Summary of the Fourth Meeting of the 

Working Group on Medium Voltage Distribution Transformers 

of the Energy Efficiency and Renewable Energy Advisory Committee 

November 30- Dec. 1, 2011 

Richard W. Parker, Facilitator 

Note: This meeting summary has been prepared for the convenience of the Medium Voltage Working 

Group. It has not been approved by the Working Group and should not be construed or taken to 

represent the official position of the Working Group or any member as to what transpired at the meeting. 

 The Working Group on Medium-Voltage Distribution Transformers (“MV Group”) held its fourth 

meeting on November 30 - December 1, 2011, hosted by the American Public Power Association in 

Washington DC. A list of attendees is included in the official transcript to the meeting. 

 The meeting began at 9:00 am. The facilitator noted that LBL had found an error in the prior 

analysis and corrected it the night before in the analysis on the table before them. In addition, 

Navigant had done a new engineering analysis using 2011 materials prices. 

Material Prices 

 There was an extensive discussion about the 2010 material prices used in the latest analysis 

and the decision to replace analysis based on 2010 materials prices with analysis based on 2011 

prices. Some stakeholders expressed concern that the price of M3 in the latest analysis appeared 

too low (by about 26 cents per lb). Others asked why 2011 prices had been used at all, when all 

prior analyses had relied on 2010 prices. In reply, it was explained that the Department normally 

tries to use the latest data and also that 2011 prices reveal a spread of about 90 cents/lb between 

amorphous metal and silicon steel, which is more representative than the very narrow spread that 

existed in 2010 (T 49). It was explained that prices used in the analysis were derived from 

industry surveys and were averages, meaning that individual prices for individual customers 

might vary from the average. It was explained that prior rulemakings used a 5-year average, but 

this one had not done so. Nonetheless, participants were surprised that new data had been 

introduced when they thought that that part of the analysis was settled. Some voiced suspicions 

that the purpose of this unexpected shift may have been to affect the result. The analysts denied 

any such intention or effect. 

 After a break, the participants agreed to use the analysis based on 2011 prices, but LBL 

promised to re-run the 2010 analysis, correcting the error for 2010 that had been corrected the 

previous evening for 2011 prices, so that participants could compare the results and ascertain the 

impact of the price change on LCC outputs. Ms Coughlin of LBL then explained the nature of 

the error that was being corrected in the LCC analysis – benefits had erroneously been assumed 

to accrue beginning in 2010 rather than the 2016 effective date of the rule, resulting in a 20 

percent increase in LCC savings. 

Electricity Price Forecasts 

 Further concerns were expressed that LBL extrapolated wholesale price trends from retail 

price forecasts, and that 2008 data had been used for modeling hourly load fluctuations when 

more recent data was available. Ms Coughlin explained that AEO does not publish wholesale 

price forecasts, only retail, so LBL had examined extrapolated from historic wholesale price data 
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based on slope established by forecast retail price trends on the assumption that wholesale prices 

would track retail prices. Also, 2008 data had been used for system lambdas (hourly fluctuations 

of prices in accordance with load) but that this pattern of hourly and/or seasonal fluctuation is 

very stable, so updating it would not materially affect the analysis. 

 Although one transformer manufacturer expressed the view that loading of transformers was 

likely to increase over the next 30 years, making a 35 percent RMS load factor too low, a utility 

representative disagreed, saying that due to voltage drop considerations it seems very unlikely 

that loading on individual transformers will change significantly over the next 30 years. 

Legal Criteria 

 Mr. Cohen of DOE then explained the legal mandate of the group and the criteria by which it 

must develop it’s recommendation consistent with law. He pointed out that the statute requires 

the Secretary to set the standard that guarantees the “maximum energy efficiency that is 

technologically feasible and economically justified” based on seven factors for consideration. 

He explained that the focus is on newly manufactured products, and the DOE jurisdiction does 

not reach refurbishments of transformers done in house by utilities, though DOE might take the 

position that sending a transformer out to another legal entity for refurbishment – an entity that 

refurbishes transformers as a commercial enterprise – might make that product a new and 

covered product subject to DOE standards. He reviewed the seven factors for consideration, 

which include Life-Cycle Costs over the life the transformer, energy savings, manufacturing 

impacts, and employment impacts. 

Refurbishment 

 When asked whether refurbishment rates had been factored into the net energy savings 

analysis, LBL responded that they had not been factored in, because the Department has no data 

on refurbishment. A utility spokesperson pointed that refurbishing entails signficant handling 

costs and additional risks of failure. However, AK Steel presented an analysis that showed that 

over 50 percent of transformers currently are replacements. Ms. Coughlin stated that 

replacements can be made with new or refurbished transformers and the Department had never 

received any information on what proportion of replacements, if any, are refurbished. She 

observed that, given this lack of hard data, assigning any refurbishment rate (or pricerefurbishment curve) would be pure speculation. The facilitator pointed out that the Department 

had requested data on refurbishment rates and costs in September, October, and November and 

none had been forthcoming. Nonetheless, a steelmaker representative asserted that 

refurbishment is a “well-established and rapidly growing industry” and numerous participants 

expressed concern with the risk of refurbishment if prices of new transformers climbs too high. 

(T108). 

 Another stakeholder mentioned a concern with impacts on small businesses, including small 

utilities and pointed out that the instant rule would likely cost more than $100 million and would 

therefore need to go through OMB review, and the Small Business Administration would get 

involved. 

PROPOSALS

 After lunch, proposals were put forward. 
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Steelmaker Proposal 

 Mr. Polinski of ATI Allegheny put forward the steel supplier proposal, which reflected his 

concern with U.S. jobs in the steel industry that might be affected by a higher standard that might 

favor amorphous metal. He noted that the 2007 standard had already produced major efficiency 

gains and had just taken effect in 2010. He observed that his offer was based on what appeared to 

be the cross-over point between (a) the price of transformers made with amorphous metal cores, 

and (b) the price of those made with M3 steel in the 2010 analysis. Another steelmaker 

representative pointed out that DOE consultants had previously indicated the steel selection 

embodied in the optimized designs chosen for each EL, and that that portion of the analysis had 

been omitted from the last analysis, but that steelmakers could not support an Efficiency Level 

that DOE’s own analysis suggests will yield the result that his company’s product is not used. 

NEMA Proposal 

 NEMA followed with its proposal based on its view of three criteria: cost-effectiveness, 

maintaining competition among various grades of steel, and protecting the competitiveness of 

small manufacturers. Mr. Caskey noted that manufacturers in his group had noted that there 

remains a disconnect between the dollars per watt saved metric widely used in the industry and 

the LCC analysis employed by DOE, and that the price-efficiency curve seemed steeper to his 

manufacturing members at EL3 and above than is showed by DOE’s analysis. He proposed the 

schedule of EL’s set forth below, with the further comments that: 

(1) 3-phase transformers are more difficult to improve in efficiency than is accounted for in 

the DOE scaling approach, 

(2) higher BILs (above 95 BIL) transformers should receive a somewhat more lenient 

standard than lower BIL units of the same KvA rating, and BILs above 150 should not see an 

efficiency increase, 

(3) refurbishment is a serious concern, though it is not clear whether that risk would become 

pronounced at a 10 percent price increase, or 20 percent, or some other number, and 

(4) network and vault transformers should receive special treatment and should not be subject 

to a stricter standards. 

 He also urged that the standard and analysis take account of impacts on small manufacturers, 

and also take account of the fact that transformers must be slightly over-designed in efficiency in 

order to be reasonably certain of passing DOE tests. He noted that some manufacturers felt they 

could retain substitution of steels in El 2 and EL 3, while others believed the cross-over occurred 

beteween EL 1 and 2. One manufacturer had told Mr. Caskey that he could not stay in business 

beyond EL1.1

 Mr. Parker pointed out and Mr. Rivest agreed that the purpose of the engineering and LCC 

analysis is to predict the likely relationships between price and increased efficiency, not to try to 

forecast specifically what designs, and with what steels, the transformers of the future will 

 

1 Mr. Caskey noted for the record that NEMA had not received a response to NEMA’s April submission of answers 

to questions posed by DOE in April, and wanted to be sure that those responses are part of the rulemaking record. 
4

feature. However, some participants pointed out that DOE data had the industry moving almost 

entirely to amorphous metal at DL 1, which they found worrisome even if DOE’s steel selection 

forecast is off by a substantial fraction. (T159) A steelmaker representative said that current 

efficiency levels already have the steel industry “very near a cliff” in the transformer market 

where it may need to exit the business. 

 However, one major transformer manufacture representative observed that the DEL 2 

standard reflects a roughly 15 percent increase in efficiency, and above that level that market 

starts to shift to M2, which can only be produced “as an outgrowth of the M3.” (T164) He said 

that DEL2 is “a question mark,” and DEL 1 “I feel we can do.” 

Electric Utility Proposal 

 Mr. Rosenstock of EEI said that he did not not have a separate proposal but that EEI 

generally favored the steel industry proposal. He emphasized that network/vault transformers 

meriting special treatment with no change in efficiency. 

Summary of Efficiency Level (EL) Proposals for 

Medium-Voltage Liquid-Immersed Distribution Transformers 

Design 

Line Steel Industry NEMA Advocates 

1 0.5 1 3 

2 0.0 (no change) 0 3 

3 0.5 1 3 

4 0.5 1 3 

5 0.2 1 3 

 A spokesman for the public power companies observed that one of his larger member utilities 

is “rewinding every single district transformer now” and that other utilities in his group said that 

“they don’t rewind at all [now], but that “between ten percent and twenty percent is really going 

to make them tip”, though that raises issues of quality. Another utility representative, however, 

said that utilities who rewind rather than purchase a more efficient transformer are shooting 

themselves in the foot. 

Advocates proposal 

Mr. DeLaski presented the proposal for the public interest advocates. He observed that his 

group is comfortable with the notion of special scaling for high BIL transformers, with special 

treatment for vaults and networks, and with separate treatment for poles and pads. He said there 

is a shared interest around the table in avoiding refurbishment and will look for ways in the 

future to avoid that result, possibly through DOE rulemakings. He noted that the Advocates had 

started out at EL 4, but had indicated that EL 3 was a level they could support, and that their 

current view was that EL 3 is one that would get a fair consideration in a contested rulemaking 

process. 

 He observed that the Advocates had stated in a prior meeting that EL 1 was not a level that 

would interest them and the latest proposal from industry seemd to be a step backward. He said 

that unless there is some sort of movement towards Level 2, then there is no point in continuing 
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discussions. 

 A utility spokesperson from California observed that California’s needs line up closely with 

the position outlined by the Advocates but that he is flexible and willing to compromise. 

Straw poll 

There was a discussion of whether to hold a straw poll. Advocates expressed concern that it 

would tend to lock in positions and suggest obstruction of consensus by a few when, in fact, the 

reason is simply that Advocates have only a few seats at the table, which is mostly populated 

with industry representatives. Others, however, said that they would like to see where people 

are. So a straw vote was taken on the various proposals. It was agreed that Working Group 

members could vote for more than one proposal . 

Votes on steelmaker proposal (24 total votes): 

 In favor: 11 

 Opposed: 8 

 Abstain: 4 

 No Vote 1 

Votes on NEMA proposal: 

 In favor: 12 

 Opposed: 7 

 Abstain: 4 

 No Vote 1 

 The two steelmakers who had put forward the steelmaker proposal indicated that they are 

“very close” to the NEMA position on all DL’s except DL 5. 

Votes on the Advocates Proposal: 

 In favor: 7 

 Opposed: 13 

 Abstain: 3 

 No Vote 1 

Whereupon the meeting adjourned with an agreement to take up Medium Voltage Dry Type 

transformers the next morning. 
6

December 1, 2011 

The meeting began at 9:00 and after introductions moved directly to a presentation of revised 

engineering and LCC/NIA results based on 2011 materials prices. 

 Mr. Parker noted that DL 9 and 10 are very small categories in terms of product shipments 

and there had been little or no discussion of these equipment classes. The focus had been on DL 

11, 12, and 13. 

 

 After a short recess, NEMA presented the proposal summarized in the table below, based on 

essentially the same criteria articulated the previous day for the NEMA’s position on liquid-filled 

transformers. 

NEMA Proposal for Efficiency Levels for Medium-Voltage Dry Type Transformers 

Design Line NEMA 

DL 9 (3 ph, 15 - 750 KvA, 20-45 kV BIL) 1.5 

DL 10 (3 ph, 750-2500 KvA, 20-45 kV BIL) 2.0 

DL 11 (3 ph, 15 – 750 KvA, 46 –95 kV BIL) 2.0 

DL 12 (3 ph, 750-2500 KvA, 46-95 kV BIL) 3.0 

DL 13 (3 ph, 225 – 2500 KvA, > 95 kV BIL) 10 % more losses than DL 12 equivalent 

EC 5 (1 ph, 15 - 833 KvA, 20-45 kV BIL) Increase allowable loss by 30% compared to 3 ph 

equivalent 

EC 7 (1 ph, 15 - 833 KvA, 46–95 kV BIL) Increase allowable loss by 30% compared to 3 ph 

equivalent 

EC 9 (1 ph, 75 – 833 KvA, > 95 kV BIL) Increase allowable loss by 30% compared to 3 ph 

equivalent 

Steel selection 

A major transformer manufacturer representative asserted that at EL 3 for DL 12, M4 and laserscribed steels are fully competitive and would compete on price. However, a steelmaker 

representative responded that the workhorse grade for the MVDT market is M4, and that DOE 

analysis suggested that the cross-over point for M4’s competitiveness is EL1 across the board. 

Another steelmaker representative noted that his company is the only one that makes H0 and H1 

in the U.S. currently and so would stand to gain from a shift to H0 or H1 under a higher standard, 

but that he nonetheless favored the efficiency level that would keep M4 competitive in the 

marketplace and would rely on the transformer manufacturers for the assessment of what level 

that is.