### Capital Reporting Company GSFLIRL Meeting 05-01-2014

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

Energy Conservation Standards Meeting Notice of Proposed Rulemaking for General Service Fluorescent Lamps and Incandescent Reflector Lamps 1614-1 EE-5B Thursday, May 1, 2014 Department of Energy 1000 Independence Avenue SW Forrestal Building Washington, DC 20585

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 2 1 A P P E A R A N C E S 2 Doug Brookman Maureen Kienle John Cymbalsky Julie Pierce 3 Lucy deButts Brian Gerke Sarah Butler Karina Garbesi 4 Michael Rivest Aisha Husain Timothy Ballo Hayden Cook 5 Andrew DeLaski Susan Callahan 6 Joe Howley Mark Duffy 7 Dave Gatto Keith Cook 8 Alex Boesenberg Garry Fernstrom 9 Charlie Stevens Michael McGaraghan 10 Eric Montgomery David Nesting 11 12 13 14 15 16 17 18 19 20 21 22

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 3 1 P R O C E E D I N G S 2 MR. BROOKMAN: Okay. We are going to 3 start. Good morning everyone. Welcome. This is the 4 Energy Conservation Standards Meeting Notice of 5 Proposed Rule Making meeting for General Service 6 Fluorescent Lamps and Incandescent Reflector Lamps. 7 Today is May 1, 2014, here in the Forrestal 8 Building, Department of Energy in Washington D.C. 9 My name is Doug Brookman, Public Solutions 10 in Baltimore. 11 We are going to start this morning with 12 welcoming remarks from John Cymbalsky. 13 MR. CYMBALSKY: Thank you Doug. Welcome 14 everyone. So today is May Day. And you are lucky 15 enough to have two Ukrainian-American kind of 16 running the show here. And so as opposed to talking 17 about world events we will talk about something much 18 more pleasant, the GSFL-IRL NOPR that we are going 19 to discuss today. I would like to particularly 20 point out, I know I have talked to a few of you 21 already, Section 6 of the agenda where we will talk 22 about shipments. We have rolled out a refinement to

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 4 1 our consumer choice modeling and we are hoping that 2 we get a lot of good comment on what we have done 3 here. We realize that with LEDs really moving along 4 things in this market are quite dynamic and so we 5 are hoping that our modeling techniques actually did 6 a good job of picking up on it. I think it did. 7 But of course we are looking for you to offer good 8 public comment here. 9 I will have to duck out just before 10:30 10 for other meetings and such but please have a good 11 meeting and thank you once again for all your public 12 comment. 13 MR. BROOKMAN: Let's start with 14 introductions. And apparently these microphones 15 need to be quite close to your face. You can get 16 used to turning them on and off. 17 MR. FERNSTROM: Good morning I am Garry 18 Fernstrom representing the California Investor Owned 19 Utilities which are the Pacific Gas and Electric 20 Company, the Southern California Edison Company, the 21 San Diego Gas and Electric Company and the Southern 22 California Gas Company. And my associate, Mike

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 5 1 McGaraghan who normally represents us on lighting 2 issues is not here this morning but he is either on 3 the phone or will be on the phone shortly. He is 4 with Energy Solutions and similarly represents our 5 utilities. Thank you. 6 MR. BROOKMAN: Thank you. 7 MR. BOSENBERG: I am Alex Boesenberg, 8 Manager of Regulatory Affairs for the National 9 Electrical Manufacturer's Association. 10 MR. K. COOK: Keith Cook with Philips 11 Lighting. 12 MR. GATTO: Dave Gatto with Westinghouse 13 Lighting. 14 MR. DUFFY: I am Mark Duffy, GE Lighting. 15 MR. HOWLEY: Joe Howley, GE Lighting. 16 MS. CALLAHAN: Sue Callahan, OSRAM 17 Sylvania. 18 MR. DeLASKI: Andres DeLaski, Appliance 19 Standards Awareness Project. 20 MR. BALLO: Tim Ballo, Earth Justice. 21 MS. BUTLER: Sarah Butler, DOE General 22 Counsel's Office.

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 6 1 MS. HUSAIN: Aisha Husain, Navigant 2 Consulting. 3 MS. PIERCE: Julie Pierce, Navigant 4 Consulting. 5 MS. KIENLE: Maureen Kienle, Navigant 6 Consulting. 7 DR. GERKE: I am Brian Gerke, Lawrence 8 Berkeley National Lab. 9 MR. BROOKMAN: If you could just stand. 10 We don't need the mike in the back. 11 MR. COOK: Hayden Cook, Navigant. 12 MR. STEVENS: Charlie Stevens, Northwest 13 Energy Alliance. 14 MR. BROOKMAN: Thanks to all of you for 15 being here. 16 MS. deBUTTS: Lucy deButts, DOE. 17 MR. BROOKMAN: Thank you, Lucy. Thanks to 18 all of you for being here so we can get an early 19 start on the day. All of you received a packet of 20 information when you checked in this morning. 21 And I am going to do a very brief agenda 22 review. Following this agenda review is an

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 7 1 opportunity for anyone that wishes to offer some 2 introductory remarks or opening statements and then 3 moving on directly from there Market and Technology 4 Assessments, Screening Analysis and then Engineering 5 Analysis. We will take a break mid-morning, say 6 10:45 or so. Following that Product Price 7 Determination, Trial Standard Levels, Energy Use 8 Analysis and Life- cycle Cost Analysis. We will 9 take the lunch midday and moving on from lunch 10 Shipments Analysis, National Impact Analysis, 11 Manufacturer Impact Analysis. Following from there 12 and then directly Emissions Modernization of 13 Emissions, Utility Impact, Employment Impact, 14 Regulatory Impact Analyses. And then culminating 15 around about 3:00 or so whenever we get there, the 16 proposed standard. 17 At the end of the day yet another 18 opportunity for you to make closing remarks, any 19 issues that you would like to bring to the fore that 20 haven't been covered sufficiently, that would be the 21 time for that. 22 And I would ask for your consideration if

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 8 1 you would, speak one at a time. Please say your 2 name for the record. There will be a complete 3 transcript of this meeting. Be concise. Share the 4 air time. There is a lot to be said during the 5 course of this meeting. If you'd keep the focus 6 here; turn your cell phones on silent; and limit 7 sidebar conversations. 8 And webinar participants we welcome you. 9 The Department of Energy is trying very hard to make 10 these meetings accessible to all via the web. If 11 you would keep your telephone on mute it will limit 12 the feedback here in the room. And if you raise 13 your hand in the software that is provided, we ought 14 to be able to hear you in the room. We will 15 recognize you to speak and unmute your phone and we 16 ought to be able to hear you right here in the room. 17 And I believe that is all of my 18 housekeeping items for now. 19 Lucy deButts? 20 We have five individuals. 21 We have 12. 22 MR. BROOKMAN: We have 12 on the line

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 9 1 right now. I thought -- do you want to do slides 2 first? 3 MS. DeBUTTS: Okay. So the note for those 4 who are on the webinar we are going to make your 5 comments be part of the public transcript. And then 6 we also encourage everyone to submit written 7 comments. We can do the slides first and then we can 8 go with the opening statements. I think it is going 9 to be in a couple of slides if that is okay. 10 So let's discuss the purpose of today's 11 public meeting. It is to present the energy 12 conservation standards DOE is proposing to GSFLs and 13 IRLs as a result of the analysis we've conducted. 14 We certainly want to understand your 15 concerns. So that is why we are asking for 16 comments. Later we will discuss the next steps in 17 this rulemaking. And as always we will provide an 18 opportunity for opening remarks at the end, I am 19 sorry, at the beginning. And of course closing 20 remarks at the end. 21 If you have any information or data that 22 could help us to analyze this rule, please provide

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 10 1 us with that. 2 In order to facilitate comments throughout 3 this presentation we will have issue boxes which 4 request comments on specific topics. These requests 5 for comments are also outlined at the end of the 6 Federal Register Notice. And the issue box number 7 corresponds to the numbering at the end of the 8 Federal Register Notice. 9 So the comment period for this rulemaking 10 ends on June 30 of this year. And that gives 11 everyone time to finalize your written comments. 12 These written comments can be submitted via email, 13 post, or courier. Of course we encourage the use of 14 electronic sources. And of course we encourage -- 15 and information on how to submit these comments is 16 presented on this slide. 17 And now to opening remarks. 18 MR. BROOKMAN: Opening remarks. 19 Garry Fernstrom? 20 MR. FERNSTROM: This is Garry Fernstrom 21 for the California Investor Owned Utilities. I'd 22 like to at some point during the day ask DOE to

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 11 1 address a question we have about testing and values 2 reported to the DOE database. So we are 3 particularly concerned about the efficacy of linear 4 fluorescent lamps as we design rebate programs 5 around them. Reported and I should say that our 6 regulators are increasingly requiring us to use 7 certified values of efficacy rather than 8 manufacturer's general specifications. So we look 9 to values that are reported to the Department of 10 Energy and to Energy Star to assure that we are 11 utilizing efficacy values that are creditable. 12 Specifically with regard to the DOE database we 13 would like to understand whether DOE requires the 14 exact value per product reported to be accurate or 15 whether it simply requires a pass fail relative to 16 what the standard is. That is to say if a 17 manufacturer reports 95 it passes. If a 18 manufacturer reports 115 lumens per watt is that 19 value required to be accurate and the manufacturer 20 in violation of the regulations in some way by 21 reporting a value higher than what it actually is if 22 it turns out the value they report cannot be

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 12 1 substantiated. So we seek clarification about that. 2 Thank you. 3 MR. BROOKMAN: Thank you. 4 Other opening statements here at the 5 outset? 6 Yes, Alex Boesenberg. 7 MR. BOESENBERG: Alex Boesenberg, NEMA. I 8 want to thank the Department as always for having 9 the meeting and allowing us to be here and discuss 10 in real time these issues. I just wanted to note 11 that due to the complexity of the rule and the 12 quantity of the information there will be perhaps 13 more times than usual where I have to finish a 14 statement with and we'll give you more detail in the 15 written comments. This is a big one, so we want to 16 avoid any generalizations that might turn out to be 17 inaccurate. So maybe it will go faster then. 18 MR. BROOKMAN: We understand. And thanks 19 for the forewarning. 20 Additional comments here at the outset? 21 Tim Ballo? 22 MR. BALLO: Tim with Earth Justice. Just

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 13 1 one quick point that is maybe a bit tangential given 2 the analysis that we have seen but the ERBR, the 3 exempted Incandescent Reflector Lamps should be 4 folded into this rulemaking. There is still an 5 outstanding obligation to complete a rulemaking for 6 those lamps. The white bulb rider even given the 7 broadest possible interpretation does not foreclose 8 the Department for setting standards that are 9 different from whether stronger or even weaker than 10 the levels that are in the EPCA table. So I think 11 the Department should revisit its interpretation of 12 the rider and reconsider including those lamps in 13 this rulemaking. 14 MR. BROOKMAN: Thank you. 15 Andrew DeLaski? 16 MR. DeLASKI: Thanks. Andrew DeLaski, 17 Appliance Standards Awareness Project. I have a few 18 comments to make at the outset and summary that we 19 will work on, develop on later today. I want to 20 begin by saying that we strongly support the 21 proposed rule in particular for General Service 22 Fluorescent Lamps. The standard builds on the 2009

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 14 1 standards and combined the improvements achieved by 2 these two standards together will lead to the 3 largest savings from any standard every issued by 4 the Department of Energy. So it is a big -- as Alex 5 said it is a big one. It is a big one because we 6 are working with commercial lighting; commercial 7 lighting is a very large piece of commercial energy 8 consumption and therefore national energy 9 consumption. So the overall improvement as I said 10 is about 23 percent improvement compared to the 11 minimum levels in effect before 2009 standards. So 12 the combination -- when you put those two together 13 with the ballast standard it is really a 14 transformation for commercial lighting in this 15 combination of standards over the past several 16 years. That will be a tremendous step forward for 17 efficiency. It is important to note that this 18 progress has been enabled by a couple of decades of 19 work; work by the manufacturers to develop high 20 efficiency products across the -- from the lamp to 21 the ballast to the system, a tremendous amount of 22 progress there. Support from the Department enabled

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 15 1 some of that progress, also billions of dollars 2 invested by utilities and their rate payers in 3 supporting commercial lighting improvements. So 4 there has been a lot of money, a lot of rate payer 5 money put into changing, creating the basis really 6 for this standard today and the standard that locks 7 in that benefit. So it is really an excellent 8 example of how standards can couple with utility 9 based programs and voluntary programs to shift 10 efficiency over a couple decade period. But the 11 standards are a crucial piece of that in locking in 12 the benefits. 13 We also appreciate the improvement that 14 DOE has made with respect to Incandescent Reflector 15 Lamps. Although the savings are modest and we are 16 going to want to understand that a little better 17 today because we are a little struck by the savings 18 estimate that come out of that rule. The standard 19 will help insure that buyers have a choice of 20 efficient options in that market place. Of course 21 in that market as John has already suggested the 22 LEDs is an excellent option for consumers because of

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 16 1 its nature as a point light source. With this 2 standard consumers will have a choice of LED 3 efficient option or a very efficient option in the 4 incandescent category. 5 For both of these rules we strongly 6 support the NOPR in its entirety. We also want to 7 raise a few issues for both the GSFL and the IRL 8 category. With respect to IRLs we are disappointed 9 that DOE did not address the so-called exempt IRLs. 10 Tim has already mentioned this. We think that by 11 addressing -- if you have one -- the way this is 12 being set up now is that you have a choice for some 13 parts of the market of the very efficient LED, the 14 very efficient incandescent covered lamp or a 65 15 watt BR or equivalent lamp which is very, very 16 inefficient. So we are creating a market where 17 you've got options, some of which are very 18 efficient, some of which are at levels that aren't 19 even covered by the 1992 standards. And addressing 20 that loophole, addressing that exempt lamp category 21 could lead to a very large savings. We estimate 22 standards at the levels in today's rule that would

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 17 1 cover the exempt IRLs would lead to annual bill 2 savings for consumers in the order of half a billion 3 dollars, annual bill savings of half a billion 4 dollars and could lead to CSU reductions by the year 5 2030 of about 50 megatons. So it is a big 6 opportunity, one the Department should address. 7 We also believe that DOE made a mistake in 8 not considering higher levels for the IRLs that are 9 covered by the rule. The California IOUs presented 10 testimony, written comments to the docket that we 11 believe put in a rock solid case for considering 12 higher levels. The Department basically gave them 13 the back of your hand. You basically dismissed the 14 arguments with a grab bag of what we feel are not 15 well substantiated rationales for why you didn't 16 consider higher levels. We think that the rule 17 should have considered higher levels for IRLs. 18 We also believe that the continued lower 19 standard for modified spectrum lamps is unnecessary. 20 There are two reasons for this. One is that 21 consumers have options in the marketplace today to 22 buy a modified spectrum lamp that offers no

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 18 1 efficiency penalty. That utility is available in 2 the marketplace in LED product and other products 3 that offers no efficiency penalty. There is no 4 guarantee that you would be able to buy that utility 5 and part of it happens using incandescent 6 technology. To make that exemption or that lower 7 standard for modified spectrum lamps is no longer 8 necessary. 9 It also appeared based on the record that 10 there are very few modified spectrum lamps in the 11 covered lamp category. And we are still 12 investigating this trying to understand what lamps 13 are being covered, are they in the covered category 14 but if there are few to no lamps in the covered 15 category, modified spectrum then that suggests the 16 question of why even have the category. 17 With respect to GFSLs just two points. I 18 want to echo Garry's concern about rating systems, 19 the ratings. We need to understand better today the 20 numbers, how the ratings are being made both with 21 respect to DOE standards reporting and catalogs. 22 And then there are two categories of lamps

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 19 1 that we are concerned about that are not covered by 2 today's standard that we think present the 3 possibility for substantial undermining of the 4 standard. One is high CRI lamps. Congress exempted 5 high CRI lamps in 1992 because it was a specialty 6 product. It was seen as being not a general service 7 lamp. Today manufacturers, including some of the 8 major manufacturers, are marketing high CRI lamps as 9 a general purpose lamp. There is work going on from 10 the utility industry to investigate or to understand 11 this now better but this is looking like a serious 12 emerging problem that will undermine the savings 13 from this standard. And we think that DOE needs to 14 better understand this emerging use of a specialized 15 lamp and marketing of it as a general service lamp. 16 And then move quickly to better understand it and to 17 address it ideally in this rulemaking. If that is 18 not possible as part of a follow on process to 19 address this exempted or this general service use of 20 this exempted lamp. 21 And then 2-foot lamps we understand DOE's 22 rationale for not covering 2-foot lamps based on the

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 20 1 Navigant study. We continue to believe that there 2 is a growing product category and we hope to have 3 data soon from the Northwest that Charlie has been 4 gathering that will help us understand better a 5 little more about the market growth in that area. 6 And we believe that is a category that DOE should 7 look to address in the final rule. 8 MR. BROOKMAN: Okay. Thank you. 9 Additional comments? 10 Garry Fernstrom? 11 MR. FERNSTROM: Garry Fernstrom for the 12 California IOUs. Just a quick follow up. We are 13 members of ASAP and I would like to state for the 14 record we support Andrew's comments. 15 MR. BROOKMAN: Okay. Thank you. 16 Additional comments before we move to the 17 content in the packet? 18 Okay. Onward. 19 MS. DeBUTTS: Okay. So we will first 20 provide an overview of this rulemaking. And we've 21 already touched in the opening remarks on the 22 regulatory history but I just want to revisit it

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 21 1 quickly. The Energy Policy and Conservation Act of 2 1992 amended the Energy Policy and Conservation Act 3 of 1975 by establishing energy conservation 4 standards for certain classes of GSFLs and IRLs. It 5 also authorized DOE to conduct two rulemaking cycles 6 to determine whether these standards should be 7 amended. It also directed DOE to adopt standards 8 for additional GSFLs if warranted. 9 DOE completed the first of those 10 rulemaking cycles and published the final rule in 11 2009. And we will refer to this rule as the 2009 12 rule for the rest of the presentation. The 2009 13 rule amended the standards for GSFLs and IRLs and 14 adopted standards for additional GSFL types. These 15 standards required compliance starting in July of 16 2012. And so we will refer to those standards as 17 July 2012 standards. 18 DOE initiated the second rulemaking cycle 19 for evaluating GSFL or IRL standards in September of 20 2011 and by publishing the framework document and 21 holding a public meeting in October of 2011. The 22 preliminary analyses followed in February 2013. It

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 22 1 was a public meeting held in April of that year. 2 This led to the NOPR analysis which is the subject 3 of today's presentation. And the next stage of the 4 second review of GSFL and IRL standards. 5 The next couple of slides we will look at 6 the current standards for GSFLs and IRLs and we will 7 start with GSFLs. 8 GSFL standards are set in lumens per watt. 9 They differ by lamp type and CCT in Kelvin. And 10 these standards are consistent across wattages. And 11 of course they came into effect in July 2012. 12 These are IRL standards. They vary by 13 spectrum, diameter and voltage. They are based on 14 the power law equation. These do not include ERBR 15 and certain R lamp types. 16 This is the outline of the rulemaking 17 schedule. As I stated earlier the framework was 18 published in September of 2011. We had the public 19 meeting, the preliminary analysis and technical 20 support document and the notice of the public 21 meeting for that were published on February 28, 22 2013. And the notice for the NOPR was published on

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 23 1 April of this year. 2 The NOPR will be followed by one last 3 major publication which is the final rule notice. 4 We are projecting this to be issued in December 5 2014. The final rule will be responding to comments 6 received during today's public meeting and the 7 written comments which are submitted prior to the 8 comment period end date. It will also present the 9 revised analysis and the standards adopted by DOE. 10 And finally the compliance date will be -- 11 we are projecting it for December 2017 which is 12 three years after the projected final rule 13 publication. 14 This slide talks a little bit about EPCA 15 factors. So when setting energy conservation 16 standards DOE is directed by EPCA to consider seven 17 factors. These factors and their corresponding 18 analysis are shown in this table. And you will be 19 examining these factors throughout this rulemaking 20 as we evaluate standards for GSFLs and IRLs. 21 Let's move on and discuss the scope of 22 coverage for this rulemaking starting with GSFLs.

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 24 1 Currently standards set may cover six fluorescent 2 lamp types with certain wattage ranges as shown on 3 this slide. These include the 4-foot medium bipin, 4 2-foot U-shaped, 8-foot slimline, 8-foot high output 5 and 4- foot mini bipin standard output and high 6 output lamps. 7 This rulemaking also considers expanding 8 coverage to other fluorescent lamp types and 9 wattages. So in order to determine whether a lamp is 10 a candidate for standards it should meet the general 11 technical description of a fluorescent lamp and not 12 fall under any exclusion specified in DOE's 13 definition of general service fluorescent lamp. 14 After that DOE determines whether standards for the 15 candidate lamp would result in significant energy 16 savings. And further if those standards would be 17 technologically feasible and economically justified. 18 We've considered fluorescent shapes not 19 covered such as circline lamps and also linear 20 lengths not covered such as five and six-foot lamps. 21 However DOE was not able to identify additional lamp 22 types that have market share and/or would end up in

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 25 1 energy consumption that results in substantial 2 energy savings for the standards. So based on 3 these findings DOE is not extending scope of 4 coverage to additional lamp types. 5 However we did decide to consider 6 inclusion of additional wattages for fluorescent 7 lamp types already covered. As stated during the 8 preliminary analysis public meeting DOE determined 9 that certain covered lamp types are being offered in 10 lower wattages and may gain market share. Therefore 11 standards for those lamps may offer energy savings. 12 The new wattage limits under consideration are shown 13 in this table. 14 We are also considering modifications to 15 clarify the definition of General Service 16 Fluorescent Lamp which exempt lamps that are 17 designed and marketed for certain non-general 18 applications. DOE is considering further clarifying 19 on some of these exemptions shown in bold on this 20 slide. 21 DOE is also proposing a definition for the 22 term 700 series fluorescent lamp. This definition

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 26 1 is aimed to provide clarification in identifying 2 these types of lamps. 3 DOE is also proposing the definition for 4 defining the term designed and marketed and similar 5 terminology as it applies to all lighting products. 6 So now we are moving on into scope of 7 coverage for IRLs which was discussed earlier as 8 well. And the scope of coverage for this rulemaking 9 applies to those IRLs that meet the definition of 10 DOE's definition of Incandescent Reflector Lamp. It 11 is shown on this slide here. Although DOE's 12 definition of IRLs does not set an upper limit of 13 wattage, the existing IRL standards are set for the 14 40 to 205 watt range because wattages greater than 15 205 are mainly specialty lamps which are a small 16 portion of the market and would not result in a 17 significant energy savings. 18 DOE's analyses, the NOPR analysis also 19 confirmed that this remains true. So this 20 rulemaking is proposing standards for this range of 21 40 to 205 watts. 22 MR. BROOKMAN: Tim Ballo?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 27 1 MR. BALLO: I wonder if we can go back to 2 slide 18. The definition of design and marketed and 3 the reason I bring this up is because as Andrew 4 mentioned we are seeing high CRI lamps that are 5 designed -- that are being marketed for general 6 purpose lighting applications either by the retailer 7 or at least in some cases by the manufacturer. The 8 definition you have here for designed and marketed 9 by stating that the application of the lamp is 10 stated in a publicly available document, that 11 suggests to me that as long as the manufacturer has 12 a document somewhere that is publicly available that 13 says well this is just for high CRI applications 14 then it is sort of insulated from liability. 15 Whereas I think that if the lamp is out there being 16 marketed for general purpose applications regardless 17 of the fact that there is some document somewhere 18 that is publicly available that says it's really 19 just for high CRI. I see a problem there with that. 20 I think the definition needs to be broader to 21 account for the fact that there are potential 22 problems with the exempt lamps.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 28 1 MS. DeBUTTS: Okay. Thanks. 2 MR. BROOKMAN: Garry Fernstrom? 3 MR. FERNSTROM: This is Garry for the 4 California IOUs. I certainly agree with Tim. The 5 definition we use ought to relate to the way these 6 products are represented in the marketplace and 7 might be utilized. 8 MR. BROOKMAN: Okay. Thank you. 9 Andrew DeLaski? 10 MR. DeLASKI: So just to follow on. I 11 said in my opening remarks I was (inaudible). This 12 is a problem that we are still frankly wrapping our 13 arms around as well. And we hope to have more 14 detailed comments for you in the written comments. 15 I think that the opportunity in this docket probably 16 is or one of the opportunities is through 17 definitions to perhaps address this emerging 18 loophole. And the definition number eight on the 19 prior slide is not emboldened and I would suggest 20 that it should be; that we should be thinking about 21 or we should be considering what modifications to 22 that definition in addition to what Tim just

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 29 1 described could be made to address the use of high 2 CRI lamps in a general service -- as a general 3 service fluorescent lamp. 4 I also want to comment on slide 13. We 5 think that obviously you need a reasonable amount of 6 time between the NOPR and the final rule and that is 7 what you have sketched here. It is that the 8 legislative deadline I think as you noted is July so 9 we are looking at this rule being a few months late 10 from what it was legally required to be due. I just 11 urge you to stick with the schedule so that it 12 doesn't get any further behind than what you have 13 already sketched out. 14 MS. DeBUTTS: Correct with time. Thank 15 you. 16 MR. DeLASKI: Thank you. 17 MR. BROOKMAN: Additional comments here? 18 MS. DeBUTTS: Okay. Well so this 19 basically concludes the overview section. The last 20 slide I have is on the NOPR stage which represents 21 the flow and the type of analysis we've conducted. 22 And we will discuss those during this presentation.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 30 1 MR. BROOKMAN: Okay. Yes. John 2 Cymbalsky. 3 MR. CYMBALSKY: So I would like to address 4 Garry Fernstrom's remark about the ratings and what 5 they represent. I will make a statement and cite 6 some sections in the CFR. And I would request that 7 if you would like to have further discussion about 8 this that we have a separate meeting about ratings 9 enforcement. All those questions should be separate 10 from this public meeting. 11 So here we go. The certified values 12 represent the manufacturer's declared rating of a 13 basic model that is derived from testing a set of 14 units of that basic model in accordance with the 15 test procedure found in 10 CFR Part 430 Subpart b, 16 appendix R, and the sampling plan found in 10 CFR 17 429.27. This rating should be identical to the one 18 on the label and in marketing literature. Again and 19 if we want to get into more detail about what that 20 means I suggest a separate follow on meeting with 21 whomever you'd like when we have the appropriate 22 personnel in the room.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 31 1 MR. FERNSTROM: This is Garry for the 2 California IOUs. Thank you John. Just one quick 3 question. I understand what you just said in that 4 what is reported must be identical to what is on the 5 label. And can you at this point indicate whether 6 or not the value reported to DOE is one that 7 manufacturers -- or that is expected to be realized 8 if products were tested to validate that value? 9 MR. CYMBALSKY: John Cymbalsky, DOE. So I 10 can tell you we actively enforce all of our 11 standards. So that is all I will say on that. 12 MR. FERNSTROM: Okay. So I would 13 interpret that to mean that the value reported is 14 the value expected? Thank you. 15 MR. BROOKMAN: Okay. Additional comments 16 before we move to the next section. Okay. 17 MS. DeBUTTS: Okay. So now Aisha Husain 18 with Navigant will present Market and Technology 19 Assessment and Screen Analysis. 20 MS. HUSAIN: Hi my name is Aisha Husain 21 and I am with Navigant Consulting. And I will be 22 going over the Market and Tech Analysis and

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 32 1 Screening Analysis. So the purpose of the Market 2 and Technology Assessment is to determine product 3 classes and identify technology options that will 4 improve lamp efficacy. 5 Technology options identified are then 6 evaluated against four screening criteria which are 7 that the option is technologically feasible, that 8 it's practicable to manufacture, that there is no 9 adverse impacts on product utility, that there is no 10 adverse impacts on health or safety. The technology 11 options that passed these screening criteria are 12 then used as design options in the engineering 13 analysis. 14 For product class determination DOE 15 divides covered products into classes based on 16 energy use, capacity of the product, or any other 17 performance related features. And then a separate 18 standard is set for each category or product class. 19 So here we have the product classes for 20 GSFLs. We are proposing three product class setting 21 factors. One is correlated color temperature or 22 CCT; CCT is the measure of perceived color white

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 33 1 light and, therefore, different CCTs offer different 2 utilities. DOE has also determined that there is a 3 decline in efficacy for lamps with CCTs greater than 4 4500 K and so the division is at lamps with CCTs 5 equal to or less than 4500 K and lamps with CCTS 6 greater than 4500 K. 7 DOE also proposes physical constraint as a 8 class setting factor particularly lamp length and 9 shape. Different lamp geometries offer different 10 utilities in the sense that they can fit in 11 different building designs and footprints. Length 12 and shape also impact lamp efficacy. 13 Finally DOE is also proposing lumen 14 package as a class setting factor. So specifically 15 standard output and high output. High output lumen 16 packages offer a different utility in the sense that 17 they can be used in high ceiling applications or 18 outdoors. They also -- the lumen package also 19 impacts the lamp efficacy. 20 So the table here represents the 12 21 product class divisions being proposed for GSFLs. 22 MS. CALLAHAN: Susan Callahan OSRAM

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 34 1 Sylvania. We'd just like to point out in the 2-foot 2 U-shaped lamps under physical constraints that there 3 are two different geometries for those lamps, six 4 inch spacing and 1 5/8th inch spacing. 5 MR. BROOKMAN: Are you suggesting they 6 should be in different product classes? 7 MS. CALLAHAN: Based on the analysis that 8 we have seen they should be in different product 9 classes based on the conclusions that you have 10 drawn; the proposed conservation levels. 11 MS. HUSAIN: Okay. 12 MR. BROOKMAN: Thank you, Susan. 13 MS. HUSAIN: We would welcome any written 14 comments on that as well. 15 So for IRLs DOE is also proposing three 16 product class setting factors. One is Lamp 17 spectrum. Modified spectrum IRLs usually use a 18 neodymium (ph) coating or some other kind of coating 19 that absorbs part of the visible light and therefore 20 gives off a different type of light and utility than 21 non-modified or standard spectrum IRLs. This also 22 results in a lower efficacy for these lamps.

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 35 1 DOE is also proposing diameter as a class 2 setting factor. Small diameter lamps can be 3 installed in smaller fixtures, therefore, offering a 4 specific utility. They also have lower optical 5 efficiency than the larger diameter lamps and some 6 cannot utilize some of the technology options that 7 can be utilized by large diameter lamps such as 8 double-ended capsules. Specifically DOE is proposing 9 to divide lamps with diameters greater than 2.5 10 inches and then lamps that are 2.5 inches or less. 11 DOE is also proposing rated voltage as a 12 class setting factor. DOE has found that most 13 consumers operate 130 volts lamps at 120 volts which 14 reduces the efficacy while increasing the lifetime. 15 DOE test procedures require that 130 volts lamps be 16 tested at 130 and similarly 120 volts lamps be 17 tested at 120. Therefore compared to a 120 volt 18 lamp a 130 volt lamp will test at a higher efficacy. 19 If there is a single standard the 130 volt lamp 20 would likely not require as efficient technology and 21 might be -- to meet the standard as a 120 volt lamp. 22 And therefore the need for this less efficient

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 36 1 technology could make the 130 volt lamp less costly 2 and potentially result in a migration to 130 volt 3 lamps and increased energy consumption. 4 So the table here shows the eight product 5 class divisions for IRLs. 6 MR. BROOKMAN: Joe Howley? 7 MR. HOWLEY: Similar to the U-lamp issue 8 there are actually two different diameter lamps 9 found in the greater than 2.5 category. There are 10 PAR38 lamps and there are PAR30 lamps. And while 11 the previous standards it was okay to group them as 12 we approach these sort of super max tech levels 13 those are modeled off what can be done with PAR38 14 technology and as you mentioned lamps with smaller 15 diameters have smaller efficiencies. It tends to be 16 exacerbated more with the PAR20 which is why the 17 PAR20 lamps, the less than 2.5 were pulled out in 18 the first rulemaking. But if you are going to 19 propose these types of levels it also creates a 20 problem where you model on PAR38, it creates a 21 severe problem for PAR30 lamps being able to meet 22 those levels because they are a less efficient

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 37 1 diameter. And again it is something that needs to 2 be looked at and we will provide further comments. 3 MR. BROOKMAN: Thank you. 4 MS. HUSAIN: Sorry. 5 MR. K. COOK: Keith Cook with Philips. 6 One question we've got is has Navigant been able to 7 find any 130 volt lamps on the market today? 8 MS. PIERCE: Julie Pierce, Navigant 9 Consulting. No. 10 MR. K. COOK: So why are we spending any 11 time on it? 12 MS. PIERCE: DOE finds no reason that 13 these lamps cannot technologically be produced and 14 also the existing product class structure includes 15 them so there may be back sliding issues if we don't 16 include them. 17 MR. K. COOK: They can't be produced. 18 MR. BROOKMAN: Alex Boesenberg? 19 MR. BOESENBERG: Alex Boesenberg, NEMA. 20 We understand the DOE's statement that there is no 21 reason why they can't be produced. However I would 22 point you to the evidence that there are none

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 38 1 available on the market. Whether that is a business 2 decision or a technological ramification as we 3 submitted in our comments to the previous rule. 4 Nevertheless they are no longer available. If they 5 are not being made available under today's standard, 6 there would seem no reason to invest time in 7 establishing a new standard for them. Furthermore 8 if they are not available under today's standard it 9 doesn't make any sense to claim any energy savings 10 from a new standard. We will conduct our own 11 analysis to attempt to identify these lamps or if 12 one can, in fact, be made and submit what we can 13 with our written comments. 14 MR. BROOKMAN: John Cymbalsky? 15 MR. CYMBALSKY: John Cymbalsky, DOE. So 16 what I am interpreting that a saying that they don't 17 exist, the manufacturers don't plan on ever making 18 them again so that if we create a standard no harm, 19 no foul; is that what I am hearing? 20 MR. BOESENBERG: With the understanding 21 that when you get to the energy savings equation the 22 multiple variable is zero.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 39 1 MR. BROOKMAN: Garry Fernstrom? 2 MR. FERNSTROM: Garry for the California 3 IOUs. Our concern here is the possibility of 4 leaving the door open to a potential loophole. And 5 I understand and agree with the manufacturers there 6 may not be a lot of value in creating a standard for 7 a product that isn't in the market anyway. But 8 looking back to incandescent reflector lamps the 9 Department of Energy regulated R lamps but exempted 10 BR and ER lamps and low and behold the market was 11 full of BR and ER lamps. So we want to avoid the 12 possibility of that happening again. That is our 13 only concern with respect to this. And I think if 14 establishing a regulation to preclude migration of a 15 product into an area where products are exempted 16 from regulations is considered we should regulate 17 the product that may not be on the market now but 18 where we have a concern that it might return. 19 MR. BROOKMAN: Alex Boesenberg? 20 MR. BOESENBERG: Alex Boesenberg, NEMA. 21 Garry I understand your argument, however, I would 22 point out that the lamps are regulated. And at the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 40 1 current regulation they are not being produced. So 2 I -- it does not make sense to elevate the 3 requirement. It is already -- they have already had 4 their efficiency raised if you will considering 5 unexisted test, it is hard to say it was raised. 6 But anyway there was an analysis that rule is over. 7 So I think the logic doesn't hold up under those 8 conditions. 9 MR. BROOKMAN: Joe Howley? 10 MR. HOWLEY: Yes, I think it is because 11 the wrong question was asked and analyzed by 12 Navigant. And the question should have been asked is 13 why aren't they available today. And the answer 14 seems to be there is no reason why they are not 15 available but they didn't ask the question why 16 aren't they available. And the reason is in the 17 previous rulemaking I agree with Alex this is a 18 completely different situation than an exempted 19 lamp. This is actually the opposite of that 20 situation. This is a situation where an existing 21 standard is set so high it exceeds the capability to 22 make a practical lamp. That is where we are at

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 41 1 today. So it is the opposite of an exemption. It is 2 a standard so high it exceeds technology limits. The 3 way it was originally analyzed they looked at max 4 tech for PAR38 lamps and the last standard was set 5 at a max tech level. And then for 130 volt lamps 6 they put an adder on it of 15% higher. So the 7 standard is set at 15% higher than the maximum known 8 technology at the time. And when you look at it 9 that way you realize the manufacturers have no 10 other, there is no other tricks here to increase 11 efficiency on either the halogen IR tube or on the 12 reflector technology. The only thing left is to 13 shorten life. But you have to shorten life so much 14 by increasing efficiency 15% you'd affect life by 15 probably about two-thirds. There would be a two16 thirds reduction. And that is if it is operated at 17 120. If it is actually operated as intended at 130 18 volt circuit it would have an extremely short lamp 19 life such that it would be completely impractical to 20 sell. So the level that you have although you might 21 argue just philosophically it can technically be 22 made, the point is it could be technically made at a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 42 1 level, at a life that is so short to have no 2 practical salability; and that is where we are at 3 today. And so we are at there in today's regulation 4 and yet there is a proposal to take that even five 5 percent higher than what is impossible to meet 6 today. And I suppose for that reason this is simply 7 philosophical because we are talking about taking 8 something not able to be made today and making it 9 even more impossible to be made tomorrow. 10 MR. BROOKMAN: Mike Rivest? 11 MR. RIVEST: Mike Rivest, Navigant. Joe I 12 appreciate the comment. On the first point that it 13 doesn't exist today I think there are instances even 14 in lighting where we've created a standard for a 15 lamp in case it would become available. Halo16 Phosphor T5s is the one I remember. So that in 17 itself wouldn't be a reason not to regulate it but 18 the argument that it is already regulated and that 19 the standard exceeds technological feasibility is 20 compelling. We will have to look into it. But we 21 understand. 22 MR. BROOKMAN: Thanks for your comment.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 43 1 Let me see. Dave. 2 MR. GATTO: Dave Gatto, Westinghouse 3 Lighting. Not to beat a dead horse but I think the 4 important thing that we would like for DOE to see in 5 here is that and Garry we appreciate the concern 6 that there may be back sliding but two things 7 happened in here I think that were missed in the 8 last rulemaking and I am kind of where Joe is, I 9 think it was just that we were all asking the wrong 10 questions. One is that we remove the utility from 11 the market that consumers like because in certain 12 parts of the country we have transients, we have 13 voltage spikes, we have power issues. When 130 volt 14 lamps were able to absorb and deal with these and 15 maintain product lifetimes that were acceptable to 16 consumers and at this point that utility is gone. 17 Consumers simply in those markets have to buy a lot 18 of light bulbs regardless of the technology in some 19 cases because of these voltage issues. The other 20 thing that I think was missed from an energy savings 21 standpoint was that you acknowledged that when 130 22 volt lamps operated at 120 volt are less efficient

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 44 1 but what you left out of that was that they also use 2 less energy. So a 60 watt halogen PAR operated at 3 130 volt 60 watts when operated at 120 volts would 4 use I think it is eight to ten percent, call it 55 5 watts, so in essence what you did was you set an 6 efficiency standard so high that an energy saving 7 product that also can deal with voltage issues that 8 are common in certain parts of the U.S. was 9 eliminated from the marketplace. Now we are not 10 suggesting that you go back and fix that. We know 11 you can't. But what we would suggest is that this 12 is the kind of unintended consequence that we'd like 13 to be very very careful about and will include in 14 our comments to NEMA when we are establishing new 15 IRL standards because I think once that bar is set 16 if I understand correctly, John, that back sliding, 17 we can go back and say oops but we can't undo what 18 we did. 19 MR. BROOKMAN: Okay. Thank you. 20 Additional comments on this series of 21 product classes? 22 Okay.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 45 1 MS. HUSAIN: I just wanted to quickly 2 follow up on Joe's comment on PAR38 and 30s if you 3 could include in your written comments difference in 4 utilities and sort of efficacy differences and the 5 same for the 2-foot that would be really helpful. 6 MR. BROOKMAN: Thank you. 7 MS. HUSAIN: Okay. So now we will move on 8 to Technology Options and Screening Analysis. DOE 9 identified technologies that can improve efficacies 10 for GSFLs as well as IRLs. For the screening 11 analysis DOE reviewed these six technology options 12 and assessed them against the screening criteria and 13 then determined which ones should be design options 14 that would be used in the engineering analysis. 15 So for GSFLs the following are the 16 technology options that were identified. Of these 17 DOE determined that multi-photon phosphors would be 18 screened out. They are in the research and 19 development phase so DOE determined that they are 20 not technologically feasible at this point. 21 For IRLs DOE identified the following 22 technology options. Of these DOE determined those

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 46 1 shown in red would be screened out. The majority of 2 these were screened out because they were not found 3 to be in commercially available lamps, therefore, 4 could not be determined to be practical to 5 manufacture. Some of the other reasons were that 6 they were not technologically feasible. And a few 7 had adverse impacts on product utility. 8 MR. BROOKMAN: Susan? 9 MS. CALLAHAN: Susan Callahan from OSRAM 10 Sylvania. I'm just looking for clarification in the 11 options that you have screened in for both IRL and 12 GSFL that could you tell me how to do that? Could 13 you tell me what that higher emissive coating 14 material is? Can you tell me how to run my lamp 15 hotter? How from an industry perspective -- there 16 are a number of these things that we actually do and 17 we actually optimize them and that is why we are in 18 the business that we are in. But some of these I 19 guess part of me is taken with the fill gas that 20 there are higher efficacy fills available. And from 21 a lamp maker's perspective I am just curious what 22 they are and hopefully they are not patented and I

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 47 1 can go and make my lamp do that. 2 MS. HUSAIN: Fill gas for GSFLs and IRLs? 3 MS. CALLAHAN: Yeah. 4 MS. HUSAIN: So we have identified certain 5 fill gas compositions and in talking to 6 manufacturers, for example for fluorescent it is 7 argon and krypton and for IRLs it is xenon mainly. 8 But we've -- 9 MS. CALLAHAN: But if I have already done 10 that. If those are part of what you need to do to 11 make the lamp, how does that become an option if it 12 is something that is inherent to the lamp? 13 MS. HUSAIN: So based on interviews and 14 research and looking at patents we've seen that 15 there are different ratios, there are different 16 combinations of these fill gases that can be used. 17 So there are ways to manipulate the fill gas 18 composition to get an increased efficacy. 19 MR. BROOKMAN: Mike Rivest? 20 MR. RIVEST: Mike Rivest. I think we have 21 to step back here and think about how the 22 engineering analysis was created. We didn't run a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 48 1 computer model to try to simulate a lamp and come up 2 with the design options and model the efficacy. I 3 believe we used commercially available lamps. And 4 so these are not you know the burden of proof that 5 it is technologically feasible, it is in the 6 commercial availability; right. And you have 7 proprietary means of achieving those efficacies. We 8 didn't probe that. What we did take -- what we are 9 trying to do is take off the table things that for 10 reasons such as patents or a scarcity of materials 11 would not be generally available for a standard for 12 example. So we are coming at it from a screening 13 prospective, not from a this is how you will get to 14 that level, a prescriptive path if you will. 15 MR. BROOKMAN: Mark first. 16 MR. DUFFY: I just wanted to -- I am 17 sorry, Mark Duffy, GE Lighting. Thank you Alex. I 18 just wanted to say it in a slightly different way. 19 Frankly the items especially with GSFL where my 20 expertise is the highly emissive coatings and the 21 gas fill composition are being used to meet the 22 current requirements of the rulemaking in the 2009

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 49 1 rulemaking. So in order to use that as justification 2 for even more I think you're applying the advantages 3 once again to go to higher levels. And I don't 4 think that is a logical approach. Those of us who 5 design these lamps are already designing them using 6 these tools and techniques to get the maximum out of 7 the performance of the lamp. 8 MR. BROOKMAN: Keith Cook. 9 MR. K. COOK: The problem I've got with 10 this approach is the fact is that it is looking for 11 a singular outcome. It is only looking for 12 efficacy. When in reality we are having to meet the 13 market requirements they are also looking for 14 lifetime, they are looking for dimability, they are 15 looking for CRI and those are all trade-offs that 16 are included in this. And so therefore I don't 17 think that this is comprehensive enough to really 18 screen out what is necessary for meeting the market 19 requirements. 20 MR. BROOKMAN: Okay. Thank you. 21 Eric Montgomery, who is joining us via the 22 web, has a comment or question. Unmute your phone

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 50 1 Eric and let's see if we can hear you. Try it 2 again. Speak clearly. Let's try again. 3 MR. MOTGOMERY: Well on the IRL subject 4 there are several things mentioned in here as 5 options that are already used to the maximum extent 6 that they can be. For example Xenon is mentioned. 7 There is no more Xenon that you can put in than the 8 quantity that is already put in. So that is not a 9 new design pathway. The other -- some of these 10 other things that are mentioned in here is design 11 pathways. Someone would have to explain to a large 12 extent how these would even improve efficiency. 13 MR. BROOKMAN: Okay. Thank you. 14 Yes, Andrew DeLaski? 15 MR. DeLASKI: I just want to follow up on 16 a point that I think Mike made. So my understanding 17 is that for both IRLs and GSFLs that the levels that 18 were selected and proposed that there are existing 19 lamps on the market that meet the levels. 20 MR. BROOKMAN: Mike Rivest. 21 MR. RIVEST: That is my understanding and 22 when we get to the section on those levels we can --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 51 1 we certainly can talk about that. 2 MR. DeLASKI: My understanding is that the 3 GSFLs that that is the case as well and including 4 that a constraint that you would use was to insure 5 that full wattage lamps were available and that was 6 for both levels; that was a constraint in the 7 decision making. 8 MS. HUSAIN: Yes. And the levels are 9 based on commercially available -- 10 MR. DeLASKI: And again it is a 11 performance standard. It is not a design standard. 12 It is up to the manufacturer how they meet it. It 13 is not to be dictated to use one or the other. 14 MR. BROOKMAN: Mike Rivest. 15 MR. RIVEST: And if in meeting those 16 levels some other utility features, consumer utility 17 attributes are being sacrificed such as life, such 18 as color we would like to know about that. 19 MR. BROOKMAN: John Cymbalsky? 20 MR. CYMBALSKY: John Cymbalsky, DOE. So 21 my question to the manufacturer is it almost sounded 22 like you were implying that you were maximizing or

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 52 1 optimizing everything that is not in red on this 2 chart to just meet the current standard if my logic 3 and my mind works from what I have heard from the 4 comments that you are already doing all this and you 5 are barely making the standard now; did I interpret 6 that right? There is no room to go higher to 7 optimize these things? Is that what I heard? 8 MR. BROOKMAN: Keith Cook? 9 MR. K. COOK: I wasn't going to address 10 that one. But I will. No there are still some 11 good, better, best scenarios. Although I think the 12 good is gone, we are now down to better and best and 13 there is an upper level that we can provide at a 14 significant cost premium. It is typically about 40% 15 higher than what is out there and it is usually only 16 professional grade. It is not usually available for 17 the general market because it is such a premium. 18 Back to my other -- okay, go on John. 19 MR. CYMBALSKY: Just to respond. Thank 20 you that is very helpful. So I think as Mike and 21 Andrew both said the focus of the conversation then 22 should not be the screening, it should be the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 53 1 engineering cost curve and the price assumed to move 2 up on the efficiency curve which I think is going to 3 be a good conversation. 4 MR. BROOKMAN: Joe Howley? 5 MR. HOWLEY: If I could make just one 6 comment on that. I think you are discussing the 7 right area though about as you move these up what 8 happens is you remove utilities. There are certain 9 things that you lose as you go higher and higher and 10 higher with efficiency. Not -- there might be a 11 lamp that could be made at a certain level but it is 12 with removing a lot of utilities that consumers 13 want. And we will talk more about those in our 14 comments about what utilities you lose as you go 15 higher even though that might be possible you are 16 left with -- you are left with a product that 17 doesn't have a lot of utilities left to it. 18 MR. BROOKMAN: Keith Cook? 19 MR. K. COOK: Yeah and as we point out 20 many times before and it is still very true we can 21 definitely improve efficacy but it is usually at the 22 expense of life; pure and simple. It is always the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 54 1 trade off. 2 MR. BROOKMAN: Okay. 3 MR. COOK: And that is the utility. 4 Right. 5 MR. BROOKMAN: Dave. 6 MR. GATTO: If I could just make -- 7 MR. BROOKMAN: You are not finished. I am 8 sorry, Keith. Keep going. 9 MR. K. COOK: I still have one question. 10 Going back to Andrew's remark that they have found 11 lamps that meet these requirements in this analysis. 12 I would like to see the one for the 130 volt IRL 13 please. 14 MR. BROOKMAN: Okay. Dave. 15 MR. GATTO: Sorry, didn't mean to cut you 16 off there, Keith. So two things. Dave Gatto, 17 Westinghouse. Thank you Alex. Going to be hearing 18 thank you Alex quite a bit today. 19 I just want to make a point John because 20 what Joe said is true for GSFL that there are, and 21 Keith, there are opportunities for higher 22 efficiencies, for reduced life, for changes in color

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 55 1 or some other options or at a premium cost which 2 typically remember these products fall within the 3 consumer and the commercial market. So there is a 4 consumer impact here if the cost increases beyond a 5 certain point. 6 I don't think that that is actually true 7 in IRL. I think in IRL where we are at is we are at 8 max tech. You've got some potential improvements if 9 you take all of those pathways but to do so the 10 combination of patents and infringement issues that 11 you have there makes it -- and we appreciate DOE's 12 statement about that in the NOPR that you 13 acknowledge that. 14 I don't know that -- we will include some 15 comments officially in the written comments but I 16 think it is important here to just separate the fact 17 that in GSFL there is still opportunity with the 18 trade off to utility for energy efficiency which is 19 something that we've been talking about. In IRL 20 that just simply doesn't exist and I don't want it 21 to get lumped in there because I think we are 22 already in the danger zone with IRL as we stand

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 56 1 today. 2 MR. BROOKMAN: Okay. Thank you. 3 Additional comments here? 4 MS. HUSAIN: Okay. Then I will pass it on 5 to my colleague, Maureen to start us on the 6 Engineering Analysis. 7 MS. KIENLE: Good morning. My name is 8 Maureen Kienle. And I am with Navigant. We are 9 going to get started now with Engineering Analysis. 10 DOE used the following general methodology to 11 develop the engineering for GSFLs and IRLs. Of the 12 product classes identified DOE first selected 13 certain representative classes to directly analyze. 14 DOE then selected baseline lamps for each 15 representative product class to use as the reference 16 point. After that for each baseline lamp DOE 17 identified more efficacious substitutes based on 18 design options identified in the screening analysis. 19 DOE then identified efficacy levels or ELs that span 20 the range of efficacy from baseline to the maximum 21 technologically feasible level. Finally DOE scaled 22 its results to the product classes analyzed.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 57 1 So we are going to first cover the GSFL 2 engineering analysis. As stated earlier DOE is 3 proposing standards for 12 product classes for 4 GSFLs. From this list DOE plans to focus its 5 analytical efforts on the product classes shown in 6 darker green. DOE directly analyzed all product 7 classes with CCT less than or equal to 4500 K with 8 the exception of the 2-foot U-shaped product class. 9 These representative product classes were primarily 10 chosen on the basis of high market volumes. 11 Next move on to the baseline discussion 12 for GSFLs. A baseline lamp typically represents the 13 most common least efficacious model on the market. 14 DOE identified three representative product classes 15 that did not have commercially available lamps at 16 the existing standard level. For the NOPR analysis 17 DOE modeled baselines for the 8-foot high output, T5 18 standard output, and T5 high output product classes 19 based on feedback from manufacturers and 20 stakeholders. To determine the efficacy of the model 21 baselines DOE used the ANSI rated wattage of the 22 most common least efficacious commercially available

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 58 1 lamp for the product class and calculated the 2 initial lumen output that would be required to meet 3 the existing standard level. For all other 4 characteristics such as lifetime and CRI, DOE 5 assumed the modeled baseline lamp would have similar 6 characteristics as the most common commercially 7 available lamps in each product class. 8 In the case of GSFLs one baseline lamp was 9 analyzed for each product class and the baselines 10 are presented in the table here. Also to note when 11 discussing efficacy in this analysis we are 12 referring to the rated efficacy of the lamp. So for 13 GSFLs rated efficacy is the catalog initial lumen 14 output divided by the ANSI rated wattage. The ANSI 15 rated wattage is listed in this table as rated 16 wattage. DOE requests comments on the baseline 17 lamps selected for GSFLs. 18 MR. BROOKMAN: Andrew DeLaski? 19 MR. DeLASKI: Can you just state again the 20 - - what you just said that the -- what is listed as 21 the catalog? 22 MS. KIENLE: The rated efficacy?

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 59 1 MR. DeLASKI: The catalog, yeah, rated 2 efficacy. 3 MS. KIENLE: Yes, so in the GSFL 4 engineering analysis we look at the ANSI rated 5 wattage so that is listed here under the rated 6 wattage column and that differs from the nominal 7 wattage which is also presented. And that is what 8 you typically see in the catalogs is the nominal 9 wattage. However the ANSI rated wattage is the 10 value that we base the engineering off of as it is 11 the industry accepted value for the wattage where it 12 is expected to perform. 13 MR. BROOKMAN: You see the comment box 14 there. Comments here? 15 Susan? 16 MS. CALLAHAN: Thank you. Susan Callahan, 17 OSRAM Sylvania. I guess this is as good a place as 18 any to bring up our 2-foot U-bend discussion. The 19 concern that we have and it is something that Joe 20 brought up is that in previous rulemakings the 21 values were such that it didn't matter that we 22 covered two different product geometries in the 2-

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 60 1 foot category but the point that I'd like to bring 2 up is that in the 1 5/8 inch spacing which is 3 typically used in a retail application, think very 4 large department stores, is that when we look at 5 this as a whole the only lamps that survive through 6 the analysis are full wattage lamps. And most of 7 these retailers currently use low wattage lamps such 8 that when they go to replace there will be an 9 immediate increase in the amount of energy required 10 because the lower wattage lamps will have been 11 eliminated by the rulemaking. And that in the six 12 inch geometries that we run into is where we have 13 reduced wattage lamps and no full wattage lamps. So 14 we can't dim them. 15 MR. BROOKMAN: Alex Boesenberg? 16 MR. BOESENBERG: Alex Boesenberg, NEMA. 17 To state that in another context and correct me if I 18 am wrong Susan. In our previous comments we 19 commented our significant concerns that if the 20 efficacy levels were raised to a point that only the 21 28 watt or similar categories of low wattage lamps 22 could meet the efficiency requirement that there

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 61 1 would be the loss of utility for diming. I believe 2 what I have interpreted from what Susan has said is 3 that in this particular category it is actually the 4 converse if the efficiency levels get raised too 5 high that the low wattage option will be the lost 6 utility; is that right? 7 MS. CALLAHAN: Yes for the 1 5/8 inch. 8 MR. BOESENBERG: For 1 5/8. 9 MR. HOWLEY: Joe from GE. Also note that 10 the U-lamp category was scaled so it wasn't analyzed 11 directly and that might have partially led to this 12 conundrum is that it was not a directly analyzed 13 category, it was a scaled category. So it may be a 14 fundamental problem with the scaling or it may be a 15 fundamental problem with where the 4-foot lamp level 16 is set which also may be a concern. So we'll 17 analyze and comment further. 18 MR. BROOKMAN: Okay. Thanks Joe. 19 MR. DeLASKI: Just to follow on -- 20 MR. BROOKMAN: Andrew DeLaski. 21 MR. DeLASKI: Alex, How come you don't hop 22 on me?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 62 1 MR. BOESENBERG: Sorry. The pumps guys 2 are even worse than us to make sure -- 3 MR. BROOKMAN: But they are learning 4 though. They are getting better. 5 MR. DeLASKI: So I am not a lamp designer 6 so if you could help me out with the engineering. 7 Why is it that in the 1 5/8 inch U-bend only the 8 full wattage can meet the levels where as in the 9 larger just the shape of the lamp it is only the 10 reduced wattage. It is an odd outcome; right. 11 You've got the opposite outcome -- 12 MR. BOESENBERG: Sorry, you need to speak 13 into the microphone. 14 MR. BROOKMAN: Who wants to address that? 15 MS. CALLAHAN: We don't know. 16 MR. BROOKMAN: Susan says she doesn't 17 know. Okay. 18 MR. BOESENBERG: Alex Boesenberg. We will 19 attempt to give better technological explanation in 20 our comments. 21 MR. DeLASKI: You are just giving -- you 22 are expressing just the facts, the observation --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 63 1 MS. CALLAHAN: Yes. 2 MR. DeLASKI: -- here is what we have 3 available; right? 4 MR. BOESENBERG: Alex Boesenberg, NEMA. 5 Our initial review by our technical experts 6 identified this problem so we are raising it. But 7 we don't have the detailed analysis yet. 8 MR. BROOKMAN: Garry Fernstrom? 9 MR. FERNSTROM: Garry for the California 10 IOUs. Well you phrased my concern because we are 11 generally beginning to require dimming in all 12 applications in California and if there is a 13 compatibility issue we sure want to understand that. 14 Thank you. 15 MR. BROOKMAN: Okay. Thank you. 16 Other points responsive to this comment 17 box? 18 Mike Rivest? 19 MR. RIVEST: Do I have to repeat it after 20 you said it? Mike Rivest. 21 MR. BROOKMAN: No you do not. 22 MR. RIVEST: Okay. Just to explain a

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 64 1 little bit how the Engineering Analysis is 2 structured and then how it then follows into the 3 national impacts analysis. The Engineering Analysis 4 will compare technologies that are incrementally 5 more efficient but will not take into account the 6 fact that consumers may for example not be able to 7 dim. That is, however, taken into account in the 8 energy savings calculation in the National Impacts 9 Analysis. So if the Engineering Analysis says that 10 you will save two watts but in fact the loss of 11 dimming would result in much higher energy 12 consumption that all gets washed out and the 13 effectiveness of that efficiency level would 14 disappear. So just so you don't react to the fact 15 that we wouldn't screen out a technology for reasons 16 such as you stated at this stage of the analysis. 17 MS. KIENLE: Can I step in for a second 18 too. 19 MR. BROOKMAN: Please. 20 MS. KIENLE: Just to clarify too and we 21 are going to discuss this a little bit more on the 22 next slide but specific to this analysis we insured

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 65 1 for the directly analyzed product classes that a 2 full wattage lamp could meet each level so that the 3 dimming utility was preserved. And if you are 4 finding issues with that we are listening to your 5 comments and will certainly take a look at that for 6 the 2-foot U-shaped product class as well. 7 MR. BROOKMAN: Andrew DeLaski. 8 MR. DeLASKI: I also want to test a little 9 bit, I don't want to dwell on it, but we're not -- 10 it appears to us that we shouldn't think about 11 reduced wattage lamps as never being able to be 12 dimmed; that there are dimming options, there can be 13 dimming options with reduced wattage lamps and that 14 it is an improving situation and that we shouldn't 15 be seeing this as a forever and ever you are never 16 going to dim a reduced wattage lamp. We understand 17 that it is harder. But we don't think it is 18 impossible. So we - - I want to be careful that we 19 are not sort of setting this as a rigid we always 20 have to have full wattage lamps because we can't dim 21 because in some cases you can dim reduced wattage 22 lamps.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 66 1 MR. BROOKMAN: Okay. Thank you. 2 Yes, please. Aisha? 3 MS. HUSAIN: Aisha Husain, Navigant 4 Consulting. Sue you had mentioned that the 1 5/8 5 inches used in retail application and then so six 6 inches are they used in specific applications? 7 MS. CALLAHAN: Susan Callahan. I would 8 have to get back to you on that. But the concern 9 that had been raised for us with the 1 5/8 is that 10 there are consumers who are using reduced wattage 11 lamps already that will not be able to replace them 12 with reduced wattage lamps so that the effect of 13 this rulemaking is a net energy loss as opposed to a 14 net energy savings. An energy increase. 15 MR. BROOKMAN: Okay. Thank you. 16 Yes, Mark. 17 MR. DUFFY: Yeah, I just wanted to address 18 unfortunately Andrew DeLaski has left. This is Mark 19 Duffy from GE. Unfortunately Andrew has just 20 stepped out of the room but I wanted to address his 21 statement about dimming the reduced wattage 28 watt, 22 25 watt other reduced energy saving type lamps. It

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 67 1 is not that you can't physically dim them. They can 2 be dimmed. It is that you will find that they are 3 much more susceptible to an unacceptable striation 4 which is visible and we get calls and complaints 5 your lamps look like barber poles and that sort of 6 thing. So this is what happens. You have 7 susceptibility to that when you use the krypton gas 8 in the lamps. And therefore we do not advise 9 dimming with krypton because it makes aesthetic 10 problems in the field. Can you do it? Yes. Are 11 you still getting light out of it? Yes. Does it 12 generate dissatisfaction among customers? Yes. 13 That is why companies like the major companies say 14 you want to do a dimming system please use the full 15 wattage, we are glad you are dimming because you are 16 saving energy by using the dimming and the actual 17 energy savings from lamps has to do with the wattage 18 that they are being operated at; not the efficiency 19 that they are measured at. 20 MR. BROOKMAN: Okay. Thank you. 21 Additional comments before we move on? 22 MS. KIENLE: Okay. So we will move on to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 68 1 the more efficacious substitutes. DOE selected more 2 efficacious substitutes for each baseline lamp. DOE 3 sought to keep characteristics such as rated life, 4 CRI, and CCTs similar to the baseline lamp. As you 5 can see here in this 4-foot medium bipin example 6 table reduced wattage lamps are identified as more 7 efficacious substitutes as are full wattage lamps 8 with higher efficacies. 9 DOE requests comment on the GSFL baselines 10 and more efficacious substitutes and in particular 11 their rated lifetimes. 12 MR. BROOKMAN: Mark? 13 MR. DUFFY: This is Mark Duffy of GE. One 14 thing that we've looked at carefully and in our 15 designing of lamps is what the various tradeoffs 16 are. With IRLs it is extremely strong tradeoff 17 between life and efficacy. If you go to extremely 18 high efficacies you can get one day, one week type 19 life. Okay. With fluorescent lamps it is not quite 20 as strong. But it is definitely present. And since 21 we are discussing very small increases in efficacy 22 baseline or required efficacies in these ELs it is

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 69 1 now coming into play and that is that you are going 2 to lose your long life lamps. Fluorescent lamps, 3 GSFL lamps at long life, long service life will be 4 less and less possible because as you reduce the 5 life -- as you go for higher efficacy you can reduce 6 the life of the lamp to get there. Now what does 7 that mean for our nation's energy savings? 8 Absolutely nothing because the amount of power that 9 is being consumed is going to be fixed. The amount 10 of light you get might change. But if you have 11 reduced the life of the lamp the amount of scrap 12 which includes rare earth phosphors which are very 13 difficult materials to obtain and use, they are 14 expensive materials. It includes the mercury. We 15 don't do a perfect job of recycling in this 16 industry. So think about how many more lamps need to 17 be generated to support lifetimes that are maybe 18 half as long as you are used to with fluorescent 19 lamps when you start to push efficacies 20 incrementally up into that region where that life 21 starts coming down. 22 MR. BROOKMAN: Garry Fernstrom?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 70 1 MR. FERNSTROM: Garry for the California 2 IOUs. So a question for GE. You talk about the 3 reduction in life. What does that do for mean 4 lumens? I am not clear whether when we have these 5 discussions we are talking about initial or mean 6 lumens for lamps but we base our calculations on 7 mean lumens. And I am wondering how that is 8 affected. 9 MR. DUFFY: Well you are correct as you do 10 design to use mean lumens if you are asking for the 11 life of the appliance, the lighting appliance as you 12 mention. I am sorry, this is Mark Duffy responding 13 from GE Lighting. I am not going to get used to 14 that. What I will say though is that this rulemaking 15 is about initial performance. It is the 100 hour 16 measurements and it is not about mean lumens. So we 17 do our best to give you an estimate of the mean 18 lumens of a population of lamps and give you that 19 rating for your design layouts. 20 MR. FERNSTROM: Well, Garry again, but I'm 21 curious about what this issue increased efficiency 22 with the consequence of reduced life what that does

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 71 1 to mean lumens. Does it put us in the same, a 2 better or a worse position with respect to the 3 energy used by the lamp for the life that you get 4 during the life of the lamp? 5 MR. BROOKMAN: Joe Howley? 6 MR. HOWLEY: We could look at that further 7 Garry but I don't expect it to have a significant 8 impact with using these tri-phosphor lamps. If we 9 were back in the days of using halo-phosphate cool 10 light and warm light which had significantly higher 11 lumen depreciation issues you would probably have a 12 significant difference in the design. But with tri13 phosphors they hold up very well over time and with 14 the levels you are talking about these are heavily 15 coated with tri-phosphors which is going to hold up 16 very well. So the difference between these long 17 life lamps and really long life lamps in design are 18 -- probably don't produce a practical difference in 19 the lighting design in terms of spacing and layout, 20 things like that. 21 MR. BROOKMAN: Thank you. 22 Alex Boesenberg?

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 72 1 MR. BOESENBERG: Alex Boesenberg, NEMA. I 2 want to make sure that we are looking at extra long 3 life linear fluorescent in the right context. I 4 believe our position and our concern at preserving 5 this category; it is not a product class which is 6 part of the topic we are raising up here is there 7 need to be a concession made for it. The issue is 8 there are consumers who prefer to have ultra long 9 life say 80,000 hour fluorescent lamps. And the 10 reasons for that are not as much in the energy 11 savings side of it as in the overall cost savings 12 which the DOE and Navigant do analyze regarding 13 maintenance cycles and cost of buying new lamps 14 during re-lamping and replacement of failed lamps. 15 So from the consumer standpoint I'd buy a long life 16 lamp because I don't want to get up on a ladder 17 again anytime soon and I am willing to pay if 18 necessary a premium for that within reason. I say 19 within reason because obviously as the later 20 sections will talk about there are technology 21 options with very long life LED but one of the 22 additional consumer utilities or consumer

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 73 1 considerations we want to make sure is balanced when 2 talking about long-life fluorescent is that there 3 are still plenty of consumers who cannot afford 4 first cost of LED systems even if they are very long 5 life and very efficient and in the analysis pay back 6 within an acceptable period of time. If they cannot 7 afford to make that investment then the answer today 8 is a long life linear fluorescent product which at 9 least one manufacturer has told me they are pretty 10 sure will be eliminated. 11 MR. BROOKMAN: Mark Duffy. 12 MR. DUFFY: Yes. This is Mark Duffy with 13 GE. I appreciate what Alex just said. I completely 14 agree with that. I'd like to remind the room though 15 that national energy savings and what we're trying 16 to do here with reduction of energy it turns out 17 that throughout the life of a fluorescent lamp it 18 consumes a very steady amount of energy. You do not 19 get an increase in the power consumption as it ages. 20 So from the standpoint of the power consumption what 21 you see in the initial is what you have at the mean 22 life and what you have pretty much all the way to

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 74 1 the end of the life for a fluorescent lamp. 2 MR. BROOKMAN: Thank you. 3 I am going to let Mike Rivest follow on 4 with this string and then I am coming to you 5 Charlie. 6 Mike Rivest? 7 MR. RIVEST: The extra long life GSFLs 8 what portion of the market might we be talking 9 about? 10 MR. BROOKMAN: Susan? 11 MS. CALLAHAN: Susan Callahan OSRAM 12 Sylvania. These products have only been recently 13 introduced into the marketplace and so we don't have 14 a good feel for that yet. 15 MR. RIVEST: Okay. You know if setting a 16 product class for an extra long life lamp were done 17 and the standard were set in such a way that it was 18 at a stringency equivalent to that of a standard 19 life lamp so that it is not a loophole. In other 20 words you would require the same level of phosphors 21 for example then it doesn't represent a loophole 22 where the market would shift extra long life just to

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 75 1 avoid meeting the standard. Personally I don't see 2 why that couldn't be done. But it can't create a 3 migration to there. 4 MR. BROOKMAN: Alex? 5 MR. BOESENBERG: Alex Boesenberg, NEMA. 6 In response to your first question I will poll my 7 members and see if we can find out any market share 8 data. I don't know if we survey that as a separate 9 product or not. But we will see what we can 10 provide. And -- 11 MR. RIVEST: Just before -- you realize 12 that there is a back sliding provision so that level 13 could never be less than what it is today for the 14 standard life product. 15 MR. BOESENBERG: We understand that 16 absolutely. And at least I would like to think that 17 we are meeting today's standards so that is not the 18 issue. It is the lost utility and the cost benefit 19 analysis with the reduced maintenance times and 20 things like that. And then I will also then in 21 response to your second point within the constraints 22 I have to operate under regarding cost and pricing I

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 76 1 will attempt to identify if there is a mitigating 2 factor of cost for long life lamps. If they are 3 more expensive logically the market isn't as liable 4 to migrate to them if they represent a -- if the 5 raising of the cost of a general standard life lamp 6 for tomorrow's rule is on par with a long life lamp 7 today and arguing that that standard not be raised 8 then there is no loop- holing; right? Did I make 9 sense? 10 MR. RIVEST: I don't know if extra life 11 would be sufficient to induce people to buy that. I 12 think our economic analysis would probably say it 13 would because it would have a lower life cycle cost 14 because of the reduced maintenance and operation 15 costs. So the LBL folks can speak to that. 16 MR. BROOKMAN: Joe Howley? 17 MR. RIVEST: But all is said is that it is 18 not infeasible that it could be a class. But these 19 types of things would have to be considered. 20 MR. HOWLEY: Just one comment on that 21 although I agree anything is possible including 22 that. That we really though should be indifferent

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 77 1 with regard to energy savings because whether a 2 consumer chooses a long life or a standard life the 3 national energy savings will be exactly the same 4 presuming that with the shorter life lamp if they 5 have to buy two of them, they will buy the same 6 lamp; they are both running at 32 watts or so. We 7 should not care which the consumer chooses to pick 8 from purely an energy savings viewpoint. It really 9 doesn't matter. So that might factor into whether 10 or not you need to create two classes or not. 11 MR. RIVEST: The tradeoff is if it turns 12 out that it has a substantial market share we don't 13 want to be limited to how high we go on the standard 14 life lamp because of the existence of the extra 15 life. And so that would argue for a separate class. 16 What would argue to having a single class is that we 17 don't want people to migrate to the long life. So 18 that is the tradeoff. 19 MR. BROOKMAN: Charlie Stevens thank you 20 for being patient. 21 MR. STEVENS: No it has been interesting 22 dialogue. Charlie Stevens, Northwest Energy

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 78 1 Efficiency Alliance. I don't know it is so 2 interesting. No one has been more concerned about 3 product lifetime than I have since about 1970 when I 4 understood the macro economic impact of short 5 product life throughout the economy. But there is 6 an inherent bias in our economy toward short product 7 life. And you can see it pretty much across the 8 entire economy. But here the existence there is a 9 lot of product out there like lighting product out 10 there that is not very efficacious and has a very 11 short lifetime. I don't see a lot of demonstrated 12 concern about product lifetime out there. And I'm 13 very much in favor of taking it into account because 14 the true energy savings should include embodied 15 energy but they don't. But I don't necessarily 16 believe that it is impossible to maintain good long 17 lifetime of a product as well as an efficacious 18 product. I see it often enough in the marketplace. 19 It is a choice. But I also see a lot more sales of 20 very non-efficacious product that has a very short 21 lifetime. So I would love to see more concern about 22 lifetime but I don't see it. And I don't expect it

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 79 1 to be very well addressed in this rulemaking except 2 through as Mike points out the economic analysis of 3 what it costs directly to have a short lifetime in 4 terms of maintenance and lamp replacement and that 5 sort of thing. But I don't necessarily believe 6 based just on what is available in the marketplace 7 that you can't do better in the way of efficiency or 8 efficacy in this case and lifetime. If it exists it 9 is possible. 10 MR. BROOKMAN: We are moving on now. 11 MS. KIENLE: If I could just add that if 12 anyone has data particularly that demonstrates the 13 relationship between efficacy and lifetime and how 14 that changes particularly at the higher efficacy 15 levels that would be really helpful to have as well. 16 MR. BROOKMAN: Final comment? 17 DR. GARBESI: Karina Garbesi at LBNL. I 18 was just going to say that if there are data on 19 differences in embodied energy that relate to 20 lifetimes that is easy to incorporate in the 21 analysis so we can do that. 22 MR. BROOKMAN: Okay. Thank you.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 80 1 MS. KIENLE: So next DOE developed 2 efficacy levels. DOE used commercially available 3 lamps and their associated rated efficacies to 4 determine the initial ELs. To establish final 5 minimum efficacy requirements for ELs DOE coupled 6 publicly available compliance data with rated 7 efficacy to determine if any adjustments were 8 necessary to the initial ELs. For the NOPR analysis 9 DOE again only analyzed ELs at which full wattage 10 version of the lamp type was available because 11 reduced wattage lamps cannot be used in all 12 applications such as cold temperature applications 13 and also because striations remain an issue for 14 reduced wattage lamps which we've discussed already 15 some. 16 Because fluorescent lamps operate on a 17 ballast in practice DOE analyzed lamp and ballast 18 systems in order to capture a real world energy use 19 and light output. DOE used manufacturer input and 20 information from the 2011 ballast rule to identify 21 the ballast type most commonly used with each lamp. 22 As you can see by the table here the 4-foot medium

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 81 1 bipin lamps were paired with multiple ballast types. 2 Both the instant start and programmed start ballast 3 were analyzed for this product class as well as 4 ballasts that operate 2 and 4 lamps and a 5 residential use ballast. All other product classes 6 were analyzed with one ballast type. 7 When developing lamp and ballast systems 8 DOE tried to select ballast models to pair with 9 lamps that would maintain system mean lumen output 10 within 10% of the baselines when possible. At the 11 higher ELs DOE selected ballasts with lower ballast 12 factors when possible to further improve energy 13 savings. This example table is of the 4-foot medium 14 bipin two lamp programmed start, lamp and ballast 15 replacement scenario. The table presents the 16 characteristics of the lamp and ballast systems 17 analyzed. For the NOPR analysis DOE also added a 18 replacement option in which the consumer could 19 choose to prioritize energy savings over maintaining 20 lumen output. So you can see at EL1 and EL2 two 21 ballast selections exist for the full wattage 22 representative unit only. The first ballast

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 82 1 maintains the system mean lumen output within 10% of 2 the baseline. This replacement results in the same 3 energy consumption as the baseline as well. The 4 second ballast listed achieves energy savings but 5 does not maintain system mean lumen output within 6 10% of the baseline. 7 This table displays the final ELs for the 8 representative GSFL product classes after accounting 9 for compliance requirements. As you can see in the 10 table for the NOPR analysis each product class has 11 two ELs with the exception of the T5 high output 12 product class which has one EL. 13 Issue 4 requests comment on the 14 methodology for developing lamp and ballast systems 15 as well as the results of these GSFL systems. 16 Issue 5 requests comment on the max tech 17 levels including the accuracy of catalog and 18 certification data which were used to identify these 19 levels. 20 And in Issue 6 DOE requests comment on the 21 methodology used to develop ELs for GSFLs and the 22 resulting efficacy levels.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 83 1 MR. BROOKMAN: Keith Cook? 2 MR. K. COOK: One question we have is in 3 the previous comments from the California IOU they 4 stated that increasing light levels is problematic 5 and that really it should be decreasing by up to 10% 6 and yet our data is showing that with the aging 7 population increasing light levels are favored 8 because the aging population having difficulty to 9 see. I was wondering what the IOU comment was based 10 upon? 11 MR. BROOKMAN: Garry Fernstrom. 12 MR. FERNSTROM: Well this is Garry on 13 behalf of the California IOUs. I wouldn't disagree 14 with you that with increasing age more light is 15 beneficial. I've personally dealt with that myself. 16 I think our comment relates to general area lighting 17 versus task lighting. So we commonly see these 18 fluorescent lamps used in general area lighting and 19 California has been decreasing the wattage per 20 square foot allowable for that over time as a 21 certain reliance is diverted to task lighting such 22 that we have adequate light at our work spaces so

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 84 1 those of us who are older can see what we are doing. 2 MR. BROOKMAN: You see the comment boxes 3 there. Let's see if we can respond to those. 4 Yes, Tim Ballo? 5 MR. BALLO: Just I had a question on 6 something you said in introducing slide 39 and I am 7 paraphrasing it. I think you said something like 8 the levels were adjusted to account for compliance 9 requirements or certification requirements. I 10 wonder if you could explain that a little bit more. 11 MS. KIENLE: Sure. This is outlined in 12 the NOPR. It is also in the TSD if you want more 13 information. But in general we based the efficacy 14 levels initially on catalog information. So that 15 means the ANSI rated wattage which I explained 16 already and the catalog initial lumen output. And 17 then we compared the levels in our data against the 18 DOE certification data and took into account if any 19 adjustments were necessary based on where the lamps 20 were performing. 21 MR. BROOKMAN: Comment Box 4 asks about 22 the methodology. Comment Box 5 asks about max tech.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 85 1 MR. DeLASKI: Can I follow up on the 2 question you just answered. So -- 3 MR. BROOKMAN: Andrew DeLaski. 4 MR. DeLASKI: -- does that mean you 5 adjusted -- what did you trust? It sounds like you 6 trusted the certification data; that was ultimately 7 what you trusted? 8 MS. KIENLE: I would say we trusted both. 9 We started with the catalog data. And if we could 10 insure that the lamps were reliably meeting that 11 level then the catalog data is generally used. But 12 yeah we took into consideration those certification 13 data. 14 MR. DeLASKI: But to insure you were using 15 the certification data to do that insuring task? 16 MS. KIENLE: Yeah. You work -- right. So 17 yes. 18 MR. BROOKMAN: Joe Howley? 19 MR. HOWLEY: Yes. In terms of comments on 20 these levels and particularly looking at column 2; 21 we are concerned about the levels that are being 22 proposed here in particular for the 4-foot medium

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 86 1 bipin lamp. We did make a comment at the last 2 rulemaking that we feel first of all that these 3 should be to the watt and not a tenth of a lumen per 4 watt. But we should set these at a lumen per watt 5 due to measurement variability and ability to 6 measure accurately down to a certain level. So 92.4 7 seems a little extreme to us in terms of the 8 specificity of that. Also the level itself is set 9 at a quite high level. 10 Mark would you like to comment further 11 about where we think that might have been obtained 12 from a statistical standpoint. 13 MR. BROOKMAN: Mark? 14 MR. DUFFY: This is Mark Duffy of GE 15 Lighting. I wasn't the person making this analysis. 16 But just from the observation and the knowledge that 17 I have of our measurements and so forth plus what 18 you can find in the DOE database I am very concerned 19 that efficacy levels 1 may be an indication of the 20 central tendency of a distribution and levels 2 may 21 be an indication of the higher tail of a 22 distribution. So if you have selected this 92.4

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 87 1 because there is some data point in the DOE database 2 that happens to have come out on the high end that 3 is a very normal situation when taking small samples 4 of large quantities of lamps and so forth. So this 5 is really that measurement statistical variation of 6 the production measurement variation of several 7 percent and so forth. So if we have a rulemaking 8 that says everything has to be above 89 you get a 9 population that is going to spread above 89 10 generally, okay, especially what is being reported 11 should all be above 89 and have a distribution. If 12 you now move to the top of that distribution, this 13 is just a single design let's say or a single 14 situation, if you move to the top of that 15 distribution and you now say everything needs to be 16 above the top of that distribution, you are not 17 actually making any -- what you are doing is doing 18 the same kind of thing that wiped out the IRL 130s. 19 You could wind up in a situation where you have set 20 it above the max tech. Max tech sits at the center 21 of that distribution. If you drive it to the upper 22 tail of that distribution you've actually gone above

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 88 1 what is max tech. So I think something that needs 2 to be indicated is we are with you on making a 3 rulemaking to drive the country toward the more 4 efficient products. But what we would like to do is 5 set those levels so that the normal production can 6 meet the levels as it is today rather than going to 7 the maximum observed value and then driving 8 everything above that. 9 So one more point I would like to draw 10 your attention to; there is an open paper that I 11 know all of you are aware of, it is LSD-63 from 12 NEMA. And I am sure you all have copies of it. 13 Utilize the information in there as you analyze what 14 you are getting into this DOE database because it's 15 going to show that kind of variation both in 16 measurement and in production variation. Thank you. 17 MR. BROOKMAN: Mike Rivest. 18 MR. RIVEST: This is getting to my 19 understanding of the certification database and the 20 way we used it. If we use the certified values for 21 particular lamps wouldn't that take into account the 22 normal distribution and wouldn't you have taken that

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 89 1 into account in the certification? 2 MR. DUFFY: Actually the answer to that is 3 no. And the reason that the answer to that is no is 4 that what is being reported into that database 5 complies with the existing law. So it goes back to 6 the CCE rule, okay, what needs to be reported is 7 based on 21 lamps taken from seven different -- we 8 can all recite the thing. And those are the numbers 9 that are being reported into that database. So if I 10 do a sampling 21 lamps is a small sample of a large 11 population of product and if my lab has a bias and 12 that is in the paper, if my lab has a bias of a 13 percent or two I might be reporting a percent or two 14 higher than somebody else who would measure perhaps 15 the same set of lamps at a different laboratory and 16 come up with one or two percent lower number. So 17 your database is going to contain all the variation 18 of both production and the variation of the 19 measurement bias between laboratories. 20 MR. RIVEST: So the certified value is 21 based on what you just described. There is also an 22 enforcement equation I assume that would be I guess

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 90 1 more generous or -- 2 MR. DUFFY: No the CCE enforcement is less 3 generous, much less generous. 4 MR. RIVEST: But you are held to -- so you 5 are held to that enforcement equation; right? 6 MR. DUFFY: I am telling you that what 7 goes into the database are actual measured values 8 drawn from the -- 9 MR. RIVEST: I heard that. 10 MR. DUFFY: -- population of lamps and 11 that there exists variation between measurement 12 laboratories as well as within the population of 13 manufactured lamps. 14 MR. BROOKMAN: Keith Cook. 15 MR. RIVEST: I heard that and what I asked 16 you was what you are legally obligated to sell based 17 on the enforcement equation. I don't know 18 specifically about lamps but in other products the 19 enforcement equation has more slack in it. But you 20 are saying in lighting it doesn't? 21 MR. DUFFY: There is no tolerance at this 22 point -- we have had this discussion with the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 91 1 Department of Energy, there is no tolerance in 2 lighting. If you have a MEPS, Minimum Energy 3 Performance Requirement, at 89 LPW you have to over 4 perform with your design in order to -- 5 MR. RIVEST: So you are saying 100% of the 6 population has to meet -- 7 MR. DUFFY: In essence. 8 MR. RIVEST: -- equation. 9 MR. DUFFY: It depends on what you want to 10 risk. If you set yourself up right at 89 you could 11 have a completely compliant mean to your population. 12 MR. RIVEST: So that is why you are 13 interpreting these numbers to mean that every lamp 14 you manufacture will have to meet this -- 15 MR. DUFFY: Absolutely. 16 MR. RIVEST: -- based on the enforcement. 17 MR. DUFFY: At the moment that CCE require 18 - - the CCE rulemaking, different rulemaking but the 19 CCE rulemaking requires that this is a minimum of 20 that population. 21 MR. BROOKMAN: Keith? 22 MR. K. COOK: Keith Cook with Philips.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 92 1 You are getting into exactly what my point was going 2 to be and my concern is the fact that it is quite 3 feasible that you could have an offshore 4 manufacturer today that is sorting product and 5 shipping the upper end of his distribution to the 6 United States to meet the requirements. And so he 7 has got a skewed distribution. He sells everything 8 else in China or wherever, I don't care where. But 9 now all of sudden you've got a point that is way out 10 there and that is a reported mean value. It is not 11 the minimum. So all of a sudden we are doing this 12 analysis, we look at this and say well this guy is 13 producing this exemplary product; that now becomes a 14 minimum value. For us to meet that minimum value 15 means that 50% of everything we are producing would 16 have to be thrown away because that was his mean 17 value to start with. That is a real concern. 18 MR. BROOKMAN: Michael McGaraghan has a 19 question or a comment. Michael unmute your phone 20 and we will see if we can hear you. 21 MR. McGARAGHAN: Hi. Can you hear me? 22 MR. BROOKMAN: Yes. You are good.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 93 1 MR. McGARAGHAN: Great. So my comment was 2 actually about the previous discussion around the I 3 think it was one slide back. 4 MR. BROOKMAN: We can go back. 5 MR. McGARAGHAN: Yeah. So Keith Cook asked 6 what the California comment was referring to when we 7 suggested that DOE waive the scenarios that result 8 in less light rather than more light. So Garry 9 Fernstrom got at part of that in his response. And 10 I just wanted to expand on that and say that in 11 commercial settings we all know that lumens 12 depreciate over time. So at the end of life of a 13 lighting system we are already down at about 594 or 14 30% of initial lumens. So if you just replaced all 15 the equipment with exactly identical equipment after 16 that lighting retrofit you are going to see an 17 increase of light, 6%. It is going to seem very 18 bright to everybody. If on top of that you replace 19 the equipment with new lamps that are actually 10% 20 brighter, the lamp and ballast system is 10% 21 brighter than you are talking about maybe a 15, 16, 22 17% increase in light and consumers always seem to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 94 1 respond negatively in that scenario. You hear a lot 2 of comments after lighting retrofit that the new 3 lights are too bright. So I am not suggesting that 4 we just keep making baselines dimmer and dimmer, I 5 am suggesting that DOE apply some sort of weighting 6 for approach to different scenarios. Energy savings 7 is a huge motivator in any kind of lighting retrofit 8 and if the building owner or operator has an option 9 ahead of them of going to 95% light and saving 10 energy or going to 102%, 105%, 108% light and not 11 saving energy, they are going to choose the energy 12 saving option every time. So the request in our 13 comment was that DOE consider that when looking at 14 these different scenarios and prioritize or 15 emphasize the cases where people actually get to 16 save energy and keep light within a reasonable 17 level. 18 The other comment on this slide that I 19 wanted to ask about was and I realize that this is 20 just one example table and you guys have a lot of 21 different tables. But I don't see 30 watts lamps on 22 here. I see 25 and 28 but 30 watts -- opportunity

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 95 1 to stay within 90% of initial lumens and save 2 energy. I also don't know if DOE considered has 3 considered dimming ballast in any of these scenarios 4 but in California in particular new building codes 5 are going to result in -- ballast, potentially 6 almost all lighting is going to dimming ballast. So 7 that is going to be a much more common approach in 8 other states as well and as other places pick that 9 up; so that is another opportunity for lighting 10 designers to design a space that saves energy 11 without increasing light inadvertently particularly 12 through tuning. So those are a couple of questions 13 that I wanted to propose on that slide. 14 MR. BROOKMAN: Okay. Thank you. 15 MR. McGARAGHAN: And just real quickly on 16 the next slide and all this discussion about 17 reporting I think I am stuck where Mike Rivest is in 18 the DOE certification database. I understand that 19 that is the value that gets reported for compliance. 20 So it should be apples to apples. If the values in 21 that database are above 92.4 then we could expect 22 future values reported to DOE to be above 92.4. So

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 96 1 the disconnect then that is a big problem and we 2 need to get to the bottom of that. I am confused 3 about that discussion. Thank you. 4 MR. BROOKMAN: Thank you. 5 Garry Fernstrom, follow on? 6 MR. FERNSTROM: This is Garry. Thank you 7 Mike. Following on your point we were just 8 discussing the database and what some of the numbers 9 mean and I heard the folks from industry say there 10 may be an issue with some offshore manufacturers 11 that may be sorting their production and sending the 12 best of their production here. I don't think it 13 matters as long as when tested the production sent 14 to the United States and sold in the United States 15 performs as reported because in fact that is the 16 distribution that we are getting whether it is 17 screened before it gets here is kind of irrelevant 18 from this standpoint of the reality of its 19 performance relative to what is reported. 20 MR. BROOKMAN: Let's hear from Brian. 21 DR. GERKE: This is Brian Gerke from LBNL. 22 Just to respond to -- is this not audible. It is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 97 1 on. I am probably in the dead zone here. Is that 2 better? 3 MR. BROOKMAN: Yes. 4 DR. GERKE: Just to respond to Mike 5 McGaraghan's questions about lamp and ballast 6 combinations and dimming and the choices that 7 consumers make we can get into that in more detail 8 when we discuss the shipments analysis. 9 MR. BOESENBERG: We are losing you. 10 MR. BROOKMAN: Just take that. 11 DR. GERKE: Try the other microphone. 12 MR. BROOKMAN: Yeah. 13 DR. GERKE: Is that better? We can get 14 into those questions about what choices consumers 15 make for lamp and ballast combinations and dimming 16 and building codes in the shipment analysis where we 17 took that all into account. 18 MR. BROOKMAN: Alex? 19 MR. BOESENBERG: Alex Boesenberg, NEMA. I 20 would like to respond to Garry's statement. Garry I 21 would agree with you from the standpoint of your 22 statement that said that if somebody wants to sort

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 98 1 their lamps then that is fine as long as what hits 2 the market here in the U.S. which is what we are 3 talking about today, as long as those are compliant. 4 But I would challenge the logic if you carry it a 5 step further and say that we shouldn't be wary of 6 the fact that that can skew the overall curve as 7 Mark Duffy was speaking to. And by that I mean if 8 someone has made a conscious decision to only put 9 for a given design. Let's say everybody is designing 10 the same because everyone is trying to hit the same 11 number of minimum performance or exceed it. If 12 someone has decided to further cherry pick, not 13 cherry pick but make a personal business decision to 14 increase the performance by a selection. If for 15 that design, that same design, that same level 16 everyone is designing to if somebody does that to 17 set the new national minimum at that level that 18 represents a individual business decision or 19 additional steps that other manufacturers aren't 20 taking. That obligates everybody else to then incur 21 those additional costs and do that too or design to 22 an even higher level as a result. So it is not

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 99 1 apples and apples. 2 MR. FERNSTROM: Okay. So this is Garry. 3 I understand your point relative to setting 4 standards. Thanks for that clarification. 5 MR. BROOKMAN: I am wanting us to move on. 6 But a final chance to provide comment on issue 4 7 GSFL systems, 4 max tech levels, and 6 GSFL efficacy 8 levels. 9 Okay. 10 MS. KIENLE: Okay. So we will move on to 11 the scaling analysis now. So once ELs are 12 established for the representative product classes 13 DOE develops scaling factors to apply those ELs to 14 the remaining product classes. This process 15 involved the comparison of lamps that differ only by 16 one parameter. The parameter under consideration 17 for scaling which in this case was either the shape 18 or CCT. To develop a scaling factor to account for 19 shape DOE compared commercially available 2-foot U20 shaped lamps with CCTs less than or equal to 4500 K 21 and the equivalent 4-foot medium bipin version. By 22 comparing catalog ratings DOE found that an average

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 100 1 efficacy reduction of 6% from the 4-foot medium 2 bipin ELs was appropriate for the 2-foot U-shaped 3 lamps. 4 Similarly to develop a scaling factor to 5 account for CCT DOE identified pairs of lamps in 6 which the only difference was CCT. For the NOPR 7 analysis DOE analyzed differences in efficacy due to 8 CCT by product class. DOE compared lamps with a CCT 9 of 4100 K to lamps with a CCT of 5000 K and 6500 K 10 to determine differences in efficacy. DOE 11 determined that a 2% scaling factor for the 4-foot 12 medium bipin product class, 5% for the 8-foot 13 slimline, 2% for the 8-foot high output, 6% for the 14 T5 standard output, and 5% for the T5 high output 15 and 3% for the 2-foot U- shaped lamps were 16 appropriate. DOE confirmed that the scaling factors 17 did not result in back sliding from the current 18 standards. 19 In issue 7 DOE requests comment on the 20 methodology and the results of the scaling analysis 21 for GSFLs. 22 MR. BROOKMAN: Comments here.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 101 1 Joe Howley? 2 MR. HOWLEY: Just in general on the 3 scaling factors we continue to receive comments 4 through some industry members that the scaling 5 factors seem to be a little bit low on the high CCT 6 and we realize you can't back slide. So maybe that 7 creates stability to not back up too much. But just 8 from a pure and I know you are looking at catalog 9 ratings which probably produces what you are finding 10 but from a pure physics standpoint they point out 11 that it is more of a 4 to 6% reduction when you got 12 to 5000 Kelvin and it could be as high as 6 to 8% 13 when you go up to the 6500 type of products. The U14 lamp scaling factor at 6% I think we have used that 15 in the past, it sounds about right. However, the 16 levels are we believe set too high on U- lamps 17 producing the problems indicated earlier. But that 18 could be just an issue with the 4 lamp level being 19 set too high as well so producing a problem in both 20 of those categories. We'll provide more analysis 21 and comment in our written comments about this. 22 MR. BROOKMAN: Thank you.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 102 1 Additional comments here? 2 MS. KIENLE: In issue 31 DOE requests 3 comment on its assumption that there will be no 4 lessening of utility or performance such that the 5 performance characteristics would be adversely 6 affected for the GSFL efficacy levels. 7 And in Issue 32 DOE requests comment on 8 whether there are features or attributes of the more 9 energy efficient GSFLs that might affect how they 10 would be used by consumers. 11 Okay. If there aren't any further 12 comments. I am going to hand this off to my 13 colleague Julie -- 14 MR. BROOKMAN: I think we need to take a 15 break at this point. It is five minutes after 16 11:00. We've covered a lot of ground already. We've 17 done well. Let's take a 15 minute break. 18 Please make sure you have got our badge 19 visible while you walk around the Forrestal 20 Building. For those of you that aren't aware there 21 are bathrooms at both ends of the hallway. There is 22 a coffee shop on the ground floor just about on the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 103 1 opposite side of the hall just about the same 2 location we are in this building. So go to the 3 elevator and head down. Go quickly though because 4 we will resume let's say 20 after 11:00 5 (WHEREPUON, a recess was taken.) 6 MR. BROOKMAN: Let's resume. 7 We are going to proceed where we left off 8 which I believe is 44. 9 MS. PIERCE: Yes. Hi my name is Julie 10 Pierce. And I am with Navigant. 11 MR. BROOKMAN: Folks let's take our seats 12 and get settled here please. 13 MS. PIERCE: Okay. I will discuss the IRL 14 Engineering Analysis. In general DOE chooses 15 representative product classes on which to focus its 16 analytical effort. Of the eight IRL product classes 17 which are shown in this table the standard spectrum 18 greater than 2.5 inches, less than 125 volt product 19 class shown in darker green was chosen as 20 representative based on its high market volume. The 21 baseline lamp is the most common, least efficacious 22 model on the market for each representative product

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 104 1 class. 2 For IRLs DOE found that the most common 3 least efficacious lamp for the representative 4 product class is the 60 watt PAR38. It is an 5 improved halogen lamp which means it is a halogen 6 lamp with an improved reflector. It has a light 7 output of 1070 lumens, an efficacy of 17.8 lumens 8 per watt, and a lifetime of 1500 hours. 9 DOE request comment on the baseline lamp 10 selected for IRLs. 11 MR. BROOKMAN: Joe Howley? 12 MR. HOWLEY: We would agree that 13 represents a baseline lamp for this category. 14 MR. BROOKMAN: Okay. Thank you. 15 MS. PIERCE: DOE identified more 16 efficacious replacement lamps using the following 17 criteria: 18 commercially available, lower wattage than 19 the baseline, lumen output within 10% of the 20 baseline, and lifetime greater than the lifetime of 21 the baseline. One replacement lamp that DOE selected 22 was a 55 watt PAR38 HIR lamp with a light output of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 105 1 980 lumens, an efficacy of 18.5 lumens per watt and 2 a lifetime of 2500 hours. The other replacement 3 lamp was a 55 watt PAR38 improved HIR lamp which 4 means it is an HIR lamp with an improved reflector. 5 It has a light output of 1120 lumens, an efficacy of 6 18.5 lumens per watt and a lifetime of 4200 hours. 7 DOE requests comment on the rated 8 lifetimes of 1500 hours of the baseline and 2500 and 9 4200 hours for the more efficacious substitutes. 10 MR. BROOKMAN: Joe Howley? 11 MR. HOWLEY: Just a quick comment on 12 lifetimes. There are two general lifetimes 13 available for this product category. The shorter 14 lives tend to be representative of lamps sold in the 15 consumer market. The longer lives are generally 16 required in the commercial market. So 1500 hours 17 typically isn't acceptable in the commercial market 18 but it would be acceptable in the residential market 19 where residents might burn these lamps 1000 hours a 20 year or less. So you get a two year life or longer 21 if they have it on a dimmer and many of these are on 22 dimmers. On the commercial a lot of retailers will

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 106 1 burn these up to 16 hours a day so they are looking 2 for lifetimes of 3000 to 4000 hours. The analysis 3 we think in this category really should be done in 4 two ways; one analysis for the residential market 5 and one for the commercial market. We think in some 6 cases this analysis is somewhat skewed between the 7 two of those different markets sort of being 8 interwoven in a way in the analysis and could 9 produce negative affects especially for the 10 residential market because the cost savings, 11 paybacks, things of that nature tend to work okay 12 for the commercial market where you have very long 13 operating hours and therefore you get fairly quick 14 paybacks, and you can get a payback from a fairly 15 expensive technology but not very well at all in the 16 residential sector. 17 MR. BROOKMAN: Michael McGaraghan has a 18 comment. Michael go right ahead. 19 MR. McGARAGHAN: Great thanks. Can you 20 hear me? 21 MR. BROOKMAN: Yes. 22 MR. McGARAGHAN: So I wanted to make a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 107 1 comment on the previous slide. Great. So Andrew 2 mentioned earlier that we were a little disappointed 3 at the identification of higher performance products 4 and the fact that DOE only identified one CSL. The 5 rational that DOE gave in a NOPR was that it was 6 only looking at PAR38 because they are the most 7 popular product on the market. And specifically 8 that DOE was only looking at PAR38 of a very tight 9 lumen range, within 10% of the baseline lamp so I 10 think that puts it between 963 lumens and 1170 11 lumens or something. So that right there just limits 12 BP to a very small subset of IRL products while 13 there are high performing products outside of that 14 range that are completely relevant to this 15 rulemaking. Any design strategies used in an 800 16 lumen lamp or 1200 lumen lamp or PAR30 lamp or any 17 other type of covered product if it improved 18 efficiency is important to consider and it is fairly 19 transferable between these different lamp types. So 20 we were not -- that approach of just looking at one 21 very lamp and identifying commercially available 22 improvement on that one lamp type.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 108 1 Secondly maybe it is a typo here on this 2 slide that second product there I think should say 3 20 lumens per watt. 4 MS. PIERCE: That is the certification 5 efficacy. 6 MR. McGARAGHAN: Okay. So I guess I am 7 lost again on the different -- 8 MS. PIERCE: The catalog initial -- 9 MR. McGARAGHAN: I was going to comment 10 that 11

-- 12 MS. PIERCE: The catalog initial output 13 and wattage are shown and the certification efficacy 14 is shown. 15 MR. McGARAGHAN: So why do those two 16 products have the same certification efficacy? 17 MS. PIERCE: That is how they were 18 reported in the certification database. 19 MR. McGARAGHAN: Okay. Then the only 20 other comment I was going to make was that and 21 somebody mentioned earlier that DOE did not make any 22 attempt to model higher performance and that is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 109 1 another area where we think DOE could have improved 2 the analysis. There are lamp designs as everybody 3 has mentioned, tradeoffs between lifetime and 4 efficacy and I'm kind of skimming through DOE's 5 response here and it doesn't explain why DOE has not 6 considered the potential efficacy improvement that 7 are commercially available in certain products and 8 scaled those increments into other representative 9 products. 10 MS. PIERCE: Sure. Well for one I would 11 point you to Appendix 5A. We did a very in depth 12 analysis of considering higher efficacy IRLs 13 including some prototype lamps that we tested and we 14 go in to depth as to why we cannot consider those. 15 And also we regarding having more efficacious 16 substitutes that would be for instance outside of 17 the 10% range we feel it is important to maintain 18 those baseline characteristics. So we would welcome 19 feedback on the criteria we used and if you can find 20 lamps using those criteria. 21 MR. BROOKMAN: Garry Fernstrom. 22 MR. FERNSTROM: Well this is Garry. I am

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 110 1 a little puzzled at your response. We found better 2 lamps. We pointed them out to you. You seem to 3 have not considered them. And it is a little bit of 4 a puzzle to me why? It would seem to me like DOE 5 didn't comply with its regulatory requirement to 6 investigate max tech. Now -- 7 MR. BROOKMAN: Which better lamps were 8 they? 9 MR. FERNSTROM: Mike can you help me out 10 here? 11 MR. MCGARAGHAN: Sure. If I am still 12 unmuted. So some of them were commercially 13 available products that were available in different 14 lumen bin or that were different lamp shapes that 15 weren't PAR38. Some of them were certification 16 values reported to DOE that I don't have the 17 products but that is what the manufacturers have 18 reported in terms of their value for compliance. 19 And some of those products were prototype products 20 that have been developed either in the past by our 21 team or by specific manufacturers. 22 MR. BROOKMAN: Charlie Stevens?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 111 1 MR. STEVENS: Charlie Stevens. Then I 2 have a question here. I mean the -- notwithstanding 3 the prototype products, set those aside for a 4 moment. Are all of the products that Mike 5 McGaraghan just described going to be subject to the 6 standards? 7 MS. PIERCE: Yes. I believe so. 8 MR. STEVENS: Then why wouldn't you 9 analyze them? 10 MS. PIERCE: Again we used very specific 11 criteria. We feel that it is important to maintain 12 the baseline characteristics. If you have comments 13 about whether those criteria could be changed we 14 would welcome those. But we definitely considered 15 all the lamps that were pointed out in comments. 16 MR. STEVENS: Yeah but I am trying to 17 understand -- I mean I understand -- what fraction 18 of the shipments is this one lamp, the 60 watt PAR38 19 or its substitute 55 watt PAR38, what fraction of 20 the total number of lamps that are subject to the 21 standards does that one lamp represent? 22 MS. PIERCE: I was not involved with the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 112 1 shipment analysis but maybe Brian -- 2 MR. STEVENS: Well if it is not something 3 close to 90% then I'd suggest your analysis is not 4 complete. 5 MR. BROOKMAN: Keith oh, pardon me, Joe 6 Howley? 7 MR. HOWLEY: Just to weigh in on the 8 manufacturer's side we did see the analysis that 9 Navigant performed as well. We believe the analysis 10 was fairly accurate in terms of addressing and 11 looking at these other products that were proposed. 12 Some of them I would suggest would not be covered by 13 the standard because some of them in certain cases 14 were 12 volt lamps and other types of lamps that are 15 not covered. So not everything that was proposed by 16 various commenters as more efficient were 17 appropriate and the technology was not 18 transferrable. I think Navigant did a pretty good 19 job at analyzing these proposed products and ruling 20 them out as appropriate for a lot of very accurate 21 technical reasons. 22 MR. BROOKMAN: Andrew DeLaski?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 113 1 MR. DeLASKI: I'd push back a little bit 2 is that this criteria of the lumen maintenance -- 3 MS. PIERCE: Uh-huh. 4 MR. DeLASKI: -- it seems to me that you 5 understand that what you can make in one lamp you 6 can make with a different package. So if you can 7 make it at that -- you should be able to scale from 8 one to the other to get the lumen to maintain lumen 9 output. It strikes me that that criteria as a 10 criteria to eliminate. That lamp could not produce 11 the lumen package if I adjusted it. It seemed to be 12 a pretty strong criteria. 13 MS. PIERCE: Well that also goes along 14 with the commercially available criteria. So we 15 wouldn't have done scaling from one lumen package to 16 another if that second lumen package wasn't 17 commercially available. 18 MR. RIVEST: This is Mike Rivest. I think 19 we will look at what was done exactly. I think the 20 concept of scaling to different lumen packages if we 21 can demonstrate that is a valid way of doing it 22 within the accuracy needed to set the standard I

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 114 1 think we need to look at that. But when you start 2 moving too many variables like bulb shape and lumens 3 we can stray off course quickly -- 4 MR. BROOKMAN: Garry Fernstrom? 5 MR. RIVEST: -- and throw in a prototype. 6 MR. FERNSTROM: So this is Garry. Let's 7 just leave it at this for this meeting. We don't 8 think that DOE considered max tech adequately. And 9 we believe that we provided alternatives that should 10 have been evaluated that we summarily dismissed. 11 MR. BROOKMAN: Okay. Thank you. 12 Final comments on issue 9? IRL lifetimes, 13 did anybody address IRL lifetimes yet? Don't think 14 so. Thanks Joe. 15 MR. DeLASKI: Andrew DeLaski. The point 16 that I think Joe that you made was that you were 17 suggesting that consumers -- a separate treatment 18 for consumer product and a commercial product line. 19 And I think one thing that we have to keep in mind 20 in this market is that there are substitutes outside 21 of the covered products. And I would submit I think 22 that most consumer reflectors being sold today are

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 115 1 not subject to the standard they are buying -- 2 MR. BROOKMAN: Andrew, you have got to get 3 that mike in front of your face. 4 MR. DeLASKI: So and then also the growing 5 LED market. So consumer's options are and for both 6 the residential and the commercial market extend 7 beyond the products covered by the regulation and 8 that any analysis you need to consider what consumer 9 choices are making amongst these product options out 10 there that are both regulated and unregulated by 11 this particular docket. 12 MR. BROOKMAN: Joe? 13 MR. HOWLEY: So my response to that is 14 that the consumers do purchase quite a number of 15 products in this regulated category. In general the 16 PAR38s for outdoor use because the BR30 lamps are 17 not acceptable in outdoor harsh weather environments 18 and there are a lot of products sold, driveways, 19 garages, other places. A 90 watt PAR38 is a very 20 popular choice for that type of application in the 21 consumer segment. And the PAR30s are a substitute - 22 - PAR30s and PAR20s are used by consumers who want a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 116 1 little more dramatic lighting effect than a BR30 2 because it has a tighter beam, has a wider beam. 3 And that is also fairly popular in the consumer 4 segment for indoor that competes with the BR30 in 5 that case. So there is quite a bit of use. On the 6 other hand there is also quite a bit of use in the 7 retail sector. But there is a significant volume of 8 products sold into both sectors. But they operate 9 very differently and that is why I am suggesting we 10 really and I don't think it is done now. Everything 11 is lumped together right now in the proposed 12 standards. I think there needs to be a different 13 kind of analysis done for these two different market 14 segments because you will reach different 15 conclusions based on their operation. And NEMA will 16 provide more comments about perhaps some ideas in 17 this area. 18 MR. RIVEST: Mike Rivest. Joe, you are 19 not suggesting that these can be differentiated for 20 the purposes of having two standards. You are just 21 saying that you would like to have an analysis that 22 shows the economics for the two sectors?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 117 1 MR. HOWLEY: Well I believe they also 2 could be differentiated not by use certainly but by 3 knowing where they are used and what the common 4 wattages are. There are some ways you could 5 differentiate them. Certainly PAR30s could be 6 treated as a residential type of product versus 7 PAR38s. And you might also be able to do some other 8 types of differentiation, technical differentiation. 9 I understand it would be very difficult to 10 differentiate it by you can only sell this product 11 in the residential sector and you can only sell that 12 product in the commercial sector. But knowing how 13 the markets behave and knowing what products are 14 used in what market you can create different 15 technical classifications for products commonly used 16 residentially and commonly used commercially. And 17 we will propose some ideas in that area. I think 18 that become more critical as we again reach these 19 max tech levels because it has the unintended 20 consequences of wiping out products in and utility 21 in some of these application sectors. 22 MR. BROOKMAN: Garry Fernstrom?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 118 1 MR. FERNSTROM: The question was raised 2 earlier about what some of the better performing 3 lamps might be and I'd just like to mention a few of 4 them here for the record: the GE 60PAR HIR Plus 5 operating at 21 lumens per watt, the Philips PAR38 6 Energy Halogen DiOptic operating at 20 lumens per 7 watt, the OSRAM Sylvania PAR38 medium base warm 8 white outdoor halogen flood operating at 20 lumens 9 per watt, and the OSRAM Sylvania PAR38 warm white 10 outdoor halogen flood operating at 21 lumens per 11 watt. So just to be specific here are some 12 references. 13 MR. BROOKMAN: Thank you. That is 14 helpful. 15 Yes, Aisha? 16 MS. HUSAIN: Hi, this is Aisha. I just 17 wanted to note that we did look very closely at all 18 those specific lamps that were stated in the 19 comment. And we can provide more detailed responses 20 for each lamp as to why they weren't considered. 21 But I just wanted to assure everyone that we did 22 look at all the comments that CIOUs provided

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 119 1 including every specific lamp. And as it was noted 2 some of them were MR16s and 12 volts which cannot be 3 considered under this rulemaking. And as for the 4 prototype lamps you will see in Appendix 5C that we 5 did testing on the prototype lamps and there are 6 requests for more information in order to proceed 7 further in that realm. So if you could provide 8 comments regarding that Appendix that would be 9 helpful as well. 10 MR. FERNSTROM: Thank you. 11 MR. BROOKMAN: Yes, thank you. 12 Okay. 13 MS. PIERCE: After identifying more 14 efficacious substitutes for each of the baseline 15 lamps DOE developed ELs based on the consideration 16 of several factors including the design options 17 associated with the specific lamps being studied for 18 example the use of infrared coatings for IRLs, the 19 ability of lamps across wattages to comply with the 20 standard level of a given product class and the max 21 tech level. DOE used an equation that is a function 22 of wattage to determine the EL. To determine the

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 120 1 coefficient of the EL equation DOE reviewed catalog 2 data of commercially available lamps and their 3 associated catalog rated efficacies. To establish 4 final minimum efficacy requirements for ELs DOE 5 analyzed publicly available compliance data and 6 adjusted the ELs when necessary. As shown in this 7 table EL1 is 6.2 times the wattage to the .27 power. 8 DOE requests comment on the max tech 9 levels identified in this analysis and information 10 on high efficacy IRLS including prototype lamps in 11 Appendix 5A of the TSD. 12 DOE developed a potential EL2 based on 13 tested prototype lamps. DOE is seeking information 14 on the cost to manufacture lamps that comply with 15 the 16 EL2. 17 Additionally DOE is seeking information on 18 whether the equipment required to apply IR coatings 19 to lamps at EL1 can also be used for lamps at that 20 EL2. 21 DOE is also seeking information on whether 22 any other additional equipment is required and

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 121 1 product conversion costs. 2 MR. BROOKMAN: Joe Howley? 3 MR. HOWLEY: So the level being proposed 4 is quite high and leaves only a few products left on 5 the market that would be available today that are 6 mainly commercial type products, not consumer 7 products. It doesn't leave any what we would 8 consider consumer products left on the market. And 9 it also we believe would not allow us to make a 10 PAR30 lamp due to some limitations with that 11 technology that don't exist with the PAR38. So it 12 would also eliminate the utility of the halogen 13 PAR30s which as we mentioned before are often used 14 as a substitute for a BR30 and is much more 15 efficient than a BR30. So we don't believe it would 16 be good policy to eliminate the halogen PAR30s from 17 the marketplace because it would actually increase 18 energy efficiency because the most logical product 19 that people would go back to would be a 65 watt 20 BR30. And we believe there are some different 21 approaches here perhaps to produce more intelligent 22 and preferable outcomes for the consumer and for

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 122 1 producing energy savings. As proposed now at this 2 level we don't believe it produces the right outcome 3 with regard to the products that would be available 4 for consumers. 5 MS. PIERCE: Could you expand on the 6 limitations of the PAR30? 7 MR. HOWLEY: Well it centers around the 8 fact the PAR38s are hermetically sealed and the 9 PAR30s use a different type technology which limits 10 some of the efficiency technologies that we can use 11 in that. We can provide more comments in our 12 written comments about that. 13 MR. BROOKMAN: Thank you. That would be 14 helpful. 15 Additional comments before we move on? 16 MS. PIERCE: Once DOE determined ELs for 17 the representative product classes it scaled the 18 results to non-representative product classes. For 19 IRLs DOE used a 15% decrease from standard spectrum 20 to modified spectrum, a 15.5% decrease from large 21 diameter to small diameter, and a 15% increase for 22 120 volt to 130 volt lamps.

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 123 1 DOE requests comment on any technological 2 barriers in manufacturing more efficacious small 3 diameter modified spectrum or 130 volt rated lamps 4 for commercial production. 5 MR. BROOKMAN: Mark Duffy? 6 MR. DUFFY: This has actually been covered 7 before but I found a very simple way to explain it 8 to you. Max tech for a 120 volt and max tech for a 9 130 volt are almost identical, not much different. 10 So the scaling factor of 15% increase for 130 volt 11 lamps has in fact eliminated them as a viable 12 product from the market place and their utility. 13 MR. BROOKMAN: Additional comments. 14 Keith? 15 MR. COOK: But it is academic. I mean it 16 doesn't matter. We can go ahead and put whatever 17 you want on it because it is out of the market. 18 MR. BROOKMAN: Okay. Thank you. 19 MS. PIERCE: Thank you. DOE requests 20 comment on its assumption that there will be no 21 lessening of utility or performance such that the 22 performance characteristics would be adversely

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 124 1 affected for the IRL efficacy levels. 2 DOE also requests comment on whether there 3 are features or attributes of the more energy 4 efficient IRLs that might affect how they would be 5 used by consumers. 6 MR. BROOKMAN: Michael McGaraghan has a 7 comment. Michael please speak. 8 MR. McGARAGHAN: Great. Thank you. I had 9 a comment on the scaling factor for small diameter 10 lamps but I think it is back a slide. DOE explained 11 that through manufacturer interviews they found that 12 fitting a double ended burner into a small diameter 13 lamp required changes to the physical shape of the 14 lamp. And they went on to say here that the 15 modified lamp might still meet ANSI standards for 16 small diameter lamps but would be larger than any 17 PAR20 lamp sold in the past and currently installed. 18 I have I guess I would like some additional detail 19 on that statement. What is the length of all PAR20 20 lamps sold in the past? Did DOE go out and buy a 21 bunch and measure them and, if so, is that in the 22 NOPR somewhere?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 125 1 MS. PIERCE: No it is not in the NOPR. 2 Can the manufacturers respond to that? 3 MR. BROOKMAN: The length of the lamps. 4 MR. HOWLEY: Only to confirm what was in 5 the NOPR that most PAR20s are designed with a single 6 ended halogen burner in the past in a compact size 7 and to squeeze a double ended halogen burner into 8 that envelope, the envelope had to be increased in 9 size. And therefore again as correctly analyzed in 10 the NOPR there are some fixtures and applications 11 where that -- where a newer PAR20 which is longer 12 than the old PAR20 simply wouldn't fit. Obviously 13 some it doesn't matter on a track fixture. But 14 other fixtures there would be problems with fit. So 15 you couldn't say that that new design would fit into 16 all existing fixtures. It will fit in some. It 17 will not fit in others. 18 MS. PIERCE: Thank you. 19 MR. McGARAGHAN: Yes, thank you Joe. It 20 is good to hear from you. It is a little 21 disconcerting that DOE doesn't have that information 22 themselves or haven't looked into that question,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 126 1 doing a little bit of research I found a range of 2 available lengths for R20 lamps from 3.1 inches to 3 4.2 inches. The lamps that we submitted was three 4 and a half inches. So it is right in the mix of 5 what is commonly sold as R20 lamps. It may be about 6 five millimeters longer than some other R20 lamps 7 and in that case I am wondering if DOE has 8 researched the fixture availability on the market 9 and identified which fixture that it -- or housing 10 that we are talking about where there is not five 11 millimeters of space and if that is a large portion 12 of the market or a rare housing or if it exists. I 13 would encourage DOE to look at that issue pretty 14 closely on its own and publish some of that 15 information if you are basing your findings on the 16 assumption that double ended burners make lamps too 17 long to fit in housings then we should have some 18 more specific information written up by DOE about 19 that situation. Thanks. 20 MR. BROOKMAN: Okay. Thank you. 21 Eric Montgomery has a comment. Thank 22 you. Eric unmute your phone, give it a try.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 127 1 MR. MONTGOMERY: Can you hear me now. 2 MR. BROOKMAN: Speak up. 3 MR. MONTGOMERY: Speak up? 4 MR. BROOKMAN: Yes. 5 MR. MONTGOMERY: You know the comment on 6 small lamps it is not just an issue of fitting a 7 double ended burner into smaller packages. It is 8 also issues associated to burners also have 9 temperature limits that the smaller reflector size 10 don't allow them to operate. In actuality when in 11 this rulemaking where we are using a standard of a 12 PAR30 there are some technologies that when you 13 apply it to a PAR30 it cannot be applied to a PAR20 14 and that is not just in the double ended burner but 15 it is also in other technologies. 16 MS. PIERCE: Could you expand on those 17 technologies? 18 MR. MONTGOMERY: for example it was 19 mentioned earlier PAR38s are hermetically sealed in 20 most cases. So some of the reflector coating 21 technology that can be used there can't be used in 22 non-hermetically sealed lamps in some cases.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 128 1 MR. McGARAGHAN: So am I still unmuted? 2 MR. BROOKMAN: Yes, you are. 3 MR. McGARAGHAN: I just wanted to respond 4 and clarify my comment. I fully acknowledge that 5 R20s or PAR20s the smaller diameter lamp are less 6 efficient by nature than the larger diameter lamp. 7 And DOE has assessed a scaling factor which we think 8 is appropriate, the starting scaling factor was I 9 think around 9%. But then DOE added an additional 10 three and a half percent just for the double ended 11 burner part. So my whole comment was about that 12 additional three and a half percent. 13 MR. BROOKMAN: Okay. Thank you, Michael. 14 Keith -- oh, Eric is not done yet. Eric 15 keep going? 16 MR. MONTGOMERY: As far as the last 17 question about polling different fixture 18 manufacturers and you know additional five 19 millimeters being used this has been looked at for 20 many, many years. And all the fixture manufactures, 21 they don't use ANSI for what will fit. They take 22 the actual length that is on the market and design a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 129 1 fixture around it. And if you change the shape of 2 that lamp it will not fit in many, many fixtures. 3 MR. BROOKMAN: Okay. Garry Fernstrom? 4 MR. FERNSTROM: Garry for the California 5 IOUs. Well again we would simply like to see the 6 data in DOE's analysis to substantiate that. I 7 don't think that is asking for too much. 8 MR. BROOKMAN: Now Keith. 9 MR. K. COOK: I just want to make a 10 clarification. An R20 and a PAR20 are not the same 11 thing. 12 MR. BROOKMAN: Thank you. Are we ready to 13 move on? 14 MS. PIERCE: I think so. 15 DOE requests comments on the overall 16 methodology, assumption and results of the GSFL and 17 IRL engineering analyses. 18 MR. BROOKMAN: No comments. 19 MS. PIERCE: Okay. I will move on to the 20 Product Price Determination then. DOE estimated end 21 user lamp prices directly rather than developing 22 manufacturer selling prices because GSFLs and IRLs

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 130 1 are difficult to break down to discrete components 2 and reverse engineer. In its research DOE found a 3 range of end user prices that were dependent on the 4 distribution channel used. To represent this range 5 DOE developed three discounts using lamp bluebook 6 prices. The low end user lamp prices are based on 7 purchases through state procurement channels, the 8 medium prices are representative of purchases 9 through large distributors or DIY stores and high 10 prices are based on internet retailers. In the NOPR 11 analysis DOE used a weighted average end user price 12 in the LCC and NIA. Based on shipment estimates 13 through each channel DOE applied 85% to the large 14 distributor price, 10% to the state procurement 15 price and 5% to the internet retail price. DOE also 16 estimated end user prices for fluorescent lamp 17 ballast using the pricing information developed in 18 the 2011 ballast rule. 19 DOE requests feedback on the pricing 20 methodology used in this analysis. 21 MR. BROOKMAN: Comments here? Joe? 22 MR. HOWLEY: It seems like a reasonable

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 131 1 approach. 2 MR. BROOKMAN: Thank you. That is 3 helpful. Garry Fernstrom? 4 MR. FERNSTROM: Garry for the California 5 IOUs. It seems like a reasonable approach for 6 linear fluorescent lamps for sure. But IRLs are 7 found in homes and small businesses and I think 8 would predominantly be purchased through retail 9 channels rather than distributors or state 10 procurement arrangements. So I think your approach 11 is appropriate for GSFLs but not necessarily for 12 IRLs. 13 MR. BROOKMAN: Charlie Stevens? 14 MR. STEVENS: Yeah. Charlie Stevens. I 15 think that would go along with Joe's suggestion that 16 separate analyses be done for commercial and 17 residential sectors I think or residential and small 18 commercial, the mom and pop kind of stores and 19 people who buy like a residential homeowner. So I 20 think that is not a bad idea, that kind of 21 segregation of the analysis. And then I would 22 support Garry's comment that if you do that you are

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 132 1 going to have to develop different percentages for 2 those two sectors. 3 MR. BROOKMAN: Okay. Thank you. 4 MS. PIERCE: Now we will discuss the Trial 5 Standard Levels or TSLs. In the next two slides DOE 6 will describe the TSLs proposed in this rulemaking. 7 DOE analyzed the benefits and burdens of the TSLs 8 which will be discussed in more detail later in the 9 presentation. DOE selected TSLs which designate an 10 EL for each product class. For GSFLs TSL1 11 corresponds to setting energy conservation standards 12 at the efficacy levels of the least efficient 13 products currently on the market for each product 14 class. TSL2 would set energy conservation standards 15 for GSFLs that would bring all product classes to 16 approximately the same level of rare earth phosphor. 17 TSL3 represents the maximum NES and NPV that can be 18 achieved without requiring EL2 for any product 19 class. TSL4 represents the maximum NPV that was 20 achievable in the analysis from any combination of 21 ELs. TSL5 which is the TSL that DOE is proposing 22 represents the max tech EL for all GSFL product

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 133 1 classes. TSL5 also represents the maximum NES that 2 was achievable in the analysis. 3 For IRLs TSL1 which is the TSL that DOE is 4 proposing represents the max tech EL for all product 5 classes. 6 These tables present the TSLs and the 7 corresponding ELs for each representative product 8 class. 9 Now we will discuss the energy use and 10 life cycle cost or LCC analyses. The purpose of the 11 energy use characterization is to estimate the 12 energy consumption of baseline and higher efficacy 13 lamps. The results of this analysis are used in the 14 LCC, payback period, and NIA analyses. Energy use 15 is calculated as input power times operating hours. 16 Various DOE sources were used to derive the 17 operating hours including the lighting market 18 characterization and EIA's CBECS, RECS and MECS data 19 sets. Using these sources allows DOE to account for 20 variation in annual operating hours across census 21 divisions and large states by building type, lamp 22 type and lighting application.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 134 1 This table shows average annual operating 2 hours for GSFLs and IRLs in each sector. IRLs were 3 not analyzed in the industrial sector since they 4 have such a small market share in that sector. 5 DOE assessed impacts on life cycle costs 6 and payback periods in sensitivity scenarios where 7 GSFLs and IRLs are operated on dimming systems. To 8 develop annual energy consumption for these dimming 9 systems DOE used the system input power ratings as a 10 result of dimming and the annual operating hours. 11 DOE made certain assumptions to determine the system 12 input power ratings. For GSFLs DOE assumed a 33% 13 lamp and ballast lumen reduction on average. The 14 associated system input power reduction was 15 calculated based on characteristics of the dimming 16 ballast analyzed. DOE assumes that dimming does not 17 change lamp lifetime for GSFLs. 18 For IRLs DOE assumed a 20% wattage 19 reduction on average which corresponds to a 25% 20 reduction in lumens and a lifetime multiplier of 21 3.94. For IRLs in addition to calculating LCC 22 savings for individually dimmed lamps, DOE also

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 135 1 assessed an LCC scenario in which a certain 2 percentage of the population used dimmers; 29% for 3 the residential sector and 5% for the commercial 4 sector. Lighting controls are also analyzed as part 5 of the NIA. 6 Now I will discuss the LCC and payback 7 period analysis. This analysis is used to assess 8 the impacts on a consumer due to potential energy 9 conservation standards. It is conducted from a 10 consumer's perspective and shows the cost of owning 11 and operating the lamp over its lifetime. As 12 indicated in the diagram the LCC considers two 13 components; one is first cost which is the product 14 price and installation cost, the other is the 15 operating cost of the lamp which is discounted to 16 the present value. When the standard level lamp 17 lifetime is different from the baseline lamp 18 lifetime DOE also calculates a residual value for 19 the remaining useful life of the lamp at the end of 20 the analysis period and subtracts this from the 21 total LCC value. From this DOE calculates the total 22 LCC for each standard level considered. Results are

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 136 1 expressed as LCC savings which are the baseline LCC 2 value minus the standard level LCC value. The 3 simple payback period is also calculated and 4 reported. 5 Now I will discuss some of the key inputs 6 to the LCC model such as electricity prices, 7 installation costs, ballast lifetimes and discount 8 rates. DOE calculated average electricity prices 9 using EIA 861 data. DOE then applied electricity 10 price trends from AEO to project future electricity 11 prices. DOE used the 2011 ballast rule, RS Means 12 and the US Bureau of Labor Statistics to calculate 13 installation costs. DOE calculated ballast 14 lifetimes in hours which translated to approximately 15 12 years for the commercial sector, 11 years in the 16 industrial sector and 15 in the residential sector. 17 DOE used a discount rate to calculate the present 18 value of expenses over the analysis period. For the 19 commercial sector DOE calculated a discount rate of 20 5.1%, for the industrial section 6.3% and for 21 residential 5.2%. 22 In the preliminary analysis DOE determined

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 137 1 the probability of a particular building in each 2 census division and large state using the lighting 3 market characterization and EIA's CBECS, MECS and 4 RECS data. In the NOPR analysis DOE used the same 5 data sources but made the calculation more specific 6 by determining the probability of a GSFL or IRL in 7 each building type instead of just using the 8 probability of the building type. These 9 probabilities were used to determine national 10 weighted averages for electricity prices, sales tax 11 and operating hours. 12 DOE requests comments on using this 13 methodology for electricity prices. 14 MR. BROOKMAN: Keith? 15 MR. K. COOK: I am not really commenting 16 on electricity price but on slide 60 you state that 17 dimming is only used 5% in commercial sector. I 18 think that over this analysis period of 30 years 19 that is way, way understated considering the fact 20 that California is now requiring dimming for all of 21 their renovations and new buildings as well as 22 ASHRAE is significantly driving it across the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 138 1 country. So that is way understated. 2 MS. PIERCE: Thank you. The NIA analysis, 3 the lighting control analysis in that accounts for 4 that. But thank you. 5 MR. BROOKMAN: Let me see. Garry 6 Fernstrom? 7 MR. FERNSTROM: Garry for the California 8 IOUs. I am not sure I understood your answer. What 9 analysis would account for greater use of dimming? 10 MS. PIERCE: The National Impact Analysis 11 which will be discussed by Brian Gerke after this 12 analysis. 13 MR. FERNSTROM: Thank you. 14 MS. PIERCE: Uh-huh. 15 MR. BROOKMAN: Charlie? 16 MR. STEVENS: Charlie Stevens. Like some 17 other people, Keith, I agree with Keith that 5% 18 dimming for the commercial sector way undershoots 19 where it should be for the forward analysis. The 20 29% for the residential sector is probably way too 21 high. I just sent John Cymbalsky a couple of days 22 ago for distribution the report from our 13 month

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 139 1 residential metering study which metered all of our 2 lighting fixtures in 103 houses. There were 2200 3 sensors altogether but by fixture type, by 4 technology, by room. We also have a census across 5 1400 houses that surveyed all those fixtures so we 6 could apply those metered results across the entire 7 region so you can probably do the same thing. That 8 data itself will be available for download probably 9 within the month to anybody who wants it. So I am 10 hoping you will be able to update an awful lot of 11 your residential lighting data. I am not sure if 12 our commercial building stock assessment data will 13 be available to you in a timely fashion but if it is 14 I will make sure it gets to you. We are also going 15 to be providing some other data but we will talk 16 about that when we talk about shipments. 17 MR. BROOKMAN: Thank you Charlie. 18 MS. PIERCE: Thank you. Would you provide 19 that with your written comments, the link to that 20 please? 21 MR. STEVENS: Sure. 22 MS. PIERCE: Thank you.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 140 1 MR. BROOKMAN: Lucy do you have -- 2 MS. deBUTTS: No I just wanted to say -- 3 this is Lucy deButts, I just wanted to say that I 4 will check with John on that data that you provided. 5 MR. BROOKMAN: Okay. Dave. Charlie was 6 saying he provided him a report. 7 MR. STEVENS: Yeah I sent him the report 8 wherein you can see some summary data in that report 9 that might be useful immediately but within the 10 month the database itself will be available on our 11 website on NEMA's website for download for anybody 12 who wants it. 13 MS. DeBUTTS: Okay. Thank you. 14 MR. STEVENS: Yeah the survey data is 15 already available. You can download the 1400 house 16 survey data now. It is on our website for download. 17 So all you need now is the metering data to apply to 18 that. 19 MR. BROOKMAN: Charlie I think Dave wants 20 you to stay there. 21 Find a way to get that microphone Dave. 22 MR. GATTO: Hey, Charlie, I am sorry.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 141 1 Just a question because I am not suggesting, I don't 2 know that I agree 29% for residential is correct. 3 At the same time is -- I believe your analysis is at 4 the fixture so I think maybe the question I would 5 have for Navigant is are you -- if that 29% was just 6 on IRL in residential that number might be closer to 7 real than if you were considering fluorescent which 8 I don't believe homeowners dim at all. 9 MR. GATTO: Or the whole home which might 10 have a lot of simple on off switches. So Charlie is 11 that something you can comment on here. 12 MR. STEVENS: Well our data will include 13 and does include controls. So there -- when you 14 look at the data you'll see data that shows the 15 technology in the socket and we use the term socket 16 loosely for fluorescent and other but the technology 17 in the socket, the wattage of the lamp, the controls 18 on that socket, and number of lamps per fixture, 19 type of fixture and the room in which it is located. 20 So all of that data is in there so you can analyze 21 it however you like. But there is enough data there 22 we think to characterize the lighting in four states

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 142 1 for residential. 2 MR. K. COOK: Charlie does it also include 3 the number of lamps on a single switch? 4 MR. STEVENS: Yes it does. 5 MR. BROOKMAN: Thank you Keith. 6 MR. STEVENS: The wattage on a single 7 switch. 8 MR. GATTO: So I would just end with and 9 this is really, thank you Charlie, that is kind of 10 what I thought. I've looked at the data but I am 11 not as close to it but I would just suggest that 12 Navigant review these percentages and then I would 13 look at the -- this might be another one of those 14 examples where lumping IRL and GSFL together is not 15 appropriate because I think in commercial it 16 probably skews the other way, heavier dimming on the 17 GSFL side with a lot more of the IRLs being in re18 complications that are simply on an on/off circuit; 19 and in residential I think it is going to be IRL are 20 dimmed quite a bit and GSFLs as close to zero as 21 statistically possible to get to. 22 MR. BROOKMAN: Okay. Thank you.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 143 1 Appreciate that Dave. 2 Additional comments here. 3 MS. PIERCE: DOE uses several lamp 4 purchasing events in the LCC model the first of 5 event is lamps failure in which a lamp fails and 6 must be replaced. The second event ballast failure 7 is only for GSFLs and includes situations where the 8 failure of the installed ballast requires a new lamp 9 and ballast purchase. The third event is new 10 construction and renovation where new fixture 11 installations occur and are not restrained to the 12 previous configuration. DOE requests comments on 13 these lamp purchasing events. 14 MR. BROOKMAN: Keith, do you want to -- go 15 ahead Mark? 16 MR. DUFFY: This is Mark Duffy of GE 17 Lighting. My question is did you consider group 18 relamping in this? 19 MS. PIERCE: Yes we did. I actually have 20 a request for comment on that. So we did. We 21 calculated the percentage of time at which group 22 relamping occurs and we used that to weight the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 144 1 lifetime. So the request for comment is the 2 assumption at the rated life at which group 3 relamping occurs which we assumed was 85%. 4 MR. BROOKMAN: Dave. 5 MR. GATTO: Dave Gatto, Westinghouse. I 6 think I am going to repeat my residential versus 7 commercial statement again. I think in residential 8 when they can't see or when the bulb actually burnt 9 out is more likely going to be the -- what they 10 consider the end of life. Whereas in commercial it 11 is a much higher percentage, 85% seems reasonable. 12 MR. BROOKMAN: Okay. 13 MS. PIERCE: Thank you. 14 MR. BROOKMAN: Keith? 15 MR. K. COOK: Keith Cook with Philips. 16 But with the aging population that can't see as 17 stated earlier. 18 MR. BROOKMAN: In my experience it is 19 getting pretty dim. 20 Yes, Susan? 21 MS. CALLAHAN: Susan Callahan, OSRAM 22 Sylvania. Does -- in the event of ballast failure

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 145 1 in the new construction and renovation since we've 2 been talking about building codes does that include 3 the price of the required controls that are called 4 out by code, especially ASHRAE 90.1? 5 MS. PIERCE: No it does not. The lighting 6 controls are conducted as a sensitivity but 7 definitely we would welcome written comments on 8 which codes we should consider specifically. 9 MS. CALLAHAN: Thank you. 10 MR. BROOKMAN: Dave? 11 MR. GATTO: Dave Gatto, Westinghouse. On 12 an earlier slide, I don't remember which one you 13 included installation cost in the analysis. I would 14 just suggest that if you have to buy a control no 15 different than having to hire an electrician if it 16 is an appliance requires a qualified installation 17 that is actually part of the installation cost for a 18 typical end user product. 19 MR. DeLASKI: Just a follow on, Andrew 20 DeLaski. That is a cost of the code of the building 21 code, of the ASHRAE code; right. I am trying to 22 figure out how that relates to the standards

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 146 1 analysis. 2 MR. BROOKMAN: Susan? 3 MS. CALLAHAN: If in order to replace the 4 ballast if I -- and I am doing it by rules, lamp and 5 ballast is not maintenance together, it can be 6 considered renovation depending upon on how many you 7 are doing. Or the renovation then putting in the 8 required controls is just part of this entire 9 package. I don't understand why that isn't part of 10 the total cost of doing that. I guess is my 11 question. 12 MR. BROOKMAN: Charlie Stevens? 13 MR. STEVENS: Excuse me, yeah, Charlie 14 Stevens. I think what Andrew is trying to get at is 15 that those costs would be applied to every EL. 16 MS. CALLAHAN: Okay. 17 MR. STEVENS: So it would wash out because 18 it is required by the code regardless of which EL 19 the standard picks, it is just going to be -- that 20 cost is going to be there always. And you can add 21 it in if you want but it won't really change the 22 outcome of anything.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 147 1 MR. BROOKMAN: Okay. Thanks Charlie. 2 Additional comments? 3 MS. PIERCE: Okay. DOE requests comments 4 on its LCC analysis period assumptions in particular 5 DOE requests comment on basing the analysis period 6 on the baseline lamp life divided by the annual 7 operating hours of that lamp for the IRL and the 8 commercial and industrial sector GSFL analyses. 9 DOE also requests comment on basing the 10 analysis period on the useful life of the baseline 11 lamp for a specific event for residential GSFLs in 12 particular DOE requests comment on its residential 13 GSFL analysis period of 15 years which is based on 14 the average useful lifetime of ballast in the 15 residential sector being approximately 15 years 16 regardless of operating hours. 17 MR. BROOKMAN: Joe? 18 MR. HOWLEY: Just a comment that it seems 19 like a reasonable approach. 20 MS. PIERCE: Okay. 21 MR. BROOKMAN: Thank you. 22 Other thoughts on these two comment boxes?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 148 1 Keith? 2 MR. COOK: Keith Cook with Philips. The 3 approach we don't have a problem with but some of 4 the analysis we do. And we will provide details in 5 written comments. 6 MR. BROOKMAN: Thank you. 7 MS. PIERCE: In the next few slides we 8 will go over the range of LCC results as well as the 9 weighted average LCC savings based on shipment at 10 the proposed TSL. For all GSFL product classes 11 there are negative LCC savings for replacements with 12 the same wattage and ballast factor as the baseline 13 since there are no energy savings for those 14 replacements. For all GSFL results the results are 15 the same for the ballast failure and new 16 construction and renovation events since we assume 17 no spacing adjustments in the latter event. This is 18 because the replacement systems were chosen such 19 that the lumen output was within 10% of the baseline 20 system when possible. 21 This table shows the range of results for 22 4- foot medium Bipin lamps across all sectors and

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 149 1 replacement scenarios for EL2 which is the EL that 2 corresponds to the proposed TSL5 for this product 3 class. 4 Here are some of the key conclusions for 5 the 4-foot medium Bipin product class. For the 6 commercial and industrial sectors savings were 7 generally positive. For the residential sector 8 savings were generally negative. The weighted 9 average LCC savings based on shipments for the 4- 10 foot medium Bipin product class is positive. 11 This table shows the range of the results 12 for T5 high output lamps across all sectors and 13 replacement scenarios for EL1 which corresponds to 14 the proposed TSL5. Replacements with the same 15 wattage and ballast factor as the baseline had 16 negative LCC savings but all other replacements had 17 positive LCC savings. The weighted average LCC 18 savings based on shipments is positive. 19 This table shows the range of results for 20 T5 standard output lamps across all sectors and 21 replacement scenarios for EL2 which corresponds to 22 the proposed TSL5. LCC savings were generally

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 150 1 positive. The weighted average LCC savings is also 2 positive. 3 This table shows the range of results for 4 8- foot slimline lamps across all sectors and 5 replacement scenarios for EL2 which corresponds to 6 the proposed TSL5. In the lamp replacement 7 scenarios LCC savings were generally negative. In 8 the lamp and ballast replacement scenarios LCC 9 savings were generally positive. The weighted 10 average value was positive. 11 MR. BROOKMAN: Michael McGaraghan has a 12 comment. Michael please speak up. 13 MR. McGARAGHAN: Hi. Thanks. I just had 14 a question about the residential 4-foot lamp 15 scenario. It looked like there were no LCC saving, 16 it is all negative. Did DOE assume that low wattage 17 lamps will never be sold into the residential 18 sector? 19 MS. PIERCE: You said low wattage lamps? 20 MR. BROOKMAN: Michael repeat -- 21 MR. McGARAGHAN: Yeah. 22 MR. BROOKMAN: Low wattage, yes?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 151 1 MR. McGARAGHAN: Yes, I am trying to 2 understand why low wattage wouldn't be an option 3 that might save energy and result in LCC savings in 4 the residential sector? 5 MS. KIENLE: This is Maureen of Navigant. 6 We did consider low wattage lamps in the residential 7 sector so those were analyzed and included. 8 MS. PIERCE: Yes, the negative LCC savings 9 for the residential sector were largely due to that 10 constraint that I discussed earlier, the 15 year 11 analysis period based on the ballast lifetime 12 regardless of operating hours. So you are not 13 getting as many operating hours to accumulate energy 14 savings in that time period to make up for your 15 initial increased purchase price. 16 MR. McGARAGHAN: Okay. Thank you. 17 MS. PIERCE: Uh-huh. 18 Okay. This table shows the range of 19 results for 8-foot high output lamps across all 20 sectors and replacement scenarios for EL2 which 21 corresponds to the proposed TSL5. LCC savings were 22 negative in all cases. So the weighted average is

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 152 1 also negative. 2 MR. GATTO: Dave Gatto, Westinghouse. So 3 I am not sure what to say other than how are we 4 explaining that to the American people? We are 5 proposing a rule where they will lose 16, 17% of 6 their value on average across the lifetime of the 7 product that we are going to have to make? 8 MR. BROOKMAN: Thank you Dave. 9 MS. PIERCE: This table shows the range of 10 results for IRLs across all sectors and replacement 11 scenarios for EL1 which corresponds to the proposed 12 TSL1. LCC savings were positive in all cases. So 13 the weighted average is also positive. 14 MR. BROOKMAN: Joe Howley? 15 MR. HOWLEY: Yes. Again on this one I 16 think the analysis was done mostly for commercial 17 customers for PAR38 lamps. And the residential 18 sector I believe would have a dramatically different 19 outcome also being negative and maybe this is a 20 question for DOE, it didn't get an answer from Dave 21 but how are we allowed to go forward when there is 22 clearly no economic benefits to anyone.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 153 1 Well there was a negative. 2 MR. RIVEST: On the previous one? 3 MR. GATTO: Yes on the previous one or on 4 this one if it is done for residential it would be 5 negative as well. 6 MR. RIVEST: I think it is a decision 7 making -- it is something that will be considered. 8 Your comments will be taken as we go. 9 MS. deBUTTS: Yes, this is Lucy. As Mike 10 stated we are presenting the analysis right now, we 11 are not making a decision at this particular moment 12 whether or not we are going to proceed but the 13 decision will have to be made, yes. 14 MR. BROOKMAN: So thank you Lucy and thank 15 you Mike. 16 Additional questions and comments here? 17 MR. RIVEST: I have just a question. 18 MR. BROOKMAN: Mike Rivest. 19 MR. RIVEST: Julie, does the TSD contain 20 sub-group analysis for residential and commercial 21 for any of these lamps? 22 MS. PIERCE: Yes. I am about to discuss

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 154 1 that. Uh-huh. 2 DOE examined two sub-groups for the LCC 3 sub- group analysis. For low income consumers DOE 4 filtered EIA RECS data such that it only included 5 data for consumers below the poverty line. This 6 impacts the probability of a GSFL or IRL within each 7 building type and division or large state which are 8 used as inputs to the operating hours, electricity 9 prices and sales tax calculations. All LCC savings 10 that were positive in the main analysis remained 11 positive. And all savings that were negative in the 12 main analysis remain negative in the low income 13 consumer sub-group analysis. 14 For institutions that serve low income 15 populations DOE expects that the majority of the 16 organizations are small non-profit groups and 17 calculated a commercial discount rate of 9.6% for 18 these groups. The sign of the LCC savings remain 19 the same except for two cases which shifted from 20 positive to negative savings. The first was in the 21 T5 standard output product class and the second as 22 in the 8-foot slim line product class.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 155 1 MR. BROOKMAN: From positive to negative? 2 MS. PIERCE: Yes. 3 MR. BROOKMAN: Okay. Questions, comments 4 here on these sub-group analysis. 5 Joe? 6 MR. HOWLEY: I think our request wasn't 7 this tiny little sub-group but just the entire 8 residential market in general versus the entire 9 commercial market especially on IRL products is what 10 we were requesting, not this sub-sub-group analysis. 11 MS. PIERCE: We do have separate 12 residential and commercial results presented in the 13 TSD for IRLs and GSFLs. 14 MR. HOWLEY: All right. Thank you. We 15 will take a look at those and make our comments. 16 MS. PIERCE: Thank you. 17 MR. BROOKMAN: Additional comments here 18 because I think it is time to go to lunch. And this 19 is a good stopping point. It is now almost 12:30. 20 So let's resume here at 1:30. A reminder you must 21 have a badge visible in the building. If you are 22 going to go to the big cafeteria you need to pass

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 156 1 through a security portal and you will need an ID to 2 get back in very likely. This room will be 3 supervised. You can leave your stuff here. And we 4 made a good start on the day. We will see you back 5 here at 1:30. 6 (WHEREUPON, a lunch break was 7 taken.) 8 MR. BROOKMAN: Welcome back. Let's 9 resume. We are going to pick up where we left off 10 which is on Shipments Analysis and National Impact 11 Analysis. We are going to hear from Brian. 12 DR. GERKE: Welcome back everybody. I am 13 Brian Gerke from Lawrence Berkeley National Lab. I 14 will be telling you about the shipments and national 15 impact analyses for this NOPR. 16 So the purpose of these two analyses taken 17 together is to estimate the impacts on the nation on 18 the consumer side that the different TSLs might 19 have. The Shipments Analysis estimates GSFL and IRL 20 shipments over the 30 year analysis period which in 21 this case runs from 2017 to 2046 and the National 22 Impact Analysis estimates the national energy

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 157 1 savings from those shipments that would be achieved 2 from the shipments at various trial standard levels 3 and also estimates the net present value to 4 consumers of those savings at the various trial 5 standard levels less any increases in cost. 6 So I have to look down at my notes a 7 little more carefully here to make sure I go through 8 all the parts of this slide. The Shipments Analysis 9 is made up of three different modules, the lumen 10 demand module, the price learning module and the 11 consumer choice module which work together to 12 produce a forecast of the shipments of GSFLs and 13 IRLs. 14 The lumen demand module computes the 15 lighting demand in GSFL and IRL applications that 16 must be met by new shipments in each year of the 17 analysis period. It depends on the rate of 18 renovations and new construction and on the need for 19 replacement of failed lamps. Some fraction of that 20 demand and a growing fraction of that demand 21 throughout the analysis period is soon to be taken 22 over by LEDs nearly all of the market by the end of

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 158 1 the analysis period. I'll discuss that assumption 2 in more detail a little bit later on. The remainder 3 of the demand is input to the consumer choice 4 module. 5 The price learning module estimates the 6 prices of lamps in each year of the analysis period 7 based on a learning curve analysis that I will 8 discuss in more detail later. The price learning 9 module feeds into the lamp cost, the first cost and 10 the O&M cost of various lamp options which are then 11 also fed into the consumer choice module. 12 The consumer choice module apportions the 13 demand among the various product classes and the 14 lamp types within those product classes according to 15 consumer sensitivity to first costs and O&M costs. 16 The model I want to point out at this stage allows 17 consumers to switch between product classes when 18 they are undertaking renovations or lighting 19 retrofits but if they are replacing failed lamps 20 they remain in the same product class that had 21 before. 22 The shipments in each year are then used

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 159 1 as an input to the price learning module in the 2 following year to update the price estimate. 3 So to talk a little more about the 4 assumptions regarding the incursion of LEDs into the 5 market. LEDs are expected to erode the total lumen 6 demands satisfied by both GSFLs and IRLs over the 7 analysis period. The chart shows the total lumen 8 capacity in the installed stock for IRLs, GSFLs, for 9 LEDs used in IRL applications and for LEDs used in 10 GSFL applications. And as you can see by the end of 11 the analysis period nearly the entire market has 12 been taken up by LEDs. That sharply attenuates the 13 savings that can be achieved from a rule on GSFLs 14 late in the analysis period simply because there 15 aren't as many products. 16 To determine the demand for replacement 17 lamps in each year of the analysis period DOE 18 projected the stock of fluorescent lamp ballasts and 19 then determined the probability that they would 20 require relamping as a function of their age. 21 Example relamping probability curves are shown here. 22 When a ballast is new it is assumed that it is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 160 1 coupled with a new lamp. And then in future years 2 the probability that the ballast needs to be 3 relamped depends on the distribution of hours of use 4 and also on assumptions about group relamping which 5 as was mentioned previously is used to scale the 6 lifetime of the lamps. 7 The price learning module as I mentioned 8 before projects the prices of lamps in each year of 9 the analysis period. This uses a learning curve 10 analysis that is now standard in DOE rulemaking 11 analyses which assumes that the price of a product 12 will drop by a certain fraction each time the 13 cumulative shipments of that product double. In the 14 case of GSFLs and IRLs because LEDs are entering 15 into the market so strongly the growth in cumulative 16 shipments and because they are relatively mature 17 products the growth in cumulative shipments is 18 fairly modest over the analysis period so the drop 19 in price is quite low. Here I am showing the 20 historical price trend of GSFLs in red and in blue 21 the price learning model as a function of time that 22 was used in this analysis and between today and the

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 161 1 end of the analysis period. The price in that model 2 drops only by about 7%. I want to point out that 3 this is shown as a function of time. But the 4 learning curve analysis as I mentioned earlier was 5 actually fitted and modeled as a function of 6 cumulative shipments. 7 A key component of this analysis is that 8 it allows for the possibility that consumers will 9 switch between product classes in response to 10 changing price signals. And in particular that 11 means that the market shares of different lamp types 12 can be different under the different standards 13 cases. The most striking such result has to do with 14 shifting from 4-foot medium Bipin lamps to T5 lamps. 15 As you can see here in the base case the market 16 share of T5s grows but it grows relatively modestly 17 and never really exceeds 10% of the total market 18 share for standard output lamps. In TSL5 when the 4- 19 foot medium Bipins become quite expensive the shift 20 to T5s is substantially stronger and they grow to 21 nearly 30% of the market by the end of the analysis 22 period. However that market, of course, is quite

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 162 1 attenuated by that point. So this is the fraction 2 of GSFL in each of those product classes and that 3 has grown very small by that period. 4 So this summarizes the result of the 5 shipments analysis for each of the product classes 6 in the base case and at TSL5 which is the proposed 7 standard level. The increase in shipments of T5s in 8 the standards case is much more striking in this 9 plot although I note that the difference in scale 10 for the different plots here. You can see that each 11 product class declines in shipments over time 12 because of the incursion of LEDs into the market. 13 And furthermore shipments of IRLs drop in the 14 standards case because the products have a longer 15 lifetime in the standards case on average than they 16 do in the base case. So there are fewer shipments 17 needed to fulfill the lighting demand. 18 There are a number of different points for 19 comment in all of this. First DOE seeks comment on 20 the reasonableness of its assumption that first cost 21 is a significant driver of consumers choice of 22 product class in particular that it might cause a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 163 1 shift from 4-foot medium Bipin T8s to standard 2 output T5s in the TSL5 standards case. 3 MR. BROOKMAN: Keith? 4 MR. K. COOK: Keith Cook with Philips. We 5 don't believe that is going to happen. If you 6 actually look at the shipment information on T5s it 7 has been flat and all of our data shows it will 8 continue to be flat. We do not see in fact the T5s 9 have been available for 20 years in this country so 10 we do not see that change happening. 11 MR. BROOKMAN: Thank you. Mark. 12 MR. DUFFY: Yeah, I agree with Keith. And 13 I basically have a question for the analyst here. 14 What did you think was driving a switch from T8 to 15 T5 because as you know they are not retrofitable, 16 they are not the same lengths. And the other thing 17 you should be completely aware of is there is not 18 much difference in energy efficiency between T5s and 19 T8s in reality. Okay. You are measuring T5s at 20 high frequency. You are measuring T8s at low 21 frequency. There is a big difference. You are going 22 to operate your T8s and your T5s both at high

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 164 1 frequency. So they are going to be roughly the same 2 energy efficiency. So there is no energy argument 3 and there is a huge renovation challenge with your 4 fixture. You have to just do the whole thing if you 5 make that change. So what was the thinking because 6 if the thinking is based on a simple cost free or 7 renovation free change, I don't see that happening. 8 DR. GERKE: So to answer that first 9 question the switching can only occur when consumers 10 are already undertaking a retrofit or renovation and 11 the assumption in that case was that the price 12 differences between those two were simply the lamp 13 and ballast choice. 14 MR. DUFFY: Why would they not go to LEDs? 15 DR. GERKE: A large fraction of people do. 16 So as I said this becomes an increasingly small 17 wedge. I am showing you that, the fractions of. 18 MR. BROOKMAN: Keith? 19 MR. K. COOK: What you need to understand 20 is T5s really get the majority of their efficiency 21 from an optical standpoint. With them being smaller 22 in diameter it is much easier for us to focus that

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 165 1 light where we need it as oppose to the larger 2 diameter T8s. But of course that is not included in 3 this NOPR, the luminaire efficiency. 4 MR. BROOKMAN: Okay. Andrew DeLaski? 5 MR. DeLASKI: I reckon I understand this 6 analysis but I guess what I am struck by is what 7 gets counted and what doesn't when it comes time to 8 count the energy savings. So for example I think 9 what you show is there is a change in the national 10 energy consumption for T8s and T5s. What you are 11 seeing is T8 -- T5 consumption is a negative 12 savings; right? And you are showing increased 13 consumption in T5s over the analysis period because 14 there is so much more of them being sold. 15 DR. GERKE: Correct. If you look at the 16 national energy savings on a product class by 17 product class level you can get -- 18 MR. DeLASKI: Right. 19 DR. GERKE: -- unusual results because of 20 the change -- 21 MR. DeLASKI: As a result of what you've 22 modeled.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 166 1 DR. GERKE: Yeah. 2 MR. DeLASKI: And what really is happening 3 is that is moving -- that is just consumption moving 4 from the T8 line down to the T5. 5 DR. GERKE: Correct. 6 MR. DeLASKI: But some of that T8 7 consumption is moving to the LED market. And there 8 is no LED line in the analysis; right. And the same 9 thing with the IRL market which is that some of that 10 consumption is moving to the LED line but yet we are 11 not capturing that. We are not modeling -- you've 12 modeled the shipments but you've not translated that 13 to what does that mean for national energy 14 consumption. 15 DR. GERKE: Right. So the assumption in 16 this analysis simply because modeling the future of 17 LEDs is highly uncertain we used an earlier DOE 18 estimate of the market share of LEDs going forward 19 and assumed that fixed for this analysis, assumed 20 that the switching then beyond that occurred only 21 within the product classes being considered. 22 MR. DeLASKI: Okay. So your assumption is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 167 1 that the standards have no -- don't cause there to 2 be any change in the shift to LED? 3 DR. GERKE: That is what is in the current 4 analysis, yeah. 5 MR. BROOKMAN: Joe Howley? 6 MR. HOWLEY: I was going to make a comment 7 on T5 to T8 but to follow on to this conversation I 8 think that is right this rulemaking is not causing 9 the shift to LED, that is an externality that is 10 happening regardless of whether we pass this rule or 11 not. So that is probably the right way to look at 12 it. It is just the energy savings in this product 13 line from these products that are left versus what 14 products aren't left. 15 On the T8 T5 again to suggest that that is 16 probably overreaching another issue is design 17 consideration. The T5 lamp has a much higher 18 luminance which means it is very bright to look at. 19 And T8 lamps have lower luminance so you tend to 20 find T8s in lower ceiling heights such as an 8-foot 21 ceiling height. If we use a T5 in that kind of 22 ceiling height we usually only use it in indirect

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 168 1 applications or in very high ceiling applications, 2 like high warehouses or perhaps high gymnasiums, 3 things like that. So the applications are quite a 4 bit different today from T5 to T8 which means there 5 really is no natural driver to drive T8 lamps to T5 6 lamps because it has more to do with the application 7 and use. It is not that they are viewed today as 8 directly interchangeable in the way they are being 9 used. 10 I guess the last comment I have is just 11 the decrease in T8s that you've modeled, decrease in 12 price seems counter intuitive for two reasons. One 13 is that we would have to add more rare earth 14 material to these lamps which is going to increase 15 their price and we expect there to be continuing 16 volatility on the rare earth market over time which 17 is hard to predict and you talk about that in your 18 rulemaking. You talk about how it is hard to 19 predict. But it could certainly spike again which 20 is going to increase prices. And the other thing as 21 the volumes go down, we are very much a volume 22 driven kind of production operation. There are base

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 169 1 costs built into that production and if we have to 2 start running all of our production equipment at a 3 much lower volume there is still going to be all 4 that base cost there. And it is going to cause the 5 percent amount of base cost to each lamp to go 6 higher again driving the price higher. So I would 7 expect the price of these products actually to go up 8 over time, not to go down. 9 MR. BROOKMAN: Keith? 10 MR. K. COOK: On the issue 30 one of the 11 concerns we've also got is the fact that as stated 12 earlier we'll be losing utility. And the reason is 13 it is going to force the market by going to the 14 higher efficiency standards go to the energy saver 15 type lamps. Energy saver lamps do not have the same 16 dimability, they don't have the same lumen packages, 17 and they do not perform at cold temperatures. And 18 so you end up with the loss of utility as a result 19 of the higher standards. 20 MR. BROOKMAN: Thank you. 21 DR. GERKE: I will respond to that comment 22 in a later slide. I wanted to respond to Joe's

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 170 1 question about rare earth briefly. The learning is 2 applied only to the portion of lamp cost that does 3 not include the rare earth. So we estimate the 4 fraction of the lamp cost that comes from rare 5 earth, subtract that out and apply the learning 6 analysis to the rest. And keep the rare earth -- do 7 a separate model for the rare earth price. 8 I want to ask a more pointed question 9 about issue 30. What we are assuming at the moment 10 is that T8s and T5s are interchangeable. I am 11 hearing that they are not. An estimate of the 12 fraction of applications in which they might be 13 interchangeable would be very helpful for improving 14 that analysis. 15 MR. GATTO: Dave Gatto, Westinghouse. It 16 would be small. I don't know that any of us could 17 come up with a number. A lot of it is design 18 driven. So to Joe's point it is very rarely a 19 decision that is made on lifetime cost savings or 20 energy savings. It is typically there is an 21 architectural element that someone is striving for 22 or they want indirect lighting because of the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 171 1 ceiling height and the amount of foot candles they 2 need per lead, those are all variables that we 3 wouldn't have any way to predict other than just 4 saying that it is a pretty small percentage. It is 5 much more likely that someone would shift if there 6 was no dimming requirement like you have now in 7 certain states and possibly others that they would 8 simply move from a 32 watt nominal wattage to a 28 9 or a 25 if they can afford the lumen loss. 10 MR. BROOKMAN: Michael McGaraghan has a 11 comment. Michael you have the floor? 12 MR. McGARAGHAN: Thank you Doug. I have a 13 similar question to the group I'm at. I am 14 wondering about this modeled shift from T8 to T5. 15 But I am curious to understand why DOE made that 16 assumption in the first place. It sounded like it 17 was related to pricing; so does DOE's analysis 18 assume that the T8 standards have much higher 19 incremental costs than the T5 standards? If so, I 20 haven't found that in the analysis that the LTC 21 table that I looked through make it look like they 22 generally have the same incremental cost. So if

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 172 1 that is true you'd expect or you would not expect 2 that shift based on price. 3 DR. GERKE: I am going to probably defer 4 pretty quickly to Navigant who did the product price 5 determination and may remember the numbers more 6 clearly than I did but I believe the first cost of 7 T8s, the incremental increase in first cost of T8s 8 at the proposed standard level was higher than that 9 for T5s if I am not misremembering which is a large 10 part of what is driving that shift. 11 MR. BROOKMAN: Aisha? 12 MS. HUSAIN: I can check really quickly. 13 MR. BROOKMAN: Let us know. 14 MS. HUSAIN: Okay. 15 MR. BROOKMAN: Michael do you have other 16 issues? 17 MR. McGARAGHAN: No I would echo industry 18 sentiment that that dramatic of a shift seems 19 unlikely but I also look forward to hearing from DOE 20 about why they modeled that. 21 MR. BROOKMAN: Well we will insert that 22 once Aisha digs that out.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 173 1 Do we have additional comments on issue 35 2 product class switching? 3 DR. GARBESI: We are on. Okay. I just 4 wanted to comment also on the assumptions. Karina 5 Garbesi, at LBNL. Sorry. I wanted to comment on 6 the assumptions that we used and how we dealt with 7 the rare earth price issue. The industry had 8 suggested last time around that we talk to King. Was 9 that his name, Brian? Alex King. And we did do 10 that. And he suggested that Cobalt would give a 11 price series that could give us a long history on 12 something that would behave similarly to potentially 13 other critical materials. And so what we did is use 14 that as a type of model and just looking at the long 15 term price history and the variability over time. 16 And then we took as Brian will show a point relative 17 to the baseline to the peak excursion that we've 18 seen in this first very large spike for rare earths. 19 We basically took the highest point that all the 20 subsequent spikes went to in the Cobalt series in 21 fractional terms and said -- we did a sensitivity 22 analysis that said what if in steady state it was

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 174 1 always at that highest level throughout. And so you 2 will see the results of that sensitivity analysis. 3 So I think we captured a very large possible long 4 term excursion there. 5 MR. HOWLEY: Okay. Thank you. I guess 6 the only other aspect of that is with the volumes 7 decreasing, projected to decrease that you have -- 8 you are going to have increased efficiencies, you 9 notice that the price came down since the 50s or 60s 10 because your model goes way back almost to the 11 beginning of fluorescent in 1939. And of course 12 back then the volumes are much lower and you see how 13 high the prices were. And we are going to return 14 almost like a bathtub where the volume is much lower 15 and the prices are going to go back up to those 16 kinds of levels. 17 MR. K. COOK: Keith Cook from Philips. 18 Yeah we are already starting to see problems with 19 the availability of these high end phosphors. And 20 we are concerned that with this switch on General 21 Service Fluorescent to nothing but high end 22 phosphors we are going to have the same problem we

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 175 1 had two years ago with availability. We are headed 2 down that path. 3 MR. BROOKMAN: Okay. Thanks Keith. 4 Yes, Aisha? 5 MS. HUSAIN: This is Aisha. So looking at 6 the end user prices between the 4-foot T8 and the 4- 7 foot T5 standard outputs at the baseline in EL1, the 8 prices are comparable but once you get to EL2 you 9 have a difference of one or two dollars where the 10 prices are a bit higher for the T8. 11 DR. GERKE: The other thing that goes into 12 that analysis that decision because it is a decision 13 being made during a retrofit it is assumed that 14 issues of lifetime also come in to the decision. 15 The final request for comment is whether 16 there are any other factors that may preclude or 17 limit the shifting that may not be considered in 18 DOE's analysis. I think we've got a lot of comments 19 on that. But if there are others we can continue. 20 So that finishes the National Impact 21 Analysis --that finishes the Shipments Analysis. 22 The National Impact Analysis estimates the energy

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 176 1 savings and the consumer net present value that 2 would accrue over the 30 year analysis period for 3 each of the trial standard levels. The national 4 energy savings is the difference between the -- 5 difference in primary energy consumption that would 6 occur in the base case versus the standards case 7 accounting both for the effect of rebound and for 8 the full fuel cycle so the cost of extracting and 9 transporting fossil fuels for example. The consumer 10 net present value is the present value of those 11 savings to consumers less the present value of the 12 total increase in installed costs that is projected 13 to occur if the standards take effect. 14 This is an overall summary of the results 15 of the National Impact Analysis and in addition the 16 monetization of emissions reduction that would 17 occur, that would be projected to occur under each 18 of the different TSLs. The emissions calculation 19 will be covered later on this afternoon by Karina. 20 The national energy savings of today's proposed 21 standard of TSL5 is estimated to be 3.5 quads of 22 energy over the analysis period, with a reduction of

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 177 1 CO2 emissions by 170 million metric tons and a 2 reduction in NOx emissions by 210,000 tons. These 3 are the highest values achieved at any of the trial 4 standard levels. The NPV of today's proposed 5 standard is $3.1 billion at a 7% discount rate and 6 $8.1 billion at a 3% discount rate. Notably at TSL4 7 the consumer NPV is marginally higher but when one 8 includes the monetized value of avoided emissions 9 the maximum net social benefit occurs at TSL5. 10 MR. BROOKMAN: Yes, Andrew? 11 MR. DeLASKI: Briefly on that point I 12 guess I would suggest that TSL4 it is the same given 13 uncertainty in the analysis the percent difference 14 in the TSL4 NPV at 7% and TSL5 it is a tie. 15 MR. BROOKMAN: Thanks. 16 DR. GERKE: This chart shows the annual 17 energy savings, the energy savings achieved each 18 year. TSL5 as well as the cumulative net present 19 value. I show this just to show that most of the 20 energy savings occurs very early in the analysis 21 period simply because of the shrinking of the GSFL 22 market. The NPV starts out negative as consumers

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 178 1 purchase more expensive equipment and then becomes 2 positive as they achieve energy savings over the 3 analysis period. So that is the results for GSFL. 4 For IRL this is the same table as before 5 for IRL which only has one trial standard level 6 which is the proposed standard. The national energy 7 savings is 13/1000 of a quad. The NPV at 7% is $.18 8 billion and the NPV at 3% is $.28 billion. 9 And this is the same charts as before for 10 IRL this is even more strongly weighted toward the 11 early part of the analysis period because of the 12 shift toward LEDs mainly. And a similar shape 13 occurs for the NPV. 14 DOE conducted a number of alternative 15 analyses to determine the impact of various 16 assumptions on the outcome of the analysis because a 17 large number of assumptions were needed to perform 18 this analysis. These alternative analyses probed 19 the impact of assumptions about future materials 20 prices such as rare earths and Xenon gas, 21 alternative technology shifts, and so on. I will 22 discuss some of these in the following slides and

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 179 1 the remainder can be found in Chapters 11 and 12 of 2 the TSD. 3 So this is the chart that Karina was 4 discussing earlier having to do with the price of 5 rare earth oxides. So DOE is aware -- is well aware 6 that the recent volatility in the price of rare 7 earth elements has been a matter of concern for GSFL 8 manufacturing. DOE developed a price index for the 9 rare earths that are utilized in GSFL phosphors 10 which is shown here. We can see a large spike in 11 late 2010 to 2011 which has largely evaporated by 12 the present time. Since the price of rare earth 13 oxides historically has been rather stable DOE's 14 reference analysis is that the price of rare earths 15 remains constant at real dollars, constant in real 16 dollars at its October 2013 level. To model the 17 impact of continued price volatility DOE performed 18 an alternative analysis in which the average price 19 of these rare earth oxides was assumed to be at the 20 midpoint between the pre spike value and the post 21 spike value in an attempt to get at what might 22 happen if there were a repeat in price swings on a

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 180 1 similar level. 2 MR. BROOKMAN: Anyone want to comment on 3 that now? 4 Keith? 5 MR. K. COOK: Well as I pointed out 6 earlier we are concerned that there is a step 7 function that is going to directly affect these 8 prices that have not been accounted for 9 traditionally. And that is when everybody converts 10 over to rare earth the consumption will exceed the 11 ability to supply and so as a result just 12 availability if not pricing alone that is going to 13 drive this. It is just getting material is going to 14 be the biggest problem. The same thing is also true 15 of the Xenon. You point out the Xenon pricing is 16 based upon some October 2013 pricing levels. But 17 last year we were not able to get Xenon period. We 18 could not use the amount of Xenon that we needed in 19 our manufacturing just because it is flat out not 20 available in the world supply. And so by forcing us 21 to these higher standards is going to shut off our 22 ability to supply a product.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 181 1 MR. BROOKMAN: Yes. 2 MR. GATTO: I just want to second Keith 3 particularly the Xenon issue. 4 MR. BROOKMAN: This is Dave speaking. 5 MR. GATTO: I am sorry. This is Dave 6 Gatto, Westinghouse Lighting. Alex where were you. 7 I need your help. He drifted off after lunch. 8 We saw in some earlier comments to the 9 framework document that Xenon had been included in 10 halogen lamps for a long period of time and there 11 was some questions about why this is relevant. I 12 think it is important to note that a few small 13 product types had Xenon in it in small amounts 14 particularly in the commercial market. The current 15 standard requires Xenon in all product types to meet 16 those needs. Those standards went into effect mid17 2012 with many manufacturers and distributors having 18 enough inventory to carry them into let's call it 19 early 2013 and in early 2013 and you guys can chime 20 in on the timing of this but in early 2013 we had 21 repeated outages of the availability of Xenon. 22 MR. GATTO: Which resulted in repeated

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 182 1 outages of product being available to distributors, 2 to consumers, to end users midyear and I believe 3 that was as close to industry wide as I've ever seen 4 for a shortage because typically when one of us it 5 out of something the others pick up the slack. And 6 in this case there was no slack, so no ability to do 7 that. So I think it is important that Navigant or 8 DOE acknowledges and looks a little harder at the 9 Xenon supply because in the NOPR it sort of 10 dismisses that as being a concern. I know you 11 analyzed the potential for it but I think that if 12 you actually looked at what happened last year you'd 13 see that the risk is much higher than you are giving 14 it credit for in the analysis. 15 MR. BROOKMAN: Charlie Stevens and I know 16 you haven't finished presenting but Charlie Stevens. 17 MR. STEVENS: I'm Charlie Stevens, NEMA. 18 From a systems prospective though I am not 19 necessarily buying the argument that all of this 20 will have the ultimate effect that people say. If 21 the suppliers of these materials fail to supply or 22 start gouging on the prices it seems to me it is

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 183 1 just going to have -- the biggest effect is to drive 2 people to solid state lighting and accelerate the 3 shift to solid state lighting where such impacts are 4 much lower, not non- existent, just lower. So this 5 is a big model that has a lot of moving parts 6 including market shifts toward solid state lighting. 7 And while it might be unfortunate if prices spiked 8 up on this stuff or shortages occurred I'd think 9 that would start to give the edge to solid state 10 lighting again which as I think most people agree it 11 already has some hedges in the marketplace and I 12 think if you start taking that into account it is 13 going to put downward prices on rare earth materials 14 and Xenon because you are dampening the demand for 15 the products that use it and giving an edge to the 16 alternative which is solid state lighting. This is 17 a feedback kind of market thing. It is a bigger 18 system than what you are focusing on I think. 19 MR. BROOKMAN: Keith? 20 MR. K. COOK: Charlie may be absolutely 21 right. But that needs to be comprehended in the 22 economic model because a conversion to the LED

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 184 1 products of course is much higher today than what it 2 is for the existing IRL products. And so it again 3 will affect the payback analysis that is included 4 here. And therefore may make it even less 5 attractive to make these standards reality. 6 MR. BROOKMAN: I kind of jumped ahead of 7 you. 8 DR. GERKE: That is fine. We grouped our 9 comments on single slides but we can cover them as 10 they come up. 11 Just to finish up this slide the actual 12 impact on the final results of doing this 13 alternative analysis was relatively modest at the 5% 14 level. 15 Moving on to Xenon which we discussed a 16 bit. DOE did an analysis in which the price of Xenon 17 spiked up by a factor of ten. That factor of ten 18 was intended to be an estimate of a large increase 19 in price because we don't really have a good 20 historical precedent for that kind of spike. The 21 impact of that price increase on the IRL analysis 22 did decrease the national energy savings by about

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 185 1 1/4 but the impact on the NPV was modest. 2 An additional alternative analysis that 3 DOE performed was an analysis in which it was 4 assumed that rather than eliminating the baseline 5 lamp from the market in the IRL case some 6 manufacturers would respond by shortening the 7 lifetime of the existing baseline lamps to meet the 8 new standards. In that case there is a significant 9 reduction in NPV and a modest reduction in NES 10 although in that case both of those measures remain 11 positive for the rulemaking. 12 So this is the official time to comment on 13 both the previous two if there is more. 14 MR. BROOKMAN: We may have covered it but 15 anything additional. 16 MR. McGARAGHAN: I have a comment. Can you 17 hear me? 18 MR. BROOKMAN: Yes, I can. 19 MR. McGARAGHAN: Great. Thanks. This is 20 Mike McGaraghan. I just wanted to ask about the 21 Xenon issue. I thought we heard from the 22 manufacturers this morning that minimally compliant

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 186 1 IRLs were already using the Xenon as a fill gas and 2 they didn't consider Xenon as an efficiency option. 3 They've already used as much of it as can be used. 4 So if that is the case then why are we even 5 assessing the impact of a standard on -- or the 6 impact of Xenon prices here? It seems like the 7 standard levels don't actually change the amount of 8 Xenon needed to be used in lamps. 9 DR. GERKE: All right. This is just 10 looking at what the impact would be of the change in 11 price that would occur for the lamps if the Xenon 12 prices were ten times higher. It was a matter for 13 concern last time, so we pursued it again this time. 14 MR. McGARAGHAN: Okay. So it doesn't 15 impact the incremental cost at all? 16 DR. GERKE: No I don't believe so. 17 MR. BROOKMAN: Andrew DeLaski? 18 MR. McGARAGHAN: So you said that it cut 19 into national savings by a 1/4? I don't follow how 20 it does that? 21 MR. BROOKMAN: Okay. Now to Andrew 22 DeLaski.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 187 1 MR. DeLASKI: I'm just echoing Mike's 2 comment that the NPV can't go down if the 3 incremental cost didn't go up. So if they are 4 already maxed out on Xenon, they can't use more. 5 DR. GERKE: It is a complete redo of the 6 analysis so the base case is also different. And 7 consumers are responding to higher price lamps. And 8 so the shift toward in the base case more consumers 9 end up choosing the higher efficacy lamps when the 10 price of Xenon is higher. And so the amount of 11 savings that is available at the standard is lower. 12 MR. DeLASKI: Okay. I am not sure I am 13 following but I am not going to hold us up on that. 14 MR. BROOKMAN: Charlie? 15 MR. STEVENS: Charlie Stevens. Are you 16 saying it is a technology shift is that what is 17 driving the savings from the standard is a shift to 18 alternative technologies because of the higher 19 prices? 20 DR. GERKE: No it is simply that in the 21 alternative analysis when Xenon prices are higher we 22 assume that the Xenon prices are higher in the base

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 188 1 case and each of the standard cases. 2 MR. STEVENS: Right. 3 DR. GERKE: So the prices that consumers 4 see relative to the operating costs are shifted and 5 that shifts the choices that they make in the base 6 case in addition to the standards cases. So you are 7 comparing to a different base case. Same baseline 8 lamps but at a higher price. 9 MR. DeLASKI: You sold fewer lamps in the 10 base case is the -- 11 DR. GERKE: Yes, that is also true. 12 MR. STEVENS: So the savings are being 13 offset by higher prices for lamps generally? 14 DR. GERKE: Right. 15 MR. BROOKMAN: Okay. 16 Final comments here? 17 DR. GERKE: So DOE also made the 18 assumption in the primary analysis that current 19 building codes will cause an increasing fraction of 20 lighting capacity to be under automated control 21 systems, California Title 24 for example, and then 22 that grows into the building stock over the analysis

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 189 1 period. So on your left there is the reference case 2 for controls in which the fraction of the total 3 lighting capacity that is switching only controls in 4 green and dimming based controls in blue grows over 5 the analysis period. 6 To understand the impact that that had on 7 the analysis DOE did an alternative analysis in 8 which the fraction of lighting capacity that is 9 under control stays fixed at present day levels. 10 DOE doesn't feel like this is a realistic scenario 11 but it gives a sense of what the impact of the 12 assumption on control is on the analysis. 13 Interestingly the impact is relatively 14 modest for GSFL; the reason for that being that to 15 the extent that the amount of dimming capacity grows 16 consumers are able to achieve an immediate energy 17 savings from a lamp only rule which bumps up the 18 energy savings available which offsets the reduced 19 energy savings that is available because lamps 20 aren't used as often and it ends up being a close 21 offset. 22 MR. BROOKMAN: Alex Boesenberg?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 190 1 MR. BOESENBERG: Alex Boesenberg from 2 NEMA. So did I hear you correctly in the last 3 statement that due to the increased application of 4 controls you are factoring in a higher amount of 5 energy savings? 6 DR. GERKE: Due to the fact that people 7 have dimmers, so the analysis -- the energy savings 8 is available depends on what ballast people are 9 coupling their lamps to. 10 MR. BOESENBERG: Right. 11 DR. GERKE: As an increasing number who 12 have dimmers going to a higher lamp efficacy level 13 gives you energy savings immediately because the 14 assumption is that people dim to the light level 15 that they want and end up using less energy with a 16 higher efficacy lamp. If the fraction of dimmers is 17 not increasing then that energy savings has to wait 18 until you actually renovate and replace your 19 ballasts into your ballast factor. 20 MR. BOESENBERG: Okay. And so that 21 national energy savings FSC, so you add that in then 22 to your overall estimates of energy savings?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 191 1 DR. GERKE: Well that is simply the 2 reference analysis assumes this growth in controls 3 and for the switching only controls there is a 4 reduction in hours of use. 5 MR. BOESENGBERG: Right. 6 DR. GERKE: So the amount of energy 7 savings that is available in those standards case 8 relative to the base case is smaller but in the 9 dimming case people are getting additional energy 10 savings simply from the fact that they get that 11 energy savings immediately upon putting in the 12 dimming ballast. 13 MR. BOESENBERG: But so okay. So where 14 does this then factor into the rule? 15 DR. GERKE: This is simply an analysis to 16 determine how large the impact is of the assumptions 17 about controls on the final numbers. So the 18 reference case numbers are the numbers that factor 19 into the -- are the primary numbers in the primary 20 analysis, the fixed controls numbers are the numbers 21 that we get for this alternative analysis. 22 MR. BOESENBERG: Okay. Well I will ask

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 192 1 the question a different way. Is DOE in the energy 2 savings assessment for this rulemaking taking credit 3 for the energy savings inherent due to the 4 installation of controls? 5 DR. GERKE: Only to the extent that by 6 having dimmers in place a lamp standard allows a 7 more immediate savings, a lamp only standard allows 8 a more immediate savings at full wattage. So it 9 factors -- certainly factors in to the analysis 10 because it is difficult for it not to. But that is 11 -- this is one of the assumptions we are trying to 12 test. 13 MR. K. COOK: But I think that is only 14 viable if the new lamp standard enables the use of 15 controls that wasn't already available. And I don't 16 see that happening. In fact as we pointed out 17 earlier in like the T5 case by going to the energy 18 savers because of the new standards you actually 19 reduce the availability of dimming in some 20 applications because of lack of compatibility 21 between the lamp and dimming ballast. 22 MR. BROOKMAN: That was Keith. Now

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 193 1 Karina. Karina? 2 DR. GERKE: I might be able to answer more 3 clearly. If you have a dimmer and you buy a lamp 4 with a higher efficacy that is a full wattage lamp 5 you can reduce your energy consumption by a larger 6 amount than if you buy a lamp that has a lower 7 efficacy at fixed light level. Is that not the 8 case? 9 MR. BOESENBERG: I understand your 10 statement. I have to take a little while to wrap my 11 head around the logic of it. 12 MR. BROOKMAN: Charlie Stevens while he is 13 wrapping his head. 14 MR. STEVENS: Yeah. Charlie Stevens. 15 Just to be clear this is in a lamp replacement 16 scenario as percentage of systems controlled goes up 17

-- 18 DR. GERKE: Correct. Yes. 19 MR. STEVENS: -- essentially? So you are 20 looking at all we are doing in this instance is 21 changing a lamp but now an increasing fraction of 22 those replacements are occurring on systems that are

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 194 1 dimmable? 2 DR. GERKE: Yes. 3 MR. BROOKMAN: For which there are 4 controls? 5 MR. STEVENS: Yeah I think we are assuming 6 dimming; right? 7 MR. BROOKMAN: -- states, steady; right? 8 DR. GERKE: Right. Correct. 9 MR. STEVENS: Okay. I think I get the 10 scenario then. Thanks. 11 DR. GARBESI: Doug can I -- 12 MR. BROOKMAN: Please do, yes. 13 DR. GARBESI: This is Karina from LBNL 14 again. In the bigger picture though it is analogous 15 to the LED issue where there is this exogenous 16 factor, a movement toward the use of controls that 17 changes the universe both through the base case and 18 the standards case. And so the numbers of types of 19 lamps that are required to respond to the different 20 conditions wind up changing if there is more demand 21 for controls in later years. If you operate on 22 controls, then there is more demand for dimming

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 195 1 ballasts in the lamps that operate with them. But 2 the base case and the standards case are subject to 3 that same shift. 4 MR. BROOKMAN: Okay. I thought that was - 5 - I got that. Okay. We are going to move on. 6 We have Mark, please. 7 MR. DUFFY: I just have a question. Is 8 that the only source of national energy savings in 9 this model? 10 DR. GERKE: No. 11 MR. DUFFY: What are the others? 12 DR. GERKE: Shifts to reduced wattage 13 lamps and shifts to lower ballast factor ballast as 14 only higher efficacy lamps are available. 15 MR. DUFFY: Hum. 16 DR. GERKE: So these are two specific 17 questions request for comment. DOE seeks input on 18 the current fraction of GSFL ballast shipment that 19 are dimming ballasts and the likely rate of growth 20 of dimming ballasts in the future. We have made 21 assumptions about that that we would like to have 22 corroborated in this analysis.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 196 1 I also didn't mention up to this point the 2 assumption about reduced wattage lamps. DOE is 3 aware that reduced wattage lamps do not function as 4 well on dimmers in all applications. And in its 5 analysis DOE assumed that the fraction of consumers 6 with dimmers who might choose a reduced wattage lamp 7 was small based on comments from last time. The 8 particular number that was used in this analysis was 9 ten percent of consumers might consider that option. 10 And we request comment on that interpretation of 11 small so we can better analyze that part of the 12 rule. 13 MR. BROOKMAN: Joe? 14 MR. HOWLEY: That is a really hard number 15 to guesstimate at and all you are doing is it is a 16 random guess. I guess just another comment based on 17 your previous statement. You mentioned that three 18 factors that we are using to get national energy 19 savings. In the case of the ballast factor I would 20 suggest that in both the base case and in the 21 standards case the same ballast factor will be 22 picked in both cases because the lumen output

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 197 1 difference of these lamps, these 32 watt lamps is 2 only about two or three percent. And ballast 3 factors change by at least 10%. And so there is a 4 much larger jump in a ballast factor. And there is 5 not enough of a jump in lumen output in any of these 6 lamps to cause someone to make a different choice in 7 ballast factor. So there should be almost no 8 difference or no savings from ballast factor choice 9 due to simply this rulemaking of making the lamps 10 more -- slightly more efficient. 11 The other aspect you are saying you'll 12 gain and I understand the comment that logically for 13 you will gain a little more energy savings with the 14 full wattage lamp because it will be a couple, two, 15 three percent higher in lumens so maybe you don't 16 have to dim it down as much. You could stop the 17 dimming and have the same light output. But you 18 lose -- so you gain there but you lose for this 19 percentage that is going to reduce wattage lamps 20 that wants to try to dim them and that the issue is 21 you can't dim them as much before these effects 22 start to happen. You can dim them a little bit but

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 198 1 you can dim the argon base lamps a lot more. So you 2 are going to get a lot more energy savings from the 3 argon based lamps than you are from the reduced 4 wattage. So to the extent people are shifting to 5 these which I agree they might because it will 6 become much more available under this set of rules. 7 You actually lose energy savings now because they 8 are not -- you cannot dim them as much. So any 9 couple percent gain you might get from the two or 10 three percent more lumens you are going to lose from 11 the percentage of people that are using reduced 12 wattage lamps and trying to dim them because they 13 can only dim them down to a much lower percentage. 14 So they'll offset each other. 15 MR. BROOKMAN: Mark. Continue on. 16 MR. DUFFY: Yeah, this is Mark Duffy of GE 17 Lighting continuing on. If you go back to the slide 18 92. Okay. I understand that the right -- that the 19 left hand chart here called reference is the one 20 that you are using which shows a growth of controls. 21 The growth of controls will come along with a shift 22 to the full wattage argon lamps because of all the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 199 1 things we've talked about. So it almost offsets 2 that shift you think you are taking with claims of 3 going to lower wattage lamps. You don't go to 4 those energy saver lamps and put them on controls. 5 You either put the thing on controls or your 6 installation is the fixed wattage installation or 7 the fixed ballast installation and you put your 8 lower energy lamp on there. So don't take credit 9 for both of those at the same time. The model has to 10 keep that as a separate decision making. 11 MR. BROOKMAN: Okay. Garry Fernstrom? 12 MR. FERNSTROM: This is Garry for the 13 California IOUs. I'd like to ask a question of Joe 14 with regard to his statement about ballast factors 15 and their availability in increments of 10% or so. 16 I thought that in retrofit applications where 17 lighting retrofit contractors in California are 18 replacing lighting systems using more efficacious 19 lamps that they could select ballast factors in like 20 two percent increments such as to try and match the 21 replacement system illumination with the system for 22 which it is replacing. And secondly with more and

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 200 1 more new installations going to dimming ballast it 2 is possible to adjust the ballast factor in effect 3 by very small increments in order to account for 4 differences in efficacies of lamps. So we are 5 assuming that new lighting systems would be tuned 6 and very precisely in order to match the replacement 7 illumination with the system for which it is 8 replacing. So I do think it is appropriate to value 9 the ballast effects in this analysis. 10 MR. BROOKMAN: Joe? 11 MR. HOWLEY: Okay. So on the dimming, I 12 agree. And we talked about that and they've already 13 modeled it and they've got their energy savings when 14 you have a fully dimmable system you can set it to 15 whatever level that you want. But the ballast 16 factor scenario is not true. There is not a 17 selection of ballast factors that vary by one or two 18 points all the way up and down from say .70 all the 19 way up to say 1.15 which is the top. They tend to 20 jump .78, .88, 1.0, 1.15. They are about a ten 21 percent jump. That is where the market is. And 22 that is where the products are designed. To the

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 201 1 extent that anybody wants any more carefully crafted 2 light levels they will jump to a dimming ballast. 3 But if they are just going with a specific ballast 4 and a fixed installation their choices are in ten 5 percent increments. And I don't see that changing. 6 MR. FERNSTROM: Okay. Thank you. 7 DR. GARBESI: Can I ask a clarification 8 question, Joe. You were saying that the lower 9 energy use lamps don't dim as well, so you might not 10 get the same dimming energy savings. I think were 11 based on a couple of different sources that we had 12 found had estimates on the order of 30% energy 13 savings for systems that are operating on dimmers on 14 average. So that -- to me that sounds like you are 15 dealing with tuning at the higher level range. I 16 mean do those more efficacious, lower energy use, 17 lamps have problems up in that range or is it really 18 down at the lower part of the range. 19 MR. BROOKMAN: That was Karina. Now Joe. 20 MR. HOWLEY: Mark -- 21 MR. BROOKMAN: Oh yeah, now Mark. Now 22 Joe.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 202 1 MR. HOWLEY: Well, okay. 2 MR. DUFFY: I'll advise you. 3 MR. HOWLEY: So clearly up in the higher 4 range where you are getting at almost full current 5 they will perform better than as you go down lower 6 and lower. As the current goes down you have a 7 harder and harder time maintaining stability. And 8 then it goes really to how the fixture was designed, 9 what the thermals are around, there are too many 10 variables now. But we do know that with an argon 11 lamp you certainly, those variables don't matter as 12 much, so I can get smooth dimming down quite low. 13 But I cannot do that with Krypton. It is hard to 14 determine when exactly that is going to stop 15 dropping out. 16 DR. GARBESI: So even at that top 30% 17 level you are not confident? 18 MR. HOWLEY: Not confident. 19 MR. BROOKMAN: Charlie Stevens. 20 MR. STEVENS: Hi, Charlie Stevens. I have 21 had a lot of conversations with our lighting and 22 retrofit folks and I would agree with the 30%

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 203 1 savings which is pretty much on the order of what we 2 find in a lot of these things. But that is comprised 3 of quite a lot of hours where there is very little 4 or no dimming and other hours where there is 50 and 5 60% dimming. So it is -- the overall savings may be 6 30% but it -- and sometimes the ballast operate at 7 that level. But we also know that a lot of these 8 lower wattage lamp applications actually do work 9 pretty well. They will work pretty right down to 50 10 and 40% in some cases. Not all by any means. And 11 they have had to work pretty hard at figuring out 12 which ones so that they don't mess up and provide 13 bad performance. But it is not universal that it 14 doesn't work. And in some cases I think what I am 15 trying to say is 30% energy savings might reduce to 16 27% energy savings if you could only dim the lamp to 17 50% instead of 30% because the number of hours that 18 you are running between 30 and 50% is not a huge 19 fraction necessarily of the dimming hours. It is 20 there but the impact on energy savings could be 21 pretty small even if you had to restrict the level 22 at which the lights the lower wattage lamps were

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 204 1 dimmed to. So it's not as simplistic as it sounds. 2 MR. BROOKMAN: Mark? 3 MR. DUFFY: Yeah. I wanted to dispel one 4 thing that I heard a little bit earlier. The 5 suggestion that the 28 watt and the 25 watt lamps 6 are inherently more efficacious than the full 7 wattage lamp is not true. Those lower wattages if 8 you look at the ANSI protocol for reference 9 photometry are on high frequency reference but 10 because the way the earlier rulemaking was we needed 11 to measure them at 60 Hertz, so at low frequency. 12 They are measured without cathode heat. The 32 watt 13 lamp is measured with cathode heat. So when you are 14 trying to figure out how much energy savings there 15 is or if one is more efficacious than another you 16 are comparing apples to oranges at that point. 17 Cathode heat in the reference photometry costs LPW. 18 MR. BROOKMAN: Okay. 19 DR. GERKE: Just to clarify one point that 20 I think may have gotten muddled a little bit there. 21 The assumption is that for those consumers who have 22 dimming ballasts only a very small fraction will

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 205 1 even consider purchasing a reduced wattage lamp to 2 put on that ballast because of the performance 3 issues. And the fraction of those people who 4 actually chose one is yet smaller. So the fraction 5 of people that have both dimming ballast and reduced 6 wattage lamps in the model is exceedingly small. 7 There were some other alternative analyses 8 that impact only the National Impact Analysis not 9 the Shipment Analysis. One has to do with the 10 reference price of electricity. DOE uses AEO's 11 reference economic growth projections for the price 12 of electricity. DOE also considered the low and 13 high economic growth scenarios from AEO which have 14 modest to moderate impacts on the NPV. 15 DOE also explored alternative assumptions 16 about rebound rate. DOE's standard assumption in 17 this analysis is that the rebound for lighting 18 applications is zero. In the framework document for 19 this rulemaking there were numbers of a residential 20 rebound rate of 8.5% and a commercial rebound rate 21 of one percent. DOE considered those as well. And 22 they have a predictable impact on the national

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 206 1 energy savings since most of this rulemaking is in 2 the commercial sector, reduces the NES by about one 3 percent. The national energy modeling system 4 assumes 15% rebound for lighting so DOE also 5 considered that and it also has a predictable impact 6 on the NES. 7 So DOE welcomes any comment on its 8 assumptions about the rebound rate for lighting 9 products or about the analysis period that it used 10 for this rulemaking. 11 All right. Now I will hand it off to 12 Hayden Cook who will tell us about the Manufacturer 13 Impact Analysis. 14 MR. H. COOK: Hi my name is Hayden Cook 15 from Navigant. And I will be discussing the 16 Manufacturer Impact Analysis or MIA that was 17 conducted for this 18 NOPR. 19 The MIA slides present three things. 20 First they present an overview of how the MIA was 21 conducted. Second they briefly discuss the 22 manufacture impacts at the proposed standard level.

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 207 1 And third they introduce the MIA topics DOE is 2 seeking comment on. 3 So the main purpose of the MIA is to 4 assess the impacts of standards on manufacturers of 5 GSFLs and IRLs. A second purpose is to identify and 6 estimate the impact on manufacturer subgroups. In 7 the upcoming slides I will discuss the impact of 8 standards on the small business subgroup. In the 9 final portion of the MIA -- the final portion of the 10 MIA involves a discussion on direct employment, 11 manufacturing capacity and other federal regulations 12 that impact the same manufacturers around the 13 compliance date of this rulemaking. 14 The main tool DOE uses to evaluate the 15 impact of standards on manufacturer is a discounted 16 cash flow model called the government regulatory 17 impact model or GRIM. The major output from the 18 cash flow model is industry net present value or 19 INPV a metric used to represent the quantitative 20 impacts of amended standards on manufacturers of 21 GSFLs and IRLs. 22 For the MIA DOE also conducted interviews

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 208 1 with manufacturers to refine the inputs to the cash 2 flow model and to understand the qualitative impacts 3 of standards. 4 This slide presents the basic structure of 5 the MIA process which takes place in three phases. 6 In the first phase which occurred during the 7 preliminary analysis DOE used publicly available 8 information such as manufacturer's annual reports to 9 develop a profile of the industry. Phases two and 10 three which were conducted as part of this NOPR 11 analysis in phase two DOE developed the interview 12 guide that was used to gather information from 13 manufacturers during the interviews and created the 14 cash flow spreadsheets that are used to estimate the 15 impacts on the industry. In phase three DOE 16 conducted interviews with manufacturers and used the 17 information to further develop the analysis and to 18 finalize the inputs that went into the GRIM. 19 Switching from the MIA methodology to the 20 specifics about this rulemaking this slide presents 21 the key issues we learned from manufacturers 22 concerning GSFL and IRL standards. First

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 209 1 manufacturers are concerned that increasing GSFL 2 standards would require manufacturers to use more 3 rare earths in GSFLs. This increased demand for 4 rare earth due to GSFL standards could cause the 5 price of these materials to significantly increase. 6 Manufacturers also noted that since the majority of 7 rare earths are mined in China and controlled by 8 Chinese companies it could be difficult to insure 9 the sale of these rare earths at the quantities 10 necessary to meet higher GSFL standards. 11 Second manufacturers are concerned that 12 amended standards to these lamps could potentially 13 strand the substantial capital investments made by 14 manufacturers in order to comply with the previous 15 2009 lamps rule since these manufacturers might not 16 have fully recouped these capital investments that 17 were made. 18 Last manufacturers stated that regardless 19 of amended standards consumers are already shifting 20 away from the GSFLs and IRLs to more energy 21 efficient technologies such as LEDs especially in 22 the commercial markets. Amended standards could

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 210 1 cause manufacturers to divert resources away from 2 the R&D of these more efficacious lighting products 3 thereby delaying the further potential energy 4 savings from those products. 5 I know we have discussed some of these 6 issues previously. But I would like to pause to see 7 if anyone has any comments on the key issues that 8 are presented here or any other key issues that are 9 not specifically addressed in this slide. 10 MR. DUFFY: Yeah, this is Mark Duffy of GE 11 Lighting. With regard to understanding the design 12 and how much additional rare earth there might be 13 and so forth you need to understand that in the 14 design of a fluorescent lamp as I increase the 15 weight of rare earths in the lamp it is not a linear 16 increase of lumens. So if I am thinking about how 17 many lumens per rare earth I get from the additional 18 incremental LPW that you are seeking here, it is an 19 enormous amount of rare earth that needs to be added 20 into these lamps and may not actually be possible 21 because the coating thicknesses get so thick that 22 the material doesn't stay on. So in other words you

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 211 1 are already at that marginal return where the cost 2 of the additional rare earth may double to get just 3 a little bit -- or the amount of rare earth may 4 double to just get a little bit of incremental 5 improvement. And that is a resource waste that goes 6 on throughout the life of that whole lamp. Okay. 7 So think in terms of how many lumens I get per rare 8 earth within the reasonable design area here and 9 don't drive it to the point where you are wasting 10 rare earth or you are causing a potential rare earth 11 shortage to get a very small amount of additional 12 efficacy. 13 MR. BROOKMAN: Okay. Thank you. Charlie 14 Stevens? 15 MR. STEVENS: Yeah. Charlie Stevens. I 16 am getting a little confused here. I keep hearing 17 from some folks that DOE is asking them to produce a 18 product that doesn't exist. And the last I looked 19 while the levels are higher than all products 20 currently in production can meet, there are products 21 in production that do meet the standards. 22 MR. BROOKMAN: Keith.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 212 1 MR. STEVENS: And so I am trying to 2 understand if those products already exist and they 3 are already performing at that level I am trying to 4 understand how impossible or difficult it must be to 5 continue to do that. 6 MR. K. COOK: For GSFLs we are to meet 7 this new proposed specification. It today 8 represents 5% of our production. So you are 9 requiring us to convert 95% over to this design. 10 MR. STEVENS: Yeah. I understand the 11 increase in the amount of material you'll use 12 overall for the shipments of the lamps that will be 13 declining over the time. But what I am hearing is 14 product technology problems and these products 15 already exist. So I am trying to separate these 16 issues. I understand the increase in the total 17 demand for rare earths and I don't think it is 18 necessarily appropriate to treat all three of the 19 ones that are typically used the same by the way. 20 Last I looked one of them was not as constrained as 21 the other two. But I am trying to separate the 22 technology issue of can we build this lamp from the

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 213 1 notion of yes if we have to build all of our lamps 2 this way yes the amount of demand for these 3 materials will increase. I understand that. 4 MR. BROOKMAN: Keith? 5 MR. K. COOK: In some cases no, we cannot 6 produce the lamp. The U-shape lamp for instance 7 just can't produce it. Others, yes, we can. So it 8 is on case by case basis. 9 MR. BROOKMAN: Okay. Thank you. 10 Michael McGaraghan has a comment. 11 MR. McGARAGHAN: Thanks. I have a 12 question for some of the manufacturers in the room 13 on the rare earth issue. We've notice in the last 14 few years a big increase in sales of 90 CRI T12s and 15 I am curious if those use rare earth phosphors and 16 if they use any of the specific elements that are in 17 short supply or have price fluctuations or if those 18 are somehow developed with a different strategy or 19 technology that is not hinging on rare earth price 20 fluctuation. 21 MR. BROOKMAN: What is that 90 CR whatever 22 12? Mark?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 214 1 MR. McGARAGHAN: 90 CRI 12. 2 MR. DUFFY: The 90+ CRI lamps are rare 3 earth based. 4 MR. BROOKMAN: Okay. Thank you. 5 Keith? 6 MR. K. COOK: No. 7 MR. BROOKMAN: Michael did that answer 8 your question? 9 MR. McGARAGHAN: Yes. 10 MR. BROOKMAN: Thank you. We are moving 11 ahead. 12 MR. H. COOK: This slide presents an 13 overview of the markup scenarios DOE ran for the 14 MIA. DOE analyzed two different markup scenarios for 15 the 16 GSFL and IRL MIAs: a flat or preservation 17 of gross margin markup scenario, and a preservation 18 of operating profit markup scenario. 19 Each markup scenario produces a unique set 20 of cash flows for the GSFL and IRL GRIMs. For the 21 flat markup scenario manufacturers earn the same 22 gross margin markup percentage as they do in the

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 215 1 base case on any increase in the manufacturer 2 production costs due to a standard. 3 For the preservation of operating cost 4 markup scenario manufacturers earn the same 5 operating profit in absolute dollars in the base 6 case as they do in the standards case in the year 7 after the standard goes into effect. 8 The least severe markup scenario for 9 manufacturers is the flat markup scenario since 10 manufacturers are able to fully pass onto their 11 consumers the additional costs due to standards. 12 The most severe markup scenario for manufacturers is 13 the preservation of operating profit markup scenario 14 since in this markup scenario manufacturers are not 15 able to fully pass through the additional cost due 16 to the standards thereby reducing manufacturers 17 profit compared to the flat markup scenario. 18 The INPV results for the GSFL 19 manufacturers are shown on this slide. The top 20 table displays the results of the flat markup 21 scenario which represents the least severe impact to 22 manufacturers. And the bottom table displays the

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 216 1 results of the preservation of operating profit 2 markup scenario which represents the most severe 3 impact to manufacturers. And TSL5 is the TSL that 4 is proposed for this NOPR. 5 MR. BROOKMAN: Keith Cook? 6 MR. K. COOK: Keith Cook with Philips. I 7 think there is a third scenario that also needs to 8 be analyzed. And that is a loss of profitability. 9 It is not just flat or maintaining but the third 10 scenario is the fact that we just can't recover from 11 these increased costs. 12 MR. BROOKMAN: Mike Rivest? 13 MR. RIVEST: Would that be because of an 14 erosion of margin or what would be the mechanism or 15 is it because of a loss of good, better, best? What 16 would be going on in the market that would explain? 17 MR. K. COOK: Yeah. First off this is the 18 total commoditization now of our market. So you 19 don't have any way to differentiate your product 20 from anybody else. So it is pure price now. And 21 the second problem is the fact that you've already 22 established the pricing level today and now to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 217 1 increase the cost it is hard to justify that there 2 is a justification that allows you to increase it. 3 So you go into these big boxes, the Home Depots, the 4 WalMarts, they are not going to accept the higher 5 price. You've already got it at a contract level; 6 they are going to want to maintain that. And so 7 with increased cost there is going to be a profit 8 erosion on this. 9 MR. BROOKMAN: Thank you Keith. 10 MR. H. COOK: The INPV results for IRL 11 manufacturers are shown on this slide. The format 12 is the same as the previous slide where the top 13 table displays the results of the flat markup 14 scenario and the bottom table display the results of 15 the preservation of operation profit markup 16 scenario. And again TSL1 is the TSL that is 17 proposed for this NOPR. 18 MR. BROOKMAN: Joe, do you want to 19 comment? 20 MR. HOWLEY: The manufacturers just noting 21 how hugely negative this impact is on a percentage 22 basis for the manufacturers and to counter with how

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 218 1 little energy savings was projected before this 2 certainly is not a good equation for the 3 manufacturers or I think even for DOE for a 4 rulemaking, this product line. 5 MR. BROOKMAN: Thank you. 6 MR. H. COOK: Any further comments? 7 MR. BROOKMAN: Andrew DeLaski? 8 MR. DeLASKI: They're also I just want to 9 understand how this analysis matches up with some of 10 the earlier analysis we heard about today. So there 11 is also markups assumed in for example the NIA and 12 the LCC, so which of these scenarios is used for the 13 LCC and the NIA? 14 MR. H. COOK: This is -- it is the flat 15 markup. 16 MR. DeLASKI: Okay. And so the LCC 17 assumes that the margins that are being earned today 18 will continue to be earned in the future? And you 19 know what is driving the difference in impacts here? 20 There are clearly the assumptions about the size of 21 the investments and fluorescent manufacturing is 22 what needs to happen to make the GSFL more efficient

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 219 1 is addition of a lot of materials but not 2 necessarily a change in manufacturing process. So 3 what you assume about cost pass through of those 4 incremental costs is going to drive your results. 5 Whereas IRL manufacturing to change the technology 6 could require significant capital tooling changes 7 and you have a very significant drop in shipments in 8 IRL, more so than in GSFL. So you are building a 9 capacity and that capacity is immediately 10 underutilized. 11 MR. GATTO: Dave Gatto, Westinghouse 12 Lighting. I just want to point out that it is an 13 incremental efficiency increase. It isn't actually 14 in the case of GSFL an incremental increase in 15 material cost. I would agree that the physical 16 equipment costs to convert are not there but I think 17 the point that Joe and Keith have been trying to 18 make and you know Charlie this is a little bit in 19 response to you, it is not that we can't make a more 20 efficient GSFL. It is that the amount of material 21 and cost associated with that is skewed, the 22 percentage of cost increase to the percentage of

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 220 1 efficiency increase are 40 to two. So it is 2 important to point out that the incremental piece 3 there is the energy efficiency -- 4 MR. BROOKMAN: Right. 5 MR. GATTO: -- not the actual cost to 6 produce the lamp. 7 MR. RIVEST: Right. And that is a 8 consumer story, it is not so much a manufacturer's 9 story. Right because your investment -- 10 MR. GATTO: I don't -- I am sorry. I 11 don't know that I agree with that. I think that is 12 kind of where Keith was. If it is an issue for the 13 consumer it is -- 14 MR. RIVEST: No. 15 MR. GATTO: -- manufacturer. 16 MR. RIVEST: I understand that but in the 17 IRL you are asked to invest up front -- 18 MR. GATTO: Yes. 19 MR. RIVEST: -- in tooling. Here you're 20 only -- you are investing in materials. So your -- 21 there is a shorter time -- your investment is 22 shorter duration and you can more easily change your

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 221 1 inventory than completely retooling your factory. 2 And so the risk is greater in IRL. 3 MR. GATTO: I appreciate that. No and I 4 do 5

-- 6 MR. RIVEST: If you could pass through 7 those costs in GSFL to the consumer -- 8 MR. GATTO: That is the key right there. 9 MR. RIVEST: -- you'd be making off really 10 well; right? 11 MR. GATTO: If. And the if is we've 12 already seen it. The if isn't there. You saw it 13 with the price spikes that we experienced with the 14 effective date of the last rulemaking there is a 15 pretty flat curve there of consumer both commercial 16 and residential acceptance of higher price for 17 initial first cost. And I am not saying that if you 18 waited long enough when no one else was left and 19 people had no lights and I mean that, I mean that is 20 kind of the extreme you have to take when consumers 21 have literally no light other than candles then they 22 are going to pay whatever it costs obviously if they

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 222 1 can afford to do so. What I think that gets missed 2 in this analysis sometimes is that gap of time can 3 be disruptive to manufacturing, to the economy and 4 to the consumers. And we just think it is important 5 to point out. And I am not disagreeing with you at 6 all Mike that it is definitely a shorter recovery if 7 you could pass along. I just don't think -- I think 8 we've been clear in our comments I just don't want 9 to miss this opportunity to make it clear that it is 10 longer than you think. 11 MR. BROOKMAN: So just to clarify that was 12 Dave speaking last and the back and forth was Dave 13 and Mike Rivest, Dave and Mike Rivest back and 14 forth. Now Eric Montgomery has a comment. Eric you 15 have the floor. You need to unmute your phone. 16 Eric you have a comment. Please speak. We are not 17 hearing you. There is a little bit of garbled signal 18 but you are not coming through. Eric sorry -- 19 MS. CALLAHAN: Could you ask Eric to email 20 me the question? 21 MR. BROOKMAN: Yes. Eric Susan suggests 22 you just email her the question and she will ask it.

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 223 1 And then also David Nesting has a comment. 2 This would be the test where we figure out 3 whether the software is failing or the individual. 4 MR. NESTING: There we go. I am unmuted. 5 I think one of the things that might be missing in 6 this as we talk about -- can you hear me all right? 7 MR. BROOKMAN: Yes, you are good. 8 MR. NESTING: Okay. Is that some of the 9 impact on manufacturers right now is focused solely 10 on the lamp manufacturer part. What is missing is 11 that although these lamps are going to use a lot 12 more REO we don't just put REO in lamps. We put 13 phosphor in lamps. And so the fact that we have 5% 14 of the margin using the very best phosphors that 15 money can buy in the world doesn't mean you can make 16 the other 95% of your product with the same 17 material. 18 MR. K. COOK: Can you explain that further 19 Dave? 20 MR. BROOKMAN: Yeah. I didn't quite get 21 that, Dave? 22 MR. NESTING: Yeah. I mean what we are

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 224 1 looking at is that right now we are moving to super 2 T8s and the fact is that under the current standard, 3 the phosphor, yeah it is still vitry along side, it 4 is still landed phosphate, all those things are 5 still true but the phosphor that we use for the so6 called super T8 and the phosphor that we use for the 7 80 color is not the same supplier and it is not the 8 same quality. So to say well why don't you just 9 make everything with that material that we found 10 from one supplier somewhere for all of the 11 manufacturers that work in the U.S. market is more 12 of a challenge. You are looking at investments on 13 REO processing and phosphor making which for example 14 those we have divested that part of the business in 15 2006. 16 MR. BROOKMAN: Eric, do you want to give 17 it another try, see if you can. You got it? 18 Yes, Mike Rivest. 19 MR. RIVEST: This is a supply chain issue. 20 They are not investing here because they are buying 21 the phosphors but the phosphors have to be made by 22 someone. So that investment has really shifted to

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 225 1 the suppliers. So it is a little bit like the 2 amorphous transformers, those who -- yeah. 3 MR. BROOKMAN: Okay. So thanks for that 4 interpretation. 5 Eric Montgomery do you want to try again 6 to join the conversation? Maybe you have already 7 emailed Susan. Not yet? Give it another try. 8 Nope. Okay. 9 MR. H. COOK: Moving on? 10 MR. BROOKMAN: Yes. 11 MR. H. COOK: One of the criteria that DOE 12 looks at is the impact of standards on small 13 businesses. To be considered a small business for 14 this rulemaking the Small Business Administration or 15 SBA sets a limit of 1000 total employees or less for 16 these companies. DOE used publicly available 17 information to identify potential small businesses. 18 Also during interviews DOE asked manufacturers if 19 they are aware of any potential small businesses in 20 their markets. After refining the list of potential 21 small businesses based on DOE's initial research DOE 22 directly contacted the remaining potential small

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 226 1 businesses to determine if they met SBA's definition 2 of a small business. DOE found 21 potential GSFL 3 small businesses and 15 potential IRL small 4 businesses. 5 All small businesses DOE identified were 6 not the original manufacturers of the GSFLs or IRLs 7 they sold nor did they own or operate the equipment 8 used to produce their lamps. Therefore DOE does not 9 estimate small business would face any capital 10 investments due to the proposed standards. However 11 most small businesses will face additional testing 12 and certification costs due to the standards. Also 13 some small businesses that control their product 14 specifications for their lamps would face additional 15 R&D and engineering costs to redesign the lamps that 16 do not meet the proposed standards. Since small 17 business have lower sales volumes than large 18 manufacturers these product conversion costs are 19 spread out over fewer units which cause the product 20 conversion costs to be significantly higher as a 21 percentage of revenue compared to large 22 manufacturers.

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 227 1 Based on DOE's analysis some small 2 businesses might choose to invest in other areas of 3 their lighting business instead of making the 4 necessary investments to continue producing GSFLs 5 and IRLs that meet the proposed standards. 6 Therefore some small businesses might exit the GSFL 7 or IRL markets to pursue other lighting products as 8 a result of the proposed standards. 9 At this time DOE seeks comment on the 10 potential impact to GSFL and IRL small businesses at 11 the proposed standards. So issue 36. 12 MR. BROOKMAN: No comments here? 13 MR. DeLASKI: I am trying to figure out 14 who -- what kind of business. Is this a -- so this 15 is a company that is buying lamps from someone else 16 and then -- basically they are almost like a 17 wholesaler or it is a private labeler. 18 MR. H. COOK: Private labeler, yes. 19 MR. DeLASKI: Okay. 20 MR. BROOKMAN: Anything else? 21 MR. DeLASKI: So under their own label or 22 under a say True Value or something like that?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 228 1 MR. H. COOK: Yes. 2 MR. BROOKMAN: Alex. 3 MR. BOESENBERG: Alex Boesenberg at NEMA. 4 An example Andrew is I know of one company that 5 sources tubes and end caps and crimps the end caps 6 on the tubes in the United States. They are a U.S. 7 manufacturer. 8 MR. BROOKMAN: Okay. Joe? 9 MR. HOWLEY: My comment is that this is 10 pushing to very high technology levels in many 11 cases. And there has got to be problems created with 12 these small manufacturers trying to access this 13 technology. I know it seems like you reached out to 14 many of them. You weren't able to get a lot of 15 responses but I think the natural assumption is you 16 are going to greatly disrupt the market and their 17 ability to provide these products when you are 18 talking about these small manufacturers. There is 19 going to be I think without too much speculation a 20 negative effect on that particular part of the 21 market. 22 MR. BROOKMAN: Hayden why don't you cue

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 229 1 the next comment boxes? 2 MR. H. COOK: So here are several issue 3 comment box. Some of them were kind of discussed. 4 Some weren't. The first comment box DOE seeks 5 comment on its use of 1.52 as the distribution chain 6 markup for the GSFL and IRL industries. This would 7 be from the manufacturer to the end user. 8 I can just read through these and if you 9 want to comment on it. 10 In the second issue box, issue 24, DOE 11 seeks comment on the $6.1 million industry product 12 conversion cost and the $65.4 million industry 13 capital conversion cost estimates for IRL 14 manufacturers to comply with the proposed IRL 15 standards. 16 And the last issue box is DOE seeks 17 comment on the potential domestic manufacturing 18 employment impact to GSFL and IRL manufacturers as a 19 result of the proposed standards. 20 Start with any of those three. 21 MR. BROOKMAN: Joe, do you -- no. Mike 22 Rivest.

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 230 1 MR. RIVEST: Mike Rivest. I'd like to add 2 following up on our previous conversations about 3 ability to pass through costs. If there were any 4 analogies or any situations from which we can learn 5 what happened, for example, when rare earth 6 phosphors costs more and that created a greater cost 7 for you, were you able to pass any of those costs 8 through to your customers. So we are looking at 9 price elasticity but from an industry wide where 10 everyone had a higher cost to see if you were able 11 to pass a portion or all of those costs through. 12 That would be very helpful -- 13 MR. BROOKMAN: Garry Fernstrom. 14 MR. RIVEST: -- in creating new scenarios. 15 MR. FERNSTROM: So Mike this is Garry for 16 the California IOUs. I think an additional 17 important dimension of your request for information 18 has to do with the transiency of the supply cost 19 increase. So this would be a relatively long term 20 effect. It might result in a different opportunity 21 to pass costs along than a shorter term effect. So 22 as examples might be provided they should include

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 231 1 some consideration of that dimension. 2 MR. RIVEST: Absolutely. Maybe there were 3 other costs that were longer term, like recycling 4 costs or I don't know -- you are in a better 5 position than I to come up with examples. 6 MR. BROOKMAN: Keith? 7 MR. K. COOK: On issue 24 I guess I don't 8 understand those conversion costs because the market 9 is changing so rapidly to LED I don't know why 10 anybody would invest in IRLs because they'll end up 11 with hung conversion costs that they aren't going to 12 be able to recover. 13 MR. HOWLEY: This is Joe. That was going 14 to be my comment. 15 MR. RIVEST: Because you have to. 16 MR. HOWLEY: Mike on your comment I think 17 you could speculate that a portion of the cost was 18 attempted to be passed on by industry would probably 19 be the best assumption with that one. On this one I 20 agree with Keith that consider what you are asking 21 the industry to do. You are asking us to invest an 22 enormous amount of money as an industry right when

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 232 1 this market is -- LEDs are coming in in waves and 2 investing all that money in a technology that is 3 sure to shrink in sales. It is a huge ask to ask an 4 industry to do that. And you have to understand 5 what a huge risk that the Department of Energy is 6 taking to ask an industry to do this kind of thing. 7 I mean these are high risk games because the costs 8 are very large. And the risks of industry being 9 able to do this or wanting to do this right as the 10 market is converting it is -- the timing couldn't be 11 worse. So it is not a good situation what is being 12 proposed here. 13 MR. BROOKMAN: What about comments on 14 issue box 26 direct domestic manufacturing impact? 15 MR. HOWLEY: Again I mean a lot of the 16 halogen type products are yet still made in the U.S. 17 Of course some are made outside. Some are -- but a 18 big portion is made in the U.S. And if these 19 investments have to be made to keep that 20 manufacturing here it puts it at risk, it puts 21 manufacturing employment at risk. And if it shifts 22 to LED a lot of these products are imported and it

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 233 1 shifts manufacturing labor out of this country. And 2 this may hasten it; a regulation that is this 3 severe. That would be my comment. 4 MR. BROOKMAN: Okay. Andrew DeLaski? 5 MR. DeLASKI: I don't know the relative -- 6 you know in fairness a lot of LEDs are made 7 domestically too. There is LED manufacturing 8 happening domestically so there is a mixture on both 9 of domestic and foreign manufacturing in terms of 10 LEDs and incandescent reflectors. 11 MR. HOWLEY: Right. But -- 12 MR. BROOKMAN: Okay. Additional comments 13 here? 14 Okay. 15 MR. H. COOK: The next slide is also a few 16 more issues for comment. In the first box DOE seeks 17 comment on the compliance cost of any regulations 18 GSFL or IRL manufacturers must make to product other 19 lighting products especially if those lighting 20 products -- if those regulations take place three 21 years before or after 2017. 22 And the second box is DOE requests comment

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 234 1 on whether GSFL manufacturers would potentially 2 increase the amount of mercury used in GSFLs in 3 order to comply with the proposed GSFL standards? 4 MR. BROOKMAN: Joe? 5 MR. HOWLEY: It should not have a big 6 impact on mercury use. 7 MR. BROOKMAN: Regulatory burden? Other 8 regulatory impacts that you'd like to note for the 9 record? 10 MR. H. COOK: And any other requests for 11 comments on any other aspects of the MIA at this 12 time? 13 MR. BROOKMAN: Keith? 14 MR. K. COOK: Well since these are already 15 covered products I don't see where there is any 16 additional change from where we are today. 17 MR. BROOKMAN: Okay. 18 MR. H. COOK: Next Karina will talk about 19 some of the other downstream analyses. 20 DR. GARBESI: So thanks. This is Karina 21 Garbesi from LBNL. DOE conducts a number of 22 standardized, what we call downstream, analyses.

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 235 1 The first of these analyses, the emission analysis, 2 takes the output from the national energy savings 3 modeling that is done as part of the NIA and here 4 you can see the results of the emissions analysis 5 that are done for GSFLs. Basically DOE quantifies 6 the cumulative emissions reductions that could 7 result from amended standards, and in so doing it 8 accounts for the upstream emissions from the power 9 plant fuel cycle as well. You can see the 10 cumulative emission here calculated for GSFLs. 11 We've highlighted TSL5, the proposed standard level. 12 Note that the units for the six chemical species 13 that are considered are different, as shown on the 14 left hand column there. So you can see that DOE 15 estimates at TSL5 that there would be emissions 16 reductions of 170 million metric tons of carbon 17 dioxide, 210,000 English short tons of NOx, .32 tons 18 of mercury, 2.8 thousand tons of nitrous oxide, 19 730,000 tons of methane and 250,000 tons of sulfur 20 dioxide. And then the same analysis with the same 21 units are repeated here, in this case for the 22 savings in emissions associated with IRLs at TSL1,

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 236 1 the only TSL considered. As you can see, they are 2 much smaller. We won't go through all of the 3 numbers again here. 4 DOE also monetizes the value of the 5 emissions reductions. DOE uses the most recent 6 social costs of carbon values that are generated by 7 the 8 Interagency Working Group on the Social 9 Cost of Carbon in its analysis. The social cost of 10 carbon includes damages associated with agricultural 11 productivity, human health effects, property damage 12 from sea level rise, and other ecosystem effects, as 13 well as other impacts. You can see in the middle of 14 the slide there the range of values that the 15 agencies have agreed to use in the impact analysis. 16 Basically these are the result of combining three 17 separate impact assessment models, and all of which 18 generate a distribution of impacts, and then they 19 combine these and take the average value from those 20 three models for three different discount rates: 21 assuming a 5% discount rate, a 3% discount rate, and 22 a 2.5% discount rate. And those average values are

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 237 1 the first three numbers there: 11.8 dollars per ton, 2 and mid range value of 39.7 dollars per ton is 3 considered the reference value, and 61.2 dollars per 4 ton is the high value. And then there is sort of a 5 high high which is the 95th percentile value at the 6 3% discount rate. The Working Group encourages use 7 of all of those values in considering the possible 8 impacts. The social cost of carbon is modeled to 9 increase over time. 10 And DOE also monetizes NOx emission 11 reductions that could result from the standards. It 12 considers a range of values, in this analysis it 13 uses $2,639 per short ton. 14 In terms of the results of that analysis 15 you can see in the four data columns the spread of 16 values from lowest on the left to highest on the 17 right. I'll just discuss the reported values for 18 TSL5. The units there are in millions of dollars, 19 so somewhere between $1.3 billion at the low end and 20 $17 billion at the high end is the estimated value 21 of cumulative emission reductions for the whole 22 analysis period. And then you can see the same

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 238 1 plots essentially repeated for IRLs; in this case 2 there are much smaller savings because of the lower 3 energy savings but potential between $6.1 and $75 4 million in 2012 dollars. 5 So issues for comment on that one: DOE is 6 soliciting input on the SCC values and in particular 7 those in the later years 2050 and beyond. 8 MR. BROOKMAN: No comments here. Okay. 9 DR. GARBESI: Okay. We will assume there 10 are no comments. 11 DOE also conducts a utility impact 12 analysis. Again these are based on the projected 13 energy savings at the different TSLs. It uses a 14 modified version of the National Energy modeling 15 system to calculate the impacts on the installed 16 capacity and on the electricity generation per year. 17 The results of that analysis are reported in Chapter 18 16, sorry 18 -- it is 19 16. 20 And we also conduct an employment impact 21 analysis. This is distinct from the employment 22 impacts in the industry itself, which is reported in

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 239 1 the MIA. This is really economy wide impacts 2 resulting from the change in spending flows across 3 different sectors of the economy as a result of the 4 proposed standards. We use a model called ImSET 5 that accounts for 187 different sectors of the 6 economy. It accounts for equipment and energy 7 expenditure changes that were developed and shown in 8 the energy savings analysis. And it gives output in 9 numbers of jobs, a projected range in the numbers of 10 jobs, either gained or lost as a result of 11 standards. You can find the results of that in 12 Chapter 17. 13 And then, last, we also do a regulatory 14 impact analysis, which for some completely 15 inexplicable reason actually calculates the impact 16 of the non-regulatory alternatives and then compares 17 them to what one would get from amended standards, 18 mandatory amended standards. In this analysis DOE 19 considered five policy alternatives to mandatory 20 standards, and then compared those to the base case 21 of no new regulatory action. So those five policy 22 alternatives included consumer rebates, consumer tax

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 240 1 credits, manufacturer tax credits, voluntary 2 efficiency targets, and bulk government purchases. 3 And again the output of the analysis is in NES and 4 NPV for those non-regulatory alternatives, which are 5 then compared in their potential impact to 6 standards. And the results of that analysis are in 7 Chapter 18. 8 MR. BROOKMAN: Alex Boesenberg? 9 MR. BOESENBERG: Alex Boesenberg, NEMA. I 10 would like to ask a question about ImSETS, Karina. 11 Does ImSET or maybe it is somewhere else in the 12 employment analysis is there any consideration given 13 to the type of job gained or lost in terms of its -- 14 I am not sure what to call it, associated affects or 15 trickle down affects depending on characteristic 16 behaviors or social behaviors within a sector and to 17 help explain my poor question, explain it such as 18 evidenced by the heavy investment by the State of 19 North Carolina in the Research Triangle Park area to 20 bring technology jobs in and the belief and the 21 publication of numerous claims by the state that it 22 has improved the quality of that area because people

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 241 1 in tech jobs also encourage their kids to do more 2 after school activities or want to go to the big box 3 store and buy more gadgets and they can do that 4 because they are in a more educated or more 5 productive job. Is there any weighting given to 6 different jobs or is it just straight numbers? 7 DR. GARBESI: There are probably other 8 people who are more expert in ImSET than I am here. 9 I believe the answer to that is no, that it is 10 really just looking at kind of flow of money through 11 the sectors and the labor intensiveness of the 12 different sectors and calculating the change in the 13 numbers of jobs. 14 MR. BOESENBERG: Thank you. That is what 15 I've also found. I was hoping you'd have a 16 different answer. 17 DR. GARBESI: Do you have a better 18 understanding of that? 19 MR. BOSENBERG: Alex Boesenberg again. It 20 is just I think if we are going to spend time on 21 social costs of carbon its worth these social costs 22 of jobs. I am sorry I don't have an answer or data

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 242 1 to submit but if we undertake one, we should 2 undertake the other. 3 MR. BROOKMAN: Okay. Let's go to the 4 proposed standard. 5 DR. GARBESI: So Aisha Husain from 6 Navigant will take over here. 7 MS. HUSAIN: So the next few slides are 8 just the summary of the standards being proposed 9 today for GSFLs and IRLs. This basically summarizes 10 the proposed standard for GSFLs which is TSL5 and 11 the associated efficacy levels. 12 And this shows the proposed standard for 13 IRLs which is TSL1 and the associated efficacy 14 levels. 15 And then just in summary of the proposed 16 rule and its impacts the products, this just shows 17 that so for the products shipped over a 30 year 18 analysis period it results in energy savings of 3.5 19 quads for GSFLs at the proposed standard level of 20 TSL5 and .013 quads for IRLs at TSL1. The NPV for 21 product shipped is 3.1 billion at 7% discount rate 22 and 8.1 billion at 3% discount rate for GSFLs. It

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 243 1 is .18 billion at 7% discount rate and .28 billion 2 at 3% discount rate for IRLs over the 30 year 3 analysis period. 4 And I think that is about it. I don't 5 know if you want to -- 6 MR. BROOKMAN: And so as we promised at 7 the outset an opportunity for anybody that wishes to 8 make concluding remarks. 9 Joe it looks like you want to make a 10 concluding remark. 11 MR. HOWLEY: No. My only concluding 12 remark is that I appreciate the ability to discuss 13 this rulemaking today. And I believe that some of 14 the levels being proposed as you have heard are very 15 high and represent problems, challenges, pain, 16 however you want to describe it for the industry. 17 We will be providing some more written comments to 18 provide more information on this. Thank you. 19 MR. BROOKMAN: Thanks Joe. 20 MS. HUSAIN: Just wanted to also note the 21 June 30 comment period close date. 22 MR. BROOKMAN: Additional final comments?

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 244 1 Andrew DeLaski? 2 MR. DeLASKI: I just want to echo my 3 opening remarks which is that we strongly support 4 the proposed rule particularly for GSFL and that the 5 savings are very large on a national basis and I 6 really appreciate the engagement from the industry 7 on the sort of helping us all to develop a better 8 understanding of the facts on the ground and of the 9 consultant in DOE who I think have done a tremendous 10 job in this docket to develop a very strong record. 11 So I think I look forward to seeing a final rule in 12 a timely way, one that will be similar to the 13 proposed rule. Thank you. 14 MR. BROOKMAN: Thanks to all of you and do 15 you wish to -- 16 MS. deBUTTS: This is Lucy deButts. I 17 just wanted to say thank you again to everyone. It 18 was a very informative meeting. And as a few of you 19 mentioned there is information going to be provided 20 to us which will be helpful to finalize analysis and 21 our comment period ends on the 30th. So thanks 22 everyone for coming.

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 245 1 MR. BROOKMAN: Garry Fernstrom? 2 MR. FERNSTROM: Garry for the California 3 IOUs. I'd just like to say for the record we 4 support Andrew's comments. Thank you. 5 MR. BROOKMAN: Thank you. 6 (WHEREUPON, the meeting was 7 adjourned.) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 221 2 3 

### Capital Reporting Company GSFLIRL Meeting 05-01-2014

CERTIFICATE OF TRANSCRIPTION

4 I, CHERYL LASELLE, hereby certify that I am 5 not the Court Reporter who reported the proceeding 6 and that I have typed the transcript of the 7 proceeding using the Court Reporter's notes and 8 recordings. The foregoing/attached transcript 9 is a true, correct and complete transcription of the 10 proceedings. 11 12 13 14 15 16 17 18 19 20 21 22 

# 5 /1&/ ZotL Date 1 I

# CH[J;Ft*'C**~** Transcriptionist

(866) 448

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### 2014 246

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2006 224:15 2009 13:22 14:11 21:11,12 48:22 209:15 2010 179:11 2011 21:20,21 22:18 80:20 130:18 136:11 179:11 2012 21:16,17 22:11 181:17 238:4 2013 21:22 22:22 179:16 180:16 181:19,20 2014 1:12 3:7 23:5 2017 23:11 156:21 233:21 2030 17:5 2046 156:21 205 26:14,15,21 2050 238:7 20585 1:15 21 89:7,10 118:5,10 226:2 210,000 177:2 235:17 2200 139:2 23 14:10 24 188:21 229:10 231:7 25 66:22 94:22 171:9 204:5 25% 134:19 250,000 235:19 2500 105:2,8

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 26 232:14 27 120:7 27% 203:16 28 22:21 60:21 66:21 94:22 171:8 204:5 243:1 29% 135:2 138:20 141:2,5 2-foot19:21,22 24:4 34:1 45:5 57:8 59:18 65:6 99:19 100:2,15 3 3% 100:15 177:6 178:8 236:21 237:6 242:22 243:2 3.1 126:2 242:21 3.5 176:21 242:18 3.94 134:21 3:00 7:15 30 10:10 94:21,22 137:18 156:20 169:10 170:9 176:2 203:18 242:17 243:2,21 30% 93:14 161:21 201:12 202:16,22 203:6,15,17 3000 106:2 30s 45:2 30th 244:21 31 102:2 32 77:6 102:7 171:8 197:1 204:12 235:17

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 90+214:2 92 198:18 92.4 86:6,22 95:21,22 95 11:17 95% 94:9 212:9 223:16 95th 237:5 963 107:10 980 105:1 A ability86:5 119:19 180:11,22 182:6 228:17 230:3 243:12 able 8:14,16 18:4 24:21 36:21 37:6 42:8 43:14 64:6 65:11 66:11 113:7 117:7 139:10 180:17 189:16 193:2 215:10,15 228:14 230:7,10 231:12 232:9 absolute 215:5 absolutely69:8 75:16 91:15 183:20 231:2 absorb 43:14 absorbs 34:19 academic 123:15 accelerate 183:2 accept 217:4 acceptable43:15 73:6 105:17,18 115:17

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 adjust200:2 adjusted 84:8 85:5 113:11 120:6 adjustments 80:7 84:19 148:17 Administration 225:14 adopt21:7 adopted 21:14 23:9 advantages 49:2 adverse32:9,10 46:7 adversely 102:5 123:22 advise 67:8 202:2 AEO 136:10 205:13 AEO's 205:10 aesthetic67:9 Affairs 5:8 affect41:14 102:9 124:4 180:7 184:3 affected 70:8 102:6 124:1 affects 106:9 240:14,15 afford 73:3,7 171:9 222:1 afternoon 176:19 against32:6 45:12 84:17 age 83:14 159:20 agencies 236:15 agenda 3:21 6:21,22 ages 73:19 aging 83:6,8 144:16 ago 138:22 175:1 agreed236:15 agricultural 236:10 ahead 94:9 106:18 123:16 143:15 184:6 214:11 aimed26:1 air8:4 Aisha 2:4 6:1 31:17,20 66:2,3 118:15,16 172:11,22 175:4,5 242:5 Alex2:8 5:7 12:6,7 14:4 37:18,19 39:19,20 40:17 48:17 54:17,18 60:15,16 61:21 62:18 63:4 71:22 72:1 73:13 75:4,5 97:18,19 173:9 181:6 189:22 190:1 228:2,3 240:8,9 241:19 Alliance 6:13 78:1 allow 121:9 127:10 allowable 83:20 allowed 152:21 allowing 12:9 allows 133:19 158:16 161:8 192:6,7 217:2

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### Capital Reporting Company GSFLIRL Meeting 05-01-2014

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