### Capital Reporting Company

Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 1

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

APPLIANCE STANDARDS AND RULEMAKING FEDERAL ADVISORY COMMITTEE COMMERCIAL AND INDUSTRIAL PUMPS WORKING GROUP

U.S. Department of Energy Forrestal Building 1000 Independence Avenue, S.W. Washington, D.C. 20585

Wednesday, April 30, 2014 9:11 a.m.

Reported by: Natasha Thomas, Capital Reporting Company

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 2 1 A P P E A R A N C E S FACILITATOR: 2 DOUG BROOKMAN 3 Public Solutions 4 PARTICIPANTS: 5 LUCAS ADIN DOE 6 JEFF ALASCIO 7 ABB 8 ROBERT BARBOUR TACO 9 ROB BOTELER 10 Nidec Motor Company 11 CHARLES CAPPELLINO ITT Corporation 12 GREG CASE 13 Hydraulic Institute 14 KATIE COUGHLIN Lawrence Berkeley National Laboratory 15 DAN DELANEY 16 Regal Beloit 17 TOM ECKMAN Northwest Power and Conservation Council 18 GARY FERNSTROM 19 representing California investor-owned utilities 20 MARK HANDZEL 21 Xylem 22 JIANGANG HU Rockwell Automation

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 3 1 A P P E A R A N C E S (Cont.) 2 PARTICIPANTS (Cont.): 3 ALBERT HUBER Patterson Pump 4 BETSY KOHL 5 DOE General Counsel 6 EMILY MARCHETTI Energetics Incorporated 7 JOANNA MAUER 8 Appliance Standards Awareness Project 9 BRENT McMANIS Baldor Electric 10 DOUGLAS POTTS 11 American Water 12 CHARLES POWERS Flowserve Corporation 13 CALLIE REIS 14 Navigant 15 ARNIE SDANO Pentair 16 JAY SIVIGNY 17 Flowserve Corporation 18 LOUIS STARR Northwest Energy Efficiency Alliance 19 STEVE THOMPSON 20 TACO 21 GREG TOWSLEY Grundfos USA 22

### Capital Reporting Company

Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 4 1 A P P E A R A N C E S (Cont.) 2 PARTICIPANTS (Cont.): 3 MEG WALTNER Natural Resources Defense Council 4 DANIEL WEINTRAUB 5 Navigant 6 SARAH WIDDER Pacific Northwest National Laboratory 7 ALISON WILLIAMS 8 Lawrence Berkeley National Laboratory 9 10 11 12 13 14 15 16 17 18 19 20 21 22

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 5 1 P R O C E E D I N G S 2 MR. BROOKMAN: Welcome, everyone. Good 3 morning. This is day two of the fifth meeting of 4 the Commercial and Industrial Pumps Negotiated 5 Rulemaking Working Group. Today is April 30th, 6 2014, here in the Forrestal Building in 7 Washington, D.C. 8 So glad you are here this morning. We 9 had a glitch getting going this morning. Our 10 court reporter was late. However, we had a couple 11 of productive informal discussions between caucus 12 members and the analysts. And also we had a 13 detailed conversation about the schedule, process 14 features only, off the record, of which we took 15 notes. I will insert a record of those notes from 16 that informal meeting in this transcript, but I'm 17 not going to do it now. I'm going to move on to 18 the issues at hand. 19 Let's start off by doing introductions, 20 as we typically do. To my immediate left? 21 MR. ECKMAN: Tom Eckman, Northwest Power 22 and Conservation Council.

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 6 1 MR. FERNSTROM: Gary Fernstrom 2 representing the California investor-owned 3 utilities: Pacific Gas and Electric Company, 4 Southern California Edison Company, San Diego Gas 5 and Electric Company, and the Southern California 6 Gas Company. 7 MR. CASE: Greg Case, Hydraulic 8 Institute. 9 MR. HANDZEL: Mark Handzel with Xylem. 10 MR. HUBER: Al Huber with Patterson. 11 MR. BARBOUR: Bob Barbour with TACO. 12 MR. POWERS: Chuck Powers, Flowserve. 13 MR. POTTS: Doug Potts from American 14 Water. 15 MR. DELANEY: Dan Delaney with Regal 16 Beloit Electric Motors. 17 MR. STARR: Louis Starr with Northwest 18 Energy Efficiency Alliance. 19 MS. MAUER: Joanna Mauer, Appliance 20 Standards Awareness Project. 21 MS. WALTNER: Meg Waltner, NRDC. 22 MR. TOWSLEY: Greg Towsley, Grundfos.

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 7 1 MR. ADIN: Lucas Adin, DOE. 2 MR. BROOKMAN: Katie? 3 MS. COUGHLIN: Katie Coughlin, Lawrence 4 Berkeley National Lab. 5 MS. WIDDER: Sarah Widder, Pacific 6 Northwest National Lab. 7 MR. WEINTRAUB: Daniel Weintraub, 8 Navigant. 9 MS. WILLIAMS: Alison Williams, Lawrence 10 Berkeley National Lab. 11 MR. BROOKMAN: Arnie? 12 MR. SDANO: Arnie Sdano, Pentair. 13 MR. ALASCIO: Jeff Alascio, ABB. 14 MR. McMANIS: Brent McManis, Baldor 15 Electric. 16 MR. BOTELER: Rob Boteler, Nidec. 17 MR. HU: Jiangang Hu from Rockwell 18 Automation. 19 MS. REIS: Callie Reis, Navigant 20 Consulting. 21 MR. THOMPSON: Steve Thompson, TACO. 22 MR. SIVIGNY: Jay Sivigny, Flowserve.

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 8 1 MR. BROOKMAN: Again, welcome to all of 2 you. Thanks. And everyone I would note was here 3 at 8:00 a.m. And we were unable to start. In the 4 informal meeting we had prior to going on the 5 record here this morning, we did establish some 6 additional meeting dates. I thought I would note 7 that here and now. And I am going to request that 8 either Lucas or I send out an email to just 9 confirm these dates and the times that we have 10 established, which are we are expecting we are 11 going to tag an additional day on our June 12 meeting. And that would be June 17th, Tuesday, 13 June 17th. And we're going to start at 9:00 a.m. 14 and conclude at 5:00 that date. We'll 15 confirm that and send that out. 16 And also we have added an additional day 17 to our July meeting. And that day will be Friday, 18 July 25th. And we anticipate if it's the third 19 day of the meeting, that probably that will be an 20 8:00 to 3:00 meeting. But we'll just confirm all 21 of that and send it out. 22 And also we have scheduled an interim

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 9 1 webinar should we need it -- and I'm thinking we 2 might; I think I got this wrong in my notes -- May 3 14th at 1:00 p.m. Eastern. And DOE will send out 4 the details on how to access that webinar as well 5 as the analytic material that we hope to review on 6 that webinar. 7 Gary Fernstrom? 8 MR. FERNSTROM: This is Gary. Doug, 9 seated next to me but out of the room at the 10 moment and, therefore, missing the introduction is 11 Charlie Cappellino of ITT. 12 MR. BROOKMAN: Thank you. Thank you. 13 And maybe one or two other individuals are not 14 here present. As soon as they arrive, we'll 15 introduce them. 16 We had a very productive discussion 17 yesterday. We had a lot of presentation, a lot of 18 material to digest. And then at the end of the 19 day, we had some very direct and useful 20 communication, especially from the manufacturers' 21 caucus, about how they imagine, envision the 22 metric coming together, how that would suit their

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 10 1 interests best. This morning I think that Sarah 2 had an opportunity to talk with them about 3 metrics, but maybe I'll just -- I'll go to Lucas 4 here for opening remarks. But I think that their 5 having consulted briefly with Greg Case just now 6 before we convened, he suggested that maybe Sarah 7 could just start off this morning because the 8 items that I have on my agenda for today are 9 metrics. And then I'll probably ask Katie to do 10 the presentation on lifecycle costs that she 11 didn't conclude yesterday -- that's important how 12 that all stacks out -- and then go from there to 13 the assumptions following the presentation that 14 Dan did yesterday, begin to go through those 15 slides and hear from everyone in the room their 16 additional thoughts on that. 17 And then, finally, there are a few other 18 issues, small issues, about how we proceed on 19 certain topics that I've made a list of that we'll 20 address as we move on as the day -- but you want 21 to say some stuff here at the outset? Lucas Adin? 22 MR. ADIN: I don't think I have a lot to

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 11 1 add, Doug. I think you basically covered it. But 2 what I understand is that we're going to have a 3 brief discussion -- well, Sarah is going to give a 4 brief presentation on what we understand to be the 5 proposal for metric. And we'll have some 6 discussion based upon that. 7 MR. BROOKMAN: That sounds right, a 8 proposal from the manufacturer caucus. One thing 9 we also discussed informally since there was 10 another process feature prior to getting on the 11 record was that I and DOE and everyone in this 12 room, we all welcome all parties present, all 13 members present, making proposals. We want that. 14 This is an equilateral body. And we want equal 15 participation and assertion by all the members 16 present. Okay? 17 So, Sarah, are you ready to go? 18 MS. WIDDER: I'm ready. 19 MR. BROOKMAN: And I would say in my 20 many years of experience at DOE, I've never been 21 happier to see a court reporter. 22 (Laughter.)

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 12 1 MS. WIDDER: Okay. So just hopefully 2 this will be a brief presentation. We had a lot 3 of helpful discussion this morning about metric. 4 And yesterday afternoon, I think we've reached a 5 proposal that most of us in the room are 6 comfortable with. I'm going to present my 7 understanding of what that is and then welcome 8 discussion from any parties about little changes, 9 things that don't make sense to you. I'd really 10 like by the end of this to get to a general 11 consensus in the room at what the high-level 12 construct of the metric looks like for controlled 13 and uncontrolled pumps. So that's what we're 14 going to have the primary discussion here. I have 15 lots of other remaining topics that we're going to 16 have to discuss of the test procedure at some 17 point in time. It's not going to be today. 18 So just, firstly, a high-level overview 19 of what we want to accomplish with the metric. I 20 made this list of five items. Be objectively 21 measurable, obviously, from a test procedure and 22 standard perspective. You want a quantifiable

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 13 1 metric. Represent the performance of the covered 2 product, which we defined earlier. I put up these 3 little boxes as a pump as consisting of bare pump, 4 a motor, and controls. And so we want to 5 represent the energy use on that covered product 6 consisting of those three components when present. 7 Differentiate performance among pump models and 8 pump configurations. So if a pump is sold with a 9 motor or with a motor controls, we want to be able 10 to clearly differentiate how those different 11 components and configurations affect the energy 12 use of that product under the test procedure and 13 potentially in the field. 14 Communicate information about pump 15 performance to the consumer. I have a little note 16 there. Maybe this isn't all the information that 17 a consumer would need to make an educated 18 decision. That is often the case. But we do want 19 it to make sense to people and intuitively help 20 them maybe select between products. They probably 21 will need more information. And that can also 22 lead into a conversation about a label, which we

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 14 1 can have at a different time, that is outside of 2 the metric. And then, lastly, compare the 3 efficiency of a given pump to the minimum standard 4 level, which is obviously, from DOE's perspective 5 and from a regulatory perspective, probably the 6 primary function of the metric. 7 And so I made this little table here 8 because I think for a while, it was confusing 9 about what we were trying to accomplish with this 10 metric. And we're trying to do two things. And 11 they're somewhat different in the way we construct 12 the metric. So the metric has a test procedure 13 component and a standard component. And the way 14 that they're calculated on each of those yellow 15 branches could be different. So Dan talked 16 through how the standard is set. It will be set 17 in terms of the PER, but it won't be calculated 18 the same way the PER is calculated for a given 19 pump model. So I can't think of a better way to 20 discuss that at this point, but a test procedure, 21 the test procedure will describe how the PER is 22 measured for a given pump. You have a pump in a

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 15 1 test stand. And then you use calculations to get 2 to the metric. The energy conservation standard 3 is set through a different process that we 4 discussed yesterday. Then they're comparable but 5 not the same. 6 And so another way to talk about this is 7 that we sent out a calculator. Lucas sent out a 8 calculator that we had developed to help calculate 9 the PER of pump models. That was only for pump 10 models. There was no standard to compare it to in 11 that calculator at this time. That standard needs 12 to be set through a different process. 13 So today or right now, we're just 14 talking about the test procedure side of the 15 metric, how you compare among pump models and how 16 you calculate the PER for a given pump. 17 We have seen this slide before, but I 18 have changed it a little bit here. So this is 19 just talking about the applicability of different 20 standard options to pump configurations. This 21 bare pump level, I put MEI in the bare pump box 22 because that is essentially what the MEI does. It

### Capital Reporting Company

Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 16 1 measures the performance of a bare pump. 2 And then down here, I want to focus on 3 what we are going to be talking about in the next 4 couple of slides is this last row here and the 5 PER. I've defined two new terms so that we can 6 differentiate between controlled pumps and 7 uncontrolled pumps. So the PER with a subscript 8 CL refers to a constant load pump energy rating, 9 and then the PER for a pump/motor/controls refers 10 to a variable load pump energy rating, sort of 11 like the highway-city comparison we were using 12 earlier. I made those terms up yesterday evening. 13 So I welcome suggestions on more intuitive, better 14 terms, but I thought that they were logical and 15 then also showed that there is some comparison. 16 Some comparison can be made between uncontrolled 17 and a variable load, but they are different, 18 different tests, different metrics. And so that's 19 where the subscripts come in. 20 So, in general, the uncontrolled and 21 variable load will have the same or a similar 22 construct. It will be a weighted, equally

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 17 1 weighted, average of electrical input power to the 2 pump with a minimally compliant, uncontrolled pump 3 as the denominator. So that would be the standard 4 that we're setting through a different process. 5 I've defined some of the terms here. 6 This is just a summary of the equation. PER is a 7 pump energy rating. W, or omega, is the 8 weighting. You could or could not have a load 9 control factor. This equation doesn't have it. So 10 I can remove it here just to remove confusion 11 because our proposal doesn't have that right now. 12 Sorry. These slides were made very recently. The 13 Pi is power input to the pump at the driver or the 14 motor. Inclusively, we have controls if present 15 or that is the intent there, that you are 16 measuring the input power to the pump. And the 17 denominator is obviously the minimally compliant 18 uncontrolled pump. We'll talk about how to 19 calculate that. And the main difference for 20 uncontrolled versus variable load is the weighting 21 points. 22 More specifically for an uncontrolled

### Capital Reporting Company

Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 18 1 pump -- then we'll talk about the variable load 2 application and compare those. For an 3 uncontrolled pump, we would use the weighting 4 points of 75 percent, 100 percent, 110 percent of 5 BEP flow, as is assumed in the EU so that they are 6 the same load points and equal weighting. The 7 motor performance would account for losses, as we 8 have discussed in previous meetings, and would be 9 either that of the motor that is paired with that 10 pump if the pump is sold with the motor or a 11 minimally compliant motor, as we have discussed 12 previously. And that would be accounted for, as 13 shown in this lower equation, through the loss 14 term. 15 This is a really complex equation, but, 16 essentially, we have the weighted average input 17 power on the numerator here. And then the 18 denominator becomes the minimally compliant 19 standard level. We saw this equation yesterday 20 from Dan. So this is the losses associated with a 21 minimally compliant motor. And then the hydraulic 22 power, that's the same hydraulic power associated

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 19 1 with these -- am I talking loud enough? -- with 2 the rated pump and then a standard pump 3 efficiency. Okay. I'm going back now. 4 And then I'll also note at the bottom 5 that there's no assumption for controls 6 performance here. We're not accounting for a 7 standardized drive efficiency. There are no 8 controls because it's an uncontrolled situation. 9 Similarly or conversely, for a variable 10 load, a controlled pump, we have adjusted the load 11 points somewhat to provide more explicit 12 differentiation of the benefit you get from 13 applying controls to a variable load. We have 25 14 percent, 50 percent, 75 percent, and 100 percent 15 of BEP flow, equal weighting, and the exact same 16 denominator. Dan discussed yesterday where these 17 weightings of .95 and .985 in the minimally 18 compliant pump came from yesterday. We can review 19 that again today if we'd like to. But, 20 essentially, this is the equation for how we're 21 going to calculate the standard. So we could just 22 say pump standard underneath there to simplify the

### Capital Reporting Company

Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 20 1 equation. 2 This is a little bit of detail about how 3 the minimally compliant pump -- where that minimum 4 PER comes from. We saw that yesterday. The 5 efficiency is set based on -- this is in terms of 6 the -- yes? Go ahead. 7 MR. ALASCIO: Hi. Jeff Alascio from 8 ABB. Can you go back one slide, please? 9 MS. WIDDER: Yes. 10 MR. ALASCIO: So, again, I just want to 11 make sure we understand. So when we look at the 12 bottom of, you know, your denominator of that last 13 line -- 14 MS. WIDDER: Yes. 15 MR. ALASCIO: -- and you have L of .75, 16 L of BEP, and L of 1.1, -- 17 MS. WIDDER: Yes. 18 MR. ALASCIO: -- and that's taking into 19 account the motor, -- 20 MS. WIDDER: Yes. 21 MR. ALASCIO: -- are we required as a 22 motor manufacturer to measure our efficiencies at

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 21 1 those loads? 2 MS. WIDDER: No, no. So we have 3 discussed -- and I actually have some slides at 4 the back, but I'll just -- at a high level, the 5 pump manufacturers or whoever is certifying this 6 pump would take the full load losses of a motor 7 that's paired with that minimally compliant pump 8 and then use a default loss curve that's been 9 defined to determine the losses at loads other 10 than full load. So there's no other additional 11 information necessary besides that that's already 12 provided in motor certification today. Okay. 13 MR. DELANEY: This is Dan Delaney from 14 Regal. Can you talk a little bit about that? So 15 I didn't catch that when you talked about it 16 before. A default loss curve? Is that something 17 that you will have as part of the formulation? 18 MS. WIDDER: Yes, yes. 19 MR. DELANEY: So my concern with that 20 would be, then, defaulting all technologies into 21 one default loss curve. 22 MS. WIDDER: Right. So I think that is

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 22 1 a really excellent observation and something we 2 need to discuss in more detail. At this point, I 3 would really like to reach agreement on the high4 level construct of this metric. And then there's 5 a number of -- on this slide, you saw a number of 6 other things that we're going to need to get into 7 to reach a formal test procedure. 8 But if we could agree on the like 9 numerator and denominator and the general idea of 10 what applies to uncontrolled versus variable, that 11 would be my goal today. And then we can revisit 12 how we specifically account for motor losses and 13 other things like that in the future. Is that 14 okay? 15 MR. DELANEY: Yes. That would be great. 16 MS. WIDDER: Okay. 17 MR. DELANEY: But when we go into the 18 default loss curve, is that something you're going 19 to provide the details of how you come up with 20 that or -- 21 MS. WIDDER: Yes. And there are some 22 previous slides that we can provide that are

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 23 1 available. 2 MR. DELANEY: Right. So -- 3 MR. BROOKMAN: Lucas Adin? 4 MR. ADIN: Where the loss curve would 5 come from and in practice, if we were to implement 6 a scheme like that, the loss curve would 7 essentially be built into the test procedure. So 8 it would say, "This is the default loss curve that 9 you use to do this calculation." And it would 10 just be part of the pump rating test method that 11 we would incorporate. Does that -- 12 MR. DELANEY: No. I think I probably 13 have a lot more discussion around that on a loss 14 curve, especially a calculated loss curve. 15 Certainly, you know, we talk about a weighted 16 factor. That could be one way to do that 17 defining, let's say, a variable torque type of 18 load. 19 MR. ADIN: Right. 20 MR. DELANEY: A default loss curve to me 21 would imply that, you know, regardless of your 22 technology, you're going to live by that. It's

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 24 1 based off your base rated point, which would not 2 be a good idea. 3 MR. BROOKMAN: So you're raising the 4 kind of issues that we hope to raise in a more 5 detailed discussion. I'm hoping to keep this at a 6 conceptual level right now. 7 MR. ADIN: The idea behind the use, the 8 premise for the use, of a default loss curve is to 9 get around the need for every motor on a pump to 10 be tested and for the motor manufacturers to -- 11 MR. DELANEY: Yes. 12 MR. ADIN: -- supply every test point -- 13 MR. BROOKMAN: Gary? 14 MR. ADIN: -- so you have something to 15 use as a basis for comparison. 16 MR. FERNSTROM: So this is Gary. 17 Different types of motors have different reduced 18 speed loss characteristics. So let's make it a 19 point to revisit that later. 20 MS. WIDDER: Yes. 21 MR. BROOKMAN: I've made a note right 22 here. We'll come back to it.

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 25 1 MS. WIDDER: Yes. I think that's a -- 2 and all of these detailed discussions still need 3 to occur. And I am fully aware of that. 4 MR. BROOKMAN: Does that happen in the 5 context of test procedure or in this metric? 6 MS. WIDDER: In the context of test 7 procedure. 8 MR. BROOKMAN: That's what I thought. 9 Okay. So let's proceed. 10 MS. WIDDER: Yes. Okay. So this is 11 just a comparison, a summary of all of the 12 information that we just went through, 13 acknowledging that there are still some details 14 that we need to get into in terms of how these 15 specific motor losses are determined for different 16 types of motors. In addition, we haven't really 17 talked in detail about how the pump input energy 18 is measured. So we need to do all of that. 19 But, in general, what I'd really like to 20 agree on today is that we establish separate but 21 similar metrics for uncontrolled versus variable 22 load -- they're on the left and the right, your

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 26 1 left and right, here -- that they're a weighted 2 average of pump input power at load points that 3 are respective to whether it's a controlled or 4 uncontrolled application. 5 We account for motor losses in some 6 format. This is at a high level. We'll account 7 for losses associated with the motor if there is 8 one or a default motor. We will talk in more 9 detail about how that is accomplished, but, in 10 general, we'd like to do that. And there is no 11 controls performance accounted for in the -- oh, 12 I'm sorry. Yes? There's no -- sorry. I have 13 this heading wrong. There's no controls 14 performance accounted for in the uncontrolled case 15 -- let me switch this -- uncontrolled case, the 16 constant load application. But then the benefit 17 of controls is captured in a calculation of bare 18 shaft input power for variable load. 19 So any discussion on that? Do we want 20 to go back? Yes? 21 MS. WALTNER: So sort of a high-level 22 question, for any given pump, would you report

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 27 1 both of these, the constant load and variable load 2 PERs, or would it be dependent on the 3 configuration that the pump is sold in? 4 MS. WIDDER: So my opinion, I think 5 that's something the Working Group has to discuss. 6 MS. WALTNER: Okay. 7 MS. WIDDER: There is only one metric 8 that a given equipment class or given pump model 9 can meet for the purposes of a standard, but -- 10 yes. There's -- yes. 11 MR. BROOKMAN: So Lucas -- 12 MS. WIDDER: I know Lucas -- 13 MR. ADIN: No. I actually had a very 14 similar question for the manufacturers' caucus on 15 how they were envisioning this in practice. 16 MR. HUBER: You know, we discussed -- 17 MR. BROOKMAN: Al Huber? 18 MR. HUBER: Yes. Al Huber, Patterson. 19 We discussed it, and we believe we will probably 20 publish a nameplate or a label that will have both 21 because we have no idea how the customer is going 22 to use it.

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 28 1 MR. ADIN: Right. And so -- 2 MR. HUBER: So the information should be 3 there for every model. 4 MR. ADIN: Procedurally, we would only - 5 - and, you know, to answer questions like this, I 6 probably should have my lawyer present, as usual, 7 but we'll revisit it again for sure before we take 8 any kind of vote. But our understanding is that, 9 at least the way that we normally do things, only 10 one of those numbers would actually be the number 11 to which a product is subject to a standard. So 12 we'd set a standard using one of those metrics. 13 And all products would be subject to a standard on 14 that basis, but the other would be like a 15 descriptive metric that would be for consumer 16 value, and it could be on the label and that kind 17 of thing. Is that -- 18 MR. HUBER: Yes. That's fine. 19 MR. ADIN: Yes. 20 MR. HUBER: And I think one of the 21 things that helps address his question earlier, 22 the denominator is going to be this standard or

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 29 1 this -- as long as the standard is reasonably 2 accurate, that's all we care about. If we decide 3 to use a higher or a better, for lack of a better 4 way to put it, motor in the numerator, we're just 5 going to have a higher rating. 6 MR. ADIN: Right. 7 MR. HUBER: And, you know, we're going 8 to meet the standard with a higher motor. 9 MS. WIDDER: Right. 10 MR. BROOKMAN: Dan wasn't here for that 11 discussion that the denominator will be a plug-in 12 value. 13 MS. WIDDER: Right. 14 MR. HUBER: Yes. 15 MR. BROOKMAN: Right? 16 MR. ADIN: So this would still enable, 17 and it will realize a benefit from using an 18 improved motor -- 19 MR. HUBER: Motor, yes. 20 MR. ADIN: -- in addition to hydraulic 21 improvements in the pump and all. 22 MR. HUBER: Exactly.

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 30 1 MR. ADIN: Okay. 2 MR. BROOKMAN: Dan, did you still have a 3 question? 4 MR. DELANEY: Yes. Just going back to 5 this point, this is very early in the motor 6 discussion. Many development has been going on, 7 both in the test standard point. We do have a 8 test standard that is out there. CSA C-838 does 9 define this about 20 points across there, let's 10 you define a variable torque, constant torque-type 11 operation, isn't really terribly mature from the 12 perspective of marking; right, because you want to 13 have the most points and make the best decision 14 for your application. 15 I guess when I go back to looking at a 16 single point and going back to a fixed-speed 17 motor, we don't want to mislead the consumer; 18 right, to select a motor at a base point speed 19 where they are going to be using this typically 20 across the variable frequency point. And 21 different technologies are going to allow that 22 drive. It is going to factor into that,

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 31 1 certainly. 2 So just having one point and noting that 3 NEMA certainly as well as Regal Beloit certainly 4 would be happy to continue and to mature this 5 along because it is very, very early in the point 6 of just deciding to use, let's say, the NEMA 7 premium table 12 values or others. And to assume 8 that those are the right efficiency levels or 9 that's the right motor for that application could 10 be misleading, we'll say, on a single efficiency 11 point for a fixed frequency-type product. 12 MR. BROOKMAN: So it's a longer 13 discussion. 14 MS. WIDDER: Right. 15 MR. DELANEY: It is a longer discussion, 16 much one that -- we wouldn't want to say that a 17 motor with the best efficiency at a direct online 18 start is the right motor for those applications. 19 MR. BROOKMAN: Yes. So I believe in 20 being direct. And I want to be direct. I am 21 hoping that at a conceptual level, at the level 22 that Sarah is describing, that we can close on

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 32 1 this today. 2 Charlie? 3 MR. CAPPELLINO: Charlie Cappellino. On 4 the titles in the green there, Sarah, you have 5 variable load on the right-hand side? 6 MS. WIDDER: Yes. 7 MR. CAPPELLINO: I think we're 8 suggesting constant load would be a better 9 descriptor. 10 MS. WIDDER: I think you mean constant 11 load on this side. 12 MR. CAPPELLINO: Yes, on the left-hand 13 side. 14 MS. WIDDER: Yes. 15 MR. CAPPELLINO: So constant load and 16 then variable load. 17 MS. WIDDER: Constant load and variable 18 load. 19 MS. WILLIAMS: So I just wanted to 20 comment on those titles, actually. If you call 21 PER variable load and you're planning to put it 22 potentially in pumps without VFDs. It should

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 33 1 potentially be called controlled load because that 2 only reflects the power if you are using a VFD. It 3 does not reflect the power if you are throttling a 4 variable load. 5 MS. WIDDER: Yes, but then they're both 6 CL. 7 MR. BROOKMAN: Al Huber? 8 MR. HUBER: Al Huber, Patterson. 9 MS. WILLIAMS: You know -- 10 MR. BROOKMAN: Thank you, Alison. Now 11 to Al. 12 MR. HUBER: That's not the issue. The 13 issue is you either control it with a variable 14 speed control or you control it with a valve, but 15 you are controlling the pump. 16 MS. WILLIAMS: Right. But if you are 17 capturing the power at reduced speeds in the 18 metric, you are -- 19 MR. HUBER: No. We're trying to drive. 20 Our point is we're trying to help the consumer by 21 giving them information that is accurate for his 22 application. Okay? So that's the reason we're

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 34 1 saying it needs to be a constant load. We're 2 suggesting to the consumer he needs a pump and a 3 motor. 4 MS. WIDDER: And, Alison, actually, 5 responding to Al and, actually, I'm agreeing with 6 you. I think that this is a nomenclature issue. I 7 see what you are saying. 8 MS. WILLIAMS: It's a nomenclature 9 issue. 10 MS. WIDDER: But, like, if you use the 11 city versus highway example again and you were 12 rating a manual car and decided to drive your 13 highway test in first gear, you would get an awful 14 rating. So we're assuming that they're 15 controlling because they have a variable load, 16 which I know why you have issues with that, but I 17 think it's just a term. 18 MS. WILLIAMS: No. I agree. It's just 19 a nomenclature issue. 20 MS. WIDDER: Right. 21 MS. WILLIAMS: But I think it should be 22 considered.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 35 1 MR. BROOKMAN: And we can resolve that. 2 MS. WIDDER: Okay. 3 MR. DELANEY: I was going to say -- 4 MR. BROOKMAN: In the spirit of defense, 5 I like that. 6 MR. DELANEY: One other point to add, 7 Doug, one other point to add to that, I agree. I 8 think we should probably try to define these, 9 certainly by a table, by showing the points, 10 defining what variable load and constant load are. 11 I think we're surprised always to find out what 12 each person means in some of that description, 13 rather than just the definition. Do it with a 14 chart, with load and speed. Define those points. 15 I think when we talk with our European 16 counterparts, our description of it had to be less 17 points than their description of it. I think it 18 is important that you define it up here 19 specifically what we mean by those little points 20 in a graph with the definition. 21 MS. WIDDER: Yes. That will be exactly 22 what we do with the test procedure. The test

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 36 1 procedure will be a description of how this metric 2 is calculated. 3 MR. BROOKMAN: Al Huber and then back to 4 Meg. 5 MR. HUBER: Yes. We understand that you 6 like speed, but this is not speed. These 75, 100, 7 110, or BEP flows -- 8 MS. WIDDER: BEP flow. 9 MR. HUBER: So, you know, it will be 10 different, but the chart will be there for the 11 consumer. 12 MR. BROOKMAN: Yes. 13 MS. WIDDER: Correct. 14 MR. BROOKMAN: Okay. Meg? 15 MS. WALTNER: Well, Al, you maybe just 16 said something contrary to this, but I was 17 wondering if it would help in the nomenclature 18 issue to say "speed," instead of "load," or does 19 that -- you know, if you said, "variable speed"? 20 No? It doesn't work? 21 MS. WIDDER: I don't think so. 22 MS. WALTNER: Okay.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 37 1 MR. BROOKMAN: Okay. So you're doing 2 well with presenting. I want you to keep going. 3 MS. WIDDER: Okay. So I guess at this 4 point, I would like to welcome -- I will go over 5 some major assumptions that are presented in this 6 table that I'd like to reach some resolution on. 7 And then if we can, that would be my goal. The 8 only other slide that I have in my up-front 9 discussion here is talking about a weighted 10 average metric versus a house of efficiency just 11 so people can get ready for that. 12 But, in general, the things that are on 13 this slide that I think are worth voting on are 14 the items captured in the table, the fact that 15 we're going to account for losses. We don't 16 specify how but at a general level, we would like 17 to account for motor losses. We're going to 18 equally weight the pump input power at these load 19 points in our numerator. We're going to have the 20 minimally compliant uncontrolled pump as a 21 denominator in both cases. This will make the PER 22 just in terms of how you're observing it on a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 38 1 label range from zero to one, where one is the 2 worst pump you can buy. That's how it will look. 3 We had talked previously about trying to 4 make a metric where higher is better. With this, 5 you could either flip them or do one minus this 6 metric. I feel comfortable with a lower is better 7 scenario, but the Working Group can certainly 8 discuss that. 9 And then we need to make an assumption 10 for drive efficiency. I don't necessarily feel 11 tied to 96 percent, but that would just be a ratio 12 that you can see that's factored out in the left13 hand side to account for the fact that you will 14 observe some increased power because of the drive 15 efficiency. And that's easy to accomplish in this 16 metric. Okay. 17 MR. BROOKMAN: Louis? 18 MR. STARR: So I guess maybe the pump 19 guys have a better idea about this, but typically 20 pumps are listed in efficiency; a higher21 efficiency pump is better. And so then you go 22 into when you connect it up in an extended

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 39 1 product, now a better efficiency pump is actually 2 lower. So it seems like you would want those two 3 to match up in my mind, but maybe the pump guys 4 can talk about -- 5 MS. WIDDER: So we have to think about 6 these not as efficiency because even in the 7 constant load application, lower is better. Lower 8 is better. Lower is better with PER, the way it's 9 presented on the screen here. 10 MR. STARR: Yes. 11 MR. BROOKMAN: Al Huber? 12 MR. HUBER: Yes. I was just going to 13 reiterate what she is trying to say here. I was 14 confused like you. I'm used to seeing efficiency 15 in the higher-efficiency is better. But we're 16 really not talking about pump efficiency here. 17 We're talking about horsepower. And so the lower 18 horsepower we use or the less horsepower we use, 19 that is better. That's why we went along with it. 20 We think it's reasonable. 21 Now, I don't know how good a metric is 22 going to be at one to zero and you've got a .5 and

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 40 1 a .25. You might better to up that times five and 2 make it five, four, three, or two, one, or 3 something. 4 MS. WIDDER: Sure. 5 MR. HUBER: That's not up for me to say. 6 MR. BROOKMAN: Yes. Louis? 7 MR. STARR: So if you want maybe 8 disassemble from it, then it would be good not to 9 have it to zero, one so the same mistakes I made 10 wouldn't happen for the people in the market as 11 well. So maybe putting a scaler in there would 12 help it out. 13 MS. WIDDER: Okay. 14 MR. BROOKMAN: Please say your name for 15 the record. 16 MR. HU: Jiangang Hu from Rockwell 17 Automation. Recently we are working on the drive 18 efficiency standard for IEC. I work with Dan for 19 those. Actually, we have several points. Now is 20 not defined how many points, but we have like 25 21 percent, 75 percent. Actually, we covered all of 22 this stuff, so for the counter performance and

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 41 1 maybe we can also use like several points for 2 drive efficiency definition -- 3 MS. WIDDER: So yes. 4 MR. HU: -- so more like optimize the 5 efficiency calculations. 6 MS. WIDDER: Yes. And that's definitely 7 something we can consider. We have had a few 8 previous discussions about that. The issue from a 9 pump manufacturer's standpoint who will be the 10 regulated entity in this case is that information 11 is not widely available. And so that would be a 12 lot more burden from their perspective to either 13 require all their drive manufacturers to provide 14 that part load data. I mean, that's definitely 15 something that we can consider. 16 MR. ADIN: But that's along the same 17 lines as the motor question. 18 MS. WIDDER: Oh, yes, yes. 19 MR. ADIN: So are we talking about the 20 default efficiency that's used in the equation or 21 what a manufacturer could actually use to 22 represent the efficiency of their product? Because

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 42 1 if we design it such that there is a test, then 2 they wouldn't have to worry about that. If they 3 wanted to represent a better efficiency, they 4 could either, you know, acquire -- 5 MS. WIDDER: Right. 6 MR. ADIN: -- data or run a test. 7 MS. WIDDER: So that's a whole different 8 discussion. But to add on to what Lucas is saying 9 and actually respond to both of those comments, 10 taking this one step further and actually thinking 11 about how you might certify products, we had 12 talked about a calculation approach, which has a 13 lot of defaults built in where you can essentially 14 just measure pump shaft input power as they do in 15 the industry commonly today and look up full load 16 motor efficiency values and drive efficiency 17 values and calculate your pump rating as for the 18 variable load application. That would be the 19 simplest and least burdensome approach. There are 20 clearly more complex approaches where you can have 21 wire to water tests that include a pump and a 22 motor, a pump and a motor and a VFD. You could

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 43 1 rate the motor and combine them, the two together, 2 in some interpolation method. 3 There's a lot of options that we have 4 discussed there that I don't think we are 5 considering as a default at this point. We're 6 just considering the least-burdensome calculation 7 approach that is accessible for everyone at this 8 point. And we can certainly discuss the testing 9 options as options that may be available right 10 away if manufacturers want to do a full wire to 11 water and improve their rating beyond what is 12 available in the calculation default. 13 MR. BROOKMAN: Dan? 14 MR. DELANEY: Just to clarify, the 15 activity that's going on here is a three-part 16 activity. The Europeans are requiring this as 17 part of the regulation for the motor, drive, and 18 obviously extended product. The IEC version of 19 that is doing a similar approach. Right? They're 20 going to develop a drive efficiency, a motor 21 efficiency use on a drive -- so each one of these 22 will be individually identified as efficiency

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 44 1 levels -- and then the whole extended product 2 itself. So a three-part type approach where the 3 extended product is more like an approach to use, 4 rather than a defined level -- okay? -- much like 5 how the Euro pump standard is today. But each of 6 these would have their own individual assigned 7 efficiency level. It's somewhat debatable how 8 that is going to happen, whether that is going to 9 be a weighted factor table, whether that is going 10 to be more specific load points. 11 MS. WIDDER: Okay. 12 MR. BROOKMAN: Al Huber? 13 MR. HUBER: We are going to have to 14 deviate from what the Europeans are doing, mainly 15 because the DOE can only regulate the 16 manufacturer; whereas, Europe can regulate the 17 marketplace, and we can't here or we don't. So 18 you're going to end up with a different scheme. We 19 finally realized that down the -- you're going to 20 end up with some differences. And that's the 21 reason why. Now, Europeans don't like it, but 22 that's the way it is.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 45 1 MR. DELANEY: I think where we're at 2 today, we're going to to find the exact same 3 regulations going to occur. You're going to have 4 a pump regulation. You're going to have a motor 5 efficiency for use on a drive eventually. That's 6 what they're having to address, essentially, from 7 their regulation. And most likely that's what's 8 going to end up occurring here as well. 9 MR. HUBER: Yes. I think -- but the 10 problem is today that information is not readily 11 available. And the control people have just 12 started. We assume that the DOE at some point in 13 time may change this regulation to reflect the 14 information when it becomes available. For right 15 now, we're just going to use the default 16 efficiency for the control; correct? 17 MS. WIDDER: Yes. 18 MR. HUBER: I mean, that's what we're 19 proposing because the information is not here. 20 MR. DELANEY: I don't disagree. 21 MR. HUBER: And they don't want, DOE 22 doesn't want, to wait for you guys to get it done.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 46 1 MR. BROOKMAN: That was a very helpful 2 and direct exchange between Dan and Al and Dan and 3 Al. We have to get a little bit more disciplined 4 about saying our names when we speak. 5 Sarah, I want you to keep leading this. 6 MS. WIDDER: Okay. So I am going to go 7 back to this summary slide. And I think are there 8 any other concerns? I'd like to welcome any other 9 concerns about the general metric construct as we 10 have it here. 11 MR. BROOKMAN: Louis? 12 MR. STARR: So it's not really a 13 concern. It may be helpful to understand how that 14 examples play out in terms of maybe just some 15 basic examples, see how the numbers fall out. Have 16 you looked at that to see how -- 17 MS. WIDDER: Yes, certainly have. I 18 actually don't know if I have them in this slide 19 deck. I don't know if I have them in this slide 20 deck. 21 MR. STARR: Actually, I don't really 22 need to know the numbers, just kind of a general

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 47 1 overview of how they fell out and -- 2 MS. WIDDER: Okay. 3 MR. STARR: -- how they're -- you know, 4 relative scale of -- 5 MS. WIDDER: Right. 6 MR. STARR: -- uncontrolled to 7 controlled. 8 MS. WIDDER: So, in general, if you 9 calculated -- so I'll use three examples. No. I 10 could do four examples. So one is a PER for a 11 constant load application. It is just rated as a 12 bare pump. So we'll go back to this slide. So 13 it's just a bare pump. And we're applying the 14 constant load metric. It would have a PER in the 15 way we define the metric, .9. Let's say it's a 16 little bit better than the minimum standard that 17 we have set. So it's near one but a little bit 18 less than one because it has the default minimum 19 efficient motor and no controls. So it's not 20 going to be able to be that much better than the 21 standard. There's not that much you can do from a 22 hydraulic perspective. We talked about that

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 48 1 yesterday. If I took that same pump and rated it 2 with a motor that was slightly better than the DOE 3 minimum standard motor, that would further reduce 4 my PER. So that benefit and efficiency that you 5 are achieving from the motor would be captured. 6 Let's say you went from a .9 to a .87. I'm making 7 these numbers up, but general trend and magnitude 8 is probably about right. So you're reducing the 9 PER, some portion, reflective of the efficiency, 10 the improved efficiency, of the motor. 11 If you were then to put controls on, 12 let's say, variable frequency drive, on that same 13 pump and motor package, that would probably reduce 14 your PER by using the load points that we have 15 assumed, something like 50 percent. So you would 16 go from like a .87 to something less than .5, .4 17 or something. And then if you were -- yes. So 18 those are the three, probably the best examples to 19 go from. 20 MR. STARR: And so in your mind, does 21 that kind of also equate sort of to the energy 22 usage more or less percentage-wise? You know, in

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 49 1 other words, 50 percent is probably what you can 2 expect out of the VFD or -- 3 MS. WIDDER: To the best of the data 4 that we have available, which is really not a lot, 5 that's probably about right. It's not terribly 6 wrong. You know, of course, these guys will tell 7 you it will depend on application. 8 MR. STARR: Yes. 9 MS. WIDDER: It will depend on, you 10 know, a lot of things. 11 MR. STARR: But it's good. I mean, at 12 least it matches up to reality, you know, and to 13 the marketplace. 14 MS. WIDDER: Yes. 15 MR. STARR: And so that's helpful. And 16 the metric, actually, reflects what is actually 17 happening in the field. So good. 18 MR. BROOKMAN: Meg? 19 MS. WALTNER: Yes. So I may have missed 20 this in what you just said, but is it right that 21 the PER will never actually be one since you have 22 losses on the bottom but shaft input power on the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 50 1 top? 2 MS. WIDDER: No. It can be one. There 3 are losses in both cases. 4 MS. WALTNER: So you are measuring them? 5 MS. WIDDER: Yes. If we look at this 6 very bottom equation here -- 7 MS. WALTNER: So I don't think losses 8 were in the top of your -- 9 MS. WIDDER: So it's confusing -- 10 MS. WALTNER: -- other page. 11 MS. WIDDER: -- because the P's 12 represent different things, and I apologize for 13 that. So if we follow this equation all the way 14 down, we start out with weighted average. The P 15 in in this case is the input power to the pump, 16 which we're calling the pump and motor because 17 that's how we defined it before. 18 MR. CAPPELLINO: So it's inclusive of 19 losses. 20 MS. WIDDER: Yes. So it's either 21 measured so it's inclusive of losses. I actually 22 have a slide about this. Well, I won't go there.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 51 1 It's either measured so it's inclusive of losses 2 or I go down to this bottom equation. I measure 3 the pump shaft input power and calculate the 4 losses in the same way I would in the denominator 5

-- 6 MS. WALTNER: Okay. 7 MS. WIDDER: -- if I have a minimally 8 compliant motor. And if I have a better -- 9 MS. WALTNER: -- or a motor that you 10 don't want to test. 11 MS. WIDDER: Right, or if I have a 12 better efficiency motor, let's say our 95 percent 13 example, I can still use the calculation approach. 14 My full load efficiency is better. And then I 15 apply a - I'll call it similar loss curve. So I'm 16 still calculating losses. It could be the same 17 default loss curve. We could come up with a 18 different curve that is a function of efficiency. 19 So if you have a better efficient motor, you have 20 a different loss curve. You know, there are a lot 21 of details we can get into there, but, 22 essentially, for every pump and motor, we would

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 52 1 measure. We would have the pump shaft input power 2 and losses or we would test wire to water. 3 MR. ADIN: So just for clarification -- 4 this is Lucas, DOE -- one basically means it is 5 minimally compliant; right? 6 MS. WIDDER: Yes. 7 MR. ADIN: It is exactly equal to -- 8 MS. WIDDER: Right. 9 MR. ADIN: Right. And if we're -- 10 MS. WALTNER: Yes. 11 MS. WIDDER: It is exactly equal to the 12 standard. 13 MS. WALTNER: I was confused with the 14 other slide's equation, where Pin wasn't -- I 15 wasn't clear that that was -- 16 MS. WIDDER: That was pump -- 17 MS. WALTNER: I know that was shaft 18 power versus -- 19 MS. WIDDER: I know. We keep calling -- 20 the term "pump" is going to mean pump and motor 21 for us. And every time I refer to the shaft input 22 power, I'm going to try and be really clear, we

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 53 1 are going to try and be really clear, that that is 2 bare shaft input power to the bare pump. 3 MR. ADIN: So the other question I had 4 is we want to think about calling this something 5 other than PER because for PER min., where it's 6 the standard, this is actually an index to a PER 7 value; right? It's not the same thing as -- you 8 see what I mean? 9 MS. WIDDER: Well, so yes. We made up 10 the term PER; right? 11 MR. ADIN: Right. 12 MS. WIDDER: So we can define it any way 13 we want. 14 MR. ADIN: No. I'm just pointing out 15 that the meaning has changed -- 16 MS. WIDDER: The meaning has changed -- 17 MR. ADIN: -- now that it has been 18 indexed. 19 MS. WIDDER: -- from before. 20 MR. ADIN: Yes. 21 MS. WIDDER: So before this was PER and 22 this was PER min.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 54 1 MR. ADIN: Right. 2 MS. WIDDER: And then we could call it 3 something as a ratio. And we could definitely 4 consider a construct like that and call this a 5 pump index -- I don't know -- you know, whatever 6 term is fine. And then the numerator and 7 denominator are both PERs. We can define PERs by 8 this equation. All of those are still options. 9 MR. BROOKMAN: Joanna? 10 MS. MAUER: I was just interested in 11 briefly hearing from the manufacturers why you 12 prefer this denominator to hydraulic power as a 13 denominator. Is it because it's most similar to 14 EEI or is there some other reason and -- 15 MR. HUBER: Ask it again. 16 MS. MAUER: Sorry. 17 MR. HUBER: Ask it again. 18 MS. MAUER: So I think one of the 19 options for the denominator was to have the 20 hydraulic power in the denominator somewhere, a 21 kind of a physical quantity in the denominator. 22 And I was just curious --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 55 1 MR. HUBER: Do you want to answer it? 2 MS. MAUER: -- why you prefer -- 3 MR. BROOKMAN: Greg Case? 4 MS. MAUER: -- this denominator? 5 MR. CASE: Greg Case, HI. If we put 6 hydraulic power in there, we would be comparing 7 the pump to itself. We wouldn't be comparing the 8 pump to a standard. So this compares the pump to 9 a minimally compliant standard pump. So it 10 compares against the industry. 11 MS. MAUER: So this is Joanna. So, as I 12 understand it, if you had hydraulic power in the 13 denominator, you could still compare one pump to 14 another, see which has a higher efficiency. 15 MR. HUBER: No. 16 MS. MAUER: It's not an index, but 17 either way you can tell which pump has lower 18 power. 19 MS. WIDDER: Right. So Joanna is right. 20 Another example for a denominator that we 21 discussed -- and "denominator" is in quotes here 22 because I flipped it. So higher is better. So

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 56 1 it's more like efficiency in this case. So 2 translation, you know, weighting, normalization, 3 whatever you want to call it, but in this case -- 4 and this is feasible to do. It turns out more 5 like a system efficiency, where now the pump shaft 6 input power and the losses are on the denominator. 7 That's your input power energy that's on the 8 denominator. Your output power, the flow times 9 head condition at the end of the pump, is on the 10 numerator. And you would have to calculate that 11 at each load point as a ratio, as opposed to like 12 the big ratio we were looking at before. You want 13 to calculate that uniquely at each load point, 14 weight those. You could or could not have a load 15 control factor. 16 We have sort of discussed a construct 17 where we don't have a load control factor. So I 18 could delete this. But it's also an option. So I 19 want to acknowledge that it's a technically -- I 20 have no idea what I just did. Okay. It's a 21 technically feasible option. The minimally 22 compliant denominator that we discussed before is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 57 1 more similar to the extended product pump approach 2 that has been milling in the EU with their EEI 3 index. So that's a benefit. 4 Other than that, I see these as both 5 technically feasible approaches. This is a 6 weighted average of efficiency that could be 7 helpful or could be confusing because it's using 8 an efficiency in a way that's not really an 9 efficiency because it's a weighted average. And 10 so that could be confusing. I don't know. It's 11 sort of like six of one, half a dozen of the 12 other, to be honest with you. 13 MR. BROOKMAN: Al Huber? 14 MR. HUBER: I think we need to be 15 careful here. We're not using efficiency. We're 16 using horsepower. 17 MS. WIDDER: Right. This, as it's 18 calculated, would be an efficiency. 19 MR. HUBER: Yes. We're not using 20 efficiency. We're using horsepower. 21 MS. WIDDER: In the previous -- 22 MR. HUBER: What we're trying to do --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 58 1 MS. WIDDER: -- case where -- 2 MR. HUBER: -- and the reason we want a 3 denominator the way it is, the denominator 4 basically is the throttle condition. The 5 denominator is the throttle condition. The pump 6 power at each one of those loads will be whatever 7 that power is that that pump consumes at that 8 load. Okay? 9 MS. MAUER: This is Joanna. The 10 denominator you're saying? 11 MR. HUBER: In the denominator. 12 MS. MAUER: Not what that pump consumes 13 but what a pump that just meets the -- 14 MR. HUBER: What a minimum -- 15 MS. MAUER: Okay. 16 MR. HUBER: Whatever we set that level 17

-- 18 MS. MAUER: Right. 19 MR. HUBER: -- a minimum compliant pump, 20 whatever it draws that power, it draws at 25 21 horsepower or 50, 75, 100, that's what will be in 22 that denominator. It will be basically the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 59 1 throttle condition. The denominator is the 2 throttle condition. 3 MS. MAUER: This is Joanna. 4 MR. HUBER: It is. 5 MS. MAUER: I don't have a problem with 6 this. I just -- 7 MR. HUBER: If you look at it -- 8 MS. MAUER: -- was trying to understand 9 why you -- 10 MR. HUBER: Right? I mean, that's -- 11 MS. WIDDER: From my opinion, there's 12 really not a compelling reason to choose one or 13 the other. It won't significantly impact how a 14 pump compares to the standard. There are pros and 15 cons on either side. 16 MR. HUBER: So what we are trying to do 17 is keep this so that what the consumer is looking 18 for is he is looking for -- let's say he has a 19 variable condition in the field, let's say. Okay? 20 So we're giving him at the bottom -- we're going 21 to give him an index. And that index basically is 22 the denominator of what would happen if he

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 60 1 throttled it. And the numerator is what is going 2 to happen if he is using a variable speed drive. 3 MS. WIDDER: So I just want to correct 4 that -- 5 MR. HUBER: Okay. So if I -- 6 MS. WIDDER: -- really quickly. Sorry, 7 Al. So the denominator is a throttled minimally 8 compliant pump. It's not the throttled same pump. 9 Sorry. We're all on the same page. We're just 10 saying it a little wrong. So I just want to make 11 sure we captured it properly in the metric. 12 MR. HUBER: Do you understand what 13 throttle -- when we talk about throttle, it's you 14 take a valve and you throttle that. 15 MS. MAUER: I understand that; right. I 16 think, as Sarah said, it's just it's not that pump 17 throttled. It's what a minimally compliant pump 18 throttled. 19 MR. HUBER: Exactly. So if I produce a 20 pump and I decide that I am going to use a premium 21 efficient motor and I'm going to use a more 22 efficient drive, then my number is going to be

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 61 1 better than that of some other comparison that may 2 be the minimally acceptable. Do you understand 3 what we're doing? 4 MS. MAUER: I understand. And I think 5 if you use hydraulic power, similarly, you would 6 see a benefit of using a more efficient motor, a 7 drive. I think they're both options for showing 8 ratings where you can see that the controlled case 9 is better. 10 MR. HUBER: I guess we're trying to make 11 this so that it to us is logical and that doesn't 12 confuse the market. What we're trying to do is 13 help educate the market as we go here so that if 14 -- that's the reason we wanted two 15 different metrics: one for constant speed or 16 constant load application and one for a variable 17 load because they're totally different, absolutely 18 different. And trying to jam the same metric in 19 there to read both is just not doable. 20 MR. BROOKMAN: Tom Eckman and then 21 coming back to Dan. 22 MR. ECKMAN: Yes. This is --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 62 1 MR. HUBER: So what we are trying to do, 2 Joanna, is we are trying to make the denominator 3 be real life. That's real life. If throttle that 4 back and in the test, if I decide to test it, I 5 can put a valve out there and throttle it. And 6 that's the way we test today. 7 MS. MAUER: I understand. 8 MR. HUBER: That's the way all of us 9 test today. 10 MS. MAUER: I understand. 11 MR. HUBER: So, I mean, it flows. For 12 us, it flows very logically. 13 MS. WILLIAMS: Can I clarify -- 14 MR. HUBER: And for the industry, it 15 flows logically. 16 MS. WIDDER: I want to let Tom go first 17 if that's okay, Alison. 18 MS. WILLIAMS: I just want to make sure 19 that what's up there is what Al is saying. 20 MS. WIDDER: It is. We talked about it. 21 MR. HUBER: We discussed it. 22 MS. WILLIAMS: The bottom is not 25, 50,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 63 1 75, 100 uncontrolled. Okay. 2 MS. WIDDER: It's the standard for an 3 uncontrolled minimally compliant pump. I think 4 we're all on the same page. It was just being 5 discussed in words that were a little confusing. 6 But I want to acknowledge Tom. 7 MR. ECKMAN: Yes. 8 MR. BROOKMAN: Tom, go next. 9 MR. ECKMAN: Yes. So the question is, 10 by using the 75, BEP, and 1.1, you've got a 11 throttle condition at the 75. So if you've got a 12 control system and/or a variable speed, you may 13 get some benefit out of that, even under the 14 standard compliant method; right? Is that true? 15 MR. BROOKMAN: Tom, yes. 16 MR. ECKMAN: For a minimally compliant 17 motor, you have got one condition where it's 18 throttled and one condition where it's above BEP, 19 1.1. So if you've got an uncontrolled motor, 20 you're going to have to throttle it to get it to 21 the 75; right? And you're going to have to over22 spin it to get it to 1.1, right?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 64 1 MS. WIDDER: No. 2 MR. HUBER: BEP. 3 MR. ECKMAN: BEP. Okay. Flow. 4 MS. WIDDER: Because it's BEP flow, and 5 those are not the same load points on the motor. 6 MR. ECKMAN: Right. Okay. 7 MS. WIDDER: Yes. No over-speeding. 8 MR. ECKMAN: Yes. 9 MR. BROOKMAN: So summarize what was 10 just said because I was cacophoning. 11 MS. WIDDER: Okay. So I am going to try 12 and summarize. Correct me if I'm wrong. We were 13 discussing what the load points meant -- 14 MR. BROOKMAN: Yes. 15 MS. WIDDER: -- in regard to application 16 to the motor. And one thing we didn't present 17 here is how the motor is sized for these 18 calculations. So we're going to assume a defined 19 and universally applicable sizing method where the 20 motor is representative of what is done in the 21 industry but above the BEP flow point. And so the 22 110 percent BEP flow point will not be larger than

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 65 1 the full load of the motor. So there will be no 2 over-speeding of the motor. 3 MR. BROOKMAN: Thank you. That was 4 useful. 5 Okay. Louis? Oh, pardon me. Dan? I 6 left you out. Dan? 7 MR. DELANEY: Yes. Dan Delaney, Regal. 8 I appreciate Alison's point about this is about 9 power. This is about, you know, reducing the 10 power consumption. And one of the things I just 11 want to point out this week -- I've talked about 12 this before. The way that we have this worded, I 13 understand it's the simplest way; right? We have 14 a fixed frequency regulation upon that. That's on 15 an induction motor, induction motor only. That's 16 the unfortunate part about this, is that other 17 technologies don't have a standard, don't have a 18 regulation that would fit into that today. I just 19 want to point that out because it is about power. 20 And those advanced technologies will reduce that 21 power dramatically across those lower points. 22 And, just so I understand, it's the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 66 1 regulation, the testing. They don't have that 2 capability today to value those points. There is 3 no ability to do the same type of motor losses in 4 that same manner. So those technologies would not 5 fall under the wording we have today as it is 6 stated there. 7 Again, we'll work with you to make sure 8 that -- you know, we want to make sure we choose 9 the right -- the best technology for the end 10 customer. 11 MR. BROOKMAN: Thank you. 12 Louis? Wait. Greg, do you want to just 13 comment, a follow-on, there? 14 MR. CASE: I think we do -- Dan, I think 15 we have that in the fact that we can test to throw 16 in the better technology. So this is the minimum 17 values for these motors. This is the minimally 18 compliant based on current A/C induction motor 19 technology. You can throw in the better 20 performing motor and drive system. And you will 21 be able to improve this PER. So I think it's in 22 there. The possibility is in there to make those

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 67 1 improvements. 2 MR. STARR: Right. And that's -- 3 MR. DELANEY: One last point back to 4 that. So as the efforts as NEMA, as Rob just 5 mentioned to me again, we have started those 6 discussions; right, so making those assumptions, 7 agreed, that's where we are today. Pick those 8 tables. Move forward with those losses. We're 9 looking to translate that. What does that look 10 like against a fixed weighted curve? So we don't 11 know that specifically today, but we are doing 12 that as a NEMA survey today is building those 13 relationships. What are those efficiencies? How 14 do they translate? Are they down? Are they 15 equal? 16 So that is something NEMA is working on. 17 Certainly induction motors, number one on the list 18 won't exclude other technologies certainly and 19 certainly provide and share that with this Working 20 Group as we develop those. 21 MR. BROOKMAN: Louis? And before you 22 do, I'm eager for us to make any additional

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 68 1 clarifications, ask any additional questions as we 2 move toward seeing where we stand with respect to 3 this metric among all the members present. Louis? 4 MR. STARR: So I have a question. At 75 5 percent of BEP, where does that roughly correlate 6 with flow, percentage of full flow? 7 MS. WIDDER: Seventy-five percent. 8 MR. STARR: Percent of BEP. So you're 9

-- 10 MS. WIDDER: Flow, percent of BEP flow. 11 MR. STARR: Right. So how much flow -- 12 if I had a pump and I tested at the 75 percent 13 point, where am I at in terms of flow? Yes. I 14 mean, where -- 15 MS. WIDDER: Seventy-five percent. 16 MR. STARR: Of flow. 17 MS. WIDDER: Of flow, of flow. 18 MR. STARR: Okay. Okay. 19 MS. WIDDER: Yes. 20 MR. STARR: I thought it was BEP-rated. 21 MR. HUBER: If your rating point, your 22 BEP, is 1,000 gallons --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 69 1 MR. STARR: Okay. 2 MR. HUBER: -- then 75 percent is 750. 3 MR. STARR: Okay. 4 MS. WIDDER: Gallons. 5 MR. HUBER: And the 110 would be 10 6 percent more, or 1,100. 7 MR. STARR: Okay. I thought what if the 8 efficiency became that -- 9 MR. HUBER: We're not -- 10 MR. STARR: -- 75 percent and that made 11 it flow. 12 MR. HUBER: Yes. 13 MR. STARR: Okay. 14 MS. WIDDER: No, no. 15 MR. STARR: That's all I -- 16 MR. HUBER: I want to clarify something. 17 What we originally wanted to do -- 18 MR. BROOKMAN: Al Huber, please. 19 MR. HUBER: What we originally wanted to 20 do was have on the denominator four points. 21 However, we do not test at 25 because we don't 22 recommend you run the pump there. Now, we could

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 70 1 calculate it. 2 PARTICIPANT: We show it on a curve. 3 MR. HUBER: We show it on our curves, 4 but we don't run it there because it's not good. I 5 mean, we may test it there because we're only 6 there for a few minutes, but we don't normally 7 because it's not something -- it would not be in 8 the operating range of the pump. Therefore, we 9 would recommend that you not do it anyway. So 10 that's what we had preferred on the bottom, which 11 would give you a real look at throttled and 12 unthrottled. But you shouldn't be throttling it 13 at 25 anyway. 14 So, I mean, you know, there's a debate 15 here about that. And I think that Sarah thought 16 that if we used consistently the denominator from 17 both cases, it would make it easier -- 18 MS. WIDDER: Yes. I agree with that. 19 MR. HUBER: -- to make it consistent. So 20 I want to clarify that. 21 MR. BROOKMAN: Yes. Louis? 22 MR. DELANEY: And I think maybe Sarah

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 71 1 can clarify it. My understanding is that it 2 doesn't really change that much the rating. 3 Whether you use 50, 75, or all those numbers, you 4 get a substantial amount of the benefit. 5 MS. WIDDER: Yes. That's -- 6 MR. DELANEY: It shows up. And so it 7 doesn't really matter too much. 8 MS. WIDDER: That's exactly correct. All 9 that would happen if we used the same weighting 10 points above and below is that the magnitude of 11 benefit, like the relative benefit, would be a 12 little bit less because in this case, you're not 13 accounting for that reduced performance. You 14 know, you're giving more credit to the controls, 15 essentially, with different weightings, a little 16 bit more credit. And that is all that's 17 happening. It won't change the ranking of pumps. 18 It won't change the comparison of configurations 19 as a general trend. 20 MR. BROOKMAN: Doug? 21 MR. POTTS: I just have a question for 22 clarification. So with regard to the minimally

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 72 1 compliant motor and the choice, I guess what 2 you're saying is manufacturers have a choice of 3 either calculating the efficiencies of -- adding 4 calculations for the minimally compliant motor 5 based upon I guess a table that would be provided 6 or doing the wire to water testing. 7 So, just to be clear, if a manufacturer 8 feels that the pump that he's selling with that 9 pump -- or the motor that he's selling with that 10 pump is just a minimally compliant motor, then 11 he's probably just better off just using the 12 calculation. 13 MS. WIDDER: Right. 14 MR. BROOKMAN: If he feels that the 15 motor -- if he knows that the motor is more 16 efficient, then it's to his advantage to test it 17 with the better motor; right? 18 MS. WIDDER: Well, to be clear, there 19 are two options there. And so this table sort of 20 lays it out. So for a pump and motor case, which 21 is the center column that we were just discussing, 22 a manufacturer can either test the bare pump

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 73 1 itself and then get the motor nameplate full load 2 efficiency that's provided by the motor 3 manufacturer and apply the loss curve. So you can 4 still account for the benefit of applying a more 5 efficient motor, but you have a default loss 6 curve. 7 Alternatively, if you think your motor 8 has better losses than the default curve allows 9 for or you think you can improve your rating or 10 you want to do a wire to water test, any of those, 11 we could provide the testing option. 12 MR. POTTS: So does that mean there are 13 three scenarios basically? One scenario is just a 14 lookup table for the minimally compliant? The 15 other scenario is nameplate efficiency of your 16 motor? And the third scenario is shop-tested wire 17 to water efficiency? 18 MS. WIDDER: So that gets a little bit 19 into certification. 20 MR. POTTS: Right, right. 21 MS. WIDDER: So, in general, you would 22 only use the default motor efficiency if you were

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 74 1 selling a bare pump with no motor. 2 MR. POTTS: Okay. 3 MS. WIDDER: And if you were selling it 4 with a motor, you should reflect the efficiency of 5 the motor you are selling your pump with. But 6 there is a calculation to do that. So it is 7 pretty easy. You know, there is a whole 8 discussion about grouping of models that we don't 9 need to have right now that could reduce that a 10 little bit, but it's really not that difficult to 11 do some more calculations. 12 MR. BROOKMAN: Louis Starr, go ahead. 13 MR. STARR: Louis Starr with NEEA. One 14 thing that will probably happen is eventually if 15 the motor guys actually do come up with something, 16 there will an AEDM, alternative efficiency 17 determination method. And then you will be able 18 to calculate it more than one way. But for this 19 one, we're starting with a base one. 20 MS. WIDDER: Yes. 21 MR. STARR: But as they figure out how 22 their motors perform, then -- what happens is it

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 75 1 will be the -- most people will just choose the 2 calculation method because it doesn't cost 3 anything to certify it. So there will be less 4 people out actually testing. So the motor guys 5 are not being disadvantaged because their motor 6 would be more efficient. Everybody will just 7 default to calculating, rather than actually 8 testing to show the advantage of their motors. But 9 eventually they will have an AEDM, which you can 10 do a calculation similar to the minimally 11 efficient morrow. 12 MS. WIDDER: Yes. I think we want to 13 acknowledge that this is a starting point and 14 hopefully leaves open options for testing of full 15 products and reflecting more diversity in the 16 market later on. 17 MR. BROOKMAN: Dan? 18 MR. DELANEY: Yes. Just to reiterate 19 with Louis said, it somewhat penalizes -- you're 20 right -- advanced technology, ones that we feel 21 above. And I would hope that we would have 22 through the assumed part load losses you have

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 76 1 there that ability to have that discussion with 2 motor manufacturers today through NEMA to provide 3 maybe an assumed part load loss for, if you will, 4 you know, a baseline for advanced technologies, an 5 induction motor line that you may have today. It 6 may have been an assumed advanced motor technology 7

-- 8 MS. WIDDER: Yes. 9 MR. DELANEY: -- part load loss. 10 MS. WIDDER: I would love to have that 11 discussion. I also would encourage you as motor 12 manufacturers, maybe even outside of this meeting, 13 to have a discussion with the pump manufacturers, 14 who will be the ones that have to test. So the 15 tradeoff here is really between testing burden and 16 accuracy. And I don't think that's a decision for 17 us to make. That's something that we would like 18 to be negotiated here. 19 MR. ADIN: And that's why we generally 20 try and make the default assumptions relatively 21 conservative. So that there is a benefit from 22 assuming that increased test burden of actually

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 77 1 getting a number or if you're going to use that 2 better component, whether it is a motor, you know, 3 or something else where there is a default, you 4 can test to that wire to water test and realize 5 the benefit. Otherwise you're just getting the 6 default. 7 MR. BROOKMAN: That was Lucas Adin. 8 MR. ADIN: Right. 9 MR. BROOKMAN: Now to Al Huber. 10 MR. HUBER: Well, I think new technology 11 will be valued by what you're doing. I think 12 you're mistaken. I don't think we'll shortchange 13 that because we're probably going to have to pay 14 more for that. In order to be able to sell it, 15 we're going to have to show a benefit, a value to 16 the customer. So, therefore, we would probably 17 test it or I assume you will have a nameplate on 18 it. And so you'll have a nameplate efficiency. 19 And there's a way for us to calculate that if we 20 calculate it. 21 I also would not assume that pump 22 manufacturers will not test because we all have

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 78 1 sales folks. And they like to go out and talk 2 about how ours is better than the other guy's. So 3 I wouldn't assume that pump manufacturers are not 4 going to do testing. 5 MR. BROOKMAN: We've covered a lot of 6 ground here. Sarah, do you think we have missed 7 anything significant? 8 MS. WIDDER: No. I feel really 9 comfortable with what I understand to be a general 10 consensus. I'm going to briefly summarize where I 11 think we are and -- 12 MR. BROOKMAN: I don't think we're quite 13 ready to vote on this because I am casting -- 14 MS. WIDDER: No. I'm just going to 15 welcome -- 16 MR. BROOKMAN: Okay. Yes. 17 MS. WIDDER: -- additional feedback -- 18 MR. BROOKMAN: Good. That's good. 19 MS. WIDDER: -- on my summary. 20 MR. BROOKMAN: Because I want -- 21 MS. WIDDER: Lucas, do you want -- 22 MR. BROOKMAN: As a process note, I just

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 79 1 wanted to say that, casting my eyes around the 2 room, a few individuals have indicated to me that 3 they are not quite ready to vote on this yet. 4 MS. WIDDER: Right. 5 MR. BROOKMAN: But, Lucas, do you want 6 to say something? 7 MR. ADIN: Well, there is just one more 8 question I want to ask to make sure I am 9 absolutely clear on this item. This is more the 10 implementation aspect and how this will be 11 employed -- 12 PARTICIPANT: Yes. 13 MR. ADIN: -- on pumps actually put in 14 the market. We had talked about putting two 15 numbers on a nameplate. I want to make sure I 16 understand which ones they are because I think the 17 nomenclature is still a little bit confusing. And 18 we talk about control or constant load and 19 variable load, but, really, in a way, those are 20 both variable load; right? 21 PARTICIPANT: Yes. 22 MR. ADIN: But the idea is that on a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 80 1 pump with a VFD, you would have both numbers; 2 right, on there to show the difference between 3 what it would look like -- what are the two 4 numbers that would be on the nameplate? I want to 5 make sure I understand what it is that you are 6 proposing here. 7 MR. HUBER: Well, they are not the same. 8 They are not both variable. You will have one -- 9 when we say, "constant load," what we're talking 10 about here is that you do not have any change in 11 the system. The system stays constant. The pump 12 never changes. No speed changes. No valves are 13 functioning, opening and closing. It's just one 14 flow, one head. 15 MR. ADIN: Right. 16 MR. HUBER: That's the constant load. 17 MR. ADIN: I understand that. 18 MR. HUBER: Okay. 19 MR. ADIN: Yes. 20 MR. HUBER: That will be on there. That 21 will be on there as PER CL if that's what we end 22 up calling this stuff.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 81 1 MS. WIDDER: So I do want to correct 2 that just slightly. 3 MR. HUBER: Now, let me -- 4 MS. WIDDER: Okay. Go ahead. And then 5

-- 6 MR. HUBER: And then if you have a 7 variable load, you will have another number on the 8 nameplate that says PER VL. And that will be if 9 you use it for a variable speed application. 10 MS. WIDDER: Right. So the -- 11 MR. HUBER: The system curves are 12 changing. And you're using it in a controlled 13 environment -- 14 MR. ADIN: Right. 15 MR. HUBER: -- with a VSD. 16 MS. WIDDER: So the slight correction I 17 want to make to that is that for the constant load 18 application, we're still accounting for the power 19 at between 75 and 100 percent of BEP, which I 20 think the pump manufacturers are in their minds 21 thinking about relatively constant. I mean, 22 that's where we get pumps operating in life.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 82 1 MR. HUBER: Okay. 2 MS. WIDDER: And so we're thinking about 3 that, capturing the range of performance where a 4 constant load might be, because it's very unlikely 5 that you hit the BEP exactly. 6 MR. ADIN: Right. 7 MS. WIDDER: I think that's what we're 8 thinking of here. 9 MR. ADIN: That clarifies that point. 10 The other question was we have been talking a lot 11 about how you compare a throttled pump to a pump 12 used with a VFD. So the pump that was sold just 13 as a bare pump plus motor have that metric use for 14 comparison on it. So, say, if you were to use 15 this pump with a VFD and control its speed, this 16 is what its rating would look like. 17 MR. HUBER: Yes. That's what you would 18 expect. 19 MR. ADIN: You have both numbers. 20 MR. HUBER: You would have to have both 21 numbers -- 22 MR. ADIN: On both.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 83 1 MR. HUBER: -- on the nameplate or the 2 label. 3 MR. ADIN: On both configurations. 4 MR. HUBER: Because we don't know how 5 it's going to be. 6 MR. ADIN: Right. 7 MR. HUBER: I mean, a lot of times, we 8 do, but a lot of times, we do not know how they're 9 going to utilize the pump. 10 MR. ADIN: Okay. 11 MR. HUBER: So we need to put both on 12 there. 13 MR. ADIN: In both configurations? 14 MR. HUBER: Yes. 15 MR. ADIN: Right. Okay. I understand. 16 MR. HUBER: For the consumer to say, 17 "Okay. If I use it in this method," -- 18 MR. ADIN: Yes. 19 MR. HUBER: -- "this is what I should 20 use." 21 MR. ADIN: All right. 22 MR. HUBER: "If I use it in this method,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 84 1 this is what I should use" as a comparison. 2 MR. ADIN: Okay. Thank you. That's 3 helpful. Thanks. 4 MR. BROOKMAN: Charlie Cappellino? 5 MR. CAPPELLINO: So, Doug, I agree with 6 you. I think before I would be comfortable voting 7 because I think I'm pretty close, but walking 8 through some more scenarios that basically talk 9 about and maybe some example I think would help, 10 basically help, cement this in people's minds how 11 it would work. 12 And then I still think we need to spend 13 a little bit more time on Lucas' point in terms of 14 the commercialization of this, you know, "What 15 does it mean? And how would it be implemented?" 16 and kind of walk through the commercialization 17 element of what this is all about. 18 MR. BROOKMAN: Maybe we could start with 19 that. Can you be more specific about the kind of 20 question that you have there? 21 MR. CAPPELLINO: I guess, you know, I 22 think there's the testing piece, "Okay. If this

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 85 1 is where we're going, you know, what does it mean 2 from a testing standpoint as a manufacturer? You 3 know, how will that work?" and kind of walk 4 through and make sure we've covered all of the 5 bases. 6 And I'm not sure where the gaps are at 7 this point. I'd like to kind of spend some time 8 and kind of either walk through that as a group or 9 at least individually be able to spend some time 10 on that. 11 I think the labeling piece -- I think we 12 need to spend a little bit more time talking about 13 the labeling, how does that work, how is it 14 interpreted. 15 So I think this is fantastic. I think 16 we have made a huge step forward. But before we 17 lock it down, we need a little more dialogue on 18 the implementation maybe because, frankly, only 20 19 minutes ago, we were still unclear in terms of -- 20 MS. WIDDER: What we were doing. 21 MR. CAPPELLINO: -- three terms in the 22 bottom, is it four terms in the bottom. You know,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 86 1 so it's still a very dynamic situation. 2 MS. WIDDER: Yes. 3 MR. CAPPELLINO: So I think we've made a 4 huge step forward. 5 MS. WIDDER: I am totally with you, 6 Charlie. I think that's a good suggestion. And 7 from anyone in the Working Group, more really 8 concrete requests for things you would like to see 9 -- and I'll open this up -- either at the next 10 meeting or it might be appropriate to have 11 independent like webinars or a subgroup that 12 addresses this content. I don't know what our 13 timing is. That's something for the Working Group 14 to decide. But I would like to make a list like 15 that. 16 MR. BROOKMAN: Right. And, Sarah, do 17 you feel like you can begin to address the 18 questions that Charlie is raising or is that 19 something that you and others are not prepared to 20 do? 21 MS. WIDDER: I mean, I could walk 22 through examples. I think the commercialization

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 87 1 question I would like to have be more of a 2 consensus discussion within the Working Group. I 3 think the other members -- I mean, I don't even 4 vote on this. So I think that's really where the 5 discussion needs to occur. 6 MR. BROOKMAN: Lucas? 7 MR. ADIN: So, from a logistical 8 standpoint, if we don't vote on this today, like 9 I've said previously, I think, it doesn't stop the 10 train on standards analysis. Like we can keep -- 11 you know, it doesn't hold up the show in that 12 respect. The main area where this becomes 13 important is in the test procedure and us 14 producing a proposed test procedure. 15 So, I mean, I think we can keep on our 16 path prospectively. We just have to be pretty 17 sure about which questions we need to resolve. And 18 I am confident that we can resolve them so that we 19 can definitely have a vote, certainly by the next 20 meeting, that would lock this down. 21 MR. BROOKMAN: Charlie, your comment 22 suggests we are not as close to voting as I

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 88 1 thought perhaps we were, that there is more laying 2 this out and being very clear about the 3 implications here than that you would like to see. 4 MR. CAPPELLINO: Yes. Like I said 5 before, you know, up until like an hour ago, -- 6 MR. BROOKMAN: Yes. 7 MR. CAPPELLINO: -- it was not clear, I 8 don't think, for everybody in the group. 9 MR. BROOKMAN: Right. 10 MR. CAPPELLINO: So I think just having 11 some time -- and maybe it's between now and the 12 next few hours here and over lunch -- to be able 13 to kind of walk through some scenarios, I mean, 14 it's possible we could feel comfortable voting 15 today, but -- 16 MR. BROOKMAN: Okay. 17 MR. CAPPELLINO: -- my preference, 18 frankly, would be to see some examples that work 19 through. I mean, we have done examples before 20 with other scenarios to make sure everybody 21 understands it -- 22 MR. BROOKMAN: Right.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 89 1 MR. CAPPELLINO: -- the commercial 2 implementation; in other words, you know, if you 3 are in the marketplace, you know, how does this 4 actually work and have people walk through that so 5 it's clear in their minds. 6 MR. BROOKMAN: I'm going to let Greg 7 follow on, then to Arnie. 8 MR. CASE: We haven't said anything to 9 this group, but HI has started a new task force 10 that's supporting the ASRAC HI members in 11 calculations. And we have 15 engineers. 12 What's so funny? 13 MR. FERNSTROM: This is Gary. I'm just 14 not surprised that you need a task force 15 specifically to address this. 16 MR. CASE: So our basic goal for that 17 task force was we wanted all of the manufacturers 18 to have a clearer understanding of what the metric 19 was and calculate through the various metrics that 20 were available to us. And, with that, we meet 21 every Friday on this task force now. And we will 22 be looking at this this Friday with what we come

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 90 1 away with here and sending those 15 engineers out 2 to run their current pump databases through this. 3 And so I would ask that we probably 4 don't vote on this today and that we have some 5 time to come back, run those numbers, and be able 6 to say, "Hey, yes. We're very comfortable with 7 this." 8 MR. BROOKMAN: Okay. That's useful. And 9 that's new data for us. That's helpful. 10 Arnie? 11 MR. SDANO: Arnie Sdano, Pentair. Could 12 I suggest that we would preliminarily accept this 13 concept? And then, as Greg said, do we have a 14 separate group at HI that is looking at this? But 15 what I would like to see would be a webex, where 16 we would have those examples of, you know, here is 17 a bare pump, here is a bare pump with a motor, you 18 know, here is one with the controls. And the 19 different ways we would go through that I think 20 would be a very productive two-hour webinar, 21 probably with that HI group, to look at. That's 22 something that perhaps Sarah could put together

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 91 1 and meet with that group in a webinar to review 2 that. 3 MR. BROOKMAN: Okay. Louis, you are 4 next, I think. 5 MR. STARR: So on the items to discuss 6 at the next meeting, it would be great if you 7 could provide some examples on the distribution 8 channels of this -- so this is more how the 9 regulations would work in terms of the label or 10 not the label but the actual DOE regulation11 required number on the pump. Who puts that on? 12 Who does not put that on? How does that work in 13 the field? If I'm a distributor and I buy your 14 pump and put it together, do I have to put a label 15 on or does it come that way with all the labels it 16 needs and so just understanding I need to 17 understand how that works in the distribution out 18 to the market? 19 MS. WIDDER: Okay 20 MR. BROOKMAN: So I have heard a couple 21 of different suggestions here. One is that we 22 maybe cannot take a formal vote, but maybe we can

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 92 1 as a general matter in principle say this 2 construct seems to be working. We need to kind of 3 road test it, check it out, perhaps do some 4 additional examples before the next meeting. As 5 Lucas said, that is not going to hold up the 6 analysis if we don't formally vote this in. 7 The other is to just kind of let this 8 thing proceed without any kind of a confirmation, 9 preliminary confirmation, on the general 10 direction, the general construct here. 11 So I am wondering what members' 12 thinkings are about this. Al Huber? 13 MR. HUBER: I think to move this forward 14 -- and I think that is what we are all trying to 15 do -- I think that Arnie's suggestion is a good 16 one. I think if we believe this is reasonable 17 until we check it out, I think we ought to take a 18 vote and say preliminarily we're okay with this, 19 but we're all going to check it out. And he's 20 going to have the 18 engineers on the task force 21 look at it. And I think we've got to get 18 22 opinions, but that's another story.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 93 1 MR. BROOKMAN: And I guess if we did a 2 preliminary acceptance, then we would be clear 3 that no one is bound by that and that everybody, 4 each member present could, all members could, 5 revise their thinking, add new data, more 6 information. 7 Gary? 8 MR. FERNSTROM: So this is Gary. I 9 would like to agree with Al. I would be pleased 10 if we could have some sort of a vote endorsing 11 this on a preliminary basis because I think we put 12 a lot of work into it. And I think the industry 13 has made a really significant contribution in 14 helping us get to a point which is going to be 15 understood by the market and useful in terms of 16 the way it works. 17 MS. WIDDER: And from my perspective, a 18 preliminary vote is helpful just because I want to 19 understand if and where there might be significant 20 reservations. So that's sort of what I was trying 21 to capture today, maybe not locking this in, but I 22 want to make sure everyone is generally

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 94 1 comfortable with this. 2 MR. BROOKMAN: I'd like to ask a 3 question. I think you asked a good question 4 there. Maybe anybody that wishes to can say if 5 they have any significant reservations at this 6 point. Chuck? 7 MR. POWERS: I don't know if the word is 8 "significant" reservations, but I'm going to be 9 clear. We got some information Friday. 10 MR. BROOKMAN: Yes. 11 MR. POWERS: We walk in here last night. 12 And it's all good stuff. Don't get me wrong. And 13 we go through it. And, as quick as we can in our 14 own minds, we have been studying this and looking 15 at it. We're saying, "Yes. It looks kind of 16 right. Yes. What about this? What about that?" 17 Don't get me wrong. 18 And now, all of a sudden, like Charlie 19 said, an hour ago, we're getting a better 20 understanding, a definition. And I think Sarah is 21 doing a great job, trying, you know, to work with 22 us. And all of that is perfect. But if we have a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 95 1 standard in the States that is different than the 2 one that is going to come across in Europe, -- and 3 that's okay -- then some of those global companies 4 are going to end up doubling the cost because the 5 standard here will be X, standard there will be Y, 6 and we have to take that in consideration as 7 companies; right? Because now, all of a sudden, 8 whatever development costs could be more; right, 9 because we have to test the two standards 10 possibly, the two levels of PERs, or whatever, to 11 qualified products; right? 12 And then at the same time, with all of 13 this data, I think, like Arnie kind of said, 14 either a webinar or something, some kind of a 15 sheet that everybody can look at. 16 So, to your point, Sarah, and I think to 17 Al's, we don't get 18 different views. I don't 18 want that either. We say, "Here is what the 19 calculations are showing," rather than coming up 20 with their own set of numbers, "Here is what it is 21 trying to share. And we're having a constant on 22 the motor. You're saying here is the motor we're

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 96 1 going to use, everybody uses," et cetera, you 2 know, so that we walk through this. We don't need 3 -- you know, that's what I'm saying. It seems 4 like we're trying to rush to a conclusion here a 5 little too quick. 6 MR. BROOKMAN: Yes. Lucas? 7 MR. ADIN: Well, that certainly was not 8 the intent. It wasn't my intent. I can't speak 9 for anyone else. 10 MR. BROOKMAN: In my view, we're not 11 rushing to a conclusion at this point. 12 MR. ADIN: No. We have been very -- 13 MR. POWERS: We will. 14 MR. BROOKMAN: No, no, no. We're not. 15 MR. ADIN: No, no, no. I'm -- 16 MR. BROOKMAN: What I would like to do 17 is get a general sense. And I am not going to ask 18 for a vote. I would like to get a general sense. 19 And I am going to scan across the members here on 20 whether people are comfortable thinking that we're 21 heading in the right direction here, noting that 22 more work needs to be done, examples need to be

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 97 1 done, maybe we need a webinar. I think it is 2 instructive for the analysts to have that bit of 3 confirmation, noting that each member here could 4 raise additional thoughts, objections, concerns at 5 our next meeting. And we may end up going in a 6 different direction. 7 Dan? 8 MR. DELANEY: I agree that, you know, as 9 you brought up at the very beginning, for us to 10 bring out very specific concerns on here, I agree 11 with Chuck. I am a little uneasy about giving, 12 you know, a vote, whether preliminary or whether 13 it's non-preliminary or whatever, capturing our 14 concerns against this I think is very important. 15 For the motor industry, certainly introducing a 16 motor part load loss curve that's never been done 17 before in our industry and putting it forward here 18 without, really, review, that's a major concern. 19 That's something certainly we want our industry to 20 get feedback on, one that doesn't exist, so 21 definitely major. I'm okay with proceeding, 22 obviously defining some of these discussions about

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 98 1 it. 2 MR. BROOKMAN: That's good. And that's 3 the kind of substantive comment that I think is 4 very useful. 5 Lucas? 6 MR. ADIN: I mean, I don't know if this 7 helps clarify, you know, with respect to your 8 concerns, I mean, I have similar concerns about 9 making a vote today on this. 10 MR. BROOKMAN: Okay. 11 MR. ADIN: And what this seems like to 12 me is more just a commitment to do more specific 13 review of this particular proposal. It's not 14 we're saying we're heading down this path, this is 15 what we want to do. And, you know, it's as good 16 as a vote. And we would only vote to undo it 17 later. That is not the way that I understand it. 18 MR. BROOKMAN: Yes. 19 MR. ADIN: I think it's more just we 20 want to look at this more closely. 21 MR. BROOKMAN: So it seems as though 22 enough individuals in the room, enough members,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 99 1 have reservations about this signal that we 2 probably shouldn't do it. 3 MS. WIDDER: Yes. No. I just want to 4 clarify that maybe I was the one that gave people 5 the undue sense that I want to vote on this. I 6 don't want to vote on this. I just want every 7 member to feel welcome to share their reservations 8 because that's what helps us move forward. So 9 that's really what I wanted to encourage. 10 MR. BROOKMAN: You shouldn't take 11 responsibility. I should take at least as much. 12 Meg, do you want to comment here? 13 MS. WALTNER: Yes. And I am sort of 14 agnostic as to whether we vote or not, but just 15 one suggestion is if we did want to take a vote, 16 we could vote on directing, you know, Sarah, what 17 we want her to continue doing on this path, not, 18 you know, we are agreeing to this metric but just 19

-- 20 MS. WIDDER: Right. 21 MS. WALTNER: -- we all want Sarah to -- 22 MS. WIDDER: Add to this list.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 100 1 MS. WALTNER: -- be working on this path 2 and add to this list -- 3 MR. BROOKMAN: That's good. 4 MS. WALTNER: -- between now and the 5 next meeting. 6 MR. BROOKMAN: That's good, Meg. That's 7 a good idea. Okay. 8 I am intuiting that we are kind of half 9 and half-ish on this point, but I would say the 10 conversation that has preceded this last bit of 11 back and forth was surrounding the manufacturing 12 caucus generally thinking this construct was good 13 and noting also that more time, more 14 investigation, more scenarios, more scrutiny was 15 absolutely necessary before our several members 16 felt comfortable voting. So maybe we will just 17 note that as a record of what we have accomplished 18 in this last discussion. 19 Now we have heard from Dan a specific 20 reservation or concern that he has about the way 21 this might be applied. Maybe we can hear any 22 additional thoughts along those lines and also

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 101 1 instructions or additional things that Sarah or 2 other members of the analytic team should be 3 doing. Any additional specific thoughts? Dan? 4 MR. DELANEY: Yes. Dan Delaney, Regal. 5 I thought I heard from pump manufacturers also 6 marking. Would that also have been a concern? Is 7 that part of labeling logistics? 8 MS. WIDDER: Marking? 9 MR. DELANEY: Yes, the actual -- what 10 gets put on on PER levels. 11 MS. WIDDER: Yes. That was -- 12 MR. DELANEY: Is that part of your 13 labeling logistics? 14 MS. WIDDER: That was part of my 15 labeling logistics. 16 MR. DELANEY: Okay. 17 MS. WIDDER: I can also include the word 18 "marking" if that's more clear. 19 MR. DELANEY: Yes. Okay. Just wanted 20 to clarify. 21 MR. POWERS: Chuck. I have a question, 22 and I guess Charlie and Greg if you guys could

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 102 1 listen. How should I -- let me back up. So let 2 me ask you a question, you guys with the team. Dan 3 did a nice job yesterday walking us through the 4 fallout pumps or the failed pumps, et cetera; 5 right? And he gave percentages and stuff; right? 6 And that was based on some formulas that we have 7 already started. 8 And I agree, you know, we are going in 9 the right direction here. And I am not upset over 10 the data. It's just I have some reservations 11 where it goes. 12 But before, Charlie, like you and I and 13 Al and the teams actually sit down and say, "How 14 does this impact our pumps?"; right, "Which ones 15 will we have to redesign?" don't we need to say to 16 ourselves as a group that it looks like we're 17 leaning towards -- we have the formula, you know, 18 fairly well-defined, okay to a certain point. We 19 have to look at it. We have to define which level 20 we're going to go to so we know the impact of 21 that. 22 In other words, if it's a PER-40 versus

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 103 1 a PER-10, you know, I mean, right now we're 2 throwing, you know, an overall understanding it's 3 going to be this much up to this much, you know, 4 if we get up to 100 million or whatever down to 5 whatever, but shouldn't we walk away from here 6 saying we think we're going to lean towards X so 7 then we can recognize the impact more? 8 Because here is my point. If the 9 formula is okay as it is and that's fine and it's 10 only going to impact a few pumps and the dollars 11 are X, then great, but if the impact is going to 12 be greater than that, you know, then -- you know 13 what I'm saying? 14 Am I thinking about it wrong, Charlie or 15 Greg? I'm just trying to -- 16 MR. BROOKMAN: Greg Case? 17 MR. CASE: I was just doodling here 18 before Chuck's question. One of the things that I 19 think may help Chuck be a little more at ease with 20 this -- and you were asking for things maybe that 21 the analytic team can do. If we could do a -- and 22 I kind of doodled a quick little curve here. If

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 104 1 we could draw a slice of the pump market or of the 2 3-D surface with all of the pump points on it, if 3 we could draw a curve where the MEI would fall, 4 the MEI curve would fall, and the new PER curve 5 would fall for whatever the same dropout level is, 6 then we might be able to see, you know, what the 7 differences might be. So there might be two 8 curves there that we could look at and see, you 9 know, what is our difference here. 10 And they are going to be the same 11 surface. So I am having some trouble here in my 12 head, but -- 13 MS. WILLIAMS: Yes. So, I mean, this is 14 Alison. So we have actually calculated C-values 15 for both MEI and PER. So you could compare. But, 16 I mean, we could give you the MEI ones also. And 17 you can compare them. 18 MR. BROOKMAN: Based on this latest 19 construct. 20 MS. WILLIAMS: So what I want to point 21 out, actually, is that in this construct, this 22 denominator is what Dan and I have been using as

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 105 1 the standard in our analyses so far. So this 2 doesn't change anything that Dan and I have 3 reported on because these are just indices related 4 to the same denominator that we were reviewing at 5 the end of the last meeting. 6 So, you know, obviously the assumptions 7 that we have talked about today have changed, but 8 this does not change anything that Dan and I have 9 done. So the C-values that we have calculated 10 still apply to this because the denominator is the 11 standard. These two are just labeled indices 12 relating to the standard in this construct. 13 MR. BROOKMAN: I'm not sure. I don't 14 understand how that answers Greg's question. 15 MS. WILLIAMS: So we, so Dan and I, 16 already have calculated C-values, which is what 17 sets the level of the surface. So we have those 18 data already. 19 MR. BROOKMAN: Katie? 20 MS. COUGHLIN: This is Katie from LBL. 21 As part of the LCC presentation, I will be showing 22 what we call a cost curve, which is essentially

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 106 1 the pump cost versus C-value, which may address 2 some of what you're talking about. So it's not 3- 3 D. We kind of sectioned out the market into bins. 4 But maybe after we have seen that, we can revisit 5 this issue about whether types of presentation of 6 the data would be useful. 7 MR. BROOKMAN: Chuck, I would make the 8 general comment that I sure can understand your 9 wanting to know more about a sense of direction, 10 but there is a whole lot of analysis yet to be 11 done and thought process and consideration by this 12 Working Group before you are headed towards 13 assigning that value, values, plural. 14 Charlie? Dan? Yes? Go ahead, Dan, 15 please. 16 MR. CAPPELLINO: Well, while he's 17 working up there, so I agree, Chuck. I mean, you 18 asked me the question, Greg. And I think we need 19 to go through more of the discussion here, get 20 more of the economic modeling before somebody like 21 yourself could sit down and go through that. So I 22 think a little bit of patience here and let kind

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 107 1 of the group kind of work through some of the open 2 issues around some economic discussions we had 3 just earlier today. I don't know if that helps 4 you feel better, but -- 5 MR. POWERS: It does. And I'm trying to 6 get my head about this, but I also want to be 7 clear. I agree with what Sarah has shown and what 8 Al is trying to say. I am agreeing with the 9 concept. 10 MR. BROOKMAN: Gotcha. 11 MR. POWERS: I'm not saying -- 12 MR. BROOKMAN: No. 13 MR. POWERS: -- I have a problem with 14 that. 15 MR. BROOKMAN: We hear that. We hear 16 that. 17 MR. POWERS: I am just trying to -- I 18 hate to say it -- put what a university might 19 think versus the real world. I want to 20 understand, like Charlie is saying, what is the 21 real impact, not a theoretical but the real impact 22 to products.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 108 1 MR. BROOKMAN: Gotcha. We're with you. 2 We understand. And I think all members want to 3 see that, I believe. 4 MR. POWERS: Yes. Okay. 5 MR. BROOKMAN: Dan? 6 MR. POWERS: One last thing. And what 7 Katie brought up is great, but yesterday they 8 showed costs. They showed what we think we can 9 raise in market. And none of that is holding 10 water with us. 11 MR. BROOKMAN: Yes. Right. 12 MR. POWERS: We're struggling with that. 13 So the lifecycle I get, but that may not add value 14 to what we're trying to address here on -- 15 forgetting about costs and the pricing and all of 16 that, how many pumps are going to fail and how 17 many are we going to design and what is the 18 impact. 19 MR. ADIN: Right. Understood. And we 20 still have those issues on our agenda to discuss 21 today. So in the remaining time we have, we're 22 going to try and address as much of those as we

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 109 1 can, understanding that you still need to, you 2 know, take all of this back with you and look it 3 over more closely and provide us with feedback. 4 So, you know, my expectation is that we're going 5 to go through the rest of the LCC that we started 6 the other day and then reserve some time to talk 7 through whatever issues in the materials we 8 presented yesterday we want to revisit. 9 MR. BROOKMAN: And I want to head in 10 that direction quite quickly. I really do. 11 Dan first. 12 MR. WEINTRAUB: Thank you. 13 So I wanted to address Greg's comment 14 because you were looking for us to help you 15 understand the difference between the original MEI 16 and what we are presenting now, so how the pumps 17 will fall out differently. So we know overall 18 you're going to have the same percentage of pumps. 19 And what we can show you so -- you're 20 saying you're not sure -- the surface is the same. 21 So you're not sure how things will change. What 22 we can give you is since we have C-values, failing

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 110 1 C-values under MEI, failing C-values under the PER 2 or wherever we're calling new metric, we can give 3 you two plots. So the lines will be at a given 4 level. And the dots will actually be different 5 because each pump has a different C-value under 6 each one. So that will give you a little bit of a 7 view, but it won't give you that much. 8 What we can give you is that each level 9 I can tell you -- you always know that you are 10 going to fail ten percent, 40 percent, and so on. 11 I can tell you how many pumps switch sides. So 12 you knew that -- you know, if there were one 13 percent was failing and now it's passing, one 14 percent was passing, now it's failing, we can give 15 you that breakdown. And we can do it fairly 16 quickly. So we can have that before the next 17 meeting. 18 MR. BROOKMAN: How are you going to do 19 that? 20 MR. WEINTRAUB: Math. We've got it. We 21 have done the analysis under MEI. 22 MR. BROOKMAN: Okay.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 111 1 MR. WEINTRAUB: We know of the 2 population. We have the data of half of the pumps 3 in the population. And we know how every single 4 pump performs, like how it will -- 5 MR. BROOKMAN: I just want to be clear 6

-- 7 MR. WEINTRAUB: Yes. 8 MR. BROOKMAN: -- about how that might 9 get done because these guys want it. 10 MR. WEINTRAUB: Yes. 11 MR. BROOKMAN: Dan? 12 MR. WEINTRAUB: Yes. So -- 13 MR. DELANEY: So Dan Delaney, Regal. 14 Just to Chuck's point, you know, when we talk 15 about, we go back, looking at how motors began 16 this, back in the early '90s in a regulation and 17 then how the Europeans finally got their 18 regulation, it was very helpful. It took us 15 19 years or more to get us to a common understanding. 20 We're not 100 percent there but very close. So I 21 would encourage that, you know, MEI versus PER, 22 that approach, that difference, that very slight

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 112 1 difference, between, you know, the weighted and 2 the lowest denominator, whatever, of the average. 3 That concept I think is very important. This is 4 your only chance to really effect it now. 5 I think you should include -- I don't 6 know if that's part of your metric nomenclature 7 just to capture that as an item here, but MEI 8 versus PER. I think that's a very valuable point 9 you guys should definitely look at, decide can you 10 live with MEI in the same calculation method, -- 11 MR. BROOKMAN: Okay. Let's -- 12 MR. DELANEY: -- a huge help going 13 forward. 14 MR. BROOKMAN: Let's hear other items. 15 Rob, please go to the microphone. Other items 16 that you would request from the analytic team that 17 they create either scenarios or application 18 examples or whatever, whatever you'd like to ask 19 them to create? Rob? 20 MR. BOTELER: Yes. Having gone through 21 this a time or two myself, one thing that you 22 probably want to add up here under labeling is you

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 113 1 are going to have to have a definition of a basic 2 model. And I think the pump guys need to 3 understand what that is. Is it the wet end? Is 4 it the wet end with the motor? Is it the wet end 5 with the motor with the control? So do we end up 6 with three different basic models for each wet 7 end? Don't know. 8 MR. BROOKMAN: State them again. The 9 three are what? 10 MR. BOTELER: Well, the three 11 definitions we have of a pump. 12 MR. BROOKMAN: Okay. The three 13 definitions. Right. Got it. Okay. 14 MR. BOTELER: And then the other thing - 15 - and I asked Sarah this at one of the last 16 meetings. And I am going to come back and ask it 17 again. Under our testing and calculation options, 18 we have got to remember we have compliance 19 testing, where we are going to supply all of the 20 data on the DOE website by basic model. And then 21 we also have enforcement testing. And when I 22 asked that question last time, your comment was

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 114 1 that the calculated test method could be used in 2 either case. And then we also have a wire to 3 water test. 4 So I think we need to -- when we talk 5 about our testing, we need to just make sure that 6 we're talking about both so that we don't find 7 ourselves after the fact with two different test 8 protocols for the pump manufacturers. 9 MR. BROOKMAN: Okay. Let me note for 10 the record that Sarah is capturing these 11 additions, these items to discuss in the next 12 meeting and/or a prospective webinar. So we've 13 got them captured here on the screen. 14 Additional thoughts about this? Yes, 15 please, Greg? 16 MR. TOWSLEY: Greg Towsley, Grundfos. 17 Just as a clarifying question, I heard Dan mention 18 something earlier about partial load motor 19 efficiencies. I have been on an understanding 20 there is no partial load in the formula for the 21 motor side. It's only one efficiency point. 22 MS. WIDDER: So the way in our

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 115 1 calculation method that we were presenting earlier 2 -- let me go up to it. Here the -- I wonder if I 3 have the full load losses. Yes. Okay. So here 4 is a little summary of how we were maybe thinking 5 about from a calculation perspective using one 6 full load efficiency value and then applying a 7 default curve here, this cubic polynomial that we 8 have come up with to adjust those losses to 9 different loading of the motor. We can talk about 10 in detail at a different time probably how this 11 really works, plays out in real life. 12 There is an alternative in the future 13 once such test methods and maybe part load data is 14 more widely available that, instead of applying 15 this default calculation with a singular full load 16 efficiency, those unique part load efficiency 17 values would be available from the motor 18 manufacturer and/or could be tested separately. 19 And so there could be a way where you have tested 20 motor data and tested pump data that combine at 21 each load point, but in absence of that today, 22 we're just going forward with the full load motor

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 116 1 efficiency, which is what is more widely available 2 in the calculation approach. To acknowledge Dan's 3 comment, there is a lot of work going on about 4 part load testing of motors. And so this approach 5 actually leaves open that you could use tested 6 motor data, as opposed to the default curve, if 7 you wanted. 8 MR. TOWSLEY: Greg Towsley, Grundfos. 9 But this is not in the recent PER calculator that 10 was sent or it is? 11 MS. WIDDER: The PER calculator that was 12 sent assumes the calculation. 13 MR. TOWSLEY: Okay. 14 MS. WIDDER: Yes. I will have another 15 comment for you about that later. 16 MR. BROOKMAN: Assumes what calculation? 17 MS. WIDDER: It assumes the default 18 motor loss curve. It assumes that -- go ahead. 19 MR. ADIN: It doesn't perform the 20 calculation. It just uses the values that would 21 be the output of this calculation. Is that what 22 you're saying, Sarah, for the losses, the values

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 117 1 that are built into the calculator, or is it 2 performing this calculation? 3 MS. WIDDER: It is performing this 4 calculation. 5 MR. ADIN: Okay. 6 MS. WIDDER: And so what the calculator 7 can do now is essentially it can do the top row 8 here, where you have put in your bare pump values. 9 You can put in an increased motor efficiency and 10 account for that. And you can also acknowledge 11 which control option you have. And it will 12 account for that. And so that's what the 13 calculator captures, is this top row, at this 14 time. 15 MR. BROOKMAN: Okay. Joanna? 16 MS. MAUER: I just wanted to perhaps add 17 one additional item to the list of kind of topics 18 for future discussion. So I think for a DOE 19 standard, this kind of weighted average approach 20 makes a lot of sense. If we think ahead to 21 utility programs, which I think we all have an 22 interest in having utility programs, be successful

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 118 1 and encouraging sales of high-efficiency pumps and 2 pumps with controls, it may be helpful to have not 3 just the PER value of the pump but some additional 4 information as well; for example, what the input 5 power is at each of the load points that goes into 6 the PER calculation. 7 So I'm wondering if maybe as part of 8 kind of our discussions whether that can -- you 9 know, we can also agree on perhaps specific values 10 that may be reported in the DOE certification 11 database that aren't, you know, part of the 12 standard. 13 MR. BROOKMAN: Lucas Adin? 14 MR. ADIN: We normally only require 15 reporting of values that are subject to a 16 standard. So whatever the efficiency standard is, 17 that's the value that we would require to be 18 reported. 19 MS. MAUER: Are you saying that that's 20 the only information that you can require to be 21 reported or that's the practice? 22 MR. BROOKMAN: Betsy Kohl?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 119 1 MS. KOHL: I mean, typically the 2 certification database is for showing compliance 3 with our standards. So the only thing we care 4 about in there is that you put in a value that 5 shows you meet the standard. That's why I think 6 we were talking about putting these other things 7 on a label or some other way because, I mean, it's 8 sort of not part of the purpose of this database. 9 So that's why we didn't require it to be reported 10 per your label. 11 MR. ADIN: I think we could take a look 12 at that and see what we could do. Certainly 13 something required to be on the label, I think -- 14 MS. KOHL: Yes. 15 MR. ADIN: -- would be reportable. 16 MS. KOHL: I mean, CCMS is for standards 17 compliance. 18 MR. ADIN: Generally. 19 MS. KOHL: So maybe look at it. 20 MS. WIDDER: Right. And to add to that 21 a little bit, I think if we're looking at it just 22 because there are other instances in CCMS where

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 120 1 you report variables that help you calculate the 2 standard. So, for example, volume of commercial 3 refrigeration equipment is reported because that 4 helps you understand that you're meeting the 5 standard. And so this is a variable that, you 6 know, those three could be maybe thought about in 7 the same way. 8 MS. MAUER: And if I could just add on 9 quickly? I think a lot of the value in this 10 metric that we're talking about is not so much the 11 standard itself but other things that can be done, 12 like utility programs, to encourage sales of these 13 high-efficiency products. And I think we want to 14 kind of leverage what we're doing here. And, you 15 know, I think a label may be a good component, but 16 I think that having something in a database 17 somewhere that programs can access, I think would 18 have a lot of value. 19 MR. BROOKMAN: Gary Fernstrom? 20 MR. FERNSTROM: So this is Gary. And 21 I'm directing my comments to my friends at DOE. 22 Certainly you may only need in your database what

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 121 1 is required to determine compliance, but a lot of 2 the rest of us, the utilities, operate these 3 programs where we would like to know what the part 4 load performance is at specific points other than 5 one aggregate number so that we can evaluate the 6 performance under different conditions. 7 MS. KOHL: So this is Betsy Kohl, DOE. 8 We are talking a little bit about whether these 9 part load values may somehow feed into the overall 10 standard, but, I mean, the CCMS database is not a 11 wish list of information that people may want. It 12 has to be somehow related to our program. So 13 that's kind of -- and, you know, the labeling may 14 be some other way for you to get that information, 15 but we're still looking into the issue that -- 16 MR. FERNSTROM: Well, the point I am 17 trying to make is there is some potential value to 18 the public and the utilities that are operating 19 these energy efficiency programs if you can 20 accommodate our wishes. And you may deem it not 21 to be a wish list, but I think the Department of 22 Energy ought to recognize this potential value if

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 122 1 it saves energy. 2 MR. BROOKMAN: Thank you, Gary. 3 MR. ADIN: Just to respond -- 4 MR. BROOKMAN: Lucas? 5 MR. ADIN: -- very quickly from the 6 program's perspective, that is something we are 7 happy to consider. I mean, I can tell you right 8 now we would definitely be willing to. You know, 9 we're not voting today. So we don't have to do 10 that. But we'll think about it. 11 MR. FERNSTROM: And one other point, 12 Lucas, yes, this information might equally well be 13 on a label, but if it's reported to the Department 14 of Energy, it carries some credibility that it may 15 not carry if it is simply stated by the 16 manufacturer. 17 MS. KOHL: So just to respond to that -- 18 this is Betsy Kohl, DOE -- if anything is reported 19 on a label, it uses our test method. So it is 20 sanctioned by the Department. And we enforce 21 efficiency standards. Right? So there has to be 22 some nexus with the information that we collect

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 123 1 that's related to that. We can't just -- anyway, 2 I have nothing else to say on that. 3 MR. FERNSTROM: Well, maybe I 4 misunderstood. You're suggesting that what would 5 be reported on the label would also need to be 6 accurate, as the Department would require that. 7 That's fine. Then if it's on the label, it's 8 equally as useful to us. 9 MR. BROOKMAN: Yes. Thank you. 10 Rob? 11 MR. BOTELER: Yes. Gary, this is Rob 12 Boteler. You are exactly right. With NEMA 13 premium, we bumped the level above the DOE 14 requirement, but we were still held accountable 15 for the accuracy of the numbers based on the DOE 16 test method and everything else. 17 MR. BROOKMAN: So that is a reflection 18 of where we want to go with discussions of test 19 procedures as we proceed here. Dan? 20 MR. DELANEY: Dan Delaney, Regal. I 21 just want to make sure that bullet is very clear. 22 I am really after not so much motor and drive loss

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 124 1 as really about the part load loss factor; right, 2 in the equation and the manner in which it is 3 used. Just be very specific about that. 4 MR. BROOKMAN: Okay. Since I'm going to 5 need to write a meeting summary on this convoluted 6 subject, I'm going to read the items that Sarah 7 has recorded labeled "Items to Discuss at the Next 8 Meeting Webinar." And they are "Metric 9 nomenclature. Comparison of MEI and PER. Impact 10 of test procedure and metric on standard. 11 Definition of basic model. Examples for different 12 pump configurations. Implementation of PERCL and 13 PERVL with the sub elements. Labeling/marketing 14 logistics. Additional reported information or 15 label information. Who is the manufacturer? 16 Market impacts, especially application to utility 17 programs" and then as a separate bullet "Motor and 18 driver part load loss factor testing versus 19 calculation options. Testing burden. 20 Certification and enforcement issues." Are there 21 more? 22 MS. WIDDER: That's all we've got so

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 125 1 far. 2 MR. BROOKMAN: That's a great list. 3 Additions to this list? Because we're about to 4 move on. Yes, Louis? 5 MR. STARR: So just on the 6 labeling/marketing logistics, I would say in the 7 sales channels. So maybe that's understood. 8 MS. WIDDER: I'll add it so it's clear. 9 MR. BROOKMAN: Thank you. 10 Yes, Bob? 11 MR. BARBOUR: Sarah, are we going to get 12 a new, updated spreadsheet? 13 MS. WIDDER: Yes, you will get a new PER 14 calculator. And, just to be clear -- and 15 hopefully everyone -- this is where I was hoping 16 to get today. I'm going to send out a new 17 calculator reflective of these two indices that 18 are presented on this slide. 19 MR. BROOKMAN: Sarah, it seems as though 20 your thought process and the discussion we have 21 had this morning, which has kind of generally 22 provided comfort surrounding where we have landed

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 126 1 with this metric construct -- does that mean that 2 you are kind of prepared to go rapidly towards 3 answering these questions? 4 MS. WIDDER: Yes. 5 MR. BROOKMAN: Yes. So I am going to 6 back to what Arnie said earlier. Should we try 7 and schedule a webinar in two weeks or so where 8 anyone who wishes to participate can listen in and 9 look at examples and ask additional questions 10 based on what Sarah is going to try and respond to 11 here? Should we try and do that or should we -- 12 MR. BARBOUR: Don't we have one already 13 on the -- 14 MR. BROOKMAN: That's not until -- 15 MR. BARBOUR: Two weeks. 16 MR. BROOKMAN: That's two weeks. 17 MS. WIDDER: It's May 14th. 18 MR. BROOKMAN: Okay. We do. But okay. 19 We've got one scheduled. I guess this would be 20 the topic for that. 21 MS. WIDDER: I just want to be clear. 22 That's scheduled for one hour. And initially I

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 127 1 think we were talking about holding that webinar 2 to discuss updated standards analyses. 3 MR. BROOKMAN: Right. 4 MS. WIDDER: And we can do either but 5 probably not both. 6 MR. BROOKMAN: Ah. 7 MR. ADIN: We would have to make it 8 longer, at least twice as long, to do both of 9 these topics. 10 MS. WIDDER: Probably more. 11 MR. ADIN: Probably more. So we could 12 do it. I mean, if it would work out better for 13 everyone to do just one long webinar, as opposed 14 to two shorter ones, then I think it would work 15 out better for us, too, logistically, but -- 16 MR. BROOKMAN: Should we do a two-hour 17 webinar? 18 MR. ADIN: Yes. 19 MR. BROOKMAN: So this would be May 20 14th. And I'm glad -- Bob, in my head, I had 21 moved it to June. So that would be May 14th. And 22 it would be from 1:00 to 3:00. And Sarah and DOE

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 128 1 will be supplying an agenda for that webinar and a 2 notice surrounding it. 3 Louis? 4 MR. STARR: I was saying maybe we could 5 start with the metric since it will probably be 6 the least contentious, I hope, rather than the 7 other one. 8 MR. BROOKMAN: Okay. 9 MS. WIDDER: Oh, do the standard second? 10 MR. STARR: Right. 11 MS. WIDDER: Okay. Yes. 12 MR. STARR: I would think. 13 MR. BROOKMAN: Okay. That makes -- 14 MS. WIDDER: I'm with Louis on that. 15 MR. BROOKMAN: Yes. So, barring any 16 major objections, that's the way we're going to do 17 it. 18 And let me ask you. Comment? 19 MS. WIDDER: Otherwise, we'll never get 20 there. 21 MR. BROOKMAN: No? And let me ask you. 22 I presume this webinar is open to all that wish to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 129 1 listen in. Yes? Just to confirm, the sense of 2 the Working Group that that is the case? We're 3 not deciding anything; right? This is an 4 information exchange. Okay? 5 (No response.) 6 MR. BROOKMAN: Okay. Great. The LCC 7 segment that we wish -- that I had intended for us 8 to do next takes about an hour. We have been 9 working at this steadily for a while now. I'm 10 thinking maybe we should take an early lunch 11 because when we return from lunch, we're only 12 working today until 3:00. Okay? 13 But I want to memorialize the progress 14 that has been made this morning. We have made a 15 breakthrough on the metrics segment. And I want 16 to thank the analytic staff. They did some very 17 good work while we were delayed this morning in 18 our start, working with the two major caucuses to 19 clarify how these pieces can come together. And I 20 really think, as I've said, we've made a 21 breakthrough in our understanding and gained a lot 22 of clarity here.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 130 1 So it's now 11:40. Let's break for 2 lunch. We'll resume at 12:40 here in this room. 3 And thank you. We had a really good morning. See 4 you back here at 12:40. 5 (Off the record.) 6 (On the record.) 7 MR. BROOKMAN: Okay. Let's resume. This 8 morning when we held our informal off-the- record 9 meeting, I committed that I would put some of this 10 into the record. These notes that you see here up 11 on the screen are what Jeremiah, who is a very 12 good keyboard person, captured in that informal 13 meeting. So I will get this printed off. And in 14 my meeting summary, I will create a more complete 15 record. 16 But, basically, I am just going to 17 summarize a few items right here right now, which 18 are that I consulted briefly with Betsy to make 19 sure we could have an informal discussion on 20 process items only; that is, timeline and meeting 21 schedule, and that we considered additional times 22 for this meeting, for this group, for this Working

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 131 1 Group, to meet. And we talked about the timeline 2 for rulemaking and whether the time that we have 3 is sufficient. A few individuals offered their 4 thoughts on how we would meet and when we would 5 meet. A few individuals talked about room 6 availability. We talked about some of the 7 additional burdens to meet as a result of 8 additional meetings. And we established some 9 dates, which I already read into the record first 10 thing this morning. 11 So I will make a more complete record of 12 this. I want to make sure all that we do here is 13 complete and according to Hoyle. 14 Now I hope you had a nice lunch. Let's 15 return to what we had started off thinking we 16 would do when the time was right, which is now, 17 Katie, to talk about lifecycle costs. 18 MS. COUGHLIN: So we are going to pick 19 up where we left off yesterday. Let me just very 20 briefly recap from the energy use. So the energy 21 use, the LCC, and the engineering are all very 22 closely coupled. So what I want to do today is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 132 1 mostly try to convey those interactions and then 2 some of the detail of how we do the calculation. 3 Given the number of issues that have been raised 4 about the engineering and what will actually 5 happen to the market under a standard, I think 6 that it's best to look at the LCC results that I 7 am going to present as a scenario analysis, rather 8 than some prediction of what the actual cost9 benefit will be. And so we can consider over the 10 next couple of months a variety of scenarios about 11 how the market might transform. And any of those 12 could be used to inform this discussion. 13 So, just very briefly, from the energy 14 use calculation, we are developing distributions 15 of duty points; load profile shapes; and annual 16 hours of operation; and, finally, this BEP offset 17 that we used to represent the difference between 18 the duty point and the BEP for the pump. All of 19 these are going to then be imported into the LCC. 20 And we develop a very large LCC sample around 21 these different distributions. 22 And this lifecycle cost is then -- it is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 133 1 generally one of the factors that is used to make 2 the decision about the standard level with -- 3 typically, the criteria are that you really can't 4 pass a standard with a substantial fraction of the 5 users who have negative LCC savings. Beyond that, 6 there's no hard and fast rule about what LCC has 7 to be or can't be. 8 So overall the purpose here, then, is to 9 assess the impacts to the consumer -- I am calling 10 them pump users in this presentation -- of the 11 change in both the purchase price and the 12 operating cost of the unit. And so it's 13 conceptually not a complicated thing. The LCC is 14 the sum of the total installed cost plus the sum 15 of the annual operating costs over the lifetime of 16 the pump applying a discount rate, a sort of real 17 discount rate, which represents the actual cost of 18 alternative investments, with the actual return on 19 alternative investments. 20 We do this Monte Carlo approach, which 21 really just means that for many of these 22 variables, some of which I have already listed, we

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 134 1 use a sampling from a distribution. And then we 2 pick some number, some large number, for the total 3 sample that is just meant to be large enough to 4 represent all the variability that might be in 5 these various quantities. So we typically use 6 10,000 LCC -- 10,000 individual LCC calculations. 7 This overview is -- let's see. Well, 8 I'll go through this quickly. This is more, you 9 know, when you review things, you can use this as 10 a guide to where things come in. So we have over 11 on the far left -- okay. So we start with the 12 engineering analysis over in the upper left. And 13 then we have the markups analysis, which I 14 mentioned yesterday. Those two go into 15 essentially determining the customer price. And 16 we add installation costs. And that defines the 17 total installed cost. Installation costs are only 18 relevant if they depend on the standard level, 19 which they don't in this case or that's what we're 20 assuming. 21 Down on the bottom row, we start with 22 the energy use calculation that gives us the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 135 1 energy consumption. Then we have electricity 2 prices. That goes into an annual energy cost. 3 Then we have repair and maintenance. That goes 4 into the annual operating cost. Then we add the 5 lifetime, a discount rate, and a trend on 6 electricity prices over the lifetime of the unit. 7 We get up with the lifetime operating cost. 8 So the total installed cost generally 9 goes up. Lifetime operating cost goes down. The 10 sum of the two is either positive or negative. And 11 that's essentially all we really care about at the 12 end of the day. And that's how we defined the 13 lifecycle cost. 14 So the additional inputs that I am going 15 to discuss today are the -- well, repair and 16 maintenance again, they only really matter if 17 they're different between different standard 18 levels and we're assuming that they aren't. So we 19 really aren't counting them at the moment. So the 20 lifetime discount rates, electricity price trend 21 are the additional inputs that we haven't 22 discussed yet.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 136 1 So the mechanics of the LCC again are to 2 create the sample of 10,000 what I call pump 3 installations. So the installation is the 4 combination of a user and a pump. So there's user 5 data that does not change under the efficiency 6 level. So, for example, if a pump is operated a 7 certain number of hours per year and you expect it 8 to have a certain lifetime, that's not going to 9 change when we change the standard level. 10 Otherwise you don't have a good comparison. 11 So the user characteristics are selected 12 and then fixed. And then on the pump side, we go 13 through each nominal efficiency level. And if the 14 pump that's chosen in the base case is above the 15 efficiency criterion, then we just leave it alone. 16 Otherwise, if it fails, we have to find a new pump 17 for that user. 18 So right now we're using -- again, this 19 is where the scenario analysis comes in, 20 essentially. So depending on the product and how 21 well you can represent the market, you can have 22 different types of what we call consumer choice

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 137 1 models to understand how when somebody's pump is 2 no longer available for sale, what are they going 3 to do. Currently we take the kind of simplest 4 method of choosing and just say they're going to 5 buy the cheapest thing that's still available to 6 them. 7 And, to add a little bit of variability 8 to that, we defined a ten percent price band 9 around the cheapest pump. And you can just 10 randomly pick something from that. 11 Now, this is something where if there is 12 additional constraint when you're looking, say, at 13 a replacement market and you can't just buy the 14 cheapest thing, you have other things that need to 15 be met, any information that we can gather from 16 you about that could be included in this choice 17 model. But for now, we're just doing something 18 simple. 19 So one of the -- so now I am going to 20 get into things that are really just calculation 21 issues because we have the data that came from the 22 manufacturers, but we need to kind of set things

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 138 1 up so we can go through this calculation method in 2 the way that we normally do because we do LCCs all 3 the time. And they all have to be kind of 4 consistent. So one of the things that we really 5 need to do an LCC is to be able to say, "Okay. 6 This is an equivalent pump under all standard 7 levels." And I need a distribution of 8 efficiencies available so that I can look at what 9 happens at each standard level. 10 So with the data that we have, the way 11 we set this up is to create what we call 12 representative units. I'll show you a picture in 13 a moment. The idea is, rather than consider each 14 individual pump, we just, say, create bins in your 15 space of power and flow. We're defining our duty 16 point here as power and flow. And within a bin, 17 we say, "Just take one pump out of that bin and 18 call that a representative pump." 19 So this is an example of how that works. 20 So we use power on the vertical axis, flow on the 21 horizontal axis. We're using a logarithmic scale 22 to capture the wide range of what is available.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 139 1 And then these are just the pumps that we have in 2 our current data set plotted at their BEP power 3 and flow. And then the grid is the set of bins 4 that we have defined. And then inside each box, 5 we just look at the kind of shipment weighted 6 average of all the pumps in that box. And we 7 defined that as our representative unit. 8 Yes? 9 MR. FERNSTROM: So, Katie, this is Gary. 10 A quick question. Are you using in these bins, 11 the distribution of available products or are you 12 using some sort of market weighting as there may 13 be many more smaller pumps sold than larger ones? 14 MS. COUGHLIN: We are actually using 15 both. So for the base case, we were defining the 16 average pump using the current shipments. But to 17 understand what might happen at higher standard 18 levels, we're keeping all the models in the 19 analysis, even if they don't currently have any 20 shipments. 21 So within each bin, essentially we start 22 off with, say, eight models. And we weight those

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 140 1 models by the shipments to come up with a bin 2 average flow, bin average power, specific speed. 3 We create pump curves and efficiency curves based 4 on the bin average data. And we leave the C5 values alone. So the C-values are then -- because 6 the C-values are sort of independent of flow and 7 specific speed. So they don't actually care where 8 you are on this plot. And the list of C-values, 9 then, gives us the basis for defining a 10 distribution of efficiencies within that bin. 11 Let's see. And then there's another 12 step. So, then, once you have defined an average 13 pump, you need to create the actual efficiency and 14 price distribution that goes with the distribution 15 of efficiencies. So that's what the next two 16 slides are meant to illustrate. 17 So now I have added -- if you think of 18 the previous plot, I am taking just the flow axis 19 on the horizontal. And now I've put the 20 efficiency, the actual pump efficiency, on the 21 vertical axis because that is the number that goes 22 into the energy use calculation. And those green

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 141 1 stars are pumps. Those two black vertical lines 2 represent the limits of a given bin. And the C3 values, a surface with a constant C-value, is 4 represented here by that green line. 5 So, as we were discussing yesterday, a 6 constant C-value is a sort of equivalent 7 efficiency across a range of sizes. So to create 8 our actual efficiency distribution for this bin 9 average pump, we basically just have to slide 10 those stars onto a vertical line that lines up 11 with the value of the bin average flow. 12 MR. BROOKMAN: Why don't you pause there 13 and see if there are any questions at this point? 14 Chuck? 15 MR. POWERS: Yes. Kate, I'd rather go 16 through the whole thing, but I had questions on 17 previous slides. 18 MS. COUGHLIN: Okay. 19 MR. POWERS: I don't know how you want 20 to go about this. 21 MR. BROOKMAN: Well, then maybe we 22 should not go --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 142 1 MS. COUGHLIN: How far back? 2 MR. POWERS: No. I can wait until the 3 end, and we can go back. 4 MR. BROOKMAN: Okay. Then let's -- 5 MR. POWERS: It's up to you all, but I'm 6 taking notes so I can remember which slides. 7 MR. BROOKMAN: Let's proceed, then. 8 Okay. 9 MR. POWERS: You don't have them 10 numbered, but I'm trying to keep -- well, you do 11 have them. 12 MS. COUGHLIN: Okay. 13 MR. POWERS: I didn't see it. 14 MS. COUGHLIN: So, again, if you want to 15 think about -- so we start off with this list of 16 models. In each model, we have flow, head, we 17 have units shipped, we have specific speed, we 18 have a C-value defined for that from that European 19 equation. It's always the same equation. So the 20 C-value itself is a number that is defined for the 21 pump. The question of which C-value defines a 22 standard is not relevant here. We're just talking

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 143 1 about the pumps themselves. 2 So what I want to do here is I want to 3 say, well, I want to treat all the pumps in this 4 bin, which have different flows, different powers. 5 I want to treat them as equivalent to a user. So 6 I have to normalize that variability across power 7 and specific speed and so that I can say, you 8 know, if -- say the pump at the right-hand side of 9 the bin has one efficiency and the pump at the 10 left-hand side of the bin has a different 11 efficiency because they have different flows. And 12 I want to say, what if they were both at the flow 13 point of the weighted average? What would their 14 efficiencies be in that case? And I can do that 15 using the equation that defines MEI, that that 16 surface equation just says, you know, for a given 17 C-value, if you move around to a different flow 18 and specific speed, how does your efficiency 19 change? That is what that equation actually tells 20 you. 21 So I do that here. I use the equation 22 from the EU that we are also adopting. And I just

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 144 1 calculate what the efficiency would be if I moved 2 all those pump flow point, duty points over to the 3 value for my bin average. 4 So that gives me an efficiency. I 5 already know the bin average flow and all the rest 6 of it. And the one other thing I need now is the 7 pump price. And since this is no longer a real 8 pump, I can't use a real price. I use the model 9 price that Dan has developed from the engineering. 10 So now we have a situation where for a 11 given representative flow point, I have now a set 12 of efficiencies that all correspond to that fixed 13 flow point. I have a set of prices that go with 14 those efficiencies. And I can begin to do the 15 analysis, which tells me, you know, suppose I was 16 buying that lowest-efficiency pump and it got 17 kicked out of the market? What would happen? What 18 would be the next pump I would buy? What would 19 its efficiency be? 20 So back again to that. So, essentially, 21 now we're looking at the same setup of an 22 installation as a pump plus a user. But now I

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 145 1 only have -- I have 81 bins in which I have these 2 representative pumps. The data is associated with 3 the pump, and I have the data associated with the 4 user. 5 So to model various bits of the 6 economics, we include in our description of the 7 user the sector, which here is -- we have 8 commercial, industrial, municipal, and 9 agriculture. And we model the application because 10 that affects the hours of use. The sector is the 11 discount rates, cost of capital, that sort of 12 thing depend on the sector. And electricity 13 prices also depend on the sector. So that's why 14 we include those. 15 The rest of these are pretty much we are 16 taking the BEP offset, as I said, from the energy 17 use. There's a load profile. We have the 18 electricity price. We have the discount rate. We 19 have the lifetime. And then we also need to 20 weight. So what fraction of pumps are irrigation 21 pumps that are not well pumps, that sort of thing? 22 What fraction of pumps are used for pressure boost

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 146 1 in the industry? 2 So that weight calculation, I'm not sure 3 we want to go through it in a lot of detail. It's 4 fairly complicated. It's complicated, but it's 5 just accounting. It's really just taking data 6 tables and manipulating them. It's really not 7 something that a lot of people care about. 8 Essentially, we use these three data 9 sources listed on the left that I mentioned for 10 the energy use calculation. We have this motors 11 database, which gives us a sense of within each 12 power range of motors what is the distribution 13 across application and sector. We're using also 14 the ag irrigation data and the PG&E pump test 15 data. To get pump distribution by sector, we have 16 a consultant estimate. And then we're using the 17 manufacturer shipments data to distribute pumps by 18 type, flow, and power. 19 So all of this, we end up being able to 20 say, "Okay. I have specified my sector, my 21 application, my pump type, my pump speed." And I 22 can say, "That's four percent of pumps. This is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 147 1 eight percent of pumps" and that sort of thing. 2 It's, again, something that you would have to do 3 to complete the calculation. It generally doesn't 4 affect the results that strongly. 5 So a couple of additional assumptions 6 that we have made that we would like feedback on, 7 there is -- this is just a table that shows the 8 crosswalk between sector and application. We're 9 not using all applications in all sectors. So, 10 for example, we're not including irrigation in any 11 sectors except agriculture. I know there's a 12 little bit of turf management that goes on, but it 13 doesn't seem to be an important thing for the 14 overall pump population. 15 And commercial and industrial have 16 pretty much every application except irrigation. 17 And that municipal, we have only cooling water, 18 pressure boost, in this very broad category of 19 other, which is sort of loads which may or may not 20 be easily characterized. And other is really just 21 something where we have no specific load profile 22 for it. So if there is something about this table

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 148 1 that doesn't seem appropriate, then we can again 2 modify it. 3 And then the sectors, we have a variety 4 of ways of estimating sector breakdowns. So I'm 5 just going to show two of them. And, then again, 6 if there is more information that we could get? So 7 our current data estimate based on those 3 data 8 sources gives us this breakdown of 7 percent, 60 9 percent, 30 percent, and 3 percent. This is a 10 pump count, not a connected load. 11 And then our consultant estimate is 12 somewhat different. The major difference is 13 between the balance of commercial/industrial, 14 which is somewhat significant because energy 15 prices in the commercial sector are quite a bit 16 higher than industrial. So if there is some 17 additional information we could use to adjust 18 these, we can take that into account. 19 So, as I said, installation costs and 20 annualized repair and maintenance are in this 21 analysis assumed to be the same at all standard 22 levels. Since the focus of the LCC is the changes

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 149 1 that occur under an efficiency level, we're not 2 including them in the annual operating cost. Now, 3 we can include them. And if there is a reason to 4 believe they would change, we can take that into 5 account. 6 And then the lifetime, in the analysis, 7 we have the lifetime depends on two variables. So 8 we have a lifetime for the pump in total hours of 9 operation, mechanical lifetime. And then we 10 divide that by the hours per year to produce a 11 lifetime in years. And the lifetime in years is 12 what goes into the LCC analysis. 13 So, again, this seems to be a reasonable 14 assumption. And if it's not a reasonable 15 assumption, then we can modify it. 16 MR. BROOKMAN: What's the source for 17 that? 18 MS. COUGHLIN: This comes from our 19 consultant report. So I went through a little bit 20 of that, yes. So I don't know why they are much 21 lower for ESFM. They are much lower. And then we 22 also have a maximum lifetime in years that we

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 150 1 implemented in the LCC that is 25 years for most 2 pumps. 3 MR. POWERS: Alison, I can't remember. A 4 couple of meetings back, what did we end up with 5 as an average? Was it 2,250 a year is the average 6 hour? I forget. Do you remember? 7 MS. WILLIAMS: I don't remember. It 8 differed by product class. And, actually -- 9 MS. COUGHLIN: Hours per year is about 10 three to four thousand. Right? I think. 11 MS. WILLIAMS: Yes. So when I did the 12 back-of-the-envelope energy savings calculation 13 before, I had some estimated hours of use that 14 they were playing with before. 15 MR. POWERS: Okay. So, in simple terms, 16 it was 2200 a year. You are talking ten years. If 17 it was 4,000, you're talking 7 and a half years. 18 MS. COUGHLIN: Right. 19 MR. POWERS: So that's -- 20 MS. COUGHLIN: But I will show you -- 21 MR. BROOKMAN: Okay. Thanks, Chuck. 22 MS. WILLIAMS: We have a distribution.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 151 1 MS. COUGHLIN: There we go. So this is 2 actually what we end up -- so when you go through 3 the LCC and you look at the output of the LCC and 4 just take all of the lifetimes that are there and 5 do a histogram, this is what we end up with. So 6 we have a very broad distribution. It's somewhat 7 less broad for the ESFM product class, but, 8 essentially, you know, there's some -- so for a 9 10,000 sample, the ESFM has about 20 percent 10 failing after I think 5 years and very, very long 11 tails. So there's a very broad range of lifetimes 12 here. This is all very approximate and -- 13 MR. POWERS: Could you go back one 14 slide? 15 MS. COUGHLIN: Sure. 16 MR. BROOKMAN: Chuck, use the 17 microphone. 18 MR. POWERS: Sorry. 19 MR. BROOKMAN: Yes. 20 MR. POWERS: So this one shows 1,800 rpm 21 -- is that right? -- at 2,200. And two-pole is 22 almost the same, at 2,200. And then you go back

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 152 1 again. Go next slide. Sorry. 2 MS. COUGHLIN: Oh. This is -- 3 MR. POWERS: So now you're back at two4 pole here; right? 5 MS. COUGHLIN: That's right. 6 MR. BROOKMAN: Al Huber? 7 MR. HUBER: I'm a little curious or 8 several of us are curious. 9 MS. COUGHLIN: Sure. 10 MR. HUBER: Why would -- 11 MS. COUGHLIN: Where to? Which slide? 12 MR. HUBER: You've got the same number 13 of hours here, but my question was not about this 14 slide. No. 15 MS. COUGHLIN: Okay. Forward? 16 MR. HUBER: Yes. 17 MS. COUGHLIN: This one? 18 MR. HUBER: Why would you see such a 19 variation between frame-mounted and close-coupled 20 end suction? 21 MS. WILLIAMS: I think I'm going to have 22 to go back and double-check our report. Yes. I'll

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 153 1 look into that. 2 MS. COUGHLIN: So this is -- 3 MR. HUBER: That doesn't look -- 4 MS. COUGHLIN: This is the -- okay. So 5 they are very different here. Right? We've got 6 2,200 versus 1,500 roughly for the frame-mounted 7 versus close-coupled. 8 MR. HUBER: Yes. But why? 9 MS. COUGHLIN: I don't know. This is 10 from our consultant report. So -- 11 MS. WILLIAMS: Let me double-check it. 12 And I'll get back to you guys. 13 MS. COUGHLIN: Yes. 14 MS. WILLIAMS: I agree that looks a 15 little weird. 16 MS. COUGHLIN: Yes. I can't validate 17 this data. I don't have the background. 18 MR. BROOKMAN: We'll check on it. 19 MR. POWERS: Yes. And I think, again, 20 just for mechanical, anything running faster has a 21 tendency to have different issues related to life. 22 So, you know, if the number was 22.2 and 20,001,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 154 1 okay, maybe. 2 MS. COUGHLIN: Right. 3 MR. POWERS: But they're almost 4 identical. And I just have a problem with -- 5 MS. COUGHLIN: Right. 6 MR. POWERS: -- speed and -- 7 MS. COUGHLIN: I mean, this is an 8 average. And he actually gave us this breakdown 9 by quintiles. And they may be different, slightly 10 different, distributions. But yes, we'll review 11 that. And, like I said, all of these inputs are 12 really coming either from the consultant report or 13 who knows where. 14 MR. POWERS: And, Katie, I think where 15 Al is coming from, to help, just to think this 16 through -- and, again, we all have different 17 designs, but an FM unit if it's bolted and, I mean 18 -- sorry -- the close-coupled, if it's bolted 19 directly to the pump, theoretically speaking, -- 20 I'm thinking ahead -- the shaft of the motor and 21 its bearings are carrying the load; right? So to 22 say that that has longer hours, somebody could

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 155 1 say, "Okay. The L/D and the spacing and all of 2 that is shorter." You might argue that it might 3 be okay. We have to look at -- I'm trying to look 4 at it mechanically. And I'm thinking, "How is 5 this thing running? How is it set up?" Something 6 just looks fishy. That -- 7 MS. COUGHLIN: I agree with you. I 8 think this is fishy. But yes. So yes. I guess - 9 - yes. It seems a bit -- definitely, it 10 definitely needs some work. So, like I said, this 11 is the scenario, to sort of understand how the two 12 pieces fit together. But we're not -- these LCC 13 results are very, very, very provisional. 14 So are we good on the lifetimes? We can 15 move on. 16 MR. BROOKMAN: Keep going. 17 MS. COUGHLIN: So energy prices is one 18 thing where we actually -- we use AEO to project 19 energy prices forward. So this little graph here 20 just shows the year and then an electricity price 21 trend normalized to be one in 2014. And it's 22 about a 25 percent increase over the 60-year

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 156 1 period of the AEO. 2 So our analysis -- essentially, I think 3 the compliance date we're looking at is probably 4 2020 roughly, something like that. So we 5 essentially say, you know, you purchased the pump 6 in the compliance year. So that will be 2020, 7 2019, whatever. And then if the pump lasts 15 8 years, we escalate the operating cost each year 9 according to this price trend. 10 MR. HUBER: Al Huber, Patterson. What 11 number of years did you use in this for how long 12 it lasts? 13 MS. COUGHLIN: That's what this -- so we 14 have its distribution of anywhere from 3 or 4 15 years up to -- it goes, actually, up to 25 for 16 ESFM and -- no -- for ESCC and IL, our consultant 17 gave us a cutoff at about 25. And then for ESFM, 18 there's a tail that goes out to 40. This is -- 19 again, I mean, this is just a first draft. 20 So, essentially, what this is telling 21 you is that there is, you know, a few percent of 22 purchasers have a four-year, a few percent have

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 157 1 five-year, a few percent have six-year. So it's 2 the whole range is represented. 3 MR. BROOKMAN: Gary Fernstrom? 4 MR. FERNSTROM: So, Katie, this is Gary. 5 Could you go to the next slide, please? I realize 6 you are illustrating someone else's data there, 7 but I'm a little puzzled at the projected 8 reduction between the middle of this decade and 9 next decade. 10 MS. COUGHLIN: I have not dug into AEO 11 2014 enough to know why that is there. Yes, but 12

-- 13 MR. FERNSTROM: I know. And I wish I 14 had an extension cord long enough to get at some 15 of that seven and ten-cent per kilowatt hour 16 electric. 17 MS. COUGHLIN: Yes, yes. So we're using 18 national average. So, again, as I mentioned, the 19 industrial price is about 30 percent below 20 commercial. So that makes a difference for the 21 LCC. And we're currently using industrial prices 22 for municipal and agriculture.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 158 1 MR. BROOKMAN: You need that extension 2 cord all the way to Texas, I think. 3 MR. POTTS: I have a question. 4 MS. COUGHLIN: Sure. 5 MR. POTTS: On the previous slide -- 6 Doug Potts, American Water. I had a question 7 about how electric price averages are figured. 8 Does it take regional pricing and then it's just 9 an average of all of those? Is there any kind of 10 weighting to sort of -- 11 MS. COUGHLIN: Yes. 12 MR. POTTS: -- population density and 13 things like that because I, you know -- 14 MS. COUGHLIN: Actually, EIA -- so EIA, 15 the Energy Information Agency, publishes this 16 Annual Energy Outlook each year. And they collect 17 data for all of the retail sellers of electricity 18 in the country. And that data includes a 19 breakdown by sector, commercial, industrial, 20 residential, where they get sales in kilowatt 21 hours, revenues, and number of customers. And 22 then they develop these weighted average prices

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 159 1 based on that data. And that sort of gets us up 2 to 2014. And then they do this projection 3 forward, which has quite a lot of resolution in 4 terms of both spatial resolution and different 5 industries. They do a lot of very detailed 6 modeling. 7 MR. POTTS: Okay. So it sounds like 8 there's a weighting in there kind of as a function 9 of kilowatt hour density in a certain area and 10 things like that. 11 MS. COUGHLIN: I'm guessing that's what 12 they would use, yes. 13 MR. POTTS: Okay. Thanks. 14 MR. BROOKMAN: Yes, Gary? 15 MR. FERNSTROM: So this is Gary again. I 16 would just like to make the observation that we, 17 as are many utilities, are moving to time-of-use 18 smart rates, which are time and seasonally 19 differentiated. And, again, this is someone 20 else's data, but as we look toward the future, I 21 think we're going to see the preponderance of 22 time-of-use pricing increasing across the country.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 160 1 So that might encourage us to do a little more 2 sophisticated analysis with respect to when energy 3 is utilized versus what the cost might be at the 4 time of utilization. 5 MS. COUGHLIN: Yes. I think for 6 irrigation, we could include a summer premium 7 because that's mostly a summer load. And I know 8 summer prices are higher. But our assumption 9 again has been for most applications, it's not 10 going to change with season. So we have not 11 included a seasonal impact in most of the 12 applications. 13 MR. FERNSTROM: Well, outside of the 14 agricultural section, the energy use may not 15 change much by season. Certainly it would by time 16 of day. And the pricing I am just noting tends to 17 be moving toward pricing that's seasonally and 18 time-of-day differentiated. Not all utilities are 19 there yet, but the trend is in that direction. 20 MR. BROOKMAN: Okay. 21 MS. COUGHLIN: Okay. So discount rates 22 are used to determine the present value of the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 161 1 lifetime operating expenses. We use the weighted 2 average cost of capital methodology, which is -- 3 essentially, what this does is say if I have a 4 choice of spending money on a more efficient pump 5 versus buying something else that's useful to me 6 in my business, what is the potential return on 7 that alternative investment? So the weighted 8 average cost of capital combines the financial 9 cost of debt if you have to finance the purchase 10 with debt versus cost of equity. 11 And, again, these are the values that 12 come out of the analysis. They tend to be 13 relatively low for these sectors, and it's lower 14 for municipal because they have access to lower15 cost capital. 16 So this gets into now this concept of 17 the -- how the products are distributed over the 18 market. So we call this the base case efficiency 19 distribution. This represents the current 20 distribution of products by efficiency. And, 21 essentially, we try to use the LCC to sort of 22 represent not just what happens when you buy a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 162 1 more efficient pump but how many people are 2 actually not impacted at all because they already 3 bought a more efficient pump. So this is why we 4 need this base case distribution. 5 So what we have here is each product 6 class is listed in the rows. And then what these 7 represent is not so much PER-0. This is the 8 cutoff C-value for each of these PERs. So this is 9 the percentage of people that would at PER-0 be 10 between the cutoff, the minimum in the data, and 11 the cutoff between PER-0 and PER-10. So that's 12 the first bin. The next bin is the value for PER13 10 to 25. So 15 percent of people are in that bin 14 and on up. So 15 percent of the market is at PER15 85 for ESCC-1800. NO matter what we do, these 16 people will never be impacted by it. And as you 17 go down those last two columns, that represents 18 the fraction of the market that is already buying 19 things that are more efficient than -- 20 MR. BROOKMAN: Al Huber? 21 MR. HUBER: Al Huber, Patterson. I have 22 a great difficulty believing that 62 percent have

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 163 1 PER-85 for any of them. And I do not understand 2 why you would have a -- 3 MS. COUGHLIN: Yes. 4 MR. HUBER: -- difference between 3,600 5 and 1,800 -- 6 MS. COUGHLIN: Yes. 7 MR. HUBER: -- end suction. And my 8 guess is -- and I haven't consulted with my 9 colleagues, but my guess is the majority of the 10 percentage should be down to the 10, 25, and it 11 should drop as you move up. 12 MS. COUGHLIN: Yes. 13 MR. HUBER: I mean, if you look at the 14 population of pumps out there, very few are at 85 15 or above. 16 MS. WILLIAMS: So -- 17 MR. HUBER: So, therefore, I doubt that 18 we are going to have that in the population. 19 MS. COUGHLIN: This is something that we 20 would review. I think there are some data issues 21 with the unit counts in our table. So we just 22 used -- again, we took the table. We put it

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 164 1 together. This is what you get. This is a useful 2 diagnostic, I think. Yes. This tells us there 3 may be some issues with some of the unit counts. 4 And we would like to review those with you. 5 MR. POWERS: I also think, Katie, that 6 in this slide -- I'm sorry, Alison. 7 MS. WILLIAMS: I just -- 8 MR. POWERS: No. Go ahead. Go ahead. 9 I'm sorry. 10 MS. WILLIAMS: So this is from 11 manufacturer data; right? We will double-check 12 it. I did notice this when I made this slide -- 13 MS. COUGHLIN: Yes. 14 MS. WILLIAMS: -- and thought that it 15 was crazy and double-checked it. And it looked 16 okay when you average the two speeds for ESCC. 17 It's about 30 percent, which is actually what we 18 expected based on looking at the data overall in 19 the engineering analysis and that kind of thing. 20 So I'm not exactly sure why that is happening, if 21 there is some weird model. 22 MS. COUGHLIN: Yes.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 165 1 MS. WILLIAMS: But I did do some 2 preliminary checks on it. And we will certainly 3 go back to the original data and see if we can 4 figure out what is driving it. But it does seem 5 to be data from the data. 6 MR. BROOKMAN: Chuck Powers? 7 MS. COUGHLIN: Yes. 8 MR. POWERS: Yes. Sorry. So, Katie, I 9 think what you are going to do and go back and 10 look at this and see is good; right? 11 MS. COUGHLIN: Well, we're actually 12 probably going to come back to you and say -- 13 MR. POWERS: Okay. So -- 14 MS. COUGHLIN: You know, for example, so 15 there's a couple of our bins which have -- you 16 know, there's one bin in one model that has half 17 the shipments. That just doesn't seem right. So 18 we'll try to flag the data issues and then send 19 them back to you for review. 20 MR. POWERS: So some observations, just 21 -- it doesn't seem to make any sense, but, again, 22 I'm no expert until I study your data and

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 166 1 understand the formulas you got to. But, like, 2 when you go from ESCC 18 to 36, you go from 12 to 3 2; -- okay? -- just using one example. The same 4 thing for the frame-mounted, you go the other way, 5 from two to four; right, for the same speed 6 variation. I would think if one were going down 7 the old -- you know what I mean? 8 That's one observation. The second is 9 when you look at the 3,600 to 18 on the row that 10 Al talked about, which was the ESCC, I'm puzzled 11 why there's such a heavy weight on the far end of 12 over 85, the PER-85, and the others are in the 10 13 and 7; whereas, the other one is fairly equally 14 loaded. 15 MS. COUGHLIN: Yes. 16 MR. POWERS: And the reason I ask that 17 is, again, I'm speculating. A lot of the 1,800 18 rpm pumps are also the same ones that could be run 19 at 3,600; right? So you would wonder why. And 20 the efficiency is not going to change much on the 21 speed by definition because of specific speeds 22 with the designs of the pumps.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 167 1 MS. COUGHLIN: Right. 2 MR. POWERS: So you know what I mean? 3 Observation, it just seemed to be, you know, very 4

-- 5 MS. COUGHLIN: Actually, we know. 6 There's one model with -- like I said, for ESCC7 3600, one model has half the shipments according 8 to the data that we received. And we validated 9 that we transcribed it incorrectly. So we need to 10 go back now. Like I said, we're going to circle 11 back to you with these flags and ask for those to 12 get a second look. So yes. 13 So, anyway, I mean, again, for the 14 mechanics of the analysis, you can essentially 15 read off from here what fraction of the market is 16 not going to be affected by the standard. So 17 whatever this table ends up being, that's sort of 18 why it's useful. 19 MS. WALTNER: Quick clarification. So 20 this is shipment? 21 MS. COUGHLIN: These are shipment 22 weights, yes --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 168 1 MS. WALTNER: Okay. 2 MS. COUGHLIN: -- in the current market 3 data. And, again, you know, we're just assuming 4 that the data that we have is representative of 5 the market as a whole. So we don't worry about 6 extrapolating. And if we need to worry about 7 that, we can review that as well. 8 MR. BROOKMAN: That was Meg Waltner. Now 9 to Chuck. 10 MR. POWERS: And then another thing, I 11 think Dan yesterday did a nice job trying to show 12 us a lot of good data. And he showed -- I'm just 13 speculating here. I think he showed X percent of 14 pumps, Dan, that would be redesigned or removed, 15 dropped out. So if you were to just -- you know, 16 again, observation. If you were to take the first 17 line there and say the 12 percent, 13 percent, 15, 18 to 12 would be removed, going by like Dan's, then 19 that's the 40 percent or something that he was 20 coming up with, or 60, but on some of them, it may 21 not be the same. So I don't know how you weigh 22 these two.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 169 1 MS. COUGHLIN: This is shipments, not 2 models. 3 MR. POWERS: Yes, yes. 4 MS. COUGHLIN: So that they would not be 5 the same numbers. 6 MR. POWERS: Shipments on products that 7 don't pass the PER. 8 MR. WEINTRAUB: Yes. 9 MS. COUGHLIN: Right. 10 MR. WEINTRAUB: Dan Weintraub, Navigant. 11 Chuck, like she's saying, so when we are talking 12 about pumps failing, we are talking about models, 13 just a model that exists. Just because a model 14 exists doesn't mean it's selling many pumps or it 15 could sell half the pumps in the marketplace if 16 they're a killer. You just don't know. 17 MR. POWERS: But the PER time is -- 18 MR. WEINTRAUB: PER, that level, the 19 groupings are based on how many pumps fail. But 20 the shipments are independent of how many fail. 21 MS. COUGHLIN: Right. 22 MR. POWERS: It's just the way the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 170 1 market works. 2 MS. COUGHLIN: Right. PER is just a 3 number that represents, you know, a cutoff. It 4 affects where we put the bin boundaries but 5 doesn't affect the actual distribution in the 6 data. 7 MS. WILLIAMS: And I'll just kind of 8 clarify two things. One, this is -- 9 MR. BROOKMAN: Alison? 10 MS. WILLIAMS: -- a little bit different 11 distribution than what Dan showed. This is not 12 percent failing at each thing exactly. And I also 13 did want to say Dan verified the 62 percent as 14 coming from a single -- what Katie mentioned, the 15 model that has -- or a lot of it is, yes. There 16 is other pumps there, too, but a lot of this is 17 driven by one data point that we verified, came in 18 to us as that. So yes. 19 MS. COUGHLIN: So you'll be hearing from 20 us. 21 (Laughter.) 22 MS. COUGHLIN: Yes. So this is really -

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 171 1 - again, it's the shipments. It's kind of where 2 the current data set shows the actual purchases 3 taking place if you bin these things according to 4 the C-value used to calculate PER. That makes 5 sense. 6 So now we get to results. So -- 7 MR. BROOKMAN: Very preliminary results. 8 MS. COUGHLIN: Right. Example results. 9 This is a scenario -- and I'm going to talk in a 10 moment about the cost of the model because that's 11 very confusing I think. So essentially what we 12 have here is the lifecycle cost, the total 13 lifecycle cost for the sample average for each 14 product class as a function of these PER values. 15 So what is happening at each PER is we 16 are getting all of the users who were buying a 17 failing pump and giving them a new pump. And I 18 think the thing that you want to take away from 19 this is, first of all, that the change in 20 lifecycle cost is a small number compared to the 21 lifecycle cost. So we're looking at pretty 22 marginal differences here.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 172 1 So it is -- you know, in an LCC 2 analysis, if these numbers are very small, they -- 3 you know, there is a limit to how much precision 4 we have in the modeling. And so we can all kind 5 of agree that they are unlikely to be ever precise 6 enough to really drive too heavily the decision 7 process. 8 And then, the other thing that we see 9 here is that you just get a steadily increasing -- 10 well, you get a steadily decreasing lifecycle cost 11 as you go to higher PER, and I will show you in a 12 moment why that happens. 13 So on this page where I just show the 14 lifecycle cost, we have a range of values from 15 roughly $9 to $12,000. And I move here now to 16 just looking at the lifecycle cost savings, which 17 are the difference at each PER level between the 18 starting value, PER zero, and the average value at 19 that level. 20 These are the savings. So, as I was 21 saying, the savings are not very large numbers. 22 They are positive, and that's a good thing because

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 173 1 the Department likes to see positive numbers. But 2 they are very small. 3 So these numbers are mostly driven by 4 hours of operation and cost of electricity, that 5 kind of thing. These are not likely to change 6 very much. 7 These numbers, on the other hand, can 8 change quite a lot as we make revisions in the 9 analysis. 10 So what I'd like to do now with the next 11 two slides is kind of break out certain pieces of 12 the picture and try to give a more intuitive sense 13 of why things work the way they do. So first of 14 all, as I mentioned, we have this -- in addition 15 to reporting the LCC, we like to do this count of 16 how many people are affected by -- either 17 positively or negatively, by the existence of a 18 standard. 19 So this plot -- we just lumped 20 everything, the whole -- all of the samples 21 together to show all product classes. The blue 22 bars are the no-impact and the current scenario,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 174 1 which means that their pump choice is not 2 affected. And that is really just a function of 3 the fact that you're defining PER as a fraction of 4 model. So that's obviously going to go down as 5 you raise the PER. 6 And then the green bars represent the 7 proportion of consumers who get a benefit, and the 8 red at the bottom is the proportion of consumers 9 who get negatively impacted, which essentially 10 means that, you know, the hours of operation or 11 whatever are not high enough to justify the 12 increased cost. 13 In this slide, I am taking the LCC -- 14 the change in the lifecycle cost and I am breaking 15 it into the two pieces, so the change in the 16 manufacturer price and the change in operating 17 cost. And, again, these two are calculated 18 independently, and they are linked by the 19 existence of a bound on the efficiency in the 20 market. 21 But, again, the benefit side is -- you 22 know, you can think of it as the operating cost

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 175 1 savings are available to finance an improvement in 2 efficiency, if you want to look at it that way. 3 And, again, those are fairly stable because they 4 depend on things that are not part of the 5 engineering, they are not part of the 6 uncertainties about the future. 7 And then, the change in the product 8 price on the bottom is -- well, we'll get to that 9 next. It's unclear at this point whether we -- 10 you know, how our product price changes should 11 really be calculated. So I think you can -- and I 12 think this is ESCC-1800. This is the subset 13 there. 14 So this operating cost side gives you a 15 pretty reliable number of the availability of 16 funds to finance efficiency improvements of a few 17 hundred, you know, $1 to $400. That's probably a 18 pretty good range. 19 And then, the question then is, what are 20 the costs really going to be? 21 And, then, my last slide is fairly 22 complicated. So I'll walk you through it. But

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 176 1 we're trying to get here at the cost -- so we have 2 seen the value of efficiency, and now we want to 3 get at the cost of efficiency. And the -- so the 4 data here that are plotted are the model cost, the 5 model price that comes from Dan's analysis, as a 6 function of the C-value of the pump for this 7 normalized set of pumps in the bin, in a 8 particular bin. 9 And then, the markers here are designed 10 to show for each pump at what point it fails and 11 goes out of the population. So the blue boxes are 12 the pumps that are available at PER zero. This is 13 what you start with. And we have a -- we have 14 some premium associated with efficiency. So you 15 go to decreasing C-value. You have an increasing 16 price, but that tails off into -- relatively 17 insensitive to efficiency past about 125. 18 Now, it is not really clear that this is 19 representative of reality, because some of those 20 models out there don't have shipments. So they're 21 in the database as models, but if you were really 22 selling those pumps they may not actually have

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 177 1 those prices. So this is sort of a hybrid of real 2 data and speculation in some sense. 3 So when you go from PER zero to PER-10, 4 we go to the red boxes. So essentially what 5 happens is those two lowest blue boxes, at PER-10 6 those pumps are no longer available. They have 7 failed. And so they have been redesigned, and the 8 redesign point is actually at PER-45. That was 9 the decision that was made about what -- you know, 10 to represent what a pump manufacturer might do. 11 They are not going to redesign to PER-10. They 12 are going to redesign to PER-45. 13 So those two models move out to that red 14 box that is sitting at about $900, and that cost 15 there is then the base price with an increment 16 that was what Dan calculated spread out over the 17 failing models. So, again, it is a sort of 18 scenario where you take your total conversion cost 19 and you distribute it only over those products 20 that are failing. 21 So you get a price increment that puts 22 you above the current market estimate of pumps

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 178 1 that already exist at PER-10. 2 And you go to PER. So we go through 3 this, and then PER-25 is the green boxes, those 4 that come in just below I think 130, and a couple 5 more pumps disappear and move up to the green box 6 at about 900. You go down like that. 7 So as you go to higher PER values, you 8 are creating these new redesigned pumps, which 9 then have to compete with the existing pumps in 10 the database. And I have picked an example where 11 there are -- there is a clear distinction between 12 the two, but in some cases, you know, if you look 13 -- this is just one representative unit. If you 14 look at the -- there are cases where those 15 redesigned costs are actually closer to the 16 current estimated market price. 17 So this curve is a hybrid of what might 18 be happening now and what might happen in the 19 future, and that is kind of the challenge with the 20 engineering is to -- you know, for the purposes of 21 doing the analysis, you need to create a picture 22 of what is the potential market value of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 179 1 efficiency that balances both the cost of getting 2 those products in the market and the willingness 3 to pay on the side of the consumer. 4 And so we understand that there are 5 problems with the way that we have set it up, and 6 I think we will be iterating to try and produce a 7 curve that represents this sort of amalgamation of 8 the present and the potential future that gives an 9 appropriate premium associated with efficiency. 10 And that is essentially what is going to drive the 11 LCC. 12 But going back here, again, we have a 13 good sense of what the value is associated with 14 efficiency. So we know that as long as the cost 15 comes in under those blue bars we are going to get 16 positive LCC savings. So it is -- generally, you 17 know, it is not a burden on the user population. 18 So even if the cost side is very 19 uncertain, we can sort of characterize the value 20 side, and that gives you a sense of, you know, 21 where -- what kind of target you need to try to 22 hit for the costs, and hopefully will enable the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 180 1 discussion to proceed in a constructive way. 2 So I guess that's it, and now it's time 3 for questions. 4 MR. BROOKMAN: Noting that this is meant 5 to be an overview and we are going to be returning 6 to both the construct and more detailed analysis, 7 so perhaps we can keep these questions at 8 something of a high level, questions and comments 9 here, because I am eager also to get to Dan as 10 well. Yes, Charlie? 11 MR. CAPPELLINO: Charlie Cappellino. So 12 I presume this is a question for Dan, that the 13 analysis here includes the assumption of the 30- 14 year amortization and the, what was it, 60 percent 15 dropout rate. And as that gets refined, it would 16 be rolled back in and -- 17 MS. COUGHLIN: Yes. 18 MR. CAPPELLINO: -- recalculated as you 19 better understand -- 20 MR. WEINTRAUB: This is Dan. 21 MR. CAPPELLINO: -- our input from 22 yesterday and today?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 181 1 MR. WEINTRAUB: Yes. The numbers that 2 you gave me, Alison, or the numbers that I gave 3 you, that's what in -- the numbers that were put 4 into that model were similar to what we presented, 5 but they were the previous iteration. So they're 6 not fully up to date because we didn't have time 7 to circle back. But, yes, they are -- when we 8 looked at the markups that we were going to apply 9 to these pumps, they were based off of those 10 conversion costs and then we came up with how much 11 would need to be amortized each year. 12 MR. BROOKMAN: Let's go to Alison. 13 MS. WILLIAMS: Yes. I just want to add, 14 the percent dropped that Dan is estimating in his 15 engineering, we don't do that in the LCC. We are 16 redesigning everything, but some of them don't get 17 sold in the LCC because of the product choice 18 model. So that -- like he is dropping a certain 19 number of models. We don't really know which ones 20 they are. So we can't drop them in the LCC 21 explicitly. 22 But they're implicitly -- there is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 182 1 models implicitly dropped because the price is so 2 high that no one purchases them. It is a sort of 3 nuanced discussion, but the simple answer is that, 4 yes, we are currently using 30-year amortization 5 with a 10 percent discount rate. Any changes to 6 the engineering analysis will be reflected in 7 this. 8 MR. CAPPELLINO: This is Charlie again. 9 So that would change the brown bars on the bottom 10 as far as the costs. 11 MS. WILLIAMS: Yes. 12 MR. CAPPELLINO: The blue bars on the 13 top would basically remain the same. 14 MS. WILLIAMS: Unless we make other 15 changes to those. 16 MS. COUGHLIN: The blue bars on the top 17 are affected by one thing, which is, again, we are 18 choosing the cheapest pump with some randomness. 19 And if the cheapest pump -- if there is a very 20 efficient cheap pump available, then you are going 21 to buy that one and get more energy savings. 22 So if we modify that choice criteria,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 183 1 you might decrease the bars on the top somewhat. 2 MR. CAPPELLINO: All right. Thank you. 3 MR. POWERS: I have a question, too, or 4 just -- 5 MR. BROOKMAN: Chuck? 6 MR. POWERS: -- an observation. I 7 think, you know, Dan, in your 30-year deal, is 8 Wall Street two years' payback or shorter? You've 9 got a long way to go? Thirty years isn't going to 10 cut it? Twenty years isn't going to cut it? Ten 11 years isn't going to cut it? I'm just saying from 12 a mathematical -- from the practice, it would be 13 good to see what is a two-year show. 14 MR. WEINTRAUB: So I think -- 15 MR. POWERS: I know you don't like that, 16 Alison, but that's the world we're in; right? 17 MR. WEINTRAUB: This is Dan Weintraub. 18 So I think what Katie is trying to get at is that 19 we have to get away from the idea of what's the 20 payback to that, because you can look at on your - 21 - on the INPV to the industry we can look at how 22 you guys are going to fare with what you could

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 184 1 actually get in the market. 2 What Katie is trying to get at is that 3 she needs to come up with a hybrid of what's the 4 value of the efficiency in the marketplace, and 5 what could those pumps be valued at? What could 6 that price be for you to sell it at? And then 7 Chris is going to run scenarios of what are 8 different markup schemes that could possibly 9 happen. 10 MR. POWERS: That's okay. 11 MR. WEINTRAUB: And you'll be able to 12 bound how the industry will make their money back 13 or not make their money back over the timeframe 14 depending on what the market will bear. 15 MR. POWERS: Well, I just think we need 16 to get a little more financial reality of what the 17 world is seeing and not what we want to see; 18 right? And I think when you look at the MSP you 19 might want to look at status quo. 20 And I agree with the concept of trying 21 to get -- you know, more efficiency might mean 22 more dollars, but it really may not be; right?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 185 1 MS. COUGHLIN: Right. Well, this is 2 actually status quo in the sense that, you know, 3 all of those -- so those blue boxes that go all 4 the way out, they are currently in the market with 5 apparently no price premium associated with 6 efficiency. There is one thing, though, that is 7 speculative, which is they don't -- a lot of those 8 are models that don't have shipments. So we don't 9 know if people really were selling them if they 10 would sell at that price, nor do we know that if 11 there was a general premium -- I mean, currently 12 there is no premium associated with efficiency. 13 But if there was, which there will be once the 14 standard passes, people will be thinking about it. 15 Then -- 16 MR. POWERS: You're saying that, but I 17 don't think very many people agree there would be 18 a premium for the efficiency. 19 MS. COUGHLIN: If not -- so I want to 20 make it very clear that if there is no premium 21 associated with efficiency, then the standard 22 level -- the LCCs just go as high as you can go,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 186 1 because there is no cost and there is a benefit. 2 Now, we all understand that there is 3 issues with that, but for the LCC, if you change 4 the 30 years to 5 years, you're going to take 5 those points that are above and lift them even 6 further up. So it's not going to help this issue 7 that much. 8 So, you know, we can do it, but I think 9 -- I think it's more a matter of understanding how 10 these individual pieces are going to fit together 11 in the final decision. 12 MR. BROOKMAN: Tom Eckman? 13 MR. ECKMAN: Yes. Gary and I were 14 talking here, and this is really a question for 15 the -- Greg left, but the rest of the pump 16 engineers in the world. I mean, what this 17 phenomenon looks like is the time and energy it 18 takes to design a better -- a more efficient pump 19 looks -- you know, you are amortizing it across -- 20 regardless of the efficiency. 21 It doesn't look like there's a premium 22 and you -- you can't get it in the market. But

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 187 1 the amount of time it takes to design a better 2 pump, whether it's a 2 percent increment or a 4 3 percent increment, whether you did a 40 or a 70, 4 is the time basically to redesign a pump pretty 5 much the same; right? And -- yes. I'm just 6 talking about the engineering time. 7 MR. HUBER: Let's be clear here. 8 MR. BROOKMAN: Al Huber? 9 MR. HUBER: Let's be very clear. What 10 we need to talk about is cost, not just the 11 design. 12 MR. ECKMAN: No, no, no. I'm just -- I 13 want to get the two pieces. I think the 14 engineering time is the same. I'm not saying -- 15 MR. HUBER: No. 16 MR. ECKMAN: -- the material cost -- no, 17 okay. 18 MR. HUBER: No. The engineering time is 19 not the same. 20 MR. ECKMAN: Okay. 21 MR. HUBER: Because he is going to have 22 to -- he is going to have to do iteration after

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 188 1 iteration after iteration in order to be able to 2 get there. 3 MR. ECKMAN: To get to the higher level. 4 MR. HUBER: Yes, sir. 5 MR. ECKMAN: Okay. 6 MR. BROOKMAN: Gary Fernstrom? 7 MR. FERNSTROM: This is Gary. In the 8 presentation yesterday, I think Dan talked about 9 that a little bit. You know, he showed in some 10 cases a higher cost of materials if you went to 11 investment casting. But he showed some 12 improvement that could be realized just as a 13 result of redesign as well. 14 So I think it's important we look about 15 how these costs stack up, because it's looking to 16 me like it's probably more cost effective, for 17 lack of a better term, if we are going to make 18 changes here to try and go for a higher level of 19 improvement than a modest improvement. I mean, 20 that's the takeaway that I am seeing at the 21 moment. 22 MR. BROOKMAN: Al Huber?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 189 1 MR. HUBER: I'm very curious, and this 2 is more of a question for the DOE people. Is the 3 major consideration of whether you set a standard, 4 is it more important for the consumer to be helped 5 or is it equally based that the manufacturer is 6 hurt? Are they equally weighted? Because I can 7 tell you, just looking, before you answer it, 8 Lucas, looking at what we saw yesterday, if you 9 were in a business you would scrap this project, 10 because the cost to what you are going to gain is 11 -- for the manufacturer is terrible. I mean, it's 12 just absolutely awful. 13 MR. POWERS: And I think to support this 14 -- and I don't know, Katie, how we do it, right, 15 in your analysis, which you've done a good job 16 with it, I just think the basic of the 17 information, like let's say no price increase, 18 whatever. But there is another envelope here that 19 we've got to be very careful about. 20 We are opening up Pandora's box for 21 competition from offshore. What stops -- just 22 think about this -- if in the U.S. -- and I'll

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 190 1 just pick a number -- $150 an hour for an 2 engineer. Just picking a number. It's more than 3 that; right? And a guy in India that I know we 4 pay $23 an hour. 5 So that manufacturer in India says, "Oh. 6 I'm going to start from scratch. I can do this. 7 And I'm going to meet this PER-40, PER-55," right? 8 His costs are going to be a lot less to get this 9 going. He may already have some products that are 10 there, newer designs, and he enters the U.S. 11 market with this EnergyStar emblem or 12 whatever we end up doing. And then, you know, 13 like Gary says and all the rest, now the price 14 increase issue is out the door. 15 He is all about volume and everything. 16 His costs are a totally different ballgame than 17 ours, and there will be no price increase of 18 efficiency; right? Because that contractor out 19 there is -- 20 MS. COUGHLIN: Yes. 21 MR. POWERS: -- going to say, "Oh. I 22 can buy this product, which is -- meets all of the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 191 1 standards and all of the requirements and 2 designs." And guess where we're getting a lot of 3 our castings. The same foundry he is getting them 4 from; right? Not in the U.S., overseas; right? So 5 you can't qualify, you know, standard of product 6 and all of that -- and things. 7 So all of a sudden the contractor says, 8 "Geez, I've got a price for a dollar, and I've got 9 a price for $10 from these other two guys," for 10 the exact same product meeting those standards. 11 Where is he going to buy it? 12 MR. BROOKMAN: That was Chuck. Now 13 Gary. 14 MR. FERNSTROM: This is Gary. So -- 15 MR. BROOKMAN: And then after Gary, I 16 want to take final questions and comments for 17 Katie. Go ahead, Gary. 18 MR. FERNSTROM: Okay. So I'm going to 19 be quick, Chuck. In every one of these standards 20 improvement processes, we hear your point of view 21 that there is some industry impact. In fact, the 22 fellow from NEMA yesterday said there wasn't any

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 192 1 rulemaking that didn't result in a loss of jobs. 2 The way I rationalize it is, 3 unfortunately, American industry is subject to 4 international competition. And incrementally 5 these rules bring some energy savings benefit, and 6 I don't think proportionately damage jobs as much 7 as the reality of international competition 8 anyway. That's just my point of view. 9 MR. POWERS: Where's the motor 10 manufacturers today? Name some in the U.S. 11 MR. FERNSTROM: The same story. I mean, 12 look at the refrigerator -- 13 MR. POWERS: Twenty of them are gone in 14 the last 10 years. Twenty. 15 MR. FERNSTROM: Yes. And look at the 16 refrigerator manufacturers, you know, versus 17 foreign competition, but -- 18 MR. POWERS: Nobody wants to admit it, 19 but it's happening. 20 MR. FERNSTROM: It is happening, sadly, 21 and I don't think it's the result of increasing 22 standards.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 193 1 MR. POWERS: Oh, really? 2 MR. FERNSTROM: No. I think these 3 things would happen anyway. 4 MR. BROOKMAN: Okay. So let's take 5 additional and perhaps final -- 6 MS. COUGHLIN: Actually, I'd like to 7 respond because, again, I want to clarify that 8 these are analyses for informational purposes. And 9 it is not so much about capturing future market 10 prices as about understanding, like I was trying 11 to say, the value versus -- an actual cost, if we 12 can find a way to get the actual cost to the 13 domestic industry into this curve, we can do that 14 balancing. 15 Now, if those actual costs are not the 16 ones that are realized in a future market, that's 17 a separate issue. It will be considered in a 18 separate kind of discussion. So, really, we are 19 just trying to get information about, you know, if 20 you could somehow mix -- pick previous decision -- 21 you know, it's a bit of an exercise in 22 imagination.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 194 1 But if you can sort of say, "Look, if we 2 had the ability to slowly meet this transition to 3 a market where there is a premium associated with 4 efficiency, what would we have to -- how would we 5 have to stratify our product prices?" And if 6 that's really not possible, then that's something 7 that we take into account. But for the LCC, it's 8 just -- you know, there's a convention about how 9 it's done, and this is how it's done. So -- 10 MR. BROOKMAN: Al Huber? 11 MR. HUBER: I'm still waiting on an 12 answer to my question, but I also -- you know, I 13 also want to comment. Your own data shows that we 14 are not getting price for efficiency. Correct? 15 Your own data. 16 MS. COUGHLIN: I consider it to be 17 somewhat ambiguous. Like I said, some of those 18 points there -- 19 MR. HUBER: Ambiguous? 20 MS. COUGHLIN: -- do not have shipments. 21 So I don't know what the price would really be if 22 they were being manufactured and sold.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 195 1 MR. HUBER: Well, it depends. You're 2 only sampling -- I don't know how many we have. We 3 did 21 manufacturers, although they're the major 4 portion of the market for sure. But there are 508 5 pump manufacturers in this country, and probably 6 we're going to end up with -- if it gets real 7 onerous, you're probably going to end up with 10 8 maybe. 9 And if you think that won't impact jobs, 10 and that that's not important, nobody is going to 11 be using the power you're saving anyway. Do you 12 understand? If there are no jobs, who is working 13 and who is going to pay the taxes and who is going 14 to support all of these programs that you are so 15 fond of? You need to think about that. There are 16 a lot of jobs at stake here. And he is not 17 kidding; these people right now can go and 18 engineer this offshore and come in here, as long 19 as they meet the standards, and there is nothing 20 we can do about it. 21 MR. POWERS: And the reason I say that 22 is there are several companies, like ourselves,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 196 1 Al's, and the others, we go to these places. In 2 order to compete in India, we have to make it in 3 India; right? There are some specialty products - 4 - don't get me wrong, some of the nuclear, some of 5 the geothermals, there is stuff that, you know, 6 there is technologies here that were the first in 7 the hunt; right? 8 But so we are in there, and we are 9 living it and we are seeing it. But we are also 10 seeing that local competitor there who on a 11 moment's notice can flip and come this way; right? 12 It can be a two-way street. So the issue here 13 that Gary is bringing up is right. We need to 14 raise the bar. We need to continue to improve -- 15 no argument. There -- needs improvement on 16 technology. No argument. 17 But how do we balance that so that we 18 try to look at -- what you're doing, Katie, is 19 excellent. How can we try to push things to gain 20 more if we could; right? And our people would be 21 very keen on that as time goes, right, over the 22 next five years and all. But at the same time,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 197 1 how can we minimize the loss of jobs and/or the 2 balance of the industries and everything that goes 3 with it, you know? 4 I agree. I just -- we've got to be 5 careful that we don't overstate this. And 30 6 years was -- I'm not picking on Dan, but that was 7 way off. 8 MR. BROOKMAN: Lucas? 9 MR. ADIN: I'll see if I can try and 10 address Al's question. Unfortunately, there's no 11 definitive way that I can tell you this one factor 12 matters more than another. It really -- there are 13 seven factors that we have to consider in 14 evaluating which standard level is justifiable in 15 a particular case. And in every standards 16 rulemaking we do, those have different 17 considerations. 18 This one will be different from a 19 refrigerators rule, which is different from a 20 motors rule, different from a lighting rule. I 21 mean, we are seeing some of the results of the 22 analysis that helps us figure out what makes

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 198 1 sense, but -- and, you know, in this case it is 2 not even just -- like we've said from the 3 beginning, I'm just one vote. I mean, everyone 4 around this table has a say in how this will work. 5 We all have to vote on it based on how 6 we feel about these different things. So, I mean, 7 I think we all came into this with the 8 understanding that, you know, we would look at 9 what the data looked at, looked like, and, you 10 know, decide for our own -- for our own purposes 11 in this negotiation what we thought was 12 reasonable. 13 So it certainly sounds like there are 14 some parts of this that the manufacturers would be 15 most concerned about. That makes perfect sense. 16 And, you know, I'm sure you must have a sense, 17 once we get into what the actual standard levels 18 might be, what you'd reasonably be able to 19 tolerate. And so you'll be -- I assume you'll be 20 voting on that basis and, you know, we'll refine 21 the analysis to help us understand what the 22 impacts would look like, but --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 199 1 MR. BROOKMAN: Tom Eckman? 2 MR. ECKMAN: Yes. I want to restate 3 there are -- as Lucas said, there are seven 4 factors here. Each one of them get weighed 5 differentially in each rulemaking. And having 6 been involved in multiple of these, I can tell you 7 there is no thumb on the scale for any one of 8 them. Each time it's a different consideration. 9 Sometimes it's the manufacturing impact that 10 drives it; sometimes it's the consumer impact. 11 So, I mean, that -- and I think I at 12 least came to this table wanting to weigh those 13 equally and find out the information that, you 14 know, as it unfolds we'll see what the 15 manufacturing benefits and costs are and the 16 consumer benefits and costs. I think that's, to 17 me, an important factor. And we will weigh those 18 and reach some conclusion. 19 I certainly don't think we have the data 20 yet to even begin to think about where they are on 21 the scale, because you guys have concerns, we have 22 concerns about -- this is an example. It's not an

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 200 1 endpoint. So I hope we're open to that. 2 And to Chuck, I clearly see the offshore 3 -- we've seen it in every rulemaking, and we've 4 seen it independent of rulemaking. And my 5 cautionary note in my own mind is, independent of 6 whether we have a rulemaking or not, those folks 7 in India are ready to come over shore -- onshore 8 independent of this. So it -- 9 MR. POWERS: In China and all, but the 10 difference is, are we speeding it up? 11 MR. ECKMAN: And that we have to weigh. 12 MR. POWERS: Are we speeding it up? 13 MR. ECKMAN: That we have to weigh. 14 MR. POWERS: And are we putting any kind 15 of a -- any kind of a challenge on it -- and 16 another example I'll give, where is the regulatory 17 here? Example; right? Let's say we love this, we 18 do it, and we're going to do it, and it's all 19 good, and we're all happy; right? He tests his 20 pump and he says, "I've got the star and I'm 21 putting it on it." Who is going to go over there 22 and verify what he tests is right?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 201 1 You want me to take 2,000 pumps that 2 come in offshore, different kinds of pumps, and 3 test every one of them to verify and give you guys 4 a report? I'll do as many as I can. I can't do 5 2,000 of them. And I won't be able to check every 6 one of them. And once the contractor already has 7 it onsite -- and don't get me wrong. I mean, 8 these are all things we've got to look at it. This 9 is the real world; right? This is the game we're 10 playing; right? 11 And I'll say one last thing and I'll let 12 it go. Pump manufacturers are losing jobs in this 13 deal -- however big, however small. How many 14 other people at this table and their constituents 15 are losing jobs because of this? 16 MR. BROOKMAN: Thank you, Chuck. 17 Alison? 18 MS. WILLIAMS: Yes. So I just wanted to 19 say, I mean, I see all your points, and I think as 20 Tom said and Lucas said, this is what you guys are 21 going to negotiate on things like that. These 22 aren't necessarily super specific to this

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 202 1 analysis, and I am wondering if before you guys 2 get into that kind of negotiation with those 3 thoughts, if we could just return to whether you 4 have any other concerns or things you'd like us to 5 update in the analyses to help us, you know, give 6 you better data moving forward or if -- I mean, if 7 you don't have any other feedback, that's fine. 8 But I just wanted to sort of return to that if we 9 could, while Katie is up there and -- 10 MR. POWERS: If we can get copies of 11 these things, I don't think we have this one -- 12 MS. COUGHLIN: No. I don't think you 13 got it. So -- 14 MR. POWERS: If we get these things, I'm 15 sure we'll love to respond to them, as logically 16 as we possibly can, you know, slide by slide, 17 like, Katie, look at this, that doesn't make 18 sense, like we did on the one; right? Those kind 19 of dialogues would be very good, but I don't have 20 this to comment on. So it's not -- 21 MS. WILLIAMS: Okay. So we can send out 22 the slides and just -- on a timeline sort of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 203 1 thing. We are supposed to do the webinar on May 2 14th. So is that like two weeks from now or 3 something? So if within the next week maybe you 4 guys can provide feedback on those things, that 5 would be fantastic? 6 I did just get the lifetime double7 checked. I think we do have an error on ESFM, 8 because it's not accounting for enough repair 9 cycles. So we will follow up on that. 10 MR. BROOKMAN: As a process note -- and 11 Lucas is next in the queue -- I was thinking that 12 the webinar on May 14th was going to deal with 13 metrics first, and then I thought it was going to 14 be the engineering analysis that Dan was doing 15 primarily. Maybe I got that wrong. 16 MS. WILLIAMS: Yes. So, I mean, from 17 our perspective -- 18 MR. BROOKMAN: So I'm wondering whether 19 we could fit LCC in there. 20 MS. WILLIAMS: You know, the engineering 21 and LCC, we'll try to send out results before the 22 webinar, and maybe it can be a little bit more

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 204 1 about follow-up questions, because the methodology 2 is not really going to change for either of ours, 3 just some of the assumptions will be. So I don't 4 think we will need to present extensively on what 5 happened. Maybe we can just point out the key 6 inputs that we change; then show the new results. 7 And I don't think that would be super time8 consuming. 9 MR. BROOKMAN: Okay. Okay. Lucas, do 10 you want to add in here? 11 MR. ADIN: I don't think I have anything 12 else significant to add. Just maybe to emphasize, 13 and maybe this isn't something that necessarily 14 needs to be specifically pointed out. But the 15 order in which we are presenting all of these 16 analyses has nothing to do with the priority that 17 we place upon them, how importantly we view any 18 one of them. 19 It's just this is the order we normally 20 do the analysis. So we're not saying, "Well, you 21 know, look at how this one turned out. Clearly, 22 this justifies something at a particular level."

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 205 1 We're not making any statements about that. This 2 is just the order we do it. As Katie pointed out, 3 it's informational and there is still more to come 4 that will, you know, potentially say different 5 things about what level might be justified. 6 MR. BROOKMAN: So on May 14th, 7 additional inputs/revisions on the engineering 8 analysis and the LCC for that conference call or 9 webinar. 10 Katie, did you have any additional 11 questions? 12 MS. COUGHLIN: I was just going to say 13 that we may actually send out questions for you. 14 So if we track down some inconsistencies in the 15 data, then we will send that out so that we can be 16 more efficient. 17 MR. BROOKMAN: I think that's very good. 18 I think that's excellent. 19 Dan first. 20 MR. DELANEY: Thank you, Katie. This is 21 -- this was very good. 22 You know, listening to the full day

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 206 1 yesterday with the pump team making their points, 2 and then looking at this data, to me it's just 3 validation of the points you guys were making as I 4 look through these. 5 I kind of understand Katie's point now 6 of unambiguous or ambiguous of what the data is, 7 because things could be drawn both ways against 8 the line, which seem, you know, crazy as you look 9 across essentially saying, you know, for the most 10 part across the PR levels. You know, very, very 11 low lifecycle cost payback -- well, I shouldn't 12 say payback, lifecycle cost as well as across all 13 of those. 14 I guess what I'm disappointed not being 15 able to see -- and maybe there is more to come -- 16 is the PERVL; right? This is all PERCL, if you 17 will, that we are discussing. It doesn't sound 18 like we're going to get a chance to see the VL. Is 19 that true or not? We're not going to do an LCC of 20 that concept? 21 MS. COUGHLIN: It's not part of the rule 22 because we're not considering variable load

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 207 1 matching as a design option. We could at some 2 point do a scenario analysis showing, you know, 3 what happens when you switch a variable load from 4 a throttle to a drive. Again, that would be 5 information, and we can do that. It's going to 6 require a lot of back and forth to get the details 7 of the drive efficiency and the matching of the 8 pumps to loads to motors, all that stuff. 9 So it's certainly possible to do that, 10 but because, you know, strictly speaking this -- 11 once we make our decision here, all of this flows 12 on through to the various other people that review 13 these analyses. The variable load is not -- not 14 being a design option, there is not really any 15 point in doing it here. 16 MR. DELANEY: Yes. I guess -- again, 17 Dan Delaney from Regal. I guess my point would be 18 is that this keeps putting out the pump as the 19 main driver. We're looking at more and more of a 20 flat efficiency across those points and showing 21 more of a savings, obviously, that can be gained 22 from a system approach and how that can be

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 208 1 justified from an LCC perspective, you know. 2 It would be nice to have at least a data 3 point or an example, and I'll assume that when we 4 talked about -- when we captured some of those 5 items, we talked about that example. It would be 6 great to be able to run through some of these, 7 just to show those as a base point. So -- 8 MR. BROOKMAN: Dan, this is the first 9 meeting you've attended. And in previous meetings 10 we have covered that ground multiple times. 11 MR. DELANEY: Yes. Absolutely. 12 MR. BROOKMAN: Multiple times. 13 MR. DELANEY: Yes. 14 MR. BROOKMAN: Mark Handzel, do you want 15 to add in? 16 MR. HANDZEL: Well, no, I -- that's 17 exactly -- you know, Dan, we've been pointing out 18 to DOE for over two-plus years that the savings 19 was not in the pump efficiency; it was in the 20 overall -- what we call the extended product 21 approach. So, I mean, you know -- 22 MR. POWERS: It was a very small

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 209 1 percentage of -- 2 MR. HANDZEL: Yes. Right. So, I mean, 3 that has been out point, that, okay, you can pick 4 on the pump, but really, if you want to be serious 5 about this, you've got to look at the extended 6 product. 7 MR. DELANEY: Yes. I guess -- Dan 8 Delaney from Regal again. Just it's nice to see 9 the LCC prove that. That's my only comment. It 10 seems to validate your points. 11 MR. BROOKMAN: Yes. 12 MR. DELANEY: I could see it being put 13 the other way. 14 MR. BROOKMAN: Gary Fernstrom? 15 MR. FERNSTROM: This is Gary. I want to 16 go back to employment one quick moment. You know, 17 not surprisingly, we are the energy efficiency 18 advocates, and we may tend to downplay the 19 industry impact and overemphasize the energy 20 savings importance. But in every one of these 21 rulemakings I have been involved in, DOE has been 22 very, very sensitive to the industry impact.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 210 1 In fact, in the transformer rulemaking, 2 the energy efficiency advocacy group walked away 3 very disappointed because it appeared to us like 4 the decision was very heavily weighted toward the 5 industry impact and not the energy saving 6 opportunity. So I would say to you that's yet to 7 be determined. And I think you'll find a fair 8 compromise come out of this. 9 MR. BROOKMAN: I want to shift gears 10 now. We returned from lunch almost at 1:00, when 11 we started. So we're just going to keep going 12 until 3:00, which is our end time today. 13 Dan, are you prepared to come up here 14 and this, as I understand it, Dan was presenting 15 on engineering analysis. He raised a bunch of 16 issues and flagged a bunch of assumptions 17 yesterday. And members requested that we review 18 some of that so that you could further comment, 19 and that's what we're going to do right now. Okay. 20 MR. WEINTRAUB: It looks like a few 21 people are taking a bathroom break. We should 22 probably --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 211 1 MR. BROOKMAN: Let's take a five-minute 2 break. 3 (Off the record.) 4 (On the record.) 5 MR. BROOKMAN: Okay. Let's resume. 6 Okay. Let's start back up. 7 Dan Weintraub you'll note is at the 8 podium. And I have asked Dan if he could somehow 9 return to the issues yesterday that seemed -- the 10 assumptions and issues that seemed to elicit the 11 greatest response. So I've asked him to start 12 there or wherever he thinks is appropriate. 13 MR. WEINTRAUB: Okay. Thanks, Doug. 14 Yes. So I went through the slides last 15 night and through the notes and put together 16 everything that I had noted people had significant 17 issues with and wanted to discuss. Some might be 18 moot at this point, but we'll go through them. And 19 if anyone has anything else to add as we're going 20 through, let's definitely go through it. 21 The goal here is to nail down these 22 inputs. So when we come back to it with updates,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 212 1 we are not talking about assumptions. We are just 2 talking about the changes in the data. We roll it 3 into the analysis. 4 MR. BROOKMAN: Which will be on May 5 14th. 6 MR. WEINTRAUB: Exactly. Exactly. Okay. 7 So the number one assumption that was up for 8 discussion, which we should talk about first, 9 probably the biggest, was percent of pumps 10 dropped. So for everyone in the room, in the 11 beginning period when we had some time I spoke 12 with the manufacturers and we talked about percent 13 of pumps dropped. 14 And I'll say up front I think we were a 15 little broad in our generalizations of the 16 industry when we were looking at pumps dropped. I 17 looked back at our data. And we talked it over. I 18 had some ideas where it would be; they had some 19 ideas where it would be. 20 What we came to agree upon, myself and 21 the manufacturers, talking about the data, would 22 be 25 percent of pumps are dropped at the low PER

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 213 1 level. Ten. And then at 40, going down 15. Now, 2 I actually have numbers to back this up, as I went 3 back into the data, and I am going to walk you 4 guys through just a quick set of numbers that help 5 make sense of this and how we were overestimating 6 it earlier. 7 Okay. Let me zoom in here. 8 MR. POWERS: Dan, will you be able to 9 send us that previous slide? 10 MR. WEINTRAUB: Yes. Yes. All these 11 slides. 12 Okay. So, for reference, the number of 13 pumps we had in our database -- 972. This is end 14 suction pumps, number of pumps we had, total 15 models that we have been using all throughout, 16 2,050. 17 So we had a select set of manufacturers 18 who talked to us about exactly how much pumps they 19 were going to drop. We know. We can count up 20 those pumps that were going to be dropped. We 21 also had a select -- we also had a set of 22 manufacturers that we spoke to that didn't tell us

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 214 1 anything about what they would drop, and then we 2 had a whole half of the industry that we didn't 3 talk to, you know, we got nothing on. 4 We took what we found from the people 5 who talked to us, applied it to the people we 6 didn't talk to, and then applied it to the 7 industry or -- sorry. So we extrapolated that 8 way. That overestimated our estimates. 9 If you look at -- we'll use PER-10, 10 number of pumps failing in the database, 97. So 11 we'll say industry models failing, 205. We knew 12 from everything 34 of those would be dropped, just 13 manufacturers telling us. That's 66 percent. We 14 kind of applied that out to everything. 15 Well, in reality, talking with the 16 manufacturers, the ones who didn't tell us 17 anything is because they are not planning on 18 really dropping many pumps. And the general 19 consensus was zero to 10 percent for a general 20 manufacturer in the industry who didn't have any 21 other reason, such as a large conglomerate 22 industry, to not drop pumps and bring in other

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 215 1 models. 2 So if you say 10 percent from the 3 remaining models that have failed are the ones 4 that drop, you get 15 models drop of all the rest 5 of the pumps, aside from the people we talked to. 6 So you have 34 pumps being dropped and 15 pumps 7 being dropped, and it ends up being 24 percent 8 when you work these numbers. 9 Similarly, going down the line, assuming 10 that less pumps are dropped as you go further out, 11 just like we had learned from the other 12 manufacturers, going down to I think five percent 13 of the pumps are dropped from the manufacturers 14 that we have not spoken to because they weren't 15 planning on really dropping many. 16 You put those numbers together and it 17 scales down to 16 and then out to 15. So we are 18 proposing modeling 25, linearly going down to 15 19 at 40, and then 15 out, based on our discussions. 20 And I think the manufacturers are in agreement 21 this is for the advocates to evaluate this. Any 22 objections? No?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 216 1 MR. BROOKMAN: And I think it's worth 2 noting again these new data -- that is based on a 3 consultation with members of the Committee. 4 MR. WEINTRAUB: Of the manufacturing 5 caucus, yes. 6 MR. BROOKMAN: Okay. Chuck? 7 MR. POWERS: Yes. And I think what's 8 good about what Dan did is a couple of us -- I 9 know Charlie and myself both said it would be 10 somewhere between zero and 10 based on the model 11 and all. But we also, you know, just to 12 reemphasize there are customers that require a 13 pump to do a certain type of application service 14 that may not meet PER, may not meet the standard. 15 So whether they say, "Look, Chuck, we 16 need a really low NPSH, and when you open that eye 17 up, you impact efficiency." There's applications 18 that require special -- they might say, "We need a 19 cut" -- I mean, "we need a velocity coming out of 20 discharge. We need you to neck it down because we 21 have some kind of pickling system or something we 22 have to go to."

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 217 1 So some of those pumps -- and they're -- 2 by the way, they're made by the thousands. They're 3 designed one time and they're done. They may not 4 make this. We're not going to delete those. What 5 we are going to do is find a way to try to improve 6 upon them a little bit better and, you know, as 7 best as possible. But there is customers that 8 will say, "Look, we need that for a specific 9 service and the way it's used." 10 So, you know, I'm just saying even 11 though there is a dropping concept or failing, 12 right, whether we're really dropping it or not is 13 another story. We may just say, "Look, we're 14 going to have to" -- and I guess that begs the 15 question, you know, like any standards that come 16 out, Lucas, will there be some type of a format or 17 something that will say, "Look, this is a 18 specialized service for a specific application. It 19 gets a waiver or something." I don't know if that 20 will come out of this ruling or not. 21 You know, there might be a reason we are 22 going to have that. I don't know. But it may be

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 218 1 prudent; right? 2 MR. BROOKMAN: Lucas? 3 MR. ADIN: Well, so, I mean, that 4 question was partly addressed at the very 5 beginning when we decided scope and the 6 definitions for the pumps that we're covering. So 7 to the extent there were specific exclusions for 8 applications, we would have addressed that in the 9 beginning. 10 Now, if there is still something you're 11 thinking of that is even within the scope that we 12 are considering here, that is kind of a different 13 question. Is that -- are you saying there still 14 might be specific applications that would be 15 covered that -- 16 MR. POWERS: Yes. It depends on the 17 application all within this; right? They are 18 still made by the hundreds of thousands. Don't 19 get me wrong. It's just that they are designed a 20 certain way for a particular, you know, 21 application that they need it that way. Right? 22 And it's okay. We'll just -- we are going to have

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 219 1 to see how the fallout is. 2 MR. BROOKMAN: We got it. Yes, we got 3 it. So, Dan, that was good. That was really 4 good. Proceed. 5 MR. WEINTRAUB: All right. So it 6 doesn't seem like there is any disagreement on 7 that. So we are going to go forward with updating 8 the numbers with those dropped percentages. 9 The other -- okay. The other items up 10 on the board I'm going to go through. Hopefully, 11 these will not take too long. First one -- the 12 next one is changes in MPC when switching to 13 advanced casting. So I went back to our data. 14 What our data showed from surveys from 15 manufacturers -- the average cost increase of 16 those reporting was two percent, and there was a 17 maximum of 15 percent increase and a minimum of 18 minus 15 percent increase. So some manufacturers 19 reported that switching to the advanced casting 20 would save money, some reported that it would cost 21 a little more money, and on average it came out to 22 two percent over, which we looked at as zero cost

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 220 1 increase. 2 Okay. So we would like to keep it at 3 zero cost increase, unless there is any 4 objections. Okay. 5 MR. SDANO: I've got a comment on that. 6 MR. WEINTRAUB: Yes, Arnie. 7 MR. SDANO: Yes. Arnie Sdano, Pentair. 8 MR. BROOKMAN: Are you on the mike, 9 Arnie? 10 MR. SDANO: One of the problems 11 associated with switching over to, say, for 12 example, investment castings, normally you might 13 have just secured that impeller in lots of five. 14 But in an investment cast situation, you have to 15 buy maybe 100 as a minimum. And so there is an 16 increase in inventory, generally speaking, which 17 has a lot of cost to it when you switch over to 18 the more advanced casting methods. 19 MR. WEINTRAUB: Okay. That's a very 20 good point, Arnie. Thank you. 21 One other thing which I think may help 22 account for the fact that not everyone would have

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 221 1 the economic incentive to switch over was that 2 when we modeled this into the analysis, we said 3 only an additional 10 percent of the market would 4 switch over to investment casting. Not everyone 5 that could would actually switch over, and this 6 was talking with Greg Case. We said 60 percent 7 are there -- are advanced casting. We said 10 8 more percent may switch over, which left the 9 remaining 30 to account for business cases where 10 it doesn't make sense to switch over, and they are 11 going to stay with sand casting. 12 MR. POWERS: Dan, there's only one 13 challenge here, and that is the higher we choose 14 later, the PER, they may not have a choice. 15 Remember, in the early phase, everybody was just 16 getting numbers together and all of that, and 17 that's fine. But, and you didn't talk composite, 18 which in a way is investment, but it's a different 19 deal. The costs are still pretty high initially. 20 So I think where we end up in the 21 decision there is going to impact whether people 22 have to go to investment.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 222 1 MR. BROOKMAN: So that was Chuck. And 2 now back to Tom Eckman. 3 MR. ECKMAN: It seems to me, Chuck, that 4 that ought to be reflected in the industry 5 conversion cost. So as it goes up higher, that 6 should be reflected if there is a requirement 7 pretty much to go to investment. 8 MR. POWERS: But this is prevailing. 9 MR. ECKMAN: Well, but if the assumption 10 is that 10 percent would have to go, well, if we 11 push it up further, then wherever that presumption 12 was then maybe 15 percent or 20 percent has to go. 13 That changes the conversion cost. It's just, you 14 know, there's a fraction that don't have to go. 15 Well, at some point, more have to go. 16 MR. BROOKMAN: Yes. Al Huber? 17 MR. HUBER: I think when you asked the 18 question, the manufacturers were looking at the 19 cost of the part itself. They were not 20 necessarily looking at -- you know, for instance, 21 the vacuum die cast may cost you more on a per 22 pound basis, but they are usually thinner-walled

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 223 1 because they are cast more accurately, and they 2 don't have to be cleaned as much. So there is not 3 that much -- so those kind of offset. Okay? 4 However, I don't think anybody 5 considered the cost of carrying inventory, and 6 Arnie is correct. You know, if you're getting 7 small lots, it's going to be difficult. It's 8 going to -- you're going to have to buy them in 9 larger lots, and then you are going to have the 10 cost of carrying inventory, which I don't think is 11 reflected in that. 12 I did. I know I helped answer the 13 survey on a personal basis, and I'm telling you we 14 didn't look at that. 15 MR. BROOKMAN: Including the capital 16 costs. 17 MR. POWERS: Yes. The sand casting, 18 they'll set up, you know, the drags for one to 10 19 to whatever you need. But lost foam, you know, to 20 get the foams, some of the guys, based on the type 21 of configuration and how difficult the curvatures 22 and issues are, they will be in lots of 500.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 224 1 MR. WEINTRAUB: Okay. Now, so jumping 2 back to what people are actually mentioning, cost 3 of carrying inventory, so obviously this was not 4 something that was explored in this. Is there 5 input that the industry could give towards the 6 additional cost of carrying inventory? And, of 7 course, we can put that -- that can be under NDA, 8 if we'd like. 9 But I would also like to remind you that 10 we are looking at the cost of changing to 11 investment casting as compared to all the other -- 12 the total aggregate costs. It is not a large 13 piece of the pie because most of the industry has 14 already switched over. So we can talk about it 15 and we can try and model it in, but I think the 16 numbers show that it's not going to impact too 17 much. We've put some weight on it already. 18 You know, you're talking about seven 19 percent right now of -- it's a seven percent 20 increase over the total cost of redesign was the 21 cost to change there, and it only applies to 10 22 percent of the failing pumps that are redesigned.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 225 1 So it's going to be a small fraction, and I 2 personally don't feel like it's going to impact 3 the results enough right now that we need to -- 4 that we need to really dig into this. Thank you. 5 All right. 6 Next, is polishing really a design 7 option? So in the end we got to the point that 8 the model showed, that less than -- or 9 approximately three percent of failing models 10 would be polished. The overall impact would be 11 small, and we're actually not even considering the 12 incremental cost due to it in the LCC. So I don't 13 feel that we need to address this further. If 14 anyone else has complaints? Yes. 15 MR. POTTS: I have a question. 16 MR. BROOKMAN: Doug Potts? 17 MR. POTTS: Yes. Doug Potts, American 18 Water. I meant to ask this yesterday. From what 19 I understand, all of the polishing options had to 20 do with polishing the impeller. Is that correct? 21 MR. WEINTRAUB: That's correct. Yes. 22 MR. POTTS: Is polishing the bowl an

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 226 1 option? Is that something that manufacturers are 2 considering? Is there any efficiency gain with 3 that? 4 MR. WEINTRAUB: So, personally, the 5 reason we screened out polishing the bowl was 6 because we are -- the majority of pumps we are 7 dealing with are cast iron, bronze-fitted, and we 8 don't look at cast iron polishing as a viable 9 design option, because we know that it will 10 degrade quickly. Although it's something that 11 manufacturers could choose to do, we are not 12 evaluating it as a design option because it will - 13 - it is going to degrade quickly over time. 14 MR. POTTS: Unless it is coated; right? 15 Unless -- 16 MR. WEINTRAUB: Unless it's coated. 17 MR. POTTS: But you did account for that 18 separately; right? 19 MR. WEINTRAUB: So coating -- so we did 20 not put coating in as a design option, because 21 manufacturers gave issues to coating. 22 MR. HUBER: This is Al Huber, Patterson.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 227 1 I can tell you, Doug, that we run tests, sending 2 them out to different places that do the 3 mechanical polishing, both bowls and casings and 4 impellers. And if you are using good casting 5 techniques, you don't get very much improvement, 6 and then it doesn't last. So it's really not very 7 viable, and coatings never last over an extended 8 period of time. 9 MR. POWERS: This is Chuck. The only 10 thing would be -- and I don't know how many pumps 11 would have this on your sheet, but the multi12 stage, so if you had one impeller for one bowl, 13 that's one thing, and you had those numbers. But 14 I don't remember, do we have a lot of multi-stage 15 pumps? 16 MR. WEINTRAUB: So the analysis thus far 17 has only been end suction and inline pumps, 18 because we didn't have the data yet on multi19 stage. 20 MR. POWERS: And now you're getting it; 21 right? 22 MR. WEINTRAUB: Now we're getting it.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 228 1 And on multi-stage we are actually making the 2 design options only be the hydraulic redesigns, 3 especially because the market -- the restriction - 4 - sorry. The scope that we're looking at, the 5 vast majority of the market is fabricated 6 stainless steel within the scope that we are 7 dealing with here for the vertical turbines, 4 and 8 6, and the radial split verticals, where polishing 9 for the vast majority just isn't something that 10 can be done. 11 All right. Running down the line, the 12 other item, second-to-the-last item was changing 13 the cost-sharing for testing costs up to 100, 14 which we agreed upon. That was an oversight on 15 our part, and so that has been updated already. 16 Finally, Chuck had brought up the idea 17 of there being other costs beyond what the HI 18 survey had given to us, and I'll open that up. If 19 you guys feel that there are more, I can't speak 20 for HI. I think it needs to be an industry 21 decision, if they don't feel that they have given 22 something that's accurate.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 229 1 MR. BROOKMAN: Al Huber? 2 MR. HUBER: I think there is an 3 additional cost, depending on -- that I'm not so 4 sure everybody considered. If you go far enough 5 up the PER, you know, we were all looking when we 6 did this at 40 I think; right? 7 MR. WEINTRAUB: Yes. 8 MR. HUBER: Okay. So if you go to 85, 9 now we're probably going to have to -- everybody 10 is going to have to do VFD. They're going to have 11 to do a lot of work, and that I don't think has 12 been reflected. So if you -- if you -- if we were 13 to require that, which the industry certainly 14 hopes you don't, but if that was the case, then 15 there would be more engineering cost involved than 16 what was reported. 17 MR. WEINTRAUB: Yes. So -- 18 MR. HUBER: Did it go to 70? 19 MR. WEINTRAUB: What's that? 20 MR. HANDZEL: Your survey, when you did 21 it, I think it went from .4 to .7, it didn't have 22 all of those different levels.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 230 1 MR. WEINTRAUB: Yes, it did. So the 2 survey, not everyone responded, but what we did 3 because of that, which we went through yesterday, 4 was after PER-40 we started upping the cost until 5 you hit a max of 1.8 times the cost that you guys 6 gave us to account for the additional iterations. 7 And Charlie went through the ideas of iterations, 8 getting it wrong, getting it right, keeping going 9 until you get to the -- hit that point. So I feel 10 that I think if that's -- I feel like we've 11 covered that idea as best we can. 12 MR. POWERS: I think Dan and a few other 13 ones, and I don't know how it impacts you 14 directly, but there is a lot of regulations on 15 lead; right? Get the lead out so to speak. So 16 there used to be bronzes that had lead in it. 17 There used to be irons. You know, I hate to say 18 it, but some of those are actually better product 19 for efficiencies, and we're not allowed to use 20 them anymore. 21 But there is alternatives people play 22 with. There might be some costs involved there.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 231 1 In other words, a standard iron class 30 of grade 2 A STME-48, there's different grades, that will 3 help that, those costs more. 4 Another one would be in relationship to 5 the inventory. If we are bringing it offshore for 6 lost foam suppliers, there's not as many in the 7 States as everybody thinks there is. Then you 8 have to -- in order to ship something in a couple 9 of weeks or a week or less, you have to have the 10 inventory here to ship it; right? So you have to 11 think about getting that over the water. 12 The other one is solid modeling versus 13 vectors; right? If you do -- you know, standard 14 Auto CAD is vector designs. That's the old days. 15 Actually, the old days where Al grew up was pencil 16 and paper, but -- and myself, by the way, I didn't 17 even have a calculator. Slide rule. I still have 18 my -- do you have your Dietzgen slide rule still? 19 I still have mine. 20 Anyway, it is the cost of the stations 21 that you have to buy or rent when you go to solid 22 modeling. That is -- that can be a pretty healthy

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 232 1 cost. If you're subbing out to a consultant, 2 you're covered; right? But some of the companies 3 may not have those stations, you know, purchased; 4 right? You know what I mean, the feed you have to 5 buy and all of that. So there are some pretty 6 healthy costs there. 7 MR. WEINTRAUB: Okay. Well, thank you. 8 I think on that last point, I mean, we 9 will have to defer to your industry group on that, 10 because they provided costs of redesign. And I 11 would myself, being an engineer, too, would say 12 that if I were to be planning out a redesign cost, 13 I think I would incorporate the cost of -- you 14 know, of going out to rent your space on a 15 computer or a mainframe. So -- 16 MS. MAUER: Chuck, this is Joanna. I 17 just wanted to ask about I think the first point 18 you raised about lead. And are you saying that 19 due to the efficiency standard you would go to 20 higher cost -- is this a cost that is associated 21 with efficiency standard or a cost that is not 22 related to --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 233 1 MR. POWERS: Different materials will 2 improve efficiency; right? Just like you get into 3 higher alloys and stainless stuff. It's the same 4 with different grades of bronzes and different 5 grades of irons, porosity levels and things like 6 that. Okay? We are not allowed to use lead 7 anymore; right? And that actually can impact 8 castings, processing, you know, corrections, 9 things like that. Right? 10 MR. WEINTRAUB: Okay. 11 MS. MAUER: But this isn't -- you are 12 not talking about a change in what you are using 13 in response to an efficiency standrd. 14 MR. POWERS: We are going to look at 15 everything. Whether it's .2, .2 percent 16 improvement or .5 across the board, as we are 17 looking here, we are getting -- that extra erg, as 18 I keep talking about, we've got to look at 19 everything. 20 MR. BROOKMAN: Mark Handzel? 21 MR. HANDZEL: You know, I was just going 22 to say, you know, what he is referring to is the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 234 1 fact that, you know, there's now low lead 2 standards that we all have to comply with in our 3 product. So we basically have gone to all those 4 low leads. So, you know, it's -- the material is 5 now harder to machine. You know, it's a higher 6 scrap rate involved. So that's what -- Chuck was 7 just saying that we have already had to make that 8 change going to the low lead materials. 9 MR. WEINTRAUB: So just to put this in 10 perspective, so what we have evaluated is the 11 baseline situation is 2012. You already 12 incorporated the low lead. Our efficiencies that 13 we're looking at are dealing with low lead 14 impellers. 15 So there is no -- there is no changes. 16 That doesn't impact us, looking at this analysis. 17 Cumulative regulatory burden, that is -- you know, 18 that is something that's considered, how much is 19 the industry facing at one time from one thing. 20 MR. POWERS: But my point is, we may 21 want to be looking at materials that help the 22 standard where we are today to the next level,

### Capital Reporting Company

Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 235 1 just like lead brought us up a different level. 2 Right? So those costs may be an impact. The cast 3 iron A-48 standard, we may have to go to something 4 different to improve efficiency, to improve the 5 products, thinness of the veins, different things. 6 That's all I'm saying. 7 MR. WEINTRAUB: Okay. Thank you. 8 All right. So we've gone through the 9 list. Unless anyone has objections, so it seems 10 like the consensus on the HI side was that we are 11 going to continue with the costs that we went 12 through, that we originally used. Okay? And no 13 objections. So we're going to continue on with 14 the cost structure. 15 That covers it. We will, I'll, send 16 this out, and we will provide the updated analysis 17 using these assumptions that we have just 18 validated now and that will close this. 19 MR. BROOKMAN: That was good work, Dan. 20 Thank you very much. 21 MR. WEINTRAUB: All right. Thank you. 22 MR. BROOKMAN: Final questions on --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 236 1 related to this? Greg? 2 MR. TOWSLEY: Greg Towsley, Grundfos. 3 Just no pressure -- the new PER calculator? 4 MS. WIDDER: I'm working on it. 5 (Laughter.) 6 MR. BROOKMAN: For the record, Sarah, 7 with her nose in the computer on the side of the 8 room, says she's working on it. 9 Okay. I think that's most of what we 10 intended to cover. I'm looking over to Lucas. 11 Yes? Yes. Okay. 12 So then it is now 20 minutes until 3:00. 13 I'm going to bring this meeting to closure and do 14 a very brief summary of what we have covered in 15 the span of the last two days, which was a lot. 16 On day one, we had a very detailed 17 description of the market and technology, 18 screening, and engineering analysis; in fact, 90 19 pages of PowerPoint slides to give a rather 20 detailed representation of all of the different 21 analyses that we together will undertake as we 22 continue to negotiate about the actual standard

### Capital Reporting Company

Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 237 1 levels. And that was the bulk of yesterday. 2 Today, we started off the meeting late 3 because we didn't have everybody and we needed 4 particularly the court reporter. But we had a 5 very productive discussion, looking ahead on the 6 process features, for the Working Group, 7 particularly the workload, whether we thought we'd 8 be able to accomplish the workload in the time 9 allocated. 10 And, as a consequence, we established 11 some possible supplemental meeting dates. And 12 everybody now has got them at least penciled on 13 their calendar. And they are June 17th and July 14 25th. More information on that to follow. 15 We also established a webinar date for 16 May 14th as a follow-on from this meeting. But 17 once we really got underway at 9:45 in the 18 morning, we had a detailed presentation on 19 metrics. And we made a breakthrough on this 20 point, I think, a lot of shared insight and a lot 21 of agreement conceptually on the direction with 22 metrics.

### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 238 1 All the members present are going to be 2 going back and doing their calculations to check 3 on that. And that will be a topic that will be 4 taken up on the webinar, the first topic of the 5 webinar on May 14th. The second topic on May 14th 6 will be the engineering analysis and revisions to 7 the lifecycle cost analysis based on feedback that 8 you are going to supply, the members present will 9 supply. 10 And then following the metrics 11 discussion, we had a good presentation on 12 lifecycle cost, and then we just closed out now 13 the reconsideration/revisions to the engineering 14 analysis based on feedback that the analysts 15 received yesterday. 16 So that's the summary of what we have 17 covered, and I'm pleased. I'm pleased by the 18 tenor of the conversation. I'm pleased by the 19 endurance of this group. And we are making 20 progress, and we are going to have to continue to 21 make progress to meet our timelines. 22 Do you wish to say anything here?

### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 239 1 MR. ADIN: Yes. Thanks, Doug. I'll 2 just offer a few closing thoughts. 3 So we have obviously presented a lot 4 over the last couple of days, and we have gotten 5 some initial feedback, which is great. We want to 6 get as much feedback as we can on everything that 7 we present. 8 I want to reiterate a point that I think 9 I have made maybe a couple of times, but that is 10 that regardless of what the information on the 11 screen in our preliminary analysis appears to 12 suggest, DOE hasn't made any decisions on any of 13 this yet. We don't have a position that we have 14 already predetermined or anything to that effect. 15 So I just want to make sure that that's 16 understood. I mean, we still have a ways to go 17 here. We still have more analysis to present. And 18 as I said earlier, we consider all of these 19 factors in deciding what would be economically 20 justified and technologically feasible and all of 21 that, all of those factors that we have to 22 consider. We don't weight any one of them over

### Capital Reporting Company

Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 240 1 another. They are all important. Employment 2 impacts, all of that. 3 So it all matters. We are going to 4 consider all of that stuff. So with that 5 considered, we want to make sure that we're making 6 a decision on the basis of good information. So 7 anywhere where you suspect that an assumption that 8 we've made or data that we have used is wrong, as 9 you have been doing all along, is -- has issues 10 with it, we want to know that as early as 11 possible. And you've been telling us, and we do 12 really appreciate that. 13 And I've gotten a couple of questions 14 about whether you can submit comments and new 15 information in the interim periods between these 16 meetings. Absolutely. We hope that you would. We 17 want to be able to incorporate as much feedback as 18 you're able to provide us. And we've gotten some 19 new data. There was an effort to get new data 20 since we've been in this meeting. We really 21 appreciate that. That's very helpful. That will 22 help us refine our analysis and give you a better

### Capital Reporting Company

Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 241 1 product on which to base your decisions, too. So, 2 I mean, I think that's just the general point I 3 wanted to make. 4 MR. BROOKMAN: Thank you. 5 MR. ADIN: Unless there are any other 6 questions specifically for DOE, I think that's it. 7 MR. BROOKMAN: As a way of bringing us 8 toward closure, I would welcome any additional 9 comments from members before we close. Mark 10 Handzel? 11 MR. HANDZEL: You know, I think it was a 12 great two days. Again, I think, you know, we made 13 a lot of progress. But, you know, I guess this 14 issue about, you know, being able to pass along 15 higher costs is one that is obviously a key one 16 for the manufacturers. 17 And, you know, I think we need to know 18 how we are going to go forward with that issue, 19 because obviously we don't feel we are going to be 20 able to pass along the costs, you know, that are 21 being suggested that we can. So where do we go 22 from here? Because I think that is a big gap.

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Commercial and Industrial Pumps Working Group 04-30-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 242 1 MR. BROOKMAN: Okay. Thank you. 2 Appreciate that. 3 Other closing remarks? 4 (No response.) 5 MR. BROOKMAN: Nothing additional. Well, 6 thanks to the analytical team. They did a great 7 job as always, and thanks to all of you for your 8 participation. You really added a lot to this 9 meeting, and I wish you all safe travels. And 10 we'll see you -- what did I say the dates were? 11 We will be meeting back here on May 28th and 29th. 12 Thanks to all. Safe travels. 13 (Whereupon, at 2:38 p.m., the 14 Commercial and Industrial 15 Pumps Working Group was 16 concluded.) 17 18 19 20 21 22

### Capital Reporting Company Commercial and Industrial Pumps Working Group 04-30-2014

1 CERTIFICATE OF COURT REPORTER 2 3 I, NATASHA THOMAS, the reporter before whom the 4 foregoing hearing was taken, do hereby certify 5 that the witness whose testimony appears in the 6 foregoing deposition was duly sworn by me; that 7 the testimony of said witness was recorded by me 8 and thereafter reduced to typewriting under my 9 direction; that said deposition is a true record 10 of the testimony given by said witness; that I am 11 neither counsel for, related to, nor employed by 12 any of the parties to the action in which this 13 deposition was taken; and, further, that I am not



### r 4 a re l a ti ve or employee o f any counsel or attorney 15 employed by the parties hereto, nor financially or 16 otherwise interested in the outcome of this 17 action. 18 19 20 21 22 NATASHA THOMAS

(866) 448 - DEPO 

### www.CapitalReportingCompany.com © 2014 243

### Capital Reporting Company Commercial and Industrial Pumps Working Group 04-30-2014

1 CERTIFICATE OF TRANSCRIBER 2 3 I, SARAH VEACH, do hereby certify that this 4 transcript was prepared from audio to the best of 5 my ability. 6 I am neither counsel for, nor party to this 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 action nor action. am I interested in the outcome of this

SARAH VEACH



### (866) 448 - DEPO www.CapitalReportingCompany.com © 2014 244

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 $ $1 175:17 $10 191:9 $12,000 172:15 $150 190:1 $23 190:4 $400 175:17 $9 172:15 $900 177:14 1 1,000 68:22 1,100 69:6 1,500 153:6 1,800 151:20 163:5 166:17 1.1 20:16 63:10,19,22 1.8 230:5 1:00 9:3 127:22 210:10 10 69:5 162:13 163:10 166:12 182:5 192:14 195:7 214:19 215:2 216:10 221:3,7 222:10 223:18 224:21 10,000 134:6 136:2 151:9 100 18:4 19:14 36:6 58:21 63:1 81:19 103:4 111:20 220:15 228:13 1000 1:12 11:40 130:1 110 18:4 36:7 64:22 69:5 12 31:7 166:2 168:17,18 12:40 130:2,4 125 176:17 13 168:17 130 178:4 14th 9:3 126:17 127:20,21 203:2,12 205:6 212:5 237:16 238:5 15 89:11 90:1 111:18 156:7 162:13,14 168:17 213:1 215:4,6,17,18,19 219:17,18 222:12 16 215:17 17th 8:12,13 237:13 18 92:20,21 95:17 166:2,9 2 2 166:3 187:2 233:15 2,000 201:1,5 2,050 213:16 2,200 151:21,22 153:6 2,250 150:5 2:38 242:13 20 30:9 85:18 151:9 222:12 236:12 20,001 153:22

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 166:13 229:21 70 187:3 229:18 75 18:4 19:14 20:15 36:6 40:21 58:21 63:1,10,11,21 68:4,12 69:2,10 71:3 81:19 750 69:2 8 8:00 8:3,20 81 145:1 85 162:15 163:14 166:12 229:8 87 48:6,16 9 9 47:15 48:6 9:00 8:13 9:11 1:16 9:45 237:17 90 236:18 900 178:6 90s 111:16 95 19:17 51:12 96 38:11 97 214:10 972 213:13 985 19:17 A a.m1:16 8:3,13 A/C 66:18 A-48 235:3 ABB 2:7 7:13 20:8 ability66:3 76:1 194:2 244:5 able 13:9 47:20 66:21 74:17 77:14 85:9 88:12 90:5 104:6 138:5 146:19 184:11 188:1 198:18 201:5 206:15 208:6 213:8 237:8 240:17,18 241:14,20 absence115:21 absolutely61:17 79:9 100:15 189:12 208:11 240:16 accept 90:12 acceptable61:2 acceptance93:2 access 9:4 120:17 161:14 accessible43:7 accommodate 121:20 accomplish 12:19 14:9 38:15 237:8 accomplished 26:9 100:17 according131:13 156:9 167:7 171:3 account18:7 20:19 22:12 26:5,6 37:15,17 38:13 73:4 117:10,12 148:18 149:5 194:7 220:22 221:9 226:17 230:6

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 78:17 92:4 97:4 100:22 101:1,3 114:14 117:17 118:3 124:14 126:9 130:21 131:7,8 135:14,21 137:12 147:5 148:17 193:5 205:7,10 221:3 224:6 229:3 230:6 241:8 242:5 additions 114:11 125:3 address 10:20 28:21 45:6 86:17 89:15 106:1 108:14,22 109:13 197:10 225:13 addressed 218:4,8 addresses 86:12 Adin 2:5 7:1 10:21,22 23:3,4,19 24:7,12,14 27:13 28:1,4,19 29:6,16,20 30:1 41:16,19 42:6 52:3,7,9 53:3,11,14,17,20 54:1 76:19 77:7,8 79:7,13,22 80:15,17,19 81:14 82:6,9,19,22 83:3,6,10,13,15, 18,21 84:2 87:7 96:7,12,15 98:6,11,19 108:19 116:19 117:5 118:13,14 119:11,15,18 122:3,5 127:7,11,18 197:9 204:11 218:3 239:1 241:5 adjust115:8 148:17 adjusted 19:10 admit 192:18 adopting 143:22 advanced 65:20 75:20 76:4,6 219:13,19 220:18 221:7 advantage72:16 75:8 ADVISORY

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73:7 alternatives 230:21 am8:7 19:1 25:3 31:20 46:6 60:20 64:11 68:13 78:13 79:8 86:5 87:18 92:11 96:17,19 97:11 99:13 100:8 102:9 103:14

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 104:11 107:8,17 113:16 121:16 123:22 126:5 130:16 132:7 133:9 135:14 137:19 140:18 160:16 174:13,14 180:9 188:20 202:1 213:3 243:10,13 244:6,7 amalgamation 179:7 ambiguous 194:17,19 206:6 American 3:11 6:13 158:6 192:3 225:17 among13:7 15:15 68:3 amortization 180:14 182:4 amortized181:11 amortizing 186:19 amount 71:4 187:1 analyses 105:1 127:2 193:8 202:5 204:16 207:13 236:21 analysis 87:10 92:6 106:10 110:21 132:7 134:12,13 136:19 139:19 144:15 148:21 149:6,12 156:2 160:2 161:12 164:19 167:14 172:2 173:9 176:5 178:21 180:6,13 182:6 189:15 197:22 198:21 202:1 203:14 204:20 205:8 207:2 210:15 212:3 221:2 227:16 234:16 235:16 236:18 238:6,7,14 239:11,17 240:22 analysts 5:12 97:2 238:14 analytic 9:5 101:2 103:21 112:16 129:16 analytical242:6 and/or63:12 114:12 115:18 197:1 annual 132:15 133:15 135:2,4 149:2 158:16 annualized 148:20 answer28:5 55:1 182:3 189:7 194:12 223:12 answering 126:3 answers 105:14 anticipate 8:18 anybody94:4 223:4 anymore230:20 233:7 anyone 86:7 96:9 126:8 211:19 225:14 235:9 anything 75:3 78:7 89:8 105:2,8 122:18 129:3 153:20 204:11

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 assertion 11:15 assess 133:9 assigned 44:6 assigning 106:13 associated 18:20,22 26:7 145:2,3 176:14 179:9,13 185:5,12,21 194:3 220:11 232:20 assume31:7 45:12 64:18 77:17,21 78:3 198:19 208:3 assumed18:5 48:15 75:22 76:3,6 148:21 assumes 116:12,16,17,18 assuming34:14 76:22 134:20 135:18 168:3 215:9 assumption 19:5 38:9 149:14,15 160:8 180:13 212:7 222:9 240:7 assumptions 10:13 37:5 67:6 76:20 105:6 147:5 204:3 210:16 211:10 212:1 235:17 attended208:9 attorney 243:14 audio 244:4 Auto 231:14 Automation 2:22 7:18 40:17 availability131:6 175:15 available 23:1 41:11 43:9,12 45:11,14 49:4 89:20 115:14,17 116:1 137:2,5 138:8,22 139:11 175:1 176:12 177:6 182:20 Avenue 1:12 average17:1 18:16 26:2 37:10 50:14 57:6,9 112:2 117:19 139:6,16 140:2,4,12 141:9,11 143:13 144:3,5 150:5 154:8 157:18 158:9,22 161:2,8 164:16 171:13 172:18 219:15,21 averages 158:7 aware 25:3 Awareness 3:8 6:20 away43:10 90:1 103:5 171:18 183:19 210:2 awful 34:13 189:12 axis 138:20,21 140:18,21 B background 153:17

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 76:21 77:5,15 132:9 174:7,21 186:1 192:5 benefits 199:15,16 BEP 18:5 19:15 20:16 36:7,8 63:10,18 64:2,3,4,21,22 68:5,8,10,22 81:19 82:5 132:16,18 139:2 145:16 BEP-rated 68:20 Berkeley2:14 4:8 7:4,10 besides 21:11 best10:1 30:13 31:17 48:18 49:3 66:9 132:6 217:7 230:11 244:4 Betsy3:4 118:22 121:7 122:18 130:18 better 14:19 16:13 29:3 32:8 38:4,6,19,21 39:1,7,8,15,19 40:1 42:3 47:16,20 48:2 51:8,12,14,19 55:22 61:1,9 66:16,19 72:11,17 73:8 77:2 78:2 94:19 107:4 127:12,15 180:19 186:18 187:1 188:17 202:6 217:6 230:18 240:22 beyond 43:11 133:5 228:17 biggest212:9

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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