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UNITED STATES OF AMERICA

DEPARTMENT OF ENERGY 

LV WORKING GROUP

NEGOTIATED RULEMAKING: DISTRIBUTION TRANSFORMERS

Volume I

National Rural Electric Cooperative Association

Conference Room C2

4301 Wilson Blvd

Arlington, VA

1:00 p.m.

Thursday

October 13, 2011

Facilitator:

Richard Parker

University of Connecticut Law School

Host:

National Rural Electric Cooperative Association 

(NRECA)
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Participants Identified: 

Rick Anderson

Fayetteville Public Works Commission

Tim Ballo

Earth Justice

1625 Massachusetts Avenue

Suite 702

Washington, DC 20036

Scott Beck

Lakeview Metals

John Caskey 

Electrical Manufacturers Association

Scott Choinski

NEMA

1300 North 17th

Suite 1752

Street

Rosslyn, VA 22209

Andrew deLaski

ASAP

20 Belgrade Ave, Suite 1

Boston, MA 02131

Tom Eckman

Northwest Power and Conservation Council

Gary Fernstrom

Pacific Gas & Electric Company

13055 Parkhurst Dr

Oakland, CA 94619

Chuck Foster

Edison Electric Institute

Dave Millure

Metglas Incorporated

440 Allied Drive

Conway, SC 29526
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Steve Nadel

American Council for an Energy-Efficient Economy

Wes Patterson

ABB, Inc.

Steven Rosenstock

Edison Electric Institute

701 Pennsylvania Avenue NW

Washington, DC 20004-2696

Robin Roy

Natural Resources Defense Council

1200 New York Avenue, NW, Suite 400

Washington, DC 20005

Paul Ryan

Hitachi Metals America

800 Grand Avenue, Suite AG-6

Carlsbad, CA 92008

Mahesh P. Sampat

EMS Consulting

1180 Brookview Dr

Athens, GA 30606

Bob Smith

Federal Pacific

Jim Rakowski 

Allegheny ATI

Participants Identified via E-Mail/Phone:

Thomas Patzner

Schneider Electric

1010 Airpark Carrier Drive

Nashville, TN 37217

Participants from DOE:

John Cymbalsky

DOE
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Participants from Navigant/LBL:

Brian Coffey

Navigant

Mike Rivest

Navigant

Rob Carmichael

Navigant

Matt Nardotti

Navigant Consulting

Chris Bolduc

Lawrence Berkley National Laboratory

Katie Coughlin

Lawrence Berkley National Laboratory

Presenters:

Brian Coffey

Navigant Consulting

1801 K St. NW

Suite 500

Washington, DC 20006

Chris Bolduc

Lawrence Berkley National Laboratory

1 Cyclotron Rd

Ms 90-4000

Berkeley, CA 94720

Washington, DC 20006
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AGENDA

 ITEM PAGE

Welcome, Mr. Parker 6

Self-Introductions 7

Agenda Review and Plan for Meeting 9

Navigant Presentation, Mr. Coffey 13

Data Requests 14

Request to Changes to Analysis 15

Review of Open Ended Questions 71

Next Steps 84

LBL Presentation, Mr. Bolduc 91

Transformer Loading 91

Transformer Lifetime 94

Peak load factor 97

Possible changes to the LCC subgroups 97

Equipment price trends 101

Electricity prices 103

Limited design selection 

due to fixed efficiency 108

LCL and price efficiency curves 111

Review of TSLs 130
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1 1:00 p.m.

3

2 P R O C E E D I N G S

4 MR. PARKER: Welcome everybody to the second 

5 meeting of the Low Voltage Group. We’re meeting 

6 physically here at the offices of the National Rural 

7 Electric Cooperative Association, which has been 

8 extraordinarily generous, not only in loaning their --

9 loaning us their office for the meeting on medium 

10 voltage where they have an interest, but extending 

11 that hospitality to this meeting where they don’t have 

12 such an interest, so it’s very kind of them to let us 

13 stay over and use this conference room, so I want to 

14 express our appreciation to them for that. 

15 We have a lot to cover today. I think to 

16 some degree we can build on the discussion that 

17 occurred at the medium voltage and for those who are 

18 new to the low voltage group and were not part of 

19 that, we’ll make every effort to bring them up to 

20 speed on what was discussed, remembering that nothing 

21 that was discussed in the medium voltage in any way is 

22 binding or despositive on this group. This is a 

23 separate group with a separate mandate to discuss a 

24 separate product line. 

25 So why don’t we begin by just going around 
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1 the table, since this is our first session and 

2 everybody introduce themselves and their organization, 

3 and we’ll go around the wall. And I would also ask --

4 I guess the set up is that we can’t hear directly from 

5 the people who are joining us by phone and webinar by 

6 voice, and there’s various logistical reasons for 

7 that, but please feel free to e-mail, to call in your 

8 comments to Tatiana, and she will pass them on to me 

9 and we’ll make sure that your question gets addressed. 

10 If you could also just make sure that she 

11 has a record of your attendance on the phone, that 

12 would be very helpful. 

13 So without further ado, let’s go around the 

14 table, starting off with you, Scott.

15 Self-Introductions

16 MR. BECK: Scott Beck, Lakeview Metals.

17 MR. PATTERSON: Wes Patterson, ABB.

18 MR. CASKEY: John Caskey, National 

19 Electrical Manufacturers Association.

20 MR. ECKMAN: Tom Eckman, Northwest Power and 

21 Conservation Council.

22 MR. NADEL: Steve Nadel, American Council for 

23 an Energy-Efficient Economy. 

24 MR. BALLO: Tim Ballo, Earth Justice.

25 MR. RYAN: Paul Ryan, Hitachi Metals 
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1 America, Metglas.

2 MR. MILLURE: Dave Millure, Metglas.

3 MR. ROY: Robin Roy, National Resources 

4 Defense Council.

5 MR. SMITH: Bob Smith, Federal Pacific 

6 Transformer. 

7 MR. SAMPAT: Mahesh Sampat, EMS Consulting.

8 MR. TENDULKAR: Vijay Tendulkar, ONYX Power.

9 MR. ROBLES: Eduardo Robles, Eaton 

10 Corporation.

11 MR. DeLASKI: Andrew DeLaski, Appliance 

12 Standards Awareness Project.

13 MR. FERNSTROM: Gary Fernstrom, Pacific Gas 

14 and Electric Company, representing PG&E, the Southern 

15 California Edison Company, and Semper Utilities.

16 MR. CYMBALSKY: John Cymbalsky, DOE.

17 MR. CHOINSKI: Scott Choinski, with the 

18 National Electrical Manufacturers Association.

19 MR. CARMICHAEL: Rob Carmichael with 

20 Navigant Consulting, supporting DOE.

21 MR. ROSENSTOCK: Steve Rosenstock, Edison 

22 Electric Institute.

23 MR. RIVEST: Michael Rivest, Navigant 

24 Consulting.

25 MR. NARDOTTI: Matt Nardotti, Navigant 
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1 Consulting.

2 MS. COUGHLIN: Katie Coughlin, Lawrence 

3 Berkley National Lab.

4 MR. BOLDUC: Chris Bolduc, Lawrence Berkley 

5 National Lab.

6 MR. COFFEY: Brian Coffey, Navigant.

7 Agenda Review and Plan for Meeting

8 MR. PARKER: Okay. Thank you. So let’s get 

9 right into the agenda. Basically what we hope to do 

10 in this meeting is, as we did with the medium voltage, 

11 is to first and foremost arrive at a -- hear your 

12 concerns with the quality and the level and the 

13 approach of the analysis and the data given for it, 

14 and to make sure that there’s a comfort level in this 

15 group where Navigant and LBL are going with their 

16 analysis, the assumptions that they’re working with, 

17 the way they’re displaying their data, the way they’re 

18 producing, and so forth. And to give them a clear, as 

19 clear guidance as we can possibly give them for what 

20 they need to do to get the analysis in shape and ready 

21 for our next meeting, which will be a real “rubber 

22 hits the road” I think as Steve put it this morning, 

23 meeting where we really bargain hard about the issues 

24 and the outcomes.

25 So we’ll start off with a presentation by 
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1 Navigant of the issues that have been raised in the e2 mail commentary and at the last meeting with the 

3 engineering analysis and what they propose to do about 

4 that. We will then -- and I’m allocating a good bit 

5 of this afternoon to that exercise. 

6 We will meet tomorrow at nine o’clock, we’ll 

7 reconvene. I believe that’s going to be at DOE, 

8 right, to work all day tomorrow also. We’ll have a 

9 discussion of the LBL analysis of life cycle cost for 

10 low voltage transformers, and work through any 

11 concerns with their analysis of their data, their 

12 methodology as applied to low voltage.

13 We will also try to arrive, for low voltage, 

14 as we did for medium voltage, with a conceptual 

15 approach to defining a point of analysis, a TSL, if 

16 you will, that reflects some kind of competitive 

17 balance, and that’s going to be quite different, I 

18 think, for low voltage than for medium voltage. But 

19 some kind of competitive balance between the various 

20 steels so that on the one hand there’s not a sole 

21 steel supplier. That may not be as much of an issue 

22 for low voltage, but if there is a manufacturing 

23 impact concern, competitiveness concern that would 

24 suggest a point of analysis that would be kind of 

25 salient, we need to get that on the table. We need to 
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1 give them clear guidance as to what we think material 

2 prices should be for this analysis. The MV group has 

3 the same charge. And remembering of course that 

4 there’s huge fluctuations in the market so there’s 

5 going to be a base case and there’s going to be a 

6 sensitivity analysis around that base case ranging 

7 from low to high. So we’ll talk about that.

8 And the deliverable for this meeting would 

9 be a set of take-away items as we agreed to for the 

10 medium voltage, which is action items that we need to 

11 do between now and the next meeting to finalize the 

12 analysis so we’re all working off the same sheet of 

13 music, the same page in forming -- assessing 

14 bargaining positions and making our arguments on the 

15 merits. We were able to do that in the medium 

16 voltage, I think we should be able to draw on that and 

17 do the same thing for the low voltage. 

18 The third issue that -- third agenda item, 

19 rather that I would propose is that the advocates and 

20 Steve Rosenstock from EEI and others around the table 

21 put forward just some broad concepts to guide people’s 

22 thinking going forward. We had a good discussion 

23 about that in the medium voltage and it’s going to be 

24 a little bit different again for the low voltage, but 

25 I think that was a helpful discussion and we should 
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1 try to have that here as well. Just things to think 

2 about.

3 I believe that will take up a good bit of 

4 our time and if we could accomplish that, that will 

5 be, I think, a pretty positive outcome. 

6 Let me say also that we will be creating --

7 we do need to get work done between this meeting and 

8 the next meeting, and particularly in refining 

9 analysis and getting it done. We need to have the 

analysis completed by November 2nd 10 so that people have 

11 time to see it, distribute it to the members by 

November 2nd 12 so that people have time to react to it 

in time for our next meeting which is on the 8th and 9th 13

14 of November. And so just working backwards from the 

November 2nd 15 deadline for completing the analysis, it 

16 means that any request for data, any changes in the 

17 analysis, any workgroups that we form are going to 

18 have to basically work next week, and we’re going to 

19 have to move on a pretty fast timeframe to get the 

20 analysis to them -- the data to them so that they can 

21 input it. If the data’s in great shape and they don’t 

22 need to supply any more data, that’s fine, but if 

23 people feel that the data they have or the analysis 

24 that they have needs to be tweaked, needs to be

25 supplemented, now, literally now, is the time to do 
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1 that.

2 And we’re going to create an online 

3 interface, a sharepoint, that we will share -- a web 

4 page for this group that we will share, where people 

5 can post their comments and threads, we’ll organize 

6 them topically, from one thread to another so that you 

7 can see at a glance what all the issues are. If you 

8 feel that a new thread, a new set of issues should be 

9 created, you can create it. You can respond to each 

10 other’s comments. You can file attachments. I think 

11 it’s even got a poling feature on it. And it’ll be a 

12 shared document repository for this group.

13 So hopefully, that will allow us to continue 

14 to progress between this meeting and the next. We 

15 hope to have that up early next week. And we will 

16 post all the slides, any presentations done from this 

17 meeting, we’ll post all the key documents in that same 

18 site, so everything will be together in one place.

19 So without further ado, first let me ask for 

20 comments on this agenda, on this game plan. Are 

21 people comfortable with that as a plan for handling 

22 this meeting going forward? Anything they want to 

23 add, modify, tweak? Great.

24 In that case, let’s -- I’ll turn the mike 

25 over to Navigant. Who is presenting? Okay. Brian.
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1 Presentation by Navigant

2 MR. COFFEY: Good afternoon everyone. I’m 

3 Brian Coffey of Navigant, and I think there’s a couple 

4 of faces in the room that are new, so -- and nice to 

5 see the old faces. Today I’m planning to present a 

6 response to several of the issues raised in the 

7 previous low voltage meeting. My colleague, Matt 

8 Nardotti, who’s sitting right over here, presented 

9 then, and there was some review of the analysis that 

10 we had at that point, and I think some suggestions for 

11 moving forward. So we’ve thought about some of those 

12 and today I’ll overview a couple of proposals for 

13 moving forward and addressing some of those concerns.

14 So here are the four topics I’m going to 

15 touch on:

16 • Data requests

17 • Request to changes to the analysis

18 • Sort of some open questions, and

19 • Next steps.

20 Data Requests

21 So taking it from the top. Several of these 

22 concerns, as Richard noted, we have two committees 

23 that have a high degree of personnel overlap but are 

24 working towards different goals to come to a consensus 

25 on their respective equipment classes. And so some of 
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1 these will be generally provided for both committees 

2 to look at, and that includes the first two, which are 

3 weight versus efficiency plots, so that people can 

4 look at what are the effects of different standard 

5 levels on both the core weight and the total weight of 

6 the transformer. 

7 Just to -- several parties have requested

8 the ability to look at some of DOE’s design details 

9 for different efficiency levels, and also to provide 

10 some of their own to enable a direct comparison to be 

11 drawn. I know there was some questions of temperature 

12 rise and how that was treated by the simulation. 

13 Also, a tool that will enable users to dial 

14 in different steel price sensitivity cases. So to 

15 answer a question like, what would happen if M3 were a 

16 little bit cheaper or lot cheaper, what would that do 

17 the shape of the cost efficiency cloud? So that’s 

18 something people can do at home on their own time.

19 And then the final thing is to supply the 

20 negotiators with simplified cost efficiency charts, 

21 which show just kind of the southeast outline of the 

22 curves for different steel types.

23 So that’s what we’re planning to deliver.

24 Request to Changes to Analysis

25 Changes to the analysis. I think one of the 
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1 -- one of the items that was called for was a TSL that 

2 corresponded to this competitive point for different 

3 equipment classes, so that’s maybe a point that allows 

4 grain-oriented steel to compete with amorphous in each 

5 case, so I’ll overview our methodology for -- or I’ll 

6 propose a way to find where that might be.

7 The second item is to update materials, 

8 prices, and look at different scenarios, and the tool 

9 that I had just mentioned would be one way to do that. 

10 There’s a question of scaling and how we 

11 conduct that, especially as you get to the extremes of 

12 the KVA ranges that we’re looking at. You know, what 

13 happens to the behavior of the scaling, are we doing 

14 it the right way? I’ll touch on that too, and also 

15 what should be the relationship between one and three16 phase transformers in the low voltage dry space?

17 Size and weight constraints also, is 

18 something that we’ve heard about. I think most low 

19 voltage transformers are on the ground, but sometimes 

20 they’re in line-ups where there’s concern about growth 

21 in size or weight, getting them in buildings and 

22 elevators, so we’ll talk about the different ways that 

23 we can treat that. And then also ask the question, 

24 are there energy savings to be gained by expanding 

25 scope of coverage, both in terms of KVA and different 
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1 exclusions. 

2 So we’ll -- so the kind of priorities that 

3 we have analytically are to achieve a level of comfort 

4 with out existing representative units. We have three 

5 design lines and three rep units. Obviously those 

6 only cover a small portion of what’s sold, but our 

7 first priority is to get some agreement that we’re 

8 modeling those in a way that roughly reflects reality.

9 Now following that, we’ll look to agree on a 

10 way to extrapolate that modeling to different 

11 efficiency levels and different KVAs.

12 And then the third question, which I think 

13 is less of a concern for this particular subcommittee, 

14 is whether there needs to be any new equipment 

15 classes. I haven’t heard of any suggested, but if 

16 there were some suggested, that would be a third 

17 priority relative to these top two.

18 So the first thing is there was a proposal 

19 to use a template that would allow bi-directional 

20 exchange of engineering data, both for DOE to supply 

21 information on its representative units at different 

22 efficiency levels, and for manufacturers to supply DOE 

23 with their data. Really, what this is looking to do 

24 is satisfy everyone that different modeling techniques 

25 are arriving at roughly the same conclusions. So, 
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1 it’s important to be able to make an apples to apples 

2 comparison of different design parameters. Selling 

3 price, you know, there are a bunch of things that lead 

4 to that, materials prices, engineering design 

5 philosophy, mark-ups, you know, which selling price 

6 you’re using, whether it’s manufacturer’s selling 

7 price or is it a downstream number. So to really --

8 if there ever is a discrepancy in the way two people 

9 are arriving at a selling price, it doesn’t say, by 

10 itself, very much about what the source of that 

11 discrepancy could be. 

12 So what we’re trying to do here is hold 

13 materials prices roughly constant and have different 

14 groups design to the same specification and try to 

15 pinpoint, if there’s a different assumption being 

16 made, what is it and how do we treat it. So again, 

17 that’s something that we’ll be sending out the 

18 committee for feedback on.

19 After that, we’ll look into scaling and the 

20 way that DOE has done it in the past is that it’s 

21 taken its representative units and scaled to other 

22 KVAs using what it calls the “.75 rule” where the 

23 ratio of the losses of two transformers is set equal 

24 to the ratio of their KVA ratings raised to the .75 

25 power. And that’s a behavior that comes from physical 
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1 first principles. We’ve gotten some feedback that 

2 maybe that exponent should really be higher or lower 

3 for different types of products, and so the proposal 

4 is to maybe plot some different data near extremes of 

5 KVA ranges and look at what exponent it would imply.

6 So there we go, that’s the proposal is to 

7 look at some of the extremes of the KVA ranges and 

8 kind of back-calculate what the appropriate scaling 

9 exponent could be. Obviously, the benefit of that is 

10 that it doesn’t tie us to a .75 slope, it permits the 

11 end of the scaling ranges to be treated maybe more 

12 accurately, and this is, again, a little bit less 

13 relevant for the low voltage, but if there was ever a 

14 desire to generalize results from one product type to 

15 another, this is a pretty flexible methodology for 

16 doing that.

17 Right now we cover up to 333 KVA for single 

18 phase and 1000 for three phase. Here’s a list of 

19 current exemptions as it reads in the 10CFR431. So we 

20 had feedback that maybe some of those are worth 

21 reexamining, and maybe that’s something the committee 

22 can talk about today if it wishes.

23 The competitiveness of different steels. At 

the first meeting, which was on the 15th and 16th 24 of 

25 September, negotiators discussed a standard that 
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1 allowed both grain-oriented and amorphous transformers 

2 to compete in the same market. So in the interim, we 

3 met with three steel suppliers, AK, Allegheny, and 

4 Metglas, and we agreed that selling price is the best 

5 metric for equivalence. The limitation of that is 

6 that it’s very sensitive to materials pricing, but we 

7 really couldn’t see another way to go about it. Our 

8 operating hypothesis was that if two similar 

9 transformers, vary significantly in price, one of them 

10 doesn’t get purchased, so that’s what we’re working 

11 from.

12 MR. PARKER: In those conversations, Brian, 

13 did you -- were you able to pin down any kind of a 

14 precise, or semi-precise quantitative way what 

15 significantly means?

16 MR. COFFEY: That’s something we would 

17 probably look to the committee to suggest. Maybe 

18 there’s a percentage that’s considered to be in the 

19 noise, but we think that, you know, it’s a pretty --

20 it’s a very materials intensive industry, and so 

21 people are -- what we’ve heard is that people are very 

22 interested in first cost. There’s some that are 

23 evaluating above the standard level, but as standards 

24 increase, that number seems to be getting very, very 

25 small and so first cost would seem to have a big 
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1 impact on purchasing behavior.

2 MR. PARKER: Steve.

3 MR. NADEL: Steve Nadel, IEEE. When you 

4 said use selling price, pulling from this morning’s 

5 discussion, I assume you mean considering all inputs 

6 that came out that people are not going to go with 

7 amorphous if it’s exact same price per, say per watt, 

8 because there are investment costs. I assume -- in 

9 order to convert over -- so I assume you’re talking 

10 about trying to have them competitive considering all 

11 costs?

12 MR. COFFEY: So the charge was to try and 

13 come up with an efficiency level for different 

14 equipment classes that would produce a market where 

15 consumers would be roughly indifferent to purchasing 

16 an amorphous or conventional transformer. Our 

17 hypothesis was that if they weren’t selling for the 

18 same price, then consumers would purchase whichever 

19 one was cheaper.

20 MR. NADEL: And just to clarify, I heard you 

21 say it’s based on consumer cost, so whatever affects 

22 the manufacturer cost gets factored in, so, good.

23 MR. COFFEY: Uh-huh (yes.)

24 MR. PARKER: Yes, Bob.

25 MR. SMITH: Bob Smith -- (off mic comment.)
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1 MR. COFFEY: No, that’s a good point, Bob, 

2 thank you. When we talk about selling price, we’re 

3 talking about as sold by the manufacturer to the first 

4 purchaser. So we look at the later price mark-ups in 

5 the life cycle cost analysis, but for the purposes of 

6 this discussion, we’re talking about as the 

7 manufacturer sells it. 

8 MR. SMITH: (off mic) And as a follow up to 

9 that question, ... situation in the low voltage dry 

10 market ... discussion that goes like this ... to do about 

11 that?

12 MR. COFFEY: Well, we could talk about 

13 different ways to do that. I mean, if it’s sold as 

14 part of a switch gear package, then it’s not being 

15 sold as a distribution transformer, so we couldn’t 

16 compare that directly, of course. Is there a way to 

17 look at what that transformer would have sold for, had 

18 it been sold on its own?

19 MR. SMITH: (off mic) Yes, I think the same 

20 way we just talked about ...

21 MR. BOLDUC: So then what you’re suggesting 

22 is that the representative case is really a high 

23 volume purchase, that’s where most of the business 

24 gets done?

25 MR. SMITH: (off mic) In terms of ...
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1 MR. COFFEY: So then I think what we would 

2 need to look at to make sure that we’re arriving at 

3 the same conclusion is the mark-up structure and see 

4 if the numbers that we outline in our technical 

5 support document roughly correspond to what 

6 manufacturers see in the market. So those have been 

7 made available. We e-mailed out our technical support 

8 document, Chapter 5, which is the engineering 

9 analysis, so I think everybody should have that data

10 already to examine, and certainly we can receive 

11 feedback on that moving forward.

12 MR. MILLURE: Dave Millure, Metglas. To 

13 address what I think was Steve’s question, the 

14 amorphous costs of prices do not include any burden 

15 for investment or recovery of investment. It’s 

16 treated as if that equipment was already installed and 

17 paid for.

18 MR. COFFEY: In the engineering analysis we 

19 treat amorphous units as if a manufacturer is 

20 purchasing a prefabricated core, because we don’t 

21 understand the majority of manufacturers to have the 

22 ability to manufacture in house. So we took that as 

23 the representative case.

24 MR. TENDULKAR: A question about this. I 

25 just heard about packaging switch gear packet the 
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1 transformer goes in, you don’t have the price 

2 structure --

3 MR. PARKER: Excuse me, this is Vijay 

4 Tendulkar, ONYX Power. 

5 MR. TENDULKAR: I’m sorry, this is Vijay, 

6 from ONYX. Do these package transformers -- they do 

7 have to meet the efficiency requirements, am I 

8 correct? Almost 100 percent of all transformers go

9 into package called a power distribution unit, almost 

10 100 percent of ... transformers, which we make for the 

11 DOE efficiency requirements.

12 MR. COFFEY: So I think I would probably 

13 want DOE general counsel input on the nuances of that 

14 situation, if it’s being sold within another product. 

15 So -- obviously, transformers sold piece-meal would 

16 have to meet the standard. If it’s embedded in 

17 another product, I think I’m not in a position to give 

18 a final answer on that. I would have to get back to 

19 you.

20 MR. TENDULKAR: Thank you.

21 MR. RIVEST: This is Mike Rivest. You said 

22 100 percent of your products are sold within -- within 

23 switch gear or within control -- what is it you said?

24 MR. TENDULKAR: What we make is the 

25 transformers for data centers.
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1 MR. RIVEST: Data centers, okay.

2 MR. TENDULKAR: And data centers do not take 

3 the transformer ... Transformer is just a cabinet. The 

4 input switchboard, and also the output thing, the 

5 panel board, a lot of ... and everything, and that’s the 

6 whole complete package.

7 MR. RIVEST: So the question is --

8 MR. TENDULKAR: And there’s a transformer in 

9 it, which can vary from something like a 50 KVA to 

10 1500 KVA.

11 MR. RIVEST: So I would question whether 

12 that is a distribution transformer.

13 MR. TENDULKAR: According to the definition 

14 of whatever you had, exemptions, it did not mention 

15 it. And that is what my e-mail I just sent. I’m 

16 sorry I sent it very late, a couple of days ago. I 

17 mentioned that very clearly, as to these transformers 

18 should be exempted, but they are not on the list.

19 MR. RIVEST: Well, let’s look at the list.

20 MR. PARKER: Well, so -- Tim, did you want 

21 to respond to that point?

22 MR. BALLO: I just had question. Is there 

23 something different about the transformer itself? 

24 Could you take --

25 MR. PARKER: Excuse me, this is Tim Ballo 
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1 from EarthJustice.

2 MR. BALLO: Could you take another similar 

3 transformer and put it in that same application, or is 

4 the transformer itself intrinsically different?

5 MR. TENDULKAR: I mentioned a lot of details 

6 in the e-mail, but just to give a quick answer for 

7 you, yes, they are different. First of all, they need 

8 very low inrush (ph) current, about 300 percent to 400 

9 percent is the requirement, which is not what we do 

10 when we used these sophisticated materials. We 

11 normally push the flux density very high, something 

12 like 15, 16 kilogauss or higher. We have to work with 

13 very low flux densities. Our cores are bigger, and 

14 that’s one of the things.

15 The other thing is this data center 

16 transformers work at a constant load, 24 hours a day, 

17 not like your garden variety distribution transformer 

18 in the back of your pole or somewhere else, which is 

19 morning is loaded and evening is loaded, nothing like 

20 that. It is a continuously loaded transformer. They 

21 have reliability issues, and none of these 

22 transformers are in operation more than about ten 

23 years. A lot of these people are not putting these 

24 datacenters in the containers, because they don’t want 

25 the cost of the building to be there.
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1 So if somebody is putting more money to get 

2 a better transformer, he’s not going to recover that 

3 money. Plus we have a size constraint. Some of these 

4 transformers are PDUs, going to the tenth floor in a 

5 Manhattan building, where the cost of the building per 

6 square foot is much high, and we have to constrain 

7 that. Plus, all these transformers have to be cooled 

8 by air conditioning because they are in an air 

9 conditioned room. So you need an efficiency higher, 

10 not at 35 percent load, which DOE looks at, but at a 

11 higher loading, and none of those factors are 

12 considered in any of these issues, and that’s the 

13 reason we were thinking it should be exempted from 

14 this DOE requirements and should be on that list.

15 Also one other thing I forgot to mention is 

16 they also need, a lot of times, not a standard delta-Y 

17 transformers, but they want delta zig-zag, or a delta 

18 double zig-zag -- there are two separate windings, and 

19 the temperature rise goes from 80 degrees to anywhere 

20 from 130 degrees, which is not standard in the 

21 distribution transformers. So all these things make 

22 the transformers a lot more difficult to make.

23 MR. COFFEY: So I think I heard two items 

24 there, the first was of compliance of units that were 

25 sold as part of another product, was the first, and 
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1 then it sounded as though we moved into a discussion 

2 of transformers that, even if they were sold piece3 meal, do they maybe belong in a different product 

4 class, or equipment class, rather. Is that an 

5 accurate summary of your points?

6 MR. TENDULKAR: Yes, to some extent, but you 

7 have the UPS transformer, the UPS transformers go in a 

8 UPS cabinet somewhere around there. We make those, 

9 but we do not put in the cabinets, somebody else puts 

10 in the cabinet. Similarly, some of the data center 

11 transformers we make, we do not put it in the cabinet, 

12 but somebody else puts in the cabinet, but they’re 

13 specifically made for a data center use.

14 MR. COFFEY: Okay. So you’re suggesting 

15 that they would be covered maybe by the spirit of this 

16 exemption, but because of the way that you sell them, 

17 they’re, in practice, not excluded.

18 MR. TENDULKAR: Exactly, they’re not 

19 included right now.

20 MR. COFFEY: So maybe what we need to do is 

21 look at the physical characteristics of these devices. 

22 I don’t have the definition up on screen, 

23 unfortunately, but maybe that’s something we can look 

24 at together as part of the technical committee and 

25 come up with a plan on it.
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1 MR. TENDULKAR: Thank you.

2 MR. PARKER: I just want to pass along --

3 Tom Patzner of Schneider Electric e-mailed in and Tom, 

4 feel free to e-mail back if I misstated what you were 

5 saying here, but the note says, “Power distribution --

6 PDU stands for power distribution unit, so the 

7 transformers in them must comply since they meet the 

8 full definition of a distribution unit, which I think 

9 is what you were saying, right, Vijay?

10 MR. TENDULKAR: Yes.

11 MR. PARKER: He also mentioned that he has 

12 some data to supply in response to Bob Smith’s point. 

13 So we’ll bring that on board with regard to those 

14 transformer sales. Mike.

15 MR. RIVEST: So, they may - so even if they

16 have to meet a standard, they may have characteristics 

17 that make it difficult to meet the standard that 

18 applies to all classes, so they may warrant a special 

19 class. So if they’re not exempt and they can’t be 

20 exempted, maybe we have to look at creating a class 

21 for them -- for those characteristics.

22 MR. PARKER: I should mention that we had 

23 this -- we had an analogous discussion for network and 

24 vault transformers in the medium voltage group, and 

25 just offer as a point of comparison, since it might be 
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1 useful. What we agreed to do there was to form a work 

2 group that would look at three things, 

3 • first, whether prices -- whether the ratio of 

4 price increment to efficiency improvement is 

5 different for this category of transformers, 

6 compared to ordinary transformers that fit into 

7 this category. 

8 • Secondly, whether one could define this category, 

9 in this case, the data center transformers by 

10 unique physical characteristics, because legally 

11 that has to be the basis for setting efficiency 

12 standards that apply to manufacturers. And I 

13 think that’s what Tim Ballo was getting at when 

14 he asked are there physical characteristics. 

15 • And the third was, if a and b are true, if they 

16 are distinct and you can define their 

17 distinction, what different standard should apply 

18 to them.

19 And so I can easily imagine doing a similar 

20 thing for data center transformer units if that were 

21 useful. Does that make sense to you?

22 MR. TENDULKAR: Yes, it makes sense to me. 

23 The reason we are not really looking at price, we are 

24 really looking at the characteristics of the 

25 transformer, the operation of the transformer, the 
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1 application of the transformer. That’s what we are 

2 looking at. 

3 And in the similar category, I also 

4 mentioned in my e-mail where the transformers used for 

5 the solar power, which are normally, during the day 

6 when the solar energy is available kind of thing, and 

7 not in the night. They are not really exempted here, 

8 but they have a different requirements to meet the 

9 efficiency, about 99 percent, and sometimes better 

10 than that, and the load pattern, they are published, 

11 by the -- for example, in California, the CEC is the 

12 one. And the manufacturers to meet those requirements 

13 for the standards, their standard, and then try to 

14 make it TP-1, it is mostly impossible to get the both 

15 things meet together.

16 And the reason for it, what we are trying to 

17 do, we want to have an efficient application, 

18 efficient transfer for the particular application kind 

19 of thing, rather than just looking the efficiency at 

20 the 35 percent point. That’s what we are looking at. 

21 And that is different approach for these two kinds of 

22 transformers which I mentioned in my e-mail. Thank 

23 you.

24 MR. PARKER: Can that be dealt with in the 

25 life cycle cost analysis by -- because the 35 percent 
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1 is a default assumption, but if this were created as a 

2 separate category, you could put in some different 

3 load factor for that in the analysis, right, in the 

4 LCC analysis could take account of that? Isn’t that 

5 right? No? So, sorry, I may have misunderstood the 

6 point.

7 MR. TENDULKAR: One other thing -- we talk 

8 about it -- one other thing we make a transformers is 

9 for the solar power. Solar power transformers, they 

10 work from the morning to the evening, or whatever it 

11 is. What we are trying to do -- we have a 35 percent 

12 efficiency kind of thing on everything we came up 

13 with, based on the load factor of the distribution 

14 transformer. Which is not the case with the solar 

15 power transformer. They have certain things. They 

16 start with the low load in the morning and low load in 

17 the evening, but in the midday, they’ve got a lot of 

18 load. And the load cycle is different, and they are 

19 not turned on during the night. They’re completely 

20 turned off. So there are no load losses.

21 DR. ROSE: May I ask a quick question?

22 MR. PARKER: Sorry, I missed that connector, 

23 thank you. 

24 MR. ROSENSTOCK: Steve Rosenstock. To 

25 follow up on the solar, are you talking about the 
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1 building mounted commercial or industrial building 

2 mounted ones, where it’s a step-up transformer from 

3 the 50 to the 120 or building voltage transformer?

4 MR. TENDULKAR: These are the transformers 

5 that they get from the panel, something like 200 volts 

6 or 300 volts, whatever it is, and then step up to the 

7 utilization voltage of ...

8 MR. ROSENSTOCK: Okay. So it’s from the 

9 panel into the building or back to the grid, 

10 basically?

11 MR. TENDULKAR: It may be back to the grid, 

12 or it may be to the building loading --

13 MR. ROSENSTOCK: So that’s one -- you’re 

14 talking about the customer’s side, you’re not talking 

15 about utility scale --

16 MR. TENDULKAR: No, no. No, no.

17 MR. ROSENSTOCK: Okay. Just for -- the 

18 second issue, basically, and again maybe this is for 

19 you, for other products, covered products, whether 

20 it’s like a motor or a light bulb, if that covered 

21 product is part of another product, like the motor is 

22 in an air conditioner, and the light bulb is in a 

23 vending machine, that product still has to meet the 

24 standard, regardless of -- it might be enclosed or a 

25 stand-alone, it still has to meet the federal 
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1 efficiency standard regardless of what it’s being put 

2 into or how it’s being applied, it still has to meet 

3 the efficiency standard.

4 MR. TENDULKAR: The problem with ... we are a 

5 transformer manufacturer that are involved in the 

6 manufacturer. They buy our transformer, package it 

7 together, and there are certain efficiency 

8 requirements within there. If they don’t meet that 

9 efficiency, they don’t get that rebate, they don’t get 

10 the incentives. So they have to meet those 

11 efficiencies for the complete product in... and a 

12 transformer. And that is based on the load cycle of 

13 the transformer during the day, solar cycle, not the 

14 other things. And if we tried to meet the TP-1 

15 efficiency or whatever efficiency we’re going to come 

16 up with, we may not be able to make those 

17 transformers.

18 MR. RIVEST: Mike Rivest. Again, if this is 

19 a transformer that is physically different from 

20 others, then there could be a separate product class 

21 established, and in that situation, you know, the use 

22 -- the way it’s applied becomes relevant. If it is 

23 not any different in terms of its electrical 

24 characteristics, for example, then how it’s used 

25 doesn’t matter. You can’t differentiate it from 
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1 something else.

2 MR. TENDULKAR: It cannot be used as a 

3 distribution transformer.

4 MR. RIVEST: Well, then, it is a different 

5 animal.

6 MR. TENDULKAR: Exactly.

7 MR. NADEL: A process suggestion.

8 MR. PARKER: Yes.

9 MR. NADEL: It sounds like this is an issue 

10 that they wanted to get the DOE lawyers involved with 

11 and we don’t have them here, so maybe we should move 

12 on.

13 MR. PARKER: Well, I think that there are 

14 both factual and legal issues involved. I think the 

15 legal issues are pretty clear, there has to be some 

16 kind of a physical distinction. And it sounds like 

17 there is, but I think it’s just a matter of working 

18 with Brian to find what that is and to see if there’s 

19 a separate class that should be created.

20 I just want to pass on a comment from Tom 

21 Patzner, Schneider Electric on the phone that, I think 

22 this was in regard to the data centers, that they are 

23 very clearly included. They were specifically added 

24 to the standard back in 2006, 2007 after previously 

25 being exempted. So he says they are exempted from the 
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1 TP-1 standard but not from the 2005 Energy Act. That 

2 just confirms Vijay’s point, I think. Thank you, Tom. 

3 Tim, did you have a comment?

4 MR. BALLO: Just one quick follow up 

5 question. What did you say the input voltage was for 

6 the solar power transformer?

7 MR. TENDULKAR: The input voltage for the 

8 solar power depend on the particular inverter, but 

9 they are about 200 volts, 160 volts, something like 

10 that as an input voltage because whatever the DC 

11 voltage available, they invert it, and that’s not very 

12 much.

13 MR. FERNSTROM: Excuse me, this is Gary 

14 Fernstrom, from PG&E. I’d like to go back to the data 

15 center transformer for a moment. Data centers are a 

16 large, important and growing load, and I think we 

17 would do ourselves a disservice if on account of the 

18 way these products are classified and the regulations 

19 applied, we wound up with a misapplication for that 

20 use. Clearly, the predominant issue there is coil 

21 losses, I-square-R losses, because these are heavily 

22 loaded in contrast to building transformers which are 

23 lightly loaded. So we should collectively work 

24 toward trying to get the best outcome for this 

25 specialized application.
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1 MR. PARKER: Okay. I think we’re in 

2 agreement on that. Let’s move on to the rest of 

3 Brian’s presentation.

4 MR. COFFEY: So I think we can continue some 

5 of these equipment class questions off line and go 

6 through what criteria would be required to discuss 

7 setting a different equipment class, and hopefully 

8 some members of the technical committee that was 

9 chartered last meeting can be part of that.

10 Also I was -- I started talking about steel 

11 competitiveness, and said at the first meeting, 

12 negotiators discussed looking at a TSL that would 

13 allow a market where grain-oriented and amorphous

14 transformers could compete. We met with the steel 

15 suppliers and agreed that selling price was a good 

16 proxy for competitiveness, if it were able to be 

17 estimated accurately. Obviously, the selling price of 

18 a transformer is strongly dependent on the assumptions 

19 made for materials prices, but our hypothesis was, as 

20 I mentioned earlier, that if two transformers are 

21 priced differently, then one of them isn’t going to 

22 get purchased.

23 So here’s an example. This is design line 

24 5, which is admittedly a liquid design line, but the 

25 methodology is identical. What we’re trying to do is 
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1 find the efficiency at which amorphous and 

2 conventional steel transformers can sell in the same 

3 market. So let’s zoom in on where the action is. And 

4 you’ll note that these lime green prices here are --

5 well, you won’t know that because you can’t see the 

6 legend -- but they’re M3 designs. And so I’m going to 

7 put a tangent on a certain part of that curve, kind of 

8 where it crosses the yellow, which is ZDMH, a high-B 

9 steel, and the peach color which is amorphous. So 

10 there’s that, that’s M3.

11 To do the same with ZDMH, in the dry space 

12 it would probably be H0 domain-refined that would 

13 serve this role, and that might have a curve like 

14 that. And then the amorphous curve is flatter still, 

15 and it’s about there.

16 So if I’m trying to say where does amorphous 

17 and ZDMH compete, at which efficiency level? Well, 

18 I’ll find where those two curves intersect, which is 

19 about right here, and then that arrow points to a 

20 place on the efficiency line where, were the standard 

21 to be set there, probably they would be seen as 

22 substitutes to each other, and you could say well, 

23 they’re pretty close in this region, so maybe we 

24 choose EL-1 here as the standard. 

25 If we looked at M3, that doesn’t intersect 
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1 the amorphous curve until down here, so there would be 

2 a question of what’s the right standard to use for 

3 that equivalence point. Now, what if M3 had a 

4 different price? This is the question that’s raised 

5 in this type of analysis. If we assume that M3 is 

6 cheaper, then those green points all come down, and 

7 you end up with a curve like that, and an intersection 

8 point that’s higher. 

9 So the conclusion I’m trying to get to is 

10 that this type of analysis is highly sensitive to the 

11 assumptions that are made about materials prices. But 

12 we think that to do this exercise it’s really 

13 unavoidable to presume something of amorphous prices. 

14 We heard a couple of different suggestions at the 

15 medium voltage meeting that just took place. AK 

16 Steel, again, not everyone’s seen this, but AK Steel 

17 presented a methodology that presumed materials 

18 prices. Wes Patterson, who I don’t think is on this 

19 committee presented some material that showed 

20 equivalence but that itself assumed the materials that 

21 his company sees. So even though it’s a tough thing 

22 to do, I think that if we decide that finding an 

23 equivalence point is a worthwhile goal, we have to 

24 come to an understanding of the materials prices that 

25 we’re going to use.
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1 Because there are some different ideas about 

2 which prices should be used, we’ve created a tool that 

3 lets -- I mentioned this earlier -- that lets the user 

4 choose different price cases for the different steels 

5 and see how the cloud shape changes under those 

6 different scenarios, so we’ll be sending that out.

7 Conclusions: This exercise is sensitive to 

8 materials prices. There was a proposal to use weight 

9 as a metric for competitiveness, but we don’t think 

10 that’s useful because consumers don’t purchase in 

11 pounds, they purchase in dollars, and moreover, it 

12 requires an implicit assumption about what the 

13 relative prices of the two materials used are, so it 

14 doesn’t really address the problem.

15 So what we’re going to do about this is 

16 provide that tool and also seek input from the 

17 committee on what they believe the materials’ prices 

18 are, what they are paying for these different grades 

19 of steel.

20 So if there are no questions on this, I’ll 

21 move on to open questions.

22 MR. PARKER: Brian, just one comment. I 

23 think it would be very good to keep those slides on 

24 the projector and we’ll circle those graphs. When we 

25 come back -- I’d like to come back, as I mentioned in 
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1 the discussion of the agenda, come back to these 

2 charts and see if perhaps this group can make a little 

3 more progress than the MV group did in trying to find 

4 the basis of these charts, what is the competitive 

5 price point. All this presumes that there’s some 

6 agreement on the material price assumptions that are 

7 going into it. So we can have that discussion, but I 

8 just wanted to mark that these are significant graphs 

9 and we should plan on coming back to them later in the 

10 discussion as we discuss steel impacts. Yes.

11 MR. MILLURE: Dave Millure, Metglas. I 

12 think you’ll find a quite different landscape here 

13 than you do with the liquid-filled. I don’t think 

14 amorphous become the material of choice until maybe 

15 CSL-5 for the low voltage, so it’s a slightly 

16 different conversation.

17 MR. PARKER: Right. It is a different 

18 conversation. It’s a similar concept, and it’s 

19 similar graphs, that was my only point. It could 

20 involve different steels. It could involve M3 versus 

21 M5 or something like that. But I’m a little 

22 disappointed that we don’t have Eric or Jerry here.

23 MR. MILLURE: M3, M5 is the same supplier, 

24 so I don’t think that’s the issue. It’s the 

25 amorphous or you can make a case of the ZDMH versus 
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1 the M3 or the M5s.

2 MR. PARKER: And so what I’m hearing is the 

3 competitiveness TSL is not as salient an issue for 

4 this group, is that accurate?

5 MR. RIVEST: What I remember from the last 

6 rulemaking, it was -- there were issues around 

7 tooling, the construction, mitering versus butt lap, 

8 and step laps and that was -- you got into serious 

9 capital costs, thickness of steel resulting in more 

10 cuts. Those were the issues with the rule. I don’t 

11 know -- I’ll be interested in hearing what the issues 

12 are.

13 MR. PARKER: So there’s not an issue about 

14 metal --

15 MR. RIVEST: This is not about amorphous --

16 MR. PARKER: No, no. Not about amorphous 

17 but about metals choice, generally? It’s about 

18 construction technique?

19 MR. RIVEST: It’s more about construction 

20 techniques.

21 MR. PARKER: Okay. 

22 MR. MILLURE: Now if we go to CSL-6 maybe we 

23 have to have those conversations.

24 MR. TENDULKAR: The question I was going to 

25 -- you have the material prices by performance here. 
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1 When you set a performance or whatever it is, we have 

2 got a different constructions of the core as the 

3 gentleman just mentioned. We did miter core and butt 

4 lap, but in the miter core also there are a half miter 

5 and a full miter, the step-lap kind of thing, and the 

6 step-lap kind of machines cost lot of money and we 

7 just mentioned in the last meeting that there are only 

8 one or two suppliers in the world and it cost a lot of 

9 investment kind of thing. Small manufacturer like us 

10 could not afford that kind of a capital investment. 

11 And then we cannot use the material to the full value 

12 of whatever -- reduce the cost of the -- reduce the 

13 losses kind of thing because -- I don’t know how you 

14 calculate the losses based on the step-lap miter, or a 

15 half ... miter, or how did you do that?

16 MR. COFFEY: We looked at a variety of 

17 construction techniques for each design line. So some 

18 of each.

19 MR. TENDULKAR: Okay. And the other thing 

20 is, when we talk about -- let’s say we have to talk 

21 about the material price. Do you also allow that 

22 material price to go up because of the capital 

23 investment cost from that, or how do you do that? And 

24 also the material prices by the region, change. There 

25 may be different price in the Midwest compared to the 
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1 west coast where we are. Are these factors taken into 

2 account in the material prices?

3 MR. COFFEY: I’ll -- as far as the different 

4 prices for different regions, absolutely not. We 

5 didn’t do that. That’s the first time I hear that. 

6 In terms of the tooling costs, yes we do take that 

7 into account. We do take that into account.

8 MR. TENDULKAR: And again with your small 

9 manufacturers like we are, we cannot buy ten million 

10 pounds of steel. So we will get a different price 

11 spread than the other people can get. So which kind 

12 of prices did you take into account when you made this 

13 chart?

14 MR. COFFEY: What we say is the prices that 

15 we use in our modeling are probably representative of 

16 a medium to large manufacturer. Although in our 

17 interview process we do ask a variety of businesses 

18 what they pay for different steels, and to be honest, 

19 we didn’t find a huge discrepancy between some of the 

20 smaller guys and some of the larger and medium ones.

21 MR. TENDULKAR: So small manufacturers like 

22 us, I think you should consider and see what we are 

23 paying and maybe that may change the chart or it may 

24 not change the chart. I do not know.

25 MR. PARKER: Were you previously consulted?
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1 MR. COFFEY: I don’t think you’ve told us --

2 I mean one of the things I had mentioned earlier is 

3 that we would be providing a template to allow input 

4 on what different businesses pay for their grades of 

5 core steel, so there will be an opportunity to give 

6 feedback on that. And also I can -- Richard, you had 

7 talked about presenting what the current prices that 

8 we used to generate these results are, so I can also 

9 show those.

10 MR. TENDULKAR: Yes, that would be helpful, 

11 thank you. I appreciate it.

12 MR. PARKER: Is that information proprietary 

13 that should not go up on a website but provided to 

14 Navigant separately, or how would you like that 

15 handled?

16 MR. TENDULKAR: I think if we give you the 

17 price information, that should be proprietary and that 

18 should not go to general public and just stay with the 

19 committee.

20 MR. PARKER: Okay. Then I think what will 

21 need to happen is that you’ll need to gather this 

22 information and find a way to sanitize it so that it 

23 can be shared with the group as a whole without 

24 disclosing confidential information.

25 MR. TENDULKAR: Thank you.
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1 MR. PARKER: And just to a little bit of 

2 note of urgency here, we need to do that very, very 

3 soon. Bob.

4 MR. SMITH: Bob Smith. Brian, it would be 

5 very helpful to me and probably some of the other low 

6 voltage manufacturers represented here, if we could 

7 see the scatter plots with our design lines rather 

8 than the liquid design lines. The efficiencies are 

9 much higher on the liquids for physical and 

10 technological reasons and I think this is a little bit 

11 confusing when we start looking at the break-even 

12 points.

13 MR. COFFEY: So, yeah, I apologize. What I 

14 was trying to show here was more a methodology to look 

15 at how different steels might compete with each other, 

16 rather than to conclude anything about any particular 

17 design line. But certainly the tool that we provide, 

18 it sounds like this may not actually be of great 

19 concern, but the tool that we provide will have the 

20 capability to look at the low voltage design lines, of 

21 course.

22 MR. PARKER: Andrew.

23 MR. DeLASKI: One of the things we heard in 

24 the first meeting we had was manufacturers -- where 

25 manufacturers are concerned about the investments 
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1 needed to go to more sophisticated manufacturing 

2 techniques. And VJ, I heard you begin to sort of --

3 you sort of said it quickly. As a non-expert in 

4 transformer manufacturing, if you could step me 

5 through the, sort of the steps up -- what are the 

6 options, steps up in manufacturing techniques that get 

7 you to improved efficiency? You kind of did it 

8 quickly, going from butt lap to -- you said it 

9 quickly. Maybe you or Bob or Eduardo can give us a 

10 short tutorial on what the options are as you step up 

11 in efficiency to improve performance.

12 MR. TENDULKAR: How much time do I have?

13 MR. DeLASKI: A short tutorial I said. And 

14 basic techniques.

15 MR. TENDULKAR: First of all --

16 MR. DeLASKI: I heard more gradations in 

17 what you said than I had heard before, partially 

18 mitered versus fully mitered --

19 MR. TENDULKAR: First of all there are 

20 stacked core construction, there are three different 

21 varieties. One is butt lap, which got the 90 degrees 

22 thing and just put it around there. Then the miter, 

23 which is -- there is a half miter which most of the 

24 people do, which is easy to do, compared to step lap, 

25 which you need a very special equipment. So these are 
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1 the three different constructions in the stacked core. 

2 And the stacked core steels are sometimes different 

3 than the wound core steels. I think that was 

4 discussed this morning a little bit.

5 Now in the stacked core you have different 

6 constructions, it’s three different constructions. 

7 Other than that, if you want to do something different 

8 in the particular construction, then you go to the 

9 better materials. And if you go to better materials, 

10 you can start with the M6, or you can start with a 

11 non-oriented steel, then you can go to M6, which is 

12 oriented steel, and as you go thinner and thinner and 

13 thinner, sometimes you got limitations as to whether 

14 you can shear it properly, because as the steel gets 

15 thinner, it is difficult to shear properly without 

16 getting a burr on it kind of thing. So those are some 

17 of the limitations people have who shear the thing 

18 inside their factory. 

19 So other than that, then you go to the wound 

20 cores. When you go to the wound cores, there are 

21 events going what you call, like a three-legged coil 

22 with the Y, two of the three loops of the core are 

23 wound together and make the core. That core it’s very 

24 efficient because there are less cardinal losses and 

25 there are other things, but it has got the drawback. 
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1 You need 15 percent more core area, because there are 

2 two loops in each leg, and they are -- the core fluxes 

3 are 120 degrees apart from each other. And because 

4 other people made mistakes in calculations, and in my 

5 e-mail I detailed that a little bit more in detail. 

6 So you need, if you are ... cross-section of ten square 

7 inches, then it’s not ten square inches as in the 

8 stack core, it is less than ten square inches. It is 

9 about 85 percent or 8.5 square inches. So you need 

10 more material. And one of the competent engineers in 

11 our company did the design with the amorphous core, 

12 nothing wrong with the amorphous core, and he goofed 

13 (ph) it, and I think OPS software does not take that 

14 into account either, and that was one of the points 

15 that I made in my e-mail. And that’s the reason we 

16 make the transformers and they were lousy, losses were 

17 a lot more than what we predicted by OPS software. 

18 And a small company like us, we have problems with 

19 that kind of thing.

20 So those are the kind of things you can have 

21 in the core constructions and losses. The other way 

22 to reduce the losses on the core is to make, use a 

23 smaller core, and more winding, but that has got other 

24 consequences also.

25 MR. DeLASKI: Thank you.
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1 MR. PARKER: I didn’t quite catch one thing 

2 you had butt, mitered and then the third type was?

3 MR. TENDULKAR: Stapler. Stapler. But 

4 that’s a miter core construction in the step-lap (ph)

5 PARTICIPANT: In a stack core construction 

6 for entry, call it, products, butt lap.

7 MR. TENDULKAR: That’s right, that’s the 

8 same placement.

9 PARTICIPANT: Okay. It is an entry level ..

10 MR. TENDULKAR: And if you had non-oriented 

11 steel, it doesn’t make a difference if it is a miter 

12 or a butt lap, the losses are the same. The miter 

13 core and the step-lap core are used for one reason. 

14 All these oriented steels, M6 and M5 and M3 and 

15 everything, they are directional material. So if your 

16 core flux is going in one direction, the losses are 

17 lower. The plus goes in 90 degrees to that, the 

18 losses are a lot more. To compromise that, we make a 

19 miter cut. It’s a 45 degrees cut on that one to 

20 reduce the losses. In the wound core you don’t have 

21 that kind of situation because the wound in the core, 

22 the flux goes in the same direction all the time. 

23 That’s the reason the wound core has the lower losses.

24 MR. NADEL: And in the stacked core, I’m 

25 just looking at my notes right here, ...
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1 MR. TENDULKAR: The half miter and miter.

2 MR. NADEL: Half miter ...

3 MR. TENDULKAR: Miter and half miter are the 

4 same thing.

5 MR. NADEL: The same thing.

6 MR. TENDULKAR: And the step-lap is a miter 

7 with a different construction.

8 MR. NADEL: That’s a third level ... stacked 

9 construction?

10 MR. TENDULKAR: Yes.

11 MR. PARKER: But these are only used with 

12 oriented -- grain-oriented steels.

13 MR. TENDULKAR: The miter and the step-lap 

14 are used with the oriented steels.

15 MR. PARKER: Right.

16 MR. TENDULKAR: Butt lap is used with any 

17 steel.

18 MR. PARKER: And you must use them with M6 

19 and up?

20 MR. TENDULKAR: We do use M6 and up, and we 

21 also use the non-oriented steel also. And it depends 

22 on the price and performance and what the particular 

23 customer’s requirements are.

24 MR. PARKER: Right. So once you have the 

25 technology to -- and the know-how to do the half-
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1 miter, miter, or step-lap process, then you are in a 

2 mode where you could move up in terms of greater rated 

3 steel.

4 MR. TENDULKAR: Greater-rated steel, we can 

5 use it, but not in all cases you can use the greater 

6 rated steel. There are certain problems with the 

7 grain-oriented steel in the certain performance, like 

8 I talked about the data center transformers. We moved 

9 away from the grain-oriented steel to the non-oriented 

10 steel, which is a lower grade, mainly because when you 

11 turn off the transformer, the remaining flux in the 

12 grain-oriented steel is much higher, the leftover flux 

13 is much higher. That gives us a lot of ... when you’re 

14 starting the transformer again, you get a big kick of 

15 the current, that’s called in... current, that may trip 

16 the breaker. The non-oriented steel have a lower 

17 remaining flux density, the leftover flux is less, and 

18 you get a less kick. And again, you have to go to the 

19 lower flux density.

20 The problem we are talking about, and maybe 

21 I am not explaining very well, in a data center 

22 transformer, some of the transformers are used to get 

23 the power from the two different sources. Only once 

24 it’s connected to the transformer and if that source 

25 has a problem, the transformer is immediately 
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1 switched, without any delay, to the second source, and 

2 that second source may not be in sync with the first 

3 source and then you get a lot of in... current. And the 

4 reason for that it switches so quickly is because the 

5 secondary of that transformer is connected to the 

6 computer loads and you don’t want to have power 

7 disruption in the computer load, and that’s a totally 

8 different application. It has come up in the last ten 

9 years or less.

10 MR. PARKER: So I didn’t follow all of that, 

11 but the sense that I got was that you don’t use the 

12 grain oriented steel for data centers because of these 

13 technical limitations --

14 MR. TENDULKAR: Exactly.

15 MR. PARKER: -- but you could still use them 

16 for ordinary commercial buildings and other --

17 MR. TENDULKAR: We use the grain-oriented 

18 steel for the solar power plants where one must get a 

19 high efficiency.

20 MR. PARKER: And depending on what the level 

21 was, you might use them in other, but that would 

22 depend on the efficiency levels, you might use them 

23 for commercial buildings. It would not be a technical 

24 reason why not.

25 MR. TENDULKAR: We are even thinking about 
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1 using amorphous core for the solar power, so it’s not 

2 that -- there is no application for the grain-oriented 

3 or amorphous in our particular company because of 

4 different applications demand different kinds of 

5 steels.

6 MR. PARKER: So it sounds like there is room 

7 for a conversation about metals in this marketplace, 

8 it’s just that there are these other things overlaid 

9 on top of it which involve construction techniques.

10 MR. TENDULKAR: Exactly.

11 MR. NADEL: Steve Nadel, IEEE. Again, just 

12 trying to understand, the current standard is 

13 basically based on the old TP-1.

14 MR. TENDULKAR: Yes.

15 MR. NADEL: Can you generally, and I’m not 

16 saying in every case, meet that standard at a minimum 

17 level with the non-grain-oriented butt lapped, or do 

18 you have to start employing either butt lapped or 

19 grain-oriented to start meeting that in your typical 

20 application, recognizing there is thousands of 

21 products out there.

22 MR. TENDULKAR: I didn’t want to take too 

23 much time on this, but let me give you one simple 

24 example. Over the weekend I was working on a design 

25 for a 300 KV TR, I believe it is for the government, 
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1 and a lot of transformers is working on that. And it 

2 is for a data center. It needs the TP-1, of course. 

3 And it needs the temperature rise of 80 degrees, and 

4 it also needs the K factor of 20. And I’m sorry to 

5 say I could not make it. I had to make it K-7, that’s 

6 the best I can do for the thing because of the TP-1 

7 requirement. If I did not have TP-1 requirement, I 

8 would have made the K20 transformer with 80 degrees 

9 rise, and it would have fit in that PDU we were trying 

10 to make. I cannot make it. So there are limitations 

11 as to what you can in, and in particular applications 

12 you need to have transformers which are different. 

13 Then you say because we don’t have any 

14 exemption there, we had to make a TP-1.

15 MR. PATZNER: Richard, Thomas Patzner from 

16 Schneider Electric. I would like to make a couple 

17 comments, please.

18 MR. PARKER: Go ahead, Thomas.

19 MR. PATZNER: The first of all, I agree 

20 with Vijay’s comment with regards to the technical 

21 applications, but Schneider Electric’s a systems 

22 supplier, we’re going to ignore those concerns or 

23 we’re going handle those inrush (ph) concerns in 

24 another way. So I do not believe we should take it 

25 into account with our efficiency levels, the change in 
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1 inrush (ph) because there are other ways to handle the 

2 inrush (ph) in the system, than having it be a 

3 constraint on what efficiency levels we go to.

4 Second of all, in regards to the initial 

5 question and regards to the manufacturing techniques 

6 or processes, the main concern Schneider Electric’s 

7 going to have is being able to switch to a new process 

8 and continue to build at the same capacity we build at 

9 today. So yes, we can switch from a butt lap to a 

10 miter, but the miter cut’s going to take us twice as 

11 long to accomplish, which means my capacity’s actually 

12 going to be cut in half. So it’s more of a capacity 

13 concern with the different processes, than it is a 

14 capital expenditure to get to those processes.

15 MR. DeLASKI: Thanks, Thomas, that’s really 

16 helpful to understand, and also a question for you, 

17 Vijay --

18 MR. PARKER: This is Andrew DeLaski.

19 MR. DeLASKI: Onyx, your company, is -- you 

20 keep coming back to the example of the data center, 

21 and that’s because that’s what your company does, am I 

22 right? Are you in a larger market, or is that sort of 

23 your particular beat?

24 MR. TENDULKAR: Our market is about 40 

25 percent of all transformers are UPS and related to 
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1 UPS.

2 MR. DeLASKI: So they’re exempted.

3 MR. TENDULKAR: They’re exempted. About 40 

4 percent of our transformers are data center, then 

5 there are some solar powered transformers and very 

6 rarely we make distribution transformers just the 

7 cabinet and distribution transformers, which is not 

8 going to be used in a data center.

9 MR. PARKER: Tom, could you give us a sense 

10 of your company’s product line and customer base, 

11 along the lines of what Vijay did with regard to Onyx?

12 MR. PATZNER: Schneider Electric is in the 

13 entire energy management business of electricity, so 

14 we sell the first device that connects to the utility 

15 grid, all the way down to the cameras that are going 

16 to monitor your security inside your building. So we 

17 have our hands in every single element in a commercial 

18 building as it’s being built.

19 MR. PARKER: Well, focusing on the 

20 transformers.

21 MR. PATZNER: Yes, which includes the device 

22 that’s going to energize the transformer, so as we 

23 move up in efficiencies, I agree 100 percent with 

24 Vijay that the inrush (ph) is going to go up with it, 

25 which means it’s going to be difficult to energize, 
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1 but we’re going to drudge that because we sell the 

2 entire system, so we actually can work with our 

3 correspondents team that makes the devices that turns 

4 the transformers on, to make sure that our transformer 

5 works with our other device.

6 MR. PARKER: Could you describe -- you were 

7 talking just now about devices for data centers, is 

8 that --

9 MR. PATZNER: Schneider Electric is in the 

10 data center market as well.

11 MR. PARKER: Are you also in the commercial

12 building market?

13 MR. PATZNER: We’re also in the commercial 

14 building market. We’re in the industrial building 

15 market. We’re in the energy business as well.

16 MR. PARKER: Do you have data off-hand on 

17 the number of -- I’m sorry.

18 MR. PATZNER: Schneider Electric controls 

19 and monitors more energy than any other company in the 

20 world.

21 MR. PARKER: So you’re not exactly a small 

22 company. (laughter.) We’ve got the two extremes 

23 here, yes.

24 MR. FERNSTROM: Well, this is Gary Fernstrom 

25 from PG&E. Wouldn’t you agree that utilities probably 
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1 monitor and control more power than Schneider 

2 Electric?

3 MR. TENDULKAR: This is Vijay Tendulkar, 

4 ONYX Power. Tom just mentioned about a few things 

5 about the ... those kinds of things. There are several 

6 ways to do that. We used to do some of those, but I 

7 was part of a standard electric one time and I also 

8 worked on the static transfer switch, an algorithm to 

9 reduce the inrush (ph) current of the transformers, 

10 and I know about those parts. But I’m basically 

11 talking about transformers connected to the output 

12 side of the static transfer switch, and these are the 

13 ones basically used in the data centers. I’m not 

14 talking about the transformers which are connected to 

15 the grid or something else, and they have a low inrush 

16 (ph) current. To stop the breakers from tripping, 

17 there are a lot of other ways to do it with the 

18 relays. But these are the plans which are switched 

19 from one source to another source within a cycle, 

20 where the two sources may not be in the sync with each 

21 other, and that’s when we have to reduce the inrush 

22 (ph) current. We have tried with the gaps, they got a 

23 lot of mind (ph) and a lot of losses, we will never 

24 make TP-1 efficiency requirement with the gapped core. 

25 We have done that also. The only way to meet these 
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1 requirements for the TP-1 is to go to the lower flux 

2 density and probably non-oriented steel. And that’s 

3 the only way we can make this particular requirement 

4 at this present time. That is at least based on my 

5 transformer experience. Maybe somebody else has a 

6 different one.

7 MR. PARKER: So it sounds like we have a 

8 clear case for, at least for working groups to look at 

9 data centers as a possibly separate category. So 

10 we’ll do that. I do want us to keep our eye on the 

11 ball, which I think is where the bulk of the sales 

12 are, and the bulk of the losses are, which is for 

13 commercial and industrial buildings that are not data 

14 centers. So let’s focus our attention on that. 

15 I realize we may be a bit limited by the 

16 people we have around the table or on the phone, in 

17 our capacity to do that through first hand anecdotal 

18 experience, but let’s put -- offer the data where we 

19 an on that, and think about, you know, what are the 

20 options, what are the sweet spots, if you will, the 

21 efficiency levels that would give cause for concern, 

22 and/or on the other hand, that would be doable in 

23 those markets. In particular, I think at this point 

24 we should focus on the quality of the analysis and 

25 whether the LCC analysis, and in this case, since 
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1 Brian is at the mic now, the engineering analysis has 

2 accurate data for making that assessment.

3 So let’s focus on that market segment if we 

4 could and see if there are issues with that aspect of 

5 the analysis that need to be addressed. Bob.

6 MR. SMITH: Bob Smith. Richard, if you 

7 would like, I have a thumb drive with some pictures of 

8 mitered cores and the Gihor (ph) core cutter that may 

9 be of interest to the committee.

10 MR. PARKER: It’ll take us some time to put 

11 that on the system. Is it valuable to have it now, or 

12 would it be something that we could share with them 

13 after the meeting?

14 MR. SMITH: Whenever anyone would like to 

15 see it.

16 MR. PARKER: Why don’t we post that on the 

17 website, if we can, for people to look at as they form 

18 their working groups and so forth. Thank you. John.

19 MR. CASKEY: John Caskey, NEMA. I guess I 

20 have two or three thoughts as we were going through 

21 this process. One is that you -- it seems like you’re 

22 trying to wrap up the discussion, particularly about 

23 this one slide that’s up there now, and talking in 

24 general terms about the substitution of different 

25 materials in the construction of the transformer, and 
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1 the way we left the meeting, whenever that was, two 

2 weeks or so ago, we basically had sort of the scatter 

3 diagram of price versus efficiency, and it basically 

4 showed that the preliminary analysis at the lowest 

5 cost, prices for a particular design of transformers 

6 was relatively flat over four different, if I’m not 

7 mistaken, four different energy efficiency levels, or 

8 four different ELs I think we were calling them at 

9 that point. So anyway, that’s an important 

10 characteristic. We really need to get to the point of 

11 validating the basic price versus efficiency curves 

12 that we saw at the last meeting that we haven’t yet 

13 seen in this meeting.

14 So before we get into any generalities of 

15 material substitution and things like that, I think we 

16 need to get back to the basics of the price versus 

17 efficiency relationship that we left with at the last 

18 meeting. So that’s sort of one point.

19 The other point deals with, you know, some 

20 of the discussion we’ve had so far with the small or 

21 medium sized manufacturers, and if there is a working 

22 group that’s going to do some special emphasis on 

23 trying to make sure that we do the best job we can in 

24 coming out with sort of fair answers once we do sort 

25 of negotiate some point here, would be that we may 
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1 want to look at what does the industry look like for 

2 the small and medium manufacturers and how does the 

3 availability of materials and the price of materials 

4 and other things like that impact them, and the cost, 

5 the capital cost for changing their line out to using 

6 amorphous or things like that, which is to have some 

7 sensitivity to what their industry or their part of 

8 the industry is like to make sure that we’re 

9 representing them also as we come up with some answer, 

10 whatever that answer might be. Thanks.

11 MR. PARKER: Great. I think that’s helpful. 

12 And I think as I take it away, the first thing is to 

13 basically validate the scatter plots, make sure that 

14 people are comfortable with the methodology and the 

15 analysis. And I think that’s a -- and then the second 

16 ting is to look at the competitiveness impacts on 

17 steel, particularly in this case, on small 

18 manufacturers and the distribution transformer 

19 business, right. And that’s got to be a particularly 

20 salient aspect of this because of the prevalence of 

21 small manufacturers.

22 MR. RIVEST: This is Mike Rivest. I think, 

23 again, my information is one rulemaking old, but I 

24 don’t suppose things have changed a whole lot. If you 

25 contrast this industry to the medium -- the liquid 
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1 industry, if you would, this industry is less 

2 concentrated so there are a lot more manufacturers. A 

3 lot of them manufacture in small volumes, and this is 

4 not a highly customized industry in the sense that the 

5 ABBs of the world have sophisticated design software 

6 and are used to have different designs based on 

7 material prices and vary those for every order as need 

8 be. 

9 The small manufacturers that work in this 

10 industry tend to have less tooling and back before the 

11 previous standard I know the TP-1 had been designed 

12 around an M6 butt lap. So to minimize the tooling, 

13 just basically try to -- although, using a grain14 oriented with a butt lap was not an efficient way of 

15 using a grain-oriented. It’s something that could be 

16 done. So I think that was the philosophy behind the 

17 TP-1 at the time. It wasn’t the best way to get 

18 there, but it was a way to get there.

19 Now, clearly some manufacturers that have 

20 the volume, can invest in the equipment and do it with 

21 a seven step miter, for example, and do it more cost22 effectively. So here I think what you’ll find is that 

23 it might be flat because the difference between one 

24 design option and the other one is how you cut the 

25 steel, and that is a one million dollar piece of 
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1 equipment that you amortize over a million cuts. So 

2 it shows up as two cents a cut. That’s great when you 

3 can afford the million dollar piece of equipment and 

4 when you can actually use it a million times. 

5 So that’s what’s embedded in these cost 

6 curves, it’s this depreciation, if you will, over 

7 many, many cuts. So what you’re seeing is a flatness. 

8 You may not even be changing steels. You’re going 

9 from a butt lap to a miter to multi-step miter and 

10 you’re seeing gains in efficiency. You’re not seeing 

11 big change in price because it’s the price of the cut.

12 MR. PARKER: Mike, just to follow up on 

13 that, does the Navigant analysis have the ability to 

14 differentiate impacts on small manufacturers versus 

15 large and assess based upon, you know, whatever 

16 defines a small manufacturer and their capital 

17 situation?

18 MR. RIVEST: We could create a cost 

19 efficiency curve for a small manufacturer where, so 

20 for example, the cost of the cut would go up because 

21 the tooling would not be used as many times, so you’re 

22 not -- think of it as, if it’s a million dollar piece 

23 of equipment being -- slicing the steel a million 

24 times a year, gives you a price per cut. Well, if 

25 you’re only using it a fraction of that, the cost per 
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1 cut is a lot higher. But then there comes a time when 

2 they’re not even going to make their cores, they’re 

3 going to source their cores. But that’s sort of --

4 that’s the backstop. So that’s the backstop. But 

5 then, what business are they in if they’re buying 

6 cores? You know, they’re in the winding business.

7 MR. PARKER: Which is okay with some.

8 MR. RIVEST: It’s a whole different set of 

9 issues here than with the liquid industry.

10 MR. TENDULKAR: (comment off mic)

11 MR. PARKER: You need to speak into the mic.

12 MR. TENDULKAR: I’m sorry. When you use a 

13 gap core, there is a gap between the legs laminations 

14 and the yoke laminations. You cannot have any joint 

15 between the yoke and the legs, and then it is not a 

16 butt lap or miter core, it is just two pieces of 

17 separate pieces, and those are 90 degree pieces. So 

18 we make a lot of that material for the UPS 

19 transformer, or when we make reactors. And that’s the 

20 reason we have a lot of machines to cut the butt lap 

21 kind of lamination. If we want to put a miter cut 

22 machine, we have to find the space. I don’t have 

23 space for my office right now.

24 MR. PARKER: Do you have a sense of whether 

25 that’s a general issue for small manufacturers or is 
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1 that a particular issue because of where Onyx plant is 

2 located?

3 MR. TENDULKAR: No, it is a general issue 

4 for small manufacturers because they have a lot less 

5 square footage than the other one. We can’t just go 

6 and rent another building, that’s a lot of expense. 

7 And that is what we mentioned in the last meeting too. 

8 It is not only these costs, the capital costs, but 

9 also the investment for the space of something.

10 MR. PARKER: Is there in the template an 

11 input -- was data gathered on the impact of moving to 

12 larger facilities to accommodate larger or more 

13 machinery. 

14 MR. PATZNER: Richard, Thomas Patzner here 

15 for Schneider Electric. I do not believe the 

16 manufacturing impact portion has been done yet, and if 

17 somebody from Navigant can correct me or not. These 

18 type of questions will be covered when we get to that 

19 portion, and we can’t get there until we get through 

20 the analysis, isn’t that -- am I correct?

21 MR. COFFEY: That's correct, Thomas, we look 

22 at these impacts in an analysis that’s separate from 

23 the engineering, but related, called the manufacturer 

24 impact analysis, and it does look at for different 

25 efficiency levels, what types of investments would be 
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1 required, you know, capital, core cutting machines, 

2 engineering time to retrain people on designing these 

3 entire efficiency units, and potentially new floor 

4 space. So to answer your question, yes, we do look at 

5 this, but it’s in the MIA, which is downstream of 

6 what’s up on the screen right now.

7 MR. PARKER: Yes, but the fact that it’s 

8 downstream --

9 MR. PATZNER: If I could expand from the 

10 answer, then? Thomas Patzner, Schneider Electric. In 

11 regards to the smaller manufacturers like Vijay and 

12 his comment that they’re building gap type cores and 

13 so forth, that is going to be almost all the smaller 

14 manufacturers, because they do play in the niche 

15 markets and the exempt market. So we need to make 

16 sure when we do that manufacturing analysis, we look 

17 at the impact that they’re not only to -- they’re 

18 going to have to keep their old equipment to build the 

19 market that’s not covered by the standard. Where a 

20 large company like myself, we choose not to build 

21 those type of products, so we’re not going to be 

22 impacted by having to keep old equipment.

23 MR. PARKER: Well, fair point. And I think 

24 what I’m taking away from this, at least, is that even 

25 though the manufacturing impact analysis is downstream 
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1 conceptually from the LCC analysis, it still needs to 

2 go forward at the same time in terms of our process 

3 because we’re on a fast process, or at least we need 

4 to make sure that the template for it and that the 

5 data for it is gathered so that once we have the 

6 inputs from the LCC process that that can be just put 

7 into something, to a grid that’s ready to go.

8 So I think it behooves us, just as there was 

9 a bi-directional data exchange for other issues, for 

10 the engineering analysis, I think it would be very 

11 helpful to set up -- to share your template for 

12 looking at manufacturing impacts with the group, share 

13 any assumptions, parameters, whatever, as much of the 

14 methodology as you can. And then the group just needs 

15 to look at it and, for the trade associations, get 

16 your members to look at this and make sure that they 

17 are comfortable with the data that’s going in and with 

18 the template that’s being followed, the categories of 

19 data that are being gathered, so that things like 

20 floor plan expansion and the costs are being counted. 

21 Because I think everybody wants the cost to be counted 

22 fairly, if they’re there. 

23 We can’t do things on a sort of an anecdotal 

24 basis with one -- I mean, it’s very helpful to have 

25 it, because it identifies issues, but when you come 
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1 down to actually creating a record that we can use for 

2 recommending a proposal, we’re going to have to have a 

3 more systematic approach. So we need to get that 

4 data, get the template validated as quickly as 

5 possible so that when we get to that point in the 

6 analysis, we’re ready to do the manufacturing analysis 

7 judiciously. Does that make sense?

8 MR. COFFEY: So, yeah, I think that’s 

9 important. There are two areas we’re asking for 

10 feedback on. The first is this engineering template 

11 that I mentioned, so manufacturers can tell us what 

12 are the different cost curves look like for building a 

13 transformer butt lap versus step-lapped, if any. And 

14 also, separate from that, what types of investments 

15 would you need to make to build those different types 

16 of transformers. So we’ll really be looking to 

17 manufacturers for input on that.

18 MR. PARKER: Yeah, and this is really 

19 something where, you know, I’m looking at John because 

20 if NEMA could help with reaching out on a short 

21 timeframe to your members for information, the more 

22 information we have the better off the quality of the 

23 analysis will be.

24 MR. TENDULKAR: Just to say on behalf of 

25 Onyx, I have a standing invitation to anybody who 
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1 wants to visit our plant and look at it, including our 

2 competitors, come in and look at it, and you’ll 

3 understand what the small manufacturer face.

4 MR. PARKER: Thank you, VJ. Brian.

5 MR. COFFEY: So I think that lets us move 

6 forward, I think I’ve been through this slide, 

7 actually, and now we’re into open questions.

8 Review of Open Ended Questions

9 I’ve just got a couple here. Folks asked 

10 about how are CSLs and ELs chosen? These are the same 

11 thing, it’s just CSL is the term in the preliminary 

12 analysis, and EL is the term for the NOPR. Initially, 

13 they had been sort of evenly distributed across the 

14 efficiency range for each design line. As we got into 

15 the NOPR, we nudged some of them in different 

16 directions to make them align with non... materials 

17 which we thought would be of interest to the 

18 stakeholders.

19 There are a couple more issues and I’m not 

20 sure to what -- hopefully I can hear a little bit 

21 about whether they apply at all to the low voltage 

22 business, but it’s compliance of different types of 

23 transformers, ones with active cooling, which I think 

24 are not a factor in the low voltage space, but I’d 

25 like to hear confirmation of that, and also 
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1 transformers with multiple primaries and secondaries.

2 MR. TENDULKAR: Can you define what a cooled 

3 transformer means?

4 MR. COFFEY: So it’s a transformer with a 

5 fan or a pump to help it remove heat. I suppose if 

6 any of these are of concern to this business, then 

7 we’d be interested in hearing about it, and otherwise 

8 we’ll assume that they’re not.

9 MR. PATZNER: Thomas Patzner from Schneider

10 Electric. The actively cooled transformers need to be 

11 included. It’s extremely likely that, because of the 

12 price pressure, certain manufacturers might 

13 incorporate that. If the efficiency is only measured 

14 at 35 percent, the fans don’t come on until you get to 

15 75 or 80 percent, that that’s how the cost target for 

16 the market might be met, and the efficiency levels 

17 might be met because you can build a smaller device 

18 and add fans to the device and keep your cost down. 

19 So we’re going to need to make sure we cover actively 

20 cooled transformer for low voltage because it’s very 

21 likely the future will have people building those type 

22 of products for low voltage.

23 MR. COFFEY: So they’re absolutely covered. 

24 The question is, how is compliance assessed? Is it 

25 assessed when the fans and pumps are off, or is it 
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1 assessed when the fans and pumps are on and would it 

2 be proper to say that if those actively cooled 

3 transformers were built, that they would have to meet 

4 standards at their base actively cooled nameplate 

5 rating?

6 MR. PATZNER: So since we -- if we’re going 

7 to cover the compliance portion in this working group, 

8 we will need to address fan cooled for low voltage. 

9 And your questions are valid in how the working group 

10 ends up summarizing them. I have an opinion on how I 

11 would like it done, but it’s just an opinion.

12 MR. TENDULKAR: This is Vijay. I would just 

13 add one more comment on what you just said. If we are 

14 going to have a look at forced air-cooled 

15 transformers, normally use the forced air cooling, 

16 normally, it is going over the normal 100 percent load 

17 or whatever the forced cooling load is beyond its 

18 maximum air natural cooled rating. And that means the 

19 transformer winding losses have to be lower so that 

20 when it is overloaded and gone beyond the air natural 

21 cooling rating, it is not overheating too much even 

22 with the forced cooling. And that means you may have 

23 to shift the efficiency point of maximum efficiency 

24 from 35 percent to somewhere else, higher than 35 

25 percent. That’s what I think about it.
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1 MR. PATZNER: Thomas Patzner from Schneider 

2 Electric again. Since the efficiencies are set at 35 

3 percent, this is a way for manufacturers to actually 

4 have different techniques of complying with the law 

5 and meeting it, and I don’t think we should take that 

6 away from us manufacturers. It’s going to meet the 

7 market need by having it in the law as is. And I 

8 agree that we’re going to have to define it in the 

9 compliance documents. But if you read the compliance 

10 documents today, I can physically build a unit and I 

11 can sell it so that it is in compliance.

12 And, another very large manufacturer, since 

13 I am representing all the manufacturers, they do sell 

14 them in the low voltage market today, starting at 225 

15 KVA. So they’re already readily available in the 

16 marketplace.

17 MR. PARKER: Do you concur with that, Vijay?

18 MR. TENDULKAR: Yes, I do.

19 MR. COFFEY: I think the question is not so 

20 much with these have to meet standards, they would. 

21 The question is, would it be adequate to mandate that 

22 they assess -- that they are assessed to be compliant 

23 in their passively cooled state. In other words, you 

24 wouldn’t test them with fans and pumps running, you 

25 would test them at their base load rating.
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1 MR. TENDULKAR: My comment on that one is 

2 the fans or other components which are generating 

3 extra losses should not be considered because they are 

4 not part of our continuous loss, like a core loss kind 

5 of thing, so they should be excluded from the TP-1 

6 efficiency requirement, or whatever type of efficiency 

7 requirement we are talking about. They should be 

8 separate and they should be considered a part of the 

9 load losses.

10 MR. PATZNER: Thomas Patzner here from 

11 Schneider Electric. The reason the product is being 

12 looked at by, not only Schneider Electric, but the 

13 other manufacturer that is actually selling them in 

14 the marketplace today, we do not believe the fans will 

15 ever be on. So we can include them in the analysis if 

16 you like, but for low voltage transformers, the way 

17 these products are loaded, the fans will never, ever 

18 be turned on.

19 MR. COFFEY: Okay. I think that’s what we 

20 were looking to hear, thank you.

21 MR. PARKER: Vijay, did you want to come 

22 back on that?

23 MR. TENDULKAR: Yes, what Tom just said is 

24 exactly what I said but in a better words than my 

25 words. The fan losses should be excluded from the 
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1 efficiency requirement because fans will never come 

2 on, so fan losses should not be there at all in the 

3 efficiency calculation.

4 MR. PARKER: All right. Thank you. Steve.

5 MR. ROSENSTOCK: Steve Rosenstock, Edison 

6 Electric Institute. I was just wondering, we’re 

7 talking about compliance, is this almost like going 

8 over into test procedure?

9 MR. COFFEY: No, I don’t think we’re looking 

10 to examine the test procedure. I think that this is 

11 maybe a gray area in the current standard that a 

12 number of parties have asked about, and so, you know, 

13 DOE will give some guidance on it, but I wanted to 

14 float the idea which many had proposed, to specify 

15 that transformers be tested in their passively cooled 

16 mode, because that was the mode in which they would be 

17 used the overwhelming majority of the time. And so I 

18 was mentioning it to receive feedback on that proposal 

19 and so far haven’t heard anything to the contrary.

20 MR. PARKER: I guess I’m a little confused 

21 now. If that’s not test procedure, what is it?

22 MR. COFFEY: This is how the test procedure 

23 is interpreted and right now this is a point on which 

24 it isn’t particularly clear.

25 MR. PARKER: Okay. Gary.
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1 MR. FERNSTROM: Gary Fernstrom, PG&E. So, I 

2 have a question about this. The issue of parasitic or 

3 auxiliary loads often comes up in energy efficiency 

4 discussions. We always want to make sure that the 

5 energy use of equipment is properly represented. If 

6 fans aren’t ever going to be used, why would they be 

7 installed? It seems to me that if there is some 

8 auxiliary feature contributing to energy use, like 

9 fans, their use ought to be included in the analysis 

10 to the extent they think, or we think they’re going to 

11 be operating.

12 And I heard discussion here suggesting that 

13 if there were fans, they’d be operating all the time. 

14 So what is the resolve of this?

15 MR. PARKER: Did you want to address that, 

16 Steve?

17 MR. ROSENSTOCK: Well, I just want to give a 

18 little -- other appliances, just because I’m familiar 

19 with it, DOE is actually looking at, in a furnace, 

20 doing separate efficiency standards for the furnace 

21 fans. The fan is a component of the furnace, but 

22 they’re looking at a stand-alone standard, just solely 

23 on the fan in that furnace.

24 MR. PARKER: Sound like they exclude the 

25 fan’s energy consumption from the efficiency of the 
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1 furnace, then, is that right?

2 MR. ROSENSTOCK: Well, they’re incorporating 

3 it now. They used to exclude it because you’re 

4 talking about gas furnace and electric motor, so they 

5 do want to mix and match, but they’re looking at kind 

6 of combining them a little bit, but they’re actually 

7 now looking at a separate standard for the fan in the 

8 furnace as a stand-alone. And there’s also, in other 

9 products, what they call stand-by mode that DOE is 

10 required to look at the stand-by mode to see if there 

11 should be a separate standard for the, quote, “stand12 by” mode of new appliances. Again, just to give a 

13 little bit more background in terms of what’s going on 

14 with other appliances dealing with some of this.

15 MR. PARKER: Is the issue of the fan use 

16 going to make a significant difference to the -- are 

17 we talking about a real issue here with regard to the 

18 ability of units to comply?

19 MR. ROSENSTOCK: Well, it gets to the test 

20 procedure.

21 MR. PATZNER: Tom Patzner from Schneider 

22 Electric here. The fans would come on at the 50 to 60 

23 percent loading point, they’d actually come on at 

24 somewhere between 65 and 70. So at the 35 percent, 

25 the fan’s electrical usage would not be in that power 
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1 loss. The reason manufacturers are looking at it, and 

2 one manufacturer currently sells it, it allows us to 

3 build a much smaller unit and reduce our core loss. 

4 And reducing core loss is the best thing overall for 

5 the energy consumption, since the core loss is always 

6 present. So yes, the fans might get turned on. I’m 

7 going to state they’re never going to be turned on 

8 based on my analysis of loading, but if they do come 

9 on, the benefits of the lesser core loss being there 

10 24/7, it’s going to outweigh any losses that the fans 

11 might add if they were turned on.

12 MR. FERNSTROM: This is Gary from PG&E 

13 again. Let me address Steve Rosenstock’s comparison 

14 with the furnace. The fan is essential to the furnace 

15 operation, whenever the furnace is running, the fan is 

16 running. In the case of the transformer, the fan 

17 isn’t essential. It’s been suggested it comes on when 

18 the transformer load exceeds a certain level. Others 

19 have suggested that it might run continuously so, so I 

20 don’t think --

21 MR. PARKER: Was that suggested in the low 

22 voltage context or the medium voltage?

23 MR. FERNSTROM: Either.

24 MR. PARKER: Who said this?

25 PARTICIPANT: (Comment off mic)
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1 MR. TENDULKAR: Let me clarify something. 

2 This is Vijay from Onyx. According to the standard, 

3 this gentleman from utilities say, we used to have a 

4 standard with 6000 KVA transformer, with 1000 KV air 

5 natural cooling, just air cooling and no fans at all. 

6 You add fans and you get 33 percent more loading on 

7 that and you go to 133 KVA. Then another state of the 

8 fan and you get 67 percent more rating on the 

9 transformer. That’s the way the people use the thing 

10 and that’s the way the utility use the fan cooling. 

11 They call it post-failure (ph) fan cooling and second 

12 stage .. 

13 Now, I’ve seen in the past, one of the 

14 manufacturer had the fans on all the time on a dry 

15 prep transformer, which is not a normal thing. It was 

16 not covered in any of the standards. If we had the 

17 fans all the time on, then they should be considered 

18 just like a core loss because it’s a continuous loss 

19 on the transformer. It doesn’t change with the load, 

20 it is continuous. If the fans are coming on only at 

21 the very high loads, then they should not be 

22 considered as a continuous load. That’s what I would 

23 suggest.

24 MR. PARKER: Can you tell, though, from the 

25 design of the transformer whether it’s designed so 
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1 that the fans will come on frequently or not? It 

2 sounds to me like that will really depend on the 

3 installation, and so there’s no way to actually tell 

4 from ex ante how to do that, but you have to come up 

5 with an ex ante specification in order to be useful 

6 for our purposes.

7 MR. TENDULKAR: This is Vijay again. The 

8 manufacturer has to declare on his nameplate, on the 

9 rating plate, when the fans have to come on, what is 

10 the rating without the fans, and with the fans what is 

11 the rating. And that has to be -- that is required by 

12 the standards, and if that is there, then of course 

13 the transformer should be evaluated on those ratings.

14 MR. FERNSTROM: But that doesn’t address 

15 Richard’s concern about how do we determine, in order 

16 to evaluate this, what the application is going to be, 

17 and consequently, when you’re above the rating when 

18 the fan comes on.

19 MR. PARKER: This takes us to the old 

20 problem that this group perennially struggles with, 

21 which is that as a matter of law and policy, we cannot 

22 differentiate based upon the application otherwise 

23 identical units. So unless there’s a physical 

24 difference in the unit, you can’t vary the standard. 

25 So that’s the issue, and I guess I wondered, is there 
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1 -- do we have data on manufacturer practices with 

2 regard to this. Do you have any data like that?

3 MR. TENDULKAR: The information I’m telling 

4 you is what are we ... the transformers ... liquid filled, 

5 something 20 years ago, I used to do those kind of 

6 things. But nowadays what I do is mainly only the 

7 specialty transformers which do not need the fans. In 

8 our equipment they’re provided by some -- by the air 

9 in the UPS or something, but those are not the 

10 transformers we are talking about. We are talking 

11 about the low voltage distribution transformers. 

12 Generally, low voltage distribution transformers were 

13 not provided with the fans for the cooling. Now this 

14 is a new monkey wrench in all of our discussion. If 

15 we are going to use the fans for continuously on for 

16 getting the cooling rating of the transformer, that is 

17 something else.

18 MR. PARKER: Okay. Bob, okay.

19 MR. SMITH: Bob Smith, Federal Pacific. I 

20 guess I would start by answering Wes’ question. This 

21 is an entirely different subject on the low voltage 

22 than it is for medium voltage where you have a fan 

23 cooled rating that gives you roughly 33 percent more 

24 capacity. The product that we’re talking about in low 

25 voltage was developed just as Tom Patzner described. 
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1 It is to give you more power output using a smaller 

2 core, which would reduce the core losses. Without 

3 calling the name of the manufacturer, and I’m saying 

4 this because I believe we’re spending way too much 

5 time on this particular product, if you want to know 

6 what it is, it’s called a Transformeror (ph) and the 

7 manufacturer will be listed when you find it on the 

8 internet, and I think you’ll have a better idea of 

9 whether you should evaluate it with the fans on or 

10 with the fans off. Thank you.

11 MR. PARKER: Okay. 

12 MR. PATTERSON: Wes Patterson, ABB. When we 

13 talk about dry type transformers, whether it’s low 

14 voltage or medium voltage, and we talk about forced

15 ratings, the life expectancy of the fan motor is 

16 dramatically different than the life expectancy of the 

17 transformer. So the fan motor will burn out in about 

18 five to seven years, and it could take out the power 

19 transformer itself. So most knowledgeable users will 

20 not run a dry type 24/7 and try to get 20 years life 

21 with the fans running. It’s never heard of in the 

22 industry.

23 MR. TENDULKAR: I concur with that, and most 

24 of our customers do not want fans on their 

25 transformers.
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1 MR. PARKER: Okay. So you’re saying this is 

2 a fairly low sales volume issue anyway. If that’s the 

3 case, then we should, at the threshold of every 

4 conversation, establish a sales volume criteria for 

5 the length of our discussion. We’ll be better off. 

6 Go ahead and finish.

7 Next Steps

8 MR. COFFEY: That brings me to the wrap-up 

9 here, and it’s next steps. We’ve talked about a 

10 couple of forms that we’re going to send out to the 

11 group, and some of those will be asking for feedback 

12 from the group on. We’ll open dialogue on whether 

13 there are any areas in which it makes sense to talk 

14 about possibly establishing another equipment class, 

15 determine if the criteria that DOE has for doing that 

16 are met in this case, and then we’ll take it from 

17 there. So I’ll take any last questions. Thank you.

18 MR. PARKER: Since we’re moving along well, 

19 can we agree on a timeframe for manufacturers in the 

20 industry getting their data to Navigant, and for 

21 Navigant turning it around? Remembering that the 

22 report, the analysis, the full analysis has to be 

complete by November 2nd 23 , which is not very far away. 

24 So -- what’s a reasonable timeframe for the various 

25 items that we’ve discussed for getting the analysis, 
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1 because I think without a deadline, things will slip. 

2 John, did you want to -- you probably have the hardest 

3 thing because you can’t just go to your -- you have to 

4 go to your membership and get their input.

5 MR. CASKEY: Right, that’s why it’s good to 

6 have a cross-section of those members here. You know, 

7 it’s harder to get the smaller manufacturers here to 

8 the table to sort of work with these issues. So I 

9 don’t really know the answer to your question because 

10 I would --

11 MR. PARKER: For the record, we wanted more 

12 of them here.

13 MR. CASKEY: -- be doing more of a serial 

14 process where we really want to get to the point of 

15 again, this issue of price versus efficiency, and then 

16 from there, some of these issues are more going on 

17 into the manufacturing input analysis, or impact 

18 analysis. So, I’m not sure what it is additional 

19 details you need relative to the first phase of the 

20 technical analysis.

21 MR. COFFEY: I think we wanted to provide an 

22 opportunity for manufacturers to send in some of their 

23 own design data and see whether it agreed well with 

24 the OPS data. If we don’t get anything, I think our 

25 operating assumption will be that we’re close enough 
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1 to reality to move forward.

2 MR. PARKER: What specifically is the design 

3 data that you would want at this moment?

4 MR. COFFEY: Well, we’re asking for the 

5 three liquid design lines, different efficiency 

6 levels, how would manufacturer sell a transformer at 

7 that efficiency, and what would be sort of some of the 

8 design details.

9 MR. CASKEY: You said the liquid?

10 MR. COFFEY: I’m sorry, low voltage dry. 

11 The three low voltage design lines, and every 

12 efficiency level, how would a manufacturer construct a 

13 cost-effective transformer to be sold, and so what 

14 would be some of the design parameters there, type of 

15 steel, construction method, pounds of conductor, that 

16 sort of thing.

17 MR. PARKER: Can you give them a template 

18 that they could -- a little questionnaire that they 

19 could put out that would structure the input? Would 

20 that help, John? If they supplied a questionnaire 

21 that you could send to your membership?

22 MR. CASKEY: I’m sorry, but I feel like I’m 

23 a little bit out of phase here. But I was thinking of 

24 it the other way around. I don’t know if Vijay or 

25 other manufacturers here want to change that, but I 
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1 was expecting Navigant to basically give us what they 

2 had following the previous meeting where we expressed 

3 some concerns about the relationships, and we were 

4 hoping you would give us back basically the delta cost 

5 per delta efficiency. And then have the manufacturers 

6 basically validate that and raise their hands saying, 

7 yeah, I can live with it, or no, it’s not in the right 

8 ballpark.

9 MR. COFFEY: No, I think the answer is yes, 

10 we were hoping to do both things, so we would provide 

11 some design data and also allow -- I’ve actually 

12 already sent out the template, but have manufacturers 

13 use that template to provide data to DOE if they wish 

14 to do so.

15 MR. PARKER: Were those sent to low voltage 

16 people as well?

17 MR. COFFEY: It was sent to everybody.

18 MR. PARKER: So I got the sequence 

19 backwards. So John’s point is very well taken. It 

20 sounds like the template is out there, he can resend 

21 it if necessary, but hopefully that will give them 

22 something to shoot at, not only the template but your 

23 -- is the delta -- are the deltas, the increments that 

24 you calculated also out there?

25 MR. COFFEY: Those can be seen from the 
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1 curves that we posted and our Excel spreadsheets. 

2 We’d had a request to send out simplified versions of 

3 those, so it was very obvious at a glance what the 

4 deltas were for each material type. We’ll be sending 

5 those out as well.

6 MR. PARKER: It would probably help the 

7 manufacturers quite a bit. Right?

8 MR. CASKEY: Yes, so for me, if you could 

9 proactively send out what you’ve got, and then I think 

10 it’s then fair to put the burden on the manufacturers 

11 to say, get back to me within seven days or five, 

12 whatever the right answer is, with any comments or 

13 corrections that you have, or concerns with this 

14 analysis, and then that sort of puts the burden on 

15 them to respond to you.

16 MR. COFFEY: Okay. Great, that sounds like 

17 a good plan.

18 MR. CASKEY: Is that reasonable for the 

19 manufacturers that are here?

20 MR. TENDULKAR: Yeah, maybe, but I have to 

21 apologize because I’m in the office next week only two 

days, and then not back until November 13th 22 . I’m out 

23 of country and I don’t have any access to anything. 

24 So I’ll see if I can do something, but I’m sorry I 

25 can’t do much on this. 
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1 MR. COFFEY: And nobody’s under any 

2 obligation, it’s just if a manufacturer wishes to 

3 provide something, this is a vehicle for that.

4 MR. PARKER: So John, you’re the man of the

5 hour. I think that’s good, so the two things then are 

6 the template and the preliminary results that you’ve 

7 got for the price increments per unit of efficiency. 

8 And the simplified curves, three things, right. 

9 Sounds like the curves, the simplified curves will 

10 actually make the increments clear. That will just be 

11 a way of displaying them, right. So you can either do 

12 it in tabular form and graphical, or just one or the 

13 other. Probably both would be good.

14 MR. COFFEY: We’ll give both.

15 MR. PARKER: Good, and the other take-aways, 

16 then, the other action items are the exchange of 

17 information on the two subcategories -- potential 

18 subcategories, that Vijay raised, data centers and 

19 solar, and I guess, Vijay, if you are gone in two 

20 days, how are we going to do that? Do you have an 

21 alternate that --

22 MR. TENDULKAR: I don’t have an alternate at 

23 the moment, but I think I mentioned all the reasons in 

24 my e-mail which is detail kind of thing, so if you can 

25 go on that and see if somebody can answer my 
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1 something, but I don’t think so.

2 MR. PARKER: Will you be accessible by --

3 hate to put you on the spot, but are you going to be 

4 able --

5 MR. TENDULKAR: Unfortunately not, because 

6 we’ll send an e-mail or something if somebody can be 

7 available to you and maybe somebody can address the 

8 questions.

9 MR. PARKER: Okay. Great, so we’ll work 

10 with you on that. Anything else on this issue? 

11 Great, well we are -- you guys must just be brighter 

12 than the other group, we’re just making progress so 

13 much faster. Just kidding. Particularly since many 

14 of the people around the table are the same people. 

15 Thanks. Why don’t we take a five minute break, get 

16 some coffee, stretch, and we will come back and look 

17 at the LBL LCC analysis.

18 (Whereupon, at 3:22 p.m., the meeting was 

19 recessed for a 29 minute period.)

20 MR. PARKER: Hi everyone. I don’t want to 

21 interrupt what are probably a lot of good side 

22 meetings, but we’ve had a very long break, and I think 

23 we do need to get started, so if we could come back to 

24 our tables. Brian. Vijay, can we get started? 

25 Great. 
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1 Thanks. We had a good discussion on the 

2 engineering analysis. We have some follow-up to do on 

3 that. What I want to turn now to is the life cycle 

4 cost analysis, and Chris Bolduc from LBL, who will 

5 walk us through that as it applies to low voltage. 

6 Thanks.

7 LBL Presentation

8 MR. BOLDUC: Thanks, Richard. Good 

9 afternoon. My name’s Chris Bolduc, I’m from Lawrence 

10 Berkeley National Lab, and I’ll be going over some of 

11 the inputs to the LCC analysis that were of issue in 

12 the medium voltage and we just think it would be good 

13 procedure to get buy-in from the LV team as well, just 

14 in terms of modeling. So we’re going to start with --

15 many of you have probably seen a lot of these slides, 

16 but the variables that we will be going over are:

17 • Transformer loading

18 • Transformer lifetime

19 • Peak load factor

20 • Possible changes to the LCC subgroups

21 • Equipment price trends

22 • Electricity prices, and then

23 • Limited design selection due to fixed efficiency

24 Transformer Loading

25 So, transformer loading, the RMS loading of 
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1 our liquid immersed -- low voltage dry type 

2 transformers, excuse me, we try to keep the mean 

3 around 21, 22 percent, the target is around 25. I 

4 believe last week there was a comment that we should 

5 lower it a little bit. I just want to put this out 

6 there for comment, if anybody has any questions about 

7 this or comments.

8 MR. PATZNER: Tom Patzner, Schneider 

9 Electric. Can you send me the actual data points, 

10 because I actually have an argument on why we should 

11 lower it, but if I could get the datapoints, I could 

12 add my -- my rationale on why it needs to be lowered.

13 MR. BOLDUC: Yes, we can, Tom. Just for the 

14 record, this is output from our model. If you’d like 

15 a more detailed explanation, Katie can go into how 

16 it’s derived, but this is model output. We use it as 

17 a diagnostic. It’s just a good indicator of how the 

18 transformer is loaded for illustrative purposes. But 

19 definitely, I can send you data. If you have data 

20 that you can send us to improve our model, we would 

21 appreciate it.

22 MR. PATZNER: So, yes I have data that says 

23 that you are -- that the loading is probably more 

24 likely to be 50 to 60 percent of these values instead 

25 of these values.
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1 MR. BOLDUC: If you can provide it, that 

2 would be fantastic. Thank you.

3 MR. FERNSTROM: Gary Fernstrom, PG&E. I 

4 have a question. In this distribution it looks like 

5 it tops out around, what, 40 percent or so. That’s my 

6 feeling too about how these transformers work, they’re 

7 pretty lightly loaded. However, we were talking 

8 earlier this afternoon about data centers, and I don’t 

9 see anything in here that would indicate there’s a 

10 segment of the market where maybe these transformers 

11 are systematically highly loaded?

12 MR. BOLDUC: I’ll speak to data centers in a 

13 couple slides.

14 MR. FERNSTROM: Okay. Thank you.

15 MR. TENDULKAR: Just a comment here. If the 

16 transformer is maximum loaded about 40 percent, that’s 

17 what you are saying, that your transformers? A lot of 

18 people are buying the big transformers.

19 MR. BOLDUC: I believe low voltage dry type 

20 transformers are often oversized due to fire codes. 

21 And that would be the story -- let me complete this --

22 that would be not the maximum load on the transformer, 

23 that would be the maximum -- our max load on the 

24 transformer, the peak load factor is something 

25 significantly higher than 43 percent.
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1 MR. TENDULKAR: Would you know what the 

2 maximum load would be, approximately?

3 MR. BOLDUC: There’ll be a slide in a couple 

4 slides will go over the peak load factor, and I’ll 

5 show you the distribution that we use.

6 MR. TENDULKAR: Okay. Thanks.

7 MR. PATZNER: Tom Patzner here from 

8 Schneider Electric. I sent to the committee the 

9 actual ..EC code that causes these products to be so 

10 lightly loaded.

11 MR. BOLDUC: Great. Thanks, Tom.

12 MR. PARKER: Can you give us a sense, Chris, 

13 as to how sensitive or not the LCC analysis is to 

14 variations in assumptions about the mean of RMS 

15 loading, within a reasonable range? Is this a high 

16 impact variable or a low impact variable?

17 MR. BOLDUC: It’s significant. Dropping it 

18 five percent will -- you will see difference in the 

19 LCC savings, in the LCC overall.

20 MR. PARKER: Thank you.

21 Transformer Lifetime

22 MR. BOLDUC: The next slide is service 

23 lifetime. There was a bit of a discussion on the e24 mailing list about using a 21 year lifetime for 

25 transformers, based on IEEE document that was written 
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1 for insulation lifetimes. We believe that’s 

2 inappropriate. We’ve heard from numerous 

3 manufacturers and utility experts that an average 

4 lifetime of 32 years is fairly normal in the medium 

5 voltage transformer world, if not longer. Again, this 

6 is just out there for the low voltage people to 

7 comment on, if they have any data otherwise, we’d be 

8 interested to read it.

9 MR. PATZNER: Tom Patzner here for Schneider 

10 Electric. From my perspective, and I’ve been in this 

11 industry since 1990, you could actually use the life 

12 of the building data you have instead of 32 years.

13 (laughter) So that would change it from 32 to 70, so 

14 what I’m saying is is when they build the building, 

15 they put the low voltage transformer in the closet. 

16 It is not removed until they tear the building down.

17 MR. BOLDUC: Okay. 

18 MR. PARKER: How many buildings in America 

19 last 70 years? But anyway --

20 MR. TENDULKAR: That may be true for certain 

21 transformers, this is Vijay from Onyx again, but may 

22 not be true for something mounted in the containers or 

23 something like that.

24 MR. BOLDUC: Okay. Thank you. On the next 

25 -- sorry.
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1 MR. DeLASKI: Could I just suggest that you 

2 should change the life?

3 MR. BOLDUC: You know, with all due respect 

4 to Tom, I like your analogy, but it’s anecdotal. 

5 Right now we have an ORNL document for that sources 

6 and cite -- we can cite the lifetime from.

7 MR. DeLASKI: What’s the source in the ORNL 

8 ... or something?

9 MR. BOLDUC: They didn’t -- well, 6870-47 

10 where they went out and did a survey of transformer 

11 lifetimes.

12 MR. DeLASKI: I see. Not that it matters 

13 that much, right? I mean we’re talking about so far 

14 out --

15 MR. BOLDUC: And it gets a little gray when 

16 you start projecting that far out. Steve.

17 MR. ROSENSTOCK: Steve Rosenstock, EEI. But 

18 that’s one set of anecdotes. Another set of anecdotes 

19 is sometimes in a commercial building with retail 

20 tenants on the first floor, there might be more often 

21 change-out if you go from, say, a retail store to a 

22 restaurant, they might have to take out the old one 

23 and put in a new one. So there might be a little bit 

24 of fluctuation on the other side as well, just because 

25 of economic turnover of that space. Again, just 
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1 anecdotal, but I know it’s happened.

2 MR. BOLDUC: Thank you. The next slide is 

3 just the distribution of lifetime.

4 MR. PARKER: So I get the sense there’s not 

5 any need for further work on lifetimes. We’re 

6 comfortable with the numbers? Thank you.

7 Peak load factor

8 MR. BOLDUC: So the next slide here is the 

9 peak load factor that we use for low voltage dry. 

10 This is actually a model input. The -- it’s a 

11 square distribution between 70 and 90 percent of the 

12 nameplate capacity of the transformer. The model 

13 does not -- there’s a randomness attached to the 

14 distribution when we run it through the Monte Carlo, 

15 but it’s essentially the shape we get. Does anybody 

16 have any questions or comments?

17 MR. PARKER: Any disagreement with this as a 

18 parameter to use in the LCC? Okay. Moving on. 

19 Possible changes to the LCC subgroups

20 MR. BOLDUC: Something that has come up from 

21 this meeting is the possibility of introducing data 

22 centers as an LCC subgroup. And this would I think, 

23 help a lot in modeling the concerns of some of the 

24 members here. What we’d need to do this effectively 

25 is we’d need a list of material limitations. So I 
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1 understood that, you know, amorphous isn’t really 

2 the best material for building these transformers. 

3 Manufacturing technique limitations. With these, we 

4 can filter designs of these types out of the LCC --

5 out of the engineering data using the LCC. We’d 

6 also need an average load factor, average lifetime -

7 - I believe these are also look very different. We 

8 would also need real data to back up things like 

9 lifetime and load factor, and those might be 

10 difficult to get, but they would help a lot.

11 MR. TENDULKAR: One other factor which is 

12 not there is the performance requirement of the data 

13 center, the requirements put by the customers on the 

14 application of the transformer. Materials, 

15 manufacturing techniques, load factor and lifetime -

16 - these are other factors, but what if -- for 

17 example, when they say 100 KV class one, there is a 

18 performance requirement as being 100 KV transformer, 

19 and that is the thing where to look. Here we’re 

20 talking about an inrush (ph) current of 300 to 400 

21 percent, that is a performance requirement, and to 

22 meet that performance requirement, what we have to 

23 do in that design. And then we have to look at the 

24 materials and the manufacturing practices and 

25 everything. But we have to meet the performance 
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1 first, and the reliability requirement -- those are 

2 the first. Just like anything else, like safety is 

3 the first thing, then other things come up. The 

4 performance requirement has to be there before we 

5 start anything else.

6 MR. BOLDUC: Thank you, Vijay. I’ll come 

7 back to you. Steve.

8 MR. ROSENSTOCK: Steve Rosenstock, Edison 

9 Electric Institute. Again, anecdotal history. 

10 We’ve seen that, you know, EEI used to work with our 

11 member companies in terms of ten, 12 years ago 

12 during the data center, first data center boom, when 

13 we had end use customers asking for 4-500 watts of 

14 transformer capacity, from the utility side, on the 

15 utility side of the transformer, and they wanted it 

16 yesterday. And then when there was metering done, 

17 the actual loading from those data centers was about 

18 20 or 25 watts per square foot, and the ones that 

19 collapsed went down to about two watts per square 

20 foot. So there might have been some very, very 

21 underused transformers. 

22 However, on the ones that were probably 

23 right-sized, we have seen a lot of data centers, 

24 they start at 25 and they’re gradually moving up. 

25 So year one it might be 25, but as they get more and 
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1 more occupied with more servers, the load does 

2 gradually increase. It’s not exactly -- not as flat 

3 as maybe in other commercial buildings where the 

4 loads don’t really vary from year to year. So, 

5 again, just a couple anecdote. Uptime Institute 

6 does have information. I know LBL has a data center 

7 area. I think Bill Shude (ph) has done a ton of 

8 research in terms of actual loading at data centers, 

9 and I think they’ve done use metering. I don’t know 

10 they’ve done any research on the transformers 

11 serving those data centers, but, you know, again, 

12 anecdotes, but just hopefully some reference points 

13 that might help you out with some of this research.

14 MR. BOLDUC: Thanks, Steve. VJ can we speak 

15 after the meeting about some of the performance 

16 metrics, unless anybody else would like to air them 

17 out here? Great, thank you.

18 MR. PARKER: And it sounds like from Steve 

19 that LBL might actually have some of the data 

20 internally, you might be able to get.

21 MR. BOLDUC: I don’t happen to know Bill 

22 Shude (ph) personally, so -- we can check. We might 

23 be able to share some data with him.

24 MR. PARKER: Great. Thank you.

25
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1 Equipment price trends

2 MR. BOLDUC: Okay. Moving on, equipment 

3 price trends. This was shown yesterday. This is as 

4 sensitivity to the NIA, where we look at the user 

5 price index for transformer equipment from 1967 to 

6 2010, and we try to derive a future price trend from 

7 this data. This data is first normalized to 2010 

8 and then we apply a changing EDP deflator to it to 

9 normalize the data. From this we have three price 

10 cases: a flat price over time is the default case, 

11 so we assume no rise in future transformer cost from 

12 today. A low price case which is modeled on the 

13 entire trend from 1967 to 2010, and then a high 

14 price trend which we capture from ’91 to 2010, so 

15 the past 20 years of data.

16 The next slide shows the price data. The 

17 red is the high price case, the dotted green is the 

18 low price case. As you can see, the red line is 

19 quite significant. We will be sharing our draft 

20 appendix of the methodology and results later next 

21 week. John.

22 MR. CASKEY: Hi, John Caskey from NEMA. Can 

23 you go back to the previous slide just for a second?

24 MR. BOLDUC: Sure.

25 MR. CASKEY: So in this case you’re saying 
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1 the high price case is modeled on the historic price 

2 increase -- index -- from ’91 to 2010. But when you 

3 go to the current -- so if I was going to literally 

4 interpret what you just told me, I would expect that 

5 red line to go almost straight up from, you know, 

6 where we’re looking at -- you’re saying --

7 MR. BOLDUC: ’91, 20 years.

8 MR. CASKEY: ’91. Not from 2000 up to 2010?

9 MR. BOLDUC: The big jump is -- and I’ve got 

10 seven years, that’s not really enough data to 

11 predict a trend off of. We’re trying to project 60 

12 years into the future, so we figure 20 years.

13 MR. CASKEY: Okay. Thanks.

14 MR. BOLDUC: Due to volatility in the 

15 market.

16 MR. CASKEY: Okay. 

17 MR. BOLDUC: Electricity prices, we use a 

18 monthly load model, based on tariff data and for the 

19 level to strike --

20 MR. PARKER: Excuse me, not to slow things 

21 down, but is there any disagreement with these? Is 

22 this an area where we need further work or are 

23 people -- going back to the equipment price trends, 

24 are people comfortable living with these parameters? 

25 Yes.
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1 MR. SAMPAT: Mahesh Sampat, EMS Consulting. 

2 Just clarification, is the same chart that you 

3 showed for medium voltage --

4 MR. BOLDUC: That’s right.

5 MR. SAMPAT: -- so is it --

6 MR. BOLDUC: There’s limited PPI data 

7 available for distribution transformers that doesn’t 

8 disaggregate the low voltage from medium voltage. 

9 There’s only one data set available.

10 MR. SAMPAT: Okay. This is a combination or 

11 an aggregation of --

12 MR. BOLDUC: It’s -- Producer Price Index is 

13 set up by manufacturer interviews by the Bureau of 

14 Labor and Statistics. So, and yes, it’s both medium 

15 voltage and low voltage.

16 Electricity prices

17 Electricity price trends, so in the model we 

18 scale electricity price over time, using AEO’s 

19 electricity price trend. We use the base case. In 

20 the model there are high and low growth scenarios so 

21 you can modify the price over time.

22 MR. DeLASKI: Excuse me, Chris. Go back to 

23 the price slide for a moment, if you don’t mind.

24 MR. BOLDUC: Sure.

25 MR. DeLASKI: So we’ve got some 
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1 manufacturers on the committee and I wonder -- we 

2 didn’t get much reaction to this in terms of your 

3 experience. I mean does the -- I guess Chris 

4 described the PPI data that aggregates a number of 

5 types of products, so I’m wondering how does this 

6 data, historic data, comport with the manufacturers’ 

7 experience over that last ten year time frame? Tom,

8 you’re on the phone, the guys who are here in 

9 person, any reaction to that?

10 MR. PATZNER: I didn’t quite hear that.

11 MR. BOLDUC: I’m sorry Tom, you didn’t come 

12 through.

13 MR. PATZNER: I didn’t quite hear what the 

14 question was, I’m sorry.

15 MR. DeLASKI: The data that’s on the screen, 

16 the historic data purports to represent price of 

17 distribution transformers over this period including 

18 as Chris described, it’s a lot more product than 

19 simply low voltage dry type transformers, and we’re 

20 applying that data from the PPI and the Bureau of 

21 Labor Statistics to your particular set of products. 

22 And I’m wondering how does that comport with your 

23 experience.

24 MR. PATZNER: So one of the reasons this 

25 product was actually mandated in the 2005 Energy Act 
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1 is because of the exact thing that occurred from 

2 1990 to 2005, See how the price continuously went 

3 down? As that went down, we increased the losses, 

4 increased the losses, increased the losses, 

5 increased the losses. That sharp curve up is due to 

6 the fact that we now have to build a product to meet 

7 the efficiencies. So this is exactly what we think 

8 -- the historical data is exactly what we saw in the 

9 marketplace backwards, and that real sharp up in 

10 2005 is because of the Energy Act, so we would 

11 assume a similar type of curve up if there’s a next 

12 level for low voltage products.

13 MR. BOLDUC: Okay. In the process of this 

14 analysis, we actually looked at the -- the index of 

15 transformer prices against commodity prices for 

16 steel, aluminum, copper -- and we noticed that the 

17 price for transformers loosely tracked the 

18 volatility in these commodity prices. In the 

19 appendix that I’ll release next week, we show an 

20 overlay of these. So we’re of the opinion that the 

21 steep rise in prices is due to a number of factors, 

22 but mostly driven by commodity prices, global 

23 commodity prices.

24 MR. DeLASKI: Thanks Chris, and thanks, 

25 Thomas -- and Thomas, it’s helpful to have you 
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1 corroborate that that sort of comports with your 

2 experience. We looked at the same graph, exactly 

3 the same graph in the liquid immersed conversation 

4 and of course there were no standards for liquid 

5 immersed in 2005, they didn’t kick in until 2010, so 

6 I take Chris’ point well. I wanted the other 

7 manufacturers, does that feel about right to you 

8 guys as well? Bob’s nodding his head I see.

9 MR. ROBLES: Eduardo Robles, Eaton 

10 Corporation. Yeah, we also saw the same trend as 

11 Tom described when legislation took effect. We also 

12 saw that increase in price, and it’s going to come a 

13 point in time, and I don’t know if you agree, Tom, 

14 or not, but we are starting to see also a price 

15 decline right now, as manufacturers find techniques 

16 to lower costs, the market is actually demanding a 

17 lower price of product.

18 MR. BOLDUC: Electricity prices, again. 

19 Anybody have any comments?

20 MR. FERNSTROM: Gary Fernstrom, PG&E. I 

21 keep being surprised in these proceedings, it’s not 

22 just this one, where the price increase for 

23 electricity is modest, and my experience as a 

24 consumer has been that it’s gone up a lot. So, is 

25 this --
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1 MR. BOLDUC: Point taken. Good.

2 MR. FERNSTROM: Well, is it adjusted for --

3 MR. BOLDUC: It’s an index. It’s an 

4 inflation adjusted index.

5 MR. FERNSTROM: Oh, okay. Okay. 

6 MR. BOLDUC: The EIA price forecast for 

7 natural gas, it essentially assumes that the market 

8 will build to natural gas, natural gas prices are 

9 falling and we get that.

10 MR. FERNSTROM: Well, maybe my perspective 

11 is biased coming from California where there is --

12 (laughter) -- there’s a big emphasis on renewable 

13 procurement, so, you know, there are other things 

14 than the cost of fuel that are driving the price, 

15 like what type of fuel you may or may not be using.

16 MR. PARKER: FER Commissioner LaFleur just 

17 gave a speech at my law school in which he said that 

18 fracking -- fragged natural gas is a game changing 

19 development -- basically her words -- which will so 

20 vastly increase the supply of natural gas if 

21 original promise is accurate, that it will keep 

22 energy prices down.

23 MR. FERNSTROM: Well, it’s -- I mean, 

24 watching television, I’d be led to believe that that 

25 also vastly increases the business opportunity for 
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1 attorneys.

2 MR. DeLASKI: So this is an interesting 

3 conversation, I guess my -- DOE is, I think, 

4 compelled to use EIA reference case.

5 MR. BOLDUC: Right.

6 MR. DeLASKI: So I’m not sure we want a lot 

7 of time talking about ... prices.

8 MR. PARKER: Right. Steve.

9 MR. ROSENSTOCK: I’m finally using this 

10 forecast they show around. Again, it’s a matter of 

11 -- we’ve seen electricity prices cycle over time. 

12 There have been times when it’s gone up nationally, 

13 and then for example, in the late ‘70s, early ‘80s, 

14 it went up pretty fast, and then in the ‘90s 

15 electricity prices went down nominally, on an after16 inflation basis it went down even further, so again, 

17 they cycle up and down it seems, especially with the 

18 supply of gas, because is a lot of times a marginal 

19 fuel. That seems reasonable to me.

20 MR. PARKER: Okay. 

21 MR. BOLDUC: Thank you. 

22 Limited design selection due to fixed efficiency

23 So it has been asserted in some of the 

24 online discussion that a fixed efficiency ratings 

25 will impact the selection of transformer 
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1 availability with the diversity of A and B values. 

2 The next slides, we have the As and Bs. In the next 

3 slide the As and Bs are calculated from the customer 

4 marginal price for energy. The following slides 

5 show that it is still a range of A -- range of 

6 transformers of load, no load, and low load --

7 sorry, NL and LL selected. 

8 So we can see this is design line seven that 

9 we have load losses on the vertical axis, no load 

10 losses on the horizontal. The green dots represent 

11 the base case. Many of them are covered up by the 

12 red dots which represent the standards case units. 

13 This is in design line seven, efficiency level one. 

14 And we can scroll through them and we can watch the 

15 red dots kind of crawl across this field of 

16 available designs, which are the blue dots. 

17 So this is efficiency level three, then at 

18 maximum technology, Maxtech, the red dots are way 

19 down in the bottom left corner.

20 If there’s no comment on this, this is just 

21 for illustrative purposes.

22 From this point, thank you very much. 

23 People have any questions, happy to try and answer 

24 them. Thank you.

25 MR. PARKER: John? Bob?
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1 MR. SMITH: Chris, Bob Smith. I think we 

2 need to remember that the A and B values are really 

3 not relevant to the low voltage transformer market. 

4 Those transformers are basically evaluated on a 

5 first initial cost basis, and very seldom on a long 

6 term performance basis.

7 MR. BOLDUC: Thanks, Bob. What I really 

8 wanted to show was that the diversity of designs 

9 could be built to meet the standard.

10 MR. PARKER: Not necessarily in all standard 

11 levels, but at a number of them.

12 MR. BOLDUC: For most standard levels, until 

13 we get to Maxtech where it’s extremely stringent. 

14 Thank you very much.

15 MR. PARKER: Any other comments? Thank you. 

16 Okay. We are making rapid progress and I don’t know 

17 that we necessarily need to -- we can decide -- we 

18 have 40 minutes before we have a hard stop and have 

19 to vacate the premises. So we could adjourn now and 

20 reconvene tomorrow, or we could press onward and see 

21 if we can -- if there is a question on, you know, 

22 the competitiveness TSL. My sense is that we really 

23 need to work on the data before we can assess that, 

24 though. And it might make sense to review the TSLs 

25 that were agreed in the last meeting, as we did in 
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1 the medium voltage group. Katie, would you be able 

2 to do that, to just walk people through? Would that 

3 be helpful to the people who didn’t -- Eduardo and 

4 Vijay -- to look at the TSLs that are already being 

5 examined, or do you have those in mind from before? 

6 Because we did this in the medium voltage group and 

7 I’m not sure if it would be helpful. Would that be 

8 useful to spend five or ten minutes on that? And 

9 just so you’re on the same page.

10 And then a discussion, as a matter of 

11 process, about whether it’s relevant to talk about a 

12 competitive or technology or economic competition 

13 TSL, and if so, how we would define it. 

14 So here’s what we have so far.

15 LCC and the Price Efficiency Curve

16 MS. COUGHLIN: Actually, before I get into 

17 this discussion, I did want to bring up another 

18 issue because it’s something that I’ve discussed 

19 individually with the various people and I think 

20 it’s an important aspect of the calculation for --

21 of the LCC analysis for the low voltage dry type. 

22 And this is the issue where we see in the 

23 engineering analysis that the bottom boundary of 

24 this price efficiency curve is fairly flat. And so 

25 the way the LCC is currently constructed, it’s two 
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1 percent of the population is evaluating. So 

2 everybody is relying on those first costs. But the 

3 algorithm just picks out the lowest first cost 

4 randomly across that bottom boundary. So the LCC 

5 baseline is showing a significant number of 

6 purchases that are higher efficiency than the DOE 

7 minimum. 

8 So the question of whether that reflects 

9 actual purchase practices is something that we are 

10 not -- we don’t really have a good indication yet 

11 from what we’ve heard. So there are some people 

12 that think that even though in this technical 

13 analysis you have a range of efficiencies that are 

14 all equivalent in first cost basis, there may be 

15 other reasons why, in the real markets, people only 

16 purchase at the DOE minimum. 

17 So this will have an effect, because if 

18 we’re over-estimating the efficiency in the 

19 baseline, we will underestimate the energy savings 

20 DOE standard. So I just wanted to reiterate that 

21 that’s something that essentially any kind of 

22 marketshare data or anything with the experience of 

23 what types of products are being sold would be very 

24 useful to us in knowing whether we should be adding 

25 an additional screening criteria to the baseline.
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1 And so I just wanted to mention that since 

2 we have extra time and it is a pretty significant 

3 issue compared to some of the other stuff that we 

4 have discussed. I guess, as part of the data 

5 collection that Navigant is doing to validate those 

6 price efficiency curves, I assume that they can also 

7 take care of collecting any data on marketshare or 

8 whatever other purchase criteria people might be 

9 using besides first cost.

10 MR. PARKER: John.

11 MR. CASKEY: I’m not sure I want to get into 

12 this, but this may be a time to do it. So within 

13 NEMA, again, we have got a variety of manufacturers 

14 in all different classes of transformers, and in the 

15 low voltage dry type area we do have a premium 

16 program which is built -- and I don’t know if Thomas 

17 is still on the phone, but is built around 30 

18 percent less loss than the TP-1 standard of whenever 

19 that was created. There are 11 companies of which 

20 they’re primarily, I would say lean towards smaller 

21 manufacturers, that are participants in -- no that’s 

22 not true, because there are both small and big 

23 manufacturers now that I think about it. There are 

24 11 companies that have signed up for that program, 

25 that premium program license agreement.
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1 I think it is valuable for them from a 

2 marketing perspective to say that they offer that 

3 product in the marketplace, and it’s certainly good 

4 for energy efficiency and things like that. But 

5 just the nature of the program is such that I don’t 

6 have -- for me being an objective sort of bystander, 

7 if you will, in the industry, I can’t ask 

8 manufacturers, you know, how many products do you 

9 sell or what your total sales are or things like 

10 that, it’s inappropriate for me, as a NEMA person, 

11 to get in the middle of that. But it would be 

12 interesting to know if any of those people have 

13 information to share in an open forum as to what the 

14 market share of those premium transformers might be.

15 So that would be helpful in trying to set 

16 that baseline, to see if people are paying, I 

17 assume, extra money to get a higher efficiency 

18 premium transformer.

19 MR. TENDULKAR: This is Vijay Tendulkar. We 

20 signed on that program and since then we have sold 

21 zero percent. Not a single one of our customers 

22 wanted it, and as I talked to some of the industry 

23 people, ten percent or less.

24 MR. PATZNER: Thomas Patzner from Schneider 

25 Electric. The market exists, there is demand for 
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1 it. The market is pretty much in a subset of two 

2 specific end type users, the lead building users and 

3 kindergarten through twelfth grade, so K through 12. 

4 So those are the two subsets, based on Vijay’s 

5 comment, which I don’t believe he chooses to play in 

6 either of those two markets, that’s why he probably 

7 wouldn’t have any sales. So it’s really just two 

8 submarkets inside the overall market that is 

9 currently buying the NEMA premium product. Oh, 

10 there is a third market, the government is also 

11 buying the product as well. So, the government, K 

12 through 12, and lead buildings.

13 MR. DeLASKI: Thomas, this is Andrew 

14 DeLaski. Just a follow-on question. So what’s your 

15 sense of the portion, given that it’s just these 

16 three segments that are purchasing transformers at 

17 the NEMA premium levels, what’s your assessment of -

18 - what’s your sense of what the market share -- so 

19 it strikes me that it’s likely that the vast 

20 majority of sales are right at the current standard. 

21 Is that a fair characterization?

22 MR. PATZNER: If we just take a snapshot of 

23 the market and we assume it’s $500 million, which is 

24 probably really close to what it is, the premium --

25 NEMA premium program type devices would be 
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1 approximately $40 million dollars of the $500 

2 million. Now, they are sold at a premium, so unit3 wise it’s a lower mix than dollar-wise.

4 MR. DeLASKI: And is there a spread of 

5 efficiency being sold between NEMA -- between the 

6 minimum standard and NEMA premium, or is this sort 

7 of a bimodal distribution?

8 MR. PATZNER: No, us manufacturers, because 

9 we tend to be conservative, almost all of us are 

10 building a little bit higher than the law, so 

11 everybody’s getting a little -- so we look at design 

12 line seven, everybody’s getting better than 98. 

13 Because we, as manufacturers do not want to fall 

14 into having any one product ever not comply. So 

15 most give a little bit more. There are certain 

16 items that people specify that ends up having 

17 efficiencies be a little bit better and worse, I 

18 could try to do a mix matrix in a pie chart for this 

19 working group on it and put it together. I can 

20 actually try to do that before tomorrow.

21 And in regards to the NEMA premium, that’s 

22 actually the lowest level of better than TP-1 that 

23 is being specified. There’s also a consortium of 

24 energy efficiency tier II that’s also in the 

25 marketplace. The tier II efficiencies that are in 
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1 the marketplace are pretty much those levels. The 

2 NEMA premium, most manufacturers are actually 

3 exceeding it, but that is the set table and that’s 

4 the program they’re complying to, and each 

5 manufacturer’s marketing team chooses how to 

6 leverage their differences from the table with what 

7 they’re actually supplying.

8 MR. PARKER: Bob.

9 MR. SMITH: Bob Smith, Federal Pacific. 

10 Tom, I would be very interested in seeing your data 

11 tomorrow and I hope you can get it before we leave. 

12 I have to say that I have never seen a low voltage 

13 transformer evaluated for losses. I do see 

14 customers buying higher efficiency transformers for 

15 exactly the reason you cited, and that’s to be part 

16 of a lead program and to get certification in a 

17 building, but I’ve never seen them buy because of 

18 lower losses.

19 The reason customers do buy low voltage dry 

20 transformers with special features include:

21 • number one, they want low sound, lower than the 

22 ANSI levels, or IEEE levels; 

23 • they want copper windings;

24 • they want a lower temperature rise than the 

25 standard 150 degree rise;
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1 • or they want a K factor.

2 Those are the reasons that people are buying 

3 the low voltage dry transformers that would be 

4 different from our standard catalog product 

5 offering.

6 MR. PATZNER: Bob, I agree, but if we look 

7 at the schematics of low temperature rise, they’re 

8 actually specifying lower BTUs at 80 percent 

9 loading, so they’re actually doing an A and B losses 

10 when they ask for low temperature rise. So we’ve 

11 been selling them in the marketplace since 1972 as 

12 low temperature rise, so we forgot the reason 

13 they’re asking for the low temperature rise is 

14 actually to lower their I-square-R losses.

15 MR. SMITH: For cooling reasons or 

16 something.

17 MR. TENDULKAR: But it is the air 

18 conditioning load, that’s what it is.

19 MR. DeLASKI: So I want to come back to 

20 Katie’s question and it sounds like, I think I saw 

21 Katie nodding when Thomas was suggesting that he could 

22 share some data tomorrow. So Thomas, I think they’re 

23 taking you up on that offer.

24 So I guess my question to you, Bob, is so 

25 then does that -- do those dynamics, or do those 
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1 pressures in the market to meet those needs for low 

2 sound and temperature rise, does that result in any 

3 distribution of efficiency above the minimum allowed?

4 MR. SMITH: Usually it will. Low sound 

5 basically means that we are lowering the induction 

6 level in the core, or we are going to a step-lap 

7 mitered core, which gives us a -- intrinsically lower 

8 sound transformer. The lower temperature rise does 

9 not necessarily mean it’s lower I-square-R losses. 

10 Lower temperature rise can come from a better cooling 

11 method, more duct spacing, et cetera. So that’s not 

12 necessarily lower losses or lower I-square-R losses. 

13 But in general, when the customer takes the time to 

14 specify some of these things, like copper windings, 

15 lower temperature, they are indeed going to get a more 

16 efficient transformer.

17 MR. DeLASKI: And -- this is Andrew again --

18 would you hazard an estimate as to the portion of 

19 sales that are above the minimum standard today for 

20 the low voltage dry type market?

21 MR. SMITH: It would only be a guess, but I 

22 would say for us it’s probably somewhere in the 

23 neighborhood of ten percent of the total low voltage 

24 units that we sell would be above the present 27 TP-1 

25 standards.
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1 MR. DeLASKI: By units or by MVA or --

2 MR. SMITH: Truly, I don’t have a clue, but 

3 I would say we could use it by units to make the 

4 answer simple.

5 MR. DeLASKI: Yeah. Thank you.

6 MR. ROBLES: This is Eduardo Robles from 

7 Eaton Corporation. We also are participants of the 

8 NEMA premium program, and we are looking presently at 

9 a low single digit volumes compared to the full range 

10 of product that we sell.

11 MR. PARKER: So I guess, as a layman, what I 

12 take away from this is that there’s this sense that 

13 there’s very little actual economic valuation going 

14 on, although there is in the marketplace, it’s mostly 

15 low first cost except among a well-defined, reasonably 

16 well-defined segment of users who are either trying to 

17 achieve something else, like lowering their 

18 refrigerant losses or else participating in some kind 

19 of a program, like Leads, or they’re a government 

20 agency making -- establishing certain standards, 

21 making a statement. 

22 I guess one -- I would just raise a 

23 question, and pose it as a question to see if it’s --

24 if it’s helpful. Does this lack of evaluation 

25 indicate a preoccupation with first cost, or is the 
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1 transformer choice and the economics of the 

2 transformer choice just not salient to them compared 

3 to all the other things that go into the cost of 

4 building a building? I guess what I’m getting at is, 

5 is there a relevant variable the sort of elasticity of 

6 demand in this area with regard to price? Is there a 

7 concern that if you went to a higher efficiency unit 

8 that there would be fewer transformers bought? I 

9 mean, if you stipulated, in other words, they’re going 

10 to meet -- they’re going to buy the cheapest -- absent 

11 some program, absent some special design feature, 

12 they’re going to buy the thing that is the lowest 

13 first cost that meets federal standards, right? 

14 So it seems to me a relevant question then 

15 is well, if you raise the standard, what will that do 

16 to profit margins -- what will that do to sales of --

17 volume of sales and so forth? Would there be an 

18 impact on that way. Is that a useful -- is that the 

19 kind of thing that you can -- first, is it a relevant 

20 question to ask, and secondly, is it a -- is it kind 

21 of something where we have data? Bob?

22 MR. SMITH: Bob Smith, Federal Pacific. 

23 Like to address your comment about customers buying on 

24 first cost at the beginning of my answer. When we 

25 converted, or when we were mandated in January 2007 to 
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1 produce only the TP-1 transformers, the manufacturers 

2 who had inventory of the older designed transformers 

3 were able to raise their price levels almost to the 

4 level of the TP-1 transformers and customers would buy 

5 the non-compliant transformers, even at slightly lower 

6 price levels because that’s how important the price 

7 was to them. We did not have to keep the full 

8 differential of the lower price of the pre-TP-1 

9 transformers. So price is a definite driving force 

10 for the selection of the transformers.

11 The next thing I would say, the features 

12 that we offer with the dry type, like lower sound, 

13 means lower inrush (ph) current, and does usually mean 

14 higher efficiencies and low sound were -- the two most 

15 critical things that cause problems in the field with 

16 the low voltage dry type transformers is that people 

17 touched the case and say they’re too hot, or they’re 

18 too noisy. So the low sound is definitely a very 

19 important attribute of the low voltage dry 

20 transformers, much more than the efficiency will ever 

21 be.

22 MR. PARKER: Okay. I guess the idea was 

23 that people -- what I understood people to be saying 

24 was they will buy the lowest price that they can get. 

25 It’s very price sensitive. If there’s a substitute 
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1 that also meets the federal standard that’s legal to 

2 buy. If the standard is --

3 MR. PATZNER: Richard, Tom Patzner here.

4 MR. PARKER: Yes.

5 MR. PATZNER: Tom Patzner, Schneider 

6 Electric. I’ll put the pie chart together, but I’ll 

7 just summarize the numbers real fast. 70 percent of 

8 the market buy aluminum 150 degree C rise. They’re 

9 buying 100 percent on price. It’s always going to be 

10 price, and the only concern they have is that the 

11 product lasts 12 to 18 months. That’s 70 percent of 

12 the market.

13 The other 30 percent --

14 MR. SMITH: Tom, Bob Smith of Federal 

15 Pacific. Ours will last 24 months.

16 MR. PATZNER: I didn’t say how long one 

17 would last, I said how long the customer wanted it to 

18 last. In regards to the 30 percent, which is where 

19 we’re finding people that are buying the NEMA premium 

20 product, there’s where the sound falls, that’s where 

21 the low temperature falls, that’s where the K rating 

22 falls, that’s where the copper windings fall, and 

23 those units price is not as sensitive because they’re 

24 actually specifying other value in the product.

25 In regards to why people do not buy the NEMA 
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1 premium, if you look at the payback period and you 

2 look at a company’s requirement for payback, most 

3 commercial buildings is three to five years. You go 

4 to higher education and hospitals, it’s like five to 

5 ten years. You go to the government, it can be ten to 

6 20 years, based on what you’re doing. It could be 20 

7 years if it’s a retrofit, it could be ten if it’s new 

8 construction. So it actually comes down to, when they 

9 calculate their payback, it does not fall into the 

10 three to five, or the five to ten. In fact, on most 

11 of my analysis, the payback is between 15 and 25 for 

12 the NEMA premium product today, if you’re in the 70 

13 percent part of the pie. It’s a lot less if you’re in 

14 the 30 percent, which is why we’re seeing the guys who 

15 are buying the 30 percent, convert over to NEMA 

16 premium. But it’s the 70 percent that’s the majority 

17 of the market, and they 100 percent buy on price.

18 MR. PARKER: Yes, Bob. Thank you.

19 MR. SMITH: Bob Smith. One of the other 

20 things that I would like to mention is that if the 

21 efficiency levels are raised on the low voltage 

22 transformers, there’s a high likelihood that they will 

23 cost more, the prices charged by the manufacturers 

24 will be higher, and for absolute certainty, if this 

25 happens, the customers will put higher RMS loading on 
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1 the transformers because they’ll buy smaller KVAs for 

2 the loads that they are now serving with larger 

3 ratings.

4 MR. PARKER: Is that response -- is that 

5 response factored into your analysis -- that dynamic 

6 kind of response?

7 MS. COUGHLIN: Well, not at the moment, no. 

8 I mean, you can -- you could factor that type of thing 

9 in, but you’d have to have some slightly more solid 

10 arguments about load growth. Because people have 

11 argued on load growth in various directions. Some 

12 people argue that load growth will be lower, and 

13 people have argued that the oversizing is due to codes 

14 which will not change due to standards. So, you know, 

15 it’s something we have the technical capability to 

16 model, but we wouldn’t be -- you’d have to 

17 substantiate these things pretty -- to keep it into 

18 the analysis.

19 MR. MILLURE: Dave Millure, Metglas. When 

20 you went to TP-1, the prices went up right? Did you 

21 see the load factors go up then?

22 MR. SMITH: I have not plotted that, Dave. 

23 I don’t know what the average KVA was when we started 

24 and before and after. That is something that I could 

25 look at, but I think it definitely will happen. 
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1 You’re talking about a machine or a product at the 

2 loadings that we have, assume that will last over 300 

3 years. As Tom has said, the building will come down 

4 before the transformer has to come out. 

5 MR. DeLASKI: Andrew again. In the last 

6 meeting I did think -- Katie helped jog my memory by 

7 your comment -- but there were -- comments were made 

8 that the electrical codes pretty much dictate the 

9 loading, and that absent a change in the electrical 

10 codes, that’s not likely to change. I see some 

11 nodding. So let’s use some --

12 MR. PATZNER: Tom -- sorry, Andrew. 

13 MR. DeLASKI: Go ahead, Thomas. I’m just --

14 maybe it was you that made that point, so you can 

15 probably clear it up for me.

16 MR. PATZNER: Tom Patzner, Schneider 

17 Electric. I disagree that the RMS will actually go 

18 up. I actually believe the RMS for low voltage 

19 transformers is going to be in a continuous downward 

20 trend. And you can do that by just walking into any 

21 cubicle that’s in any commercial building, and you’re 

22 going to see more empty outlets than you’re going to 

23 see outlets being used. So the National Electric Code 

24 requires a number of outlets that are placed in a 

25 building. Those number of outlets determine the size 
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1 of the transformer, and as less and less of those 

2 outlets are used, the RMS values is actually going to 

3 be decreased as we move forward through this analysis. 

4 And the analysis, I believe, is keeping it constant, 

5 which is fine with our perspective, but we actually 

6 believe it’s actually going to go down into the 

7 future.

8 MR. PARKER: Just as a point of information, 

9 based on your analysis, does it appear that the 

10 decisions -- the efficiency levels that are being 

11 chosen now by the marketplace are rational from the 

12 standpoint of lowest -- minimizing life cycle costs?

13 MS. COUGHLIN: Well, again, we have very 

14 little data apart from -- we have very little data on 

15 the efficiency levels that are being purchased, so the 

16 issue for the LCC for the standard is the engineering 

17 curve shows a much broader range of efficiency 

18 available within a few percent of the lowest cost. So 

19 you could be buying on first cost, and you could still 

20 buy something that’s higher efficiency than the DOE 

21 standard.

22 And the question is, is that -- is that 

23 feature of the engineering analysis misrepresenting 

24 reality? And so from what I’m hearing, there’s a 

25 small but not insignificant fraction of the market 
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1 that will end up purchasing a more efficient 

2 transformer largely driven by other design 

3 considerations. But it also sounds like there’s a 

4 price premium associated with that. So that doesn’t 

5 really get -- I mean that suggests to me that there is 

6 an issue with the engineering where these price 

7 efficiency curves are too flat, and there’s some other 

8 criterion that’s being used that we haven’t factored 

9 into our design analysis.

10 MR. DeLASKI: That’s possible, Katie, but it 

11 also seems to me that what I’m hearing from the 

12 manufacturers is that the first cost driver is 

13 incredibly strong in this marketplace. The joke of 

14 what, 18 months, make it last 18 months, I think is 

15 one that’s kind of bringing the point home that four 

16 percent price premium, they’re not going to pay it.

17 MS. COUGHLIN: Right. But we have a no 

18 price premium.

19 MR. DeLASKI: So the question is -- and I 

20 think the other question is is pricing. So if you’re 

21 a manufacturer, you don’t want -- and I’m not a 

22 manufacturer, but I’ll hazard a guess that they want 

23 to earn a premium on a NEMA premium product. You want 

24 to have good, better, or best. I mean this is sort of 

25 marketing 101. So even if your cost is zero, your 
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1 cost is zero, you don’t want to sell it for a zero 

2 premium, that’s your better product, so it doesn’t 

3 strike me as a bizarre result.

4 MS. COUGHLIN: Yeah, that’s fine. Again, 

5 but the technical point is that should we implement in 

6 the LCC some kind of constraint at the base case that 

7 people don’t buy above the DOE minimum beyond a 

8 certain percentage. That’s the technical question 

9 that we’re really going to have to just sort out from 

10 discussion because we don’t have the data to make that 

11 reconciliation between sort of what we’re seeing in 

12 engineering and what’s going on in the market.

13 MR. PARKER: This is just figuring out what 

14 is the impact of the standard.

15 MR. DeLASKI: How do you handle markups?

16 MS. COUGHLIN: In this particular case, 

17 that’s not what’s driving the issue. There’s really -

18 - this thing is flat.

19 (comment off mic)

20 MS. COUGHLIN: Yes, that’s true in general, 

21 but in this particular case that boundary is flat. 

22 And actually, the minimum price occurs at efficiency 

23 significantly above the DOE minimum.

24 MR. PARKER: Excuse me, Katie, we have ten 

25 minutes. Did you just want to walk us through the 
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1 TSLs and we’ll wrap that up and then we’ll convene 

2 tomorrow morning.

3 MS. COUGHLIN: Okay. 

4 Review of TSLs

5 So, yes the Trial standard levels are -- I 

6 mean we went through this last time and just to 

7 refresh your memories. The efficiency levels which 

8 are in the current analysis are defined for each 

9 individual design line, so just sort of screening at 

10 each efficiency level, you screen designs out that 

11 don’t meet that efficiency level under test procedure 

12 conditions. And then the trial standard levels are 

13 composed of choosing an efficiency level for each 

14 design line within a product class, and the product 

15 classes are the low voltage, medium voltage, dry type 

16 and liquid and liquid immersed. 

17 And then within the analysis there are 

18 certain things that can only be done at certain stages 

19 so, particularly for the life cycle cost, we don’t 

20 need to know trial standard levels, we only need to 

21 know efficiency levels, but to move forward to the 

22 National Impacts analyses and the manufacturer impact 

23 analysis we need to actually work with the trial 

24 standard levels. So until we have a selection of 

25 those, we can’t produce the quantitative results for 
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1 the MIA and the NIA.

2 So the national impact numbers that depend 

3 on the choice of TSL are national energy savings, the 

4 net present economic value associated with kind of net 

5 of cost and benefits, and then the emissions and 

6 social cost of carbon are done in a separate 

7 accounting. We could also produce -- again, this may 

8 be more relevant for the medium voltage. Once you 

9 have a trial standard level and we can calculate the 

10 impact on shipments, we can come up with rough 

11 forecasts of demands for new materials.

12 So for most rulemaking processes, there’s 

13 several trial standard levels that are standard 

14 effectively. So there’s Maxtech, which is required by 

15 law, which is the highest efficiency that’s considered 

16 in the engineering. So in that case, for each design 

17 line you would choose the highest efficiency level. 

18 The maximum MPV is the -- it’s something we 

19 get once we’ve done the NIA, but generally speaking it 

20 corresponds to what you get if you use the minimum LCC 

21 for each design line.

22 And then there’s the maximum energy savings 

23 with non-negative net present value, and again, 

24 roughly speaking that corresponds typically to the 

25 highest efficiency level that you get with sort of 
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1 neutral LCC impacts. So roughly zero LCC savings.

2 And then we define additional TSLs according 

3 to the product, and for this rulemaking, there’s these 

4 technology breakpoints that may be relevant, that can 

5 be based on a manufacturing technique or based on core 

6 materials. 

7 And at the last meeting, this group also 

8 asked for trial standard levels based on reductions in 

9 the annual energy costs in buildings, because this is 

10 something I guess used in building energy management. 

11 So we can produce -- I use 30 percent, or it could be 

12 50 percent -- a TSL could be selected by specifying 

13 the magnitude of reduction just on the annual energy 

14 costs by design line.

15 And then once the TSLs that are based on 

16 these general criteria are selected, it may be 

17 technically necessary to pick one or two additional 

18 ones to -- if we have gaps in the design space.

19 So essentially, part of the -- what we hope 

20 to get by the end of tomorrow is this -- these 

21 additional TSLs that correspond to different pictures 

22 of how the market might function in the future.

23 MR. PARKER: Thanks, Katie. It occurred to 

24 me that I wonder if doing it sequentially would work. 

25 I mean, once we get the engineering data QA/QC so that 
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1 you have a staple set of engineering data to work 

2 with, would it make sense for you to do the analysis 

3 with the TSLs that are already either required by law 

4 or agreed on by the group as a first step? See how 

5 that populates the space, see what gaps there are and 

6 see what we can learn from that, and then -- and that 

7 will give you a manufacturing impact assessment if you 

8 plug that into your model and so forth for those 

9 levels, those TSLs. That would give you a life cycle 

10 cost assessment for those TSLs. 

11 And then would that help us in arriving at 

12 the sort of competitiveness TSL of the manufacturing 

13 impact TSL? Would that make sense, or do you need to 

14 do everything in a batch, in a group?

15 MS. COUGHLIN: Yeah, you need to come up 

16 with the criteria. If your issue is competitiveness 

17 or some other manufacturing or market thing, you have 

18 to come up with the criteria before the TSL can be 

19 defined.

20 MR. PARKER: Before that TSL can be defined. 

21 But we have identified -- we have already precisely 

22 identified a number of other TSLs and so I guess the 

23 question is, would it make sense to go ahead and do 

24 the analysis for those, and see what the -- because in 

25 some sense, the competitiveness TSL is, you know, it’s 
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1 an endogenous variable. It’s -- it flows from 

2 downstream competitiveness impacts that you don’t 

3 necessarily know until you’ve done the downstream 

4 analysis. So I’m just wondering if it makes sense to 

5 work iteratively that way.

6 MR. DeLASKI: I had a thought, which is that 

7 if you have a full complement of TSLs, right, so let’s 

8 say you have seven, which is going to be a pretty good 

9 complement, it puts you in a position to evaluate and 

10 each manufacturer will evaluate the impacts on each 

11 TSL. And in a negotiation, it could be different -- 

12 different companies in different positions and they’re 

13 going to have different reactions. So I think in this 

14 case it may be that you’re able to have that as -- I 

15 don’t know that you’re going to create a TSL, or a cap 

16 is what you say, before the fact --

17 MR. PARKER: Maybe not. What you’re saying 

18 is maybe you won’t have to if we have seven TSLs 

19 anyway, and it provides a bracket for the analysis. 

20 People can interpolate --

21 MR. DeLASKI: I guess what I add to that is 

22 that you may choose, just to use an example, it may be 

23 that you decide, or that one decides that for a given 

24 product class that you’re comfortable with TSL, call 

25 it two, and for another product class you’re 
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1 comfortable with TSL three. You can mix and match 

2 your TSLs to get a call it TSL-A. And this has been 

3 done before by DOE, you know, where you end up with a 

4 final TSL which is a combination for different product 

5 classes. When I say seven, you actually have quite a 

6 lot more there. You’ve got some multiple of seven as 

7 possible outcomes.

8 MS. COUGHLIN: Just a practical note, we 

9 don’t really have time to iterate, so I think -- and 

10 we don’t have time to do the analysis in pieces, so 

11 the TSLs that we get, we will do the results for those 

12 TSLs and that will have to be the basis for the 

13 negotiation.

14 MR. DeLASKI: We can create our own as we 

15 go, based on those seven.

16 MR. PARKER: So well this is an important 

17 point, and maybe what we should do is begin with this 

18 in the morning, since we only have a few minutes. But 

19 think about it overnight. This is a creative 

20 suggestion, the idea is to basically declare a victory 

21 on the search for this chimerical competitive TSL, at 

22 least in this group, work with the TSLs that we’ve 

23 already defined and mix and match and interpolate and 

24 hope that we can do that once the results come in. Is 

25 that a fair statement of what you were suggesting, 
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1 Andrew?

2 He’s nodding yes.

3 MR. BALLO: This is Tim Ballo. I just had a 

4 question, I guess for John on that. Is that going to 

5 be a problem? In the past when we’ve done that, we’ve 

6 done that in comments on a proposed ruling, DOE goes 

7 back and does the analysis and a final rule that 

8 accepts or rejects, but here we’re discussing --

9 you’re saying you’re not going to have time to do the

10 analysis before the proposed rule is issued, and then 

11 we put you in the situation of proposing something 

12 that you don’t have the analysis to justify.

13 MR. CYMBALSKY: Right I think for what 

14 Katie’s saying, we want results before the next 

15 meeting to base this on, so I think at this point we 

16 should run with what we have, do all the analysis and 

17 look at them together and then if there are very small 

18 changes we think we have to make, then we’ll evaluate 

19 at that time. But I don’t think over the next three 

20 weeks we want to be getting into this rope-a-dopey.

21 MR. PARKER: I guess one thing that I was 

22 unclear about Katie, and the thing that sparked the 

23 question about iteration, was that I thought the gap 

24 filling TSL was by definition an iterative TSL that 

25 would be done as a second stage once you see what the 
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1 gaps are, but did I misunderstand that?

2 MR. CYMBALSKY: You know the gaps.

3 MR. PARKER: You know the gaps by looking at 

4 them. Okay, you want to respond to that? Yeah.

5 MS. COUGHLIN: It’s not that complicated. 

6 If you have say design line six you have TSLs at 

7 efficiency level two and then TSLs at efficiency level 

8 six, and nothing in between, you would just put 

9 something in between.

10 MR. PARKER: And can you tell -- do you --

11 have you identified areas where there appear to be 

12 these gaps where you would be using that kind of a 

13 TSL?

14 MR. CYMBALSKY: Not yet.

15 MR. PARKER: But you would look at that 

16 before you do it.

17 Okay. That provides, I think, a further 

18 level of comfort if there are large gaps that will 

19 allow -- that will create large spaces that might not 

20 be analyzed, I understand that LBL will populate those 

21 with gap-filling TSLs and that will give further 

22 comfort to this strategy of working with the TSLs that 

23 we have and not creating a new one.

24 Let’s not leap to that, think about it 

25 overnight. We’re at five o’clock. Let’s adjourn and 
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1 convene at DOE tomorrow -- in here? Is it here? 

2 Sorry. It’s great. So we have it for tomorrow 

3 morning. So we’ll meet here at nine o’clock and if we 

4 can get you guys out early on a Friday, that will be 

5 absolutely fine. We’re not going to use more time 

6 than we need. I would like to get us early if we can. 

7 Great. Thank you all, see you all tomorrow morning.

8 (Whereupon, at 5:03 p.m., the meeting in the 

9 above captioned matter was adjourned, to reconvene 

10 tomorrow morning, Friday, October 14, 2011 at 9:00 

11 a.m.) 

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REPORTER'S CERTIFICATE

This is to certify that the attached proceedings 

before:

U.S. DEPARTMENT OF ENERGY

VOLUME I

In the Matter of:

MEETING OF THE LV WORKING GROUP

Were held as herein appears and that this is the 

original transcript thereof for the file of the 

Department, Commission, Board, Administrative Law Judge 

or the Agency.

Further, I am neither counsel for or related to any 

party to the above proceedings.

 Official Reporter

Wendy Greene 

Dated: October 20, 2011