From: Robert Berman [mailto:bermaneconomics@gmail.com]

Sent: Monday, November 14, 2011 1:19 PM

To: Hirsch, Bruce R

Cc: 'Steve Nadel'; Robert Berman; Phil Hopkinson; Eric.Petersen@aksteel.com;

jerry.schoen@aksteel.com; Maxine (EMAB) Savitz; mhyland@appanet.org;

Raymond.Polinski@ATImetals.com; maheshsampat @bellsouth.net; tpetrosino@carolina.rr.com;

dbrender@cda.copper.org; Ja mes.Lass@cleco.com; chris.brown@cogentpowerinc.com;

frank.guilbault@cogentpowerinc.com; ted.johnst one@cogentpowerinc.com; Aaron Meyers; Antonio

Trujillo; Jack C Moore; Jerry L Corkran; tballo@earthjustice.org; carlosgsiqueiros@eaton.com;

eduardorobles@eaton.com; Emily (CONTR) Marche tti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org; DYoung@energ y-solution.com; rick.anderson@faypwc.com;

bsmith@federalpacific.com; rgreeson@fed eralpacific.com; carlos.gaytan@ge.com;

artrosenfeld@gmail.com; greg.coulter405@gmail. com; ned.efbrush@gmail. com; Richard Parker;

Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen; cabolduc@lbl.gov; gjrosenquist@lbl.gov;

kcoughlin@lbl.gov; ScottB@LVMetals.com; dave .millure@metglas.com; kwinder@mleainc.com;

jrossetti@mlgw.org; Brian Coffey; Caitlin Johnson; Matthew Nardotti; Michael Rivest; Zhimei Luo;

Jim.creevy@nema.org; john.c askey@nema.org; mwaltner@nrdc.org; rroy@nrdc.org;

robert.saint@nreca.coop; Teckma n@nwcouncil.org; vijay.tendulkar@onyxpower.com; gbf1@pge.com;

chuck.simmons@pgnmail.com; ahofmann@pub licpower.org; pkumar@publicpower.org;

adelaski@standardsASAP.org; jmauer@stand ardsasap.org; wes.pa tterson@us.abb.com;

chad.kennedy@us.schneider-electric.com; thomas.pat zner@us.schneider-electric.com; charlied@uus.org

Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference



### Bruce,

Those upfront transformer costs ar e compared to the fuel cost savings in the LCC approach. The

discounting process values fuel cost saving in the future at less than the costs in curred today. The

positive LCC means that that the efficiency a dvocates are not ignoring costs, but comparing

them with benefits and finding that the consumer is better off and will be paying less. One does

not, however, need to rely on the LBL analysis to see this. The ABB sales data shows M3

transformers being delivered at EL4 efficiency. As a modeler, I am always skeptical of model

results -- people do not live in computers and certainly not on in some of the back-of-theenvelope calculations that we have seen from others. Market sales data, however, is quite real. In

this case it unambiguously says that the tran sformers at EL4 are an economically reasonable

choice -- the market has, in fact, selected that choice on multiple occasions.

To the extent that there are dug-in positions, again the evidence does not support that it is the

efficiency advocates that ar e dug-in. Although EL4 is achievabl e and beneficial based both on

market data and LBL analyses, the proponents of greater efficiency indicated a willingness to

compromise. It is certain repr esentatives of the industry who ha ve consistently said either no

change, or a fractional change. It is those industry re presentatives who appear to be advancing

the "my position or nothing" attitude. Although I happen to agree that substantial movement

towards more efficient distribution systems, I also note that these are incredibly expensive

meetings. We have a large number of very se nior people devoting s ubstantial time to the

meetings, their preparation and non-trivial trav el costs. These peopl e have other things

competing for their time. If you and others hone stly believe that you cannot agree to a higher

standard, and place no value on regulatory certain ty, then let's not waste additional time and

### money. Let's just say that we gave it a good shot, cut our losses here, and make our respective

cases to DOE outside the negotiation process and let DOE make it's own decision. I believe that

they certainly have sufficient in formation to support their positi on in a February NOPR. I can't

imagine what else they would need.



### Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 14, 2011, at 11:49 AM, Hirsch, Bruce R wrote:

Steve,

I am disappointed with your approach to this assignment.

It appears that negotiation to you is defined as agreeing with your position

‐‐‐ or calling it off. It is

unfortunate that you believe the American public, especially in these trying economic times, should be

expected to foot the (very large) bill for more efficient transformers when it is still not certain that there

is value in doing so. You have clung to one suspect calculation that indicates there may be a payback

‐‐‐

in the distant future

‐‐‐ and only if all the assumptions being made pan out. You choose to ignore the

costs, not yet factored in, on US jobs, US businesses and the reliability of supply of an item so

desperately needed for our economy to expand.

This is not a “cut and dried” economic decision but is one that needs to be taken seriously for the major

impact it could have on the electric supply of the US and the financial position of the American public. If

DOE makes the final decision on this, I would expect them to do “due diligence” in considering all the

effects there decision would have on US businesses and the US economy.

Let it be known that the Utility Industry has not pulled out of the negotiation process and will continue

to work with DOE to reach the right decision.

Bruce.From: Steve Nadel [ mailto:snadel@aceee.org ]

Sent: Friday, November 11, 2011 2:16 PM

To: Robert Berman; Phil Hopkinson

Cc: Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB)

Savitz; mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ;

Hirsch, Bruce

R; tpetrosino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogentpo

werinc.com ; frank.guilbault@cogentpowerinc.com ; ted.johnstone@co gentpowerinc.com ; Aaron Meyers;

Antonio Trujillo; Jack C Moore; Jerry L

Corkran; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily

(CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energysolution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ; rgreeson@federalpacific.com ; carl

os.gaytan@ge.com ; artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ;

Richard Parker; Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel

Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millure

@metglas.com ; kwinder@mleainc.com ; jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnson@

navigant.com ; matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ; Jim.c

reevy@nema.org ; john.caskey@nema.org ; mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ;

Teckman@nwcouncil.org ; vijay.tendulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@pgnmail.co

m ; ahofmann@publicpower.org ; pkumar@publicpower.org ; adelaski@standardsASAP.org ; jmauer@standa

rdsasap.org ; wes.patterson@us.abb.com ; chad.kennedy@us.schneiderelectric.com ; thomas.patzner@us.schneider-electric.com ; charlied@uus.org

Subject: RE: Negotiated Rulemaking - Distribution Transformers Teleconference

Phil,

We're in the middle of negotiations and some of us have made clear that no or little change to the

standard is not acceptable as the DOE analysis just ifies higher standards (higher levels are technically

feasible and cost-effective on a life-cycle cost basi s). The efficiency groups would rather leave the

decision to DOE than agree to subpar standards. If you and other participants want to veto any

significant change in the standard, th en we might as well save some time , break off negoti ations and just

make our respective arguments to DOE. Is that what yo u want to do? If the answ er is no, then let's start

talking about how to make higher standards acceptable rather than continue to make arguments about

why low standards are needed. We're all busy and if we're going to ma ke progress we need to break new

ground and not rehash old ground.

Steve

>>> Phil Hopkinson < phopkinson@hvolt.com > 11/11/2011 1:16 PM >>>

Hello Robert and all:

You must not have looked at Jerry Corkran’s message because he found the cost to be $17/watt, which

is pretty close to my number, where both Jerry and I have used M3 core steel to derive the cost curve.

The fact is that the cost curve is very steep with M3 and quickly hits the brick wall.

1. I have checked Carlos Gaytan’s cost curves as well and he is finding about the same relationship with

M3.

2. I have checked Wes Patterson’s data as well and he is finding an M3 cost curve about the same as

mine.3. I have checked the OPS data with M3 as well and it too is very close to $20/watt.

a. For example, for design line 1 they show an efficiency at 50% load of 99.08% which translates to 232

watts of loss and sells for $1,960.73.

b. They show another M3 design with an efficiency of 99.26% which translates to 186 watts of loss and

sells for $2962.11.

c. The change in selling price is $2,962.11

‐ $1,906.11 or +$1,001.38

d. The change in watts is 232

‐ 186 or ‐ 46 watts.

e. The OPS $/watt is therefore, $1,001.38/46 watts or $21.77

f. Hence we see that all data sources are pointing to cost per watt of ~$20 /watt saved to go from the

current mandatory standard to EL1. I get $30/watt to go to EL2 and $53/watt to go to EL3

4. The fact is that M3 is about out of gas and the DOE did a good job in the last rule making.

5. The fact also is that a push to anything beyond present does not show economic value and I do not

support it.

6. The fact also is that a push to higher efficiencies will kill the new transformer market and open up the

rebuild market, destroying jobs at the new transformer manufacturers and resulting in transformers of

lower efficiency which will cost energy and not save it.

Best regards,

Phil

Philip J Hopkinson, PE

President & CEO HVOLT Inc.

3704 High Ridge Rd.

Charlotte, NC 28270

phopkinson@hvolt.com

Ph 704-846-3290

Fx 704-845-2520

Cell 704-236-3320

www.hvolt.com

From: Robert Berman [ mailto:bermaneconomics@gmail.com ]

Sent: Friday, November 11, 2011 11:16 AM

To: Phil Hopkinson

Cc: Corkran, Jerry L; Richard Parker; Freeman, Jeremiah

(CONTR); rick.anderson@faypwc.com ; tballo@earthjustice.org ; ScottB@LVMetals.com ; john.caskey@nem

a.org ; Cymbalsky,

John; adelaski@standardsASAP.org ; Teckman@nwcouncil.org ; gbf1@pge.com ; carlos.gaytan@ge.com ; rg

reeson@federalpacific.com ; bruce.r.hirsch@bge.com ; jhodge@howard.com ; mhyland@appanet.org ; dave

.millure@metglas.com ; snadel@aceee.org ; wes.patterso n@us.abb.com ; Eric.Petersen@aksteel.com ; Raym

ond.Polinski@ATImetals.com ; artrosenfeld@gmail.com ; srosenstock@eei.org ; rroy@nrdc.org ; robert.saint

@nreca.coop ; chuck.simmons@pgnmail.com ; kwinder@mleainc.com ; mwaltner@nrdc.org ; jerry.schoen@

aksteel.com ; Paul.Ryan@hitmet.com ; ahofmann@publicpower.org ; pkumar@publicpower.org ; bsmith@fe

deralpacific.com ; greg.coulter405@gmail.com ; jmauer@standardsasap.org ; Cohen, Daniel; Meyers,

Aaron; Jim.creevy@nema.org ; jrossetti@mlgw.org ; cabolduc@lbl.gov ; kcoughlin@lbl.gov ; brian.coffey@n

avigant.com ; mrivest@navigant.com ; gjrosenquist@lbl.gov ; caitlin.johnson@navigant.com ; zhimei.luo@na

vigant.com ; Marchetti, Emily (CONTR); charlied@uus.org ; DYoung@energysolution.com ; James.Lass@cleco.com ; maheshsampat@bellsouth.net ; matthew.nardotti@navigant.com ;

Raba, Jim; Savitz, Maxine

(EMAB); tpetrosino@carolina.rr.com ; chris.brown@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.

com ; frank.guilbault@cogentpowerinc.com ; ned.efbrush@gmail.com ; dbrender@cda.copper.org ; chad.kennedy@us.schneiderelectric.com ; eduardorobles@eaton.com ; vijay.tendulkar@onyxpower.com ; thomas.patzner@us.schneider

-electric.com ; carlosgsiqueiros@eaton.com ; Robert Berman; Trujillo, Antonio; Moore, Jack C

Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference



### Even if it were that high (and Mr. Hopkinson is the only one I've seen who has put the number

anywhere near that), the effi ciency objective is saving Watt- hours (energy) not Watts (the

capacity to save energy) . One Watt saved fo r 8,760 hours per year for 30 years is 262.8 kWh

(not counting leap years). Even at Mr. Hutchi nson's $20, that's just over 7¢ / kWh. If Mr.

Hutchinson will examine his electric bill, as he ha s reported, he will see that even as high as 7¢

it's a good buy, and that assumes we put a ZERO valu e on any environmental benefits (which is

why DOE agreed to reconsider its 2007 MEPS in the first place.

Indeed, the cost of losses per Watt (roughly the A factors that O PS has been using) are no where

near the $20 claimed here. Moreover, as ABB and others have pointed out, the proper approach

would have been to minimize cost subject to e fficiency, not A & B, which would have resulted

in a lower, flatter curve to the asymptote. ABB's actual market data -- physical transformers

produced and delivered -- shows a competitive market for M3 transformers even at EL4

efficiency. You can make all the hypothe tical claims you want to, gentlemen, the market is

the real world

.



### Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 10, 2011, at 6:53 PM, Phil Hopkinson wrote:

Well stated Jerry

That is also what my analysis a nd report said. If you restrict to M3 then the cost of EL1 rises to

about $20/watt.

### Phil

Phil Hopkinson,P.E.

HVolt Inc.

704-846-3290

F: 704-845-2520

C: 704-236-3320

phopkinson@hvolt.com

On Nov 10, 2011, at 18:04, "Corkran, Jerry L" < Jerry.Corkran@CooperIndustries.com > wrote:

To Mr. Parker and the DOE working group,

The reason for the request for the incremental cost of the losses is that the current DOE efficiency levels

can be obtained if the design is optimized at about $4 per core watt and $1 per winding watt at full

load. At the DOE 50% kVA rating, this is the same as evaluating the losses or optimizing the design at

about $4 per total watts loss.

The present DOE efficiency loss level results in transformer designs about like many utilities were

purchasing their transformers before 2007. The utilities were purchasing the efficiency levels that were

justified based on the cost of losses. A few utilities were purchasing higher efficiency that the 2007

efficiency rules because of the calculated cost of energy being higher than the $4/$1 loss evaluation.

What came up in the discussion last week was even for loss level 1, the incremental cost of losses was

about $17 per watt for the design checked, between the present DOE losses an efficiency level of DEL1.

The added cost of $17 per watt is so much higher than the typical cost of the energy for the utilities,

that it is very questionable that the DOE payback estimates are accurate. A 3% interest rate may be a

factor in the payback calculations.

Jerry Corkran

From: Richard Parker [ mailto:richardparkerdc@gmail.com ]

Sent: Thursday, November 10, 2011 3:23 PM

To: Robert Berman

Cc: Freeman, Jeremiah

(CONTR); rick.anderson@faypwc.com ; tballo@earthjustice.org ; ScottB@LVMetals.com ; john.caskey@nem

a.org ; Corkran, Jerry L; Cymbalsky,

John; adelaski@standardsASAP.org ; Teckman@nwcouncil.org ; gbf1@pge.com ; carlos.gaytan@ge.com ; rg

reeson@federalpacific.com ; bruce.r.hirsch@bge.com ; jhodge@howard.com ; mhyland@appanet.org ; dave

.millure@metglas.com ; snadel@aceee.org ; wes.patterson@us.abb.com ; Eric.Petersen@aksteel.com ; Raym

ond.Polinski@ATImetals.com ; artrosenfeld@gmail.com ; srosenstock@eei.org ; rroy@nrdc.org ; robert.saint

@nreca.coop ; chuck.simmons@pgnmail.com ; kwinder@mleainc.com ; mwaltner@nrdc.org ; jerry.schoen@

aksteel.com ; Paul.Ryan@hitmet.com ; ahofmann@publicpower.org ; pkumar@publicpower.org ; bsmith@fed

eralpacific.com ; greg.coulter405@gmail.com ; jmauer@standardsasap.org ; Cohen, Daniel; Meyers,

Aaron; Jim.creevy@nema.org ; jrossetti@mlgw.org ; cabolduc@lbl.gov ; kcoughlin@lbl.gov ; brian.coffey@na

vigant.com ; mrivest@navigant.com ; gjrosenquist@lbl.gov ; caitlin.johnson@navigant.com ; zhimei.luo@na

vigant.com ; Marchetti, Emily (CONTR); charlied@uus.org ; DYoung@energy-solution.com ; James.Lass@cleco.com ; maheshsampat@bellsouth.net ; phopkinson@hvolt.com ; matthew.n

ardotti@navigant.com ; Raba, Jim; Savitz, Maxine

(EMAB); tpetrosino@carolina.rr.com ; chris.brown@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.c

om ; frank.guilbault@cogentpowerinc.com ; ned.efbrush@gmail.com ; dbrender@cda.copper.org ; chad.ken

nedy@us.schneiderelectric.com ; eduardorobles@eaton.com ; vijay.tendulkar@onyxpower.com ; thomas.patzner@us.schneider

-electric.com ; carlosgsiqueiros@eaton.com

Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference



### Robert,

I understand the DOE staff are working on the in cremental Watts calculations and will get that

out to group as soon as it's ready.

best wishes,

Richard

On Thu, Nov 10, 2011 at 11:52 AM, Robert Berman < bermaneconomics@gmail.com > wrote:

Thank you Richard. That clarification is helpful.

In the liquid-filled meeting we were told that we would receive an analysis of incremental Watts

saved by DL for all ELs, as well as the incremental cost. When will that analysis be available?

For many of us, that analysis is the basis for a dditional, perhaps extensiv e analyses, so it should

come with enough lead time before any additional meetings or teleconferences to that we can

give it the required consideration. It would be most helpful if th e incremental cost were provided

separately for transformer and installation, with any pole component of the installation identified.

For the MV Dry and LV Dry meetings, it would be most helpful if you would also circulate an

agenda with objectives, hopefully this week, so that we are able to prepare for those meetings.



### Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 10, 2011, at 11:14 AM, Richard Parker wrote:

### Dear Colleagues:

The telcon on the 17th is currently planned for medium-voltage dry-type and the telcon on the

21st is reserved for low-voltage. There will be revised analysis circulat ed in advance of both

calls per our discussion yesterday. Each call has substantia l chunks of time allocated, though I

hope we won't need all that time.

It may be prudent to schedule a liquid-filled call at some point as well, but I propose that we

hold off on that for day or so, until we can clarify when revised analysis for liquid-filled will be

ready.

Thanks for your very constructive participation in the meetings over the last two days.

Richard Parker

On Thu, Nov 10, 2011 at 10:05 AM, Freeman, Jeremiah (CONTR)

< Jeremiah.Freeman@ee.doe.gov > wrote:

When: Thursday, November 17, 2011 1:00 PM

‐ 5:00 PM (GMT

‐ 05:00) Eastern Time (US & Canada).

Where: Webinar and Phone

Note: The GMT offset above does not reflect daylight saving time adjustments.

*~*~*~*~*~*~*~*~*~*

Dear Colleagues,

This event is to save the time slot on your calendar based on our discussion at yesterday's meeting.

Later today further information will be sent regarding the registration information for our November 17

and November 21 webinars. After registering you will get the link for the webinar and a toll free

number.

Please call with questions or concerns.

Very Respectfully,

Jeremiah Freeman

202

‐ 431

‐ 4243 (cell)

202

‐ 586

‐ 1867 (office)

### >>> This e

‐ mail and any attachments are confidential, may contain legal,

professional or other privileged information, and are intended solely for the

addressee. If you are not the intended recipient, do not use the information

in this e

‐ mail in any way, delete this e

‐ mail and notify the sender. CEG

‐ IP2