 

5 written out? 

6 MR. FRANCO: That's written out in the TSD 

7 I believe for furnaces it is around 40%. 

8 MR. VERSHAW: You actually didn't have it 

9 for furnace fans unless I had to back out -- you had 

10 how much of a cost to fix the fan blower $274.00 and 

11 3.43 hours of labor but it doesn't say what the 

12 failure rate would be. Maybe it would be nice to 

13 know what that considered because I did turn in 

14 failure rate numbers on the difference between PSCs 

15 and DC motors under the FER and these are actual 

16 numbers that we are seeing and also I turned in what 

17 I thought replacement motors should cost and I'm not 

18 sure you can get a replacement X13 motor for $274.00 

19 as a homeowner. 

20 And I turned in that information also and 

21 you might want to look back at that and see if that's 

22 matching that. And then the other thing that I am 
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1 wondering about is we are using a brand new power 

2 supply in this level, in the TSL in the 92% level or 

3 maybe all of them. What was the failure rate on 

4 that? 

5 And if it fails how much does it cost to 

6 replace it, is that factored in? 

7 MR. FRANCO: In terms of the fan component 

8 -- 

9 MR. VERSHAW: Switch and power supply. 

10 MR. FRANCO: So we don't have that -- 

11 MR. VERSHAW: We don't have it as a 

12 product we only have a transformer. 

13 MR. FRANCO: Yeah, we don't have it as a 

14 separate component. 

15 MR. VERSHAW: I'm really -- whenever you 

16 use new technology you probably have a learning curve 

17 right. And probably how steep do you want the price 

18 of it, well it is going to be way up here and a high 

19 failure rate at the beginning and it is going to get 

20 better over time so I think you need to take a look 

21 at that. I don't even know where they are used or 

22 what they are, to tell you the truth I'm not a double 
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1 EE so it would be interesting to find that out. 

2 MR. MURPHY: Can I just go back to 

3 marginal prices for a second and something that 

4 Victor you mentioned that you had said that you had 

5 use of tariff information that you got from APGA. 

6 AGA also submitted a marginal cost study as well that 

7 actually indicated about a 25% differential between 

8 average and marginal. Did you incorporate that in 

9 your analysis as well? 

10 MR. FRANCO: We did do the comparisons for 

11 our results between those two sets of data, yes, it 

12 is included. 

13 MR. BROOKMAN: Frank Stanonik. 

14 MR. STANONIK: Frank Stanonik, AHRI. So 

15 on the maintenance cost you do talk about additional 

16 maintenance costs associated with condensate 

17 withdrawal. So to my very limited knowledge in this 

18 area I do not believe that the condensate pump that 

19 in some cases will be required because of the 

20 installation of a condensing furnace that the 

21 lifetime of the pump is the same as the lifetime of 

22 the furnace so does this include in fact some point 
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1 the full replacement of the condensate pump? 

2 MR. FRANCO: Yes, it includes both the 

3 condensate pump and the neutralizer filter in the 

4 main -- 

5 MR. BROOKMAN: We have a question from 

6 online: Terry Small asks why is the repair cost for 

7 manufactured housing gas furnace so much lower than 

8 for non-weatherized gas furnace? 

9 MR. FRANCO: We'd have to get back to 

10 exactly the reason. One reason is they are actually 

11 using different components which is there is a PSC 

12 motor instead of X13 motor as the baseline, that's 

13 probably the primary reason. 

14 MR. BROOKMAN: Yes Dave Schroeder? 

15 MR. SCHROEDER: This is Dave Schroeder. 

16 It looks like from the TSD that proprietary data was 

17 used to determine maintenance frequency across the 

18 board. Is there any way that that source data can be 

19 made available? 

20 MR. FRANCO: Thank you for that question I 

21 was actually going to get to that. So we do use this 

22 2008 American Home Comfort survey data to -- 
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1 especially for the maintenance cost. We try to use 

2 as much publicly available data as possible. In this 

3 case this was the only source. We do in the appendix 

4 related to the main sensory -- we do put in all of 

5 the data that we actually use so these are aggregate 

6 values that are coming from the data. 

7 We do publish those we are allowed to 

8 publish that. We don't have access to the raw data 

9 but that is what we use is published and how it is 

10 actually used in the analysis. We combine that with 

11 RECS data which actually gives us how often an owner 

12 for example will maintain if he does maintain the 

13 furnace regularly or not and how we use American 

14 Comfort survey is kind of just aggregate that in 

15 terms of years. So once RECS tells us if the owner 

16 is going to maintain it regularly American Comfort 

17 survey kind of gives us a sense of is that yearly, is 

18 that every couple of years is that every five years. 

19 MR. BROOKMAN: John Cymbalsky? 

20 MR. CYMBALSKY: John from DOE. So there 

21 was a question that was just asked was part of the 

22 APGA submission and that's under questions 1 and 2 
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1 under the related to maintenance costs so that's the 

2 answer to those two questions. 

3 MR. BROOKMAN: We have a question, a double 

4 question from Jim Moore, Jim who is online, Jim Moore 

5 asks has DOE used more frequent fan motor failures 

6 with the move away from PSC motors or are you using 

7 PSC failure rates with the new motor technology? 

8 MR. FRANCO: Thank you for that question. 

9 We are actually being consistent with the 2014 

10 furnace rule and we are having an increased failure 

11 rate and that is consistent with the final rule. 

12 MR. BROOKMAN: Okay Rick? 

13 MR. MURPHY: Victor just going back to the 

14 reference to [American] home comfort study and I recall

15 trying 

16 to look through it in my notes that there was a 

17 reference that in its cost and other areas of the 

18 home comfort study that we are trying to gain access 

19 to but I believe there was also in addition to the 

20 [American] home comfort study that relied on energy

21 consultants 

22 to develop some numbers so what I am trying to get at 
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1 was it strictly the data or the home comfort study or 

2 was it a combination of that along with other input 

3 and if so how do we get access to the intelligence 

4 that came out of that. 

5 MR. FRANCO: I really appreciate the 

6 comment. Whenever we get input for example from 

7 expert consultants or some consultants, we do publish 

8 what their assumptions how we use that data. In the 

9 case of maintenance it is mainly to validate more or 

10 less based on the understanding of the approach. 

11 It is not in terms of providing any 

12 additional data. In terms of the actual methodology 

13 as described there as I described we used American 

14 comfort surveys for data, we use directly from that 

15 survey we did publish there and data that we are 

16 getting from RECS which is publicly available we do 

17 publish the fractions as well there so we try to not 

18 have anything that you can't get access to as much as 

19 we can. 

20 But please provide any comments if you 

21 find something that is -- you think that is not well 

22 understood and we will try to answer that. 
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1 MR. BROOKMAN: Neil? 

2 MR. LESLIE: Neil Leslie, GTA. There's 

3 one part of that question, the first question I just 

4 want to make sure I don't remember hearing an answer 

5 to and that is why was only one year of the study 

6 data used when there were four years of data used in 

7 other parts of the analysis. 

8 MR. FRANCO: And I appreciate that 

9 question. We had direct access during that time to 

10 just one survey of that data when we looked back and 

11 looked at the other surveys the data was very 

12 similar, so potentially it could be used multiple 

13 years. For this we only had access for that one 

14 single year the data for this particular variable. 

15 So now we are going into the inputs 

16 lifetime and discount rates. So first, let's discuss 

17 lifetime. We use a distribution of lifetimes we use 

18 the method that uses survey data that comes from 

19 American Housing Survey and RECS. American Housing 

20 Survey provides how many furnaces are installed in 

21 the U.S. 

22 It's fairly robust survey that is 
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1 conducted by HUD [Housing & Urban Development] and Census

2 every couple of years so that gives us a better number in

3 terms of total furnaces that are in the nation and we use

4 also RECS data in terms of the age of the equipment that is 

5 currently being installed to give us also a sense of 

6 this distribution. 

7 We combine that with manufacturer's 

8 shipment data. The manufacturer's shipment data is 

9 data that has been provided by AHRI throughout the 

10 years and also is publicly available on their 

11 website. 

12 For this analysis we actually did a 

13 modification based on the previous analysis. In 

14 discussions with AHRI we were able to understand 

15 better what the shipments included. The shipments of 

16 the AHRI do not include weatherized gas furnaces so 

17 they actually provided for about a 6 or 5 year 

18 period. Recent period they provided weatherized gas 

19 furnace shipments. 

20 Adding those shipments to the overall 

21 shipments give us a slightly lower value in terms of 

22 annual lifetime compared to the 2011 DFR and the 
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1 Census question from AGA partly. 

2 MR. CYMBALSKY: This is John from DOE. So 

3 this would be question 8 from the APGA docket 

4 material relating to the switching logic. 

5 MR. FRANCO: In addition to that we 

6 provide an appendix in the lifetime appendix we do 

7 provide the different references that we used to 

8 compare. These are 15 references that we compare 

9 this lifetime value and we believe that this is an 

10 agreement to those other references consistent with 

11 this value. 

12 This is in appendix 8G. Next we discussed 

13 the discount rates. So discount rates are used to 

14 convert operating costs, lifetime operating costs 

15 into present value. We use another publicly 

16 available data source that comes from the Federal 

17 Reserve Board it's called a survey of consumer 

18 finances. For this analysis we used multiple years 

19 from 1995 to 2010. It comes out every three years. 

20 We disaggregated these by -- the discount 

21 rates by income for this analysis. This is different 

22 from the 2011 analysis, as you can see they vary. 
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1 This is the average, we do have distributions and the 

2 distributions are available in the discount rate 

3 appendix in chapter 8. 

4 MR. BROOKMAN: Steve Rosenstock? 

5 MR. ROSENSTOCK: Steve Rosenstock, EEI 

6 please refresh my memory the highest income group is 

7 1 or 6 just out of curiosity? 

8 MR. FRANCO: Thank you for that 

9 clarification. The highest income group is 6, low 

10 income is 1, the lowest income group. 

11 MR. ROSENSTOCK: Thank you. 

12 MR. FRANCO: These are percentiles just to 

13 clarify so income group 1 represents zero to 20% and 

14 the highest income group is 90%. 

15 Next we will be discussing the base case 

16 efficiency distribution. There is actually two 

17 slides for this. 

18 MR. BROOKMAN: Mark? 

19 MR. KREBS: I apologize but this is 

20 another big one on my list and the last big one for 

21 the record. Discount rates, okay there was in the 

22 furnace fan rule which I did review, at least the 
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1 filed comments, there was a very interesting one from 

2 George Washington University regulatory study center 

3 and she took a look at discount rates in depth and 

4 with a bunch of economists that she cited showing 

5 discount rates that should be like in the range of 

6 100% maybe higher. 

7 And these rates totally reverse the 

8 aggregate or individual consumer savings, however you 

9 want to cut it and you know you go back to 3% and you 

10 go back to 7% you know but as I recall you know and 

11 you quote the OMB but as I recall OMB circular 8094 

12 also recommends using other discount rates to show 

13 the sensitivity of the estimates to the discount rate 

14 assumption. 

15 That's a direct quote out of my Laclede's 

16 comments for the DFR. And my question then is you 

17 know how have you actually looked at you know these 

18 situations for a growing part of American population 

19 who is dropping out of the middle class it seems. You 

20 know where is that? 

21 MR. FRANCO: Thank you so much for those 

22 comments. So just to clarify I think the 3% and 7% 
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1 that you are referring to is what is applied in the 

2 NIA analysis and we will be discussing that later. 

3 In terms of what is supplied in terms of the LCC the 

4 consumer level, these are the rates derived from this 

5 analysis for the descriptions in the TSD of how that 

6 is derived. There is a distribution so there are 

7 some households that have in the low income group 

8 very high discount rates that are applied when their 

9 household is sampled. 

10 You can look at the distribution and you 

11 can see that it's significant so there is a 

12 distribution but these are just average values. 

13 MR. KREBS: Okay so the worst case kind of 

14 gets blended in with the average and everything is 

15 averaged. 

16 MR. FRANCO: No, no, every household is 

17 applied a specific discount rate so there are 

18 households that have 100, 150% discount rate. 

19 MR. KREBS: All right. 

20 MR. BROOKMAN: Mark Nayes who is joining us 

21 online has a question or a comment, Mark go right 

22 ahead. 
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1 MR. NAYES: Yes going back to that filter 

2 and maintenance replacement for the costs -- if I put 

3 in a high efficient you know standard filter that is 

4 supposed to last a year that's $50.00 right there, 

5 that's more than we have got down for the maintenance 

6 cost. How am I supposed to pay a guy to go out there 

7 and perform maintenance on the system? 

8 MR. BROOKMAN: Okay, okay Mark thanks. 

9 MR. FRANCO: Thank you. 

10 MR. BROOKMAN: And we also have a comment 

11 or a question from Everett Surey. It is how do you 

12 deal with the fact that the AHS survey data if 

13 analyzed by the NAHB shows that the average tenure in 

14 a house is under 20 years and well under that in the 

15 South and West. 

16 MR. FRANCO: We don't -- we analyze just 

17 the furnace in terms of the person occupying it could 

18 be over the years multiple owners, some of your 

19 comments. 

20 Okay so moving on to the next topic. The 

21 base case efficiency distribution is a major 

22 component of the LCC and this is the last in terms of 
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1 the LCC components before going to fuel switching 

2 which will have a huge amount of slides so there are 

3 two slides here. The first describes more or less 

4 the process that we are using and the data sources. 

5 So, the base case efficiency distribution 

6 describes -- reflects the projected market shares of 

7 products at different efficiency levels in the 

8 absence of standards. This absence reflects that not 

9 all consumers purchase products at the current 

10 minimum efficiency level and that it recognizes that 

11 some consumers already purchase products at a higher 

12 efficiency level. 

13 DOE projected its market shares for 2021 

14 based on historical shipments data. Some of it 

15 provided by AHRI, also we have the sources here also 

16 Energy Star shipments for the years that we didn't 

17 have data from AHRI directly, we had historical data 

18 from 1980 to 2009. From 2009 we used Energy Star 

19 data, 2012 and also we disaggregated between 

20 efficiency levels of the condensing side from the 

21 latest AHRI certification directory. 

22 So the results are shown here in terms of 
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1 disaggregated base case efficiencies for different 

2 markets. You can see that there are differences 

3 between North and South and between replacements and 

4 new construction. We did get feedback from 

5 manufacturers in the manufacturer interviews but 

6 there were differences in terms of new construction 

7 in terms of the venting market share so there is a 

8 larger fraction of furnaces that are below 95 as you 

9 can note in the North in the new construction versus 

10 the replacement. 

11 So for example here you have 32% in new 

12 construction and 15% at 92 level. The overall 

13 fraction of condensing is fairly close between the 

14 two but distribution between the efficiency is 

15 different. 

16 MR. CYMBALSKY: Okay so we think this 

17 answers from the docketed questions priority question 

18 A and then questions 1 through 4 related to the base 

19 case AFUE efficiency from the docketed APGA 

20 questions. 

21 MR. BROOKMAN: Thank you John. Frank 

22 Stanonik? 
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1 MR. STANONIK: Frank Stanonik, AHRI. The 

2 one thing I am not tracking here in the previous 

3 slide so you had shipment data from us non-condensing 

4 condensing for quite a few years. I understand you 

5 had historical shipment by states from us back up to 

6 2003 or something like that but then you slipped in 

7 here that you are still using somehow our directory 

8 listings as a basis for shipments distribution. 

9 Where does that fit into this table? 

10 MR. FRANCO: Sure thank you for that. I 

11 went really quickly through that. Basically we have 

12 all the information about the fraction of condensing 

13 versus non-condensing. We don't have for a lot -- I 

14 think we only had one for 2002 - 2003 year -- a 

15 disaggregation between the different efficiency 

16 levels in terms of condensing so to disaggregate 

17 between them we used the latest AHRI directory. 

18 MR. STANONIK: So are you presuming that 

19 the same distribution of listings by efficiency 

20 translates to shipments? 

21 MR. FRANCO: Partly. Let me explain it's 

22 more detailed in TSD but maybe I can do it simply 
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1 here. For the North replacements we do exactly but 

2 then we do modify that for the North and the South. 

3 The Norths new construction and the South as well 

4 because of manufacturer input in terms of those 

5 markets. 

6 MR. BROOKMAN: Steve Rosenstock? 

7 MR. ROSENSTOCK: Steve Rosenstock, Edison 

8 Electric Institute. I'm just kind of curious you 

9 know I am looking at the 95% numbers and it says 

10 replacement 45% in the North and 5.5% for 90 AFUE and 

11 you know but you look in the South and the numbers 

12 are a lot closer. They are flipped for some reason 

13 and I am just kind of curious the reason for the 95% 

14 market having such high market shares is that because 

15 of an incentive program or is that because they 

16 already have 95% AFUE furnaces existing by 2021? 

17 MR. FRANCO: That is correct. One of the 

18 main drivers we think in the future especially is the 

19 Energy Star program. Energy Star currently has 95% 

20 levels for the North and 90% level for the South. 

21 So the South is mainly in the lower AFUE 

22 in the North you are going up to 95 because of that 
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1 incentive to go to 95. 

2 MR. BROOKMAN: Aniruddh? 

3 MR. ROY: So on slide 68 you mentioned the 

4 AHRI directory as being the source as well as the 

5 shipments collected by AHRI so how were you able to 

6 purge in your shipments analysis the PSCs and the 

7 80's and forecast the shipments past 2021 based on 

8 that data? Because that data also captures that 

9 market. 

10 MR. FRANCO: We are only considering in 

11 terms of condensing market and yeah there are some 

12 PSCs but we are only looking at the AFUE in terms of 

13 that. We assume that the market still will be just 

14 the AFUE would be similar distribution, just looking 

15 at the AFUE of those units, not the motor. 

16 MR. BROOKMAN: Mark Nayes has a comment and 

17 he is joining us online, Mark go right ahead. 

18 MR. NAYES: Yes I was just going to 

19 comment on those percentages on replacements in the 

20 North. At the time we had the very large federal tax 

21 credit and we also had some very nice gas incentives 

22 for high efficient furnaces and those are very 
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1 accurate to what we have been seeing but I am just 

2 kind of wondering in the last couple of years they 

3 have had a much more robust selection of 98% 

4 efficient furnaces and we are moving much closer to a 

5 20% replacement rate on those styles. 

6 MR. FRANCO: Thank you for your comments. 

7 MR. BROOKMAN: Yeah, appreciated that. 

8 MR. NAYES: You are welcome. 

9 MR. ROY: Aniruddh Roy, Goodman. Just a 

10 follow up question so even though historically there 

11 hasn't been a slight downward trend in the shipments 

12 it still is showing an upward curve from 2021 onwards 

13 without any factoring of any dip in shipments. 

14 MR. FRANCO: Let me go back to the next 

15 slide I think it will help explain and it will also 

16 deal with part of the AGA's comments in this regard. 

17 So let me show this is the projected base case 

18 efficiency distributions during the analysis period 

19 as again we are starting at 2021 so if you can see 

20 from here from the historical data there is a trend. 

21 The trend increases more dramatically between 2005 

22 say and about 2011. After 
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1 that there is a decrease. Now between 2011 and 2012 

2 is based on Energy Star shipments and we don't -- 

3 Energy Star doesn't actually have all the shipments 

4 so we had to actually scale those shipments up so 

5 those numbers might be slightly lower than they are 

6 so if AHRI has more accurate data that would be great 

7 for those two years but based on Energy Star data our 

8 current assumptions in terms of the regional values. 

9 We are using the projections between 1992 

10 to 2004 which we assume is the period before 

11 incentives. We are not using to project in the 

12 future the -- we are not using the data between 2005 

13 and 2011 because we believe that has a lot of 

14 incentives which might not translate into the future 

15 and this is the result of that. 

16 MR. BROOKMAN: Okay Rick? 

17 MR. MURPHY: Rich Murphy, AGA. Just don't 

18 understand the logic where this has significant debt 

19 from 2012 is it to 2013 and I believe the information 

20 that was shared established attributable during a 

21 period of time where there were incentives in the 

22 market. Is the conclusion that there was no market 
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1 transformation impact of those incentives during that 

2 period of time? 

3 MR. BROOKMAN: I see Frank Stanonik has a 

4 comment. 

5 MR. STANONIK: Well I will let him answer 

6 first. 

7 MR. FRANCO: Yes there is but there is 

8 still -- this is a fairly large lifetime for furnaces 

9 to do a full market transformation so there is kind 

10 of evolving but it is fairly small in our 

11 projections, but at least comment if you think that 

12 is accurate. 

13 MR. STANONIK: Okay Frank Stanonik, AHRI. 

14 You probably think you need to recognize that from 

15 2009 to 2012 the data comes from the shipments 

16 collected by Energy Star. Okay, so in fact, 2009 

17 before 2010 -- so they were collecting the peak and then 

18 it looks like the bottom dropped out right so the 

19 question I have is in that period in that -- what is 

20 it 4-5 year period -- did you check because I don't know 

21 myself -- were -- did the Energy Star program always 

22 have the same number of furnace manufacturer 
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1 participants? 

2 In other words were you getting the data 

3 for those 4 or 5 years from the same group of 

4 manufacturers? 

5 MR. FRANCO: Thank you for that question 

6 and this is a great point. So as I mentioned it had 

7 to do some assumptions especially for the data 

8 between 2011 and 2012, let me explain. In 2011 

9 Energy Star changed their criteria for the North to 

10 95% so they don't have any shipments data for 

11 instance sold in the North between '90 and '95 and 

12 basically their assumptions are just for the 95. 

13 They also changed the criteria in terms of 

14 a fan efficiency so that dropped a lot of furnaces 

15 that were sold as condensing but didn't meet 

16 efficiency requirements. In addition to that they 

17 also added some constraints in terms of the cabinet 

18 losses so that further decreased so actually the 

19 value in 2012 that we got the data from Energy Star 

20 was only 9% from that and previous data we increased 

21 that we believe to I think it was 34% based on what 

22 we think the market in the North and everything. 
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1 We would appreciate more accurate date if 

2 it is available. 

3 MR. BROOKMAN: Frank keep going. 

4 MR. STANONIK: Frank Stanonick, one follow 

5 up, two points. So in fact that drop there in a 

6 sense may represent a worst case but in fact it is 

7 without question incorrect okay. But the other point 

8 I want to make and again I'm not going to contest the 

9 question about we had this huge peak the years 

10 preceding 2011 or so no question some of that was 

11 driven by significant tax credits okay. 

12 But in terms of this chart okay, so I had 

13 let's -- again I'm not going to have the exact 

14 number. Let's just say that in the last '08 through 

15 '10 or '11 I -- these tax credits introduced an 

16 additional I'll just make up a number 5 million 

17 condensing furnaces to the market okay. So I'm 

18 looking at this chart let's say 2010 so I start to 

19 think in 2030 those extra 10 million or whatever 

20 number I said furnaces are going to be replaced and I 

21 would say that the correct assumption is that once 

22 you have got that condensing furnace into that 
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1 consumer's home that is what they are going to put in 

2 again, okay. 

3 So even though I would certainly say you 

4 can't take that line to say my thing is going to do 

5 this I would say in your future projections you have 

6 got to account for that blip because that blip will 

7 in fact in this case raise the boat a little bit, 

8 rising tide raises or something like that. 

9 MR. BROOKMAN: Dave Schroeder? 

10 MR. FRANCO: I appreciate that comment, 

11 thank you. 

12 MR. SCHROEDER: Hi, this is Dave Schroeder. 

13 So I understand certainly the rationale for pulling 

14 out data during that incentive period as being 

15 influenced by something outside of the market but it 

16 seems like there are some very good reasons to 

17 exclude the points immediately after that period as 

18 well so if you extrapolated 2005 through or sorry 

19 2000 to 2005 out into the future by the time you get 

20 to 2021 it's essentially impossible to sell a 

21 non-condensing furnace in the northern part of the 

22 United States. 
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1 Any way my point is I don't really 

2 understand the rationale for including those two data 

3 points that are after the big peak particularly 

4 because you have had some inconsistencies it seems 

5 like in the source data. 

6 MR. FRANCO: Thank you for that so we are 

7 in terms of the growth we are just considering 1993 

8 to 2004 in terms of the growth and our starting point 

9 is 2012. 

10 MR. BROOKMAN: Dave Schroeder has a 

11 follow-up. 

12 MR. SCHROEDER: Another comment and this 

13 relates to both this chart and back to discount rates 

14 and forward to discount rates actually. So you could 

15 count every house you analyze, you calculate an LCC 

16 savings done before correct. So from that that 

17 actually implies also a discount rate that consumers 

18 would tolerate and that number is going to be 

19 significantly different possibly than the discount 

20 rates you assigned in the previous maybe two slides 

21 ago and I think you are about to tell us that you 

22 used the payback period of 3 years for switching 
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1 options which applies another discount rate so you 

2 actually have homes, one individual home with three 

3 different discount rates what it look like. 

4 MR. FRANCO: I believe there is only 2, 

5 there's the 1 to bring back to the present value and 

6 then we will discuss the fuel switching I didn't 

7 understand the third. 

8 MR. SCHROEDER: So payback period or 

9 payback periods that consumers would tolerate and 

10 aren't inherently related to discount rate you have 

11 assigned discount rates a few slides ago. The LCC 

12 numbers in combination with these shipment numbers 

13 imply a second discount rate, right because you have 

14 got a payback period from the LCC analysis and then 

15 in switching you have a 3 year payback period so 

16 that implies a different discount rate. So one home 

17 is 3 discount rates. 

18 MR. FRANCO: Please submit your comments. 

19 MR. BROOKMAN: Dave? Neil are you in the 

20 same contents stream? 

21 MR. LESLIE: I am in the draft in this 

22 part of it. 
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1 MR. WINNINGHAM: Neil could I just 

2 interject one note on Dave's comment as a follow on? 

3 MR. LESLIE: Mine is a clarification more 

4 than anything else. I am very confused as to what 

5 is AHRI data and what purported over to the EPA data 

6 on that chart. There's a 2013 data point diamond 

7 shaped and you are saying to 2012 I don't know where 

8 the 2013 data wound up coming from and I don't know 

9 whether the 2009 data point is from AHRI data or it 

10 is from the EPA data so I would just like to 

11 understand the source of the specific data points on 

12 that chart, that would be very helpful to me. 

13 MR. FRANCO: Thank you so much, let me 

14 clarify again. Data before 2009 was provided from 

15 AHRI in terms of the fraction of condensing and 

16 non-condensing and that was actually provided by 

17 region. After 2009 -- 

18 MR. LESLIE: Wait on 2009? For the 2009 

19 data plan it shifted, so up through 2008 is AHRI 

20 data? I just want to make sure. 

21 MR. FRANCO: Up through 2009, 2009 so 

22 that's the relation to the previous rulemaking AHRI 
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1 provided data up to 2009. 

2 MR. LESLIE: Up through 2009? 

3 MR. FRANCO: Yes. 

4 MR. LESLIE: Not up through 2008? So 

5 2009, 2010, 2011, 2012 and 2013 then become a shift 

6 in data sources to the EPA data source. I just want 

7 to make sure that I have that. 

8 MR. FRANCO: Let me clarify 2013 is a 

9 projection number. 2012 is the last number that we 

10 got from Energy Star, I'm sorry if I misspoke. 

11 MR. BROOKMAN: Dave, thanks for being 

12 patient. 

13 MR. WINNINGTON: Yes just to kind of 

14 follow on to Frank's thoughts -- and I believe it was 

15 the 2010-2011 timeframe -- EPA made a significant change 

16 to their program that put a lot more burden of 

17 testing as well as product use supplied so there may 

18 have been some influence here that people just 

19 dropped out and didn't report. 

20 MR. FRANCO: Thank you for that, I did 

21 mention that about the 2011-2012 values that's why we 

22 needed to adjust them because of that. 
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1 MR. CYMBALSKY: This is John from DOE so 

2 we have manufacturers and others in the room, are 

3 there data that exists that we can get provided to 

4 us? I mean I know the data exists so -- 

5 MR. KREBS: That's what Neil was trying to 

6 ask but you know he's not really educated. 

7 MR. CYMBALSKY: He's more polite than me. 

8 MR. DELASKI: I would just comment, this 

9 is Andrew. The AHRI data is wonderful data and it 

10 will be wonderful to have it up to date. I would 

11 just encourage the industry to manufacturers, the 

12 associations to submit up to date data and that would 

13 really help the analysis undoubtedly. In the absence 

14 of updated data, the Department has to do the best 

15 they can with what is provided in the public realm so 

16 I would encourage I see Dave nodding, I would 

17 encourage all the manufacturers who are here to work 

18 for the good of the Association to provide up to date 

19 data. 

20 MR. BROOKMAN: I believe Harvey is next. 

21 MR. SACHS: Harvey Sachs and Dave 

22 Schroeder I think about my own life. I think that 
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1 the switching thing is entitled to a different call 

2 it payback it is a virtual number that is a proxy for 

3 our uncertainties about the stickiness in consumer 

4 behavior. I have done something very 

5 non-cost-effective the last several years in keeping 

6 my cable connection so the stickiness may well have a 

7 different value than the capital investment decisions 

8 and I would defend DOE for trying to develop a proxy 

9 which I am darn sure is not perfect. 

10 MR. BROOKMAN: Mark Krebs, I mean, pardon 

11 , 

12 me. 

13 MR. KREBS: Close enough, we are among 

14 friends. Einstein is credited with saying you know 

15 solutions to problems should be as simple as possible 

16 but no simpler okay and that's kind of where we are 

17 at I think. You know I am looking -- I see all this 

18 stuff and part of it is from this data base, part of 

19 it is from another data base, you know I realize that 

20 those big rebates for high efficiency furnaces 

21 impacted this stuff, I realized that the crash, the 

22 great recession whatever they called it had an impact 
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1 on shipments but why don't we just get the raw AHRI 

2 shipment data for this period, for the period that we 

3 know of and then we can deal with it. 

4 Then we have something to talk about and 

5 we are not you know, it is not all piece-milled 

6 apparently like it is now. 

7 MR. BROOKMAN: Well we have heard an 

8 additional treaty for the data to come forward 

9 somehow. 

10 MR. KREBS: It's just another way of 

11 reiterating what Neil tried to say. 

12 MR. BROOKMAN: So now we are moving on 

13 there, keep going. 

14 MR. FRANCO: So this is a major piece of 

15 the analysis there's quite a few slides to go through 

16 in this analysis. 

17

18

19

20

21

22
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1 MR. BROOKMAN: Okay let's start back up. 

2 I understand here at the outset Victor has 

3 clarification. 

4 MR. FRANCO: Thank you yes there was a 

5 question from N.J. in regard to the base case 

6 efficiency distribution. Application in the LCC 

7 spreadsheet and there was a spreadsheet there it is 

8 disaggregated by 30 RECS, designated regions. 

9 Actually RECS provides 27 to be more accurate. We 

10 disaggregated an additional three, one of them is 

11 West Virginia because the North has West Virginia 

12 disaggregated so that is separately. 

13 In the actual spreadsheet we list West 

14 Virginia as part of another region but that was just 

15 a misprint, West Virginia is a separate region. 

16 MR. BROOKMAN: So I just got the word from 

17 Brenda that we need to leave this room at 5:00 sharp 

18 so I want to encourage everyone's commenting to try 

19 to keep their comments especially succinct so we can 

20 make it through all of this material and so now back 

21 to Victor. 

22 MR. FRANCO: So there are a number of 
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1 questions related to this part of the analysis and I 

2 will try to answer as many of the preliminary 

3 questions as possible and your questions as clearly 

4 as I can. I will focus on three slides mostly and I 

5 will go through the other slides fairly quickly. 

6 So kind of the setup of the analysis is 

7 that we did do product switching for this equipment. 

8 In the analysis we assumed that -- 

9 MR. BROOKMAN: Thanks you, guys. Keep going 

10 Victor. 

11 MR. FRANCO: In the analysis, we assumed 

12 that there is potential for switching when going from 

13 the current standard to the 90 or above standard 

14 levels. In that case, we would be going from 

15 potentially from non-condensing situation replacement 

16 situation we are going to condensing weatherized gas 

17 furnaces is one of the options, the primary option. 

18 And alternative options are electric 

19 furnace and heat pump in terms of the electric 

20 heating. In terms of cooling because of the 

21 associated cooling and heating equipment you 

22 potentially -- if you have a central air conditioner 
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1 you potentially could go to a central air conditioner 

2 or you could go to an air handler plus a heat pump. 

3 In terms of water heating, there is also 

4 the potential for switching if you have an orphan 

5 water heater we also analyze the potential for going 

6 from a gas storage water heater to an electric 

7 storage water heater. 

8 MR. BROOKMAN: Yes Steve Rosenstock? 

9 MR. ROSENSTOCK: Steve Rosenstock, Edison 

10 Electric Institute. As much as I would love to think 

11 that the electric options were the only options that 

12 is not true. I will try to be as brief as possible 

13 for what Doug said. In my view, looking at this and 

14 looking at the support document this is an incomplete 

15 analysis. 

16 There are other options that consumers can 

17 choose from for example, oil fire non-condensing 

18 furnaces, other alternative direct heating equipment, 

19 room by room heating equipment, biomass, wood type of 

20 heating system if they really wanted to spend a lot 

21 of money. 

22 In terms of the water heating system 
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1 there's oil fired water heaters, there are solar 

2 water heaters, there are instantaneous water heaters. 

3 This is a very limited analysis assuming that 

4 consumers only have basically one option or two 

5 options at most and just simply is not true. 

6 Therefore a lot of the numbers it is 

7 really incomplete because it is assuming that 

8 consumers will look at no other technology whatever 

9 in terms of any sort of other -- all the impacts that 

10 they only have a choice of these two and there is 

11 nothing else out there and well there's other -- all 

12 the other associated side effects. So most of this 

13 section, anything on fuel switching in my mind this 

14 is a totally incomplete analysis and all the results, 

15 assumptions and results are erroneous thank you. 

16 MR. BROOKMAN: Dave Winningham? 

17 MR. WINNINGHAM: This is Dave Winningham 

18 with Allied Air. Very quickly and it may not fit 

19 here but is there an extended repair versus replace 

20 of product considered in this methodology? 

21 MR. FRANCO: Could you clarify what you 

22 mean by extended? 
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1 MR. WINNINGHAM: People would choose to 

2 repair their old inefficient product so to speak, 

3 replacing heat exchanger versus incur the cost of a 

4 new more efficient product. 

5 MR. FRANCO: Thank you for that 

6 clarification. In this analysis we did not model an 

7 extended repair as an option, please provide that in 

8 your comment if you believe that that should be 

9 added, thank you so much for that comment. 

10 MR. BROOKMAN: Okay. 

11 MR. FRANCO: The next two bullet points 

12 are related to slides that would be more specific so 

13 I won't go into those until we get to those two 

14 specific slides. 

15 MR. CYMBALSKY: I just want to point out I 

16 think on this slide we tried to set up answers for 

17 priority question C and question 4 in the related to 

18 switching logic. 

19 MR. FRANCO: In relation to that actually 

20 I forgot to answer one of the questions. One of the 

21 questions was if we modeled going from switching from 

22 a non-condensing to a non-condensing in the base case 
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1 in the LCC analysis and we did not model that. 

2 We believe that for various reasons some 

3 consumers in the base case decide to remain even 

4 though it might not be the best option in going from 

5 non-condensing to non-condensing so that answers one 

6 of those questions. 

7 The next few slides are basically just the 

8 options, so I will just go really, really quickly 

9 through these. As you can see these are the same 

10 that we have described earlier just in graphically. 

11 This further disaggregates how we use the analysis. 

12 We consider whether there is commonly venting or not. 

13 This is fairly complicated, it's -- I believe it is 

14 fairly well explained in the appendix related to fuel 

15 switching and please provide any comment. 

16 MR. ROSENSTOCK: Steve Rosenstock, EEI. 

17 Then I will ask it a different way, why didn't you 

18 consider other options that are out there for 

19 consumers? 

20 MR. FRANCO: At the time we collected the 

21 analysis these seemed to be the options that were -- 

22 that most that would potentially be the ones that 
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1 consumers would go to the most. Please submit 

2 comments if you think that we should consider others. 

3 MR. ROSENSTOCK: Steve Rosenstock, EEI. 

4 What's that based on? 

5 MR. CYMBALSKY: This is John from DOE. So 

6 in your remarks before you mentioned that at least 

7 for a couple of technologies that were the I'm using 

8 your words, "very expensive options" so if the idea 

9 of fuel switching is that you are doing it to save 

10 money which the economic rationale would present here 

11 I guess my question is why would you switch to "very 

12 expensive option" relative to this and include that 

13 as a viable consumer option. 

14 MR. ROSENSTOCK: Steve Rosenstock, EEI. 

15 In certain cases that very expensive option might be 

16 the same price or lower price than what you might 

17 have to do inside the house based on your 

18 configuration of the current system. So for some 

19 consumers it might be a more expensive option but for 

20 others based on what they might have to do to meet 

21 the new standard it might be the same or a lower 

22 price so again it is all relative to what a consumer 
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1 is facing with its current system. 

2 MR. CYMBALSKY: Okay, in that case, we will 

3 ask you to provide the data on the cost of switching 

4 to oil including the environmental and tank issues 

5 that exist with that and then if you have any data on 

6 switching to wood from gas -- and then you mentioned, I 

7 think, direct heating equipment -- that's fine, we will 

8 take the data that you have on that. 

9 MR. ROSENSTOCK: Steve Rosenstock, EEI. 

10 Again, thank you for that but again I was just saying 

11 there's so many options out there and it just seemed 

12 like you were just totally you know not considering 

13 all -- I'll stop there thank you. 

14 MR. BROOKMAN: Okay thank you Mark Krebs? 

15 MR. KREBS: I won't stop there I have got 

16 a couple more to add to Steve's list. One of them is 

17 if you are really poor and you can't afford to 

18 replace your furnace that you just turn on the range 

19 and try to heat your house that way. You know, 

20 another option is if you go down to the dollar store 

21 or somewhere you know and you get an electric 

22 resistance heater, you know maybe you get a whole 
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1 bunch of them and plug those in because that's the 

2 only choice you have got, either that or freezing to 

3 death. 

4 So there are other options and yeah they 

5 should be considered. 

6 MR. BROOKMAN: Okay let's proceed with the 

7 analysis that is here. 

8 MR. FRANCO: Thank you for all of those 

9 comments, please provide written comment. These are 

10 the options in the graphical the next presents the 

11 same in a tabulated format. As you can see there's 

12 six combinations that we start with there are 

13 non-condensing with certain other combination 

14 air-conditioning or water heating combinations. 

15 This next slide presents the actual 

16 tabulated numbers in terms of how many households 

17 belong to these criteria, the most common is a 

18 non-weatherized gas furnace with a gas water heater 

19 and a central air conditioner which represents about 

20 66% of the sample. 

21 I'll stop on this one and be more detailed 

22 because this is one of the one's we receive a lot of 
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1 comments on and please provide -- 

2 MR. BROOKMAN: We have a comment from Mark 

3 Nayes on line who says a question in fact, does this 

4 switching take into account the complete inability to 

5 install a condensing gas furnace in place of a 

6 non-condensing gas furnace and are required to 

7 install a different form of heat? 

8 MR. FRANCO: Thank you for that question. 

9 Would you repeat that -- 

10 MR. BROOKMAN: Steve Rosenstock? 

11 MR. ROSENSTOCK: Yeah again it might be in 

12 the weeds here I was trying to see -- as part of this 

13 decision making matrix I am just wondering especially 

14 on the water heater side was there any factor 

15 considered for age of the water heater versus the 

16 furnace for example if albeit an equation if the age 

17 of the water heater is less than half the age of the 

18 furnace are people really going to make that switch 

19 or less than one third? 

20 I mean you are an excellent salesperson, 

21 you convince someone to take out a 5 year old gas 

22 water heater when they are replacing a 20 year old 
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1 furnace. 

2 MR. FRANCO: Thank you for that comment, 

3 yeah that is described in our TSD we do take that 

4 into account. We assume that for example the furnace 

5 is fairly old it is more likely that they will 

6 replace it. If it has just been replaced only a few 

7 years then it is less likely, the description is in 

8 the TSD. Question? 

9 MR. BROOKMAN: Yes please? 

10 MR. MURPHY: Doug and John, could you 

11 direct us to where we could find more information on 

12 where those situations where that previous question -- 

13 about where it is impossible to install a condensing 

14 is included in the fuel switching? 

15 MR. FRANCO: Okay yes let me -- this was 

16 related to installation costs. Before, I mentioned that 

17 what we do in our analysis is we assign very large 

18 costs for some of these households with assigned, 

19 sometimes it's a very, very large cost because you 

20 are going to have multiple laws in a very large 

21 ventilation. 

22 MR. MURPHY: I'm sorry this is Rich 
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1 Murphy, AGA. I think the question I'm not sure but 

2 for instance if there is a condominium project where 

3 they do not allow penetrating an outside wall, how is 

4 that considered in the analysis? 

5 MR. FRANCO: We do have it different for 

6 example for multi-family kind of condominium 

7 situations and situations sometimes referred to as 

8 row houses. We do account for them having to 

9 penetrate multiple walls, the cost is usually 

10 significant that usually that requires some analysis 

11 or it is a significant cost that's associated to 

12 that. 

13 MR. BROOKMAN: Harvey Sachs? 

14 MR. SACHS: Harvey Sachs. Since this has 

15 come up several times for the use of generally fairly 

16 low rise buildings we are seeing the introduction 

17 into the market of who the stack solutions for 

18 venting condensing furnaces vertically rather than 

19 horizontally. 

20 MR. FRANCO: Thank you for that comment. 

21 So I am going back to the fuel switching so this is 

22 how we conducted fuel switching it is based on 
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1 economics in terms of the household so as described 

2 before there is a payback associated with this 

3 analysis. We do this analysis household by household 

4 as described before some households have very 

5 different installation costs total install costs and 

6 very different operating costs because how a 

7 different region of the country where natural gas or 

8 electricity prices are very different from other 

9 households so all of that is taken into account what 

10 we are doing if you follow this flow chart. 

11 After that we do a payback calculation 

12 related to the -- comparing the non-weatherized gas 

13 furnace option of the 90% or above versus the 

14 electric furnace or heat pump options. If the 

15 payback period with that comparison is above 3.5 

16 years we assume that a homeowner would choose to 

17 switch. If the payback is less than that then we 

18 assume that the homeowner will remain with 

19 non-weatherized gas furnace. 

20 This payback criteria is based on this 

21 analysis data and RECS 2009 data. We will go 

22 through the explanation of how that is calculated. 
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1 We had a question again about this analysis data 

2 which is this American Home Comfort survey about the 

3 availability of the data. 

4 We don't for many of these have the 

5 disaggregated data by either different housing 

6 incomes, the raw data but we do have a little bit of 

7 sense of the distribution by region in terms of that 

8 would give some results. The data that we actually 

9 did use from that are these aggregated values and we 

10 provide those here in this table and they are 

11 available in the TSD. 

12 We do not use any other data that is 

13 provided from this survey, only the data that is 

14 reported here. 

15 MR. BROOKMAN: Dave Schroeder? 

16 MR. SCHROEDER: This is Dave Schroeder. 

17 Did you ask decision analysis if this aggregated 

18 distribution level data was available? 

19 MR. FRANCO: Yes they do have this 

20 aggregated data. It might not be all different 

21 factors that you might want to consider but I'll go 

22 through the payback you have to match that to what is 
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1 available from RECS so that's what's the complexity 

2 in terms of matching that data to the RECS data. 

3 It's about choosing to match the 

4 aggregated data as shown. 

5 MR. BROOKMAN: Steve? 

6 MR. ROSENSTOCK: Steve Rosenstock, EEI. 

7 Again I'm looking at this diagram. Shouldn't it say 

8 that the payback is less than 3 years if they are 

9 going to switch or are they more than 3 years? 

10 MR. FRANCO: I'll go into that. It's a 

11 little bit counter-intuitive and I'll go into why 

12 that is as we go, thank you sorry. 

13 MR. MCCRUDDEN: Charlie McCrudden, ACCA. 

14 Way back on slide 29 sort of at the beginning you had 

15 a payback period life-cycle cost in yellow right here. 

16 This one has payback period of a 3.5 years, that's 

17 some kind of determination. How did you come up with 

18 3 years and is that a payback period that DOE looks 

19 at or is it just -- 

20 MR. FRANCO: I'll go through in more 

21 detail about the actual calculation what that means 

22 and hopefully that will explain your question, thank 
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1 you. 

2 MR. MCCRUDDEN: Okay. 

3 MR. FRANCO: So the decision analysis or 

4 home comfort survey data is provided here on this 

5 table on the -- on your right so essentially the 

6 nominal values are what they represent is the answer 

7

8 277 

9

10 to this question. The question is what are consumers 

11 willing to pay for 25% higher efficiency equipment so 

12 this could be, this is HVAC equipment so this is the 

13 central AC gas furnaces, any of that type of 

14 equipment. 

15 Responses, obviously there is a 

16 distribution -- in terms of the responses this is the 

17 aggregate value that they are willing to spend 

18 compared to not having this 25% efficiency. We use 

19 as much data as available, these are all the surveys 

20 that are available from 2006 to 2013 and we convert 

21 that to 2013 dollars. 

22 Next we compare that to what's the average 
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1 cost that people pay in terms of energy costs, in 

2 terms of central air conditioning and heating in 

3 RECS 2001, 2005 and 2009 that matches this period as 

4 well. 

5 We convert that from nominal dollars to 

6 2013 dollars and we get this 906. The equation to 

7 calculate the 3.5 year payback is provided here below 

8 and this results says you can see it is 792 which is 

9 what consumers are willing to pay for 25% higher 

10 efficiency, 25% of that value in terms of energy 

11 costs and you get a 3.5 year payback so that is the 

12 basis for the 3.5 year payback. 

13 That's how much they are willing to pay to 

14 go to higher efficiency non-weatherized gas furnace. 

15 In the analysis I know there's a question, in the 

16 analysis therefore we assume that if the payback is 

17 higher than that there will be switching so that is 

18 why the payback here is greater than 3.5 it is when 

19 they are switching. 

20 If it's less than 3.5 there is no 

21 switching so hopefully that clarifies that question. 

22 When you bring two additional conditions then to this 
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1 to finalize our analysis. The first condition is 

2 that the total installed costs of the alternative 

3 needs to be less than the non-weatherized gas furnace 

4 installation cost. So if that isn't the case there's 

5 no switching so that's our first condition. So this 

6 alternative has the total installed cost has to be 

7 less than that. 

8 The other condition is that if the payback 

9 is below zero meaning that the alternative actually 

10 has greater savings in terms of energy costs, there 

11 is also switching. This is the case for example if 

12 you are in an area with low electricity rates 

13 compared to natural gas and then potentially your 

14 heat pump will be more cost -- there will be more 

15 cost savings from the heat pump option. 

16 This describes this and I know there are a 

17 number of questions so I will stop here and answer 

18 your questions. 

19 MR. BROOKMAN: Mark? 

20 MR. KREBS: Yeah in the opening page or so 

21 of the official federal registered NOPR you know it 

22 shows a simple payback of 7.2 years you know along 
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1 with an average life-cycle savings of this $305.00. 

2 You know I'm just suggesting maybe in league with 

3 Einstein's definition of doing things as simple as 

4 possible would DOE consider just straight going to a 

5 payback criteria? You know I mean and if something 

6 is better than a 3 year payback, you know I for one 

7 I'm not going to contest it, I am going to consider 

8 that in my customer's best interest and stay away 

9 from DOE you know. 

10 Is that a possibility to consider you know 

11 that we go to something totally different than this 

12 life-cycle costing thousands of pages of complexity 

13 you know, can we do that? 

14 MR. BROOKMAN: Thank for the comment Mark. 

15 MR. KREBS: No, I appreciate you know is it 

16 doable is it within -- is it even within -- I mean as 

17 the secretary determines with that language, isn't it 

18 within your capability of doing this or are you 

19 prohibited from doing it? 

20 MR. COHEN: This is Dan Cohen from the 

21 General Counsel's office. There is an authority 

22 within EPCA that allows us to do it -- essentially 
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1 what you are saying is a three year simple payback? 

2 MR. KREBS: Well I know there is a 

3 rebuttable -- I know that and here's 3 1/2. In the 

4 spirit of compromise I am willing to go to 3 years. 

5 MR. COHEN: But just to be clear that 

6 already kind of goes around the other 7 factors in 

7 the statute right, it's just a simple determination 

8 honestly your payback. 

9 MR. KREBS: I'm just -- you have the 

10 flexibility to do it if you want, that's what I am 

11 hearing unless you tell me different. 

12 MR. BROOKMAN: Frank Stanonik? 

13 MR. STANONIK: Just an observation, I mean, 

14 I guess I'm sitting it is probably irrelevant, but I 

15 am scratching my head saying okay you posed the 

16 question or you presented this as willing to pay for 

17 a 25% higher efficiency okay. Well if you go -- if 

18 your baseline is 80% AFUE and you go to 92 that's 12 

19 point gain over 80, that's a 15% increase in 

20 efficiency so I am trying to think, okay, so why this 

21 particular question when in fact the situation we are 

22 analyzing or trying to analyze is much closer to what 
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1 would the consumer be willing to pay for a in my 

2 example of a 15% increase in efficiency? 

3 This just strikes me as odd. 

4 MR. FRANCO: Thank you very much for that 

5 comment. Just a reminder we did not design this 

6 question and this is just a question that was 

7 designed not on our intent and this is what they 

8 asked in terms of the 25%. There isn't a survey that 

9 would go into that detail. There are other surveys 

10 that provide -- sometimes you ask people if maybe the 

11 energy cost is less than that. Usually, the payback 

12 if it is a little bit less they are thinking that 

13 they need to pay usually greater. 

14 So this might be conservative, potentially 

15 in that sense looking at other surveys, but this is 

16 the survey data that we have and we feel that we have 

17 found that it has the most data. Please provide a 

18 comment in that regard to -- 

19 MR. STANONIK: I'll provide a comment now, 

20 I mean I don't envy the task that DOE has okay and we 

21 have certainly gone back and forth about how you 

22 would like to have the best data you could get and 
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1 some of that might be in our hands and some of that 

2 we can share and some we can't or whatever, but my 

3 comment is, okay, so in some cases if you don't have 

4 good data then I don't necessarily agree that in all 

5 cases then you grab whatever might be there because, 

6 say in this case, this is the question they asked and 

7 I would say but this question really doesn't have 

8 relevance to this rulemaking and so I think in some 

9 cases my comment would be sometimes then don't use 

10 whatever is the available data because it just 

11 doesn't fit. 

12 Don't pound a square peg into a round 

13 hole. 

14 MR. CYMBALSKY: This is John from DOE. So I 

15 disagree with the foundation of your statement that 

16 this doesn't apply. This is actually just saying 

17 what the willingness to pay for efficiency is. If it 

18 says 10, 5, 15, it gives a number right, it's 

19 normalized so it's perfectly reasonable. 

20 MR. STANONIK: I was asked to give a 

21 comment so I was. And by the way I wasn't good 

22 enough to -- I wasn't staying for that comment 
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1 either. 

2 MR. CYMBALSKY: Thank you for that 

3 comment, we only thank you for good comments. 

4 MR. BROOKMAN: Dave Schroeder? 

5 MR. SCHROEDER: That's a difficult 

6 question to follow but I am curious why in all of the 

7 rest of the LCC's spreadsheet and the NOPR the word 

8 payback means what I believe to be the traditional 

9 definition of payback, meaning the time after which 

10 you start to recover money and in this case if you 

11 follow the logic in the LCC spreadsheet that is not 

12 what payback means. 

13 Payback in this case means the time after 

14 which consumers begin to lose money to operational 

15 cost increases relative to the baselines, so could you 

16 comment on why you mixed those terms? I mean, even 

17 within this one spreadsheet they are mixed. 

18 MR. FRANCO: Thank you for that comment. 

19 I appreciate that, we will try to define that better 

20 and I can see that could be misunderstood because 

21 they are using the same term we will correct that, 

22 thank you. 
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1 MR. CYMBALSKY: So on this slide, Dave 

2 just pointed to the questions we think we have 

3 addressed. So we think priority questions B and D and 

4 questions 1, 2, 3, 5, 6 and 7 in the related to fuel 

5 switching have been addressed so if not, please -- 

6 MR. BROOKMAN: Dave Schroeder? 

7 MR. SCHROEDER: This is Dave Schroeder I 

8 think -- 

9 MR. CYMBALSKY: I think we are going to 

10 get to C eventually. 

11 MR. FRANCO: Yeah let me know if I don't 

12 get to it in my next slide. This I think has a 

13 couple of responses. This provides -- this is the next 

14 slide to kind of go over a little bit about detail, 

15 not too much due to the time constraints, but this presents 

16 the summary of all the inputs. There are more 

17 details in the TSD compared to what is shown here. 

18 This gives you the -- how we determine the cost for the 

19 electric furnace, central AC and heat pumps, the 

20 price trends of these two, all the installation and 

21 maintenance costs that we assume when we got that 

22 information in terms of the value in terms of the 
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1 energy use, we are using the latest energy efficiency 

2 standards that would be applicable during that period 

3 of time 12/21 and also the lifetimes. 

4 As you can see, most of the data comes from 

5 previous rulemakings that DOE has conducted for this 

6 product. There were a couple of questions in 

7 relation to these, which I will go through in more 

8 detail, that are related to first electric furnaces. 

9 For electric furnaces we didn't have direct data 

10 similar to what we do in terms of the manufacturer 

11 cost. 

12 We have a value that comes from RS Means 

13 and there was a question why we multiply that times 

14 3. We assume that the markup for that equipment 

15 would be around 3 and so we divide the RS Means value 

16 by 3 to get the manufacturer, the manufacturer 

17 production cost. 

18 After we get that value then we use our 

19 general markup distribution to that value, that 

20 single value to become comparable to the other 

21 values, so that is the answer to the first question. 

22 There was another question related to the electric 
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1 water heaters in terms of the differences between 

2 natural gas water heaters and electric water heaters. 

3 Usually the market, if you are purchasing between 

4 electric water use and gas water heaters, electric 

5 water heaters are usually cheaper in terms of the 

6 manufacturer costs. 

7 Here though, we are considering the case 

8 where we are having to switch from natural gas to 

9 electric water heaters so we have to include the fact 

10 that the major cost is due to the fact that we have 

11 to do installation costs in terms of potentially 

12 adding electric outlet, potentially doing some work 

13 in terms of the electrical panel, and those costs are 

14 added in. 

15 In addition to that, when you are going 

16 from natural gas to an electric water heater you 

17 might have to size that a little bit to a larger 

18 size. For example, if you start with a 60 gallon gas 

19 water heater you might have to go to a 50 gallon 

20 water heater because you want to get the same output 

21 out of it, say to take your showers. 

22 So an electric water heater would be 50 
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1 gallons, natural gas would be 40 gallons. We take 

2 that in counter analysis as well. The details are 

3 provided in the TSD. Please submit anything that you 

4 feel that needs some further clarification. 

5 MR. CYMBOLSKY: So I think on this one for 

6 the docketed questions we think we have 3, 6 and 7 

7 from the questions asked previously and not answered 

8 by DOE. 

9 MR. FRANCO: Do we have any questions? 

10 MR. CYMBOLSKY: If we didn't, please ask 

11 it. 

12 MR. BROOKMAN: Neil go ahead. 

13 MR. LESLIE: This is Neil Leslie, GTI. 

14 Maybe you did, so the simple question I guess, why was 

15 the uniform distribution chosen for remaining 

16 lifetimes for cooling and water heating equipment? 

17 MR. FRANCO: Yes, thank you for that. 

18 That question actually relates back to how we account 

19 for the remaining lifetime of the water heater. 

20 There is no data in terms of when the furnace fails -- 

21 what's the age of the water heater -- so we assume kind 

22 of a uniform distribution -- we assume, well it's between 
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1 1 and 13 years once the furnace fails. 

2 If you feel that maybe something else 

3 could be better to represent that please let us know. 

4 Thank you, so now this is the final slide 

5 for product switching in terms of the result -- so these 

6 are the results of the switching and as you can see 

7 here they vary between North of the country and 

8 between the national standard levels. So as you go 

9 to a higher efficiency standard levels the switching 

10 goes up, which follows what you might think. 

11 You also get switching to electric 

12 furnaces and heat pumps that are disaggregated in 

13 these figures. All the way at the bottom there is 

14 also the switching that occurs between the gas 

15 storage water heater and the electric storage water 

16 heater and those values are there. 

17 MR. BROOKMAN: Don Brundage? 

18 MR. BRUNDAGE: Don Brundage, Southern 

19 Company. I think your numbers on switching to 

20 electric furnace are unrealistically high. Even in 

21 the South, meaning rest of the country, it is rare at 

22 my company to have a destroyed electric furnace. 
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1 They have actually been banned in single family 

2 housing under the building code for about 10 or 12 

3 years. What is especially puzzling is the percentage 

4 numbers looking at these between electric furnace and 

5 heat pump, it appears to be about the same percentage 

6 in the North picking electric furnace over heat pump 

7 compared to and rest of country and with the higher 

8 heating loads that would seem to be very counter 

9 intuitive. 

10 I would expect lower numbers choosing -- 

11 much lower numbers choosing electric furnace over 

12 heat pump in the South and very minimal choosing 

13 electric furnace over heat pump in the North, thank 

14 you. 

15 MR. FRANCO: Thank you so much for those 

16 comments. Let me just go through two additional 

17 things that might help on this. We did assume in the 

18 energy use the efficiency of the heat pump to vary 

19 between regions. In the North, even though the sea 

20 level is the same in the North, efficiency drops 

21 because of the climate conditions. 

22 In the South the efficiency would be 
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1 greater so that it counts for some of the numbers how 

2 they play out. Also you need to consider that these 

3 numbers are aggregate for the North. There are some 

4 situations in the North where electricity prices are 

5 fairly competitive with natural gas. 

6 One such situation is in the Pacific 

7 Northwest, so those are considered if you look at the 

8 actual disaggregated numbers by region. For example, in 

9 the North you would see that as well. 

10 MR. BROOKMAN: Rick Murphy? 

11 MR. MURPHY: It's Rick Murphy, AGA. 

12 Victor this chart here do you also have that broken 

13 up between replacement and new construction? 

14 MR. FRANCO: This between replacement and 

15 construction, yes. I think it is in the appendix D -- if 

16 not, it would be D and I but I think it is in the 

17 appendix and broken down as one of the actually, 

18 that's one of the major inputs to the NIA analysis, 

19 we put it down by new construction and replacement 

20 part. 

21 MR. KREBS: Victor Mark Krebs again with 

22 Laclede. In this chart especially are we looking at 
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1 -- we are looking at replacements and clearly it says 

2 so right there, you know what about new construction 

3 because I think fuel switching is a really different 

4 scenario in new construction because they don't have 

5 all of these, they don't have to do a lot of work 

6 upgrading their electric service panel, you know. 

7 They just simply go with the next bigger 

8 size you know, they -- by your own calculations I 

9 think you show a savings in construction costs by not 

10 having to build a constructive flue so you know I 

11 think that the switch might be total, you know is my 

12 point. Heat pumps with electric resistance or heat 

13 pump water heaters perhaps you know and everything 

14 else you know there will be no gas service in which 

15 case what are the environmental impacts of that. 

16 I guess you know raise that as areas that 

17 you know it is kind of hard to determine how you are 

18 separating this out you know in all cases. Let me 

19 just ask you flat out -- you know is there a set 

20 percentage of the market that you -- that's new 

21 construction in your papers that I have been talking 

22 about all day -- you -- say you assumed 25% you know, is 
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1 that similar here? 

2 MR. FRANCO: That's correct, so just to 

3 reiterate this is the household by household. The 

4 building sample 25% is assigned to new construction. 

5 That's then you can disaggregate those results and 

6 sorry about that that's a good clarification. These 

7 results are only for replacements. There's a similar 

8 table in the TSC and I'll point to the page that has 

9 the new construction results and all the analysis, 

10 new construction is obviously very different, very 

11 different considerations. 

12 The page for this is page 22 and 23. On 

13 page 22 this table is 8J43, which is the residential 

14 results and 8J.4 is the new construction results, 

15 sorry about the clarification. 

16 MR. BROOKMAN: Harvey Sachs? 

17 MR. SACHS: First I want to thank Mark 

18 Krebs. I am agreeing with essentially everything he 

19 said that new construction is battleground and that 

20 leads me to the question for Victor. In your 

21 consideration heat pump case were you considering the 

22 sort of classic all American air source heat pump or 
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1 were you considering some of the newer BRF equipment? 

2 MR. FRANCO: This is just the regular 

3 source of heat pumps. 

4 MR. SACHS: So we are certainly seeing the 

5 beginnings of substantial market transformation in a 

6 couple of northern areas where they are finding 

7 capacity maintenance with variable speed compressors 

8 down to speeds below zero and seeing relatively high 

9 HSPF values or better yet COP values under these 

10 conditions. 

11 This may emerge as something that matters 

12 competitively far more than the question of 

13 condensing versus non-condensing. 

14 MR. BROOKMAN: Dave Schroeder then to 

15 Steve. 

16 MR. SCHROEDER: I think you may have tried 

17 to answer this question before but I am not sure that 

18 I fully understood your answer so I am going to try 

19 again. 

20 MR. FRANCO: Thank you. 

21 MR. SCHROEDER: In cases where there is a 

22 first cost advantage of the switching option relative 
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1 to the 92% case the model chooses that option where 

2 you have essentially a negative payback as you have 

3 defined it. 

4 MR. FRANCO: Let me try to rephrase that. 

5 So we compare the non-weatherized gas furnace you 

6 mentioned 92% versus the electric option. If the 

7 payback is below 3.5 then that -- there's no 

8 switching. If it goes negative that, so below zero -- 

9 then there is switching because that's the case when 

10 you actually have operating cost savings on the 

11 electrical side. 

12 MR. SCHROEDER: Okay so if you have 

13 operational cost savings and you have first class 

14 savings, even relative to an 80% furnace it would 

15 select that case as well and it would consider it to 

16 be a fuel switching case. You would also have 

17 probably a good life-cycle cost savings but I don't 

18 understand how that it related to the rule? 

19 Do you understand my question? 

20 MR. FRANCO: Yeah, this is what I 

21 mentioned earlier -- we didn't consider the case 

22 where you are going from a non-condensing to these 
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1 other options. If you think that we should consider 

2 that's please submit a comment on that -- yeah. 

3 MR. BROOKMAN: Steve Rosenstock? 

4 MR. ROSENSTOCK: Steve Rosenstock, Edison 

5 Electric Institute. Again another option which is 

6 not considered is the ground source heat pumps which 

7 Harvey was very involved with for many, many years. 

8 Geo-thermal heat pumps is another design option for 

9 new construction. Anyhow I am looking at all of 

10 these numbers and I am just -- it's basically from 

11 what I am seeing in terms of when you switch over the 

12 water heaters is that it seems that it is 20% or 

13 switching to electric heating source that another 

14 that 2 up to 4% of that, 20% or up to 35%, basically 

15 about 20% of those are also -- they are also going to 

16 switch their water heaters as well. 

17 And again I guess you took a lot of things 

18 into account, I just you know especially for over 55 

19 gallons we are going to have to go to a heat pump 

20 water heater, I definitely have to agree with Don 

21 Brundage of the Southern Company. I think especially 

22 for replacements in my mind I think with all the 
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1 other technology options out there these numbers just 

2 seem way, way high and also there is no context of 

3 the fact that the heat pumps have increased twice in 

4 efficiency and their costs have increased twice over 

5 the last 9 years and this doesn't talk about the 

6 other side of the equation where people can put in 

7 gas equipment rather than heat pumps because of the 

8 higher cost of the heat pumps, thank you. 

9 MR. BROOKMAN: Frank Stanonik? 

10 MR. STANONIK: I think there is one area 

11 in this analysis that you need to factor in so you -- 

12 in the chart on slide 74 on a national basis roughly 

13 20% of replacement installations are installations 

14 where there is no air conditioning. 

15 MR. FRANCO: Thank you, that's correct. 

16 MR. STANONIK: So when this consumer is 

17 faced with the choice of replacing their gas furnace 

18 and they are presented with the choice that it is 

19 only going to be a condensing gas furnace okay. 

20 Given that significant purchase and significant 

21 change out of the system okay, I think you need to 

22 consider that if you know, if they aren't into this 
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1 situation well what am I going to do and the choice 

2 is well we can give you this very expensive high cost 

3 installation condensing gas furnace or we can give 

4 you a heat pump, which oh by the way will give you 

5 air conditioning that you didn't have in the past and 

6 as Andrew and I discussed, consumers value comfort and 

7 in fact there is a dollar value to that comfort, okay. 

8 If you think about that, that 

9 significantly changes at what point the consumer 

10 would say from an economic standpoint, oh sure, give 

11 me, let's forget that old gas product just give me 

12 that wonderful heat pump I will have heated and I 

13 will have cool and that will be great because they 

14 didn't have cool and there's no question that a 

15 standard home in the United States today has heating 

16 and cooling and those people who don't have it either 

17 can't afford it for whatever reason or they just 

18 haven't got around to it but they sure would like to 

19 have it and so I think you have to factor that in. 

20 That the choice might be okay you are 

21 either going to have to pay this cost for your new 

22 gas furnace or whatever or I could give you this heat 
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1 pump and yeah it might cost more okay, it might cost 

2 more but now your house is going to be warm in the 

3 winter and cool in the summer and as we talked 

4 there's a value, I think you have to work it in there 

5 because it will drive that decision. 

6 MR. FRANCO: Thank you so much. Just to 

7 clarify how we did it and what -- we did not consider 

8 in that situation the heat pump to be an option if 

9 they didn't have a central air conditioner so for 

10 example the case would be say, for example, number 4. 

11 The options are listed here, they would either have an 

12 electric furnace -- 

13 MR. STANONIK: And I think that there's a 

14 slight error in the analysis. 

15 MR. FRANCO: I thank you for that comment, 

16 we appreciate it. 

17 MR. BROOKMAN: Please say your name. 

18 MR. DRUMHELLER: Craig Drumheller 

19 representing the National Association of Home 

20 Builders. One of the components here that I think is 

21 missing with fuel switching -- I represent the 

22 National Association of Home Builders, we build 
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1 roughly a million homes a year and all of them have 

2 to make decisions whether you are going to use gas or 

3 electric but I think one of the components that is 

4 missing here is deciding okay I am going to go to a 

5 direct vent furnace so now what am I going to do with 

6 my water heater? 

7 Am I going to go with a direct vent gas 

8 water heater, am I going to go to a B vent on my 

9 water heater, or am I going to go to an electric water 

10 heater -- so I think that's a major component that's 

11 missing on this -- so you are talking about heating and 

12 cooling comfort but you are not talking about water 

13 heating and I think that's where a lot of my builders 

14 said well that's what I'm probably going to do I am 

15 not going to run a dedicated B vent for a water 

16 heater -- so I think you should include that in your 

17 analysis. 

18 MR. FRANCO: Thank you, we appreciate that 

19 comment. 

20 MR. SACHS: Craig this is Harvey Sachs. I 

21 think that is an important question and we certainly 

22 have some empirical experience which was related to 
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1 me by a Massachusetts utility that the builders in 

2 their area were responding in a very constructive and 

3 cumulative even way. What they did is install the 

4 condensing furnace and then they installed a power 

5 vented gas water heater, low efficiency and then they 

6 offered the chimney as an expensive adder so that 

7 people could have a fireplace. 

8 Once they had gone to the condensing 

9 furnace and the power vent they kept all of the 

10 amenity of gas and built themselves in a very nice 

11 option that most people chose to go upscale with. 

12 MR. BROOKMAN: I think now we are moving 

13 on to slide 78, Dave Schroeder? 

14 MR. SCHROEDER: In the fuel switching 

15 logic the model chooses whatever option has the 

16 longest payback period and assuming that there is one 

17 over 3 years. If there are two over 3 years 

18 what's the rationale for choosing the one with the 

19 longest rather than the lowest first costs -- because 

20 presumably people are considering switching because 

21 of first cost issues. 

22 MR. FRANCO: Again to thank you we did not 
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1 trust that that was one of the questions that you had 

2 asked -- that was just a simplification -- we assumed that 

3 was the greatest one, please submit comments that you 

4 think how that can be improved, thank you. 

5 So these are the results -- these results 

6 presented here are with fuel switching so when you 

7 see for example 90% a fraction of these results are 

8 actually switching to either a heat pump or electric 

9 furnace or going from a gas water heater to an 

10 electric water heater. This presents a simple 

11 payback and the overall system. The next slide 

12 presents the impacted consumers and the average LCC 

13 savings. 

14 The next slide actually compares the 

15 results between without switching and with switching. 

16 In the appendix we also provide different scenarios 

17 for the switching so you can look at what would 

18 happen if there was a difference in switching a 

19 fraction in terms of changing the payback criteria. 

20 So you can take a look at that analysis in 

21 the appendix 8J. 

22 MR. BROOKMAN: Neil? 
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1 MR. LESLIE: Could you maybe explain why 

2 the payback period drops when you start to put fuel 

3 switching in there compared to without fuel 

4 switching? 

5 MR. FRANCO: Thank you for that question 

6 and that's a question you have provided. The -- you 

7 can think of it as the LCC results that is a 

8 distribution. Most of the people that would be more 

9 negatively impacted would be in this negatively 

10 impacted distribution. If they find this equivalent 

11 to be benefitting because they have a lower cost and 

12 maybe their operation costs are not that different 

13 they would be more positively impacted than if they 

14 were with going with the standard. 

15 Because of that the overall payback 

16 decreases and the LCC savings decrease. Now if you 

17 notice from this slide note that for example the 

18 switching -- without switching and with switching 

19 fractions are very, very similar so they are still 

20 pretty much being negatively impacted but they are 

21 less negatively impacted on average. 

22 This does not mean that all households are 
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1 not more negatively impacted -- say for example they 

2 decide to install electric furnace, maybe over the 

3 lifetime they will have significant operating costs 

4 but on average the payback does decrease and the LCC 

5 savings on average increase. 

6 But this analysis is done household by 

7 household, so household to household they will be both 

8 negatively and positively impacted, does that answer? 

9 MR. LESLIE: Mostly I guess -- my other part 

10

11 304 

12

13 of this is when you run it, with and without switching 

14 them, is it expected that a different house will be 

15 impacted with in the without switching version 

16 compared to with switching? In other words, how 

17 do I get from the 9 to the 7.7 using the same house 

18 or is it a different house that wound up winding up 

19 having a net cost or is it the same house with a net 

20 cost but that when you switch then you accrue a 

21 benefit by switching? 

22 MR. FRANCO: So one feature of Crystal 
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1 Ball and again it's a little bit technical, but one 

2 feature of Crystal Ball is they can actually sample -- 

3 if you do different scenarios -- you sample the same 

4 household, so what we do with and without switching, 

5 you are sampling the same household so essentially 

6 what you are doing is in this area with product 

7 switching the household that switched for example 

8 will choose a heat pump and that's the -- the 

9 benefits in terms of the heat pump going from 80% 

10 that they wish to install and not having to install a 

11 heat pump and the results without switching that same 

12 household economics are going from because there was 

13 no switching it would need to go to the condensing, 

14 that's 90% or 92% whatever the standard, wherever the 

15 level we are looking at. 

16 Hopefully that answers. 

17 MR. BROOKMAN: Mark Nayes, I almost 

18 dropped you out, you are next, please go ahead. 

19 MR. NAYES: Yes, I want to go back to the 

20 inability to install certain condensing furnaces and 

21 certain condominiums. I can get about 99.9% of homes 

22 install a condensing furnace just by being able to be 
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1 creative but there are certain instances where like 

2 in a condominium if you are on the lower level and 

3 you have a vaulted ceiling, there is no wall you can 

4 go through to vent out you are going to have the vent 

5 going through your kitchen table, it is going to go 

6 through your dining room window. 

7 If you want to go through a different wall 

8 you are going to someone else's living space and we 

9 are not allowed to do that so what am I supposed to 

10 do in that instance? 

11 MR. BROOKMAN: Did you say 99.9, it works? 

12 MR. NAYES: I can get it in just about 

13 every instance. I can put a condensing furnace in 

14 just about any home out there but there are some that 

15 it doesn't matter what kind of money you put at it, 

16 what kind of costs I put on it I cannot install it 

17 according to code. 

18 MR. BROOKMAN: Okay thank you. Bud 

19 Miller? 

20 MR. MILLER: Thank you, Bud Miller, APGA. 

21 A number of times today the speakers indicated that 

22 he would in the next generation revise certain things 
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1 to account for things that have been said in 

2 questions and answers today. So my question, whether 

3 it is of the speaker or you, John, is when will we see 

4 this new iteration? Will it come with full 

5 explanation and we will then have a revised comment 

6 period to respond to that revised iteration? 

7 MR. COHEN: Yes, I mean we are going to 

8 have to look into this and talk it through really, it 

9 depends on what the changes would be right. If they 

10 are just sort of clarifications or corrections or 

11 whatever we could just put another new version of the 

12 spreadsheet in it doesn't really change the basic 

13 thrust of what is up there now. 

14 MR. BROOKMAN: So that was Dan Cohen. 

15 MR. MILLER: And this is Bud Miller. 

16 Hopefully if you do put up a new spreadsheet A -- you 

17 will tell us about it, and B -- you will explain it 

18 because we have had that problem in the past and then 

19 we will have to decide if you don't provide a new 

20 comment period whether to ask for one depending upon 

21 what we see in terms of what you post, but notice is 

22 very important in terms of when you post it and what 
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1 it reflects, what changes it reflects, thank you. 

2 MR. CYMBALSKY: So before we move on so I 

3 just wanted to recap for the benefit of the questions 

4 for docket. We think we have got questions 1A and 4 

5 in the section noted as previously asked and not 

6 answered. We also think we have got question 1 

7 related to installation costs and question 5 in the 

8 previously asked and not answered, okay just to keep 

9 that. 

10 MR. BROOKMAN: Okay we are going to press 

11 on here. 

12 MR. FRANCO: This next slide and John will 

13 present it. 

14 MR. CYMBALSKY: So I will take this one. 

15 We want to throw a few slides in here just to compare 

16 the AGA analysis that has been out there, it is 

17 actually in our docket as well compared to what we 

18 have here in the NOPR so we just threw a couple of 

19 slides up here to show that. I am not going to read 

20 through here but you could see what we believe to be 

21 the AGA assumptions in their modeling and so you can 

22 see them there. If we advance the slide we could see 
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1 what the key differences here are so really when you 

2 look at the analyses we have several levels of fuel 

3 switching in both. 

4 What really matters is when you do switch 

5 my recollection is where it switches like in what 

6 region of the country what the heating load is in 

7 that switching situation and then all of the 

8 economics that play out in terms of what we used in 

9 our analysis which is what we presented here, the 

10 prices that the AGA analysis has, how carbon factors 

11 and things such as that change over time to get the 

12 environmental benefits. 

13 But you know we think that you know 

14 everything that we have done in our fuel switching 

15 analysis clearly has taken some good comment here 

16 today but again we think the level of switching is 

17 similar it is just you know what house switches and 

18 where the house is and what the heating load is gets 

19 you to a different answer in both of our studies 

20 which is kind of a high levels. 

21 MR. FRANCO: This answers a couple of 

22 questions from AGA I think. 
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1 MR. CYMBALSKY: Yes, that is question 1C on 

2 the previously asked and not answered. 

3 MR. BROOKMAN: Steve Rosenstock? 

4 MR. ROSENSTOCK: Just a very quick -- I have 

5 not had a chance to see the AGA study. I know you 

6 said it is on the docket. On slide 81 these 

7 conclusions, which I would love to look into deeply, 

8 are these annual figures or over 30 years? And there 

9 are conclusions are those 30 year numbers? Annual? 

10 Well I would have issues with a couple especially the 

11 emissions thank you. 

12 MR. BROOKMAN: Okay. 

13 MR. FRANCO: So the next final piece of 

14 the LCC is we do a subgroup analysis we take a look 

15 from our sample of people that would be in the low 

16 income or senior only. The results presented here 

17 are the comparisons between the senior or low income 

18 of all consumers. 

19 The next slide just to finalize if there 

20 are any additional comments for the LCC then we will 

21 move on to the next. 

22 MR. BROOKMAN: Yes, Mark Krebs? 
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1 MR. KREBS: Just one real short -- just to 

2 reiterate what the comments in the furnace fan rule 

3 from Sophie Miller that states that for those low 

4 income groups you are vastly understating the 

5 discount rate. 

6 MR. BROOKMAN: Okay thank you, Mark Nayes 

7 has a comment -- it's a question in fact. If this is 

8 designed to save energy why is the entire building 

9 mechanical not being considered as a whole? 

10 MR. FRANCO: The standard is only for 

11 furnaces we only considered the furnaces on this 

12 analysis, thank you for the comment. 

13 MR. BROOKMAN: Frank Stanonik? 

14 MR. STANONIK: This last slide -- hopefully 

15 in one or two sentences you can explain how does the 

16 average life-cycle cost for a senior only become 

17 higher than for the nation? Wouldn't they have the 

18 same installed price, cost of the furnace? 

19 MR. FRANCO: This relates to the 

20 distribution of these furnaces throughout the country 

21 and the appropriate discount rate and so there's a 

22 lot of economic factors you would have to look into 
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1 exactly the distribution of these and economics but 

2 they are all -- everything is similar in terms of the 

3 assumptions and this is the results of that. 

4 MR. STANONIK: Follow up, Frank Stanonik, 

5 AHRI. If that is true then why would you look at 

6 senior only as a separate sub-group? They have to 

7 have some significant changes and I guess I'll go 

8 look at the TSD. 

9 MR. FRANCO: Thank you for that comment. 

10 MR. BROOKMAN: Neil? 

11 MR. LESLIE: So I know we are all getting 

12 very close to the end of the day here. First of all 

13 I want to express my appreciation for the efforts you 

14 all put into doing your best to answer questions that 

15 are very thorny and maybe somewhat very challenging. 

16 I appreciate the efforts and it doesn't matter 

17 whether we agree or disagree with the answer what I 

18 appreciate is the fact that you worked hard to figure 

19 out an answer to them. 

20 I have one last one sitting in here -- I 

21 think aside from the West Virginia thing, you already 

22 did it, thank you I was somewhere else at the time 
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1 even if I was here. 

2 But I have a challenging question in here in that I'm 

3 not sure what's equitable and how we get at equity so 

4 it has to do with question number 4 on the overall 

5 sheet and I am going to just ask it again and if you 

6 feel you have answered it in the best way you can, 

7 okay, but I am struggling still just a little bit. 

8 So the question is and they are both 

9 important. How are negatively and positively 

10 impacted homes segmented? North, South, new 

11 construction replacement, different options in 

12 different home locations and sizes and configurations 

13 as well as other factors that would impact consumer 

14 classes differently -- our concern is that the 

15 averages continue not to show the impact on marginal 

16 effected consumers both positively and negatively. 

17 I am not sure how to address that right 

18 now but as you had offered to do your best to answer 

19 all the questions that were on here I believe that is 

20 the very last one I see that is in play in my mind 

21 right now. 

22 MR. FRANCO: Thank you for that question. 
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1 Kind of -- it was answered throughout the presentation. 

2 Basically what we do is we segment the market in 

3 terms of new construction, replacement in the 

4 building sample, in terms of the building sample. 

5 Once we produce the aggregate results the average of 

6 all the 10,000, so for example, if you want to only 

7 look at the results for the South out of the 10,000 

8 that represents 4,701 households. 

9 The disaggregation between of that -- 

10 between new construction and replacements would be 

11 1,161 and 3,500 so you can actually if you had all 

12 the 10,000 they will all be there in terms of they 

13 are all disaggregated and all the inputs are 

14 representative of what they should be for new 

15 construction versus replacement. Hopefully that 

16 answers. 

17 MR. LESLIE: It's almost unanswerable I 

18 know but the hope is that if we can identify and this 

19 may be for some of the other folks that may be having 

20 some discussions, different sub-categories that 

21 matter. And that is what I was trying to get at, 

22 both positive and negative not just negatively so 
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1 that people can appreciate and understand the impact 

2 on different classes of consumers. 

3 Locationally and size of home, income 

4 classes, whatever type of granularity as you said 

5 there is a lot of information in the 10,000 data 

6 points and of that large set of information there was 

7 a certain subset that deemed to be appropriate for 

8 the rulemaking. 

9 The concern that we have is that there may 

10 need to be some additional granularity in this for a 

11 good equitable rule. 

12 MR. FRANCO: Thank you so much for those 

13 comments, I appreciate it. 

14 MR. BROOKMAN: Questions? Go ahead 

15 please. 

16 MR. DRUMHELLER: Craig Drumheller 

17 representing the National Association of Home 

18 Builders. These are just kind of my final statements 

19 so that some of them are similar to what Neil has 

20 just indicated. 

21 They are very concerned that a large 

22 section of the population will be negatively impacted 
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1 by this rule. Warmer climates, less expensive gas 

2 areas, replacements especially those that exist in 

3 finished areas. The analysis, just like any analysis 

4 has a series of assumptions what I call knobs and it 

5 appears that all of these knobs seem to be turned in 

6 one direction. 

7 The low discount rate -- we believe this 

8 is unrealistically low. Consumers based on their 

9 willingness to pay and alternative debt that they 

10 have the discount rate should be closer to the 10, 

11 12, 14% range. Energy cost escalation rate you know 

12 historically they have been -- it has been much 

13 flatter than is typically predicted by the Department 

14 of Energy and projected material prices -- again all 

15 of these knobs turn in the direction that 

16 overestimate the payback. 

17 While the consumers are typically willing 

18 and these are surveys that NHB has done over and over 

19 again about a 7 year payback, NHB adjusted their 

20 policy a few years ago to say you know what we will 

21 go to a 10 year payback but it is not really what the 

22 people that buy the homes want. They want 7 but we 
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1 went to 10 just so we could be involved in some of 

2 the conversations. 

3 And DOE's numbers in a lot of cases go 

4 above 12, 13, 14 years which is unrealistic 

5 especially for a piece of equipment that your 

6 estimates says 21 years and some of ours are even 

7 closer to the 18, 16 year range. That's cutting it 

8 rather close. Everybody needs to keep in mind this 

9 is a minimum standard, everybody has to do this we 

10 are not talking about Energy Star we are talking 

11 about everybody must comply with this and we think 

12 that this is overstepping. 

13 Corrections to this problematic 

14 requirements may be bifurcated standards maybe for 

15 condensing and non-condensing and have separate 

16 categories and separate requirements for each 

17 category, potentially having regional North/South 

18 requirements and in addition having exemptions for 

19 replacements. 

20 So hopefully you will consider that and we 

21 will include that in our comments, thank you. 

22 MR. BROOKMAN: Okay thank you. 
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1 MR. CYMBALSKY: So at this point I am just 

2 going to announce that clearly we didn't reach the 

3 finish line so we will see you all again on April 

4 13th to finish the meeting so we will put out an 

5 announcement and a blast and do a webinar 9 A.M. 

6 So let's try 10 A.M. because I think we 

7 will have some west coasters that may not want to 

8 travel all the way back for the rest -- so it is a 

9 Monday, April 13th -- yes. We will be here as well so 

10 please mark your calendars, we are going to pick off 

11 at the shipments and finish the rest of the slides. 

12 And then at that point everyone can do 

13 their closing remarks. I really appreciate everyone 

14 for sticking around and really this was a great 

15 dialogue a lot of good information. I know the 

16 material was dense but we got through I think the 

17 hardest part so I appreciate it. Thank you. 

18 (Whereupon the meeting adjourned at 4:51 

19 p.m.) 

20

21

22
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A

a.m 1:14 5:2 319:5

319:6

abbreviated 15:22

ability 11:1 25:15

29:17 71:22

able 13:14 26:21

27:2 29:9 41:18

48:3 56:11 74:6

74:10 76:1 79:1

90:10 97:22 107:4

124:17 125:9

138:11 211:20

221:5 239:14

249:5 306:22

absence 44:2 158:21

245:8,8 260:13

absolutely 74:1 98:8

126:12 159:21

191:18 201:19

AC 97:1,3 171:3,6

175:22,22 176:7

177:12 278:13

286:19

ACCA 3:8 116:22

117:9 123:7

131:18 145:13

173:1 175:1

176:16 277:13

acceptable 43:15,16

accepted 220:14

access 22:9 25:13

209:13,15 235:8

236:18 237:3,18

238:9,13

accessible 13:10

accidentally 133:9

accompanied 16:5

account 15:9 16:15

32:21 34:6 43:1

89:5,13 94:21

122:18 127:9

130:18 141:3,5,9

141:10,15 142:18

142:20 143:1

145:5 148:22

150:20 151:1,19

151:22 153:9,15

155:7,9,19 156:9

156:19 162:6

167:12 168:2,3,6

169:6,8,11 170:1

174:15 176:13

182:12 183:16

185:8 186:16

187:3,20 188:8,12

188:18 199:10

200:10,15,22

201:6 203:9 211:5

214:14,15 224:12

255:6 272:4 273:4

274:8 275:9

289:18 297:18

308:1

accountable 14:12

accounted 32:19

60:19 82:17 177:5

202:9 224:9,11

accounting 61:6

accounts 141:19

222:17

accrue 305:20

accuracies 92:12

accuracy 91:14,19

92:9 94:5,12

accurate 64:11 89:5

250:1 251:6

252:12 254:1

263:9

accurately 35:17

ACEEE 3:18 81:7

86:5 113:19

130:10

achieve 29:6,11

39:5 51:16 56:9

achieved 44:16

achieves 44:19

achieving 67:17

acidity 170:3

act 15:15 25:12

active 26:4,7 49:9

96:18 199:18,19

200:2

actual 21:2 63:7

92:11 109:20

112:19 118:4

123:4 124:17

134:10 138:17,17

192:17 193:4

195:15 206:7

215:3 216:7

231:15 237:12

263:13 271:15

277:21 292:8

Adam 2:13 7:20

52:5 57:14 60:1

62:11 64:19 66:12

70:18 73:18 76:7

77:3 81:21 83:4

85:12,13 92:3,17

95:6 97:8

add 12:7 19:6 99:20

101:20 193:11

219:12 224:2

270:16

add-on 104:2

added 77:7 120:14

133:12 145:19

147:14 154:9

170:4 253:17

267:9 288:14

adder 230:15 302:6

adders 77:7 176:17

adding 70:6,10

93:16,18 133:18

154:19 167:19,20

239:20 288:12

addition 50:15

103:1 151:15

194:21 236:19

240:5 253:16

288:15 318:18

additional 9:8 19:19

25:19 43:7 45:6

50:10 61:13 66:4

74:13 83:20 95:17

99:13 119:2 133:7

140:16 142:14,17

156:17 169:14

178:10 219:12

227:2 233:15

237:12 254:16

262:8 263:10

279:22 291:16

311:20 316:10

additive 208:5

address 25:12 28:15

29:18,19 38:9

40:12 48:11 71:7

77:3 86:2,22 90:2

90:4 119:5 130:17

131:15 162:13

169:22 173:5

314:17

addressed 11:17

15:13 29:1 87:8,9

96:14 286:3,5

addresses 15:20

41:4 133:20

addressing 16:8

154:16 162:12

168:15 199:3

adds 99:17

adjourned 319:18

adjust 186:7,10

195:6 215:7

218:12 259:22

adjusted 32:21

196:7 317:19

adjusting 196:17

197:15

adjustment 194:20

194:22,22 195:6

195:10 197:14

215:11

adjustments 186:2

186:13 193:8,13

198:14

adopt 20:17

adopted 28:8 55:2

advance 12:13

18:13 309:22

advanced 125:18,19

125:20

advancing 12:16

26:5

advantage 295:22

adverse 22:22 24:12

Advisors 49:8

advisory 228:11

advocate 51:14,15

221:19

advocates 20:6 26:2

28:6 228:5

AEO 196:13 226:19

228:5

affect 42:10

affiliated 18:9

affiliation 5:16 49:2

afford 270:17

299:17

after-the-fact 40:16

afternoon 64:22

101:4

AFUE 18:20 19:3

20:18 23:2 29:22

46:19 47:16 48:1

53:21 65:3,8 80:9

80:10 86:8 88:18

108:1 190:6,10,20

190:20 191:15

193:10 204:4

211:8 219:12

246:19 248:10,16

248:21 249:12,14

249:15 282:18

AFUEs 109:7

AGA 10:11 12:3,8

20:5,10,14,16

21:4,10,20,21

22:5,14 28:15

32:10,11 37:14

123:14 137:14

207:9 233:6 240:1

251:17 274:1

292:11 309:16,21

310:10,22 311:5

AGA's 250:16

age 149:2 157:5

239:4 272:15,16

272:17 289:21

agencies 14:16

agenda 8:14,14

aggregate 66:15

99:8,9 123:9

235:5,14 242:8

278:17 292:3

315:5

aggregated 67:20

78:16 107:22

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March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

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March 27, 2015

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average 50:6,7

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230:20 233:8

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281:1 303:12

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aware 60:6 92:22

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awful 136:20

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bad 146:21,22

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balance 97:20

balances 220:14

Ball 16:14,19,21

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ballpark 210:5

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banned 291:1

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March 27, 2015

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bifurcated 207:3

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big 9:20 55:10

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bigger 185:16 293:7

biggest 27:15

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billion 20:9,11 30:9

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biomass 265:19

bit 9:22 12:22 37:22

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blind 81:8

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blower 88:21 93:9

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board 234:18

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boat 255:7

boiler 129:4

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Book 129:2

books 197:3,10

bordering 35:11

bottom 55:17 102:5

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bought 36:3 58:16

box 95:6 98:9 103:3

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boxes 45:13 128:13

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93:8 224:18,18

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brands 64:5,13,16

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breakdown 79:7

breaking 207:15

breaks 158:22

Brenda 263:17

BRF 295:1

brief 8:17,19 13:22

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briefly 24:5 31:5

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brings 70:11

broader 113:22

broken 79:8 84:10

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149:12 152:11

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162:15 168:7,17

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Bud 307:18,20

308:15

budgets 20:11

build 63:7 214:6

293:10 300:22

build-up 63:3

builder 117:21

119:7,7

builders 300:20,22

301:13 302:1

316:18

building 5:9 11:22

57:5,6 63:12,15

117:4 118:10,13

118:20 119:8

123:16 142:6,12

180:4 182:6

184:14,17 185:3

186:3,6,14 193:2

194:14,17 195:4,6

196:2,8 198:15,20

214:8 291:2 294:4

312:8 315:4,4

building's 192:15

buildings 118:15

150:1,3 185:21

186:16 274:16

buildup 63:1

built 114:17 129:17

143:11 176:7

194:15 213:21

302:10

bullet 130:11 189:5

195:5 267:11

bunch 10:2 119:8,9

242:4 271:1

burden 23:10 31:10

31:12 259:16

burdens 21:1

burdensome 23:3

Bureau 113:21

117:6 118:10,14

118:20

burner 88:20 89:16

192:7,13 211:5

business 13:1 49:8

115:12

businesses 18:1

49:11

button 88:5

buy 32:4 64:4 79:7

79:8,13 119:9

120:3 215:7

317:22

buys 36:3

C

C 5:1 267:17 286:10

c-becks 184:15

cabinet 82:14,18,19

171:14 253:17

cable 261:6

CAC 173:21

cafeteria 180:7

Calcs 209:16

calculate 88:22

256:15 279:7

calculated 69:12,14

69:18 193:16

198:11 275:22

calculating 193:3

225:14

calculation 103:7

199:14 275:11

277:21

calculations 293:8

calculator 207:15

calendars 319:10

calibrate 59:9

calibrated 69:20

calibrating 57:12

California 135:14

144:12

call 41:12 72:19

73:14 96:13 98:1

108:11 125:18,19

176:17 194:6

207:20 212:20

227:6 261:1 317:4

called 155:1 156:14

209:15 240:17

261:22

caller 157:8

capability 281:18

capacities 82:3

capacity 55:20

56:22 82:8,9

134:9 192:8,8,10

192:13 205:19

216:5,13,18,18

295:7

capital 261:7

capture 111:14

captures 249:8

capturing 33:19

carbon 20:16 121:3

121:5 310:10

care 15:14 218:4

carefully 141:2

Carlo 103:22

Caroline 3:9 6:15

carrier 59:14 73:2

198:22

carries 171:12

case 19:8 37:18 38:1

44:3,3 62:2 78:14

102:2 116:6 119:7

119:17 123:20

124:4 125:21

126:17 133:4

140:9 143:16

146:5,8 156:2,14

156:16 158:19

167:4 169:9,16,17

171:18 173:21

177:14 191:15,19

193:19 196:14

197:11 207:16

208:3,3 211:12

235:3 237:9

241:15 243:13

244:21 245:5

246:1,19 250:17

254:6 255:7 263:5

264:14 267:22

268:3 270:2 280:4

280:11 284:6

285:10,13 288:7

293:15 294:21

296:1,9,15,16,21

300:10

cases 62:3 102:3,14

102:14 117:20

118:1 140:15

142:8 143:7 163:3

164:1 233:19

269:15 284:3,5,9

293:18 295:21

318:3

catch 130:11 144:16

categories 318:16

category 110:2

143:21 318:17

cathedral 141:8

caught 88:9

cause 146:22

causing 51:17

CBECS 198:9

ceiling 141:8,8

153:9 173:21

307:3

cell 13:7

cells 102:5 131:19

Census 113:21

117:1,6 118:10,14

118:20 239:1

240:1

center 158:12 242:2

central 74:4 158:11

169:10,13 170:11

171:2,6 175:22

176:3,7 189:16

214:19 264:22

265:1 271:19

278:13 279:2

286:19 300:9

centrally 163:4

Centrotherm 34:9

cents 224:1

CEO 49:7

certain 28:17 48:19

60:13 83:10 99:2

111:6 194:3

203:17 269:15

271:13 306:20,21

307:1,22 316:7

certainly 44:11 65:1

65:10 80:20 87:13

137:20 173:18

175:1 202:3 207:5

228:4 255:3,13

283:21 295:4

301:21

certification 245:21

cetera 15:11 48:13

82:13

chafed 228:5

chain 59:18 63:18

challenge 110:21

challenges 38:15

41:4,8

challenging 40:3

313:15 314:2

chance 98:15

229:13 311:5

change 25:9 33:7

44:6,8,8,10 55:8

62:1 66:1,10

82:16,17 112:5

120:10,10 157:12

178:17 196:8,9

227:19 259:15

298:21 308:12

310:11

changed 68:7 82:10

82:10,11,12

218:17 220:8,9

229:13 253:9,13

changeover 77:10

changes 11:11 25:8

44:17 53:20 61:21

62:7 67:11 69:3

71:20 196:7 299:9

308:9 309:1 313:7

changing 61:21

82:21 196:19

303:19

channel 115:11,14

116:5,12

channels 106:4

115:7,10

chapter 85:20

101:18 102:6

111:19 125:6

195:14 241:3

characteristics

128:6,7 129:14,18

192:9

characterization

102:6 183:22

characterized 106:2

charge 133:2
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March 27, 2015

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charged 64:9

Charles 3:8 4:5

Charlie 117:9

131:17,18 145:13

173:1,14 174:14

174:22 175:4

176:16 277:13

Charlie's 119:5

chart 101:10 128:2

129:9 151:3 169:3

170:8 181:20

183:6 190:6

202:19 226:9

254:12,18 256:13

258:6,12 275:10

292:12,22 298:12

chase 72:16

cheaper 218:18

288:5

cheapest 139:14

cheat 105:7

check 195:13

252:20

checked 203:16

checkup 133:5

Chicago 49:9 50:5

50:11

chimney 19:2 140:8

143:10,14 144:3,5

156:11 158:4,8,9

158:10,11 302:6

chimneys 143:8

choice 14:21 35:22

218:8 266:10

271:2 298:17,18

299:1,20

choices 24:15 50:15

choose 212:20

265:17 267:1

275:16 306:8

chooses 221:2,12

296:1 302:15

choosing 223:8

277:3 291:10,11

291:12 302:18

chose 205:13 302:11

chosen 56:5 289:15

Christopher 7:9

Chuck 4:9 5:22

149:12,13 157:7

195:17 197:2

Chuck's 201:18

chunking 98:5

churn 229:7

circle 97:18

circular 242:11

circulating 200:14

circumstances 19:6

28:18

citations 25:7

cite 46:11

cited 242:4

citizens 14:12

city 50:7

clarification 172:7

176:3 195:18

203:21 217:10

241:9 258:3 263:3

267:6 289:4 294:6

294:15

clarifications

308:10

clarifies 279:21

clarify 89:11 127:11

149:1 206:3

208:16 210:6

212:7 215:18

241:13 242:22

258:14 259:8

266:21 300:7

clarifying 216:3

class 15:9 242:19

296:13

classes 46:14 53:14

54:22 60:15

314:14 316:2,4

classic 188:5 294:22

Clay 4:7 7:1,1 19:21

19:22 73:20 78:20

97:17

clean 133:5

clear 21:22 26:18

30:21 282:5

Clearinghouse

117:7

clearly 10:21

111:20 264:3

293:1 310:15

319:2

click 179:17

climate 171:4 196:8

196:9,18,18,19

197:15,16,18

291:21

climates 317:1

clogged 100:21

close 19:5 55:22

152:9 166:19

246:13 261:13

313:12 318:8

closer 248:12 250:4

282:22 317:10

318:7

closest 27:21 155:8

closet 131:2,4,7,11

131:13 152:4

156:3 163:2,8

Closets 130:20

closing 9:9 25:11

319:13

clothes 63:22

co-axial 168:12

coalition 25:22 26:1

coasters 319:7

Cochrane 4:8

code 143:13 159:6

159:17 170:5

171:19 197:8,10

201:14 291:2

307:17

codes 162:9 197:4

coffee 100:17,21

Cohen 2:5 7:5,5

281:20,20 282:5

308:7,14

coincides 112:1

cold 158:5

collaborating 29:13

collaboration 28:5,9

28:14,22

collaborative 28:12

29:3

colleagues 107:14

collect 80:18 168:9

collected 54:19

123:3 249:5

252:16 268:20

collecting 252:17

column 148:10,11

223:9

combination 91:7

93:3 237:2 257:12

271:13

combinations

271:12,14

combine 235:10

239:7

combined 16:14

208:22

combustion 140:17

155:20

come 11:9 62:18

66:18 68:10,22

69:8 80:12 82:3

98:13 101:16,19

101:21 102:8,11

102:12,12,17

113:15 117:5,6,11

129:1,19 144:5

147:19 148:14

163:6 168:15

179:16,20 225:18

230:9 262:8

274:15 277:17

308:4

comes 11:7 44:7

81:22 116:20,22

117:3 147:13,15

160:21 177:21

178:18 195:7

222:13 227:19

238:18 240:16,19

252:15 287:4,12

comfort 214:12

215:1 220:13

230:11 234:22

235:14,16 236:14

236:18,20 237:1

237:14 276:2

278:4 299:6,7

301:12

comfortable 71:22

99:8 229:11

coming 37:7 40:20

44:9 54:5,14

83:21 109:9

110:16 120:19

189:1 198:7

199:12 202:2

228:4 235:6 258:8

commence 100:22

comment 8:11 9:11

9:14 11:21 17:8

22:10 25:17 26:9

45:12 52:8 62:18

64:17 70:12 73:1

73:2 77:19,20

78:2,5 79:3 92:15

95:6,9 112:21

113:5 119:3,11

126:9,9 127:1

131:8 137:2

138:14 145:2

149:15 150:5

168:14 172:21

176:14,21 177:6

177:10,15 183:6,6

187:18 197:13

201:9,13,18

208:15 210:17

226:5,14 229:6

237:6 243:21

244:10 249:16,19

252:4,11 255:10

256:12 258:2

260:8 267:8,9

268:15 271:9

272:2 273:2

274:20 281:14

283:5,18,19 284:3

284:9,21,22 285:3

285:16,18 297:2

300:15 301:19

308:5,20 310:15

312:7,12 313:9

commented 138:19

139:2

commenting 263:18

comments 8:18 10:8

14:2,3,6 17:19

19:17,19 25:20

42:9 43:8,11

45:14 52:13 61:13

95:11 99:13

126:22 127:18

134:2 136:9

147:19 153:17

165:4 172:15

175:2,12,16

178:22 179:12

192:3 212:8 217:1

217:6 229:17

230:3 237:20

242:1,16,22

244:19 250:6,16

257:18 263:19

269:2 271:9 272:1

285:3 291:16

303:3 311:20

312:2 316:13

318:21

commercial 117:4

118:10 185:5

Commission 116:18

committee 228:11

common 35:22 36:4

55:6 149:16 154:3

160:6 171:21

172:2 177:12

196:3 197:7

271:17

commonly 19:2

145:5,10,11

146:21 155:1

167:20,21,22

168:4 268:12

communities 51:18

137:17

community 49:9,15
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March 27, 2015

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companies 18:9

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115:11

company 2:12

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144:11 196:7

290:19,22 297:21

comparable 137:11

287:20

compare 12:4 58:9

59:6,20 124:8

136:18 137:6,10

240:8,8 278:22

296:5 309:15

compared 35:3 58:3

63:8 67:14 68:5

69:5 82:9 147:15

164:21 210:8

220:11 239:22

278:18 280:13

286:17 291:7

304:3 305:16

309:17

compares 93:22

303:14

comparing 62:10

68:20 205:15

210:7 218:10

275:12

comparison 11:5

44:1 56:6 63:5

76:2 124:2 126:15

198:8 207:9

209:19 229:22

230:1 275:15

comparisons 233:10

311:17

compartmentalized

164:15

compensation

114:15

competition 48:12

competitive 42:15

292:5

competitively

295:12

complete 13:4 14:1

75:5 272:4

completely 21:11

75:9 90:3,20

complex 16:18

22:13,18 101:11

117:17

complexities 172:16

complexity 21:13

22:8 207:6 277:1

281:12

compliance 11:10

15:14 46:22 47:17

60:8,9,11

complicated 11:18

85:7 125:12

126:19 151:3,5

152:21 268:13

comply 318:11

complying 27:3

84:13

component 72:11

72:13 78:15 98:6

129:7 142:14

168:21 178:5

188:19 192:6

193:4,8 199:14,21

200:19 202:15

208:4,6 232:7,14

244:22 301:10

components 57:3

77:8,14,16 82:11

82:16,20 91:5,8

93:3 98:5 128:21

140:20 177:2,3

184:13 192:18

193:12 199:17

200:3,3,6,6 230:5

230:6,7 234:11

245:1 300:20

301:3

compounded 207:7

compressors 295:7

compromise 282:4

compromised 34:1

conceal 156:6

165:21 166:2

concealing 140:17

156:1 165:13

concentric 188:6

concept 111:4

126:11 227:9

concepts 105:10

concern 15:4 17:7

30:22 38:19 48:20

314:14 316:9

concerned 14:19

18:14 19:11 20:17

21:4,16 23:2

24:16 41:17

145:19 316:21

concerning 20:21

concerns 19:8,15

29:2,19 78:17

85:3 90:6 95:18

concert 22:17

concise 13:6 52:13

concluded 228:14

conclusion 65:14

66:5,8 69:22

163:7,11 211:13

220:12 251:22

conclusions 59:21

311:7,9

concrete 216:9

condensate 128:14

128:15 162:7,9

169:1,12,14,16,18

169:20,21 170:2,3

170:10,17,21,22

171:4,12,13,14,20

171:21 172:11

175:13,20 177:1

177:11,13 183:17

187:15,20 200:9

215:22 233:16,18

234:1,3

condensed 206:4

condensing 12:13

23:13,14 33:14,16

33:17 35:2,5,10

35:14,20,22 36:8

44:14 50:1,8

55:10 58:2 62:2

67:9 70:6 73:5,11

76:21 126:5,6

128:15,16 138:4

138:10 139:11

140:13 145:12

147:14 150:13,18

153:14 154:19

156:12 162:20

163:7 166:6,7,9

168:1,22 170:20

171:15 173:8

174:6 182:10,11

183:17 187:14

188:4 190:15,22

191:9,11,12

205:10,18,21

208:4 209:4

210:20,21 213:4

219:16,19 233:20

245:20 246:13

247:4,12,16

249:11 253:15

254:17,22 258:15

264:16 272:5

273:13 274:18

295:13 298:19

299:3 302:4,8

306:13,20,22

307:13 318:15

condition 132:3

164:2 200:5 280:1

280:5,8

conditioned 163:13

163:16,22 164:3

164:11,12,15,22

202:4

conditioner 96:6

109:22 169:10,13

170:17 171:13,20

171:22 172:10

189:10 203:10

264:22 265:1

271:19 300:9

conditioners 109:15

110:5 176:3

208:22

conditioners.cond...

189:17

conditioning 5:20

47:20 79:19 89:2

170:11,11 279:2

298:14 299:5

conditions 132:12

186:7 197:15,16

279:22 291:21

295:10

condominium 274:2

274:6 307:2

condominiums

306:21

conduct 46:1

conducted 149:7

239:1 274:22

287:5

configuration

152:17 168:10

269:18

configurations

314:12

confined 164:18,20

confirm 57:19 97:11

97:11

confirmation

162:17

confused 117:15

258:4

confusing 96:17

congruent 126:12

connection 261:6

connector 159:14

connectors 143:16

connects 117:20

consequences 20:20

23:5

conservation 1:2

5:6 15:15 18:13

20:4 45:18

conservative 221:7

222:9 283:14

consider 44:7,8 81:3

102:2,10 106:11

109:15 132:22

140:2,14,16

143:15,22 156:16

164:22 169:12

179:2 182:9

214:10 230:8

268:12,18 269:2

276:21 281:4,7,10

292:2 296:15,21

297:1 298:22

300:7 318:20

consideration 13:2

121:1 138:5

149:18,19 165:14

188:8 294:21

considerations

294:11

considered 24:4

106:21 107:8

231:13 266:20

271:5 272:15

274:4 292:7 297:6

312:9,11

considering 170:9

203:7 214:1

249:10 256:7

270:12 288:7

294:21 295:1

302:20

consistent 21:5

60:16 89:14 109:4

109:17,19 110:6

113:8 126:20,21

200:18 201:7

206:5 224:14

236:9,11 240:10

consistently 49:12

114:9

constant 73:3,5,9,10

106:13 216:6

224:18

constant-torque

76:13,17 85:16

constraints 253:17

286:15

construction 115:19

115:20 117:4,10

118:11 122:22
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March 27, 2015

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constructive 26:16

28:10 29:1 293:10

302:2

consultant 6:4

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consultant's 161:6

consultants 236:21

237:7,7

Consulting 52:5

consumer 26:3

32:20,22 37:4,11

42:2 45:19 61:20

99:20 101:20

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105:22 112:5

115:3,6,17 116:9

117:4,20 119:20

120:2,11,22

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215:2 218:8,8

220:6,17 221:2,12

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314:13

consumer's 255:1

consumers 18:17

21:1 22:21 23:11

23:17,19,21 24:2

24:8,13 28:2,16

30:8,13,16 32:4

34:14 36:7 49:18

75:21 95:10,21

112:8,9 115:15

221:20 222:5,7

223:11 224:3

227:20 229:4

245:9,11 256:17

257:9 265:16

266:4,8 268:3,19

269:1,19 278:10

279:9 285:14

299:6 303:12

311:18 314:16

316:2 317:8,17

consumption 30:7

93:1,8,10,21 95:2

102:7 147:2 184:4

202:6 203:1

212:21 214:13

215:19,20 219:11

219:18 220:4

227:19

consumptive 91:7

93:3

contacted 123:10

contain 71:16

contained 21:8

contemplate 83:3

contemplated

172:17 174:2

content 45:16 48:16

48:16 52:9

contents 257:20

contest 254:8 281:7

context 22:12 42:15

106:22 107:16

298:2

continue 27:7 29:3

36:16 37:2 38:16

39:21 40:2 111:2

314:15

continued 3:1 4:1

28:13 38:18

continues 19:16

35:12 37:18,19

172:20

continuous 200:13

203:6 211:6

contract 115:21

119:8

contractor 5:22

49:8 59:16 115:17

116:8,21 117:3,11

117:12,13,14,19

117:19 118:2,3,6

118:9,21 120:5,8

120:15 122:12,14

172:18 217:3

contractor's 123:7

contractors 6:2

16:20 64:8 117:2

123:3,8,11 137:4

137:18 172:19

173:11 174:5,18

217:4

contravention

15:19

controlled 190:7

controls 77:13

93:10 231:4

controversy 110:8

conventional 33:18

conversation 13:13

13:15 99:6,11

conversation/ 83:19

conversations 318:2

convert 240:14

278:20 279:5

convince 272:21

cool 158:3 299:13

299:14 300:3

cooling 6:1 90:19,21

96:3,10,13 158:11

196:14 200:13

202:20 203:2,5,5

203:18 264:20,21

289:16 299:16

301:12

COP 295:9

corner 151:13

corporations 18:2

correct 35:10 58:17

109:2 118:14,22

119:12 124:22

127:13,16 131:5

136:3,12,14 137:1

162:21 170:12

172:13 179:8,11

181:19 190:2

191:18 195:22

196:20 201:19

202:8,15 203:14

209:6 210:16

217:6,7,13,17,22

218:2 230:17

248:17 254:21

256:16 285:21

294:2 298:15

corrected 31:1

correction 31:6 34:3

122:17

corrections 308:10

318:13

correctly 157:22

217:16

correlated 84:12

correspondence

55:1

corresponding

42:19

cost 9:3 11:19 19:7

22:21 23:16,18,22

25:4 34:21 50:8,9

50:15 56:13 57:7

57:10 58:19 59:7

61:4 63:4,12,19

63:19 64:10 66:19

67:21 68:22 69:2

69:13,14 71:10,15

71:20 72:11,12

73:2,8 74:1 75:17

75:18,20 76:5,16

77:1,8,9,15,16

78:13 79:6,9 80:9

82:15,21 85:19

93:5 94:1 99:17

99:21 101:2,17,22

102:13,18,18,20

102:21,21 103:12

103:13 104:15,17

105:15 115:12

120:2,14,15 121:9

123:22 124:4

127:5 129:2,8

133:9,18 134:1

138:5 139:9

145:12,19 150:10

152:18,19 153:1,2

153:5,22 154:10

161:19,21 162:8

165:18 166:2

168:6,21 169:18

170:9 175:14

177:22 178:1,6

179:7 182:4,18

183:16 187:13

214:7 215:4

218:16 220:5,10

220:10,17 224:7

229:20 230:9,22

231:10,17 232:5

233:6,15 234:6

235:1 236:17

244:6 267:3 270:3

273:19 274:9,11

277:15 279:1

280:4,6,14,15

283:11 285:15

286:18 287:11,17

288:10 295:22

296:10,13,17

298:8 299:2,21

300:1,1 302:21

304:11 305:19,20

312:16,18 317:11

cost- 39:5 69:1

cost-driven 35:13

cost-effective 31:3

41:3

cost-efficiency

66:16 67:19 69:7

costing 281:12

costly 51:4

costs 16:12 23:3,4,8

23:12,13 25:4

28:17 34:5,14,20

35:5 38:13 43:2

48:13 49:19 50:6

50:8 51:7,19

53:19 54:2 56:9

59:21 60:19 61:20

62:13,17 63:1,6

63:16,17 67:13,17

69:4,14 72:8

78:13 82:22 85:8

89:1 97:19 98:7,7

101:7,21 102:4,5

102:9,11,11,20

103:4,17 104:19

104:20 105:19,21

112:9,10 122:2

127:3,4,20 128:8

128:10,12,12,13

128:14,17,18,22

129:2 132:21,22

133:1,8,10,13

138:12 139:22

140:1 143:7 147:6

150:13 152:14,16

154:4,5,9 155:15

156:17 157:12

165:19,21 167:2,3

167:4,6,12,18

169:19,21 170:4

171:8 172:17,20

174:3,12 177:14

177:19,20,21

178:5,6,9,9,11,11

178:16,18 179:5,5

179:10 181:4,5,14

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227:5,5,6,7 230:5

233:16 236:1

240:14,14 244:2

273:16,18 275:5,5

275:6 279:1,11

280:2,10 286:21

288:6,11,13 293:9

298:4 302:19

304:12 305:3

307:16 309:7

Council 6:21 7:4

36:21

Counsel 5:18

Counsel's 7:5,11,13

7:14 281:21

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countries 18:11

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122:9 135:2,3,6

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162:1 211:11

212:15,20 213:18

225:13 275:7

290:7,21 291:7

310:6 312:20

counts 292:1

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39:17 43:11 70:16

71:8 74:13 91:3

114:1 128:20

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213:15 229:9

235:18 239:2

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270:16 286:13

287:6 295:6

309:18 310:21

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96:18,20 177:20

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301:20 316:16

crash 261:21

crawl 129:17 130:7

160:20 164:5

crazy 98:1

create 49:12 57:5

created 108:17

159:5

creative 307:1

creatively 29:5

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credit 120:7 127:3

249:21

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112:6,7,7,10,14

112:15 119:18

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130:6 185:5 253:9

253:13 271:17

275:20 281:5

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Crystal 16:14,19,21

104:2 223:14

305:22 306:2

cuing 72:22

cumulative 31:10

31:12 111:6,8

302:3

curiosity 241:7

curious 210:5 248:8

248:13 285:6

current 43:4 44:11

47:12 80:4 89:20

146:11 161:8

176:12 191:17

199:11 245:9

251:8 264:13

269:18 270:1

currently 15:22

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144:21 150:16

165:9 173:10

185:10 210:7

239:5 248:19

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113:13 114:13

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114:7 205:12,20

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customer's 228:21

281:8

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cutting 318:7

CYBALSKY

155:13

cylinders 18:6

CYMBAKSY

132:9

Cymbalsky 2:3 7:8

7:8 9:18,19 45:8,9

45:10 52:17 61:7

61:11 105:5

107:15 108:16

109:3,18,19 119:4

121:7 124:21

130:16 133:22

135:10 161:3

178:19 179:9,17

182:22 183:11

189:22 196:12,20

213:6,9 215:5,11

215:14 218:7

219:8 226:18

235:19,20 240:2

246:16 260:1,7

267:15 269:5

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285:2 286:1,9

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CYMBOLSKY

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Dan 2:5 7:5 281:20

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53:1 57:16 58:4

58:18,22 59:8

60:2 61:19 62:4

62:14 65:13 66:13

71:13 73:6,12

76:8 77:4 82:6

85:12 90:14 91:9

91:15 92:18 95:8

96:11 97:11

darn 261:9

data 10:2 11:4,12

15:10,10 21:8

25:13 34:1 35:3,4

35:7 54:18 66:6

78:18,22 79:2

80:3 92:20 98:10

106:7,7,8 108:17

109:9,20 110:1,2

110:3,13,14

111:15,16,18,20

111:21,22 113:20

116:20,22 117:6,7

123:3,7,8,9

126:10,17 128:22

129:2 137:3,3,6,6

137:7 144:22

146:1 158:21

178:4,16,20 179:1

179:2 186:22

187:1 188:20,22

190:8,14,18 191:2

192:10 197:17

198:9 220:3

225:18,21 226:1

233:11 234:16,18

234:22 235:2,5,6

235:8,11 237:1,8

237:12,14,15

238:6,6,10,11,14

238:18 239:4,8,8

239:9 240:16

244:12 245:4,14

245:17,17,19

247:3 249:8,8

250:20 251:6,7,12

252:15 253:2,7,10

253:19,20 255:14

256:2,5 258:5,5,6

258:8,9,9,10,11

258:14,19,20

259:1,6,6 260:3,4

260:9,9,12,14,19

261:18,19 262:2,8

270:3,5,8 275:21

275:21 276:1,3,5

276:6,8,12,13,18

276:20 277:2,2,4

278:4,19 283:16

283:17,22 284:4

284:10 287:4,9

289:20 316:5

data- 110:20

database 138:21

207:18

date 20:21 22:6,20

24:9 46:22 60:8,9

254:1 260:10,12

260:18

dates 196:14

Dave 3:19 4:6 6:4

6:11,13 13:17,20

61:16 130:21,22

190:4,5 215:16,17

216:15 234:14,15

255:9,12 256:10

257:19 259:11

260:16,21 266:16

266:17 276:15,16

285:4 286:1,6,7

295:14 302:13

Dave's 258:2

David 4:14

day 5:5 8:9 9:8,13

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313:12

days 158:5,22

196:15 197:18,19

DC 1:8 231:15

de 65:14

dead 63:13

deadline 19:18

deal 11:22 71:8 82:2

120:8 154:17

175:8 199:4

228:22 244:12

250:16 262:3

dealer 64:3 117:5

173:15

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dealing 127:12

169:17 198:20

deals 44:21,21

166:7 170:4

death 271:3

debate 221:22

debated 222:1

debt 251:18 317:9

decade 114:5

decades 114:2 229:9

229:11

decide 220:7 268:3

305:2 308:19

decided 211:10

deciding 301:4

decision 31:9 32:20

74:5 272:13

276:17 278:3

300:5

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301:2

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declined 17:3

declining 107:7

decrease 65:17

198:14 216:7

251:1 304:16

305:4

decreased 50:21

253:18

decreases 106:9

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decreasing 106:8,12

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Defense 7:4 36:21

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110:11,12 146:3,4

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deliberative 17:5

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delivery 146:18

delta 174:19

demand 81:10

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Department 1:1,6

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22:6 24:20 25:11

27:1,18 28:9,19

32:9,12 33:6,11

33:20 35:4,6,14

35:17,19 36:2,10

36:11 42:8 49:5

51:10 74:9 97:14

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111:2 222:2

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depend 115:6

depending 30:9

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depiction 117:10

deplete 50:16

Depot 64:8,13 80:19

depth 242:3

derived 105:21

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descended 158:12

describe 71:19

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128:19,19 129:8

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described 28:16

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150:19,22 153:7

155:9,11 164:17

166:15,18 168:3

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187:22 188:1,9

194:21 198:15

202:10 225:16

237:13,13 268:10

273:3 275:1,4

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describing 103:18

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115:14 117:18

188:10,16 191:19

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description 165:5

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65:19 69:3 92:19

93:4 94:19 283:5

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designs 56:9 210:20

desire 18:12

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Despite 21:10

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detail 101:13

103:18 104:10

106:5 115:1

126:22 128:18

140:1,18 143:5

147:22 149:2

150:6 153:19

184:11 186:1

188:13 189:1

190:12 193:1

277:21 283:9

286:14 287:8

detailed 19:17 43:8

129:9 165:5

182:15 192:2

247:22 271:21

details 43:5 45:7

66:4 114:14 132:1

138:9 140:11

160:15 181:12

182:16 187:21

192:22 195:10

206:5 286:17

289:2

determination

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190:9 277:17

282:7

determine 46:2

53:19 77:12

101:18 102:7

115:2,6 124:17

128:5,8 129:9

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192:13 200:17

234:17 286:18

293:17

determined 83:15

105:14 192:14

199:2 202:20

203:4

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determining 141:1

141:4

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develop 21:22 38:8

57:7 67:16 69:10

83:22 111:3

236:22 261:8

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developing 28:15

32:18 54:12 66:13

development 16:8

49:8 239:1

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109:13 129:4

138:18 139:2

160:22 239:22

242:16

diagonal 151:14

152:22

diagonally 151:13

diagram 115:21

277:7

dialogue 319:15

diamond 258:6

Diane 2:19

difference 48:10

58:6 61:4,17

77:13 82:15 85:20

88:18 94:15 122:5

133:19 135:2

168:6 198:13

204:19 207:11

213:15,22 219:17

231:14 303:18

differences 12:6

56:8 62:15,16

68:14,15,21 69:2

132:19 166:18

246:2,6 288:1

310:1

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12:12,14 25:6

27:6 35:8 36:9

48:10 56:10 59:15

62:8 68:1 78:16

79:13 81:4 104:11

104:13 105:8

107:5 108:8

109:20 110:2

115:10 130:6

136:4 141:3 144:7

148:13 150:10,11

161:11 163:19

167:4 169:5,19

173:10 182:5

187:22 188:12,20

190:16,19 192:13

195:21 196:10

201:2 205:19

206:1,8 212:2

213:17,18 214:7

229:19 230:5,6

234:11 240:7,21

245:7 246:1,15

247:15 256:19

257:3,16 261:1,7

268:17 272:7

274:5 275:5,6,7,8

276:5,20 281:11

282:11 293:3

294:10,11 303:16

304:12 305:14,18

306:3 307:7

310:19 314:11,12

315:20 316:2

differential 69:4

102:2 124:15

173:12 200:10

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difficult 38:12 124:5

227:17 285:5

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dimensions 57:4

dining 307:6

dioxide 20:16

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direct 11:4 15:6

16:17 18:21 20:7

46:18 56:6 96:15

105:21 140:17

155:20 160:15,18

161:13,16,19,20

162:2,19 163:9

164:20 178:10

188:6 238:9

242:15 265:18

270:7 273:11

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directed 46:1

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directly 70:19 78:5

123:11 129:11

188:7 237:14

245:17

directory 192:11

245:21 247:7,17

249:4

disaggregate

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247:16 294:5

disaggregated

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240:20 245:19

246:1 263:8,10,12

276:5 290:12

292:8 315:13

disaggregates

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disaggregation

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discredit 81:13

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discriminating

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discussing 45:20

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65:22 81:8 83:20

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104:12 119:16

123:21 224:22

discussions 28:14

29:4 36:15 38:11

39:10,13,16,17,21

88:17 239:14

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disposal 133:6

disproportionately

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dissipating 17:8

distance 142:21

143:3,4 153:10

distances 142:17

distinct 97:4

distinction 108:10

distinguishes

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distort 112:4

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distortion 112:5

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distribution 14:8,11

14:14,17 35:18,20

59:18 63:18 106:3

115:7,10,11,14

116:5,12 141:19

142:7 165:19

175:15 186:9,13

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238:17 239:6

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243:12 244:21

245:5 246:14

247:8,19 249:14

263:6 276:7,18

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289:15,22 304:8

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districts 14:15,15

divide 192:15

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15:5 16:12,19

17:1,2,15 20:17

21:3,11,17 23:21

24:11,12,16 25:3

26:9,11,19 31:3,6

31:8,11,13,19

34:6,16,19 39:13

41:1,7 43:16

45:10 46:1,4,9,12

46:18 47:7,8,9

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53:21 54:2,4,11

54:19 55:3,5,16

56:8,17 57:2,6,9

60:6,12,16,19

61:9 65:21 66:3

66:17,22 67:8,14

68:13 69:22 71:1

75:16 83:10 84:10

87:16 90:16 92:3

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99:8 105:5 107:15

108:13 109:19

110:18,20 112:13

114:2,11 115:18

116:10,12 119:5

121:7,15,18 122:4

124:22 136:17

139:3 143:15

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154:18 155:13

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172:17 174:2

178:1,19 182:22

189:6 196:12

213:3,13 215:5

219:12 220:2

226:18 227:11

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236:5 240:2

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261:8 269:5

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283:20 284:14

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228:15,16 229:4

269:9 275:10

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30:15 37:16 38:20

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290:18 297:20

Donald 2:12

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159:13 195:13

232:22 236:3

doubling 33:17,18

111:5,8

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273:10

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downstream 82:3

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draft 18:22 143:18

143:20 144:2

146:10 149:5,10

150:16 157:2,3,10

157:14 159:4,12

227:11 257:21

drafting 158:5

drain 171:1,14

172:11 177:13,13

drained 170:17

draining 162:9

dramatically 25:9

250:21

drastic 25:8

draw 41:1

drawing 178:3

drill 151:17,20

152:3,8

drilling 153:22

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drip 169:20

drive 38:14 300:5

driven 31:17 110:21

111:5,14 254:11

driver 61:2 67:12

93:7

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306:18

dropping 242:19

drops 291:20 304:2

Drumheller 2:15

300:18,18 316:16

316:16

duct 133:8,9 146:20

146:21,22 147:7

147:15 157:11

168:12 173:20

207:20,20,21

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due 21:20 23:5

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DuraVent 34:9

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full 25:13,15 27:2

41:2 142:12

195:15 234:1

252:9 308:4

full-on 98:10

fully 77:12 104:3

105:15 161:1

188:9 219:6

295:18

fundamental

170:13 213:22

fundamentally

218:14,19

funded 37:22

funding 50:17,18

51:1

furnace 11:6,9

18:16,22 19:1,3,5

19:13 23:14 29:7

31:21 35:22 36:1

44:14 49:21 51:3

53:7 54:21,22

60:5,7,10,12

61:18 64:4 69:5,6

69:16 76:6,13,14

76:19 79:7,10,11

80:9 85:15,17

87:15 90:20 95:11

96:4,5,10,13,16

96:18,19,21,22

99:22 100:3

103:11,11 106:3,3

106:21 107:10

108:18 115:16

120:3,3 124:7,10

125:13 126:4,18

127:4,5,15 129:4

129:10,12,19,21

130:1,19 131:11

131:13 133:3,5,16

134:13,16 136:17

139:9,10,11 140:3

140:3 141:10,19

141:22 142:5,8,9

143:17,18,20

144:3 145:6

146:11,12,12

147:10,14 149:2,3

149:16 150:15,18

150:18 151:1,8

153:14 156:3,13

163:8 167:17

168:2 169:9

170:20 171:14,15

172:1 174:6

177:12 182:10,11

183:15 184:22

185:1,6,6,14,19

186:15 189:8

190:7,10 191:4

192:17 193:14,18

193:19 195:19

196:2 197:7

198:12 199:10,20

200:4,17,20,21

201:7,13 202:3,22

203:1,3,8,17

207:1,8,10,10

208:4,12,20 209:3

210:7 213:4

214:22 216:5,10

220:6,20 230:6,9

230:16,21 231:3,9

233:20,22 234:7,8

235:13 236:10

239:19 241:22

244:17 252:22

254:22 255:21

264:19 270:18

271:18 272:5,6,16

272:18 273:1,4

275:13,14,19

279:14 280:3

286:19 289:20

290:1,20,22 291:4

291:6,11,13 296:5

296:14 298:17,19

299:3,22 300:12

301:5 302:4,9

303:9 305:2

306:22 307:13

312:2,18

furnaces 1:3 5:8

12:13 14:20 15:4

15:8 18:14,19

20:4,19 23:13

31:19,22 32:2

33:14,15,16,17,18

33:19 35:2 37:20

44:4,12 45:20,22

46:9,11,14,16,17

46:20,21,21 47:1

47:3,4,4,13,14

48:1,4 49:6 50:1,3

50:4,8,9 51:20

53:11,14,15,16

59:4,5 64:7 68:12

68:15,16,17,19,19

69:8,9 70:2,2

76:22 77:22 79:8

79:15 90:18 93:4

96:1 97:2 107:18

107:22 109:14,16

115:22 116:1

127:3,12,13,14,16

131:9 140:13

143:11 148:6,16

148:16 149:11

150:13 154:19

156:20 157:3,9

168:22 172:17

173:8 181:15

184:4 186:10,12

186:16 187:5

188:4,7 189:14,15

189:16,16 190:1

191:9,16 193:15

193:16 197:9

205:10,10 210:20

211:8 228:1

230:14 231:7

238:20 239:3,16

246:8 248:16

249:22 250:4

252:8 253:14

254:17,20 261:20

264:17 265:18

274:18 278:13

287:8,9 290:12

306:20 312:11,11

312:20

further 46:1 50:16

70:10 82:3 89:12

90:3 99:6 105:3

121:14 128:7

173:9 175:16

181:22 183:20

187:1,9,21 195:10

202:9 253:18

268:11 289:4

future 174:21

191:17 211:3

226:2 248:18

251:12,14 255:5

255:19

G

G 5:1

gain 236:18 282:19

gains 172:22

gallon 288:18,19

gallons 289:1,1

297:19

game 163:17 228:9

garage 129:18

130:7 131:15

160:19

garage-- 164:8

Gary 221:9

gas 3:3,19 4:7 5:18

6:6,9,14,19 7:1

12:12 13:21 14:8

14:9,10,14,16

15:4 16:6,9 17:21

18:3,5,6 19:1,15

20:1,7,8,18 24:14

27:16,17,19,21

28:1 29:2,7,22

30:3 34:12 46:20

46:20 47:1,3,13

47:13 49:6 50:7

53:10,15,16 54:21

54:21 55:9 62:21

64:4,7 68:12,15

68:16,17,19,19

69:6,7,9 70:2,2

87:15 106:2,3,17

109:14 115:22

127:12,13,14,16

133:5 143:13,20

144:11 145:18

148:6 158:5 159:6

164:9 167:17

168:1,5 169:9

181:14 183:15

184:4 185:9,10,14

185:19 187:5

189:13,15 209:3

211:8 223:20

225:15 234:7,8

239:16,18 249:21

264:16 265:6

270:6 271:18,18

272:5,6,21 275:7
The Energy Conservation Standards For Residential Furnaces

March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

Page 335

275:12,19 278:13

279:14 280:3,13

288:2,4,8,16,18

289:1 290:14

292:5 293:14

296:5 298:7,17,19

299:3,11,22 301:2

301:7 302:5,10

303:9 317:1

gasses 152:10

gassing 139:15

gathers 123:8,9

GC 41:13 119:5

gee 87:17 175:6

general 5:17 7:5,10

7:12,14 8:14

115:21 117:3,11

117:14,19 118:1,6

118:9,21 122:13

210:5 281:21

287:19

generally 37:6

52:19 66:2,8 69:1

70:4 71:17 72:2

107:18 217:4

274:15

generate 104:4

generation 307:22

gentleman's 138:16

Geo-thermal 297:8

George 242:2

Georgia 136:5

getting 44:21 76:22

87:14 164:20

221:18,19 223:7,7

225:17 237:16

253:2 313:11

Gibbons 162:5

give 9:22 26:14 59:1

87:17 92:12

128:21 161:9

176:2 188:11

192:18 203:17

224:3 239:5,21

276:8 284:20

299:2,3,4,10,11

299:22

given 21:12 41:16

56:7 74:3 215:20

298:20

gives 93:20 102:3

129:13 186:1

235:11,17 239:2

284:18 286:18

giving 173:10

glad 5:9 9:20

glean 41:14,18

go 8:12 10:15 11:12

11:12 12:2,6

13:17 31:9,12

42:3,3 45:12

48:20 49:16 50:13

51:7 52:2,6,13

53:2 63:20 67:6,7

74:14,20 75:2

76:19 84:22,22

85:1 88:14 92:3,6

92:17 94:10 97:7

100:5,17,18

101:12 103:6

104:9,12 105:8

106:15 108:6,7

114:21 117:17

123:15 127:21,22

128:18 130:14

132:3,10,11,14,21

136:11 139:22

140:11 141:1,12

141:17 143:2,5

147:20 150:3,12

150:14 151:12,15

151:18,21 152:8

152:20,22 153:8

153:18 155:17,21

156:1,4 157:15

159:10,13 160:15

165:12 166:8

168:19 172:11

176:8 181:12

186:3 188:13

189:4 193:1 195:5

206:6 211:17

214:14 216:12

217:8 218:18

229:17 233:2

242:9,10 243:21

244:6 249:1,17

250:14 262:15

264:5 265:1,2

267:13 268:8

269:1 270:20

275:21 276:21

277:10,11,12,20

279:14 281:11

282:4,17,18 283:9

286:14 287:7

288:19 289:12

290:8 291:16

293:7 297:19

301:4,7,8,9

302:11 306:13,18

306:19 307:4,5,7

313:7 316:14

317:21 318:3

goals 12:18

goes 44:20 52:19

83:9 99:22 106:11

153:4 191:6 198:4

215:21 282:6

290:10 296:8

going 5:4,12 9:16

10:16 11:4,12

12:2,4 27:20

31:18,18 33:16

42:8,14 44:13

45:3 48:15,17,19

52:6,21 54:10,11

60:17,22 62:14

64:20 65:3 66:3

66:12 70:15 73:14

73:18,18 75:4

81:21 83:3,4

86:20 89:11 90:1

90:3,13 92:18

93:17 94:13,18

96:20 99:20 100:4

100:17 101:1,2

104:13 106:16,22

107:4,18 118:2,11

121:2,5,8,14

125:7,20 126:5

138:18,19 139:19

141:20 143:22

146:9 149:14,22

150:2,6,8 152:6

152:10 155:3

157:12 160:9

162:17 163:3

166:12 167:7

168:18 170:18

174:9 175:12

176:21 179:16,18

179:18,19,19,21

180:1,2 181:3,19

182:10 183:1

184:6,11 187:18

190:17 192:3

194:6 197:7,8

200:18 201:12,16

201:22,22 206:20

212:11 215:20

218:12 219:15,17

219:22 220:19

221:16 223:19

225:2 226:11

232:18,19 234:21

235:16 236:13

238:15 244:1

245:1 248:22

249:18 254:3,8,13

254:20 255:1,4

256:18 262:13

264:9,12,14,16

265:5 267:21

268:4 272:18

273:20 274:21

277:9 281:4,7,7

286:9 288:15

295:18 296:22

297:15,19 298:19

299:1,21 300:2

301:2,4,5,7,8,9,14

301:15 303:9

304:14 306:9,12

307:4,5,5,8 308:7

309:10,19 314:5

319:2,10

good 5:4 11:20

19:21 26:16 28:1

28:2,12,14 29:21

32:17 48:14 49:3

52:4 79:14 89:7

95:17 101:4 104:7

105:7,9 111:20

146:18 152:4

156:8 158:21

178:4 179:15

190:11 208:7

225:6 255:16

260:18 284:4,21

285:3 294:6

296:17 310:15

316:11 319:15

Goodman 3:16,22

127:7 224:16

250:9

goodwill 29:17

gotten 138:16 217:3

government 26:4

222:17 226:21

grab 33:21 284:5

granularity 158:15

316:4,10

graphical 271:10

graphically 268:10

gravity 156:20

157:3,9,9,10

great 10:11 11:21

37:5,5 41:9,22

82:5 138:8 175:8

219:14 251:6

253:6 261:22

299:13 319:14

greater 39:5 215:1

279:18 280:10

283:13 292:1

greatest 142:13

303:3

green 128:13

Greg 7:18

Gregory 4:13

GRI 157:20

ground 17:4 53:2

98:3 100:18 143:2

154:20 180:7

297:6

group 4:11 6:10

26:14 38:7 39:17

58:12 72:18

109:12 146:17

241:6,9,10,13,14

243:7 253:3

groups 26:2,3 39:12

312:4

growing 242:18

growth 186:18

256:7,8

GTA 238:2

GTI 3:4 6:5 16:9,22

17:16 22:17 24:9

33:5 144:6 145:9

152:12 217:9

289:13

guess 71:22 81:1

96:8,17 107:18

108:3,19 126:8

162:17 163:6,11

173:12 176:17

179:4 194:13

207:1 213:1

222:12 228:6

269:11 282:14

289:14 293:16

297:17 305:9

313:7

guessing 173:9

guide 159:5

guy 71:10 73:13

119:9 244:6

guys 59:22 139:13

147:12 205:9

264:9

H

Haddock 210:18

219:10

half 76:10 134:13

145:10 209:8,12

272:17

hall 100:17 180:7
The Energy Conservation Standards For Residential Furnaces

March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

Page 336

hand 13:12 74:16

84:19 188:14

handle 158:15

187:13

handled 210:19

handler 265:2

hands 284:1

happen 44:20 151:4

171:11 303:18

happened 114:19

happening 89:19

94:22 111:22

123:19 208:10

217:2

happens 117:17

149:6 159:10

216:4

happy 12:11,17

75:3 87:17 99:11

229:11

hard 13:9 39:13

50:15 124:7

144:19 165:1

183:12 293:17

313:18

hard-off 40:5

hard-to-vent 34:12

hardest 38:11 49:20

319:17

HARDI 3:11

116:21 123:9

Hariharan 2:9 7:12

7:12

Harvey 3:18 6:21

81:5,6 86:4,5 87:1

88:3 113:18,19

130:10 157:4,15

171:9,10 175:4,6

228:2,3 229:6

260:20,21 274:13

274:14 294:16

297:7 301:20

Harvey's 97:19

hat 110:15

hatched 227:10

hate 160:2

Haydock 198:22

hazard 158:18

head 91:10 109:21

218:13 282:15

health 201:15

hear 9:17 13:14

52:11 75:22 84:22

88:1 101:3 173:3

heard 38:3 45:4

47:6 65:16 73:17

145:15 262:7

hearing 42:8 217:15

238:4 282:11

heat 31:19 32:1

42:16 43:3 67:9

67:11 70:6,7,9

78:14 82:11,19

133:16 169:16

173:21 176:22

192:19 193:11,11

193:12 199:2,5,9

199:13,14 200:8

202:2,2,6 215:22

216:19 224:11

264:19 265:2

267:3 270:19

272:7 275:14

280:14,15 286:19

290:12 291:5,6,12

291:13,18 293:12

293:12 294:21,22

295:3 297:6,8,19

298:3,7,8 299:4

299:12,22 300:8

303:8 306:8,9,11

heated 299:12

heater 19:2,9,9

27:22 86:14

140:15 145:6

149:16 156:15,17

157:18 158:5

159:16 160:1

166:8,20 167:5,21

167:22 168:5

265:5,6,7 270:22

271:18 272:14,15

272:17,22 288:16

288:19,20,22

289:19,21 290:15

290:16 297:20

301:6,8,9,10,16

302:5 303:9,10

heaters 156:10

158:16 166:17

266:1,2,2 288:1,2

288:2,4,5,9

293:13 297:12,16

heating 5:20 6:1

24:15 47:20 50:2

50:13 51:6,7,18

79:18 95:21 96:10

158:22 159:8

184:18 185:1,2

192:15 193:2,7,16

196:14,15 197:18

197:19 202:20

203:2,4,10,21

204:1,2,9,10

209:5 214:8

218:17 264:20,21

265:3,18,19,20,22

270:7 271:14

279:2 289:16

291:8 297:13

299:15 301:11,13

310:6,18

heavy-duty 48:16

height 141:6 153:9

heights 141:6 150:2

help 22:17 27:10

49:18 57:11 71:12

98:2 147:12

250:15 260:13

291:17

helped 10:14 20:14

29:5 34:13 227:16

helpful 72:5 78:10

98:19 139:18

165:7 258:12

HH 130:11,14

131:16

Hi 255:12

higer-efficiency

103:16

high 28:17 35:2,6

80:10 85:8 106:12

114:9 137:8

138:12 141:8

172:16 201:1

204:15,16,18

205:4 209:4 210:1

222:3 232:18

243:8 244:3

248:14 249:22

261:20 290:20

295:8 298:2 299:2

310:20

high-efficiency

115:4

higher 23:8,12

24:18,18 30:11

50:6 58:2 60:20

62:2 106:12

111:12 112:11

114:11 124:6,7

136:8 164:1

176:13 203:5

205:9 215:21

216:8 218:12

219:12,15,18

220:15,20 242:6

245:11 278:11

279:9,14,17

282:17 290:9

291:7 298:8

312:17

higher-efficiency

106:1

highest 241:6,9,14

highlight 14:5

highlighted 34:13

highlights 45:11

highly 21:14 74:22

hire 22:17

historical 106:6,7

186:19 190:8,14

190:15 192:9

245:14,17 247:5

250:20

historically 250:10

317:12

history 8:16 9:22

30:1 41:16 46:7

hit 48:11 67:2 88:4

Hodges 2:18 6:8,8

17:20,20

hold 87:22 148:1

206:20

holding 26:15

206:21

hole 151:17 152:8

154:1,10 284:13

holes 151:20 154:2

home 46:16,20

47:13 50:16 53:15

54:21 64:8,13

68:12,15,17,19

69:5,8 70:2 80:19

106:3 116:1,1,2

117:5,5 119:6,7

127:14 151:4

167:15 183:2,15

183:19 185:11,11

185:14 188:7

190:9 218:17

222:21 234:22

236:14,18,20

237:1 255:1 257:2

257:16 276:2

278:4 299:15

300:19,22 307:14

314:12 316:3,17

homeowner 137:4

196:1 231:19

275:16,18

homeowner's 99:21

homes 12:13 50:4

90:7 96:5 119:8

138:17 144:19

156:21 176:7

184:5 185:13,13

185:22 187:22

188:2 190:20

194:15,18 257:2

301:1 306:21

314:10 317:22

homework 183:2

honestly 282:8

hookup 133:6

hope 8:9 25:11 27:1

27:7,9 29:3,8

41:17 48:4 81:12

315:18

hopeful 17:14

hopefully 8:18

17:10 48:17 79:4

137:19 181:11

277:22 279:21

306:16 308:16

312:14 315:15

318:20

horizontal 141:14

142:14,15,15,16

142:17,20,22

154:18 155:4

horizontally 141:18

143:3 151:9,21

153:11 274:19

hour 53:12 55:20

135:22 136:1,13

179:22

hours 63:20 88:20

88:21 89:2,16

134:5,10,15,21

136:12 192:7,14

204:12 207:12

211:5,6,7 212:5

216:7 219:2

223:22 231:11

house 44:13 141:11

152:15,17,19,19

158:12 170:10

171:2 172:8 182:9

182:12 218:15

220:7 244:14

256:15 269:17

270:19 300:2

305:14,17,18,19

310:17,18

household 50:12

96:9 103:11,11

122:8 128:4,4,5,6

128:8,22 129:11

129:14,15,16,22
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March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

Page 337

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143:19,19 150:21

152:21 153:2,3,5

153:6 161:20,20

169:4,6 171:3

176:9 184:17,19

185:1,3,4,12

186:14 189:8

191:2,4 192:9,12

193:15 194:6

197:19 225:12

243:9,16 275:1,3

275:3 294:3,3

305:6,7,7,7 306:4

306:5,7,12

households 23:7,16

38:19 39:2,9 40:5

40:7 41:5 103:17

131:9 138:6 143:9

151:7 162:1,2

167:3 185:13,17

185:19 187:4

189:7 193:14

194:4 201:1

230:21 243:7,18

271:16 273:18

275:4,9 304:22

315:8

houses 171:16,16

172:3 193:20

274:8

housing 234:7

238:19,19 239:1

276:5 291:2

HPBA 2:16

HSPF 42:20 295:9

HUD 239:1

huge 44:15 138:21

245:2 254:9

humor 228:20

hundred 38:20 39:3

125:3

Hunt 4:10 6:19,19

144:9,10,11,18

145:18,22 181:17

181:21,21

hurt 49:16 50:12

HVAC 117:2 119:9

278:12

hypothesis 160:5

I

ICF 3:10

idea 56:2 58:19

80:19 119:20

269:8

identified 212:14

identify 29:18

315:18

IEC 91:18

ignore 111:15

120:12 221:17

ignoring 222:7,8

Illinois 49:9 50:20

imagine 98:3 155:2

immediate 5:14

immediately 5:13

8:14 255:17

immense 21:12

impact 18:16 24:21

31:20 32:4,5,6

42:12 49:20 51:11

65:14 133:18

162:8 165:17

166:16,18,19

178:10 179:6

208:1 214:17

217:21 229:3

252:1 261:22

314:13,15 316:1

impacted 148:10,12

150:11 165:18

166:11,13 175:14

261:21 303:12

304:9,10,13,20,21

305:1,8,15 314:10

316:22

impacts 22:22 24:8

24:10 31:8,14,16

33:8 121:8 165:15

166:22 168:22

266:9 293:15

Impetuousness

157:6

implement 94:1

implemented 60:14

60:18

implications 25:15

145:16 147:1

implied 176:18

implies 256:17

257:16

imply 108:13

257:13

important 9:21 12:1

12:10 17:3 36:16

60:3,4 78:15 84:9

91:22 103:8 114:1

129:7 140:20

145:3,12 159:1

178:3,17,21

184:13 185:15

190:12 192:5

193:4 199:21

216:4 301:21

308:22 314:9

impose 20:22 23:1,3

impossible 22:2

138:6 158:3

255:20 273:13

improved 223:8

303:4

improvement

194:17

improvements

194:7

improves 65:16

improving 147:7

in-standards 41:10

inability 272:4

306:20

incentive 44:21

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194:16 222:22

272:13

man 134:5

man-hours 58:20

manner 84:13

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manufacturer 31:8

31:20 32:5 53:19

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173:15 246:5

253:4 260:2,11,17

manufacturing

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57:4 59:21 63:12

63:16,17 70:1

71:17 80:15

map 105:9,9 224:6

mapping 132:12

maps 196:9

March 1:12 5:8

29:11

margin 115:13

marginal 218:16

225:15 227:5,5,6

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mark 4:11 6:10

47:19 58:11,12

70:16 73:16,21

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Marshall 4:10 6:19

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McCarter 3:13

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78:15 86:18 100:6

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119:15 120:11

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174:15 191:5

192:16 213:20

214:21 216:18

219:1,3 225:11

260:4 261:10

266:22 272:20

281:5,16 282:13

283:20 285:16

304:22 308:7

meaning 130:12

280:9 285:9

290:21

meaningful 17:12

17:14 25:16 74:11

147:19

meaningfully 15:16

means 51:7 53:22

99:10 129:1 132:6

136:13,21 146:21

154:4 180:3 182:1

189:10,13 199:19

200:12 230:10

277:21 285:8,12

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median 198:16

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269:20

meeting 1:1 2:1 5:7

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52:20 180:9 319:4

319:18

meetings 11:15

13:10 27:14

meets 22:3

Melchi 3:11

member 20:5,10

21:21

members 14:10,17

18:1,10 20:14

37:15 43:17

137:17 175:9

membership 18:8

memory 241:6

mentally 218:17

mention 44:5 131:8

259:21

mentioned 38:8

40:6 45:21 46:7

47:10 54:16 56:15

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85:15 119:17

145:14 146:4

151:8 213:16

227:15 233:4

249:3 253:6 269:6

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mess 146:17

message 178:14

met 11:14

metal 140:10

method 86:9 104:6

123:16 184:2

238:18

methodologies 21:8

21:15,17 25:14

methodology 82:22

95:14 109:19

110:6 140:22

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methods 86:14

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74:21 77:20 88:2

88:2

MHGF 187:14,14

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mic 8:6 58:13 63:14

Michael 2:7 3:6,14

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microphones 5:15

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midday 9:6

middle 98:3 139:12

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migration 196:16

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72:4 78:7,9 79:22

98:18

Miller 3:13 5:17,17

307:19,20,20

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million 20:15 50:21

50:22 185:22

193:17,18 216:11

223:20 254:16,19

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mind 44:18 120:1

266:13 297:22

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mindful 162:8

minds 29:5

mine 83:8 258:3

minimal 291:12

minimis 65:14

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221:5 245:10

318:9

miniscule 94:20

Minnesota 79:20

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minority-owned

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94:5,8,16

minutes 100:14,20

174:10 180:2

misprint 118:17

263:15

missed 76:8

missing 300:21

301:4,11

misspoke 259:10

misunderstood

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mitigate 39:5

mix 80:5 161:12

mixed 285:16,17

mixing 197:4

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68:12,15,17,18

69:5,8 70:2 106:3

115:22 116:1,1

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March 27, 2015

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motion 160:16

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mouth 157:13

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multi-level 172:8

multi-stage 212:4

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45:21 46:8 47:14

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nationwide 15:3

23:16

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27:17,19,19 29:7

29:22 30:3 36:20

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146:10 149:5,10

150:15 157:2,3,14

159:4 223:20

225:15 275:7

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289:1 292:5

nature 39:14 74:4

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Navigant 2:13 3:7

3:14 7:9,21 52:5

59:12 62:11 63:3

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Nayes 47:19 79:4,6

79:18 127:2 139:5

139:7 156:18

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201:19 243:20

244:1 249:16,18

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306:17,19 307:12

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NDA 81:11

near 163:5

necessarily 64:4

88:10 213:20

218:4 284:4

necessary 16:1

51:16 58:20 114:7

130:19 174:16

need 9:12 11:10

13:3 17:9 19:3

31:6 37:20 41:22

44:18,22 50:3

52:10 53:4 62:9

66:7 71:21 72:6,7

72:10 75:17,18

76:9 82:12 86:1

87:8 112:18 120:1

141:16 142:18,20

158:15,19 159:9

159:22 160:1,7

172:19 173:8

174:21 206:3,3

217:6 219:9

232:20 252:14

263:17 283:13

292:2 298:11,21

306:13 316:10

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51:2 60:13,21

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needs 25:12,12

33:20 34:16,22

43:1 84:3,13

112:13 157:22

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negative 18:15

20:19 23:4 212:2

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negatively 304:9,9

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negotiated 40:19

neighbor 142:3

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neither 157:7

net 23:8,16,18,22

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networks 64:3

173:16

neutralizer 170:2

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neutralizing 170:2

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new 22:4 29:6 34:6

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88:18 89:4 95:22

100:4 111:1

115:18,19 117:10

136:4 140:10,10

140:14 161:7

167:12,13,13

168:12 173:17,17

176:7,10,11

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187:15 194:15,18

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232:1,16 236:7

246:4,6,9,11

248:3 267:4

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newest 114:17

newly 22:12

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The Energy Conservation Standards For Residential Furnaces

March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

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non-disclosure

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non-furnace 200:11

non-heating 90:19

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non-mobile 185:11

non-profit 16:7

non-weatherized

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156:13 168:1

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31:4 34:21 41:15

83:15 87:9 109:16

138:20 212:12

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161:14,17 171:11

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253:22 263:11

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291:20 292:3,4,9

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North/South 318:17

northern 36:1 139:8

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Norths 248:3

northwest 35:7

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not-for-profit 14:11

note 24:5,10 33:3

60:3,4 71:5 103:8

163:13 166:6

188:17 246:9

258:2 304:17

noted 15:21 20:5

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notice 5:7 20:3 44:4

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47:17

NPGA 17:21,21

18:11,12 19:16

NPV 30:14

NRCAN 4:8

NRDC 3:17 38:4

number 21:6 28:16

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132:3 135:13

136:12 139:11,12

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161:22 176:6

181:3 185:20

193:21 194:3,10

201:1 205:17,19

218:3 221:7

223:19 239:2

252:22 254:14,16

254:20 256:18

259:9,9 261:2

263:22 280:17

284:18 300:10

307:21 314:4

numbers 10:3 11:11

24:8 25:6,8,9

47:18 59:1 68:10

91:6 92:1 131:19

131:21 132:1,11

139:17 148:13

152:13 161:12

206:7 219:4 224:6

231:14,16 236:22

248:9,11 251:5

257:12,12 266:6

271:16 290:19

291:4,10,11 292:1

292:3,8 297:10

298:1 311:9 318:3

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o'clock 183:11,12

object 74:22 75:5

objectionable 23:9

obscure 98:6

obscured 21:7

observation 282:13

observed 62:6 67:8

110:4 114:13

obvious 212:1

obviously 57:20

58:7 66:6 73:22

98:21 101:11

122:7 127:20

137:8 144:2 149:7

150:6 152:1 165:7

165:19 175:15

181:10 185:9,12

186:6 188:10

192:2,5 278:15

294:10

occupancies 195:19

195:21 197:6

201:14

occupying 244:17

occur 17:15 169:5

occurs 44:1 202:6

220:4 290:14

odd 283:3

offer 227:16

offered 302:6

314:18

offering 12:12

office 7:6,11,13,15

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official 280:21

offset 20:15

oh 189:19 202:11

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oil 46:21 47:4

265:17 266:1

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oil-fired 46:16,16

okay 5:3 8:7 9:15

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45:7,9,16 46:7

48:21 52:1,12

58:19 61:12 64:17

64:18 72:20 73:13

73:16,18 74:12

75:13 78:1,7 79:3

84:16 90:13 91:12

92:15,17 97:14

99:13 118:19

120:2,4,8,16,19

121:11 125:16,18

139:5,7,18,19

146:2,14,15 148:1

157:15 168:17

170:14,16 174:7

174:11 175:10

189:21 191:22

196:21 197:12

198:6 199:7

201:17 202:11,11

202:12 204:3

206:20 207:10

209:12 218:3

220:3 224:21

227:14 228:21

229:3,15 236:12

241:21 243:13

244:8,8,20 246:16

251:16 252:13,16

254:7,11,12,17

255:2 261:16

263:1 267:10

270:2,14 271:6

273:15 278:2

282:15,17,20

283:20 284:3

296:12 298:19,21

299:7,20 300:1

301:4 307:18

309:8,10 311:12

312:6 314:7

318:22

old 86:8,10 88:19

134:16 156:20

191:5,16 267:2

272:21,22 273:5

299:11

older 144:18 209:20

OMB 242:11,11

on/off 211:1

once 144:1 211:19

216:7,11 218:15

235:15 254:21

290:1 302:8 315:5

one's 271:22

one-on-one 39:16

one-quarter 209:9

ones 108:1 164:15

268:22

ongoing 36:15

online 45:3 64:2

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113:6 120:17

123:2 124:3 139:5

156:19 157:8

162:5 199:1

201:10 218:22

234:6 236:4

243:21 249:17

onwards 250:12

opaque 16:18 21:14

open 28:13 149:21

164:13,22 183:6

opening 8:17,19,19

12:19 13:16,22

14:5 17:18 26:9

42:13 45:6 47:6

48:7,19 107:19

280:20

operate 51:19

operating 48:13

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102:21 103:17

104:19 122:1

192:7,14 203:7

211:5,6,7 212:5

216:7 240:14,14

275:6 296:10

305:3

operation 200:11

202:6 304:12

operational 285:14

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opinion 72:8 88:4

208:13

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March 27, 2015

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266:4 267:7 268:4

269:12,13,15,19

270:20 275:13

280:15 295:22

296:1,6 297:5,8

300:8 302:11,15

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81:4 93:4 133:15

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266:5 268:8,18,21

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297:1 298:1

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order 56:1 58:5

76:16 93:5 104:14

119:10 206:21

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16:7

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originally 85:3

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159:16 166:20

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156:10,14,14

157:18 158:6,16

160:1 166:8,17

167:5 168:5

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outdoors 170:17,21

outlet 169:19

288:12

outline 31:5

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output 192:16,16,17

216:11,18,20

288:20

outset 8:18 17:19

25:20 52:14 263:2

outside 19:4 21:18

163:5 172:11

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over-estimated

31:14 32:14 34:6

34:20

over-estimates

24:20

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24:22

overall 101:9 103:7

120:10 122:6,16

122:20 134:20

165:18 166:18

169:3 178:5 211:9

239:20 246:12

303:11 304:15

314:4

overcome 23:11

overestimate 187:8

317:16

overestimates 24:17

overhangs 155:10

overhead 122:2

136:2 139:16

172:20

overlaps 100:8

overstepping

318:12

overturned 28:11

overview 8:22 54:8

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140:22

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281:12

paid 59:5 220:11,20

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panel 288:13 293:6

papers 90:8 208:6

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parameters 130:7

184:7

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part 38:17 42:18

43:20 55:12 60:3

76:8 86:16 89:8

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122:18 126:4

127:20 128:12

143:4 144:17,21

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178:20 187:6

188:19,21 200:4

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219:7 235:21

238:3 242:18

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187:18

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219:10

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51:18 59:17,19,20

63:9 220:8,19

221:2,6 222:10

244:6 278:11

279:1,9,13 282:16

283:1,13 284:17

299:21 317:9

payback 16:13

32:16 101:9 102:1

102:22 103:3,14

181:5 184:5

222:21,21 223:3

256:22 257:8,9,14

257:15 261:2

275:2,11,15,17,20

276:22 277:8,15

277:16,18 279:7

279:11,12,16,18

280:8,22 281:5,6

282:1,8 283:11

285:8,9,12,13

296:2,7 302:16

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304:15 305:4

317:16,19,21

paying 59:15 120:4

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penetrating 274:3

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215:7 221:8 226:8

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299:16 302:7,11

302:20 304:8

311:15 316:1

317:22

percent 94:6 148:9

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96:5 163:1 176:8

196:18 209:21

210:5 224:3 291:3

291:5 293:20

percentages 249:19

percentiles 241:12

perfect 261:9

perfectly 152:4

284:19

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performance 11:8

period 22:11 25:10

30:3,17 101:10

102:22 103:3,15

106:10,10 113:15

181:5 183:7 184:5

200:13 239:18,18

250:18 251:10,21

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257:8,14,15 262:2

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277:15,16,18

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phase 133:12

177:18

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197:2

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phones 13:7

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319:10

picking 291:6

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piece 138:4 150:12

178:8 215:8

262:14 311:13

318:5

piece-milled 262:5

pieces 74:22

Pinto 2:8 7:10,10

pipe 140:18 144:19

145:15
The Energy Conservation Standards For Residential Furnaces

March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

Page 345

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piping 133:6 149:18

169:20

place 23:10 39:19

47:1 88:13 95:17

133:4 144:14

171:1 272:5

places 44:3

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310:8 314:20

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please 5:3 8:5 10:18

13:2,8,11 19:20

36:19 39:20 45:4

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63:10 71:5 73:17

73:19 74:20 78:2

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100:15 106:15

117:8 123:12

126:22 127:22

130:21 134:3

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179:1 180:5 190:4

195:16 196:22

216:22 217:5

226:6 230:2

237:20 241:6

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268:15 269:1

271:9 272:1 273:9

283:17 286:5

289:3,10 290:3

297:2 300:17

303:3 306:18

316:15 319:10

plug 271:1

plumber 135:22

Plumbing 6:1 117:2

plus 69:13 92:10,10

94:5,7,16 99:18

159:11 205:17,19

230:14 265:2

point 10:1 32:8

34:18 43:21 45:14

61:13 65:2 78:6

80:12 81:3 83:7,9

88:3 94:4 96:8

100:8 113:22

115:10 116:11

119:15 148:19

149:18 150:8

161:6 168:16

172:7,7 174:14

179:4,15 181:20

182:2,17 185:16

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209:14,19 211:22

221:11 223:1

233:22 253:6

254:7 256:1,8

258:6,9 267:15

282:19 293:12

294:8 299:9 319:1

319:12

pointed 286:2

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153:8,16,19

155:14,18 160:17

254:5 255:17

256:3 258:11

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polar 197:22

policy 15:15 19:22

317:20

polite 260:7

polypropylene 34:8

pool 184:8

poor 172:22 270:17

population 196:15

242:18 316:22

portfolio 37:10

portion 97:18

147:13

posed 282:15

position 158:8

positive 18:20

315:22

positively 304:13

305:8 314:9,16

possibility 281:10

possible 17:10

23:14 37:9 40:13

55:22 98:22 116:4

120:14 151:12

183:5 235:2

261:15 264:3

265:12 281:4

possibly 256:19

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35:18 41:11

potential 19:7

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potentially 23:4

141:21 150:15

151:7,20 152:7

153:3 164:9

167:11,14 238:12

264:15,22 265:1

268:22 280:13

283:14 288:11,12

318:17

pound 284:12

power 93:1,14,17,19

93:21 99:16

202:18,19 203:3

203:11 205:9

219:10,12,15

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154:4 222:7

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126:12

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preceding 254:10

precisely 29:15 36:3

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13:1 14:1 17:13

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147:1,14 201:1,5

203:13 207:19

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62:12 63:7,17

69:11,12 75:20

80:12 81:17 85:6

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102:16 103:16

104:16 105:13,16

105:22 106:6,8

107:1,2,12 108:8

112:16 113:8,21

114:11 115:3,11

119:17 120:10

121:17,18,22

123:16 127:2

229:20 232:17

269:16,16,22

286:20 312:18

prices 54:3,13 59:15

59:17 85:13

101:19 102:8

104:20 105:14

112:7,10,11 114:8

115:3,6 124:3,8

124:13 139:4

225:4,5,9,12,13

225:22 226:10,10

226:11,20,22

229:18 233:3

275:8 292:4

310:10 317:14

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124:16

primarily 31:17

55:21

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80:2 115:13

234:13 264:17

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246:17 267:17

286:3

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probability 104:1,5

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probably 9:3 39:13

91:10 110:9

134:21 148:17

149:17 174:9

189:12 201:10

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232:17 234:13

252:14 282:14

296:17 301:14

problem 36:4 98:3

158:7,16 160:1

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problems 15:18

86:9 261:15

procedure 65:1,4,9

65:13 66:9 83:9

84:3 88:5,16,19

88:19 89:4,20

91:17 199:11

201:4 204:4

procedures 83:12

83:15 84:12 87:6

88:12

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52:22 86:8 139:19

139:21 175:10

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21:6 26:12 27:13

28:4,20 38:9

39:14 41:11 78:22

81:14 83:10,14

84:4,9,14 86:16

86:18,22 114:2
The Energy Conservation Standards For Residential Furnaces

March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

Page 346

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processes 57:5

80:11,15 114:17

114:18

produce 315:5

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producers 18:3

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24:17 54:18 60:15

64:21 65:8 67:13

76:3 92:20 94:19

100:2 101:19

103:1,13 104:16

105:3,13,14

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173:3,6 177:10

187:12 190:12

192:1 194:5,9,19

197:21 198:2
The Energy Conservation Standards For Residential Furnaces

March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

Page 347

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200:19 201:8

206:22 209:11

210:18 211:3,21

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294:20 295:12,17

296:19 299:14

301:21 304:5,6

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311:1 312:7 314:2

314:4,8,22

questions 10:8,10

10:13,14,16,18,22

11:2 14:3 17:1,4,7

17:9 21:10 27:1,2

27:9 48:18 53:4

61:1,8,13 70:16

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rank 132:7

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rate 30:9 32:15

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111:6 113:16

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136:4 179:15

227:10,13,14,19

229:1,7 236:7

238:16 240:13,13

240:21 241:21

242:3,5,7,12

243:4,8 256:13,14

256:20 257:3,11

257:17 280:12

Rathbun 4:12

rating 86:8,10

ratings 66:1 92:22

ratio 204:6

rationale 107:11

255:13 256:2

269:10 302:18

raw 235:8 262:1

276:6

re-ask 106:16,22

re-lining 143:9

re-raise 168:18

reach 319:2

react 218:16

read 73:6 81:21

135:21 160:12

181:11 182:14

183:3 229:13

230:2 309:19

readily 64:1

reads 207:21

ready 179:20

real 13:15 72:13,14

126:12,17 136:16

136:19 226:9

227:18 312:1

realistic 36:6

realize 261:19

realized 261:21

really 11:20 16:3

26:20 31:14 32:19

33:12 37:3 38:9

38:16 39:15 42:9

42:13 43:1 44:5,9

63:4 65:19 71:7

81:17 87:12,14

89:4,7 92:8 96:1,8

98:22 100:8,9

110:15 120:7

138:12,12 146:20

165:4,7,10,11

178:17 206:2

207:21 208:21

217:1 223:4

224:13 227:6,12

232:15 237:5

247:11 256:1

260:6,13 265:20

266:7 268:8,8

270:17 272:18

284:7 293:3 308:8

308:12 310:1,4

317:21 319:13,14

realm 260:15

reason 80:2 90:18

114:6 151:10

216:14 222:13

234:10,10,13

248:12,13 299:17

reasonable 72:8

78:13 98:12

123:18 284:19

reasonably 24:3,4

59:20 74:6

reasons 33:12

255:16 268:2

rebate 12:12

rebates 138:22

261:20

Rebecca 2:20

rebound 214:6,10

214:15 215:9

217:11,13,18,20

221:22 222:15,22

223:4 224:4,11

rebuild 80:3

rebuttable 282:3

REC 182:8

recall 109:13

124:20 236:14

242:10,11

recap 309:3

receive 84:21

271:22

received 8:9 10:8

12:20 13:17

153:18 154:14

recessed 180:9

recession 261:22

recipients 51:2

reckoning 181:3

recognize 15:8

38:18 84:20 202:1

252:14

recognizes 245:10

recognizing 40:6

recollection 310:5

recommendation

28:8

recommends

242:12

reconciled 228:6

reconciliation

123:18

reconfigure 19:7

reconsideration

24:7

reconsidered 24:3

reconvene 180:10

record 13:3 14:4

15:17 78:3 207:8

207:8 241:21

recorded 8:4

recover 103:15

285:10

RECS 129:10,11,13

130:3 141:7 149:2

184:15 185:11,16

185:22 186:6,6

187:4 188:22

189:6 190:7 191:4

193:6 194:2,3,5

195:8 196:1

197:19 198:9

220:3 235:11,15

237:16 238:19

239:4 263:8,9

275:21 277:1,2

279:3

redo 166:12

reduce 34:14 121:5

reduced 33:8 50:18

103:16 178:10

220:10

reduction 50:22

210:1,4

reference 86:1

129:4 236:14,17

references 91:18

116:15,16 225:8

225:17 240:7,8,10

referred 22:16 48:7

71:11 113:20

274:7

referring 157:9

163:14 176:1

219:4 243:1

refine 165:6

reflecting 114:15
The Energy Conservation Standards For Residential Furnaces

March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

Page 348

reflection 89:19

114:18

reflects 245:6,8

309:1,1

reformatting

133:11

refresh 241:6

refrigerant 173:22

Refrigeration 5:20

regard 71:9 217:1

230:3 250:16

263:5 283:18

regarding 70:16

123:16 138:10

regardless 96:22

region 23:17 122:9

132:18,19 145:6

161:11 190:22

191:3,21 197:20

225:12 258:17

263:14,15 275:7

276:7 292:8 310:6

regional 18:10

40:22 144:8 191:3

213:16 214:1

251:8 318:17

regions 144:7

213:18 263:8

291:19

register 46:11 95:17

registered 280:21

regular 295:2

regularly 235:13,16

regulatory 8:16

31:10,12 45:17

242:2

Rein 2:18 6:8

reiterate 153:8

294:3 312:2

reiterating 262:11

relate 83:12 121:16

121:20

related 11:2 48:1

61:3,14 81:2

95:14 106:19

108:11 128:17

147:6 149:21

153:19 154:13,17

217:11 235:4

236:1 246:18

257:10 264:1

267:12,17 268:14

273:16 275:12

286:4 287:8,22

296:18 301:22

309:7

relates 34:19 95:14

124:17 165:13

168:22 200:7

256:13 289:18

312:19

relating 130:18

240:4

relation 18:14

189:13 258:22

267:19 287:7

relationship 28:12

66:17 67:19 220:9

relative 108:2,21

111:17 126:1

209:10 210:10

269:12,22 285:15

295:22 296:14

relatively 295:8

release 79:1

released 10:2

relevance 284:8

relevant 80:13

reliability 100:10

reliance 15:10

21:13

relied 21:17 53:21

54:6 236:20

relies 16:13

relined 144:3

relining 143:13

146:5,5 156:11

159:16 167:11

168:11

relook 66:7

rely 79:2 80:2,13

relying 78:22

remain 17:7 90:21

268:3 275:18

remainder 147:15

remaining 289:15

289:19

remains 107:8

remand 53:13

remanded 47:7,9

remarks 8:17,20 9:9

12:8,19 13:16

16:2 45:6 47:7

48:8 73:21 107:19

172:4 269:6

319:13

remediation 145:20

remember 42:14

114:4 205:16

206:20 217:19

223:2 238:4

remembering

157:21

remind 43:17

100:14 148:2

reminder 283:5

reminds 119:22

remodel 167:15

removal 133:3,6

134:12 162:7

169:21 175:13

183:17 187:15,20

remove 187:13

removed 133:10

removing 134:11,16

render 15:18

renovations 23:13

repair 102:10

104:20 177:4,5

230:4 234:6

266:19 267:2,7

repairing 230:5

repeat 76:9 131:1

214:18 219:7

272:9

repeating 138:19

rephrase 65:6

107:19 120:5

296:4

replace 197:7 232:6

266:19 270:18

273:6

replaced 50:3 144:1

144:2 254:20

273:6

replacement 18:21

115:19 122:21

133:4 134:11

135:5 138:2 140:9

140:10,16 143:7

175:21 231:17,18

234:1 244:2

246:10 248:10

250:5 264:15

292:13,14,19

298:13 314:11

315:3,15

replacements 36:1

138:17 176:10

182:20 246:3

248:1 249:19

293:1 294:7

297:22 315:10

317:2 318:19

replaces 156:12

replacing 134:11

140:2 209:20

267:3 272:22

298:17

report 116:19,21

118:15,20 157:20

160:21 161:1,7

165:10 227:11

259:19

reported 20:11

154:10 187:4

198:10 276:14

represent 55:8

79:17 80:7 130:15

189:14 254:6

278:6 290:3

300:21

representative

55:19 56:22 59:18

73:22 82:8,9

315:14

representatives

17:16 26:3

represented 56:13

representing 17:22

93:13 300:19

316:17

represents 18:11

132:3,12 149:10

169:3 185:21,21

241:13 271:19

315:8

request 13:17 14:2

22:10 70:11 72:3

74:3 75:10 78:11

requested 22:6

32:10 66:6 72:17

requests 22:5

require 46:4 60:11

87:21 142:13

143:8,13 154:19

156:11

required 18:19 46:5

78:12 80:16 133:7

143:16 145:21

153:21 154:2

166:5 169:15

233:19 272:6

requirement 85:16

155:1 170:5 213:4

requirements 26:13

213:17 253:16

318:14,16,18

requires 140:7

274:10

research 9:8 12:11

16:8 90:7

reseller 59:14

Reserve 240:17

residence 163:4

residential 1:3

18:14,16 20:4

44:4 53:7 118:13

118:15,18,20

129:2 185:4,6

294:13

residents 49:15,22

51:17

resistance 51:5

270:22 293:12

resize 166:12,20

resizing 143:15

156:12

resolution 37:9

resolved 34:22

resonates 63:5

resort 208:11

resource 8:11 36:20

Resources 3:9 6:16

7:3

respect 29:20

respectfully 22:5,10

74:3

respective 137:17

respectively 47:15

respond 131:8

308:6

responding 302:2

response 137:15

responses 278:15,16

286:13

rest 105:6 135:2,3

135:12,15 161:22

211:11 212:15,19

285:7 290:21

291:7 319:8,11

restrooms 100:16

180:6

result 18:20 19:12

22:1 53:13 60:19

81:15 130:8

133:19 211:9

251:15 290:5

resulting 50:20

161:15

results 33:2 36:9

37:5 66:16 67:15

70:3 93:13 95:15

123:19 124:12

132:16,17 139:1

145:9 161:22

198:7 211:10

233:11 245:22

266:14,15 276:8

279:8 290:6 294:5
The Energy Conservation Standards For Residential Furnaces

March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

Page 349

294:7,9,14,14

303:5,5,7,15

304:7 306:11

311:16 313:3

315:5,7

resume 180:3

retail 14:11 18:2,17

63:7 64:2 75:20

81:17 114:8 116:5

116:13 123:16

124:3,13

retailer 63:19 80:17

116:7

retrofit 23:14

retrospectively

114:10

return 197:5

reveal 72:2

reverse 54:4 55:15

242:7

review 8:15 22:14

30:19 43:8 46:4

72:1 241:22

revise 307:22

revised 47:16 65:1,4

308:5,6

Rheem 2:19 3:12

6:3 74:21 88:2,8

88:10

RIA 9:6

rich 62:21 112:1

179:3 251:17

273:22

Rick 123:14 137:14

177:16 236:12

251:16 292:10,11

rid 148:15

right 31:5 42:15

44:11 45:16 53:1

58:4 60:2 61:19

65:9 70:15 80:5

90:14,15 97:21

103:3 109:3

112:17 119:7,10

124:8 125:5

128:11 135:17,21

136:13 152:17

159:21 162:20

164:11 170:8,14

175:17 177:8

178:16 179:6,9,10

188:14 194:4

203:13,20 209:4

213:15 218:1

222:14 223:2,7

224:9 227:13,16

232:17 243:19,21

244:4 249:17

252:18 257:13

277:15 278:5

282:7 284:18

293:2 308:9

314:17,21

right-of-ways

149:21

rise 30:14,15 125:7

274:16

rising 255:8

Rivest 3:14 8:2

59:10,11,11 62:11

62:11 63:11,15

64:12 72:4,5,10

78:8,9 79:22 80:1

RIVIST 78:9

road 139:13

Robin 3:17 7:3

36:18,20

robust 238:22 250:3

roll-up 36:4

roof 153:10 188:3

room 1:9 13:12

27:13 28:6 29:18

39:20 40:18,19

90:9 151:17 163:2

163:17 175:7

180:5 226:9 227:8

260:2 263:17

265:19,19 307:6

rooms 164:16

Rosalyn 4:8

Rosenquist 4:13

7:18,18

Rosenstock 3:15

6:17,17 42:5,6,6

91:1,2,2,12,20,20

92:7,7,14,14 94:2

94:3,3 175:18,19

175:19 176:4,5,15

194:12,12 195:12

197:21,22 208:17

208:18,18 209:7

209:18 210:9,14

223:16,17,17

226:5,7,7 227:7

241:4,5,5,11

248:6,7,7 265:8,9

265:9 268:16,16

269:3,3,14,14

270:9,9 272:10,11

277:6,6 297:3,4,4

311:3,4

roughly 162:2

298:12 301:1

round 284:12

row 166:20 274:8

rows 161:9

Roy 3:16,17 7:3,3

36:20,20 127:7,7

224:16,16,20

249:3 250:9,9

RS 129:1 136:13,21

230:10 287:12,15

rule 9:21,21 11:3,4

11:6,9,18 15:6

16:18 18:15 20:22

21:9,13 22:3,13

23:9,10 25:2,16

27:21,22 29:12,20

31:7 39:6 44:1,2,6

44:18,19 46:9,12

46:18 47:7,9,16

49:16,19,21 50:12

55:3 60:5,7,10,12

60:18 74:2,10

83:10,14 84:5,14

85:15,17,18 86:18

86:22 87:15 88:5

89:14,16,18 96:16

110:1 129:5

200:17,21 201:7

203:9 205:11,16

206:6 207:1,6,8

208:12 210:3

223:3 236:10,11

241:22 296:18

312:2 316:11

317:1

rulemaking 5:7

20:3 21:6 22:1

26:8 36:17 38:5

39:14 40:17 52:6

53:6 60:10 86:8

87:22 88:4 90:15

161:8 258:22

284:8 316:8

rulemakings 36:5

46:1 110:18

224:10 287:5

rules 84:10 109:4

228:9

ruling 47:11 172:19

run 58:22 88:21

301:15 305:13

runs 152:16

Rusty 3:22

Ryan 172:15

S

S 2:15 5:1 181:1,1,1

Sachs 3:18 6:21,21

81:5,6,6 86:5,5

87:1,12 113:18,19

113:19 130:10,10

157:4,5,17 159:15

159:19 171:9,10

171:10 175:5,6

228:2,3,3,18

229:5 260:21,21

274:13,14,14

294:16,17 295:4

301:20,20

safety 19:8 158:18

158:20 201:15

sales 62:12 63:17

80:20 117:6,7

122:15

salesperson 272:20

sample 103:17

128:4,5 176:10

182:6,8 184:14

185:2,16 186:3,6

186:14 187:7

198:20 271:20

294:4 306:2,3

311:15 315:4,4

sampled 185:18

243:9

sampling 306:5

Samuel 3:7

Sarah 3:10

satisfactorily 15:13

save 20:14 27:17,21

31:2 49:18 95:4

99:17,19 100:7

269:9 312:8

saved 43:22 222:18

saves 28:1 29:22

100:7

saving 43:18 94:13

94:17

savings 21:2 29:6

29:11,14 30:2,7

30:12,13,14,16,17

30:17,18 33:8

37:5 42:2 44:1,15

44:19 48:13 94:21

100:9 102:13

178:7,10 179:7,10

209:21 210:11

221:20 222:14

224:7,8 225:14

242:8 256:16

280:10,15 281:1

293:9 296:10,13

296:14,17 303:13

304:16 305:5

saw 202:18

saying 61:17 87:7

92:19 95:4 108:17

110:5 148:7

159:20 165:1

175:21 189:6,7

205:9 207:12,16

207:17,17 208:21

209:2 219:8 224:6

258:7 261:14

270:10 282:1,15

284:16

says 31:11 83:14

92:3 100:7 113:7

127:2 148:20

172:15 189:22

191:4 196:1,7

202:22 205:11

208:20 222:2,3

225:18 248:9

272:3 279:8

284:18 293:1

318:6

scale 56:2 80:12

122:3 251:4

scenario 36:4,11,13

177:14 293:4

scenarios 303:16

306:3

schedule 26:10

47:11

scheduled 100:20

Schroder 61:16,16

62:1

Schroeder 4:14 6:4

6:4 130:20,22,22

131:2 190:5,5

191:14,22 234:14

234:15,15 255:9

255:12,12 256:10

256:12 257:8

260:22 276:15,16

276:16 285:4,5

286:6,7,7 295:14

295:16,21 296:12

302:13,14

Schryver 3:19 6:13

6:13 13:17,19,20

scope 52:6 53:5,6

scoped 78:11

scratching 282:15

screw 72:13 75:18

98:11

sea 291:19
The Energy Conservation Standards For Residential Furnaces

March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

Page 350

seal 168:9

season 90:20 95:11

95:22

seats 5:3

SEC 69:19

second 32:8 33:22

42:18 43:20 73:21

74:19 84:19 91:13

95:13 131:12

189:4 195:5 233:3

257:13

secondary 67:9 70:6

78:14

Secondly 24:16

secretary 281:17

section 61:8 101:8

138:1 155:16

161:4 195:12

206:3 266:13

309:5 316:22

sector 26:4 117:2,4

secured 180:6

Security 116:18

sedimentacious

144:13

see 5:5,10 8:8 9:20

10:3 23:7,16 27:6

27:16 33:8,16

35:9,21 37:17

38:13,22 39:20,22

40:14,21 41:7,9

41:17,19,22 44:2

45:13 46:11 47:17

48:9 58:6 63:5

64:5 66:10 68:6

68:21 72:8 88:11

92:6 93:6 115:9

119:10 120:13

122:10 125:1,6

130:6 132:19

136:18,18,19

139:17 144:7

160:19 174:2

179:18 182:14

185:3,20 187:19

193:7 198:8,13,18

201:16 206:6

208:10 212:1,6

216:14 220:3

229:19 231:21

240:22 243:11

246:2 250:19

252:3 260:16

261:17 268:9

271:11 272:12

279:8 285:20

287:4 290:6 292:9

303:7 308:3,21

309:20,22,22

311:5 314:20

319:3

seeing 40:10 95:20

124:18 125:10

231:16 250:1

274:16 295:4,8

297:11

seeking 49:12 95:8

99:3

seen 160:4 229:7

SEER 42:17,19

segment 18:11

52:11 176:9 315:2

segmentation

182:15

segmented 314:10

segments 181:6

segregated 184:8

187:1 190:21

select 191:1,10

223:8 296:15

selected 36:9 54:1

55:16,21 56:16

82:7

selecting 54:17

selection 36:7 54:10

55:14 82:7 250:3

selections 55:18

selects 191:7

sell 75:3 255:20

selling 53:19 54:3

54:13 69:11,12

115:3 121:17

sells 76:4 116:7,8,9

Sempra 2:22

send 227:3

senior 311:16,17

312:16 313:6

sense 22:17 45:1

99:20 153:13

161:10 188:11

198:17,19 235:17

239:5 254:6 276:7

283:15

sensing 81:7,12

sensitive 71:16

sensitivity 106:11

178:2 242:13

sensory 235:4

sentence 95:20

sentences 312:15

separate 15:8

116:11 188:17

200:1 213:3

218:14 232:14

263:15 313:6

318:15,16

separated 130:20

separately 184:10

188:16 212:16

263:12

separating 293:18

September 10:1

sequence 83:11

series 111:20 317:4

serious 20:19 78:17

seriousness 15:17

serve 14:13 51:18

128:2 137:18

served 193:21

service 293:6,14

serving 193:17

195:20 201:14

set 37:17 46:10 58:5

83:3 101:13 110:3

111:10 229:8

267:16 293:19

316:6

sets 233:11

setting 48:6 81:14

133:4

settlement 26:10,13

42:19 47:8

setup 264:6

seventh 35:16

severely 50:12

sewer 162:10

171:21

shaped 258:7

share 13:5 28:19

107:7 137:20

246:7 284:2

share-weighted

66:18

shared 112:8

193:20 195:18

196:2 251:20

shares 19:15 35:2

66:22 119:21

186:18 245:6,13

248:14

sharing 98:13 142:3

155:11 186:15

sharp 263:17

sheet 105:7 209:16

314:5

shell 194:14,17

195:4,7 196:8

198:16

Shephard 78:4,4

83:7 86:15 87:4

Shepherd 3:20

shift 114:16 259:5

shifted 43:2 258:19

shifts 80:4

shipment 106:20

109:7 190:8 192:9

209:1 239:8,8

247:3,5 257:12

262:2

shipments 9:5 31:17

31:18 108:15,20

186:11,19,21

187:1 189:17

190:15 239:15,15

239:19,20,21

245:14,16 247:8

247:20 249:5,6,7

250:11,13 251:2,3

251:4 252:15

253:10 262:1

319:11

shipped 44:12

shipping 69:14,14

106:8

shoals 28:21

shop 100:21 226:21

Shorey 81:22 113:5

123:2 126:8,10

218:22

short 139:3 142:10

165:20 188:3

312:1

shortcomings 15:21

shorthand 40:4

shortly 174:9

show 10:6 11:4 31:1

33:2 59:7,8 113:7

126:11 183:18

223:9 224:5

242:12 250:17

293:9 309:19

314:15

showers 288:21

showing 35:19

226:9 242:4

250:12

shown 35:6,8 36:10

55:17 91:6 103:3

103:13,14,20

104:14 115:21

122:12,13,17

145:7 245:22

277:4 286:17

shows 27:11 35:8

39:2 54:7 55:11

56:15 66:7 85:19

101:9 122:6,19

207:9 244:13

280:22

shut 95:10,21

shutter 210:21

side 43:3 55:11 93:6

127:9 128:11

158:20 188:14

223:20,22 229:8

245:20 266:12

272:14 296:11

298:6

sides 158:10

sign 59:12

significant 19:12

20:22 80:20 114:3

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232:13 249:11

250:7 271:4

272:11 273:3

280:20 286:11

296:20 297:2

300:1

year 29:10 87:22

97:5 129:17

197:17,20 219:2

223:3,21 224:1,3

225:19 230:15,18

238:5,14 239:17

244:4 247:14

252:20 257:15

272:21,22 279:7

279:11,12 281:6

282:1 301:1 311:9

317:19,21 318:7

yearly 235:17

years 11:14 24:18

24:19 27:14 34:1

38:6 40:17 42:17

46:5 87:14 148:15

148:17 176:6

191:5 228:6 229:3

230:16 235:15,18

235:18 238:6,13

239:2,10 240:18

240:19 244:14,18

245:16 247:4

250:2 251:7 253:3

254:9 256:22

261:5 273:7

275:16 277:8,9,16

277:18 280:22

282:4 290:1 291:3

297:7 298:5

302:17,17 311:8

317:20 318:4,6

yellow 182:9 277:15

yep 139:7 194:11

yesterday 64:22

65:16,22 66:6

83:20 88:17 89:11

89:17 90:3 97:15

146:19 192:20

yield 30:12

Yokogawa,Yokog...

92:4

York 136:5

Z

zero 100:5 179:5

241:13 280:9

295:8 296:8

zone 139:8 171:4

196:9,18

0

0.0 95:5

08 254:14

1

1 46:6 93:16 94:14

212:14 219:1

222:4 223:4

235:22 241:7,10

241:13 246:18

257:5 286:4 290:1

309:6

1,000 14:9

1,161 315:11

1,500 50:10

1,800.00 79:11 80:9

80:12

1.1 20:9

1.21 125:1

1.27 70:2

1.34 70:1 122:10

1.4 20:11 37:15

1.74 224:1

1/2 282:3

1:00 180:3

1:45 180:3,10

10 42:17 134:21

191:5 197:17,20

254:15,19 284:18

291:2 317:10,21

318:1 319:6

10-Ks 69:19

10% 191:12

10,000 152:15 185:4

315:6,7,12 316:5

10.00 221:2,3

10:30 9:2

10:55 100:13

100 243:18

100% 77:5 160:19

164:8 242:6

100,000 159:11

1000 1:7

103 210:20

10K 116:18

11 93:12 254:15

113 113:2

12 223:22 282:18

291:2 317:11

318:4

12% 222:4

12,000 185:17,18

12/21 287:3

13 42:17,19 290:1

318:4

13.9 223:22

13th 319:4,9

14 42:19 318:4

14% 317:11

140 140:5

15 24:19 100:14

240:8 284:18

15% 222:2 223:4

246:12 282:19

283:2

150 12:14

150% 243:18

151 20:15

16 24:19 63:1 318:7

16.1 30:8

16.5 106:9

163.00 125:8

165.5 50:22

167 167:9

17 46:10

17% 217:19

172.00 124:16

18 100:6 318:7

18% 167:1

19 18:10 46:13,15

71:2 186:20
The Energy Conservation Standards For Residential Furnaces

March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

Page 358

191 207:13

194 195:2

1970 190:19

1975 45:18

1976 190:17

1976-1977 190:17

1980 245:18

1987 45:21 46:8

1989 46:10

1990 47:15 149:4

157:21

1990's 144:6

1992 47:15 186:21

251:9

1993 256:7

1995 143:11,12

149:4 240:19

1998 227:9 228:16

1999 191:6,7,9

1A 309:4

1C 311:1

2

2 61:8 93:17 94:11

94:14 127:5

134:18,18 212:14

235:22 257:4

286:4 297:14

2-stage 204:5

2% 80:7

2,200 50:10

2,800 18:8

2.2 166:14

20 176:6 244:14

272:22

20% 23:15 166:19

191:9 210:11

241:13 250:5

297:12,14,15

298:13

2000 27:22 255:19

2001 279:3

2002 247:14

2003 186:21 247:6

247:14

2004 251:10 256:8

2005 116:22 250:21

251:12 255:18,19

279:3

2006 42:18,20

278:20

2007 46:4,13 47:15

55:2 117:1,3

129:4

2008 234:22 258:19

259:4

2009 149:6,7 185:16

186:6,7 195:9

197:15 245:18,18

252:15,16 258:9

258:14,17,18,18

258:21,21 259:1,2

259:5 275:21

279:3

2010 46:6 50:19,21

240:19 252:17

254:18 259:5

2010-2011 259:15

2011 11:3 15:6

16:17 25:7 46:19

47:5 61:4,18

96:15 129:4 154:8

154:12 160:22

239:22 240:22

250:22 251:1,13

253:8,8 254:10

259:5

2011-2012 259:21

2012 20:10 116:21

117:1 225:20

245:19 251:1,19

252:15 253:8,19

256:9 258:7 259:5

259:9

2013 20:10,16 117:7

129:2 198:4

226:10 251:19

258:6,8 259:5,8

278:20,21 279:6

2014 20:12 47:9

60:7 154:13 195:8

197:22 198:4

200:17,21 201:7

203:8 205:3 206:6

210:8 226:1 236:9

2015 1:12 5:8 46:15

47:17 50:19,22

210:10 226:12

2019 60:8 210:9

2020 226:2

2021 11:9 60:10

106:10 144:1

148:14 149:7,9

186:8,10,18

191:20 193:3

194:16 195:9

196:8 198:11

245:13 248:16

249:7 250:12,19

255:20

2030 254:19

2040 226:2,4,12

2050 106:11

20585 1:8

21 148:17 230:16,19

318:6

21.5 24:18 229:2

22 294:12,13

22.52 230:18

225,000 53:11

2252 230:14

23 99:17 294:12

232.09 50:21

24 47:9

24/7 96:7

25 30:15 175:21

193:18

25% 175:21 233:7

278:11,18 279:9

279:10 282:17

283:8 293:22

294:4

27 1:12 5:8 46:19

263:9

274.00 231:10,18

277 278:8

29 148:15 277:14

3

3 93:18 94:11,14

134:18 212:17

256:22 257:15,17

277:8,9,18 281:6

282:3,4 286:4

287:14,15,16

289:6 302:17,17

3-year 25:10

3% 189:15,16 242:9

242:22

3,500 315:11

3.1 30:2,8

3.4 50:19

3.43 231:11

3.5 275:15 277:16

279:7,11,12,18,20

296:7

3/10ths 148:8,9

30 30:5 100:5 176:6

210:12,14 227:22

263:8 311:8,9

30-year 106:9,10

30% 191:9,10

304 305:11

305.00 281:1

31% 23:17 50:21

32% 246:11

33% 160:20 163:19

164:7

330 219:3

34% 50:18 253:21

349 219:3

35 39:19

35% 297:14

35.00 154:8

350 125:3

350.00 50:8 79:10

355 219:3

360.00 165:19

365 96:7

37 14:9

38 18:9

39% 23:20

39.00 178:7,9

3rd 17:11

4

4 130:17 134:9,15

212:17 219:1

246:18 253:3

267:17 300:10

309:4 314:4

4-5 252:20

4% 297:14

4,701 315:8

4.4 30:14

4:51 319:18

40 93:15 289:1

40% 40:8 166:22

210:13,14 231:7

44 205:17,19

45 180:2

45% 248:10

467 209:2

490 209:3

5

5 30:15 85:20 94:8

134:9,15 183:10

183:11,12,12

204:8 212:17

239:17 253:3

254:16 272:21

284:18 286:4

309:7

5% 39:2 40:4 92:10

94:8,17 205:9,13

205:21 207:14

5,700 185:18

5.1 50:18

5.5 248:10

5:00 263:17

50 12:12 18:9

193:17 288:19,22

50% 149:16 165:16

229:1

50,000 159:11,11

50.00 136:1 244:4

51 181:3

52 187:19

54 185:21

55 189:5 223:20

297:18

55.00 223:21

56.00 224:2

58% 204:6

58.7 161:15,18

59% 162:2

6

6 101:18 127:5

239:17 241:7,9

286:4 289:6

6.8 42:20

60 288:18

60% 162:1 209:13

60.00 135:22

64 216:11

65 190:20

65% 190:20

66% 271:20

67% 162:19 163:14

164:1

68 249:3

687 207:13

7

7 8:13 102:6 195:14

205:20 223:3

282:6 286:4 289:6

317:19,22

7% 122:16 205:11

242:10,22

7.2 280:22

7.7 42:20,20 305:17

7.9 20:15

70% 191:11 212:22

700 14:9

727 219:1

74 298:12

75% 148:7

78 302:13

792 279:8

7A 187:10

7B 193:1 195:15

202:10

7B.3.1 202:22

203:18

7D.3.1 208:20

8
The Energy Conservation Standards For Residential Furnaces

March 27, 2015

202-347-3700 Ace-Federal Reporters, Inc. 866-928-6509

Page 359

8 57:20 125:6 141:6

141:6 161:5 223:3

240:3 241:3

8% 205:11,13,20,20

8.00 99:17

8.2 42:21

8.2.7 125:6

8.5.1 39:1

80 48:1 76:17,20

108:21,22 124:15

125:7,17 216:11

218:9,13 282:19

80's 80:6 224:17

249:7

80% 44:7 54:20

56:18 57:21 58:3

58:9 62:2,5,10

70:4,5 76:14 79:9

107:6 111:11

126:4 146:12

150:16 178:7

198:12 207:9,13

216:10 282:18

296:14 306:9

80,000 55:20 82:1

80/92 213:12

8094 242:11

81 311:6

86 86:12

89,000 51:1

8B 160:22 188:1

8D 134:1 135:20

181:20 182:16

183:18 188:9

8D.2.8 145:8

8E 229:21

8E-089 1:9

8G 240:12

8J 303:21

8J.4 294:14

8J31 113:7

8J43 294:13

9

9 42:17 95:3 141:7

298:5 305:17

319:5

9% 165:18 253:20

9.5 94:7

9.67 99:19

9:00 1:14

9:09 5:2

90 76:18 125:19

154:20 219:17

228:9 230:14

248:10 253:11

264:13

90's 86:19 230:14

90% 55:9 56:18

62:5,10 67:7 70:5

70:7 107:9 125:8

191:12 215:22

219:11 230:14

241:14 248:20

275:13 303:7

306:14

906 279:6

90s 145:9

91 186:21

92 76:18,21 124:15

207:10 213:11

218:10,12 219:11

219:17 246:12

282:18

92's 80:6

92% 15:3 18:19

19:3 20:18 23:2

29:21 31:9 56:19

58:8,10 62:5

106:21 107:9

178:7 232:2 296:1

296:6 306:14

93 207:10

93% 58:9 207:10,13

95 67:8 246:8

248:22 249:1

253:11,12

95's 80:6

95% 30:11 31:13

35:9 36:1 39:7

56:19 62:6 67:6,7

68:6 70:7 107:9

219:11 248:9,13

248:16,19 253:10

957 208:12 219:2

97% 189:9 190:1

98 80:6,9,21 108:20

108:22 212:1

98% 56:19 68:5,11

79:10 80:9,10

107:10 250:3

99.9 306:21 307:11
360 

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