From: Rick Anderson [mailto:rick.anderson@faypwc.com]

Sent: Friday, September 23, 2011 2:50 PM

To: 'Kenneth Winder'; 'Rosenstock, Steven'; richardparkerdc@gmail.com

Cc: 'Richard Parker'; 'Corkran, Jerry L'; Caitlin Johnson; tballo@earthjustice.org; ScottB@lvmetals.com;

john.caskey@nema.org; john.cymbalsky@ee .doe.gov; adelaski@standardsasap.org;

Teckman@nwcouncil.org; gbf1@pge.com; carlos.g aytan@ge.com; rgreeson@federalpacific.com;

bruce.r.hirsch@bge.com; mhyland@appanet.org; dave.millure@metglas.com; snadel@aceee.org;

wes.patterson@us.abb.com; Eric.Petersen@ak steel.com; Raymond.Polinski@atimetals.com;

rroy@nrdc.org; robert.saint@nreca.coop; chuck.simm ons@pgnmail.com; mark.stoering@xcelenergy.com;

cabolduc@lbl.gov; kcoughlin@lbl.gov; Brian Coffey; gjrosenquist@lbl.gov; Michael Rivest; 'Jerry Hodge';

jrossetti@mlgw.org; Jim.creevy@nema.org; 'M eyers, Aaron'; Daniel.Cohen@hq.doe.gov;

jmauer@standardsasap.org; greg.coulter405@ gmail.com; bsmith@federalpacific.com;

pkumar@publicpower.org; 'Trujillo, Antonio'; 'Phil Hopkinson'; ahofmann@publicpower.org;

BermanEconomics@gmail.com; Paul.Ryan@hitmet.com ; jerry.schoen@aksteel.com; mwaltner@nrdc.org;

chad.kennedy@us.schneider-electric.com; eduardor obles@eaton.com; vijay.tendulkar@onyxpower.com;

carlosgsiqueiros@eaton.com; thomas.patzner@us.sc hneider-electric.com; 'Marusinec, Richard M';

'Schneider, Jeffrey A'; 'Loomans, Michael T'; 'Poole, Raymond L'; 'Moore, Jack C'; 'Smith, Jennifer'

Subject: RE: Distribution Transformers Committee reques ted areas for the DOE to Investigate before

final rules are selected.

Richard,

I’d like to build on the comments of people like John Rossetti, Ken Winder, Bruce Hirsch, David Flaten

and Chuck Simmons (Users of Distribution Transformers) and recognize the efforts of Wes (ABB), Jerry

(Cooper) and Jerry (Howard) in attempting to communicate the importance of Transformer Load Factor

and Peak Transformer Loading; as it re lat es to Transformer A&B Factors.

Some observations:

1. Design Optimization is not equal to Electrical Efficiency. Why? Because Design Optimization

takes into consideration the individual utility’s cost of energy and demand, Fixed Charge Rate,

CP/NCP, Load Factor and the Peak Loading on the Transformer, in addition to ot her

considerations. Electrical Efficiency simply looks at Energy Out/Energy In at a fixed load.

Transformer A&B Factors takes all the Economic and Engineering Factors into consideration and

attempts to optimize the individual utility’s costs versus its ability to reliably deliver energy and

demand to the consumer.

2. Transformer Loading in the rural areas of the nation are not necessarily the same in the urb a n

areas of the nation. In a Subdivision, the utility can serve multiple residences from a single

padmount (rectangular) transformer and the limiting factor is Voltage Drop (typically due to

distance). Utilities are generally required to deliver voltage at 120 volts +/

‐ 5% based on St at e

Utilities Commission requirements; we have no choice. So, an overhead (round) transformer in a

rural area typically may serve one customer while a padmount transformer in an urban area

would serve multiple customers. In a Subdivision, it will depend on the size of the lots. Small lotsmean more customers can be served by a single transformer. Large lots mean less customers,

typical due to front lot line distances and ultimately voltage drop.

3. This means that, at the very least, transformer loading (Load Factor and Peak Load) are

influenced by location (rural vs urban) and typical weather conditi ons (th e Southeast versus

New England). So, this suggests that the transformer loading practices will vary across the entire

nation, depending on where the utility is located and what the cost of demand and energy may

be in that neck of the woods.

4. Utility engineers design for the hottest day of the year and the coldest day of the year. We’re

not allowed to blow up tra n sformers on the Fourth of July or Christmas Day. In between is

anything but maximum loading, so the engineers try to maximize efficiency the rest of the time.

5. Utilities have been studying Transformer Loading for years so they can optimize the asset. We’re

not going to buy a dum p truc k if we can do it with a golf cart. Utilities constantly examine their

transformer loading practices in an effort to keep their costs down. In the case of Fayetteville,

we have the lowest electric rates in North Carolina; that’s beca use we constantl y examine what

we do and how we do it. This suggests we know what we’re doing when it comes to using

distribution transformers.

6. ANSI/IEEE C57 recommends transformer loading guidelines based on temperature, “pre

‐

loading” and peak loading over a given time period

. For instance, a 50 kVA transformer is

designed to deliver 150 kVA (300% of nameplate) for short periods of time without damaging

the internal insulation systems. Utility engineers know this and develop Protection Philosophies,

employing CSP Breakers and Standard Fuse Ratings, so transformers don’t blow up and spew

mineral oil all over the pla c e. Transformer loading is a deliberate practice based on a variety of

influencing factors.

7. It appears the Department of Energy did not consult electric utilities when it came to Load

Factor and Peak Loading. It appears they may have tried to back into the numbers by consul ting

with the man ufacturers regarding Transformer A&B Factors. No User on this Committee is

aware of being contacted by DOE for this important piece of the puzzle.

8. In the case of Fayetteville, if I change my Engineering Factors to DOE recommendations, my B

Factor goes up from $1.32 to $1.77 per watt; a 34% in c rease. This means that I’m telling the

transformer manufacturer that my cost of energy is 34% higher than it actually is and that I need

the manufacturer to design a much more efficient transformer that I really don’t need.

9. Defining transformer efficiency requirements also suggests that th e DOE knows how to load a

distribution transformer better than a utility engineer that constantly examines his processes.

From a User’s standpoint, it makes no sense to me.

10. I believe a reasonable solution would be to establish a subcommittee regarding Electrical

Engineering Considerations. This sub group could recommend Tran sformer A&B Factors,Residential Load Factors, Single Phase Overhead Transformers (round), Single Phase Pads

(rectangular), Voltage Drop, Vault

‐ Type, Network and other types of transformer applications.

Generally speaking, at this point in time, I cannot support the Engineering Analysis; especially since

electric utilities, prime Users of this equipment, were not consulted as part of the approach. I truly

believe the S ubcom mittee needs to take a hard look at some of the data the Users have presented.

They’re trying to correct some pretty gross assumptions.

Thanks for the opportunity to comment.

Rick Anderson, PE

Manager of Electrical Engineering

Fayetteville PWC

PO Box 1089

Fayetteville, North Carolina 28302

Office: (910 ) 223

‐ 4517

Cell: (910) 263

‐ 5058

FAX: (910) 323

‐ 2990

From: Kenneth Winder [ mailto:kwinder@mleainc.com ]

Sent: Thursday, September 22, 2011 7:12 PM

To: Rosenstock, Steven

Cc: Richard Parker; Corkran, Jerry L; Caitlin Johnson; Rick Anderson; tballo@earthjustice.org ;

ScottB@lvmetals.com ; john.caskey@nema.org ; john.cymbalsky@ee.doe.gov ;

adelaski@standardsasap.org ; Teckman@nwcouncil.org ; gbf1@pge.com ; carlos.gaytan@ge.com ;

rgreeson@federalpacific.com ; bruce.r.hirsch@bge.com ; mhyland@appanet.org ;

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

Raymond.Polinski@atimetals.com ; rroy@nrdc.org ; robert.saint@nreca.coop ;

chuck.simmons@pgnmail.com ; mark.stoering@xcelenergy.com ; cabolduc@lbl.gov ; kcoughlin@lbl.gov ;

Brian Coffey; gjrosenquist@lbl.gov ; Michael Rivest; Jerry Hodge; jrossetti@mlgw.org ;

Jim.creevy@nema.org ; Meyers, Aaron; Daniel.Cohen@hq.doe.gov ; jmauer@standardsasap.org ;

greg.coulter405@gmail.com ; bsmith@federalpacific.com ; pkumar@publicpower.org ; Trujillo, Antonio; Phil

Hopkinson; ahofmann@publicpower.org ; BermanEconomics@gmail.com ; Paul.Ryan@hitmet.com ;

jerry.schoen@aksteel.com ; mwaltner@nrdc.org ; chad.kennedy@us.schneider-electric.com ;

eduardorobles@eaton.com ; vijay.tendulkar@onyxpower.com ; carlosgsiqueiros@eaton.com ;

thomas.patzner@us.schneider-electric.com ; Marusinec, Richard M; Schneider, Jeffrey A; Loomans,

Michael T; Poole, Raymond L; Moore, Jack C; Smith, Jennifer

Subject: Re: Distribution Transformers Committee reques ted areas for the DOE to Investigate before

final rules are selected.

Mr. Parker and others,Below are additional thoughts for the modeling, studies and considerations to help in this negotiated

Rulemaking process.

1.The DOE/Navigant has modeled the loading on distribution transformers. However, many questions

have arisen that need to be answered concerning the accuracy of the model. Access to information and

vetting of that information needs to be performed to have confide nce in the model.

This process must take place, and it cannot be done efficiently and in the depth that is should be in a

Rulemaking Committee meeting. Some of this information gathering and vetting could be performed

through contact with Navigant to explore their modeling an d programmin g. We request that the rules

be examined to determine if a subgroup of the Ratemaking Committee is allowed to meet with Navigant

to request and receive information in an effort to understand the details of the DOE/Navigant model

and to provide additional input where needed. This would be par t of the effort of the subgroup to

accep t and approve the accuracy of the studies and modeling that is performed as the basis to make the

decisions required by the Rulemaking Committee.

We believe that the rules governing this request should be made public. We do not expect that the

discussions between subgr oups of the Rulemaki ng Committee and DOE/Navigant would be made

public. However, results of such discussions that change the model should be made public.

2. When utilities furnish A and B factors to suppliers, the expectation is that those factors are being

used to create the optimum transforme r design whil e meeting or exceeding minimum efficiency

Standards. The A and B factors provide lots of information about the expected loading of the

transformer. Imbedded in those factors is information about the expected marginal pricing over the life

of the unit, peak responsibility of the transformer's load, load factor of the uni t that translates into loss

factor, etc. It creat es the relationship between the core losses and winding losses and gives insight to

the manufacturer how to design the transformer to optimize that relationship. We do not want to lose

the value of furnishing these A and B factors to su ppliers.

As efficie ncy requirements have been set at specific minimum values and a specified load, purchasers

are being forced to buy transformers that do not utilize these A and B factors and thus the transformers

purchased may not be the most efficient product for their intended application. We believe this should

be investigated and request that be do ne.

3. When transformer bids are evaluated, one of the purposes is to determine which supplier to

choose. There are many factors including price to be evaluated, but price is usually the major driver. If

efficiency levels are increased, how will that affect supplier's ability to co mpe te or will it have the effect

of driving some of them out of business. The unacceptable results would be one or two mega

‐ suppliers

that control the market. This has many negative consequences. Suppliers should be given the

opportunity to respond to questions about this situation.

4. Supp liers indica ted at our first Rulemaking Committee meeting that 90% of purchases were at

minimum efficiency and 10% exceeded that. If the minimum transformer efficiency is increased, how isthe relationship of those percentages going to be affected. This requires additional information, studies

and sensitivity analysis.

5. We support the request made by the suppliers and manufacturers that DOE/Navigant correctly

model the transformer designs and cost relationships. The measure of success is to match actual

current market prices for various scenarios that is acceptable to th e suppli ers, manufacturers and

purchasers. The modeling must also be accurate to determine realistic incremental pricing if efficiency

is increased. If this modeling is not accurate, since it is one of the cornerstones of this whole effort, we

cannot trust the conclusions drawn from the studies.

Once the modeling be comes accurate per above, more sensitivity analysis will likely be requested.

6. The DOE/Navigant model uses distribution transformer failure rates of 0.5% per year from the first

year of installation and thereafter, due to lightning and other random causes. They also use an

additional 0.5% per ye ar du e to corrosion, starting in year 15. Survival function per DOE is in the shape

of the standard Weibull curve. The modeling at the rates of failure stated cause a concern about the

modeling and does that really create a realistic lifetime? Is the lifetime average number of years an

accep t able lifetime for transformers based upon actual experience? How does that differ for steel

versus Amorphous core transformers?

If a transformer fails, how does the DOE/Navigant model its replacement? How does a failure affect the

operating costs and other aspects of the modeling?

7. DOE/Navigant state that they assumed unity power factor for their calcul ations. They also assume

that the initial peak loading of transformers is 0.9 p.u. and the initial load on the transformer is grown at

1% per year. The values used have an effect on the model and need to be accurate. What is the basis

of these assumptions? Ar e th ese assumptions acceptable to the utilities based on their experience and

operations? If they are not accurate, they will cause the misrepresentation of operating costs and

failure rates, life cycles, etc.

8. We believe that modeling and studies should be performed for a Rural subgroup within the

DOE/Navigant mod e l similar to the analysis done in the original Rulemaking. We know from the original

Rulemaking process that the PBP is longer for this rural subgroup than other groups. As a result of the

original minimum efficiency standard for distribution transformers, public power subgroups were

required to purchase transformers with lengthy payb ack period s (at times approaching 20 years).

Now we are engaged in another effort to consider increasing the efficiency requirements. If studies

performed will separate public power as subgroups (municipal and rural cooperatives) from the

investor

‐ owned utilities, the payback periods will likely show an even more extended payback period for

publi c power utilities and their consumers.

The combined payback period of these Rulemakings must be considered as an impact on utilities and

their consumers.We are concerned that these distribution transformer efficiency Rulemakings are placing a heavy cost

burden for increased efficiency on rural consumers. The effect is that we are reaching unacceptable

payback periods and a declining cost/benefit ratio that does not support increasing efficiency beyond

what the present standard requires.

Kenneth A. Winder, PE

NRECA

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