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1 U.S. Department of Energy 

2 

3 

4 

5 

6 Manufactured Housing Working Group 

7 

8 

9 

10 1:02 to 5:15 p.m. 

11 Tuesday, September 9, 2014 

12 

13 1000 Independence Avenue, S.W. 

14 Washington, D.C. 20585 

15 

16 

17 

18 

19 

20 

21 

22 
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1 APPEARANCES 

2 Mediators: 

3 EILEEN HOFFMAN 

4 JAVIER RAMIREZ 

5 TED BANTLE 

6 DAVID HUANG 

7 In Attendance: 

8 MARK WEISS - MHAR 

9 ROBIN ROY - Natural Resources Defense Council 

10 KEITH DENNIS - National Rural Electric 

11 Cooperative Association 

12 MATTHEW WALKER - Navigant 

13 JOHN CASKEY - National Electrical Manufacturer's 

14 Association 

15 LOWELL UNGAR - American Council for an Energy 

16 Efficient Economy 

17 JOE HAGERMAN - DOE 

18 BERT KESSLER - Palm Harbor Homes 

19 EMANUEL LEVY - Systems Building Research Alliance 

20 MIKE LUBLINER - Washington State University 

21 Extension Energy Program 

22 
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1 APPEARANCES CONT'D: 

2 RICHARD POTTS - Virginia Department of Housing & 

3 Community Development 

4 EMANUAL SANTANA - CAVCO 

5 DAVID TOMPOS - NTA, Inc. 

6 MICHAEL WADE - Cavalier Home Builders 

7 ROB LUTER - Lippert 

8 SCOTT DRAKE - East Kentucky Power Cooperative 

9 ED BARBOUR - Navigant 

10 LOIS STARKEY - MHI 

11 PAM PONTILLO - DOE 

12 RICK MENLIN - Department of Housing Urban 

13 Development 

14 STACY EPPERSON - Next Step Network 

15 ISHBEL DICKENS - National Manufactured Home 

16 Owners Association 

17 RICK PETERSON 

18 AMY BARNARD 

19 ROBER LUCAS 

20 

21 

22 
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1 P R O C E E D I N G S 

2 MS. HOFFMAN: I'm Eileen Barckus Hoffman 

3 and I'm here from Federal Mediation and 

4 Conciliation Service as is my colleague. 

5 MR. RAMIZREZ: Javier Ramirez. 

6 MS. HOFFMAN: And? 

7 MR. BANTLE: Ted Bantle. 

8 MS. HOFFMAN: And we're calling this 

9 meeting to order. Appreciate a few minutes. 

10 We've got a few folks joining us and we know 

11 there's quite a few online as well. 

12 Before we get started we've got an 

13 incredibly packed two days. But let's hear who 

14 his here. Let's start with you, Mark. 

15 MR. WEISS: Mark Weiss, MHAR. 

16 MR. ROY: Robin Roy, Natural Resources 

17 Defense Council. 

18 MR. DENNIS: Keith Dennis, National Rural 

19 Electric Cooperative Association. 

20 MR. WALKER: Matthew Walker, Navigant. 

21 UNIDENTIFIED SPEAKER: Office of General 

22 Counsel, DOE. 
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1 MR. CASKEY: John Caskey, National 

2 Electrical Manufacturer's Association. 

3 MR. UNGER: Lowell Unger, American Council 

4 for Energy-Efficient Economy. 

5 MR. HAGERMAN: Joe Hagerman, DOE. 

6 MS. HOFFMAN: All right. Thank you. Now 

7 we know there are quite a few folks online so 

8 that we would want to know who they are. 

9 (microphone disturbance.) 

10 MS. HOFFMAN: Oh, excuse me one second. 

11 Did you get some disturbance? 

12 MR. RAMIZREZ: You know what? Before we 

13 start by giving names, why don't we -- the folks 

14 that are online, can you make sure that you mute 

15 your computers and just use the phone? And then 

16 let's have Ted go down the list. 

17 (Microphone feedback.) 

18 MR. RAMIZREZ: Yeah, let's have Ted go 

19 down the list and then he'll name the folks that 

20 are here. Yeah, let's have Ted go down the list 

21 and then he'll name the folks that are here. 

22 Yeah, and then once he says your name make sure 
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1 you confirm that you're online. 

2 MR. BANTLE: Okay. This is Ted Bantle 

3 from FMCS. If you could confirm you're on the 

4 line? 

5 Ishbel Dickens? 

6 (Microphone feedback.) 

7 MR. BANTLE: Ishbel? Okay. Mark Ezzo. 

8 Okay. It appears that everyone is muted. 

9 We'll start over. 

10 (Pause.) 

11 MR. BANTLE: Just one moment. 

12 (Technical difficulties.) 

13 MR. BANTLE: Okay. It appears that we're 

14 getting a little feedback from Peter Schneider's 

15 phone and Robert Peterson or Paterson's phone. 

16 If you could mute your phone or mute your 

17 computer that would be greatly appreciated. 

18 (Microphone feedback.) 

19 MR. BANTLE: Are we good? I think we're 

20 good now. 

21 (Microphone feedback.) 

22 MR. BANTLE: Yeah. Robert Peterson, it 
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1 appears we're getting a little feedback from your 

2 phone. 

3 So we will get started. Is Ishbel 

4 Dickens on the phone? 

5 (No audible response.) 

6 MR. BANTLE: Okay. Mark Ezzo. 

7 MR. EZZO: I'm here. 

8 MR. BANTLE: Okay. Richard Hanger? 

9 MR. HANGER: I am here this morning. 

10 Good morning. 

11 MR. BANTLE: Burt Kessler? 

12 MR. KESSLER: I'm here. 

13 MR. BANTLE: Emanuel Levy? Emanuel Levy? 

14 UNIDENTIFIED SPEAKER: He's not present. 

15 MR. BANTLE: Okay. Mike Lubliner? 

16 (No audible response.) 

17 MR. BANTLE: Okay. Richard Potts. 

18 MR. POTTS: I'm here. 

19 MR. BANTLE: Manuel Santana? 

20 MR. SANTANA: I'm here. 

21 MR. BANTLE: David Tompos. David Tompos? 

22 MR. TOMPOS: I'm here. 
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1 MR. BANTLE: Thank you. And Michael 

2 Wade? 

3 MR. WADE: Yes. Good morning. 

4 MR. BANTLE: Is there anyone -- are there 

5 any working group members on the line that I did 

6 not call? 

7 MR. LUTER: Yes, Rob Luter with Lippert. 

8 MR. BANTLE: Thank you, Rob. 

9 MR. DRAKE: And Scott Drake, Kentucky. 

10 MR. BANTLE: Thank you, Scott. It also 

11 appears that there might be an issue involving 

12 feedback with Michael Wade's phone. If you could 

13 mute your computer speakers, or your phone, vice14 versa. That would be greatly appreciated. Thank 

15 you. 

16 MS. HOFFMAN: Okay. Good morning, again. 

17 Good morning again, Eileen Hoffman. This is a 

18 meeting of the Manufactured Housing ASRAC Working 

19 Group. 

20 As I said, we have a very very full 

21 agenda. We would like to start, though, with any 

22 opening remarks from our working group members 
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1 before we move in to some presentations. So why 

2 don't we turn around and, Lowell, any comments 

3 before we get started? 

4 MR. UNGER: None. 

5 MS. HOFFMAN: Okay. John. John Caskey. 

6 MR. CASKEY: Sure. I always have 

7 comments. 

8 This is John Caskey from National 

9 Electrical Manufacturer's Association, and I'm 

10 the ASRAC representative on the working group. 

11 And a couple different points. One is that I 

12 wanted to thank everybody for doing all the work 

13 that they've done to date, including the Navigant 

14 and PN&L and DOE staff and all the people sitting 

15 around the table and on the phone that, you know, 

16 I've tried to keep up with all the emails and the 

17 reports and it's just a huge volume of 

18 information to try and make sense of it all. 

19 Hopefully we'll do a better job of getting those 

20 reports, you know, sort of updated today and then 

21 we'll make sure that everybody is on the same 

22 page. But just wanted to thank everybody for all 
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1 the work that they've done so far. 

2 And sort of going back to the first 

3 session, you know, my takeaway from the first 

4 session, from what I understood was our goal as 

5 an organization, or really you guys as an 

6 organization, is the goal is to improve overall 

7 energy efficiency of the manufactured housing 

8 sector while maintaining its affordability. 

9 So when I look at what we're doing I keep 

10 on coming back to that, where we're looking at 

11 the cost effectiveness of the energy efficiency 

12 improvements. But then we also, at the end of 

13 the day, want to look at the affordability. So 

14 for me the process to really get there, I mean, 

15 and we've been going through is looking at some 

16 of the basic assumptions and where are the 

17 opportunities for energy efficiency in the 

18 manufactured housing segment. And then having 

19 the consultants do an analysis on those things to 

20 come up with the incremental costs for those 

21 improvements and the savings, and from there you 

22 can derive the life cycle costs for those 
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1 particular improvements. 

2 But as we go through that and even as we 

3 identify improvements that maybe look cost 

4 effective from a life cycle cost perspective, 

5 really need to circle back and look at the people 

6 that are buying these facilities to make sure 

7 that they are affordable from their perspective. 

8 So I don't know what that means at this point, 

9 but certainly that's something that we need to 

10 focus back on before we conclude everything. 

11 The other thing just deals with the 

12 negotiated rulemaking process overall, having 

13 been involved with other negotiated rulemaking 

14 processes, for me personally I think there is 

15 just a huge amount of value in what you're doing 

16 by going through all the analysis, by looking at 

17 the data, by doing different scenarios and 

18 different runs, and then looking at the date 

19 after that to see if that data is in the right 

20 ballpark. And I think that that is hugely 

21 valuable from my perspective compared to the 

22 earlier days when DOE would do some -- hire 
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1 somebody to do some analysis and it seemed like 

2 as an interested party we sort of lost the 

3 connection with the analysis. We got what the 

4 numbers were but didn't really know how they were 

5 derived, and we didn't know how sort of valuable 

6 they were and how sort of whether they were 

7 validated or not. 

8 So, I think by being involved with this 

9 process, this negotiated rulemaking process, you 

10 really have the opportunity to sort of validate 

11 those numbers and make sure they're in the right 

12 ballpark. So that in itself is really a 

13 significant value from my perspective. 

14 And then the final thing is really that, 

15 you know, when you look at the schedule we're 

16 sort of running out of time. So we really need 

17 to, over the next few days, focus on the things 

18 that sort of we can control and maybe get away 

19 from the things we can't control; identify those 

20 things that we can reach or you as a group can 

21 reach consensus on. I personally view I'm sort 

22 of like an innocent bystander; an interested 
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1 observer but it's really up to you as a member, 

2 sitting around a table, to come to some consensus 

3 on, you know, those things that you think you can 

4 move forward to and try and get them wrapped up 

5 so that we can go through the rest of the process 

6 with Department of Energy to get them adopted. 

7 So that's my speech for the day. 

8 MS. HOFFMAN: Thank you, John. Thank 

9 you, John. Any other comments? Keith? 

10 (No audible response.) 

11 MS. HOFFMAN: Okay. Robin? Stacy? 

12 Welcome. Mark? 

13 MR. WEISS: Thank you. Mark Weiss. Two 

14 things. First of all I want to thank John for 

15 his comments regarding the importance of 

16 affordability, and also say something with regard 

17 to time. 

18 I think John is right. There is a 

19 tremendous amount of information that's been put 

20 on the table that's been presented, and I think 

21 we are going to need sufficient time to work 

22 through that in a proper manner. 
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1 UNIDENTIFIED SPEAKER: Mark. 

2 MR. WEISS: From our perspective it's 

3 more important to get it right than to do it 

4 quickly. And considering the amount of time 

5 that's already lapsed since the passage of the 

6 ISIS statute, I think the onus on us is to take 

7 the time necessary to do this properly. Thank 

8 you. 

9 MS. HOFFMAN: Any comments from our 

10 members on the line? 

11 MR. LUTER: This is Rob with Lippert. 

12 I'd just like to echo Mark's feelings that we 

13 need to get this right the first time. 

14 MS. DICKENS: Hi, Ellen (sic). This is 

15 Ishbel. I just wanted to let you know that I 

16 think everything is working and I'm online and 

17 listening and hopefully you're hearing me as 

18 well. 

19 MS. HOFFMAN: Yes, we are. Thank you. 

20 If there aren't any other comments at the 

21 moment -- oh. 

22 (Discussion about technical 
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1 difficulties.) 

2 MR. BANTLE: Hi. This is Ted Bantle from 

3 FMCS. Just one more note. We have three 

4 individuals we're getting some feedback issues 

5 for. Or from. Emanuel Levy, Michael Wade, and 

6 Peter Schneider. And okay, our recommendation is 

7 that you just mute your phone when you're not 

8 speaking. Thank you very much. 

9 MS. HOFFMAN: Okay. Now, let's get 

10 started. First on our agenda is DOE Navigant 

11 will be making quite a presentation. So, 

12 Matthew. 

13 And I think it will be available to 

14 everyone online as well. 

15 MR. WALKER: All right. Good morning, 

16 everyone. My name is Matthew Walker from 

17 Navigant and today I'm just going to go through a 

18 little bit of information about the LCC Model, 

19 brief recap from last time when we presented on 

20 the process, and to give a little more detail on 

21 the calculations that are used in that analysis 

22 for those who are interested. And then we can 
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1 also look at the spreadsheet a little bit, and 

2 also some of the costs inputs, the straw man in3 cost inputs and we'll get into those in a minute. 

4 So this slide is very familiar. It's 

5 from last time. I mean, just a reminder, the LCC 

6 has a balance of first costs and energy cost 

7 savings, and we're looking for that balance point 

8 where that investment and the more expensive home 

9 that's more efficient is offset by the energy 

10 cost savings. 

11 The status of the model right now is that 

12 the structure and calculations are in place, 

13 we've also included some straw man inputs. And I 

14 really just stress the straw man nature of that. 

15 I'll get into it more later, but it's you know, a 

16 rough estimate based on public available data. 

17 But we'll get into more of that later. 

18 And again, another slide from last time. 

19 Just a reminder on some of the financial 

20 parameters that are very important to an LCC 

21 analysis. I know we have a financial subgroup, a 

22 working subgroup putting together some 
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1 information on some of these values and that's 

2 really critical here. The LCC as it was sent out 

3 yesterday, has initial placeholder values for 

4 each of these parameters. But ultimately the 

5 working group will need to agree upon the 

6 specific values that are selected for the 

7 analysis. 

8 So then back to first costs. First cost 

9 here really just associated with the housing -- 

10 Sure thing. 

11 MR. RAMIZREZ: It's Javier. I just have 

12 a question. Could you go back one slide? 

13 MR. WALKER: Absolutely. 

14 MR. RAMIZREZ: You had said that the 

15 working group was going to determine what these 

16 components are. But in the analysis that you 

17 forwarded you gave certain recommendations or you 

18 plugged in values. 

19 MR. WALKER: That's correct. 

20 MR. RAMIZREZ: And are you going to go 

21 over those to show how you came up with those 

22 values, like where they came from? 
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1 MR. WALKER: I think we referred more 

2 just to discuss what's included in the 

3 spreadsheet. 

4 MR. RAMIZREZ: Yeah. Yeah. Okay. 

5 MR. WALKER: I think reviewing the 

6 specific source of each of those is not -- 

7 MR. RAMIZREZ: Well, no. I don't mean 

8 the source, but -- 

9 MR. WALKER: -- as critical. 

10 MR. RAMIZREZ: -- like -- not the source, 

11 just the number. 

12 MR. WALKE: Yeah. 

13 MR. RAMIZREZ: Okay. Okay. 

14 MR. BARBOUR: And this is Ed Barbour with 

15 Navigant. I'll just add, the numbers are in 

16 there to make sure the model works. 

17 MR. RAMIZREZ: Uh-huh. 

18 MR. BARBOUR: And they're placeholders 

19 based on publicly available data. They're not 

20 necessarily -- actually on almost all of them, 

21 none of them have come directly from the working 

22 group yet. 
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1 MR. RAMIZREZ: Okay. 

2 MR. BARBOUR: And so today we're looking 

3 for a lot of input from the working group on 

4 those inputs. Not just the financial parameters, 

5 but also the costs. 

6 MR. RAMIZREZ: Okay. 

7 MR. BARBOUR: So we can make it work. 

8 MR. RAMIZREZ: Excellent. Thank you. 

9 MR. WALKER: All right. So back to the 

10 first cost slides. These are these costs 

11 associated with the housing purchase. In the 

12 diagram on the left hand side you have the down 

13 payment and financing fees that happen right in 

14 the beginning. So those are happening in the 

15 present day. Down payment is a portion of the 

16 overall cost of the more expensive home, relating 

17 to those more efficient measures. 

18 The initial payment that you're making is 

19 then added to the mortgage payments and property 

20 taxes that occur on an annual or a monthly basis 

21 throughout the life of the loan, or throughout 

22 the period of analysis that's selected for the 
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1 LCC. 

2 And then of course those yearly or 

3 monthly payments are discounted to the present 

4 year so that when we're adding the two dollar 

5 values together they're on the same basis. And 

6 so the summation of all those monetary 

7 expenditures results in the total first cost or 

8 the total housing cost. 

9 So then operating expenses is the other 

10 half of the LCC. These are calculated also on an 

11 annual basis, discounted to their value in the 

12 present year. The basic process here is that the 

13 energy plus analysis that PNNL puts together, 

14 outputs and energy use index, which is an annual 

15 energy use per square foot, and they provide that 

16 for each of the codes that's being analyzed, and 

17 each of the zones that are being analyzed. 

18 So then those basic energy use numbers 

19 are converted to dollars by multiplying by the 

20 fuel cost estimates and things from places like 

21 the Energy Information Agency. 

22 Mark, do you have a question? 
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1 MR. WEISS: Yeah. Mark Weiss, MHERR. If 

2 you can, how does this type of analytical model 

3 compare with the methodology that's used by the 

4 Census Bureau and the American Housing Survey 

5 with relation to operating costs, including 

6 energy. Is there any similarity? Is it 

7 consistent? Can you just expound on that a 

8 little bit if you can? 

9 MR. WALKER: Mark, I guess I'm not really 

10 familiar with the specific numbers that you're 

11 referring to. 

12 MR. BARBOUR: Yeah. This is Ed Barbour 

13 at Navigant. We can look into that. 

14 MR. WALKER: Yeah. 

15 MR. BARBOUR: We haven't compared that. 

16 I mean, typically we compare it with the Energy 

17 Information Administration's Residential Energy 

18 Consumption Survey, and that does have a little 

19 bit of AHS type of data. EIA looks at it, but we 

20 haven't done that direct comparison. We can do 

21 that for you and try to get back to you. 

22 MR. WEISS: Okay. I mean, it's just for 
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1 quite some time now I've been looking at the AHS 

2 data and I'm just interested in how your approach 

3 compares with what they do. 

4 MR. BARBOUR: Yeah. And Ed again. I'll 

5 just add that I mean, what we've done here from a 

6 methodology standpoint is to follow the way we do 

7 -- or the way the Appliance Standards Program at 

8 DOE does LCC analysis, which is typically UCOE. 

9 MR. WEISS: No, I understand that. It's 

10 just, you know, given the amount of data over the 

11 number of years that AHS has, just if we do a 

12 comparison, I just want to compare apples to 

13 apples. 

14 MR. WALKER: Okay. Great. So, after the 

15 energy costs value is calculated for a single 

16 year we also apply an energy price escalation 

17 factor to account for the expected rise in energy 

18 costs over the period of analysis. So, then all 

19 those years of energy cost savings are then 

20 discounted back to the present year and that 

21 becomes your total energy costs savings, or total 

22 operating expense value. 
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1 Another factor that could be included 

2 here is the maintenance cost. The maintenance 

3 cost would be something -- for some reason when 

4 you apply one of these more energy efficient 

5 measures you have to do some incremental 

6 additional work to keep that item operating 

7 properly. I think currently that hasn't really 

8 been identified, but I did just want to continue 

9 to remind everyone that we do have the 

10 opportunity to include those costs if we think 

11 that that's necessary. 

12 So I will move on to residual value, 

13 unless there's any other questions. 

14 Okay. So residual value is the term 

15 usually used on an LCC analysis for any value of 

16 the item that you have purchased, the more 

17 efficient item that you have purchased that still 

18 has some worth at the end of the period of 

19 analysis. So this is the same concept as was 

20 being talked about last time with the resale 

21 value of the more efficient home. 

22 So a residual value is something that we 
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1 have built into the LCC model. We have the 

2 ability to turn it on and off, depending on how 

3 the group wants to use it. And currently we've 

4 used a simple and kind of standard approach to 

5 this concept, which is that the price of that 

6 energy efficiency measure, the EEM, is 

7 depreciated using a straight line method over the 

8 life of that product. So it's a 30 year 

9 depreciation, which means that if you're at year 

10 15, perhaps we've decided to only analyze a 15 

11 year period, at the end of that 15 year period 

12 half the value of the EEM is still in play and 

13 that would be credited back to the customer, or 

14 credited back to the end user. And so that's 

15 that kind of, I guess, is a positive thing for 

16 developing a cost effective LLC. 

17 But as we get back to the spreadsheet I 

18 can show more directly what the impact of that 

19 residual value is. Were there any questions here 

20 before we keep going? 

21 MR. DENNIS: If there's a measure within 

22 the house that's less than the analysis period is 
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1 it like reset? Say a product lasts 10 years and 

2 we're doing 30 years, do you do three cycles for 

3 that product? Or how does that -- or do you just 

4 depreciate it over 30 years, even though it's a 

5 10 year product? 

6 MR. WALKER: So, what you're bringing up 

7 is something that would need to be done if we 

8 have an EEM, some piece of insulation, something 

9 that does only have a 10 year life. 

10 MR. DENNIS: Okay. 

11 MR. WALKER: But currently I think the 30 

12 year assumption is pretty safe for a lot of the 

13 insulation. But depending on what we end up 

14 agreeing upon for the particular measures that 

15 are going to be proposed by the group, we might 

16 need to do what you're talking about. 

17 MR. DENNIS: Okay. Thanks. 

18 MR. WALKER: Yeah. 

19 MS. HOFFMAN: That was Keith Dennis. 

20 MR. WALKER: All right. I'll keep going. 

21 So this slide talks about what's in the LCC 

22 spreadsheet that was sent around yesterday. It 
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1 includes -- I'm counting right here. It includes 

2 five efficiency levels, so that's the 2006, 2009, 

3 2012, and 2015 ICC, as well as Energy Star. Each 

4 of those codes is compared to a basic HUD code 

5 compliant manufactured house. 

6 The energy data that's associated with 

7 each of these codes or efficiency levels, again, 

8 comes from the energy plus output that's been 

9 distributed a few weeks ago, and that includes 

10 separate energy use figures for a customer that 

11 has electric resistance heat, or heat pump, 

12 natural gas, or propane systems. And each of 

13 those is analyzed separately through the LCC, but 

14 they can be rolled up into a weighted average at 

15 the end. 

16 MR. LUTER: Question. 

17 MR. WALKER: Sure. 

18 MR. LUTER: Rob with Lippert. Which 

19 Energy Star program did you use for this 

20 analysis? 

21 MR. HAGERMAN: This is Joe Hagerman, DOE. 

22 We worked with Emanuel Levy to get the Energy 
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1 Star for manufactured home requirements. And 

2 that's what's been modeled by PNNL. 

3 MR. LUTER: Thank you. 

4 MR. WALKER: Okay. So that's the energy 

5 side of things, and just again, the straw man EEM 

6 costs that are currently populated in the LCC 

7 model are estimates. They're based on publicly 

8 available data. They're not necessarily 

9 manufactured housing specific, but we do expect 

10 that they would be certainly within an order of 

11 magnitude and provide a nice place for a 

12 discussion for today. 

13 But again, each of those values will have 

14 to be agreed upon by the working group, and 

15 that's something that Emanuel Levy has been 

16 working on to collect more specific cost data 

17 from industry. 

18 I think that probably covers the 

19 scenarios and data that's included in the LCC. 

20 Mark? 

21 MR. WEISS: Mark Weiss. Could you 

22 identify some of the public sources, referring 
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1 to? 

2 MR. WALKER: Sure. There are several. 

3 There was a PNNL study on the cost effectiveness 

4 of the 2012 ICC. There is -- go ahead. 

5 MR. HAGERMAN: This is Joe Hagerman, DOE. 

6 I believe that document that you're talking about 

7 is what's known as the determinations. Is that 

8 right? Or part of the determination? 

9 MR. BARBOUR: Yeah. This is Ed Barbour 

10 with Navigant. 

11 So a lot of the cost data came from 

12 whatever we could find publicly available. So it 

13 included the PNNL IECC 2012 TST as part of the 

14 determination of rulemaking. It included reports 

15 that fed into that, include I think it was 

16 Faithful and Gould, which was a report 

17 commissioned by PNNL to look at the costs 

18 associated with the 2012 standard. 

19 We also used comments received in the 

20 previous round of the rulemaking to start this, 

21 including Tom Eckman's, as well as other from 

22 certain manufacturers. We also tried to use data 
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1 from other residential sectors like the EPA 

2 Energy Star program in terms of air sealing. And 

3 we can go through them in detail as we walk 

4 through them. 

5 But, you know, I'll caveat that in terms 

6 of the data. A lot of it is based on general 

7 residential or standard residential construction, 

8 not manufactured housing. We had to be able to 

9 put in a cost data into the model in order to see 

10 if it works. So what we've done is tried to 

11 match those requirements for manufactured housing 

12 with the costs associated in standard stick-build 

13 residential. So that's what you'll see, a lot of 

14 the costs were associated with that. Some may be 

15 tailored to manufactured housing, and we can talk 

16 a little bit about that. But they are not costs 

17 that we received necessarily directly from 

18 manufacturers. At least not in this go around. 

19 So just to note. 

20 MR. CASKEY: Yeah, John Caskey at NEMA. 

21 And unfortunately my question that sort of keeps 

22 on hanging with me goes back to the first cost. 
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1 And how is -- can you refresh my memory on how 

2 land is treated? In manufacture housing sector 

3 is it still just the same similarity as 

4 traditional single-family where the cost of the 

5 land is embedded into the mortgage itself, or any 

6 of these properties -- or any of these homes put 

7 on leased space and you have like a monthly lease 

8 cost? 

9 MS. STARKEY: Lois Starkey, MHI. Sorry I 

10 was late. We estimate that about 70 to 80 

11 percent, let's say, I think it was in last year's 

12 census it was 75 percent of all manufactured 

13 homes that are sold are placed on real property. 

14 If you average that over a 10 year period we 

15 would estimate it's about two thirds. It 

16 fluctuates from year to year, but it looks like 

17 the trend is going up. Manufactured homes, that 

18 amount, 75 we say is going on personal property. 

19 I mean, on real property. 

20 However you can't say that 75 percent are 

21 financed as traditional real estate. And we 

22 don't have a good handle. We are trying to get a 
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1 better handle on what percentage of that 75 

2 percent say is financed as real property because 

3 some homes that are put on real property that 

4 might be somebody's farm, or they don't want to 

5 encumber the property, so they'll finance it as a 

6 chattel mortgage. So it's really hard to tell 

7 how, in terms of how the land is treated, but you 

8 can -- and I think the home builders have done 

9 some -- they did a modeling study to break out 

10 how much the land would cost. And I think you 

11 can get -- that data could be obtained. 

12 Obviously it varies by market. 

13 So, but when we talk about the cost of 

14 manufactured housing we generally break it out so 

15 that you know it's construction cost, new 

16 construction cost, it's without the land, and 

17 then you add in the land. 

18 MR. CASKEY: Okay. So sort of -- thank 

19 you very much for that information. That's very 

20 helpful. 

21 So, do you think those sort of 

22 assumptions are reflected in the analysis that 
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1 you've worked on so far? 

2 MR. WALKER: Yeah. I would say part of 

3 that. So the element of that that's included is 

4 the proportion of customers that follows the 

5 traditional real estate loans versus the chattel 

6 loans. 

7 I think something that I should probably 

8 point out is that capturing the land value is not 

9 a key component of the LCC because the more 

10 efficient home doesn't require a different piece 

11 of land. It can go on the same place so that 

12 that doesn't represent an incremental cost going 

13 from one code to the next. But the types of 

14 financing is definitely included. Okay. 

15 So this fuel and equipment type 

16 distribution, this was a topic that was discussed 

17 a bit at the last meeting. It is another 

18 important element of the LCC in that it gives us 

19 the ability to, like I was saying, aggregate or 

20 average the LCC results corresponding to a 

21 customer that has one of the four different types 

22 of heating systems that we've analyzed. 
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1 MR. RAMIZREZ: I'm sorry. Let's, if we 

2 can, let's just do like a five minute function 

3 break here so that way we're not distracted by 

4 anything. Just so that we could clean this up 

5 real fast. All right? Just for those of you at 

6 home, we had a little spill that we just need to 

7 clean up real quick. 

8 So we'll just take five minutes, so that 

9 way -- 

10 MS. HOFFMAN: It wasn't an oil spill. 

11 MR. RAMIZREZ: -- you get our full 

12 attention. 

13 MS. HOFFMAN: Just a coffee spill. 

14 MR. RAMIZREZ: Yeah. 

15 MS. HOFFMAN: But when we come back we'll 

16 ask the public members to introduce themselves 

17 when we come back. 

18 (Off the record from 9:46 a.m. until 9:49 

19 a.m.) 

20 MS. HOFFMAN: Okay. Let's get our seats 

21 and start again. Thank you. 

22 We have a question first on the 
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1 presentation from Michael Wade. And do you want 

2 to read it out, Matthew, and -- 

3 MR. WALKER: Sure. Yeah, we have a 

4 question from Michael Wade, and I think it will 

5 apply better once we get into the spreadsheet 

6 overview. 

7 MS. HOFFMAN: When we get to the 

8 spreadsheet. Okay. 

9 MR. WALKER: But I have it up here next 

10 to my computer so we won't forget it. 

11 MS. HOFFMAN: Okay. Great. 

12 MR. WALKER: Okay. So I think we're 

13 ready to get back into this. We were on -- yes? 

14 MR. RAMIZREZ: I thought we were going to 

15 have the folks in the public introduce 

16 themselves. 

17 MS. HOFFMAN: Oh, yes. Right. Yeah, we 

18 have a number of people from the public, both 

19 online and also in our audience here. If you 

20 would just introduce yourself, starting with the 

21 people here in the room? 

22 MS. PONTILLO: Good morning. This is Pam 
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1 Pontillo and I'm from the Office of Department of 

2 Energy, Office of Conflict Prevention Resolution. 

3 MR. HUANG: Good morning. My name is 

4 David Huang. I'm a mediator from the Federal 

5 Mediation Conciliation Service. 

6 MS. HOFFMAN: Thank you. And now who is 

7 -- yes? Yes, sir. 

8 MR. MENLIN: I am Rick Menlin. I am with 

9 the Department of Housing Urban Development. 

10 MS. HOFFMAN: Thank you. Who is on the 

11 line that is from the public? 

12 UNIDENTIFIED SPEAKER: We don't have them 

13 (inaudible). 

14 MS. HOFFMAN: Oh, okay. So maybe we can 

15 just read their names? We're going to read your 

16 names. 

17 MR. RAMIZREZ: Yeah, we have two. Right 

18 now we have Robert Peterson and Amy Barnard 

19 (phonetic). 

20 UNIDENTIFIED SPEAKER: Uh-huh. 

21 MR. RAMIZREZ: Okay. 

22 UNIDENTIFIED SPEAKER: And Robert Lucas. 
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1 MR. RAMIZREZ: And Robert Lucas. 

2 MS. HOFFMAN: Okay. All right. Thank 

3 you. 

4 MR. WEISS: What I was reaching for so 

5 recklessly a few moments ago was the GAO report 

6 that came out in July 2014. That indicates 

7 that -- 

8 MS. HOFFMAN: That's Mark Weiss speaking. 

9 MR. WEISS: Thank you. Mark Weiss. 

10 According to the Manufactured Homes Survey, in 

11 2013 70.2 percent of manufactured homes were 

12 placed on leased or owned land outside of a 

13 community. 

14 MR. WALKER: All right. So this is 

15 Matthew Walker again from Navigant. We're on the 

16 fuel and equipment type distribution slide. And 

17 I was just reviewing that this is important 

18 because this allows the LCC to aggregate 

19 different runs for customers that are using 

20 different heating systems if we want to look at a 

21 single number that represents an entire zone. 

22 The source of data that's used for the 
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1 numbers that are currently populating the LCC 

2 which are again, numbers that need to be agreed 

3 upon by the working group, are based on the 

4 Census Bureau 2011 American Housing Survey. I 

5 give the table below at the bottom of the slide, 

6 that corresponds to that data, you can see that 

7 they provide information specific to different 

8 regions as well as rolling that up into a 

9 national average. 

10 And just looking at the numbers, that you 

11 can kind of see that the electric furnace or the 

12 resistance is pretty popular, at near 50 percent; 

13 natural gas, 21; heat pump 17; oil is hardly 

14 used; and then propane at 12 percent on the 

15 national average. And of course it varies once 

16 you look in particular regions. 

17 There are other sources available and 

18 they generally support the HSS estimates, but 

19 they -- you know, they are focused on perhaps 

20 different sectors or different types of people. 

21 Any questions here? 

22 (No audible response.) 
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1 MR. WALKER: Great. 

2 MR. SANTANA: This is Manny with CAPCO. 

3 MR. WALKER: Yes, Manny. 

4 MR. SANTANA: On that (indiscernible)is 

5 that just the fuel per percentage of the entire 

6 population, or just manufactured homes? 

7 MR. WALKER: Yeah, this is just 

8 manufactured homes. So it's the portion of 

9 manufactured home customers or end-users that are 

10 using each of these heating types. 

11 MR. LEVY: Matthew, Emanuel Levy. Can 

12 you hear me? 

13 MR. WALKER: Yes. 

14 MR. LEVY: First of all I want to say 

15 that what you've done here with your spreadsheets 

16 is terrific. It makes it very easy to look at 

17 parametrics, and particularly identify quickly 

18 what the important variables are. 

19 And I imagine, I haven't looked at this 

20 exhaustively, but I would imagine this data is 

21 pretty important to the results. And my 

22 suspicion is that the percentage distributions 
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1 are actually a little bit different than this for 

2 new construction. That this -- the AHS data is 

3 historic data, or it's for all houses in place. 

4 And more current construction, I think, has a 

5 different profile of equipment selection. 

6 MR. BARBOUR: So this is Ed Barbour with 

7 Navigant. Just a little bit of clarifying. 

8 So this is actually an analysis that PNNL 

9 did as part of their first runs in order to 

10 create the different packages and do the energy 

11 plus runs. This comes from the micro-data for 

12 the American Housing Survey, and it looks at only 

13 manufactured housing that had been put in place 

14 from 1990 to 2011, to serve as a proxy for new 

15 construction. 

16 We've received a number of comments that 

17 this is probably not quite the today's 

18 distribution in terms of fuel types. We did get 

19 data from Michael Lubliner for the Pacific 

20 Northwest. But right now, from a national 

21 standpoint in terms of what we had access to, 

22 this was the best source. And so that's -- and 
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1 Emanuel, you were right. It does have an impact 

2 when you look at one number across the nation. 

3 But we wanted to present this in order to get 

4 feedback as to whether or not this is the type of 

5 distribution this working group wants to do. 

6 Anyway. 

7 MR. LEVY: Right. And I think that 

8 that's the right approach. 

9 I think it might be worthwhile to talk 

10 with some of the manufacturers of equipment 

11 because there are only a handful and they would 

12 know what they sell. I suspect you'll find a 

13 much higher percentage of natural gas being sold. 

14 And heat pump is an aftermarket item. 

15 We have some anecdotal information about 

16 that because all the Energy Star homes must be -- 

17 must have a heat pump. And that would be at 

18 least 15 percent right there. 

19 So I think we can help you a little bit, 

20 get better data. But this certainly is one of 

21 those areas where the data is pretty -- the 

22 results are pretty sensitive to this assumption. 
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1 MR. WALKER: Yeah. Agreed. Thanks 

2 Emanuel. We also got another question from Mike 

3 Lubliner. He asks, which states are represented 

4 by the west. That's the west region that's here 

5 on this table. We'll have to get back to you, 

6 Michael and we can make a list. But thanks for 

7 the question. 

8 MR. LEVY: Manny again from CAVCO. You 

9 know, I recognize that when you add up the total, 

10 say for the south, you don't add up to 100. 

11 What's the -- I guess, what's the tolerance? 

12 MR. WALKER: Yeah, Manny, the reason that 

13 the numbers don't always add up to 100 is because 

14 there are some other sort of fringe fuel types. 

15 MR. LEVY: Okay. 

16 MR. WALKER: And so if I was to take 

17 these numbers into our own analysis we account 

18 for the sort of missing small percentage so that 

19 it adds up to 100. 

20 MR. LEVY: Okay. 

21 MR. WALKER: But that's a good point. 

22 Okay. So I'm going to move on to the 
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1 slide that talks about how to use the LCC model. 

2 And we will also look at the spreadsheet itself, 

3 but this just gives a general overview. 

4 There are toggles on that inputs and 

5 summary tab that change the scenario viewable in 

6 the calculations throughout the spreadsheet. So 

7 that's where you have the opportunity to select 

8 the 2006 IECC, or maybe the Energy Star 

9 efficiency levels. You also have the option to 

10 run the analysis for a single section versus a 

11 double section home. 

12 There's then a button on the results tab 

13 that would tabulate just the LCC savings number, 

14 which is that final summary value, for every 

15 scenario. And that gives you a one-stop-shop to 

16 compare all the zones at all the different codes 

17 for just the LCC savings value. 

18 And again, the LCC savings value is the 

19 summation of the first costs and those energy 

20 costs. So a positive LCC savings number means 

21 that the customer might be gaining value and a 

22 negative number is when the first costs outweigh 
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1 the energy savings. 

2 Also on the inputs and summary tab you 

3 can alter the financial inputs. So that's just a 

4 quick spot you can put in, you know, a 10 percent 

5 interest rate on your loan versus a 7 percent. 

6 And all the other values update instantly and you 

7 can see the impact of that particular assumption. 

8 And then I mention on the residual value 

9 slide that we have that calculation included to 

10 be able to account for a resale value. There's 

11 also a toggle to turn that calculation on and off 

12 so we can see what the impact of including that 

13 resale value is. 

14 And then we have a table here at the 

15 bottom of the slide that just gives an example of 

16 the LCC results. You kind of have four 

17 categories of values. They get rolled up 

18 together. You have the incremental home cost. 

19 So that's the summation of your down payment, 

20 initial loan fees, as well as all of the monthly 

21 mortgage payments and annual property tax 

22 payments. All rolled up into one number. That's 
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1 compared against the energy cost savings number 

2 which is again the energy savings that happens in 

3 every year rolled up into a single number. 

4 So the reason the incremental home cost 

5 is negative is because in that case the customer 

6 is spending more money, so it's kind of a -- it's 

7 more money out of their pocket compared to the 

8 energy cost savings where money is actually going 

9 into their pocket. 

10 So you add together the numbers of the 

11 incremental home costs, the energy cost savings, 

12 and the residual, and you get the total LCC 

13 savings. And this is the type of summary table 

14 that's provided in some of the other areas of the 

15 spreadsheet. 

16 So I guess, Joe, I guess we have a choice 

17 here. We can look at the cost overview, or we 

18 could go to the spreadsheet. 

19 MR. RAMIZREZ: Before you do, can you go 

20 -- yeah, this is Javier. 

21 Can you go back to the fuel piece there? 

22 And this is something that the work group is 
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1 going to have to determine as far as what's the 

2 fuel distribution? Or do we just use what's 

3 provided here as, I guess as the starting point? 

4 MR. WALKER: I think your first option is 

5 what we want to do. And Emanuel was talking 

6 about some of the possible changes to these 

7 numbers and how important it was. 

8 MR. RAMIZREZ: Okay. 

9 MR. WALKER: So this is kind of a best 

10 estimate that we came up with for publicly 

11 available national data. 

12 MR. RAMIZREZ: Okay. And Emanuel, is 

13 that something that you're working on then? 

14 MR. LEVY: Can you hear me? 

15 MR. RAMIZREZ: Yeah. 

16 MR. LEVY: Can you hear me? 

17 MR. RAMIZREZ: Yeah. 

18 MR. LEVY: We're not currently working on 

19 this. It would be an easy matter for us to do a 

20 little bit of digging here. Particularly as I 

21 mentioned earlier with some of the equipment 

22 manufacturers, because there are only a handful 
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1 of them. 

2 MS. STARKEY: This is (inaudible). 

3 MR. WALKER: The mic is not on. 

4 MS. STARKEY: Lois Starkey from MMHI. 

5 Yes, I think I can get with Emanuel and we can 

6 get that information. We've got members who are 

7 providing these -- not all of them. But as 

8 Emanuel said, there's only a handful so I think 

9 we can -- we'll certainly try our best to get 

10 what we can get. 

11 MR. HAGERMAN: And this is Joe Hagerman. 

12 Mark, is that something also you could probably 

13 get from your members as well? 

14 MR. WEISS: I'll see what I can do. 

15 MR. HAGERMAN: Okay. Great. 

16 Spreadsheet. 

17 MR. RAMIZREZ: So then, just to be clear 

18 then, so Lois, Manny, and Mark will try to -- I'm 

19 sorry, Emanuel will try to gather the fuel data; 

20 the fuel numbers. Is that accurate? 

21 MR. LEVY: Yes, we'll do that. 

22 MR. RAMIZREZ: Okay. How long would that 
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1 take, you think? 

2 MR. LEVY: Lois, do you want to go on 

3 record? 

4 MS. STARKEY: Yeah. I don't know that I 

5 can get it tomorrow, but you know -- 

6 MS. HOFFMAN: In the next seven days? 

7 MS. STARKEY: Oh, definitely. Yeah. I 

8 can get it before the next meeting. 

9 MR. RAMIZREZ: Okay. And then forward 

10 that to Joe -- 

11 MS. STARKEY: Yeah. 

12 MR. RAMIZREZ: -- and then if you could 

13 forward it on to Navigant to -- 

14 MS. STARKEY: Sure. 

15 MR. RAMIZREZ: Great. Thanks. 

16 MR. WALKER: Okay. Well, I think the how 

17 to use the model slide segues nicely into the 

18 overview of the spreadsheet. So I think we'll go 

19 that direction if everyone is ready. 

20 UNIDENTIFIED SPEAKER: You should ask if 

21 there are any comments, questions on the phone. 

22 MR. WALKER: Are there any other 
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1 questions on the phone, though, before I move to 

2 the spreadsheet? 

3 (No audible response.) 

4 MR. WALKER: Okay. Javier, can you make 

5 sure I'm getting -- is this viewable on this 

6 webinar? 

7 MR. RAMIZREZ: Yeah. 

8 (Setting up the PowerPoint presentation.) 

9 MR. WALKER: Okay. So there's a lot of 

10 detail on this spreadsheet and I'll try to keep 

11 the overview rather short, but feel free to stop 

12 me and send me down any specific questions along 

13 the way as you see fit. 

14 I think I'll just start off with a 

15 question from Michael Wade. I may not be able to 

16 answer it on the fly, but we'll see. 

17 He asks, in the inputs and summary tab 

18 why does the cost of the name located in column J 

19 not stay constant when the analysis period 

20 changes? 

21 I think he's referring to what I'm trying 

22 to highlight here in my Quickview LLC Summary. 
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1 That's the incremental home cost. The reason 

2 that does not stay constant is because as the 

3 analysis period changes the number of months of 

4 mortgage payment that's captured in the 

5 incremental home cost changes, and you might 

6 wonder, well, what happens to the rest of that 

7 money? Well, it can be captured in the residual 

8 value if we turn that on. And that's something 

9 we can talk about, but Michael, hopefully that 

10 answers your question, at least for now. 

11 MR. RAMIZREZ: If I remember correctly, 

12 also what you're saying though, is that if we do 

13 get into that, I think it may have been Robin, if 

14 I'm not mistaken, that was saying that if we get 

15 into something like that model then that residual 

16 formula becomes fairly complicated. Is that 

17 accurate? 

18 MR. WALKER: That's right. I mean, it 

19 could be complicated. I was presenting earlier 

20 that we've currently implemented a simpler 

21 strategy where it's a simple linear depreciation. 

22 But there are other factors that you could take 
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1 into play, such as the ability for a customer to 

2 resell, you know, an R30 ceiling, versus an R38 

3 ceiling. I think is that -- 

4 MR. ROY: This is Robin. It can be 

5 complicated, I supposed. 

6 MR. WALKER: Okay. 

7 MR. ROY: And I did raise my concern 

8 about such a complication. On the other hand 

9 there is great interest in thinking of what the 

10 first buyer's perspective would be if it was 

11 again a first buyer. 

12 And to that end there was some 

13 information that was brought forward. The NATA 

14 Guide, which gave some valuation direction, which 

15 is fairly specific for Energy Star, for an 

16 example, which I think you can extrapolate from 

17 in lieu of better information. So that's 

18 actually pretty nice. 

19 I think I've circulated that NATA Guide 

20 that Emanuel Levy was kind enough to provide. I 

21 think others will provide additional information, 

22 but as a starting point, and if there's nothing 
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1 else, it's not that complicated. 

2 MS. EPPERSON: This is Stacy. And Robin, 

3 so you know, at the last minute we held back the 

4 NATA data because it was dated 2011 and we're 

5 just getting an update on it, so they don't have 

6 it just yet. Okay. 

7 MR. UNGER: This is Lowell Unger. Can I 

8 check from what you said? Do I understand that 

9 if you're analyzing a period which is shorter 

10 than the mortgage, or the loan period, or one of 

11 the loan periods, that you're including in the 

12 cost the down payment. I don't know if you have 

13 any homes which have no loans, and then loan 

14 payments only through the end of the period that 

15 you're analyzing. Is that -- 

16 MR. WALKER: That's right. And I think 

17 we'll think about this one a little more off line 

18 too. That's a good question. 

19 MS. HOFFMAN: Before we get going, 

20 continue, we have a point of information from 

21 Michael Lubliner for the committee looking at 

22 fuel type. He says he would caution on using any 
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1 higher gas percentage unless it's propane. He 

2 would caution on using aftermarket heat pumps 

3 data not installed at a plant. So, for the 

4 Committee to entertain. Thank you. 

5 MR. WALKER: Okay. So let me just try to 

6 go through kind of a how-to tutorial to use this 

7 model. I'll try to kind of follow the handouts 

8 that you also may have picked up if you're here 

9 in the room. But the screen works too. 

10 So the first page on the handout and the 

11 screen, the tab that I have on the screen right 

12 now, is the inputs and summary tab, and this is 

13 where you can toggle some of those scenarios that 

14 I'm talking about. So here there's a drop-down 

15 box where you can select one of the different IEC 

16 codes, or Energy Star. Right now we have 2015. 

17 You can select either a single or double 

18 section home. Right now I have a single section 

19 home. 

20 The economic growth case affects the way 

21 the energy costs escalate over the 30 years. The 

22 reference is kind of the standard scenario, so 
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1 we'll just leave it there. 

2 And then we move down into another 

3 section, which I've called financial inputs. And 

4 here's where you see lots of the numbers that 

5 correspond to the parameters that we had on one 

6 of the second slides I presented earlier. 

7 MR. RAMIZREZ: I'm sorry. Let me slow 

8 you down just a -- 

9 MR. WALKER: Sure. 

10 MR. RAMIZREZ: Let me slow you down for 

11 just a minute. 

12 All right. I wanted to slow you down 

13 just because I was pretty impressed with what you 

14 just did there with the economic growth thing. I 

15 didn't know Excel could do that so I learned 

16 something else today. That's my second learning 

17 for today. 

18 But does everyone else understand that? 

19 So when you have -- if you have this spreadsheet 

20 here, that you could play around with that? Can 

21 you show how to do that again? 

22 MR. WALKER: So, I think a better example 
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1 is looking at the efficiency level. Is that one 

2 also interesting? 

3 MR. RAMIZREZ: Okay. Yes. Yeah. 

4 MR. WALKER: So, if I'm wanting to know 

5 the LCC savings associated with a particular code 

6 or a particular efficiency level, I can click 

7 here and the cell will be seven. It gives me a 

8 lot of options. The custom levels aren't valid 

9 right now, but they are sort placeholders for any 

10 future runs we want to do, and I could select the 

11 2009 IECC and you can see that all the numbers on 

12 the green table updated. 

13 MR. RAMIZREZ: Okay. 

14 MR. WALKER: I'm just going to put it 

15 back to 2015 because I think that's a nice one to 

16 look at -- 

17 MR. RAMIZREZ: Okay. 

18 MR. WALKER: -- right now, but they all 

19 are functional. 

20 MR. LUTER: Question, please? 

21 MR. RAMIZREZ: Yeah. 

22 MR. LUTER: Okay. Rob with Lippert. 
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1 What is the baseline for savings? You indicate 

2 that incremental home costs in that indicate 

3 savings, but versus what? Baseline HUD or -- 

4 MR. WALKER: You're correct. Baseline 

5 HUD is the reference point for all of the 

6 incremental cost assumptions, as well as the 

7 energy use. So baseline HUD represents the cost 

8 and energy use reference point. 

9 MR. LUTER: Okay. Thank you. 

10 MR. LEVY: Matthew. It's Emanuel Levy. 

11 Can you hear me? 

12 MR. WALKER: Yes, I can. 

13 MR. LEVY: Can you scroll one column to 

14 the right so we can see the last column in the 

15 table. 

16 MR. WALKER: Oh. 

17 MR. LEVY: Yep. So, am I correct in 

18 interpreting what's happening here is that when 

19 you compare HUD against, in this case, IECC 2015, 

20 for single section home, for example in a 

21 location like Baltimore, the cumulative cost of 

22 doing that is 1934, and the cumulative savings is 
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1 5440, for a net total savings of 3506? 

2 MR. WALKER: That's correct. 

3 MR. LEVY: So whenever you have a 

4 positive in the LCC savings column, what it 

5 suggests is that more efficiency, even more than 

6 2015, is cost effective? 

7 MR. WALKER: That is correct. And I do 

8 just want to put in another plug for the caveat 

9 of the fact that the (indiscernible) right now is 

10 straw man. And so we shouldn't get too concerned 

11 about the particular results right now. But that 

12 is a correct interpretation of what we have on 

13 the screen right now. 

14 MR. LEVY: Okay. And the simple pay back 

15 is a very useful piece of information because 

16 what it's suggesting is that the specific set of 

17 assumptions you've made result in a simple 

18 payback of 11.4, but given that set of 

19 assumptions you can probably go even farther than 

20 that and still be cost effective. 

21 MR. WALKER: Yeah, I mean, it's a 

22 possibility. If another energy efficiency 
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1 measure that was higher performing than IECC 2015 

2 existed and it also was at a cost effective price 

3 point, it's a possibility. 

4 MR. LEVY: Well certainly in the southern 

5 zones there will be efficiency measures which are 

6 available to get beyond the levels that you've 

7 shown there. 

8 MR. WALKER: Okay. 

9 MR. SANTANA: This is Manny with CAVCO. 

10 Now the home costs, are those mostly based on 

11 material costs? So when you said baseline HUD, 

12 you know, the incremental home costs, or this is 

13 how much more it's going to cost a baseline HUD. 

14 So what are you using for say Zone 1A in Miami? 

15 What are you using insulation level? 

16 MR. WALKER: You said insulation? 

17 MR. SANTANA: Yeah. 

18 MR. WALKER: Well, I can't show that very 

19 easily with the spreadsheet I have up right now, 

20 but we can look at PNNL's Energy Plus output, 

21 which provided the particular R values associated 

22 with the 2015 code for Zone 1A, for either the 
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1 wall or ceiling, or whichever component you're 

2 interested in. And that would be the type of 

3 insulation that was assumed when we applied a 

4 cost value. 

5 MR. SANTANA: Okay. 

6 MR. WALKER: I just don't have a good 

7 visual for that right now. 

8 MR. SANTANA: Okay. But when you say 

9 that this is how the 2015 IECC compares is it 

10 2015 prescriptive path? You know, so the 

11 insulation, those that are given in the chart, 

12 the IECC? 

13 MR. BARBOUR: Yeah. This is Ed Barbour 

14 with Navigant. It's the 2015 IECC PNNL runs. 

15 And in some cases they've made assumptions in 

16 terms of where you can get to in terms of 

17 insulation levels and different components. 

18 So what is shown in here directly match 

19 what PNNL did from the Energy Plus runs in order 

20 to come up with the energy savings associated 

21 with the different IECCs as well as the HUD code, 

22 which is the baseline. 
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1 Matthew is going to go through individual 

2 component costs that were assumed, or at least 

3 placed in here. And again, it is a straw man, to 

4 try to get feed back from the working group on 

5 where we are, as well as to start to solicit, you 

6 know, some real costs and real data from the 

7 Manufactured Housing Group. So. 

8 MR. SANTANA: Okay. Okay. You know, now 

9 how were things like say whole house tightness, 

10 you know, how was the incremental cost of that 

11 assumed or figured? 

12 MR. WALKER: Manny, we do have some 

13 slides that we're going to get to after I run 

14 through the spreadsheet that will have the 

15 particular ceiling or tightness levels, and the 

16 cost associated with those. I think it might be 

17 easier to handle your question then if you don't 

18 mind waiting. 

19 MR. SANTANA: Yeah, that's fine. 

20 MR. WALKER: Okay. Great. 

21 MR. SANTANA: Thanks. 

22 MR. LUTER: Question, please? 
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1 MR. WALKER: Go ahead. 

2 MR. LUTER: Rob with Lippert. Just a 

3 point of clarification. Incremental home cost in 

4 this slide is manufactured cost, correct? 

5 MR. WALKER: Well, that's actually -- I 

6 want to be sure I know what you're saying. It's 

7 the price that the customer experiences when they 

8 go to purchase the more efficient home, as the 

9 retail price. 

10 MR. LUTER: Okay. So it's the street 

11 price or retail price. Okay. 

12 MR. WALKER: Correct. And that's 

13 certainly where we want to be once we have agreed 

14 upon those costs. If you find these numbers not 

15 to be representative of the retail, that's where 

16 we want to go later on. 

17 MR. LUTER: Understood. 

18 MR. WALKER: Yeah. 

19 MR. LUTER: I agree that retail is what 

20 you need to look at but I'm not sure how we got 

21 there on this analysis. 

22 MR. WALKER: Right. 
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1 MR. LUTER: And I’m hoping to find out. 

2 MR. KESSLER: This is Bert at Palm 

3 Harbor. I've got the spreadsheet up on the 

4 screen that was sent yesterday. 

5 MR. WALKER: Okay. 

6 MR. KESSLER: And I don't have column N. 

7 MR. WALKER: Yeah, I was afraid someone 

8 might ask that. 

9 MR. KESSLER: The simple payback. 

10 MR. WALKER: When I made the printouts, 

11 for the people that are in the room, I thought 

12 that the simple payback should be brought to a 

13 higher level view, so that it didn't have to be 

14 found at a lower level of the spreadsheet. So we 

15 can provide the updated version to you. But the 

16 simple payback numbers are on a different tab and 

17 I'll show you where those are. But I thought 

18 that they were a nice one to have here on the 

19 summary table. It seems like Emanuel enjoyed 

20 looking at them too. 

21 MR. HAGERMAN: Joe Hagerman. Is that 

22 something that we could circulate at break or 
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1 something? 

2 MR. RAMIZREZ: It looks like it's trying 

3 to do it right now, so -- 

4 MR. HAGERMAN: Okay. Great. 

5 MR. RAMIZREZ: -- you all should get it 

6 here in just a minute soon as -- it just went 

7 through so you could check your e-mail in just a 

8 few seconds. 

9 MR. HAGERMAN: Is there any other changes 

10 in that new version that you sent out; that's 

11 being sent out right now that you want to tell 

12 everybody about? So there's no surprises. 

13 MR. WALKER: No, this is the substantive 

14 change. I think you might find that column J -- 

15 or cell J5 used to be called Home Cost, and I 

16 added the word "incremental" to emphasize that 

17 point. But no, no other surprises. 

18 Okay. So yeah, thanks for working with 

19 us. 

20 MR. RAMIZREZ: Lowell, you had a 

21 question? 

22 MR. WALKER: It's a living model. 
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1 MR. UNGER: Silly random question. When 

2 I look at this you have about a dozen regions or 

3 so, and I think for equipment types, and you sum 

4 over the equipment types. But I don't have a 

5 sense how to look at the regions. Do you have 

6 any information on how many manufactured homes 

7 there are in each of these regions? 

8 MR. WALKER: I think we do. I almost 

9 think we've distributed a map in one of the 

10 earlier meetings. I think that's something we 

11 could get back to you on. 

12 MR. UNGER: Yeah. Because I wasn't 

13 expecting an immediate answer, but -- 

14 MR. RAMIZREZ: Yeah, we -- 

15 MR. UNGER: -- I would be interested in 

16 that so I could kind of look. 

17 MR. RAMIZREZ: Yeah. 

18 MR. BARBOUR: This is Ed Barbour with 

19 Navigant. Yeah, we can submit that and actually 

20 that's another piece of information we should 

21 look for the working group to look at. And 

22 that's the distribution by climate zones in terms 
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1 of stars and percentage of homes. Total number. 

2 Well, actually, that's how it weights. So if, 

3 you know, for example if -- and we've assumed, 

4 you know, the majority of the placements are in 

5 the south and the southwest, and they have the 

6 larger percentage of the total that comes in, as 

7 well as we've done the fuel costs, the weighting 

8 costs by the different regions that we showed 

9 earlier. We've mapped that and that's actually 

10 what you're seeing there, until we get to the 

11 national number. But we see the fuel costs are 

12 what weights everything from Miami, Houston, 

13 Phoenix, those areas. 

14 So we can show how we map that. 

15 MR. WALKER: Yeah. And you make a good 

16 point because we have not rolled up those 12 

17 zones into a single number, which is what Lowell 

18 was asking about. 

19 MR. UNGER: At least have some 

20 information toward that. 

21 MR. WALKER: Yeah. 

22 MR. RAMIZREZ: Ed, did you say that you 
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1 needed something from the working group on that? 

2 MR. BARBOUR: It's the same answer I'm 

3 going to say with every piece of data that's in 

4 here. We need inputs from the working group. 

5 And I've heard some statements in some of the 

6 questions that they're eager to see what's behind 

7 the numbers. We can share that, but those, I 

8 hope, are not the final inputs for the EEM that 

9 end up influencing or informing, not influencing, 

10 informing the working group's decision. 

11 The numbers that are in there are 

12 placeholders to make sure the model works. 

13 MR. RAMIZREZ: Okay. 

14 MR. BARBOUR: So I want to emphasize 

15 that. It's based on data that is publicly 

16 available that we could have and that we put in, 

17 so they're hopefully representative and not an 

18 order of magnitude off. Who knows, maybe they 

19 are. But they're data that we've collected, put 

20 in, make sure the model works. Hopefully we're 

21 in the ballpark so that it gets, you know, the 

22 model -- because if it's not then the model may 
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1 not work as well either. 

2 But we just want to make sure that that's 

3 what it is. 

4 MR. RAMIZREZ: Okay. 

5 MR. BARBOUR: So everything that you see 

6 in the tool, we're always open and actually we 

7 would like feedback from the working group in 

8 terms of how the LCC -- we want to make sure that 

9 they get the analysis that they need to inform 

10 their decisions. That's the key point. 

11 MR. RAMIZREZ: And if I'm not mistaken, 

12 Lois, that's what you and Emanuel are putting 

13 together some of those numbers? 

14 MS. STARKEY: For? 

15 MR. RAMIZREZ: Some of the numbers that 

16 we need; specific numbers that we need in order 

17 to plug into the spreadsheet. 

18 MS. STARKEY: Well, we're going to get 

19 the breakdown of fuel use, and I mean, we're 

20 working on all the numbers. I mean, Emanuel -- 

21 yeah, I know Emanuel is working -- 

22 MR. RAMIZREZ: Okay. 
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1 MS. STARKEY: -- and our manufacturers 

2 are working very hard to get those costs. And I 

3 also can provide a breakdown that HUD and MHI 

4 have done over the years of what your breakdown -

5 - you can see what the regional shipments are by 

6 state. 

7 MR. RAMIZREZ: Okay. 

8 MS. STARKEY: If it would help. Was 

9 there anything else? 

10 MR. RAMIZREZ: Well, that's the question 

11 I was going to ask. I guess it goes to Ed and 

12 Matthew. Are there other information other than 

13 what Lois and Emanuel are putting together here 

14 that you would need from the working group; the 

15 working group could help to get data to plug in 

16 here? Other than what they're working on? 

17 MR. BARBOUR: And this is Ed Barbour, 

18 Navigant. 

19 Not really, but we're getting ready to go 

20 through the difficult details behind some of the 

21 EEM costs, at least in terms of the insulation 

22 levels and the fenestration levels and the air 
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1 tightness that we would want to get feedback 

2 from. 

3 MR. RAMIZREZ: Okay. 

4 MR. BARBOUR: So as we walk through, I 

5 imagine that we're going to elicit responses from 

6 a number of manufacturers in saying, oh that's 

7 way too low or that's way too high. Or maybe 

8 not. But you know, so we'll see that here. 

9 MR. RAMIZREZ: So the group just needs to 

10 look for anomalies. 

11 MR. BARBOUR: Well just, you know, help 

12 us correct the data or help us have better data 

13 in that particular format. 

14 MR. RAMIZREZ: Okay. I'm sorry. Someone 

15 on the phone? 

16 MR. LUBLINER: Yeah, this is Mike 

17 Lubliner. I just want to clarify that the data 

18 that's used now, would you characterize this as 

19 the best data DOE has available to it, and point 

20 out that DOE has asked for this data since the 

21 ANOPR and has used the data that it received from 

22 the ANOPR, as well as other sources. 
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1 The question for Ed or Joe. 

2 MR. BARBOUR: Yeah, this is Ed Barbour. 

3 MR. LUBLINER: Is the data -- 

4 MR. BARBOUR: I would not characterize 

5 this as the best available data to DOE. This is 

6 not a result of a comprehensive cost study that 

7 DOE funded at Navigant. It is based on publicly 

8 available data that we could compile in less than 

9 a month. That's the way I would characterize it. 

10 MR. LUBLINER: Thank you. 

11 MR. BARBOUR: From all sources; all 

12 residential sources. So again, I hope we're in 

13 the ballpark. I hope we're not off on order of 

14 magnitude. But it is not based on a funded cost 

15 study as we might do in other compliance 

16 standards regulations. It's meant to be a 

17 starting point for discussions for the working 

18 group. 

19 MR. RAMIZREZ: Okay. So then when we get 

20 into those cost items, then we'll see exactly how 

21 those look then. Okay. 

22 MR. HAGERMAN: I mean, this is Joe 
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1 Hagerman with DOE. I think all the working group 

2 members want to get these costs right. Right? 

3 Because it drives the output, so. 

4 MR. RAMIZREZ: Right. 

5 MR. HAGERMAN: You know, the ask is 

6 always out there, give us better cost data. You 

7 know, absent better cost data we're stuck using, 

8 you know, Navigant's best guesses -- 

9 MR. RAMIZREZ: Okay. 

10 MR. HAGERMAN: -- from those publicly 

11 available data sources. So. 

12 MR. RAMIZREZ: Okay. So they're clear 

13 that NCI is a default unless we hear other. 

14 Okay? 

15 MS. DICKENS: This is Ishbel. May I ask 

16 a simple question? 

17 MR. RAMIZREZ: Yeah. 

18 MS. DICKENS: So, I was looking at this 

19 spreadsheet and I appreciate that the numbers 

20 we're using are just what you have and that's 

21 great. So, is it true to say that if you're 

22 buying a home in San Francisco it would take you 
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1 -- the longest is six years, to make the least 

2 overall savings, where as if you were in 

3 Fairbanks it would take you the least number of 

4 years to make the maximum number of savings? 

5 MR. WALKER: Ishbel, I'll say part of 

6 your question got a little bit garbled as it came 

7 through. But I can just say what a payback 

8 period is and I think that will help you. 

9 A simple payback just says how long does 

10 it take for me to recoup my initial investment 

11 without any fancy financial discountings or 

12 anything like that. So it's just, I spent $100 

13 on a house, I get $50 a year energy savings, so 

14 that takes two years to pay back. It's that 

15 simple. I shouldn't say it's that simple, but 

16 that's the way that particular parameter is 

17 calculated. 

18 So when you gave the San Francisco 

19 example, yes, in 11.4 years the San Francisco 

20 customer would recoup their initial investment. 

21 That's the best way to interpret that. Does that 

22 help you? 
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1 MS. DICKENS: Yeah, although it seems as 

2 if living in Fairbanks you're going to recoup 

3 your initial investment much quicker and make a 

4 greater overall total savings. Is that right? 

5 MR. WALKER: Well, I mean, I can just -- 

6 I can talk through generally how that happens. 

7 So in Fairbanks your energy cost just naturally 

8 is enormous because you're very cold and you're 

9 always running your heater. So if you make any 

10 small change to the efficiency of that Fairbanks 

11 person's home, the savings are magnified because 

12 they're running their systems much more. 

13 So that's why, if you can see what I'm 

14 highlighting on the screen, that person is saving 

15 $16,000 in energy in Fairbanks as opposed to only 

16 $3,000 in San Francisco, while they have kind of 

17 similar incremental home costs because the EEMs 

18 associated with the code in those zones is fairly 

19 similar. 

20 Yes, it's a similar property. The person 

21 who has the most expensive home to operate is 

22 able to yield or glean the most savings. 
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1 MS. DICKENS: Right. Okay. Good. Thank 

2 you. That's helpful. 

3 MR. WALKER: Okay. 

4 MS. DICKENS: Thank you, Matthew. 

5 MR. LEVY: Matthew, it's Emanuel Levy. I 

6 have two interrelated questions. One is actually 

7 a point followed up by Ishbel's comment. 

8 If you kept adding more and more beyond 

9 2015, conservation measures to the home in 

10 Fairbanks, until the LCC savings came down to 

11 zero, which potentially is what we're looking at 

12 as the target here, right? That's the bottom of 

13 the curve. 

14 MR. WALKER: I mean, I guess that's a 

15 possibility. 

16 MR. LEVY: Just theoretically. All the 

17 simple paybacks, in that case, if all the LCC 

18 savings got down to zero, all the simple paybacks 

19 would get to some level, right? Like 13 years or 

20 14 years, based upon the numbers you have here. 

21 MR. WALKER: Uh-huh. 

22 MR. LEVY: So the simple payback is just 
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1 kind of an artifact. It just tells you how many 

2 years your LLC analysis is equivalent to in terms 

3 of simple payback. 

4 MR. WALKER: That's right. 

5 MR. UNGER: Can I interrupt? I think 

6 what he's saying is not quite correct. The LCC 

7 savings here is compared to HUD code. It's not -

8 - I mean, if you get to zero you will have the 

9 same overall financial impact as the HUD code. 

10 You will not have the leased life cycle cost. 

11 MR. WALKER: That's right. 

12 MR. UNGER: So I mean, you would have to 

13 maximize, you would have to adjust the parameters 

14 until you maximize the LCC savings in order to 

15 hit the low point on the curve, if that's the 

16 objective. 

17 MR. LEVY: Yeah, I mean, actually this 

18 brings me to the second point. I don’t agree 

19 with that because it's not really being compared 

20 with -- 

21 MR. RAMIZREZ: Emanuel. 

22 MR. LEVY: Yes, sorry. 
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1 MR. RAMIZREZ: Before you get too deep 

2 into that let me ask the nonengineers, are you 

3 following this? 

4 MS. STARKEY: (Shakes head no.) 

5 MR. RAMIZREZ: Okay. All right. Yeah, 

6 and you can hide behind me on this one, right? 

7 Yeah, I wasn't quite following that 

8 either and I want to make sure that -- because it 

9 seems like that is one of the lynch pins here 

10 that we're trying to figure out, and I want to 

11 make sure that everyone understands this. Is 

12 there a way that that could be explained in 

13 layman's terms? 

14 Does anyone want to give that a shot, the 

15 life cycle cost curve? 

16 MR. LEVY: Yeah it's (inaudible). 

17 MR. RAMIZREZ: Okay. So can you pull up 

18 that slide? 

19 All right. Now, if we could -- Matthew, 

20 I'm going to call on you here to use the pointer 

21 here. Now, as you're discussing this, move the 

22 pointer along the line as low -- and Emanuel, 
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1 while we're talking here. 

2 So Emanuel, you said that if the goal is 

3 to get zero, where is that at on this curve? 

4 MR. LEVY: The red dot, right. 

5 MR. WALKER: No. 

6 MR. RAMIZREZ: Okay. So there's some 

7 disagreement here. 

8 MR. UNGER: So first of all, if you're 

9 trying to compare this curve to the spreadsheet, 

10 the spreadsheet has LCC savings. This curve is 

11 in terms of LCC, life cycle cost. So, you would 

12 have to flip the vertical axis. What is positive 

13 in the spreadsheet is negative on this chart. 

14 Now, the other piece is that the 

15 spreadsheet is comparing the life cycle cost to 

16 the HUD code. The baseline is the HUD code. So 

17 zero on the spreadsheet would be at the yellow 

18 square. 

19 MR. RAMIZREZ: The dotted line. 

20 MR. UNGER: Where the dotted line is 

21 would be where zero is on the spreadsheet, as the 

22 spreadsheet is currently constructed. And as you 
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1 go down the curve toward the red dot, the life 

2 cycle cost savings on the spreadsheet will 

3 increase, and you would get a higher and higher 

4 number and eventually if you went past the red 

5 dot, I don't know whether it does in terms of the 

6 scenarios that are available in the spreadsheet, 

7 then you would eventually start returning and you 

8 would start getting lower life cycle cost savings 

9 compared to the HUD code. So the number on the 

10 spreadsheet would then start getting lower again. 

11 MR. RAMIZREZ: And you start moving 

12 towards the dotted line again. 

13 MR. UNGER: Right. Right. And 

14 eventually you would again hit zero, at which 

15 point the life cycle cost is the same as if you 

16 had the home at the HUD code. 

17 MR. RAMIZREZ: Emanuel. 

18 MR. LEVY: Yeah, all of you agree that 

19 the red dot is a point at which the savings 

20 exactly equals the cost. 

21 MR. UNGER: Not if you're comparing it to 

22 HUD code. 
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1 MR. LEVY: Well, okay. This is what -- 

2 MR. SANTANA: Manny with CAVCO. 

3 MR. LEVY: Sorry. 

4 MR. SANTANA: When you say zero, do you 

5 mean that's a zero incremental cost? Well, it's 

6 the same cost as the (indiscernible)for the HUD 

7 code, for the HUD baseline? 

8 MR. WALKER: Yes, that is correct. 

9 MR. SANTANA: So zero means zero added 

10 cost to the consumer, right? 

11 MR. WALKER: That's right. 

12 MR. SANTANA: Okay. 

13 MR. WALKER: And that's zero added cost 

14 over the whole life of operating the product. So 

15 on the yellow square, if you make a HUD code home 

16 and then you make another HUD code home, and you 

17 compare the total operating costs of the two 

18 homes, and subtract the two, you get a zero. 

19 Then if you go way down the curve, surf back up 

20 to the dotted line, there's another point where 

21 you've spent a ton of money making a really 

22 efficient home, and the energy cost savings 
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1 associated with that more efficient home exactly 

2 offset the energy cost savings. And so that's 

3 another equivalent home from a life cycle cost 

4 basis. Even though that customer with the zero 

5 on the far right-hand side of the plot has had to 

6 spend more money up front. 

7 So they're equivalent on a life cycle 

8 cost basis, they're not equivalent on a first 

9 cost basis. 

10 UNIDENTIFIED SPEAKER: Where would the 

11 curve intersect on that? 

12 MR. SANTANA: I think, you know, the way 

13 that I understood this is that once you get to 

14 the right of the red dot, you get diminishing 

15 returns because, you know, so the zero on the 

16 other side, that isn't a zero. It's a whole lot 

17 more expensive. You just -- 

18 MR. LEVY: You actually -- Manny, you're 

19 getting negative returns. 

20 MR. SANTANA: Right. That was my 

21 understanding of the curve. So it isn't a zero 

22 on the right side of the curve. You know, it's 
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1 going to be a lot more expensive, but you get 

2 less energy savings. So you get less bang for 

3 your buck, essentially, when you get past the red 

4 dot. 

5 MR. RAMIZREZ: The negative returns are 

6 the -- 

7 MR. LUBLINER: This is Mike Lubliner. 

8 MR. RAMIZREZ: Go ahead, Mike. 

9 MR. LUBLINER: Yeah. I'm totally 

10 confused here. You know, I thought this was 

11 pretty clear that the optimum point from an 

12 energy and a life cycle cost is where that dotted 

13 line meets on the right of the curve. 

14 Diminishing or not, Manny, it's still to 

15 the consumer, more cost effective to buy the home 

16 as it moves to the right. 

17 And the other point I wanted to make has 

18 to do with the misrepresentation of payback as a 

19 useful absolute assessment tool for cost 

20 effectiveness. Payback is a great tool for 

21 comparing, as Ishbel pointed out, you know, one 

22 city to another and relative savings. But 
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1 payback does not consider the things that are 

2 shown here in the life cycle cost because if a 

3 payback is two years and the measure lasts 30 

4 years, the payback doesn't consider the energy 

5 savings for the next 28 years. Nor does it 

6 consider if the person sells the home after two 

7 years in Fairbanks, the money that they get back 

8 out of their initial investment. 

9 So I would caution us not to use or 

10 discuss payback other than for relative 

11 comparisons like climate. Climate, for example, 

12 you know, it cuts both ways. 

13 The Fairbanks example might show that 

14 foam sheeting on the walls is cost effective, 

15 which clearly it wouldn't maybe not be in San 

16 Francisco. So it's useful for looking at 

17 relative comparisons. But really we need to 

18 fundamentally understand this life cycle cost, 

19 all of us here, and agree that optimum point is 

20 where that curve reintersects that dotted line. 

21 MR. WALKER: Yeah. I'd like to try to 

22 clarify one more time on this plot. I think we 
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1 have to be careful with optimal because that gets 

2 into a judgment call as to what is best on the 

3 plot. But we can at least agree upon the facts 

4 of what the plot represents. 

5 So let me just try one more time and I 

6 feel like there's still differing views. And it 

7 would be nice like Michael Lubliner was saying, 

8 it would be nice for us all to come to the same 

9 consensus here. 

10 So, if you start at the yellow dot, 

11 that's a HUD code home. If you buy another HUD 

12 code home you don't save any money; you're at the 

13 same place. So that's a zero. It means you've 

14 saved zero money. 

15 As you move down the curve to the green 

16 dot you've spent more to buy a more expensive 

17 home but there's energy savings and those energy 

18 savings are large, so they make the overall cost 

19 of ownership of that home less than the yellow. 

20 And so because the overall cost of ownership is 

21 less than the yellow, there are positive savings 

22 because you might have a $100 HUD code home minus 
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1 a $90 green home to get $10 of savings. But then 

2 you can push that even further. You can get to 

3 the red dot where you might have a $100 HUD code 

4 home but only an $80 red home. 

5 And so that's your maximum LCC savings. 

6 You've saved the most money relative to the 

7 yellow HUD code home. 

8 But then as you continue to move to the 

9 right you can increase your energy savings, 

10 because that's what's happening as you move to 

11 the right. So you go to the blue home. You've 

12 increased your energy savings, but you're not 

13 saving as much money as the red home. And 

14 actually the blue home and the green home have 

15 the same overall cost of ownership except the 

16 difference is that the blue home cost more up 

17 front. 

18 The same thing happens as you look at any 

19 vertical -- or sorry, horizontal line on the 

20 plot. So if we take the dotted line, the yellow 

21 square and my zero over here, which I'm drawing 

22 again, both have the same overall cost of 
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1 ownership. So this point here represents the 

2 most energy savings you can have without making 

3 the overall cost of ownership of the home greater 

4 than the HUD code home. So there's no money 

5 saved there, but there's a lot of energy saved. 

6 But then you can push it even further and 

7 buy which is called the space age manufactured 

8 home. It's so expensive that the energy savings 

9 never offset the first cost, and that's why it 

10 falls above the dotted line, and so that's a 

11 negative savings which means loss of money. 

12 So I think that's the facts of how to 

13 interpret this plot. Now there's discussion as 

14 to where on the curve we want to end up as a 

15 group, but I think that's the accurate 

16 description of what this means. 

17 MR. SANTANA: Well, this is Manny with 

18 CAVCO, and I think I understand what you're 

19 saying. So the difference between the dotted 

20 line where it intersects the curve on the right21 hand side and the yellow point, the difference 

22 between those two is just a matter of time? 
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1 MR. WEISS: No, that -- 

2 MR. RAMIZREZ: Time and cost. 

3 MR. WEISS: Yeah. 

4 MR. RAMIZREZ: Time and cost of the 

5 initial energy efficiency measures. 

6 MR. WEISS: In other words, the space -- 

7 MR. SANTANA: So those two points are 

8 back at zero, so it's just over time, you know, 

9 you spent more money but you save on energy so 

10 those two -- so you know, another thing that I'd 

11 like to point out is that this curve is 

12 idealized. You know, the line from the red dot 

13 to the point where it intersects the curve, might 

14 be a very steep line, right? 

15 MR. WALKER: It's a possibility. This 

16 curve is just an illustration. It doesn't 

17 represent -- 

18 MR. SANTANA: Right. 

19 MR. WALKER: -- the expectation for 

20 manufactured housing. It could be very 

21 different. 

22 MR. LEVY: This is Emanuel. Could I 
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1 interject a point here? 

2 MR. WALKER: Sure. 

3 MR. LEVY: If you were to plot the points 

4 on your table, the table we were just looking at, 

5 the green point would have a positive value. 

6 MR. WALKER: Correct. 

7 MR. LEVY: The red points would be zero. 

8 MR. WALKER: That's not -- 

9 MR. LEVY: The blue would have a negative 

10 point. 

11 MR. WALKER: That isn't correct, Emanuel. 

12 I don't mean to be so -- 

13 MR. LEVY: I mean, so what -- 

14 MR. WALKER: -- abrupt, but it really 

15 isn't. 

16 MR. RAMIZREZ: The zero -- 

17 MR. LEVY: I mean, if you moved from the 

18 dot -- if this was really a series of dots, this 

19 curve, the dot that was right before the -- and 

20 each one of those dots represented a level of 

21 efficiency, the dot that was right before the red 

22 curve, to go from that dot to the red point would 
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1 be almost zero. 

2 MR. WALKER: You're talking about where 

3 my arrow is? 

4 MR. LEVY: It would still be positive. 

5 Yes. 

6 MR. WALKER: Okay. 

7 MR. LEVY: If there was a dot there, and 

8 we're trying to construct this curve as part of 

9 this exercise we're going through. If there was 

10 a dot on the curve right there, the difference 

11 between that dot and the red dot, and moving to 

12 the red dot another level of efficiency, would 

13 generate slightly positive results. 

14 The next dot after that red dot, the next 

15 level of efficiency, would be slightly negative. 

16 Would you agree with that? 

17 MR. WALKER: I feel like what you're 

18 describing is the change in LCC savings. You're 

19 talking about the slope of the curve. And I 

20 would agree with that. But, if we're talking 

21 about simply the value of red dot LCC minus -- 

22 or, sorry. Yellow square LCC minus red dot LCC, 
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1 that's not a zero. Would you agree with that? 

2 MR. LEVY: Yeah. No, I’m sorry. I was 

3 talking about incremental change. 

4 MR. WALKER: Right. So incremental 

5 change, we're totally with you, and that's kind 

6 of a calculus thing that we get all excited about 

7 where that's the optimal point where the slope 

8 gets a zero. 

9 MR. RAMIZREZ: All right. 

10 MR. LEVY: Right. 

11 MR. RAMIZREZ: So, to go back to layman, 

12 though, we're using an anchor. We're using a 

13 starting point and that starting point is the HUD 

14 code and we're measuring everything off of that, 

15 not the incremental moves. Or can we, I guess? 

16 Can we do that? 

17 MR. LEVY: Well, I think that's the 

18 difference between what we should be doing and 

19 what has been done so far. I think what has been 

20 done so far is very helpful, but I would like to 

21 make a pitch for the fact that this really should 

22 be an incremental analysis. And I'm not sure how 
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1 to use the tool right now to accomplish that. 

2 MR. LUBLINER: This is Mike Lubliner. I 

3 again would respectfully disagree with what Matt 

4 was proposing. 

5 I understand that the cost of ownership 

6 over the life of the home is what we've been 

7 targeted by Congress to look at, which means it 

8 isn't the calculus and the increments, it's the 

9 overall package to the consumer. And I'm a 

10 little concerned that we're really going sideways 

11 here with suggesting that we're not going to be 

12 looking at the full cost of ownership over the 

13 life of the home. It bothers me that we're 

14 dealing with the calculus of what the optimum 

15 point. 

16 If we were designing a voluntary program 

17 with incentives we might be looking at maximizing 

18 that optimum. But we're not here. We're trying 

19 to get what's cost effective to the consumer over 

20 the life of the home, and it doesn't matter what 

21 happens down in the calculus. It matters what 

22 happens at the horizontal intersection. Thank 
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1 you. 

2 MS. STARKEY: This is Louis from MHI. I 

3 would like to hear what Emanuel's rationale is 

4 for taking the optimal incremental approach. 

5 MR. LEVY: Yeah, I'm glad to say that. 

6 And Mike, just to clarify, I'm not disagreeing 

7 that we're doing a life cycle cost analysis and 

8 that's what we want to be doing. I am agreeing 

9 with that. I'm just saying that the way you go 

10 about doing that to make sure you make the best 

11 investment for the homeowner is to determine all 

12 those features that from a life cycle cost 

13 standpoint are cost effective. 

14 And the way you do that is you would 

15 create a curve like what we're looking at on the 

16 screen, which consists of a series of dots. And 

17 each dot consists of an incremental improvement 

18 in efficiency. And instead of looking at jumps 

19 from HUD code to IECC 2015, it's much better from 

20 the life cycle cost perspective for the consumer 

21 to look at incremental level jumps in efficiency 

22 until they reach a point where the next jump, 
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1 going from R13 to R19, for example, yields a 

2 negative result for the consumer, whatever that 

3 number is. 

4 And if you just simply look at big jumps 

5 like going from HUD to IECC 2015, you are 

6 assuming that you're adding a whole bunch of 

7 features into the home, some of which will be 

8 cost effective, and some of which are not cost 

9 effective, but you don't really get to see that 

10 until you look at the measures individually. 

11 MS. HOFFMAN: Lois -- 

12 MR. LUBLINER: Mike Lubliner. Yeah. 

13 MS. HOFFMAN: Hold on. Did that answer 

14 your question? 

15 MS. STARKEY: Yes. 

16 MR. LUBLINER: I agree that it may be 

17 interesting to look at the increment of each 

18 measure, but that's not what we're concerned 

19 about. We're concerned about a package of 

20 measures that overall are the lowest life cycle 

21 cost package to the consumer when compared to the 

22 status quo which is the HUD 1994 energy code. 
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1 MR. LEVY: And, Michael, I'm suggesting 

2 to you that what I just laid out is the way to 

3 get there. 

4 MR. LUBLINER: I guess we disagree. I'm 

5 sorry. 

6 MR. RAMIZREZ: And maybe I'm over 

7 simplifying this, but I think that the scope of 

8 this committee was to look at the 2015 IECC as a 

9 starting point. And John, maybe you could chime 

10 in here as far as if we don't reach agreement, 

11 what happens? And I don't mean to -- 

12 MR. CASKEY: You have to remember -- 

13 MR. RAMIZREZ: I'm like a bullet. 

14 MR. CASKEY: -- I work for NEMA. I don't 

15 work for, you know, DOE. DOE is obligated to do 

16 the best job that they can on energy efficiency 

17 improvements in this sector. And, you know, it's 

18 up to them to decide what they're going to do if 

19 this group doesn't reach consensus. 

20 MR. RAMIZREZ: Yeah, and I was thinking 

21 more of like the -- as the ASRAC member, that 

22 this thing being assigned to a working group, if 
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1 the working group cannot come up with a 

2 consensus -- 

3 MR. CASKEY: Then it basically is passed 

4 back to DOE for them to do it on their own. 

5 MR. RAMIZREZ: And we're using 2015 IECC 

6 as that starting point. This is what we're 

7 looking at. And what doesn't work in the 2015 

8 IECC, what can, and whatever doesn't work, what 

9 recommendations or modifications can this 

10 committee agree on by consensus? Is that an 

11 accurate summary of what we're doing? 

12 MR. ROY: This is Robin. Can I throw in 

13 -- we're bogged down uselessly here. If we had 

14 some numbers that we were talking about I think 

15 it would clarify it for so many. Talking in the 

16 abstract with curves is really cool for folks 

17 that get the curves. I get the curves, and I 

18 understand why it's difficult for folks to get 

19 curves. I don't get a lot of things in English, 

20 but I do get numbers and that's fine. 

21 We should move on, have some real 

22 numbers, and I will say something else. I mean, 
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1 with respect to what our objective is, typically 

2 NRDC would be working towards the maximum amount 

3 of energy savings that is achievable without 

4 leaving consumes worse off. So no savings in 

5 dollars for consumers, but not worse off. That's 

6 what we normally work towards. 

7 You know, that's a good place for the 

8 environment. It's not a bad place for consumers. 

9 This is different from appliance standards. This 

10 is housing, and this is even more important, this 

11 is affordable housing that is targeted to the 

12 less advantaged members of our society. So in 

13 this case we actually can see some really 

14 fantastic opportunity to achieve a bunch of 

15 energy savings and also increase affordability 

16 for this group. 

17 So we wouldn't be driving for squeezing 

18 every ounce of cost effective energy savings out. 

19 We're looking for an interesting balance. But 

20 that's a bit of an aside. We're really bogged 

21 down because we're not talking about numbers. 

22 We're talking abstract. I think Emanuel and Lubi 
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1 are talking past each other. I'm sure they are. 

2 MR. RAMIZREZ: Yeah, that's kind of how I 

3 was looking at it as well, that it just looks 

4 like we're going to have the figures in there and 

5 how you interpret those, whether it be 

6 incremental or based off of the HUD, the numbers 

7 are still going to be what the numbers are. 

8 You're going to be looking at them from your own 

9 perspective though. 

10 MS. HOFFMAN: It might be good to take a 

11 kind of a process check of where we are. And I 

12 want to ask, actually, Matthew, are you almost 

13 finished with your presentation, or is there 

14 more? 

15 MR. HAGERMAN: Well, I think -- this is 

16 Joe Hagerman, DOE. I think it would be good for 

17 us to take a break. 

18 MS. HOFFMAN: Take a break, yeah. 

19 MR. HAGERMAN: And then when we come back 

20 Matthew can go through the cost. 

21 MS. HOFFMAN: Right. 

22 MR. HAGERMAN: So we can get off of this 
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1 abstract chart, as Robin says, and into the real 

2 meat of the numbers. 

3 MS. HOFFMAN: Uh-huh. Right. So why 

4 don't we take a 10 minute break? Thank you. You 

5 on the line also. 

6 MR. LEVY: Eileen. Eileen. 

7 MS. HOFFMAN: Yes. Yes? Someone asked 

8 me -- 

9 MR. LEVY: Can I just make one comment -- 

10 MS. HOFFMAN: Who is it? 

11 MR. LEVY: -- before we break? 

12 MR. RAMIZREZ: Go ahead, Emanuel. 

13 MS. HOFFMAN: Emanuel. Yes. 

14 MR. LEVY: Yeah. I also believe what 

15 Robin said is correct that Mike and I are talking 

16 past each other and we could probably get this 

17 sorted out easily. 

18 But I just want to make one maybe more 

19 visible analogy here that may help to suggest 

20 what the difference is and why it may impact what 

21 Matthew does with the spreadsheet. 

22 If you only look at going from HUD code 
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1 up to some very high level like IECC 2015, you 

2 have a whole package of measures that are 

3 included in that change. And let's just say for 

4 argument's sake that one of the changes is a 

5 change of insulation level from the walls of 

6 going from R11 to R19. In that change alone, if 

7 you only looked at that change alone, it would be 

8 very positive. It would have real positive 

9 benefits, inexpensive to do, it saves a lot of 

10 energy, so that the number you saw on Matthew's 

11 table would be very positive. 

12 But also in that package of measures is 

13 going from let's say bubble glass up to low-e 

14 argon very high performance window, which if you 

15 looked at that measure individually would have 

16 negative value. I'm just saying this 

17 hypothetically. 

18 So you have two measures. And let's just 

19 say your change is only those two measures. The 

20 change of going from the insulation levels, from 

21 11 to 19, is so positive that when combined with 

22 the window change the package of the two things 
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1 together look like their positive. But what it's 

2 hiding is the fact that that window change is not 

3 cost effective. And my only point is, we want to 

4 make sure that we don't have hidden in the 

5 packages, measures that are not cost effective. 

6 And they're just being carried along by virtue of 

7 the fact that there are other things in the 

8 package measures that are very beneficial. 

9 And the incremental approach that we're 

10 talking about would help you distinguish those 

11 measures that are good value, and those that have 

12 negative value. And my main point is that in 

13 going back to Matthew's analysis, he's only 

14 looking at packages, where I think what you need 

15 to do is you have to look increments. 

16 MR. RAMIZREZ: Okay. 

17 MS. HOFFMAN: Thank you. Well put. Do 

18 you have one more comment or should we take a -- 

19 let's take a break, actually. We'll get your 

20 comment afterwards. Ten minutes, okay? 

21 MR. HAGERMAN: Okay. So we'll be back at 

22 11:05 Eastern? 
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1 MS. HOFFMAN: Yeah. 11:05. 

2 (Recess from 10:54 a.m. until 11:05 a.m.) 

3 MS. HOFFMAN: We're back to Matthew. And 

4 I think you had a question also, from -- would 

5 you -- 

6 MR. WALKER: That's right. We have two 

7 technical questions about the spreadsheet that 

8 I'll -- this is Matthew Walker -- that I'll 

9 answer, or at least acknowledge, and then we'll 

10 move on to the PowerPoint. 

11 So we have one from David Tompos. He 

12 asks, "If you press the populate summary tables 

13 button on the results tab why does it change the 

14 tables even if no inputs are changed?" 

15 And, David, the table shouldn't change so 

16 you may have to -- I don't know. I may have to 

17 link up with you separately to see what's going 

18 on, but when you press this button, populate 

19 summary tables it appears as though a bunch of 

20 stuff is happening but if you haven't changed any 

21 inputs the numbers stay the same. If that 

22 doesn't help just ping me later and I can 
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1 probably help. 

2 And we also have one from Michael Wade. 

3 I think I may have to get back to him on -- get 

4 back on this one. But it says, "When you change 

5 the duration of the loan on the spreadsheet the 

6 simple payback in years does not change. How can 

7 this be accurate?" 

8 I think I just need to investigate this 

9 question and we'll respond later. But thanks for 

10 the question. 

11 UNIDENTIFIED SPEAKER: (Inaudible) the 

12 formula thing. 

13 MR. EZZO: Hey, Matthew, it's Mark Ezzo 

14 at Clayton Homes. Can I ask a question about the 

15 spreadsheet? 

16 MR. UNGER: Actually, can I just check on 

17 the last question? This is Lowell Unger. 

18 MR. EZZO: Sure. 

19 MR. UNGER: You said when you change the 

20 loan -- 

21 MR. WALKER: It says, when you change the 

22 duration of the loan the simple -- 
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1 MR. UNGER: The loan doesn't factor into 

2 a simple payback. Simple payback is no 

3 financing, if I understand. 

4 MR. WALKER: That may be the answer. 

5 MR. UNGER: Okay. 

6 MR. WALKER: I just wanted to double7 check in case there is something amiss. But what 

8 you're saying sounds probable. 

9 MR. UNGER: Thank you. 

10 MR. WALKER: Okay. Mark? 

11 MR. EZZO: Yeah. I was playing with the 

12 spreadsheet on the finance rate to the consumer 

13 and the part I don't understand is when I'm 

14 increasing the loan rate to the consumer my 

15 incremental home cost is going down. It's going 

16 the opposite direction of what I think it would 

17 go. So under your financial inputs there, when 

18 you increase those rates the cost of the home is 

19 going down. 

20 MR. WALKER: I'm seeing the opposite when 

21 I tested it here, so let me just put it back to 

22 where it was. It was at .09. So, let's just 
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1 take Memphis at 973 for its incremental home 

2 cost, Memphis 937. I change the chattel loan 

3 interest rate from .09 to let's give them 25 

4 percent. And then Memphis -- we're showing here, 

5 1497 for the incremental cost, which is a -- 

6 MR. EZZO: Yeah. What I was doing is go 

7 up there above where it says discount rate 

8 nominal, chattel and real estate. 

9 MR. WALKER: Okay. 

10 MR. EZZO: Those are the ones I was 

11 changing. So when I was increasing the chattel 

12 or real estate -- 

13 MR. WALKER: Okay. 

14 MR. EZZO: -- numbers there the 

15 incremental home cost was going down. 

16 MR. WALKER: Right. So, Mark, those are 

17 separate and that's why there are two spots for 

18 input here on the sheet. So the loan parameter 

19 is what the consumer will pay to the bank. So 

20 I've put down here 25 percent. 

21 MR. EZZO: I see. 

22 MR. WALKER: The discount rate is, for a 
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1 lack of a better word, it's how we bring -- well, 

2 it's just how we bring those future payments back 

3 to the present year. And that may not be the 

4 same as the interest rate. The discount rate is 

5 based on that particular customer's opportunity 

6 costs and the default setting I had here was that 

7 I made them the same, but they don't have to be 

8 the same. 

9 MR. EZZO: Okay. 

10 MR. WALKER: Yep. So it does make sense 

11 that with a larger discount rate those fees or 

12 costs that are happening, become diminished, or 

13 decrease. So that is going in the correct 

14 direction. 

15 Thanks for the question, though. I'll 

16 move on to the PowerPoint now. I might need a 

17 little help removing the pencil tool. Oh, I 

18 think it happened, actually. 

19 Okay. So we're resuming the slides and 

20 the second half reviews the straw man EEM costs. 

21 I'll say some of these caveats again, the straw 

22 man EEM costs are generally based on publicly 
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1 available data. Ed talked a little bit earlier 

2 about some of those specific sources that we 

3 used. They're rough estimates, and again, 

4 they're not based on a full cost analysis. So 

5 it's not the best that can be done without 

6 additional data. It's what could be done with a 

7 short timeframe using public data. 

8 And so the following slides, we would 

9 just summarize those EEM costs by each component. 

10 And I think Joe has a note to make. 

11 MR. HAGERMAN: I have a note to make that 

12 these slides are not part of the printouts. We 

13 made these last night to explain the costs. So 

14 we'll circulate this. Maybe even right now if we 

15 can. 

16 MR. WALKER: Okay. Did someone have a 

17 question? 

18 MR. LUBLINER: Yeah. This is Mike 

19 Lubliner. I wanted to ask a general question 

20 about cost in terms of what the group is feeling. 

21 My feeling is, is that the industry has buying 

22 potential that many in the site build industry 
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1 don't have. So, isn't it reasonable to assume 

2 that the energy efficiency measure cost for this 

3 industry will be no less than what a site builder 

4 could build for a consumer? And I don't 

5 necessarily want to suggest that we jump into 

6 that discussion now, but I think we need to be 

7 thinking about that discussion in the context of 

8 what the cost of (indiscernible)is when it's 

9 codified, and when the buying power available to 

10 the industry is utilized (indiscernible). Thank 

11 you. 

12 MR. WALKER: Okay. So I'll move on to 

13 the first of the specific slide. So each slide 

14 is going to look like this. It has a table of 

15 incremental costs. The component under 

16 discussion right here is wall insulation. You 

17 can see the different levels of insulation down 

18 the left hand side of the table, and then the 

19 double wide and single wide cost. 

20 So those numbers, such as $700 for R21 in 

21 a singlewide home is the rough straw man estimate 

22 of the incremental retail cost to go from an R11 
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1 wall to a R21 wall. So that already accounts for 

2 the size of the home. It's that final number. 

3 And what we wanted to do here with these 

4 tables is, again, recognize that this is a straw 

5 man starting point, and here's some feedback as 

6 to specific numbers, way too high, way too low, 

7 all sorts of things. This is feedback time. 

8 MR. RAMIZREZ: I'm sorry, Rick. As a 

9 public viewer I would just ask that -- if someone 

10 was to call on you to give some input, I would 

11 ask for that. Okay? Thanks. 

12 Okay. All right. Thank you. 

13 MR. CASKEY: This is John Caskey with 

14 NEMA. Maybe I'll sort of relay what he's sort of 

15 thinking. You know, in general I would have 

16 thought from my naïve perspective that, okay, 

17 you've got the basic cost for building the home, 

18 and then these are just the incremental costs of 

19 adding the additional insulation. So to me it 

20 seems like if I had to throw out a number I would 

21 have guessed, if a single wide is 50, that a 

22 doublewide -- and I thought we were using some 
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1 other term instead of singlewide and doublewide, 

2 but -- 

3 MR. WALKER: You're right. Single 

4 section, double section. 

5 MR. CASKEY: A single section and a 

6 double section. So apologize for that. 

7 MR. WALKER: Yeah. 

8 MR. CASKEY: But I thought if a single 

9 section was 50 that maybe a double section 

10 because it has to be more quantity of insulation 

11 that it might have been $75 or something like 

12 that, would have been my wild guess. Or the same 

13 is true if it was $500 for a single section for 

14 the R19 that maybe doing it in a doublewide would 

15 be another 30, 40, 50 percent more than that. So 

16 why are we not seeing that, or am I out of touch 

17 with the manufacturing part of this industry? 

18 MR. WALKER: Well, let's see. I don't 

19 know if I can give you a specific answer. But 

20 these estimates are based on the estimated square 

21 footage of the two. Ed? 

22 MR. BARBOUR: Yeah. So this is Ed 
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1 Barbour at Navigant. 

2 So, when we calculated it based on the 

3 models that PNNL used, the wall area is actually 

4 very very similar from a double and a single in 

5 terms of exterior wall areas. Twelve hundred and 

6 sixty square feet for a double section and 1,200 

7 square feet for a single section. So when you -- 

8 and we assumed, at least in this when we were 

9 doing this for the first step to R13 that the 

10 studs stayed the same. It's just a different 

11 level of insulation, therefore the price is just 

12 associated with the going from R11 to R13 from an 

13 insulation standpoint. 

14 We looked up some insulation costs from 

15 different home improvement providers like Home 

16 Depot and other places, but that's how we did it. 

17 MR. WEISS: Mark Weiss, MAHRR. I guess I 

18 hear you with respect to walls, but that says 

19 floors. So -- 

20 MR. WALKER: That should be wall. 

21 MR. WEISS: Okay. So you're doubling it 

22 with a -- per se. I'm not an engineer, but I can 
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1 figure that out. 

2 MR. TOMPOS: This is Dave Tompos. I had 

3 the same point that Mark did, but I'm also 

4 curious. You know, I've already brought up the 

5 point that R19 is just about the maximum that we 

6 can put into a floor cavity outside of the 

7 outriggers. Is this taking into account that 

8 we're going from a two by six to a two by eight, 

9 which is about twice the cost? 

10 MR. WALKER: Dave, I just wanted to 

11 clarify, we had a little bit of a discrepancy 

12 here with the labeling. This slide is the wall 

13 insulation and not the floor, but we will get to 

14 floor either next or on the third slide. 

15 MR. TOMPOS: Okay. Well, I'll ask the 

16 same question. 

17 MR. WALKER: Yeah. 

18 MR. TOMPOS: Well, I guess because we 

19 have the same situation from going from a two by 

20 four to a two by six. 

21 MR. WALKER: That's right. 

22 MR. TOMPOS: Now, we don't have as big a 
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1 jump in price, but it's probably, if I had to 

2 guess based on prices online you're talking about 

3 a dollar extra per framing member. 

4 MR. WALKER: So do you find that overall, 

5 going from a two by four to two by six becomes 

6 more expensive, taking into account the 16 on 

7 center to 24 on center change based on the higher 

8 structural integrity of the thicker beams? 

9 MR. TOMPOS: Well, I don't think 

10 everybody is doing a two by -- or 24 on center. 

11 MR. WALKER: Okay. 

12 MR. HAGERMAN: So this is Joe Hagerman, 

13 DOE. I think, you know, this illustrates why we 

14 need some feedback on these costs and these moves 

15 between the different energy efficiency measures, 

16 right? So I mean, so for you know, to David, we 

17 understand the concern. So what should this 

18 number be then, right? Ultimately we've got to 

19 have a number here. 

20 MR. LUBLINER: This is Mike Lubliner. I 

21 want to clarify that too. So the cost we're 

22 seeing here for wall insulation, going from R11 
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1 to R21, don't reflect an assumption of any 

2 additional cost of the framing of two by four to 

3 two by six, given the existing framing approach 

4 the industry uses. 

5 MR. BARBOUR: This is Ed Barbour with 

6 Navigant. No, it does assume. So when we go 

7 from R13 to R19 we assumed, or at least the 

8 report that we used as a basis for this, the PNNL 

9 IECC TSD, you're going from a two by four to a 

10 two by six. 

11 The difference between -- the different 

12 assumption that we made in our straw man is that 

13 we did not move it out to the 24 inches on 

14 center. We did actually add some framing costs, 

15 and honestly it was just a ballpark number that 

16 we could put in there. The cost difference 

17 between -- 

18 MR. LUBLINER: Thank you, sir. 

19 MR. BARBOUR: -- R19 and R21 is reflected 

20 in terms of the insulation and that's based on 

21 information that Tom Eckman provided as a 

22 response to comments or earlier in the 
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1 rulemaking. 

2 The other comment I'll make is that for 

3 the R20 levels, which we've seen in a number of 

4 the runs, for the costing we assumed that most 

5 manufacturers would just go to an R21 insulation 

6 and not necessarily change the framing and 

7 wouldn't necessarily go to some complex 

8 configuration with foam and insulation. That's 

9 our assumption. 

10 But yeah, we're looking for feedback on 

11 these numbers and to see how accurate they are. 

12 MR. EZZO: It's Mark Ezzo at Clayton 

13 Homes. I'll give you my feedback from our 

14 standpoint. Obviously we do two by four and two 

15 by six walls. Like you said we go from four inch 

16 wall to the six inch wall once you get beyond our 

17 13 insulation. 

18 We don't space two by six wall studs at 

19 24 on center when we go to two by six. We keep 

20 them at 16 on center, and we don't use any R20 R 

21 value in any wall assembly. We go 11, 13, 19, 

22 then 21. Thank you. 
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1 MR. TOMPOS: This is Dave Tompos. I'm 

2 going to ask Mark Ezzo, or any manufacturer, do 

3 those numbers look like they represent the cost 

4 to the consumer or the manufacturer's cost? 

5 MR. EZZO: The jump from 11 to 13 looks 

6 low to me. The jump to 19 and 21 looks a little 

7 more accurate to me if we're considering cost to 

8 consumer. But I think 11 to 13 might be a little 

9 light. 

10 MR. RAMIZREZ: What would you put there? 

11 MR. EZZO: I mean, to me I think the 

12 material cost to the home builder going from 11 

13 to 13 is about 50. So whatever factor you're 

14 using to get to the end consumer, I think that 

15 may have been missed on the 11 to 13 bump. 

16 MR. RAMIZREZ: Okay. Thanks. 

17 MR. EZZO: Uh-huh. 

18 MR. LEVY: This is Emanuel. Just to 

19 clarify. Everybody is expecting the cost data 

20 from us, and we do plan to provide that certainly 

21 by the end of this week, numbers that we've 

22 collected from about 10 different manufacturers. 
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1 So hopefully we will have some better data for 

2 you by the end of the week. 

3 MS. HOFFMAN: Thank you. Mark, you 

4 had -- 

5 MR. WEISS: Yes, since the question was 

6 raised, what is the factor you're using for going 

7 from wholesale to retail? 

8 MR. BARBOUR: This is Ed Barbour at 

9 Navigant. So the costs that we collected, or the 

10 reports that we reviewed, honestly because we 

11 didn't collect costs, already had made that 

12 assumption in terms of the retail pricing. So, 

13 for this one, since we were collecting insulation 

14 costs from Menards, Lowes, Home Depots, those 

15 types of outlets, you know, that's a retail price 

16 already. We assume that the manufacturer was 

17 getting something better. Again, it's a rough 

18 straw man but it was about the best we could do 

19 for this level. 

20 MR. WEISS: Okay. So the answer is, we 

21 don't know the markups included, basically? 

22 MR. BARBOUR: Right. Ed again. Yeah, we 
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1 did not apply a markup to any of the -- we didn't 

2 create a cost to the consumer markup. 

3 MR. WEISS: You gathered retail costs. 

4 MR. BARBOUR: We just got the costs that 

5 we could, you know, that were retail costs. 

6 MR. LUBLINER: This is Mike Lubliner. On 

7 the last meeting I had made a suggestion that 

8 perhaps DOE or its contractor engage NIMA on 

9 insulation wholesale costs to get a sense of what 

10 the costs of some of the materials are that the 

11 manufacturer isn't typically purchasing in large 

12 quantities now. Things like possibly R13, R15, 

13 R21 or special orders. And I want to make sure 

14 that the costs that we're using are indicative of 

15 what we believe the cost of these materials to be 

16 if they were getting the kind of buying power 

17 associated with a code change. 

18 So I guess the question is, other than 

19 the work that Emanuel is providing on cost from 

20 the industry, is DOE's contractor able to also 

21 work backwards from wholesale costs? And that 

22 will hopefully get at what Mark's question was, 
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1 which is, what are the overall markups from crude 

2 materials to consumer costs. So just your 

3 thoughts on that, Joe, or if you see that's a 

4 direction we're going to be going or not? 

5 MR. HAGERMAN: Yes, this is Joe Hagerman 

6 at DOE. I think that, you know, we'll take -- 

7 we'll explore all, you know, directions that we 

8 think are possible to get us the most accurate 

9 retail costs here. But we'd really, you know, 

10 prefer if the manufactures could supply the cost 

11 information, so then we don't get into arguments 

12 of what those factors are to go from wholesale to 

13 retail. That's the honest answer. 

14 MR. LUBLINER: Then I would encourage, 

15 Joe, I would encourage Emanuel to engage NIMA to 

16 try to -- or the manufacturers to engage their 

17 suppliers to try to get a better sense of, 

18 particularly the high density products in the 

19 walls, what they're going to cost in a more of a 

20 steady state market realm. I know that's a 

21 difficult what-if, but I think it's important to 

22 consider in the analysis so that we don't miss 
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1 that buying opportunity to use a higher density 

2 wall insulation. Thank you. 

3 MR. WALKER: Okay, great. I've moved on 

4 to the next slide which covers the ceiling straw 

5 man costs. There's only one level here to look 

6 at. Does anyone have any feedback? 

7 (No audible response.) 

8 MR. WALKER: I guess here you do see a 

9 different ratio between the single and double 

10 section, since it's the area rather than the 

11 perimeter. 

12 MR. HAGERMAN: This is Joe Hagerman, DOE. 

13 Mark, as you gave us kind of a thoughtful, you 

14 know, kind of gut check here on the last numbers, 

15 you know, could we ask you to give us a gut check 

16 on these numbers as well? 

17 MR. EZZO: Yeah, Joe, those don't look 

18 too awkward to me. I mean, I can't tell you, you 

19 know, anything precise, but it doesn't look like 

20 it's off too far. 

21 MR. HAGERMAN: And then this is Joe 

22 Hagerman again, DOE. David Tompos, you had a 
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1 shipping issue that you brought up multiple 

2 times. Does that factor in here again? You can 

3 say it's comparable but -- 

4 MR. TOMPOS: I don't think we're going to 

5 have a problem with R38. I haven't had a chance 

6 yet to check that on any type of cathedral 

7 configuration. 

8 MR. KESSLER: This is Bert, Palm Harbor. 

9 Question about the R value 30 that's listed. Was 

10 that used on the HUD base unit? 

11 MR. WALKER: Yeah, I believe so. 

12 MR. KESSLER: Well, I think the actual 

13 would be more like R21. 

14 MR. WALKER: Can you clarify what you 

15 mean by actual, or are you saying the code says 

16 21 rather than 30, or is this some sort of 

17 standard practice? 

18 MR. KESSLER: What I'm saying is that for 

19 current HUD Thermal Zone 1, if you take it down 

20 close to the UL max you can probably get away 

21 with an R21. 

22 MR. WALKER: Okay. Does anyone else have 
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1 similar experience; any of the other 

2 manufacturers? 

3 MR. EZZO: Yeah, it's Mark Ezzo. I would 

4 agree with that. But here we're comparing -- 

5 we're not comparing HUD base to IECC, we're 

6 comparing two R values, right? 

7 MR. WALKER: That's right. 

8 MR. EZZO: And you're not showing all the 

9 variables that are being compared, you're just 

10 showing one. You're showing 30 to 38. 

11 MR. WALKER: That's right because the 

12 codes and efficiency levels that have been 

13 analyzed thus far utilized 30 and 38. 

14 MR. RAMIZREZ: Do we need to add a third? 

15 MR. HAGERMAN: So this is Joe Hagerman 

16 with -- 

17 MR. KESSLER: I'm going to repeat my 

18 question. 

19 MR. HAGERMAN: Right. Go ahead, Bert. 

20 MR. KESSLER: I'm going to repeat my 

21 question. This was Bert. For the base HUD unit 

22 that's being compared, if we use an R30 in the 
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1 ceiling? 

2 MR. WALKER: Yes, that is currently 

3 what's being done. 

4 MR. KESSLER: Okay. And then like for 

5 the walls you used R11 as the base and then 

6 analyzed the 13, 19, 20, and 21 upgrades? 

7 MR. WALKER: Yeah, that's usually a 

8 pretty safe way to interpret the table. We just 

9 have to keep in mind that the different HUD zones 

10 may have had a different starting point, so, 

11 every zone may not have used the R11 as the base, 

12 but I think generally you're correct. 

13 MR. TOMPOS: Dave Tompos. And I'll ask 

14 manufacturers again because I was -- I'm pretty 

15 sure, without verifying this, that some 

16 manufactures are using an R19 in the ceiling. So 

17 I don't think -- I don't know where R30 came in 

18 as the base. 

19 MR. HAGERMAN: So this is Joe Hagerman, 

20 DOE. In our previous analysis with the Energy 

21 Plus runs, where we went from the component U 

22 values to the UO values, that's where we used R30 
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1 as the HUD base ceiling insulation. That's where 

2 that came from with given the framing factors and 

3 everything, that the PNNL assumptions and that 

4 modeling document that I sent out, all those 

5 inputs were in there. So that's, you know, what 

6 Matthew is showing here is the R30 as a carryover 

7 of those assumptions. 

8 Now if we want to go back and change it 

9 we can. We have no problem with that, but you 

10 might want to look at the framing factors and 

11 everything. 

12 MR. TOMPOS: Well, I need to get some 

13 feedback from the manufacturer. Help me out 

14 here. Don't we have Zone 1 houses with R1911 and 

15 11? 

16 MR. EZZO: This is Mark Ezzo. Yeah, we 

17 do, but I think to Joe's point, if you look back 

18 on those tables where they ran the HUD code 

19 analysis for Zone 1, they used wall, roof, and 

20 floor insulation and a window to come up with a 

21 total of UO that meets current HUD code, right. 

22 So they ran their calc with an R13 wall, an R30 
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1 roof, and an R13 floor, and a window of 1.07, 

2 which I think is just like a single glaze 

3 aluminum window. 

4 So that was the tradeoff. I mean, if you 

5 go to a better R value in the ceiling -- or 

6 excuse me, worse R value in the ceiling, like an 

7 R19, like you're suggesting, Dave, to get that 

8 same, you know compliance check for Thermal Zone 

9 1 current HUD code, that window is going to have 

10 to get a lot better. 

11 MR. WALKER: That's a really good point, 

12 Mark because -- 

13 MR. EZZO: If you understand. 

14 MR. WALKER: -- if we change one 

15 component we have to consider the overall system 

16 impact on that UO compliance. 

17 MR. EZZO: So I think what you're going 

18 to see is the delta between the 30 and the 38 is 

19 some number, like we're looking at. But then the 

20 delta from the window of 1.07 to whatever it 

21 needs to be, that's going to be a big number. 

22 MR. HAGERMAN: Joe Hagerman from DOE. 
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1 That's absolutely correct. So I mean, the one 

2 way to think about this is we can go component by 

3 component like Matthew is doing, but you have to 

4 kind of weigh the total package cost at the very 

5 end to see if you feel like that's kind of 

6 representative of taking your kind of existing 

7 HUD code based to whatever level it is we've 

8 selected here. 

9 MR. RAMIZREZ: So, do we keep this at 30 

10 and 38? Yeah? 

11 (General nodding of heads in 

12 affirmative.) 

13 MR. LUBLINER: This is Mike Lubliner. 

14 What I was hearing from Mark is that the 

15 manufacturers at least in Zone 1 have two 

16 different approaches. One uses a better window. 

17 If they use a better window they're down to R19 

18 in the ceiling, better than a single pane 

19 aluminum. And if they use a better window like -

20 - I don't know what is it, a double pane aluminum 

21 or double pane vinyl, that they can get back down 

22 to the R19. Excuse me, I misspoke. 
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1 But that's the tradeoff. Is that 

2 correct, Mark? And should we be looking at 

3 both -- 

4 MR. EZZO: Yeah, that's the -- 

5 MR. LUBLINER: -- those cases? 

6 MR. EZZO: That's exactly right, Mike. 

7 MR. RAMIZREZ: Okay. 

8 MR. EZZO: And the reality is, there's a 

9 whole lot of ways to skin that cat for, you know, 

10 for any thermal zone. There's a lot of different 

11 tradeoffs you can use. I mean, most people 

12 aren't starting off with R13 in a wall, for 

13 instance. So, there's just a lot of different -- 

14 I mean, look at all the different components 

15 you've got. You've got wall R value, ceiling R 

16 value, floor R value, and the type of window 

17 you're using. Of course how much glass in the 

18 home. There's a ton of variables involved, and a 

19 whole lot of different ways to arrive at that, 

20 you know, compliant overall U number. 

21 MR. RAMIZREZ: Okay. All right. Thank 

22 you. 
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1 MR. WEISS: Mark, just this -- this is 

2 Mark Weiss, just to clarify. That's because of 

3 the performance nature of the HUD code, correct? 

4 MR. EZZO: Yeah, that's right. 

5 MR. WEISS: Okay. Which allows you to 

6 provide the maximum affordability for the 

7 consumer, correct? 

8 MR. EZZO: That's right, yeah. It's not 

9 prescriptive. It's not telling us, you know, you 

10 have to have certain R values in cavities. You 

11 can be flexible with the way you run it as long 

12 as your overall U value comes out. 

13 MR. WEISS: Right. And that applies to 

14 all the various energy zones, correct? 

15 MR. EZZO: Right. I think there is 

16 something in there about Thermal Zones 2 and 3 

17 have to use insulating glass. But other than 

18 that there's a lot of flexibility. 

19 MR. WEISS: Great. Thank you. 

20 MR. WALKER: Well, great. I'll move on 

21 to the next component. This is the floor 

22 insulation. Few different levels here. We'd 
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1 love to hear some of the feedback that we got on 

2 the other components. 

3 MR. WEISS: Well, to come back to the 

4 point we were discussing before, why isn't it 

5 double? Why isn't double section double of 

6 single section, if you're doubling the floor 

7 space. Maybe you're not. 

8 MR. WALKER: Right. Yeah, I think it's, 

9 what you said there at the end, the double 

10 section tends to not be as long as a single 

11 section. So even though it's about twice as wide 

12 it's not the same length. 

13 MR. BARBOUR: So this is Ed Barbour at 

14 Navigant. The floor area of that was included in 

15 PNNL's models. For double section it's 1,568 

16 square feet, for single section it's 924 square 

17 feet. So not quite double. 

18 MS. HOFFMAN: Any comments? Okay. Let's 

19 go on, please. 

20 MR. WALKER: Okay. So now I move to a 

21 different type of component. This is windows. 

22 The top table has SHGC and the bottom has U 
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1 factor. Anyone want to lead off with one or the 

2 other? 

3 MR. KESSLER: This is Bert. The code, 

4 HUD code, does not require a solar heat gain 

5 coefficient. 

6 MR. WALKER: Okay. Yes, I think that 

7 makes sense, and so the incrementals that you see 

8 here are basically coming from a no requirement 

9 or a standard window to a window that has better 

10 SHGC, sorry. Go ahead, Ed. 

11 MR. BARBOUR: This is Ed Barbour with 

12 Navigant. So, the IECC codes do require SHGC. 

13 So, windows, even coming up with straw man can be 

14 difficult as anybody that's dealt with windows 

15 knows that when you're dealing with multiple 

16 attributes it's hard to separate costs out. We 

17 were able to find a report done in 20 -- I'm 

18 going to get the date wrong, but it's Faithful 

19 and Gould, it was done in support of the IECC 

20 determination at PNNL. I was able to break out 

21 costs by both SHGC and U value, give me sort of 

22 representative. 
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1 They're not necessarily additive. 

2 Actually, they are not additive. So you couldn't 

3 go and add up the two and expect to be the same 

4 cost because of the way products are. This is a 

5 product area that -- to help serve the working 

6 group we would, you know, love to have better 

7 data in terms of the windows that you're 

8 installing, that you're using, as well as the 

9 performance levels, since it is sort of a 

10 multiattribute type product. 

11 But this is what we used for the straw 

12 man to try to make it work and, like I said, look 

13 for feedback. 

14 MR. CASKEY: I'm not sure if you touched 

15 on this before but at certain times manufacturers 

16 were sort of hesitant to give real data. But in 

17 the past and working with DOE they've been able 

18 to provide that data confidentially to DOE and 

19 it's not become part of the official record, so 

20 it's never exposed to the public. So I don't 

21 know if that's something that would help us in 

22 this particular case, just to make sure that all 
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1 the manufacturers -- can you correct me what the 

2 legal aspect of that is? 

3 MR. HAGERMAN: This is Joe Hagerman, DOE. 

4 Yeah, we've made that request to all the 

5 manufacturers, and Navigant can execute those 

6 confidentiality agreements and collect that data 

7 and just report up the aggregate to DOE. That's 

8 how it's done in the past. 

9 We made that offer, I think. Emanuel is 

10 collecting that data for the manufacturers and 

11 acting as that conduit. But ultimately we've got 

12 to populate these tables or we're kind of at, you 

13 know, a standstill. Or we'll just use the data 

14 that Navigant gets us and we'll just move on off 

15 the cost topic all together. 

16 MS. STARKEY: Yes. I'll just speak for 

17 Emanuel. I've been jumping on Emanuel. This is 

18 Lois from MHI. But I think we -- the end of the 

19 week will be the late -- you know, if we could do 

20 it earlier we will but we are, you know, working 

21 really hard to get that data. It's not as easy 

22 as you might imagine. And there is reluctance, 
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1 and there has been, for a variety of reasons that 

2 they don't want to deal directly with DOE. But 

3 we are -- you know, we do have about 10 

4 manufacturers that have stepped up. Again, but 

5 we're going to have to go back to them in order 

6 to have the data real because we gave them a 

7 chart, gave them all the little cells to fill in 

8 and they sent it back, you know, you know, some 

9 of the cells not filled in and so we're having -- 

10 you know, it's a lot of person hours and time 

11 getting it, so we'll try to get it as fast. 

12 We're not dragging our feet. I can assure you. 

13 MS. HOFFMAN: Thank you, Lois. 

14 MR. LUBLINER: This is Mike Lubliner. I 

15 had a question regarding that effort. I've been 

16 talking with people within the industry for quite 

17 a few years about how they price their products 

18 and I understand it is confidential and I respect 

19 that. 

20 I want to make sure that, as I said 

21 before, when we are collecting cost data from 

22 manufacturers or from insulation suppliers, 
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1 manufacturers, that we're really clear that these 

2 are costs that we expect would be steady state 

3 costs that would be expected in a volume 

4 procurement associated with a code change, and 

5 not an option pricing when that code change -- 

6 you know, that status quo option pricing. 

7 My understanding is that markups the 

8 manufacturer uses on special orders are almost 

9 twice in some cases, what they price something if 

10 it's part of the code. And so I want to make 

11 sure that we're not misrepresenting the costs as 

12 costs that are a special order and not mainstream 

13 costs given a code change. Thank you. 

14 MS. STARKEY: And this is Lois from MHI. 

15 I assure you, Michael, that we will be using 

16 numbers that we use as a matter of standard 

17 practice when they build and sell a home to a 

18 retailer. 

19 Now what a retailer does after the home 

20 is sold to the retailer and then the retailer 

21 sells it to the homeowner is another matter all 

22 together. But we will be providing you numbers 
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1 that we -- that the manufacturers provide to 

2 their customers, their direct customers who are 

3 the retailers. 

4 MR. EZZO: Lois this is -- 

5 MR. LUBLINER: and is that as a special 

6 order, or -- 

7 MR. EZZO: Lois, this is Mark Ezzo. I 

8 think there may be some confusion here. The 

9 material costs that we're providing, those 

10 manufacturers are providing is our cost that we 

11 buy from Owens Corning or Johns Manville, or 

12 Kernow Windows. It's our cost. It's not 

13 necessarily what we're charging the retailer. 

14 Okay? 

15 MS. STARKEY: Well, let me just correct 

16 that. I think what -- Emanuel, help me if I'm 

17 wrong. But I think what we'll end up doing is 

18 doing a standard markup cost above that material 

19 cost. I think that's what we're planning to do. 

20 MR. EZZO: So you're going to be 

21 providing a cost -- 

22 MS. STARKEY: Yes. 
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1 MR. EZZO: -- that is not the 

2 manufacturer's material cost -- 

3 MS. STARKEY: Correct. 

4 MR. EZZO: -- you're going to be giving a 

5 cost that's factored up to either the retailer or 

6 the consumer? 

7 MS. STARKEY: That's correct. 

8 MR. EZZO: Okay. 

9 MS. STARKEY: And we can't really do it 

10 to the consumer, but I don't think it's a fair 

11 statement to say we can do that to the consumer 

12 at this point, but we can certainly do it to the 

13 retailer because the -- you can make a standard 

14 average, I think, from what a retailer, but 

15 sometimes depending on the market, a retailer may 

16 mark up an option, you know, 30 percent or 50 

17 percent. That's really hard to know. But we'll 

18 have a retail markup that is used in a standard 

19 retail analysis. 

20 MR. EZZO: I guess to Mike Lubliner's 

21 question, though, Mike, the number us 

22 manufacturers are giving are not going to be 
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1 factored. We're going to give what we pay for 

2 R11 and R19 and a dual glaze low-e window and 

3 those kind of things. 

4 MR. LUBLINER: At current pricing? 

5 MR. EZZO: At current pricing, yeah. 

6 MR. LUBLINER: So if those -- 

7 MR. EZZO: We're not going separate out 

8 and say, well, R21 is an option material so we're 

9 going to give a, you know, accelerated price or 

10 an increased price. We're going to give you what 

11 we pay for it. 

12 MR. LUBLINER: Very good. Thanks, Mark. 

13 Thanks, Lois. 

14 MR. ROY: And, Mark, this is Robin. 

15 Question. Do you have any insight as to whether 

16 if you are buying in greater volume as you would 

17 if it's under a standard, if you're buying 

18 greater volume whether that would change the 

19 pricing you're getting from the manufacturers? 

20 MR. EZZO: Yeah, Robin. It's hard to 

21 say. I mean, we would have to go back to our 

22 suppliers and say, you know, give us an estimate 
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1 as to what R21 would be, for example, if in stead 

2 of buying this many pounds a year we're buying 

3 that many pounds a year. And we haven't done 

4 that. 

5 MR. SANTANA: This is Manny -- 

6 MS. HOFFMAN: Comment for people on the 

7 phone? Just excuse me a second. Eileen Hoffman. 

8 MR. SANTANA: Yeah, this is -- 

9 MS. HOFFMAN: If you're on the phone, 

10 please give your name first because this is being 

11 a written record. So, and we'd also like to know 

12 who you are. Thank you. 

13 MR. LEVY: This is Emanuel. 

14 MR. SANTANA: This is -- 

15 MR. LEVY: Robin, I wanted to take 

16 another shot at your question. I can give you 

17 some anecdotal information right now about the 

18 data we've collected. For any one data point, 

19 any one insulation level, there might be a plus 

20 or minus 20 or 30 percent difference in cost 

21 among manufacturers, simply because you're 

22 comparing small companies with large companies. 
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1 It may also be more expensive for one 

2 manufacturer to buy one insulation material in 

3 one market because it's a-typical. So we're 

4 trying to take that all into account and have a 

5 blended average rate for all the cases. Won't be 

6 perfect, but it will be as close as we can get. 

7 MR. LUBLINER: This is Mike Lubliner. 

8 Thanks, Emanuel. 

9 Getting back to Mark's explanation, I 

10 think if it's possible, and I don't know that 

11 it's possible, but if it is possible, as you're 

12 engaging these suppliers of insulation. If you 

13 could get to the question that Robert tried to 

14 articulate based on my comment, you know, in 

15 other words, R21, R13, R15 I think are the big 

16 ones. What do you expect if this was mainstream 

17 code that the insulation manufacturers could 

18 total up for the volumes expected? You know, 

19 what do we expect, and if it's a small percentage 

20 we don't have to worry about it, but it would be 

21 interesting to get that because I think that 

22 we'll be able to take advantage of the buying 
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1 power of the industry pooling its resources 

2 between small and large manufacturers if we 

3 engage the suppliers and the insulation 

4 manufacturers with that discussion. 

5 And that's kind of why I suggested that 

6 perhaps DOE want to do that independent of this 

7 effort, or in conjunction with this effort. 

8 Thank you. 

9 MS. HOFFMAN: Eileen Hoffman. I think we 

10 have what, one more slide, or two more slides? 

11 Okay. And then we'll make a few remarks and 

12 break for lunch. But let's hear that. Thank 

13 you. 

14 MR. UNGER: Sorry, just one more -- 

15 UNIDENTIFIED SPEAKER: How are the 

16 windows applied, if I might? 

17 MR. UNGER: Sorry. I had one brief 

18 comment on windows. Lowell Unger. I believe 

19 there is also Energy Star studies on price 

20 differential that would be another source of 

21 information, and I don't think Eric Lacey is at 

22 this meeting, but I think he was also hoping to 
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1 seek from the window manufacturers, some 

2 information. So you can check with him. 

3 MS. HOFFMAN: Okay. I think he's going 

4 to be here tomorrow. 

5 MR. LUTER: This is Rob Luter. I have a 

6 comment. 

7 MR. RAMIZREZ: Yeah, go ahead, Rob. 

8 MR. LUTER: As a window manufacturer I'd 

9 like to say that there are construction 

10 attributes that are going to benefit both U value 

11 and solar heat gain at the same time. So the 

12 earlier comment that you can't necessarily 

13 separate them is very accurate. 

14 The other observation I'll have, and I'll 

15 defer final judgment until Emanuel runs all the 

16 numbers, but I see these figures as being 

17 understated, for what I'll call street prices. 

18 MR. RAMIZREZ: Do you have some numbers 

19 that you could plug in? 

20 MR. LUTER: Those have already been 

21 furnished to Emanuel for his analysis. 

22 MR. RAMIZREZ: Okay. 
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1 MR. LUTER: And he'll be furnishing 

2 those, I guess by the end of the week. 

3 MR. RAMIZREZ: Perfect. Thanks. 

4 MR. WALKER: Okay. I'll move on to the 

5 envelope leakage slide. Same story here. We 

6 have three different levels of leakage with 

7 prices for double and single section homes. 

8 Any initial feedback that we can hear 

9 today in advance of the cost data later in the 

10 week? 

11 MR. LEVY: Matthew, actually, we don't 

12 have the final list of cost information to 

13 provide. But if you have associated with each of 

14 these levels to see the construction differences, 

15 we can certainly go back and get that 

16 information. 

17 Hang on. 

18 MR. WALKER: Okay. 

19 MR. RAMIZREZ: Yeah, if you could that 

20 would be great. Thanks, Emanuel. Mark? 

21 MR. LUBLINER: This is Mike Lubliner. On 

22 the envelope leakage step I think it's important 
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1 that it depends on kind of where you're starting 

2 and where you're going. For example, it may be 

3 that going from a single pane window in Zone 1 to 

4 a double prime vinyl is going to get you a 

5 significant amount of envelope reduction without 

6 spending any money associated with envelope 

7 leakage. That cost has been appropriated to the 

8 better window. 

9 So as Rob was pointing out, it's hard to 

10 separate out solar heat gain coefficient from U 

11 value. 

12 To some extent, at least with the leakier 

13 base case homes, the window leakage is 

14 contributing significantly to this envelope 

15 leakage, and it has a different cost than say 

16 caulking and sealing or other things that require 

17 additional material or labor. Thank you. 

18 MR. LUTER: This is Rob Luter. Actually 

19 all HUD certified windows have the same leakage 

20 maximums, whether they're the least expensive 

21 aluminum single glazed, or the most expensive 

22 vinyl dual glazed. 
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1 MR. LUBLINER: So if we builder tested 

2 both those homes they'd come in at the same 

3 number? 

4 MR. LUTER: Yes, sir. With respect to 

5 the window leakage. 

6 MR. LUBLINER: But the respect to the air 

7 change of the house at 50 pascals. You blower 

8 door the same identical house, one has got a 

9 single pane aluminum window, the other has got 

10 the double pane vinyl window, and you're 

11 saying -- am I hearing what you're saying Rob, is 

12 that we're going to get the same air change 50 

13 pascal blower door test? 

14 MR. LUTER: I'm saying that I'm a 1701, 

15 which is the standard for windows used in 

16 manufactured housing; limits air leakage to 

17 windows -- or excuse me, for windows to .3 cfm 

18 per square foot, regardless of materials used or 

19 design. 

20 MR. LUBLINER: I totally understand. 

21 This is Mike Lubliner again. Just to follow up. 

22 Maybe Emanuel you can -- you have built a lot of 
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1 Energy Star homes where you've changed from a 

2 single pane aluminum, I'm assuming, to a double 

3 pane vinyl. Are you seeing any difference in air 

4 change rate from the thousands of homes that have 

5 been built with that change? Because we do when 

6 we test better windows. We see tighter homes. 

7 MR. LEVY: Yeah, two thoughts about that, 

8 Michael. It's an interesting point you're 

9 bringing up. One is we test the Energy Star 

10 homes, but we don't have a big database of non11 Energy Star homes to compare those with. We have 

12 our targets for Energy Star and it's hard to, as 

13 you would know, to do an effective comparison 

14 against something that's not being built. 

15 MR. LUBLINER: So the savings is -- 

16 that's not there, the savings isn't there, then? 

17 MR. LEVY: No, I'm not saying that. 

18 Just, we haven't measured it. We haven't looked 

19 at it. 

20 MR. LUBLINER: Okay. You haven't 

21 measured it. Thanks. 

22 MR. LEVY: And also it's hard, when you 
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1 do a blower door test, to distinguish between 

2 what the leakage part that's attributable to the 

3 windows versus everything else in the building. 

4 MR. RAMIZREZ: Thank you. Oh, sorry, 

5 Mark. 

6 MR. WEISS: Yeah. This is Mark Weiss. 

7 Does the model reflect testing costs, or is that 

8 just materials? 

9 MR. WALKER: I think we would 

10 characterize this as materials. 

11 MR. WEISS: Materials only. 

12 MR. WALKER: Yeah. 

13 MR. WEISS: Is testing caught somewhere 

14 else in the model? 

15 MR. WALKER: So I guess you're referring 

16 specific -- well, I don't know. I see what your 

17 question is. I guess testing cost is not 

18 specifically addressed in the LCC model at this 

19 point. Is that something that you'd like to see 

20 included? 

21 MR. BARBOUR: No, this is Ed Barbour with 

22 Navigant. No, we haven't included the cost in 
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1 this analysis of testing equipment and/or, you 

2 know, the labor. So it's just the labor and the 

3 materials in order to seal the product. 

4 MR. WEISS: Yep. Thank you. 

5 MR. WALKER: Okay. I'll do the final 

6 slide here, duct leakage. 

7 MR. LUBLINER: This is Mike Lubliner. I 

8 had a question about assumptions here, and a 

9 question for the industry to ponder. 

10 Our experience in moving from foil tapes 

11 to sealed ducts in the Northwest to Mastic, was 

12 that the tapes and the Mastic had about the same 

13 labor and incremental costs; they were 

14 comparable. And the way that we're getting 

15 tighter ducts in general is by going to Mastic 

16 and testing. 

17 Now as Mark said, question about testing 

18 aside, if we leave the cost of the testing of the 

19 ducts to confirm that they're tight out of the 

20 equation, what are these 292.30, or what do these 

21 numbers represent? Is this some incremental cost 

22 of Mastic over tape and incremental labor 
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1 associated with applying the Mastic? I need to 

2 better understand that. 

3 I would suggest that from our experience, 

4 there is no incremental cost because the labor 

5 and the materials are roughly the same whether 

6 you use Mastic or tape. I may be wrong and I'd 

7 look to the manufacturers outside our region to 

8 provide me some guidance. Thank you. 

9 MS. HOFFMAN: Any comments? 

10 MR. LUBLINER: Hearing on comments. 

11 MS. HOFFMAN: Okay. 

12 MR. RAMIZREZ: Yeah. 

13 MR. LUBLINER: You mean I'm right? 

14 MS. HOFFMAN: I think we're getting close 

15 to lunch, also. 

16 MR. ROY: Hang on. Robin here. We have 

17 one thing that's on these slides that's not 

18 shown. It's the subsequent slide with 

19 incremental costs for heat pump water heaters and 

20 more efficient heating equipment, water and 

21 space. It's interesting too. While it's not 

22 clearly something we're going to set a standard 
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1 on, it's something that we clearly need to 

2 understand better and it's something that's still 

3 within our consideration. 

4 MR. DENNIS: And I have maybe a more 

5 basic question. Do homes -- are we having any 

6 consideration for say, Energy Star ready or heat 

7 pump ready house? Like, I know it's not 

8 necessarily an efficiency measure, but I know 

9 part of the problems that we have with retrofits 

10 is that the way the homes are built it's hard to 

11 put some of these more efficient appliances in, 

12 and I don't know if that's something that's even 

13 touched upon, upon what we're doing. If there's 

14 design considerations for if somebody wants to 

15 upgrade to a different product. 

16 So, my kind of not understanding of 

17 exactly how industry works, so I was just 

18 throwing that out there as a question. 

19 UNIDENTIFIED SPEAKER: That's probably 

20 not for you. 

21 MR. WALKER: Yeah, it's not for me. 

22 MR. DENNIS: No, that's Keith Dennis. 
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1 MR. WALKER: That's a decision the 

2 working group could come to as to the types of 

3 standards and regulations that you're interested 

4 in. 

5 MR. HAGERMAN: So Joe Hagerman, DOE. I 

6 think we can easily add Robin's slide on the cost 

7 difference between the equipment, you know, 

8 configurations. But I'm not sure how we would 

9 address, you know, this idea that the product be 

10 ready for a higher type of equipment. I'm not 

11 sure how we would get to that. 

12 MR. WALKER: Okay. 

13 MR. HAGERMAN: But we'd welcome a 

14 recommendation or some how to -- it's not like we 

15 don't want to think about it. We just don't know 

16 how to necessarily think about it, so. 

17 MR. ROY: This is Robin. Actually, maybe 

18 it's a good question for some of the 

19 manufacturers who make a fair number of Energy 

20 Star homes that end up with heat pumps in them. 

21 Maybe they have a sense of what they do or don’t 

22 do differently to make their products more ready 
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1 to accept them. 

2 MR. EZZO: This is Mark Ezzo at Clayton. 

3 I don't know that we do anything different. I 

4 mean, the house leaves with a furnace and a 

5 blower, air handler, and if on site it gets a 

6 heat pump I don't know that we do a whole lot 

7 different at the plant side. 

8 MR. DENNIS: So just practically 

9 speaking, if a utility wanted to incentivize a 

10 different type of heating product that was more 

11 efficient it would mean switching out something 

12 that was already shipped with a new product and 

13 disposing of the old furnace and blower? Is that 

14 how it works now? I don't know. 

15 MR. LUBLINER: This is Mike Lubliner. My 

16 understanding is Mark is correct that basically 

17 what heat pump ready means -- 

18 MR. RAMIZREZ: Michael, for some reason 

19 you faded out there. 

20 (Lubliner was accidentally disconnected.) 

21 MR. RAMIZREZ: All right. Well, if we 

22 need to continue that discussion after lunch we 
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1 could do so. I think this was the last slide. 

2 But we do want to make you aware of one change on 

3 the agenda when we come back. Instead of getting 

4 into the committee reports Robin has agreed to 

5 move his discussion from the second day to the 

6 first day on affordability, and so we're going to 

7 have that discussion after lunch. 

8 MS. HOFFMAN: Yeah. And then after that 

9 we'll have subcommittee reports, and of course 

10 also think about during lunch any additional data 

11 that you can provide for this working group. 

12 Thank you. 

13 So let's see, what time is now? 

14 MR. RAMIZREZ: It's noon. 

15 MS. HOFFMAN: Noon. Please come back at 

16 1:00. Thank you. 

17 MR. RAMIZREZ: Okay. Great. Thank you, 

18 Matthew. 

19 (Lunch break from 11:59 a.m. until 1:04 

20 p.m.) 

21 MR. RAMIZREZ: Okay. Let's go ahead and 

22 get started. Since I modified the schedule 
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1 slightly and we put Robin up here for his 

2 affordability concept discussion, and so I 

3 modified the agenda to incorporate that, so 

4 Robin, whenever you're ready come on up and if 

5 you could lead us through? 

6 MR. ROY: Well, I think you all know that 

7 I've been very interested in this topic of 

8 affordability and how we're going to deal with 

9 this issue as it comes forward. We'll see some 

10 numbers and we'll have some reasonable costs that 

11 we're trying to understand how to balance with 

12 out -- the cost effectiveness and the 

13 affordability. 

14 What that's led me to over a while is the 

15 need to come up with something that allows us to 

16 carve out a group of manufactured homes for whom 

17 entry costs or initial costs, that first term of 

18 ownership are particularly limiting and 

19 challenging, and come up with something which is 

20 cost effective for them. 

21 So in that case, what seemed to make 

22 sense to me is to suggest that we use two product 
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1 types that allow us to balance affordability 

2 issues and efficiency objectives that we're all 

3 working towards. The nature of the act, it 

4 directs DOE to come up with a standard that has 

5 cost effectiveness defined in a way that's 

6 different from what's typically done for 

7 appliance standards. They talk about life cycle 

8 cost and they talk about purchase price. These 

9 are both, they're interesting, they're different. 

10 I think there's actually a wise bit of guidance 

11 that they came up with to cause some more 

12 reflection on DOE's part and now on our part 

13 about how you balance different time horizons, 

14 different perspectives, recognizing that 

15 manufactured housing has a particular important 

16 role in the nation's affordable housing policy. 

17 In any case, so I'm suggesting that we 

18 come up with a product definition that has -- or 

19 a term sheet that has four parts. The first two 

20 are a set of technical requirements for a product 

21 type, for lack of a better name. I'll call it 

22 FO, for Full Options. Technical requirements for 
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1 a product type which we'll call LO, limited 

2 options which has lower first cost and lower 

3 efficiency as a result, but is more -- but you 

4 know, by virtue of its lower first cost is going 

5 to be something which those more constrained 

6 households can get into, and now we get to some 

7 other interesting parts. 

8 I think while it may be a little bit 

9 outside the direct ASRAC charter for us, we also 

10 need to think, quite specifically if we take such 

11 an approach as this, about working with DOE or 

12 having DOE work with EPA towards updated Energy 

13 Star criteria based on what we learn through this 

14 process. And again, if we take this to this two 

15 product type approach, we also need to be clear 

16 that the federal government, DOE working with 

17 HUD, I think in this case, and comes up with 

18 energy labeling for these two different product 

19 types, that really helps consumers with their 

20 decision making and their understanding the 

21 difference between these product types. 

22 Anyway. So what I'm suggesting is two 
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1 different product types, LO and FO. And just as 

2 a side note, when DOE is setting appliance 

3 efficiency standards they typically use the word 

4 product class. It's the term of art, it's the 

5 parlance at DOE. I think it's based on a variety 

6 of feedback I got as I discussed this with many 

7 of you over the last -- well, last day and a 

8 half. It's nice to use something like the word 

9 type as opposed to the word class, even though 

10 that is what DOE normally uses. So that's 

11 something. I don't know, Joe, how much freedom 

12 you guys have in using different words, but I'd 

13 suggest that. 

14 Okay. Let's talk about these four parts 

15 of the term sheet. First, the product type FO. 

16 You may recall in one of our meetings either two 

17 or four weeks ago, we were looking at the 

18 different definitions that we would be 

19 considering, the different, the financial and 

20 life cycle cost assumptions that we'd be looking 

21 towards and we came up with three groups. We had 

22 a worst case, a best case, and a weighted average 
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1 case. And those were reflected in some way 

2 different time horizons of buyers, reflecting 

3 different discount rates and financing ability. 

4 Do you guys all recall that? Do you 

5 recall that? It's part of that term sheet 

6 framework document and it's one of the bits which 

7 has a consensus tick next to it, that we're going 

8 to have these three different perspectives that 

9 we were looking at when we were doing cost 

10 effectiveness assessment. If you don't remember 

11 it, let me know and I'll send through again that 

12 term sheet framework document and it will refresh 

13 your memory. 

14 In any case, my -- pardon? 

15 UNIDENTIFIED SPEAKER: Go ahead. 

16 MR. ROY: I didn't hear that. I think 

17 it's useful to actually refer back to that and 

18 think about how those different perspectives 

19 actually should show up in a proper DOE standard. 

20 So, in any case, for the full options 

21 product type, I'm suggesting the efficiency level 

22 should be based on maximizing the cost 
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1 effectiveness to all owners over a home's life. 

2 So that's -- it's the 30 year, whatever year 

3 life, of that home which will have many different 

4 -- there are several different owners in it. 

5 The cost effectiveness assumptions would 

6 be based on that weighted average cost case that 

7 -- weighted average case that we have from that 

8 term sheet, framework document. They physical 

9 characteristics, what manufactured home is going 

10 to have to comply with this FO technical 

11 requirement? I'm suggesting it's all the 

12 manufactured homes that are not type LO. So 

13 we'll get to that type LO in a moment. 

14 The compliance paths would be the full 

15 range of prescriptive UA, U -- all the options 

16 that are in IECC now. I'm not sure about the 

17 HERS rating because there's some question about 

18 that. But in any case it's basically suggesting 

19 we delegate that to a separate discussion. 

20 But we are looking at a broad sort of 

21 compliance paths. We have physical 

22 characteristics that are defined by exception. 
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1 In any case, so now on to part which is 

2 really most interesting, how does that differ -- 

3 the full options product type differ from the 

4 limited options product type? Well, it differs 

5 in certain very important ways. First, the 

6 efficiency level we'd be looking at for this LO 

7 product type would be based on maximizing the 

8 cost effectiveness to the first owner. 

9 Now you might recall that that was pretty 

10 much what defined the worst case in the term 

11 sheet framework document from a couple of weeks 

12 ago. If you don't recall that, take a look back. 

13 And all the details associated with that would go 

14 into the analysis that Navigant and DOE are doing 

15 here. 

16 I should also so, you know, one thing, we 

17 had this nice discussion this morning about that 

18 curve, and where on the curve we want to be. 

19 Where the -- there's something that's also 

20 interesting. That curve is not the same curve 

21 depending on what cost of financing you're 

22 assuming, right? It's a different curve if 
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1 you're talking a chattel loan or a weighted 

2 average consumer cost of financing. Those are 

3 different curves. 

4 So I think in this product type you end 

5 up with different curve and you're choosing a 

6 different point on it. What you'd be choosing 

7 here is the cost minimizing point from a curve 

8 that has characteristics of the more financially 

9 constrained buyer that's out there. 

10 The physical characteristics -- what is 

11 interesting to me is to see if you can define a 

12 set of attributes for a typical entry level or 

13 basic home, a limited options home that overlays 

14 reasonably well with these financing constrained 

15 folks. And one of the thoughts that came out 

16 was, well, maybe the window floor area ratio is a 

17 pretty good indicator. Windows are a nice 

18 amenity. They tend to be reasonably expensive 

19 and drive up cost for a home. They also have 

20 some particular bearing on the energy 

21 performance. So windows are kind of nice in 

22 three ways, kind of a trifecta there. 
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1 So we can figure out and look into the 

2 manufacturers for this, can we figure out sort of 

3 an egress requirements based window, floor area 

4 ratio that defines a generally low cost -- low 

5 first cost home? That might be a good product 

6 definition. 

7 I throw that out. The reason I have a 

8 little question mark here is I suggest a 

9 window/wall area ratio of less than 11 percent. 

10 Not sure that's the right number. I'm not sure 

11 that window/wall area ratio, whether that should 

12 be a function of whether it's a single or a 

13 double section. But if we can carve out a good 

14 definition of a product type that is aimed 

15 towards lower first cost, that would be very 

16 useful. 

17 My first suggestion is of less than 11 

18 percent window/wall area ratio. Sorry, window 

19 floor area ratio. Got the wrong number there. 

20 The compliance path I can imagine we'd 

21 have a different set of options for the 

22 compliance path; maybe not using the full suite 
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1 of options that are laid out in the IECC. Maybe 

2 you use them all. Maybe you restrict it to UA. 

3 Maybe you restrict it to prescriptive. Maybe you 

4 have all three. But it's an area for discussion. 

5 It doesn't have to be the same suite of 

6 compliance path options. 

7 And finally I suggested that it would 

8 seem reasonable for this limited options product 

9 type to limit the total amount of production 

10 that's out there. the objective being for that, 

11 that we want to make sure that we get the 

12 economies of scale in the full options production 

13 that allow higher efficiency units to not be 

14 disadvantaged, just because they have been -- 

15 because they are relatively rare. The 

16 manufacturers won't be buying in such volume for 

17 them. 

18 Not sure how important that is, but I can 

19 imagine that that's important. I've suggested a 

20 30 percent as a starting point limit and can't 

21 see how DOE would apply such a thing other than 

22 on a per manufacturer basis. But again, up for 
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1 consideration. 

2 Right. So the notes really basically say 

3 much of the same. One thing which I should also 

4 draw to your attention is there is a process that 

5 DOE, through the Office of Hearings and Appeals, 

6 once a standard has been adopted for a 

7 manufacturer to seek an exception or an 

8 exemption. There's nothing in this definition 

9 which would get in the way of a manufacturer 

10 seeking such an exception or exemption to make a 

11 different efficiency level of a product. So that 

12 is a different avenue that I suppose the 

13 manufacturers may be aware of, but given that you 

14 haven't been regulated by DOE, you may not be 

15 familiar with. And it's an important one to 

16 note. And if you have a manufacturer that's 

17 going to be particular disadvantaged by the 

18 standards which come out, even under this more -- 

19 even under this approach which allows a 

20 considerably lower efficiency level to come 

21 through, there is an approach for remedy. And 

22 DOE does regularly rule in favor of manufacturers 
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1 and allow them to build something differently. 

2 Okay. Now on to the last bits of this. 

3 So two types of two types, full options, limited 

4 options, and then updating Energy Star. There's 

5 no question that as we go through this process we 

6 are going to find there are thermal opportunities 

7 that go beyond what we see in Energy Star. It 

8 would be quite surprising if Energy Star was 

9 taking full advantage of all the cost effective 

10 energy efficiency that's out there. Maybe it is, 

11 maybe it's not. But what would be great would be 

12 for Department of Energy to undertake as part of 

13 this exercise, on a specified timeline, to work 

14 with EPA to come out with a new definition of 

15 Energy Star. 

16 I think that's particularly important 

17 because as we were discussing earlier, I mean, we 

18 will fund -- and I should also say that updated 

19 Energy Star, that might be based on the best case 

20 under that term sheet document, with more 

21 reflecting a societal discount rate. 

22 This would be something which utilities 
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1 or other efficiency providers could avail 

2 themselves up in defining their own programs. 

3 Lots of utilities have energy efficiency 

4 programs. They're looking for something to hinge 

5 those off. They often reference Energy Star. It 

6 would be useful to have a specific Energy Star 

7 criteria upgrading, updating. And we're going to 

8 learn something through this process. 

9 Now, I'm presupposing what the numbers 

10 will show, but I assume that there will be 

11 something that's different. 

12 It's not really clearly part of our 

13 charter, but we're going to learn something 

14 that's really relevant, so we should bring it in. 

15 And the fourth piece of this proposal is 

16 to have a clear energy label that allows 

17 consumers to actually easily acquire information 

18 about what the implications of the purchase 

19 decisions are. And I'd propose that should be a 

20 permanently affixed energy label. It would 

21 actually fit quite well with HUD's current 

22 requirement to have a permanently affixed tag of 
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1 some sort. So DOE, again, would have to work 

2 very closely with HUD to figure out what's a way 

3 to get that permanently affixed labeling done. 

4 You know, this is a HUD activity, generally. 

5 But what's interesting is there is energy 

6 information on the current HUD label, I believe. 

7 But it's not the kind that's really straight 

8 forward for a buyer to make use of. It doesn't 

9 put -- well, here's an example of what might be 

10 more easy for a buyer to understand. This is an 

11 energy guide label that's typical of, you know, 

12 an FTC label. It shows what the dollars are for 

13 models coming out this year. It puts this 

14 particular model right there in front of you, so 

15 you can see what the energy use is, what the 

16 dollar spent is for the types of fuel. Something 

17 along these lines which makes it easier for a 

18 consumer to see what type of spend they might be 

19 having if they're making a decision to go with an 

20 LO as opposed to an FO. Just useful, not just 

21 for that first buyer but for resale buyers as 

22 well. 
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1 I think that it's actually incumbent on 

2 us if we take a two-product type approach to also 

3 take a labeling -- to suggest that labeling is 

4 important, and permanent labeling, to make it 

5 clear why there are these options and what the 

6 trading off is. 

7 So, that's about it for my proposal, four 

8 parts. I think if we don't address this issue of 

9 affordability we're going to have some serious 

10 challenges. I suspect that what DOE will do, it 

11 will throw its hands up in the air, say we don't 

12 know how to tradeoff between higher first costs, 

13 and they're going to come and say, we're talking 

14 three, $4,000, $5,000 per section, they're not 

15 going to know how to address that. It is a 

16 fundamentally challenging issue. We've been 

17 talking around that issue a lot here. We want to 

18 carve out a group that is particularly attune to 

19 the least advantaged of our nation's households 

20 on their path to homeownership, while still 

21 getting as much energy efficiency that's cost 

22 effective out, and while also leaving a great 
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1 door for utilities and other supplementary energy 

2 efficiency supporters to tag on and fill up the 

3 remaining bit of energy efficiency. 

4 That is my thought. We can send out this 

5 all on one page to you. Have you sent that? 

6 MR. RAMIZREZ: Just did. 

7 MR. ROY: Excellent. So you guys should 

8 all have a copy of this thing. You should 

9 probably reflect on it for a little bit. I 

10 suspect it doesn't really change what analysis we 

11 should be doing, except in one degree, we 

12 shouldn't have quite as many discussions and 

13 debates about where we are on a curve. This 

14 would allow us to be working towards two 

15 different curves and two different points on two 

16 curves, consistent with our earlier view that we 

17 should be looking at three different perspectives 

18 that allow us to move ahead of those, get some 

19 real numbers, give us some comfort that we are 

20 working on a path that's going to try to have 

21 allowance for these different perspectives. 

22 So it should encourage us to give DOE a 
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1 better path forward. But we have lots of 

2 questions that need to be considered, like what's 

3 the right product type definitions. Is it 

4 window/floor area ratio? What are the right 

5 compliance paths? What fraction of production 

6 limits should there be? There are a number of 

7 details. You know, anyway. I'll throw it out to 

8 you. 

9 MR. RAMIZREZ: Initial comments or 

10 questions? 

11 MS. STARKEY: Well, I'll start off by 

12 first thanking you, Robin, for really 

13 thoughtfully -- 

14 MS. HOFFMAN: That's Lois speaking. 

15 MS. STARKEY: Oh, I'm sorry. For 

16 thoughtfully putting together a proposal that 

17 addresses, you know, the lowest income of home 

18 buyers. And you know, I think it has some merit 

19 for, you know, to think about as we have been -- 

20 as our membership has been addressing this issue 

21 informally and looking at updates to the 94 

22 standard. We did actually consider the idea of a 
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1 small home because when we looked at the IECC we 

2 realized that the smaller homes going on the 

3 Northeast would have trouble meeting the new 

4 energy code. So we did look at this concept of 

5 two different standards, if you will, or 

6 something different for -- you know, it's two 

7 different standards, basically. 

8 And we ultimately rejected it. I don't 

9 really think that we rejected it firmly, but we, 

10 you know, we took another path as we moved 

11 forward with our effort. And that was because 

12 mainly we liked to have as much uniformity in the 

13 process. And in the real world when you're out 

14 there in the -- when people are actually out 

15 there building the homes in the factory it's a 

16 lot. You know, they've got a, you know, a sheet 

17 that goes along with every home and they now have 

18 Energy Star, they have whatever, you know, home 

19 design it is. But then they're going to yet have 

20 another standard, and then they have the modular 

21 home and it's just -- it's awkward in the real 

22 world to actually make that work. 
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1 So, but that doesn't mean that we can't, 

2 you know, relook at it. You know, I think we 

3 need to, you know, take a serious look at it 

4 because it certainly addresses an issue that 

5 we're concerned about. 

6 MR. RAMIZREZ: Thank you, Louis. Mark? 

7 MR. WEISS: Mark Weiss. Thank you. 

8 First, Robin, thanks for putting that together. 

9 Appreciate it. Appreciate the thought that went 

10 into it and I think you've raised -- you've 

11 addressed a number of important issues. 

12 I can see some areas in this where small 

13 manufacturers could have some problems, 

14 particularly with respect to the production 

15 limit. I mean, once you get down to smaller 

16 manufacturers, you have some manufacturers that 

17 cater almost exclusively to an upper end market, 

18 and then you have some manufacturers that deal 

19 almost exclusively with a, you know, entry level 

20 type market. So that would be something we'd 

21 have to think about and also there are 

22 implications related to a label where there's 
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1 some history that we need to think about as well. 

2 But a good thought and something we should 

3 consider; think about. 

4 MR. HAGERMAN: This is Joe Hagerman, DOE. 

5 So, this is pretty consistent with how we might 

6 think about regulating other products like 

7 refrigerators where you have side by side doors, 

8 or you know, top mount freezers and bottom mount 

9 freezers. So I think there is some, you know, 

10 consistency there if we can define the physical 

11 attributes that differ. Right? Like you've 

12 started to here in the window to wall ratios, for 

13 example. 

14 I don't like to -- even to Mark's point, 

15 I'm not sure that we have the ability to limit 

16 people's productions of, you know, side by side 

17 refrigerators versus top mount refrigerators. 

18 Right. So I mean, we'd have to understand that a 

19 little bit more. So I'd take, you know, Mark's 

20 point I think is something we'd have to think 

21 about. 

22 But, you know, I'm encouraged and 
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1 whatever we can do to encourage this group to 

2 come up with a consensus to help us understand, 

3 you know, what's the best option for the public 

4 here is what we need to be trying to support. So 

5 if this group wants to come up with these two 

6 different product classes, or types, I'm sorry, 

7 then you know, let's explore that possibility. 

8 Right? I mean, the affordability -- these 

9 concepts of affordability, we have to struggle or 

10 we have to come to terms with how we balance the 

11 three things here, the 2015 IECC, the LCC, and 

12 then the affordability issue. So those are our 

13 three legs of the stool that we have to kind of 

14 sit on, so. 

15 MR. RAMIZREZ: Folks at home or offsite, 

16 any questions or thoughts or comments? 

17 MS. DICKENS: This is Ishbel. So, I 

18 talked with Robin and Safety about this kind of 

19 idea and I like it a lot. I was just curious 

20 about something that Emanuel -- I think it was 

21 Emanuel said this morning, about just improving 

22 the wall insulation to be a minimally -- could be 
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1 minimally costly but extremely effective in terms 

2 of energy savings. And so could we look at those 

3 kind of basic things as ones that we'd include to 

4 lower our limited option bubble, because if we 

5 can get a lot of value for a buck that way 

6 without it being a huge impact on the cost of the 

7 home, but a huge benefit to the consumer, that's 

8 an approach that I think is very worthwhile. 

9 I'm just curious what the manufacturers 

10 would think of that. 

11 MR. RAMIZREZ: Any manufacturers want to 

12 chime in? 

13 MR. LUBLINER: Hearing on manufacturers 

14 chime in, this is Mike Lubliner. I want to thank 

15 Robin for trying to untie this Gordian knot of 

16 separating life cycle cost with the affordability 

17 issues that Mark Weiss has continued to 

18 articulate. 

19 I guess I too want to get to consensus, 

20 and I need to get a handle on just how many of 

21 these 50,000 or 60,000 homes a year are really 

22 going to fall into this product type LO based on 
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1 the fact that they're entry level homes and 

2 affordability. And so until we start to get some 

3 feedback, not just in generalization but actual 

4 percentage of the industry by climate zone or by 

5 house type, or ideally by both, it's really hard 

6 for me to compromise or come to consensus because 

7 I don't know exactly what I'm compromising in 

8 terms of magnitude the impact on the overall 

9 fleet average of the country. 

10 MR. ROY: Mike, this is Robin. 

11 MR. LUBLINER: So I'd like to 

12 (inaudible). 

13 MR. ROY: I really, I agree with that. I 

14 want the numbers to speak and inform all this. 

15 I'm presupposing that we're going to see a fairly 

16 wide split between what looks like it would be 

17 cost effective from all owners perspective; 

18 what's the difference between that over the life 

19 of a home and what a first buyer chattel driven, 

20 or not even able to get chattel, a buyer might be 

21 looking at. And I think those are probably both 

22 different from what somebody is looking at a 
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1 utilities cost of funding might be able to do, 

2 for example through an Energy Star program. 

3 I suspect we'll see thousands of dollars 

4 per floor difference across that spectrum. But 

5 that may not be the case. I too, like you, look 

6 forward to working through some of the actual 

7 numbers. Otherwise it's an exercise in abstract. 

8 MR. LUBLINER: I mean, can we -- this is 

9 Mike Lubliner again, follow up. Can we get a 

10 sense from the manufacturers as to this kind of 

11 affordability group, the group that is going to 

12 be better off with the less efficient home 

13 because they can't buy the more efficient home, 

14 are we talking about five percent of the market, 

15 50 percent of the market? Just some sort of a 

16 sense of what we're talking about here would be 

17 really useful to get feedback on before I could 

18 embrace this as a good consensus approach. 

19 MS. HOFFMAN: Okay, Lowell, you have a 

20 comment? 

21 MR. UNGER: No, I didn't. Not of my 

22 question, so if there are answers to that 
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1 question. 

2 MS. HOFFMAN: Okay. Lois. 

3 MS. STARKEY: Would it be helpful if we 

4 provided some annual household income of 

5 manufactured home buyers, and I mean, that will 

6 at least give you an idea? I've got something 

7 from foremost here, you could put it -- if you 

8 wanted to put it on the other side. 

9 MR. LUBLINER: It would be helpful. We 

10 would like to get your opinion on -- 

11 MS. STARKEY: That will give me a 

12 breakdown of what the percentage is of -- 

13 MR. RAMIZREZ: Can you e-mail that to me? 

14 MS. STARKEY: Percentages. I don't -- 

15 not easily. I'm sorry. 

16 MR. LUBLINER: So, Lois, does that 

17 include the cash purchases as well, people that 

18 buy these homes for cash, or people that buy the 

19 chattel mortgages because they don't want to tie 

20 up their land, not because they can't afford a 

21 conventional mortgage? 

22 MS. STARKEY: I can't answer that right 
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1 now. And I think this data comes from the -- 

2 MR. LUBLINER: Well, those are the kind 

3 of issues -- 

4 MS. STARKEY: -- Census Bureau, so I 

5 think the answer is probably no, we can't. 

6 MR. LUBLINER: Yeah. This is Mike 

7 Lubliner again. Just to follow up. It seems to 

8 me that you, industry, has the data. So it will 

9 be going to the Census Bureau would be a recourse 

10 because we're not able to get your data 

11 specifically on when you loan, what percentage 

12 time do you have to loan? What percentage of the 

13 people buy cash? Or when you offer a chattel 

14 mortgage, what percentage of those people are 

15 purchasing that chattel mortgage because they 

16 don't want to tie up their land as opposed to 

17 they can't afford a conventional mortgage? Those 

18 are critical issues and I don't want -- I think 

19 it's useful to have some survey data, national 

20 survey data, but what I'm looking for is 

21 information from the manufacturers who have the 

22 best information available. And I haven't gotten 
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1 any specifics yet on those particular questions. 

2 And I'd like to come to consensus. I 

3 really would, but I need to hear that stuff. 

4 Thank you. 

5 MS. STARKEY: Well, we don't really. 

6 It's hard. We don’t really. We rely on census 

7 data for a lot of that information, for income 

8 information. I mean, we know where homes go, but 

9 we don’t really know, you know, how -- we know 

10 where they go but we don't know exactly what 

11 incomes they have. I mean, that's hard to get. 

12 Again, lenders we've been -- data is a problem, I 

13 must say. But we don't have that data, you know, 

14 in a precise way. So we rely on census data. 

15 MR. LUBLINER: Thanks, Lois. Mike 

16 Lubliner. One last follow up and then I'll be 

17 quiet. This is important; really critically 

18 important. 

19 I would suggest that you survey your 

20 retailers to get that information. That's what 

21 we're doing in the Northwest to manufactured 

22 housing retailers. We're going out to the 
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1 retailers and asking them, what percentage of the 

2 people are buying cash, what percentage are 

3 buying chattel, and of those buying chattel what 

4 percentage of them are buying chattel because of 

5 affordability, or separately for other issues 

6 like I mentioned, they don't want to tie their 

7 land up. That would be a constructive, very good 

8 exercise, and I think that at least half your 

9 industry, a good chunk of your industry is 

10 vertically integrated. In other words, they have 

11 lenders that they work very closely with that I 

12 would think you could have that information at 

13 hand. But maybe I'm naive on that. 

14 MR. WEISS: Mark Weiss. Mike, going back 

15 to your original question. If you look at the 

16 NAHB study, that posits that a $1,000 price 

17 increase excludes, what, 347 some thousand 

18 prospective buyers from the market. That's what, 

19 four times the size of the current annual 

20 manufactured housing market. If you take $1,000 

21 down to $100 assuming a linear type regression, 

22 you're excluding what, 35,000. Virtually half 
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1 the market just on $100,000. So that's a pretty 

2 substantial impact and I think we need to go 

3 through that analysis and see how that relates to 

4 our situation. 

5 MR. LUBLINER: Yeah, I agree, Mark. This 

6 is Mike Lubliner. Follow up on that. I totally 

7 agree with that. And I think we should use 

8 correct price elasticity values. But I believe 

9 the NHB data is for site build housing, not 

10 manufactured. I believe the Meeks and the 

11 Marshall work that was submitted would be more 

12 appropriate for those price elasticities and I 

13 would encourage us to discuss this in the context 

14 of that. 

15 But separate from that I do believe that 

16 the industry could survey their retailers and 

17 their lenders to get at least a ballpark sense of 

18 the questions that I've asked. Thank you. I'm 

19 going to stop on this one. 

20 MR. WEISS: Yeah, just brief follow up on 

21 the NAHB survey. My understanding of that is, is 

22 that their figures were specific to manufactured 
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1 housing. They did both single section and double 

2 section. 

3 MS. STARKEY: Yes, that's correct. And 

4 they used, it's a standard economic analysis. 

5 This is Lois at MHI. 

6 So they actually -- that is a, you 

7 know -- I think there's -- people can argue about 

8 the validity of the whole study and the use of 

9 the price elasticity of demand analysis, but they 

10 did use HUD code shipment data to do that study. 

11 MR. LUBLINER: So I'm hearing you're more 

12 comfortable with the NAHB data than your own MHI 

13 Meeks data. 

14 MS. STARKEY: I think it's different. I 

15 think we can make -- we'll try to get what you 

16 want but I think you're going to come up with the 

17 same kind of data you're getting from Census and 

18 Foremost, and others. 

19 MR. LUBLINER: Thank you, Lois. 

20 MR. EZZO: Hey, Mike this is Mark Ezzo at 

21 Clayton. And this is just a real simplistic 

22 review or view of this thing from someone who 
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1 doesn't have all the data. But just in thinking 

2 of terms of what our plants build around the 

3 country, I mean, typically we talk about it in 

4 terms of it's either low-end, which is entry 

5 level, you know it's pretty close to minimum HUD 

6 code. There's the medium level, which is a 

7 little bit step above that. And then there's a 

8 higher end. 

9 So of those three chunks, you know, I 

10 can't tell you what percent we operate at each 

11 one of those, but I would say the biggest 

12 percentage is the lower end. And then secondly 

13 would be the middle of the market with, I think, 

14 the highest end product being the lowest. And 

15 looking at the pie chart we're looking at here on 

16 our screen, that looks fairly indicative of what 

17 I understand our plants are doing today; where if 

18 you look at the, you know, the 99.999 or less and 

19 then the 10 to 20 and 20 to 30, and that 

20 represent, gosh what, a big chunk of the market, 

21 that sounds about right to me with the rest of 

22 the numbers reflecting middle and higher end. 
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1 I don't know if that does you any good, 

2 but I can't -- I don't have (indiscernible). 

3 MR. LUBLINER: Thanks, Mark. 

4 MR. RAMIZREZ: Robin, could you talk a 

5 little bit more about that Energy Star piece that 

6 I think was your number three? 

7 MR. ROY: Right. Well, Energy Star is 

8 clearly now within the jurisdiction, even, of the 

9 Department of Energy. I think that's an EPA set 

10 standard. However, it is something of great 

11 bearing on manufactured housing and manufactured 

12 housing energy efficiency; energy efficiency 

13 programs. 

14 I suspect many, most, if maybe all -- 

15 maybe not, of the utility programs that try to 

16 encourage higher efficiency manufactured housing 

17 and new construction as opposed to retrofits, 

18 reference Energy Star. I'm not sure that's the 

19 case, but I would expect that it's the case. So 

20 it's something which clearly it's of great 

21 importance in a practical way to folks that want 

22 to run good efficiency programs for new 
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1 manufactured housing. So we should be mindful of 

2 that. 

3 We will have information that is relevant 

4 to Energy Star. We shouldn't ignore it. We 

5 should move that forward. I suspect what makes 

6 sense for Energy Star is a very different level 

7 of cost effectiveness than what makes sense for a 

8 buyer, taking a mortgage or a chattel loan 

9 because it's typically run by a government or a 

10 utility program with a very different cost of 

11 funds, very different mid and long-term 

12 objective. I mean, they're talking about buying 

13 energy efficiency, or buying new power plant, new 

14 contract. Not something, you know, on the supply 

15 side. 

16 To put some parody there is useful. And 

17 for us to provide that information to that Energy 

18 Star process, and you know, sometimes the Energy 

19 Star process and updating is not as fast as one 

20 would hope it would be; as technology moves 

21 along, as market conditions change. Here is 

22 something which I would expect information is 
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1 coming quickly through this process and markets 

2 will also change with higher volumes of purchases 

3 at higher end, higher efficiency that may change 

4 some of the cost and cost effectiveness. 

5 So that's why I want to tie it in and DOE 

6 does have a lot of opportunity to work with other 

7 agencies and the Federal Government. So I'd 

8 implore them to find a way to bring this 

9 information to bear. 

10 MS. HOFFMAN: Thank you, by the way. I 

11 think it's a fascinating idea, and one really to 

12 think about and consider for this group, whether 

13 it's today or next week. But I think it's an 

14 intriguing approach to look at, and -- 

15 MR. ROY: This is Robin. I have to 

16 say -- 

17 MS. HOFFMAN: Yeah. 

18 MR. ROY: -- when you say that it reminds 

19 me of when one of my children, I won't say which, 

20 was born, people said, "what a fascinating 

21 looking child." 

22 MS. HOFFMAN: I hadn't used that word 
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1 now. But I think it's very -- it's worth really 

2 great consideration. And I'm just asking the 

3 group as to what do we want to do with it at this 

4 point. We've got enough on our program to deal 

5 with as well, but do we want to look at some of 

6 the aspects of it? What I've been hearing is a 

7 need for more data, you know, what is the 

8 percentage of low income people who are buying 

9 manufactured housing. How big or large is the 

10 sector that would be the, for want of a better 

11 word, the LOs as opposed to the FOs in this 

12 instance. But can that be achieved? Can we get 

13 that data? I would ask -- 

14 MR. ROY: And this is Robin. I think 

15 that's an interesting set of data we could choose 

16 to pursue and it will help inform a decision at 

17 some point. But we don't need to resolve that -- 

18 MS. HOFFMAN: Uh-huh. 

19 MR. ROY: -- before structuring some of 

20 our thinking -- 

21 MS. HOFFMAN: Uh-huh. 

22 MR. ROY: -- along these lines. In fact 
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1 we need to be going along these lines and doing 

2 our analysis anyway. I'm suggesting a sensible 

3 way to structure smart thinking. At the end when 

4 we say, oh wow, in fact that conjectured that 

5 there is a pretty big range of dollars per 

6 section, we need some solution, we will have done 

7 the work and we'll then say, well, to how many 

8 people does this really apply. We don't have to 

9 hold this in abeyance until that is resolved. 

10 MR. RAMIZREZ: Lowell? 

11 MR. UNGER: Thanks. I would also like to 

12 thank Robin for a creative attempt to address 

13 real concerns. I mean, my preference would 

14 certainly be a single standard. We think all 

15 people deserve to live in efficient homes. And 

16 we'd be concerned about the precedent in terms 

17 of, you know, in general for standards and other 

18 things, that it works -- the system will in 

19 general work better if there is a single standard 

20 than to try to segment the market too much and 

21 create many different standards. 

22 That said, if this is a way of addressing 
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1 the concerns, I certainly think it's something we 

2 should consider. We'd be very interested in this 

3 question of how -- what would the market share 

4 be, because obviously among other things it 

5 relates to what are the energy losses that will 

6 happen because we have this product type that's 

7 less efficient. 

8 One other point of information that may 

9 be useful on that is if we're going to use the 

10 window to wall or window to floor, you alternated 

11 which one you're talking about, but if we're 

12 going to use a window ratio it might be useful to 

13 know what the market looks like in terms of 

14 different window ratios. Obviously that could 

15 change but at least that would be a starting 

16 point as to where it is now. 

17 A couple other specific comments, one is 

18 I recognize Joe's concern about putting caps on 

19 production. Another approach to that might be, 

20 which has been used elsewhere, to put an overall 

21 threshold that if more than a certain portion of 

22 the homes are in the limited option category, 
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1 that that would automatically trigger a review of 

2 the standard to look whether the standard is 

3 appropriate or its done something, which was not 

4 what was intended and needs to be changed. So 

5 that might be another way of addressing that 

6 issue. 

7 I think we would be very concerned about 

8 basing any standard on worst case assumptions. 

9 You know, they should be based on the best 

10 assumptions we can find. That said, if there are 

11 different -- if we believe different people are 

12 going to be purchasing these homes then it might 

13 make sense to base it on the, you know, financing 

14 or other characteristics on who is purchasing 

15 those homes rather than some other fictional, you 

16 know, market. So I'm able to get that data. I 

17 don't think I would call it worst case. 

18 MR. ROY: That's just what we called it 

19 (inaudible). 

20 MR. UNGER: And in that sense also, of 

21 course, that might then shift who is buying the 

22 other full option, in which case that should be 
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1 then rereflected (sic) and the assumptions made 

2 for the full option. 

3 One other thing I'll just note is I 

4 believe that IECC includes a requirement for 

5 energy label. I don't believe that label does 

6 include the energy cost, which as Robin pointed 

7 out, might be a very useful thing. But the label 

8 in question, at least, I think may come into play 

9 just because that would be an IECC requirement 

10 under normal circumstances, and you know, and 

11 perhaps for manufactured homes, the exact kind of 

12 label would make some -- would be different than 

13 it is under IECC. Thanks. 

14 MR. RAMIZREZ: That gave some additional 

15 structure of some of the things to consider if we 

16 are to go down this path. And if I understand 

17 the group correctly there is some value in 

18 heading down here, at least for now, and then we 

19 decide later on whether we actually do it or not. 

20 What other information and who is going to gather 

21 it, do we need in order to move forward? 

22 Even just what Lowell had mentioned, the 
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1 different window ratios, if there was a 

2 percentage of sales. I don't know if there's any 

3 information that we could gather on that piece. 

4 If there is a percentage of sales and then that 

5 would trigger a review on the reasons. 

6 Based on income levels, if we were to do 

7 something like that we would have to know the 

8 legality of that and then we also have the data 

9 on that already. That was just supplied by Lois. 

10 At least ballpark data on that. And then the 

11 energy labeling. 

12 But what other items do we need in order 

13 to move forward? 

14 MR. DENNIS: This is Keith Dennis. I 

15 think that before we go down this road, or I 

16 think one of the first questions to answer would 

17 be, how do we just make sure that the upper -- 

18 the full option is not just a voluntary standard? 

19 And I think that there is an attempt here for a 

20 production limit. And it sounds like there's 

21 going to be people opposed to that for reasons 

22 like 100 percent of one manufacturer might be low 
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1 end, and it might be worth making sure that there 

2 is a practical way to differentiate the products 

3 in the legal way so that it's just not a low 

4 efficiency and a high efficiency. One ends up 

5 being kind of a voluntary -- maybe something like 

6 what Lowell said, where there's a relook, if 

7 there's a certain market share that's 

8 inappropriate. 

9 Window to wall area ratio, I think that 

10 that's interesting because it seems like it says 

11 if somebody wants, you know, more windows, 

12 they're more likely to be able to afford the full 

13 option. But at the same time you say if you 

14 can't afford, you know -- if you're in a low15 income then you can only have a certain amount of 

16 windows. Might be a little bit awkward. But in 

17 general it's an interesting concept. And again, 

18 I think the tradeoff without the data is, could 

19 we get a higher lower standard through 

20 negotiation and have, you know, push everyone up 

21 a little bit and still have people voluntarily 

22 going higher, or are we getting a better bang for 
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1 our buck with allowing some kind of what seems 

2 like an exception for lower when it's an 

3 affordability issue, and then kind of have a 

4 standard be higher. 

5 So, the mechanism of what we're trying to 

6 do here is important and I just think it's 

7 important that that kind of -- we can spend the 

8 time on it but it might be important to kind of 

9 get that nailed down, how that really works 

10 before we make two standards and assume at the 

11 end we cal all agree on -- I think what's going 

12 to probably be the contentious piece of it, which 

13 is how is the lower one limited and how is the 

14 top one not just a voluntary -- become not just a 

15 de facto voluntary standard? 

16 MR. ROY: Well, my thinking was that the 

17 window -- and it should be floor, not wall. I 

18 apologize. The window floor ratio, need to think 

19 more from the manufacturer do they think that 

20 would work. But I suspect that would not be a 

21 bad product type definition, or something to base 

22 product type definition on, because it relates 
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1 pretty clearly to amenity as well as to cost. 

2 Right? Folks aren't going in that direction for 

3 lower windows, except to save money. People like 

4 more windows. I think it's generally the case. 

5 May not be 100 percent, but my understanding is 

6 that that's generally the case. 

7 So it seems to be this fortunate 

8 confluence. It relates to cost, it relates to 

9 amenity, and actually interestingly enough, 

10 windows relate to energy. It's the part where a 

11 lot of energy flows if you have a lot of windows. 

12 But maybe we can't find the -- 

13 MR. LUBLINER: This is Mike Lubliner. 

14 MR. ROY: -- decent one, and we do have a 

15 minimum window size for egress purposes. I 

16 suspect most of the homes sold are not at that 

17 minimum size, but a fair number are, and I 

18 suspect there may be a few more at that minimum 

19 size if such an approach is taken. 

20 Again, I don't think it would take that 

21 much more analysis to proceed along this path 

22 then we're already having to do. We've already 
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1 undertaken to do. This is just a framework for 

2 thinking how we might use it. 

3 MR. RAMIZREZ: Michael. 

4 MR. LUBLINER: Yes. So in terms of the 

5 window area, my experience with the Northwest 

6 factory production, you know, up to 20 

7 manufacturers building up here, 10 to 20, over 

8 the years -- and again, we're building as 

9 everybody has noted, the upper, middle to higher 

10 end product. Only less than 10 percent of our 

11 homes are single section homes in the region. 

12 But the average is less than 11 percent window to 

13 floor area. So I'm comfortable coming up with a 

14 metric for that, but I don't think that 11 

15 percent would be the right number. 

16 And I guess my question would be, is does 

17 the manufactured housing industry from their 

18 (indiscernible) approved plan, track percent 

19 blazing as a function of floor area, and could 

20 that information be shared in a way that would 

21 help inform this discussion on affordability. 

22 MR. SANTANA: Manny with CAVCO. I can 
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1 only speak for our plant, but we don't track 

2 anything on the basis of percentage of window 

3 area. 

4 MR. WEISS: Mark Weiss, MHAR. Just to 

5 bring some perspective to this based on specific 

6 numbers. If you go to the American Housing 

7 Survey 2011, they do have a calculation of the 

8 purchase price in 10, $20,000 increments. In any 

9 event, increments starting at less than $10,000 

10 all the way up to $300,000 or more, comparing 

11 both site build homes and manufactured homes. 

12 And if you look at that the median purchase price 

13 for a manufactured home is $30,000. And the vast 

14 bulk of the demand -- actually, the single 

15 highest number on the entire chart on the 

16 manufactured side is for a purchase price less 

17 than $10,000. So that's what you're dealing 

18 with. 

19 You know, the vast bulk of the demand is 

20 at the lower end of the market. 

21 MR. RAMIZREZ: And that's new 

22 construction? 
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1 MR. WEISS: New construction. 

2 MR. LUBLINER: Do we know the glazing 

3 area, Mark? Mike Lubliner. Of those homes, the 

4 affordable homes? 

5 MR. WEISS: I don't know if that type of 

6 information is in the AHS. I certainly don't 

7 have it. I don't think it is. 

8 MR. LUBLINER: That's the kind of 

9 specifics that it will be useful to move this 

10 discussion along. Thank you. 

11 MS. STARKEY: This is Lois. Rick here is 

12 reminding me that the HUD code requires a minimum 

13 eight percent window glaze area. 

14 MR. ROY: Window floor area? 

15 MS. STARKEY: Window floor, excuse me. 

16 MR. LUBLINER: We typically see entry 

17 level homes less than 10 percent. 

18 MR. RAMIZREZ: That would be consistent 

19 with the HUD minimum. 

20 UNIDENTIFIED SPEAKER: Who was that? Who 

21 was that? 

22 MR. RAMIZREZ: I think that was -- 
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1 Michael, was that you? 

2 UNIDENTIFIED SPEAKER: I think it was 

3 Lubliner. 

4 MR. LUBLINER: Yes, it was. I'm sorry. 

5 MR. LEVY: This is Emanuel. First of 

6 all, this is a very good conversation and I want 

7 to acknowledge again, Robin, for keeping the pot 

8 stirred and bringing up some interesting ideas 

9 over what could have been very dismissive issues. 

10 And this is an interesting and creative way to 

11 approach it. I think that we're talking to two 

12 different possible ways to bifurcate the 

13 standard. One is to set a set of physical 

14 constraints on what the home looks like, and the 

15 other is to perhaps qualify the buyer for that 

16 lower end home. Maybe on FICO score or something 

17 like that. 

18 So, I mean, this is obviously something 

19 that engenders a lot of considerations and needs 

20 a lot more thought than perhaps we can put into 

21 this conversation. And maybe there should be a 

22 committee as Javier suggested earlier. But I 
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1 would strongly suggest that we think about how 

2 the customer qualifies for this and what the 

3 physical constraints would be on the home that 

4 that buyer qualifies for. And importantly, what 

5 the implication is in terms of demonstrating 

6 compliance. How would this actually work in the 

7 market place and what kind of constraints would 

8 this pose for manufacturers demonstrating 

9 compliance for those homes? 

10 MR. WEISS: Mark Weiss. I hear what 

11 you're saying and I would really start -- hate to 

12 start getting into a situation where we're 

13 essentially profiling buyers or discriminating 

14 against certain buyers and effectively telling 

15 people what they can buy and how much they can 

16 spend. It just smacks too much of discrimination 

17 I think, to work. 

18 MS. HOFFMAN: But there is an idea about 

19 flushing this out a little more, having perhaps a 

20 dedicated group to work with Robin a little 

21 further. I think is there an interest in doing 

22 that, and can we -- excuse me. I've said 
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1 fascinating. I didn't, but I thought it. Okay. 

2 But I think we want to flush it out and Lois, I 

3 saw you nodding. Are you -- 

4 MS. STARKEY: I think that's sort of the 

5 question now. 

6 MS. HOFFMAN: Uh-huh. 

7 MS. STARKEY: I think definitely we 

8 should get a committee together. 

9 MS. HOFFMAN: Yeah. So I'm nominating 

10 Robin on it, and Stacy. 

11 MS. EPPERSON: Yes. 

12 MS. HOFFMAN: Lois. Anyone else? Mark? 

13 Anyone at home here? 

14 MR. HAGERMAN: So is that just the 

15 finance committee? Joe Hagerman again. Finance 

16 committee? 

17 MS. HOFFMAN: Is it? 

18 MR. HAGERMAN: It's the same -- 

19 MS. HOFFMAN: Well, is there anyone else 

20 who hasn't stepped up to the plate, as it were? 

21 Oh, Lowell. 

22 MR. UNGER: I can join it as well. 
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1 MS. HOFFMAN: Okay. Lowell. 

2 MR. UNGER: Either. 

3 MS. HOFFMAN: Okay. Good. Good. Thank 

4 you. Now -- 

5 UNIDENTIFIED SPEAKER: They just want 

6 efficiency voice on it so I'm glad to hear it. 

7 MS. HOFFMAN: Yeah. Thank you. 

8 MR. RAMIZREZ: Well, you know what? Let 

9 me get the names of the folks because on the 

10 finance Stacy is the lead on that one, which if 

11 we were -- what we would call the affordability 

12 subcommittee, that would be Robin as the lead. 

13 But on the finance subcommittee we had Stacy, 

14 Robin, Mark Ezzo, Ishbel, and Lois. So this 

15 group does sound like it's going to be a 

16 little -- 

17 MS. HOFFMAN: Mark Weiss. 

18 MR. RAMIZREZ: I'm sorry, Mark Weiss. 

19 MS. HOFFMAN: Okay. So, but for this 

20 committee it would be Robin as the Chair and 

21 Stacy, Lois, Lowell, and Mark. And any other -- 

22 anyone else who would like to -- 
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1 MS. STARKEY: I just -- 

2 MS. DICKENS: This is Ishbel. I'd be a 

3 part of it. 

4 UNIDENTIFIED SPEAKER: I didn't hear 

5 that. So Ishbel. I didn't hear what she said. 

6 MS. HOFFMAN: Oh, Ishbel, you want to be 

7 on this committee? 

8 MS. DICKENS: Yeah, I would. Thank you. 

9 MS. HOFFMAN: Okay. Yes. I'm sorry, 

10 Lois, you -- okay. So we -- 

11 MR. ROY: (Inaudible.) 

12 UNIDENTIFIED SPEAKER: No, that does not 

13 deserve a mic. 

14 MS. HOFFMAN: Oh, it doesn't deserve a 

15 mic, but Robin is going to have refreshments for 

16 that committee. 

17 MR. RAMIZREZ: This evening. 

18 MS. HOFFMAN: Right. And not now; this 

19 evening. 

20 MR. RAMIZREZ: You know what? Let me hit 

21 on that one just a little bit more because I want 

22 to try and see if I could really exploit this 
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1 group, right? In the sense of, if you're going 

2 to be working as a subcommittee, there were a few 

3 questions that were raised on things that would 

4 be beneficial in order for the group to hear and 

5 review. But what about also giving it some 

6 structure in the sense of, if we were to go down 

7 this road can this group also put together a 

8 straw man of what that would look like, with the 

9 LO and the -- what was the other one? FO. Is 

10 that something that the subcommittee would be 

11 willing to undertake? 

12 The reason I say that is it seems like 

13 there is far more benefit and the ability to 

14 really dig in if we are looking at actual numbers 

15 versus concepts. I don't want us to spin our 

16 wheels with concepts. 

17 MS. HOFFMAN: I'm seeing a few -- Eileen 

18 Hoffman. I'm seeing a few nods from the people 

19 who volunteered for the committee. Can we assume 

20 that's a yes? 

21 MR. ROY: I'm not saying no. 

22 MS. HOFFMAN: Oh, okay. Good. Well, 
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1 it's not a no, so we'll go with that. Okay. Did 

2 you -- and after the meeting we'll go over the 

3 questions too. 

4 Now I think we might want to move to the 

5 next part of the program, which is some of the 

6 reports of the various committees, so Stacy 

7 Epperson on finance. 

8 MR. RAMIZREZ: Could I suggest a one 

9 function break before we -- 

10 MS. HOFFMAN: Sure. 

11 MR. RAMIZREZ: -- roll into that? Okay. 

12 Thank you. 

13 (Recess from 2:02 p.m. until 2:15 p.m.) 

14 MR. RAMIZREZ: Okay. You want to start 

15 pulling it back together? 

16 Okay. So, let's go ahead and start off 

17 with Stacy, with the finance. 

18 MS. EPPERSON: Okay. Thank you. Stacy 

19 Epperson of the finance subcommittee. First of 

20 all, thanks to MHI for helping pull so much of 

21 the data by talking to the lenders. 

22 Today we're going to be presenting loan 
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1 data for both chattel or personal property loans 

2 sometimes called home only loans, versus real 

3 property or mortgages. So we'll start with the 

4 chattel. 

5 You can see that the interest rate range 

6 on this is today, 6.3 to 9.5 percent, with a loan 

7 term that ranges somewhere between 12 and 20 

8 years, down payment between 12 and 18 percent, 

9 points and fees, one to two percent, no private 

10 mortgage insurance on these type of loans. We're 

11 not -- you're not going to have property tax, 

12 generally, with these because you're not securing 

13 the land you may have. Not on land, but on the 

14 home you may have tax. Sales tax, you will have 

15 that in most states too. And we are referencing 

16 a chart that takes you to another spreadsheet of 

17 tax rates across the country provided by the tax 

18 foundation. 

19 So, I think it's important to note that 

20 the 2013 numbers source U.S. Census that 78 

21 percent of homes are financed with chattel 

22 personal property. 
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1 So let me just pause here. Any questions 

2 on chattel, or additions from the committee? 

3 MS. STARKEY: Yes, Stacy, when you sent 

4 the chart around on sales tax I did a little 

5 checking and maybe I can get some more details, 

6 but every state, almost every state, has some 

7 state statute that takes that sales tax and does 

8 something with it with respect to their home. So 

9 it may not be the sales tax as this chart shows, 

10 but at least this provides a base. But then most 

11 ever state has something usually less, as I 

12 understand it, than the sales tax. 

13 MR. RAMIZREZ: You mean like a credit or 

14 some sort? 

15 MS. STARKEY: Yeah, like a percentage of 

16 the invoice or some something that isn't exactly 

17 what the sales tax on personal property is. 

18 MS. EPPERSON: Thank you, Lois. 

19 MR. LEVY: Stacy, Emanuel. That's a 

20 pretty big range in terms of interest rate. Can 

21 you suggest what the range is about? 

22 MS. EPPERSON: Yes. So typically what we 
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1 fund in this type of finance is risk base lending 

2 based on credit score can affect that rate, and 

3 it would be my opinion that's really what's 

4 driving this here. But I'll defer to see, Lois, 

5 anything else you want to add? Or Mark? 

6 MS. STARKEY: Yes. I think so and I 

7 think it's probably credit score and then just 

8 what the other market rates are. You know, what 

9 the market in general is doing and how that and 

10 the interest rates just like on real property, 

11 that changes based on treasury rates, et cetera, 

12 et cetera. So there are other factors that the 

13 lenders use to set that rate as well. 

14 MS. EPPERSON: Yeah, they're cost of 

15 funds, absolutely. 

16 MS. STARKEY: Yeah, cost of funds. 

17 That's a good -- that's what I meant to say. 

18 MR. WEISS: Do we know over what time 

19 period these figures are for? Last year, last 

20 two years, that sort of -- 

21 MS. STARKEY: I think they were this 

22 year. I would say 2013, 2014; within the last 
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1 year. 

2 MR. UNGER: This is Lowell. I just note 

3 not that, you haven't gotten to the real property 

4 but the interest rate range is much wider on 

5 chattel and for real property. So, okay. So 

6 it's not -- it must be some other factor going on 

7 than regular mortgages. 

8 MR. WEISS: Well, sure, because you're 

9 not relying on the land as well as security for 

10 the loan so it's much more risk based. 

11 MS. EPPERSON: Uh-huh. It's risk base 

12 lending. Yes, absolutely. Okay. Okay. Then I 

13 think that's my cue to move to real property 

14 mortgage where the interest rate range, you can 

15 see it's a much more narrow range here of, you 

16 know -- I'll let you look at these numbers. 

17 Basically 3.9 to 4.3. You typically have a 

18 longer loan term option. Here we have 15 to 30 

19 years. Down payment requirements, 10 to 20 

20 percent for a more conventional type finance. 

21 But 3.5 percent for FHA which would be -- of 

22 course carries that government guarantee. 
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1 Points and fees, again, same, 1.1 to 2 

2 percent. Private mortgage insurance, you are 

3 going to have that with conventional, you know, 

4 .5 to one percent. And then for less than a 90 

5 loan to value you're going to also have 120 to 

6 125 basis points, and then we've provided 

7 information, of course, on taxes. So let me 

8 pause here and see if there are questions. 

9 MR. UNGER: Lowell again. Any idea how 

10 many homes are bought without a loan? 

11 MS. EPPERSON: We don't have that data 

12 yet. 

13 MR. WEISS: Without a loan at all? 

14 MR. UNGER: Yeah. 

15 MS. EPPERSON: Yeah. Straight cash. 

16 Case buyers. 

17 MR. SANTANA: This is Manny -- 

18 UNIDENTIFIED SPEAKER: How about an 

19 estimate? 

20 MR. SANTANA: Do you have any idea of 

21 what percentage is in the 12 year average and 

22 which one is in the 20 year, or which one is in 
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1 the -- you know, how much is in the 30? Or is it 

2 just pretty much even? 

3 MS. EPPERSON: No, that's a range that 

4 the lenders gave us. I think it depends on, you 

5 know, the individual lender. We're not talking 

6 about -- if we wanted to just go when we do our 

7 assumptions with an FHA mortgage then, you know, 

8 we could go with that. I don't think it makes 

9 much difference in terms of -- I think we'd have 

10 to do either an average or have a couple of 

11 different scenarios for different long terms, 

12 which is not hard to do. 

13 But they'll be all over the board. It 

14 depends on what the individual home buyer wants 

15 to do or can do, just like in the conventional 

16 market. You can do a seven year loan or a 10 

17 year loan, or a -- you know, it's what makes 

18 sense for the lender and what makes sense for the 

19 homeowner, and what, you know which is 

20 financially feasible. 

21 MR. LUBLINER: Lois, Mike Lubliner. I'm 

22 just wondering, is it possible to survey your 
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1 major retailers around the country to get an idea 

2 on the percentage that pay cash? That's a pretty 

3 high percentage in certain areas but a very low 

4 percentage in other. But I'm just wondering if 

5 we don't have that variable it's hard for us to 

6 figure out how that plays into the overall 

7 equation. We are focusing significantly on 

8 trying to get the affordability numbers, and I'm 

9 just wondering, how many people just go out and 

10 buy cash -- pay cash for these. And they may not 

11 be impacted by some of the affordability issues. 

12 So I would encourage whoever could, on 

13 the committee or DOE, to try to investigate 

14 further the cash procurement and see whether it's 

15 an issue. If it's not I'd be happy to shut up on 

16 it. 

17 MS. STARKEY: We can look at -- the 

18 annual housing survey digs down into some finance 

19 issues and we can take a look at that. So if 

20 you're sitting at your computer and you want to 

21 get into the AHS and get into that financial data 

22 right now. But otherwise we can get into that. 
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1 We can also -- I'll shoot an e-mail to my 

2 colleague who deals with the lenders on a daily 

3 basis and see what we can do. We'll be glad to 

4 try our best. 

5 MR. LUBLINER: Thank you, Lois. 

6 MR. RAMIZREZ: Mark? 

7 MR. WEISS: Mark. Mark Weiss. Just one 

8 brief comment. 

9 Just because you're paying cash doesn't 

10 necessarily mean that affordability is not an 

11 issue. It might be more of an issue because you 

12 might not have a lot of cash. 

13 MR. EZZO: As does -- 

14 MR. LUBLINER: Mark, that's right. As 

15 does chattel doesn't necessarily mean that 

16 affordability is an issue as well. 

17 MR. RAMIZREZ: And that was Emanuel? 

18 MS. EPPERSON: I think it was Mike 

19 Lubliner. 

20 MR. RAMIZREZ: Oh. 

21 MS. EPPERSON: Okay. 

22 MR. RAMIZREZ: Any other questions? 
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1 MS. EPPERSON: Okay. I think that 

2 concludes our report, unless you have additional 

3 questions of us. We'll investigate the cash as 

4 best that we can. 

5 MR. RAMIZREZ: Okay. Was there anything 

6 on the other documents that you needed to review, 

7 or was that somewhat rolled in there? 

8 MS. EPPERSON: It was rolled in there. 

9 MR. RAMIZREZ: Okay. 

10 MS. EPPERSON: You have two more 

11 documents. One dealing with tax rates from the 

12 tax foundation. One side's property tax for 

13 those in the room. The other side, you know, 

14 your sales tax. The last document is just 

15 straight from the Census giving us the history 

16 from 2007 to 2013. You can look at the bottom of 

17 the chart in terms of new manufactured homes 

18 placed. It's going to give you those located in 

19 communities on private property, and then again 

20 how they're titled. 

21 MR. RAMIZREZ: All right. Then if that's 

22 it then let's -- David, you want to give us a 
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1 quick update on where you're at? I understand 

2 that you need additional information, but could 

3 you just give us a brief update? 

4 MR. TOMPOS: You hear me? 

5 MR. RAMIZREZ: Yeah. 

6 MR. TOMPOS: All right. Dave Tompos. 

7 Right now I do need some more time. A lot of 

8 these issues depend on some of the cost 

9 information as well as where we're going to end 

10 up on UO values. I do have a document that was 

11 given to me by Lois that I can send to the 

12 committee that gives you some information on 

13 shipping limitations. And I can use those -- I'm 

14 trying to figure out, or asking the question of 

15 the committee, what they're going to find useful. 

16 Right now I'm working on a cross-section 

17 that would show that small house, and then I'm 

18 going to try to calculate a maximum U value that 

19 we can get in the rough cavity without going over 

20 that 13 foot six limit. 

21 And what the committee has to understand 

22 is a lot of these production or size limitations, 
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1 other than the height that I'm seeing in some 

2 areas, and you would see that based on this 

3 report, these aren't hard limits. Everything can 

4 be overcome by paying more money. 

5 One of the things that I identified is, 

6 you know, if we get over that 13 foot six inch 

7 width, in some states we have to use an 

8 additional escort. I don't have any way of 

9 coming up with a price for that additional 

10 escort. Is there a way that -- or anybody on the 

11 call that can get that information? 

12 Other than that I need about a week to 

13 get some of these -- the small house and the 

14 calculations done. I do have my guys working on 

15 that right now. 

16 MR. EZZO: Dave, this is Mark Ezzo. Just 

17 let me know and I can try and get you information 

18 on escort costs. 

19 MR. TOMPOS: Yeah, if you could provide 

20 that it would be great, Mark. And I'll send this 

21 document on some of the transportation limits out 

22 to the committee. Or out to Javier. 
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1 I think some of the things that were 

2 being brought up by the costing information, some 

3 of the information that I brought up are probably 

4 going to be revealed in that information as far 

5 as, you know, I brought up several times going to 

6 two by eight floor framing. I think a lot of 

7 that information is going to get put into the 

8 costing information, so it should get addressed 

9 when that information becomes available. 

10 MR. RAMIZREZ: Okay. Any questions or 

11 comments? 

12 MR. LUBLINER: Dave? 

13 MR. TOMPOS: Yeah. 

14 MR. LUBLINER: This is Mike Lubliner. As 

15 I work on the trial standards that our 

16 subcommittee is working on it would be useful to 

17 have a sense of, let's start with the ceiling 

18 insulation. When you have this low truss 

19 limitation that you speak of because of height 

20 restrictions, it would be interesting to have an 

21 idea of how much of that loose fill ceiling 

22 insulation is being displaced if we went to a 
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1 compression, it is as is proposal that we 

2 discussed on our committee and with the group? 

3 Likewise, I'm wondering in terms of the 

4 width of the home, if you could elaborate on what 

5 the implications there. Is it just two by six to 

6 two by four, or are we talking about other things 

7 that might impact the width restriction? You 

8 could handle each of those and we can go offline 

9 and talk about those separately if they're too 

10 technical. Thank you. 

11 MR. TOMPOS: I can address the width 

12 restriction. It's not necessarily a restriction. 

13 I mean, we can get around all of these things by, 

14 like I said, paying for another escort. Or if 

15 energy efficiency is more important to the 

16 homeowner than square footage, you know, we can 

17 use two by sixes instead of two by fours and make 

18 a smaller house for the homeowner. 

19 None of these are really hard limits 

20 other than from this article or study that I'll 

21 send out. There is a height limit in some 

22 portions of Connecticut and I think in one of our 
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1 last meetings the gentleman from Vermont 

2 mentioned that they also have a 13 foot six inch 

3 height limitation. However, he could help me if 

4 he -- he mentioned that there are manufacturers 

5 putting in R60 in roof cavity. I don't know how 

6 to do that and maybe if the gentleman from 

7 Vermont could share that information that would 

8 solve all our problems. 

9 MR. LUBLINER: Dave, it's Mike Lubliner 

10 again. I'd just like to focus on my two 

11 questions. Will we be able to get some -- how 

12 many bags of insulation are we losing if we go 

13 with the tapering in the ceiling. That's my 

14 specific question. 

15 The second one has to do with the width 

16 of the home when you go from two by four to two 

17 by six. We've seen that happen as a transform of 

18 the industry out here. Twenty years ago, two 

19 ways it was done. One way is they counter20 labored the two by six so they're the same floor 

21 plan, and they didn't lose any square footage. 

22 But then they did add a little bit more on the 
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1 width to the home. And that's what I'm trying to 

2 get a better understanding on is, is the adding 

3 of a -- if you counter-labor the wall out, if 

4 that's a possibility, is that the issue you're 

5 talking about? I'm trying again to understand 

6 what are we doing that's restricting the width 

7 with the measures that we're looking at here? 

8 MR. TOMPOS: I don't think we're 

9 restricting the width. I'm just saying that 

10 there's an additional cost associated with an 

11 additional escort in some states of the country. 

12 MR. LUBLINER: So why would we need the 

13 escort if we're not restricting the width. 

14 MR. TOMPOS: There's state laws that say 

15 if you are over 13 foot six inches in width you 

16 have to have two escorts instead of one. 

17 MR. LUBLINER: Okay. This is Mike 

18 Lubliner and I don't want to go cycling with you 

19 here. So I fully understand that. I can give 

20 you the cost of what Washington State estimates 

21 for an extra. 

22 What I'm wondering is, is when does that 
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1 actually happen? What causes that to happen? Is 

2 that that you are counter-laboring or you're 

3 building the home wider? And how much wider are 

4 we talking about in that we're going from a two 

5 by four to a two by six? Is that the only width 

6 issues we're talking about here? 

7 MR. RAMIZREZ: Lois, did you want to add 

8 something? 

9 MS. STARKEY: (Shakes her head no.) 

10 MR. TOMPOS: I only caught a small part 

11 about that, and that was -- this is Dave Tompos. 

12 I have a terrible echo and can't understand what 

13 you're saying, Mike. 

14 All I'm trying to do is make sure that we 

15 accounted for some of the issues if we do have to 

16 increase the width of the home. 

17 MR. RAMIZREZ: All right. Let me say -- 

18 MR. TOMPOS: There's ways around it and 

19 ways to do it. 

20 MS. STARKEY: I will say something. 

21 MR. RAMIZREZ: Michael, let me suggest 

22 that you talk to David and see if you two can't 
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1 figure out where the disconnect is and do that 

2 offline, and if there's anything that comes out 

3 that -- 

4 MR. LUBLINER: Yes. Thank you. 

5 MR. RAMIZREZ: -- that you think would 

6 benefit the full group then we could bring it 

7 back at the next meeting. Is that all right, 

8 Michael? 

9 MR. LUBLINER: That's fine. 

10 MR. RAMIZREZ: Okay. Thanks. And that's 

11 more for clarity because Dave is having a hard 

12 time hearing you. Lois? 

13 MS. STARKEY: Yeah, the only -- I think 

14 that this is an issue of we try to get as much 

15 interior space that's usable by the consumer, the 

16 homeowner, that takes into consideration the 

17 particularly stringent restrictions that we have 

18 from state highway departments, in particularly 

19 the Northeast. So I think this is the issue; one 

20 of the issues. We really try to maximum the 

21 interior space as much as possible. 

22 MR. LUBLINER: Thank you, Lois. So to 
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1 clarify, we're talking about this additional 

2 width. Is it only going from the two by six to 

3 the two by four to the two by six? Or are there 

4 other factors that I don't understand? 

5 MR. RAMIZREZ: Yes, and that's the 

6 discussion that you could have with David 

7 offline. Okay. 

8 MR. LUBLINER: Yes, or perhaps some of 

9 the other manufacturers could provide some input. 

10 MR. RAMIZREZ: Any other manufacturer 

11 want to jump in or -- 

12 MR. EZZO: It's Mark at Clayton. I don't 

13 know that there's anything that we're talking 

14 about that increases the width other than a six 

15 inch wall. 

16 MR. LUBLINER: Thank you very much, Mark. 

17 I don't know that we'll need to have that call 

18 with Dave. 

19 MR. RAMIZREZ: Okay. David is receptive 

20 of you would give him a call if need be. 

21 Okay. Lois, did you have something else 

22 or -- okay. All right. Michael, did you want to 
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1 add anything as far as your trial standard 

2 levels? 

3 MR. LUBLINER: Yeah, I'll just give an 

4 update. We haven't had any subcommittee 

5 meetings. We're kind of -- I'm hoping that we're 

6 going to get some cost data so we can take these 

7 straw man, take the simple stupid path that I 

8 proposed, and cost it out. And then possibly use 

9 the spreadsheet that's been shared to evaluate 

10 it. 

11 I wasn't certainly trying to -- and I 

12 think we made some inquiries to try to coordinate 

13 a go-to meeting using DOE support staff here to 

14 coordinate with the committee. And I did send 

15 out a first cut to those people on the committee 

16 of kind of a (indiscernible) of energy efficiency 

17 measures that may go well beyond where we're 

18 going with this rulemaking, but could be part of 

19 an Energy Star program or what. And the purpose 

20 there is to just make sure that everything, all 

21 the measures that we think might be applicable 

22 for an analysis, get vetted through the 
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1 committee. I'm not proposing that all the things 

2 that we pour dumped, these would be e-pump water 

3 heaters, energy efficient appliances, lighting, 

4 other things that I've noted on other calls, that 

5 they're going to make it into this analysis. 

6 But we wanted to come up with a list that 

7 was inclusive and then we would go ahead with the 

8 committee members and decide, put them into three 

9 categories. One, they don't meet the left test. 

10 In other words they're not technically feasible 

11 to construct. They may be expensive, but that's 

12 not the key. The key is that they're not 

13 technically feasible. 

14 The second one is, you know, they're good 

15 candidates for beyond like Energy Star programs 

16 that voluntary in nature. 

17 And the third would be, yes, these are 

18 measures that should be looked at by the PNNL 

19 analysis. 

20 So I'm hoping that we'll be able to 

21 convene a group rather shortly and work on that 

22 and have some information for the next meeting. 
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1 Thank you. 

2 MR. RAMIZREZ: Okay. Any questions for 

3 Michael? 

4 MR. UNGER: This is Lowell. I have one 

5 question. I don't think it's for Michael but it 

6 is related. 

7 If I understood PNNL, in one set of their 

8 runs did four scenarios that were related to 

9 Michael's straw men, I just wanted to confirm 

10 that and also check how they're doing that in 

11 particular in this question of the insulation and 

12 the roof where Michael had up to R49 but tapering 

13 down, and the PNNL run said it was R49 insulation 

14 in the roof. But I'm not sure -- it wasn't clear 

15 to me whether PNNL had tapered it following what 

16 Michael was talking about, or they were modeling 

17 something else. So I'm just trying to get 

18 whether in fact those runs are the same as the -- 

19 MR. HAGERMAN: Consistent. So this is 

20 Joe Hagerman, DOE. We circulated a document, I 

21 think right after last week's meeting, on what 

22 PNNL did to build those models. And so all the 
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1 assumptions and the description of how they 

2 tapered that insulation are all on that document. 

3 So I would first go back to that document. 

4 After circulating that document nobody, 

5 you know, flagged anything. But you know, please 

6 look it over and see if we need to have a further 

7 discussion on it. So. They're sure they're from 

8 last week's meeting. 

9 MR. LUBLINER: Joe, Mike Lubliner. 

10 MR. HAGERMAN: Two weeks ago. 

11 MR. LUBLINER: Thanks, Joe. Mike 

12 Lubliner. I don't know that they did the R49 

13 case. I think they did the R38 case. And I 

14 don't know that they assumed that the tapering 

15 insulation that would have went in where the 

16 tapering is for R38, with that insulation, that 

17 bag count, did that get moved into the taller 

18 area? Or was that just not even included? 

19 So there are some details there that I 

20 think if we're going to get into this trial case 

21 proposal we'll need to look at more depth and 

22 hopefully all the information on that is there. 
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1 But I don't believe 49 -- that because of the 

2 issue of how much you can really get in there was 

3 evaluated in the report you shared, we can look 

4 at that. 

5 MR. HAGERMAN: Yeah. Why don't you just 

6 MR. LUBLINER: It may not be a big issue. 

7 MR. HAGERMAN: Yeah. This is Joe 

8 Hagerman, DOE. Why don't you relook at that 

9 report? They did do -- Package One had R49 in 

10 it. And Package Two as well. But why don't you 

11 look over that report and then get back to me if 

12 you have questions. I'll get them to explain it. 

13 MR. LUBLINER: Thank you. 

14 MR. RAMIZREZ: No other questions for 

15 Michael? 

16 MR. LUBLINER: Lowell, I did not mean to 

17 cut you off. 

18 MR. UNGER: No, I was done. Thanks. 

19 MR. RAMIZREZ: All right. Then if there 

20 are no other questions for Michael then we're 

21 going to jump into the 2015 IECC scope with 

22 Manny. And let me ask the group, do you want 
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1 Manny -- I think that one might be a little bit 

2 longer discussion. Do you want to take a one 

3 function before we roll into Manny's report? I 

4 see a couple heads bobbing. 

5 So let's do 10 minutes. Let's come back 

6 and then we'll start off with Manny. 

7 (Recess from 2:40 p.m. until 2:49 p.m.) 

8 MR. RAMIREZ: Manny? 

9 MR. SANTANA: Yes. 

10 MR. RAMIREZ: Okay. Sorry about the 

11 hurry up and wait. But during -– during the 

12 break, I’m thinking that this section might take 

13 a little bit of time. 

14 And there are a couple of other factors 

15 as well that I believe Eric was working with you 

16 pretty close on this piece. And he -– Eric is 

17 going to actually be with us tomorrow. 

18 And we just found out as well that the 

19 2015 IECC books came in today. They are at the 

20 office right now and we could bring those 

21 tomorrow. 

22 Let me ask the group here, who has copies 
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1 of the 2015 codes? Did anyone bring them? 

2 Okay. So having the books may be 

3 beneficial. I believe that ten copies were 

4 ordered so we might have enough for everyone 

5 here. And if not, we may have to do some 

6 sharing. But at least we could follow along on 

7 that as well. 

8 So what I’m suggesting is that we save 

9 that for tomorrow, for Manny’s report. Is 

10 everyone okay with that? 

11 MS. HOFFMAN: Manny, are you okay with 

12 that? 

13 MR. SANTANA: It’s okay with me. This is 

14 Manny here and I think that having the IECC in 

15 order to see what we’re -– you know, because 

16 we’re taking sections directly out of the IECC. 

17 So you’re going to want to be familiar with the 

18 content. 

19 You know, so I think that part is 

20 critical. And if we could have the code book in 

21 people’s hands tomorrow, that would be the way to 

22 go. 
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1 MR. RAMIREZ: Okay. Okay, so let’s do 

2 that. And then one thing that -– and maybe this 

3 is a bit selfish, but I think that it’s actually 

4 going to be beneficial for everyone, is that as a 

5 facilitator, one of the things that makes me 

6 nervous is that when we start throwing out a 

7 bunch of things that folks are going to do, and 

8 it sounds like there -– it seems like there is a 

9 lot out there right now, and I think there might 

10 be some benefit if we could review –- let’s call 

11 it the road map, right, to a fact sheet -- what 

12 do we need to do, who is going to do it and by 

13 when? Somewhat of a summary of what we –- of 

14 what’s out there. 

15 Okay. Is everyone okay with that? 

16 All right. So as far as just getting to 

17 a terms sheet –- let me just jot down a couple of 

18 notes here. 

19 MR. HAGERMAN: This is Joe Hagerman, DOE. 

20 It strikes me that this group as a whole is going 

21 to have to make a lot of decisions in the next 

22 coming meetings, right? 
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1 And that’s all based on a lot of the 

2 information that we have been discussing today. 

3 And it’s still out withstanding -- or 

4 outstanding. 

5 I think what you’re hopefully trying to 

6 do here is record –- start to record some of 

7 those decisions that us as a group need to make, 

8 right? 

9 MR. RAMIREZ: Right. 

10 MR. HAGERMAN: And then hopefully start 

11 recording when we’re going to get that 

12 information so we can start making those 

13 decisions, right? 

14 Just it worries me, and I think it 

15 worries John too that -- you know, that we’re 

16 kind of kicking the can down the street a little 

17 bit. Rightfully so because we need the data, got 

18 it. 

19 But at some point in time we have to say, 

20 okay, we have enough. And, you know, this is a 

21 working group, it's composed of professionals 

22 that need to use their professional judgment, 
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1 right, as experts in this space to guide that 

2 term sheet. 

3 MR. RAMIREZ: One of the things that we 

4 constantly look for is paralysis by over 

5 analysis, right? And so at what point do we need 

6 to pull the trigger? 

7 And one of them is -– and we just talked 

8 about this this morning, is the affordability 

9 piece that Robin talked about. And that’s the 

10 two paths. And we just formed that subcommittee. 

11 So why don’t we put the affordability 

12 subcommittee. 

13 And basically, just in a nutshell, we're 

14 talking about two compliance paths. And 

15 hopefully that committee can work on a term sheet 

16 that would include both of those paths, right? 

17 Okay. Paths being the terminology that 

18 we’re using for something else. and that’s 

19 something else that’s on my list here, right? 

20 Okay. So product types, yeah. And then 

21 assign to –- Robin, we’re just going to put your 

22 name down there as the lead for that committee. 
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 Our next meeting is the 22nd and the 23rd 1 . 

2 So is that something that you could have by the 

22nd 3 ? 

4 MR. ROY: Yes. 

5 MR. RAMIREZ: Okay. And if -– if you get 

6 anything done sooner and you could send it to Joe 

7 so that we could have any analysis run that need 

8 to be run. Then we will get on that as soon as 

9 possible. 

10 MR. HAGERMAN: Yeah, everybody gets bonus 

11 credit if you get me the stuff early. 

12 MR. RAMIREZ: Is there anything 

13 additional that you need in order to move on 

14 that? 

15 MR. ROY: It’s Robin. No, I will be 

16 calling a few folks and seeing what kind of 

17 information we have as well as putting the 

18 subcommittee together. 

19 MR. RAMIREZ: Okay, all right. 

20 And then –- 

21 MR. LUBLINER: This is Mike Lubliner. 

22 MR. RAMIREZ: Yeah, Michael. 
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1 MR. LUBLINER: I don't know if Rick 

2 Mendlen is still in the room from HUD but I 

3 was -- as I have commented on this one before, I 

4 think that getting a good distribution of percent 

5 glazing as a function to floor area would be a 

6 useful thing to help inform this proposal or 

7 discussion. 

8 So I’m just wondering if there is a way 

9 that we can quickly get some of that data so that 

10 we’re not exempting homes that shouldn’t be 

11 exempted from the full path, or vice versa. 

12 And Robin, do you believe that that 

13 information is going to be important for -- as a 

14 prerequisite, and how do you plan to get it? 

15 MR. ROY: This is Robin. I don’t think 

16 it’s a prerequisite but I think that information 

17 would be useful. 

18 Rick, as a member of the public, would 

19 you care to comment on the possible availability 

20 of such information through HUD or its 

21 contractors? 

22 MR. RAMIREZ: Thank you, Robin. 
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1 Rick? 

2 MR. MENDLEN: Robin, we have all of the 

3 floor plans that are approved that are currently 

4 in use. And so telling you, you know, by region, 

5 by location, we don’t have it that way. They 

6 just get model approvals. 

7 And they can do upgrades and, you know, 

8 as long as they meet the minimums in their 

9 packages -- if you want a sampling, we can try to 

10 do something for you. But I need to know what 

11 the ground -– what the criteria would be. 

12 MR. RAMIREZ: You’re talking about 

13 sampling of different floor plans? 

14 MR. MENDLEN: Yeah. I mean -- but I 

15 think you’re going to find that -- you heard Mark 

16 Ezzo said -- he’s on the line -- that he’s going 

17 to give you the best data possible because he’s 

18 got –- they represent the largest manufacturer in 

19 the business right now. So they ought to have a 

20 fairly good cross-section of available window 

21 sizes that are being used. 

22 And I think you’re going to find that 
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1 it’s somewhere between eight to ten percent as an 

2 average. 

3 MR. ROY: And as a member -– thank you, 

4 that’s very helpful. 

5 And as a member of this subcommittee, 

6 Mark Weiss, I will no doubt be asking you whether 

7 you think some of your –- the members that you 

8 represent have dissimilar attributes that we 

9 should be particularly cognizant of. 

10 MR. LUBLINER: Thank you, Rick. This is 

11 Mike Lubliner and I appreciate your input. 

12 MR. RAMIREZ: All right. So then Mark 

13 Ezzo and Mark Weiss will provide some information 

14 on glazing area? 

15 MS. HOFFMAN: Mark Ezzo, can you do that? 

16 MR. EZZO: Yeah, I’m fine with that. 

17 MS. HOFFMAN: Good. Thanks. You’re an 

18 honorary member of Robin’s committee. 

19 MR. EZZO: Glad to be included. Thanks, 

20 Robin. 

21 MR. RAMIREZ: All right. Term sheet will 

22 also have -- 
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1 MR. LUBLINER: I’m sorry, it’s Mike 

2 Lubliner again. I’m wondering if Mark Weiss is 

3 going to be able to provide the other 

4 manufacturers' glazing to make sure that we’re 

5 not biasing this towards the Clayton brands. 

6 MR. RAMIREZ: Yeah, Mark has acknowledged 

7 that, that he would work on that and see what he 

8 could get. 

9 MR. LUBLINER: Thank you, Mark. 

10 MR. RAMIREZ: All right. Kind of going 

11 back to the beginning here, and the scope and 

12 definition of what this working group is doing 

13 for the term sheet, that would be the title or in 

14 the beginning of the term sheet. 

15 A draft of that –- where does that come 

16 from? Joe, is that something that you guys put 

17 together or where does that come from? I’m 

18 assuming that there’s going to be like a scope 

19 of -- 

20 MS. HOFFMAN: I think there’s a template 

21 for this, for the term sheet explaining the 

22 committee and the scope. 
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1 MR. HAGERMAN: I’m sorry, I’m with you 

2 now. So Joe Hagerman, DOE. Navigant has taken 

3 all of the term sheets the previous working 

4 groups have compiled and reduced those to, you 

5 know, an outline that -- you know, they are 

6 acting as, you know, administrative staff for us 

7 here to help, you know, compile this for the 

8 group so that nobody necessarily has to write 

9 anything. 

10 So what they have done is tried to 

11 extract that a little bit. And that’s what we 

12 were going to share at, you know, 4:30 or 3:30 

13 tomorrow. 

14 MR. RAMIREZ: Okay. 

15 MR. HAGERMAN: But it contains stuff 

16 like, you know, we need to come up with 

17 definitions. Especially if you’re going to start 

18 talking about a new product, you know, type. 

19 It’s going to have to have these performance, you 

20 know, U-value routes versus prescriptive routes 

21 versus, you know, performance routes. So it’s 

22 going to contain those such things. 
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1 MR. RAMIREZ: So Navigant by tomorrow? 

2 MR. HAGERMAN: Yeah. 

3 MR. RAMIREZ: Early on we talked about 

4 climate zones. Are we using the 2015 IECC or are 

5 we using the 3 HUD climate zones? 

6 The question I have for you all is that 

7 something that you could decide today? If not, 

8 what do you need in order to make this decision? 

9 MR. ROY: This is Robin. My thinking is 

10 that it’s best to let the numbers inform whether 

11 there is some benefit in it. And then it can go 

12 back with the manufacturers and see if they have 

13 some disproportionate costs. 

14 I assume that the analysis that the DOE 

15 is doing, it’s not adding much to their burden to 

16 separate it. So I would hold it off, not really 

17 to defer it, because you’ll have information 

18 that’s meaningful later. 

19 MR. HAGERMAN: This is Joe Hagerman, DOE. 

20 Is that one of the last decisions that you think 

21 we have to make? 

22 Okay. It’s one of the first questions we 
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1 had and it’s the last decision that we are going 

2 to make. All right, got it. 

3 MS. HOFFMAN: But Navigant is using both, 

4 right? 

5 MR. HAGERMAN: They are doing all eight 

6 climate zones and then they map it to the three 

7 climate zones. So when you see the data, you see 

8 it both ways. 

9 MR. ROY: It’s not quite the last because 

10 I would like to know very much the manufacturers, 

11 whether there are undue burdens and costs or 

12 costs savings. So some time for them to reflect 

13 upon it would be very useful. 

14 MR. RAMIREZ: So as far as assigned to, 

15 it sounds like PN&L and Navigant will be 

16 providing data all along. 

17 Lois, do you have something? 

18 MS. STARKEY: Yeah, I agree with Robin. 

19 But I also wanted to address the issue of kicking 

20 the can down the road. Because I think once we 

21 get this cost -– we get you this cost data at the 

22 end of the week, I think that things will fall 
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1 into place fairly quickly because we really have 

2 had a lot of discussion. 

3 And any of you manufacturers, my members 

4 or Emanuel on the phone, jump in if you don’t 

5 agree with me. But I think, you know, once we 

6 get the numbers, I think the next meeting we have 

7 will be very productive and we may even be able 

8 to do some work before that. 

9 MR. RAMIREZ: Great. And so what I’m 

10 understanding is that once we plug in the real 

11 numbers, it will bring some clarity to where we 

12 can even actually get consensus on some items. 

13 MR. HAGERMAN: Joe Hagerman, DOE. I have 

14 one question about the costs. And maybe Emanuel 

15 can answer this but -– so I believe he is pulling 

16 together costs for individual components, right? 

17 Like how much more are R9 insulation costs versus 

18 R13 insulation. Is that correct, Emmanuel? 

19 MR. LEVY: That’s right. What we will 

20 have is similar to what the laboratory did. We 

21 will have a description of the whole component 

22 design that includes each individual level of 
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1 insulation, R13 and R19 and so on, and all of the 

2 other components to make up that composite 

3 construction and the U-value that corresponds to 

4 that. 

5 MR. HAGERMAN: All right. 

6 MR. LEVY: And the costs -– and the 

7 average cost for that. and it was requested a 

8 high and a low. 

9 MR. HAGERMAN: So do you feel like -– 

10 MR. LEVY: That’s what our plan is. 

11 MR. HAGERMAN: So do you feel like the 

12 way you are going to present that information is 

13 consistent with how Matthew is pulling together 

14 the LCC, that he can just plug and, you know, 

15 copy and paste your numbers into his LCC, or is 

16 there going to be another -- you know, another 

17 necessity for him or Navigant to aggregate those 

18 costs up? 

19 MR. LEVY: Well, actually -– 

20 MR. HAGERMAN: What I want to try to do 

21 is avoid, you know, having to have another, you 

22 know, discussion or working group on costs just 
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1 because the costs weren’t aggregated up and he’s 

2 having to translate things. I don’t necessarily 

3 want him to have to translate anything. 

4 MR. LEVY: You know, I’m sure there will 

5 have to be some discussion about this, but I 

6 think what Matthew needs -- and, Matthew, tell me 

7 if this is correct or not -- is costs for all of 

8 the specific levels of R value that you have 

9 modeled that are in the matrix. 

10 So the -– so for all of the combinations 

11 of different measures for all of the levels of 

12 IECC and HUD code, you need to have what the R 

13 values and the costs are for each of the 

14 components to make up all of those packages. 

15 MR. WALKER: And this is Matthew Walker 

16 from Navigant. That is correct, that is just 

17 what we need. 

18 MR. LEVY: And we will probably be 

19 providing more discreet data than that. We will 

20 have some intermediate levels as well. But you 

21 can pick and choose what information you will 

22 need. 
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1 MR. HAGERMAN: So this is Joe Hagerman 

2 again, just real quick. So not to belabor the 

3 point, but there is that one category of the air 

4 exchanges for the unit. Are you going to be able 

5 to cost out the different levels of air 

6 exchanges? 

7 A Well, I think so. We have to see 

8 what’s in the package. I think that’s what we 

9 talked about earlier, that Matthew had put 

10 together a list of the items that are in that 

11 package. And then we will go back to the 

12 manufacturers and ask them for costs associated 

13 with that. Am I thinking about that correctly? 

14 MR. HAGERMAN: I think that’s correct. 

15 This is Joe Hagerman, I think that’s correct. 

16 I’m going to go back –- I’m going to work 

17 with Matthew and PN&L so we can describe in very 

18 kind of explicit terms –- discreet terms what it 

19 is and those different packages of air exchanges. 

20 MR. LEVY: Yeah. I mean, my logic of 

21 associating those particular measures with a 

22 particular level of air infiltration is something 
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1 that may need to be discussed but –- 

2 MR. HAGERMAN: Sure. 

3 MR. LEVY: -- we can certainly cost out 

4 the measures. 

5 MR. HAGERMAN: Sure. And then Mike 

6 Lubliner, do you have a question? 

7 MR. LUBLINER: Yeah, along these lines, 

8 the –- if we are going to be looking at the costs 

9 of the envelope leakage, it would be important I 

10 think to separate out the labor and materials 

11 costs from the testing. 

12 Make sure we can separate that out so 

13 that we can look at both of those and seek 

14 cost better solutions. 

15 The other thing I was going to point out 

16 is I would recommend the same thing for the 

17 duct –- the assumed costs for tidying up the duct 

18 work, we should do the same thing. 

19 I think I got cut off when I was trying 

20 to make the point that our experience has been 

21 that the cost of mastic and labor for tighter 

22 ducts are about the same. But I would like to 
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1 get some confirmation from real people in the 

2 industry doing this. 

3 So those would be the two that I think -– 

4 make sure that we clarify that we are going to 

5 get both of those from the industry and we are 

6 going to break out the implications of the 

7 testing from the actual materials and labor. 

8 Joe, that was my one point. And I have 

one other point. And that is March 24th 9 , 2010, 

10 Tom Eckman in Northwest Power Planning Council 

11 provided cost data from the Pacific Northwest 

12 based on many years of working with –- in 

13 partnership with the manufactured housing 

14 industry and the utilities. 

15 This is research that’s been done. And I 

16 just want to make sure that the cost data that 

17 was provided in the (unintelligible) -- this was 

18 the response to your request back in 2010 to 

19 provide cost data, and we did. 

20 And I just want to be clear as to what 

21 extent was that cost data used. And I would 

22 encourage some discussion if that cost data comes 
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1 way in off from efforts going on. 

2 So perhaps, Emmanuel, if you haven’t seen 

3 that, or if your costs committee hasn’t seen 

4 that, it would be appropriate to share it. This 

5 is all public record. And I think that we 

6 probably could help to evaluate areas where there 

7 may be questions. 

8 And I would love to volunteer to work on 

9 that if we do run into issues on costs and make 

10 sure that we’re all talking apples and apples. 

11 What we have seen in the past is that 

12 costs, incremental costs really get driven by the 

13 assumption of the base case that we have 

14 discussed here today. 

15 So not only do we want to make sure that 

16 we have good cost data and we’re clear on how 

17 that cost data gets marked up to the consumer, 

18 but we need to have these other factors in 

19 concern too. 

20 Thank you. Sorry for the ramble. 

21 MR. RAMIREZ: Michael, you said you have 

22 that report? 
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1 MR. LUBLINER: It should be in public 

2 record. 

3 MR. RAMIREZ: All right. So we will 

4 forward that to the group then. 

5 Okay. The other thing that I have on 

6 here is the paths that we are going to be 

7 following, right? 

8 We had talked about the possibility of 

9 having three different paths, the performance, 

10 prescriptive and the UO. Is that the road that 

11 we are going down or are we looking at just one 

12 path? Lois? 

13 MS. STARKEY: Speaking on behalf of the 

14 manufacturers, we definitely want the performance 

15 path. If we have –- we can certainly have a 

16 prescriptive path but that’s how we do -– that’s 

17 how we build our homes. And they are built very 

18 efficiently because of that. 

19 MR. RAMIREZ: So is that all we need is 

20 one path of performance? 

21 MS. HOFFMAN: What I heard, maybe I 

22 should just clarify, was that there seemed to be 
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1 a passive recognition of a variety of paths to 

2 get there, both prescriptive and performance and 

3 maybe one other, is that correct? Yeah, the UO 

4 and -– 

5 MR. WEISS: Yes. 

6 MS. HOFFMAN: Yes. 

7 MR. WEISS: Yeah. Mark Weiss, I mean, 

8 under the HUD code absolutely performance has 

9 always been the way to go. And it’s the way it’s 

10 set up. And it’s a result of the affordability. 

11 But I think what we discussed -- and Lois 

12 wasn’t here for the last meeting, but what we 

13 discussed was getting cost information. 

14 MS. STARKEY: Sure. 

15 MR. WEISS: Data for all paths and -– 

16 MS. STARKEY: Right. 

17 MR. WEISS: -- then look at them, so -- 

18 MS. STARKEY: Right. But it appeared 

19 that we wanted to pursue or at least look at all 

20 three roads to heaven here. And getting the data 

21 as well. Okay. 

22 MR. HAGERMAN: Joe Hagerman -- 
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1 MR. LUBLINER: Mike Lubliner again, I 

2 want to clarify –- 

3 MR. RAMIREZ: Michael –- 

4 MR. LUBLINER: -- (unintelligible) 

5 proposal – 

6 MR. RAMIREZ: I’m sorry, go ahead, 

7 Michael. 

8 MR. LUBLINER: Yes, my question was we 

9 had a keep it simple proposal which was 

10 prescriptive in nature and just kind of a trial 

11 balloon. Is there any effort to make sure that 

12 the costs that we have can be used to estimate 

13 what the incremental costs of those packages 

14 might be? 

15 And is somebody working on that or is 

16 that something that our committee needs to work 

17 on? 

18 It seems like there needs to be some 

19 liaison on that one between the cost people and 

20 to the extent that we are going to use that 

21 simplified path in rule making. 

22 MR. RAMIREZ: Okay. Is –- nothing is 
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1 being done on that, right, as of yet? 

2 MR. HAGERMAN: This is Joe Hagerman, DOE. 

3 Michael, I’m sorry, I don’t follow you. So could 

4 you re-ask the question? 

5 MR. LUBLINER: Yeah, I’m sorry, Joe. 

6 What I was hoping is that we might be 

7 able to get -– using the cost data we’re 

8 collecting, that Emanuel is collecting, that we 

9 make sure that we have sufficient data to cost 

10 out the –- those KISS paths that were received 

11 rather favorably by many of the industry folks in 

12 correspondence with me. 

13 MR. HAGERMAN: Absolutely. So we are 

14 going to have to make sure that those packages 

15 are reflected in the LCC, if they’re not already. 

16 MR. LUBLINER: Thank you. 

17 MR. RAMIREZ: Okay. So I guess I’m still 

18 not certain. I’m hearing that there’s a 

19 possibility of exploring two of the three paths. 

20 Are we saying to keep that open still to possibly 

21 explore all three or has it been narrowed down to 

22 performance and prescriptive? 
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1 MR. ROY: This is Robin. I think keep it 

2 open. I don’t think the analyses differ that DOE 

3 does. It doesn’t really require any change in 

4 what DOE and Navigant do, so we don’t need to 

5 make an arbitrary decision. 

6 We clearly have an interest in the 

7 prescriptive and which type of performance, is it 

8 a UA or UO. We don’t have to decide that. We 

9 might find that they both have benefits. 

10 MS. HOFFMAN: So we’re holding this in 

11 abeyance? We are going to keep going. 

12 MR. RAMIREZ: Based on the data. 

13 MS. HOFFMAN: Yeah. 

14 MR. ROY: There’s just no reason to 

15 limit. 

16 MS. HOFFMAN: Right. 

17 MR. HAGERMAN: Joe Hagerman, DOE. The 

18 only third path was that rated path. And we 

19 didn’t hear really any strong reaction whether to 

20 include that or not. So that is an entirely 

21 different path in terms of how it’s formulated. 

22 MR. ROY: You mean the HERS related one? 
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1 I thought what we had heard – this is Robin. We 

2 had heard about that was the HERS method did not 

3 seem particularly suited to small homes, smaller 

4 typical homes. So that was not likely to be 

5 sensible for manufactured housing. 

6 MR. UNGAR: This is Lowell, one question 

7 on that. I know that you did some analysis 

8 trying to map the UO to the others. Are -- for 

9 all of the runs, like for the Straw Man, are 

10 there also calculations of UO and UA values? And 

11 I assume that would be -– or is that a trivial 

12 thing to do? 

13 And just in terms of if we’re dealing 

14 with these three paths. If it’s easy, would it 

15 be useful to have –- for all of these various 

16 runs and also for the different window of ratios, 

17 to have what’s the associated UO and UA values so 

18 we know what we’re dealing with and if we’re 

19 going to try to look at all three of them. 

20 MR. RAMIREZ: So by me seeing Ed jot that 

21 down, I’m assuming that that’s something that 

22 Navigant is going to work on, or is that PN&L? 
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1 MR. BARBOUR: This is Ed Barbour, 

2 Navigant Consultant. We will work with PN&L. And 

3 they have already –- I believe they have already 

4 done the UO calculations for all of the different 

5 runs. And so it’s fairly straightforward. The UA 

6 is pretty straightforward as well to do. 

7 MR. LUBLINER: This is Mike Lubliner. It 

8 seems like the REScheck, given that we get the 

9 right U values and the assumptions for 

10 compression and tapering and things like that in 

11 there, which are based on PN&L’s U value 

12 documentation for HUD, you know, that we are 

13 probably in a pretty good position to look at 

14 REScheck and just take the view A that comes out 

15 of that and divide by the surface area, add the 

16 crossover duct to UA implication and have a UO 

17 value. Very simple modifications to make the 

18 REScheck to allow it to be used for both, UO or 

19 UA. 

20 MR. RAMIREZ: Okay. Then we have Manny’s 

21 report which we are going to be doing tomorrow, 

22 which is the 2015 IECC, which are excluded, which 
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1 are included and which need discussion. So 

2 that’s going to happen tomorrow. 

3 What else, what else do we need to put on 

4 this list that we need in order to get to a final 

5 term sheet? 

6 MR. HAGERMAN: Joe Hagerman, DOE. So 

7 just to be clear, every time I send you any 

8 materials I always put a careful note at the top 

9 that says, you know, there are other factors in 

10 the 2015 IECC that you need to consider, right? 

11 And so I think that’s what Manny’s group is going 

12 to go over tomorrow. 

13 But just to stress, you know, that code 

14 includes other factors other than just 

15 prescriptions or prescribing the envelope and the 

16 performance. There may be some requirement for 

17 ventilation or pipe wrap or, you know, whatever 

18 those items are. 

19 But I think that the group needs to at 

20 least discuss them and see if they are applicable 

21 to manufactured housing. 

22 MR. RAMIREZ: Manny, is that part of what 
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1 we are going to be walking through with your 

2 subcommittee to at which –- which of these 2015 

3 IECC pieces we need to consider? 

4 MR. SANTANA: Well, this is Manny with 

5 Cavco. You know, the IECC, it gives you three 

6 ways, three general ways, right, which allows you 

7 to say you're IECC compliant, or it gives you 

8 three ways to comply, you know. 

9 And regardless of which way you use, 

10 there are certain sections –- I think there’s 

11 twenty-five in total that are called mandatory 

12 that you have to comply with regardless of –- 

13 now, ventilation, say whole house ventilation, 

14 isn’t one of them. But there are some things -- 

15 duct sealing, that is one of them. And, you 

16 know, insulation of mechanical piping, that’s one 

17 of them, you know. 

18 So what we’re going to do is, we’re -- 

19 we're eating an elephant, right? So we’re taking 

20 it one bite at a time. So we started off with 

21 just a section that are mandated, and which of 

22 those sections we can include and which of those 
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1 sections we could exclude, and without any other 

2 kind of discussion. 

3 And we were going to present those, the 

4 easy stuff first. And then as time permitted or 

5 as time went on, we were going to start to 

6 discuss some of the other ones and see if there 

7 is any way we can come to any recommendations for 

8 the group as a whole. 

9 And if we finished the mandatory 

10 provisions, we were going to jump into the rest 

11 of the code. You know, so that might include 

12 climate zones, it might include, you know, their 

13 prescriptive path. But it all depends on how 

14 fast we work and how fast we can come to a 

15 consensus. 

16 But initially it was just to look for the 

17 mandatory sections and try to provide a 

18 recommendation on those. 

19 MR. RAMIREZ: Okay. So then it sounds 

20 like we may gradually expand what your committee 

21 is doing just to continue going through all of 

22 the 2015, but we will start off with what you 
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1 have tomorrow. 

2 MR. ROY: This is Robin. And there is 

3 one other thing that I think we need to have a 

4 coherent discussion, even if we don’t regulate 

5 it, on the treatment of NAECA covered products, 

6 water heaters and space heating. 

7 We need to address that explicitly, why 

8 we are not covering it, if we don’t. Then we need 

9 to have recommendations for it if we do. 

10 MR. RAMIREZ: Is that something that will 

11 be flushed out when we are reviewing the 2015 

12 codes or is that something specific that we need 

13 to add on here? 

14 MR. ROY: Largely preempted in the IECC 

15 coverage of these NAECA covered products. So, 

16 no, it won’t be flushed out there. 

17 MR. RAMIREZ: Okay. 

18 MR. ROY: It will be flushed out, not 

19 fleshed out. 

20 MR. RAMIREZ: Depending. 

21 MR. HAGERMAN: Joe Hagerman with DOE. I 

22 think you added a few more things to that list. 
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1 And that is labeling, that this group needs to 

2 have some recommendation to ASRAC or Energy Star. 

3 Is that already up there? 

4 MR. ROY: I consider that up there under 

5 the affordability piece. 

6 MR. HAGERMAN: Okay. 

7 MR. ROY: I know it’s not really but it 

8 will show up again there. 

9 MR. HAGERMAN: We also previously heard 

10 that this group might want to make some 

11 recommendations to –- even though it’s currently 

12 outside the scope of the committee, thoughts on 

13 enforcement and compliance or enforcement. 

14 MR. ROY: I would think that would be 

15 completely sensible but I thought you really 

16 wanted to avoid that? 

17 MR. HAGERMAN: Well, we do. It’s not the 

18 scope of this committee yet. But you could 

19 recommend that this committee extends itself to 

20 think about those issues. 

21 MS. HOFFMAN: If we can get this part 

22 resolved, I think we can move ahead to the 
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1 compliance and enforcement. But we have to get 

2 through this first. 

3 MR. RAMIREZ: We’ll stir up this pond 

4 first and then we’ll go stir up that pond next, 

5 okay. 

6 MR. LEVY: Hey, Javier? 

7 MR. RAMIREZ: Yeah. 

8 MR. LEVY: Emmanuel, just to –- I know 

9 you need to get your list longer. There are a 

10 couple of items in which we will be talking about 

11 tomorrow which will probably overlap with what 

12 Manny’s committee is also doing on the whole 

13 house and duct leakage levels and solar heat gain 

14 coefficient, but let’s not lose track of the 

15 discussion on climate zones. 

16 I don't know if we have put that to bed 

17 and said we are going to stay with the existing 

18 three, I thought that was still on the table, 

19 because that certainly is a -– 

20 MR. RAMIREZ: Yeah, it is. 

21 MR. LEVY: -- issue. 

22 MR. RAMIREZ: I think it’s under –- can 
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1 you go to the scope template –- definitions and 

2 the term sheet in the notes section there. Oh, 

3 I’m sorry, climate zones is separate. 

4 Yeah, we have not –- we didn’t finalize 

5 any decision on that. The group was going to 

6 look at some additional data as we go along and 

7 then hopefully it will kind of make it clear of 

8 which path we need to follow. But that's not a 

9 decision that's been made yet. 

10 MR. LUBLINER: I have a question, Mike 

11 Lubliner here, on climate zones. 

12 MR. RAMIREZ: Okay. 

13 MR. LUBLINER: It seems that –- it seems 

14 that we’re talking about two options right now. 

15 One would be to use the IECC climate zones or use 

16 the three HUD climate zones, which I personally 

17 am in favor of the three HUD climate zones. 

18 If there are some other proposal that’s 

19 going to try to come up with a hybrid of those, 

20 which I have heard some rumblings about, but 

21 nothing formally discussed, I’d like to know 

22 about that and put that on the table. 
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1 But I’m just wondering, you know, can we 

2 get some sort of a sense from the group now based 

3 on what we’ve heard so far about how the group is 

4 leaning towards the two existing climate zone 

5 proposals, which is the IECC or the HUD climate 

6 zone, or is that not appropriate for discussion 

7 yet? 

8 MR. RAMIREZ: Well, we heard from you 

9 that you’re leaning towards the three HUD, 

10 correct? So does anyone else want to chime in? 

11 MR. ROY: This is Robin. And I’m leaning 

12 towards letting the numbers speak and then seeing 

13 whether the manufacturers have reasons as to why 

14 we should overrule that. 

15 MR. LEVY: I second that. 

16 MR. ROY: On appliances =– 

17 MR. RAMIREZ: Who seconded that on the 

18 phone? 

19 MR. LEVY: Emmanuel. 

20 MS. HOFFMAN: Come on, Manny. We have to 

21 have you identify yourself. 

22 MR. ROY: The appliances, is that the 
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1 space and water heating equipment? I would say 

2 that’s space and water heating equipment as 

3 opposed to appliances. Appliances, people might 

4 misread that as -– 

5 MR. HAGERMAN: You have already 

6 established that it’s everything that ships from 

7 the factory installed. 

8 MR. ROY: Yeah, I really –- yes. But I 

9 would like to draw out the space and water 

10 heating from appliances -– equipment from 

11 appliances. I think it’s worth doing. 

12 MR. HAGERMAN: It’s all equipment shipped 

13 from the factory installed. 

14 MR. SCHNEIDER: This is Peter Schneider 

15 (unintelligible). I may have missed it, but were 

16 there discussions with regards to roof pitch and 

17 has that been evaluated to determine, you know, 

18 height down the road with, you know, 

19 (unintelligible) value over the exterior wall as 

20 we had discussed two weeks ago? 

21 We were going to evaluate the limitations 

22 on roof pitch. And I just wanted to mention that 
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1 in case I missed it. 

2 MR. RAMIREZ: Yeah, we gave you a few 

3 assignments. 

4 MR. SCHNEIDER: Yeah. 

5 MR. RAMIREZ: Actually, David did have a 

6 request from you. David Tompos wanted to know 

7 how you get the higher U value in the ceiling 

8 with the limited height restriction of 13.6. 

9 MR. SCHNEIDER: Well, we’re at –- yeah. 

10 MR. RAMIREZ: So if you could -- if you 

11 could do me a favor though, if you could call 

12 David and let him know how you all do that, I 

13 would appreciate that. 

14 MR. SCHNEIDER: Okay. 

15 MR. RAMIREZ: Is that something you could 

16 do for us? 

17 MR. SCHNEIDER: Sure. 

18 MR. RAMIREZ: Okay. 

19 MR. LUBLINER: Peter, Mike Lubliner. 

20 MR. SCHNEIDER: Yes. 

21 MR. LUBLINER: I had a -– I just wanted 

22 to -– I did ask David if he could give us some 
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1 estimate of how much of blown insulation is 

2 displaced when you have a conventional full heel 

3 truss versus what is typical out there so that we 

4 can start to decide, you know, how much -- how 

5 many bags of insulation are moved or are 

6 displaced, and what the implication is for U 

7 value in coming up with an approach that allows 

8 the home to be shipped under current 

9 restrictions. 

10 So I’m hoping that that group, that they 

11 will be able to provide some of that information 

12 as well. I think that really –- 

13 MR. SCHNEIDER: Yeah, that’s great. 

14 MR. LUBLINER: -- gets at the discussion 

15 that you have. The issue of the R60 is a 

16 separate issue. 

17 MR. RAMIREZ: What else do we need in 

18 order to get to this term sheet? 

19 MS. HOFFMAN: Emanuel, I see you’re on 

20 the program for tomorrow. Are you going to have 

21 data to present tomorrow? 

22 MR. LEVY: What we’re talking about 
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1 tomorrow are these white papers that I sent you. 

2 MS. HOFFMAN: Oh, okay. Okay. So you 

3 will be discussing that. Fine, thank you. 

4 MR. LEVY: Right. 

5 MR. RAMIREZ: Yeah. So if we get all of 

6 this stuff right here we could put our term sheet 

7 together, correct? 

8 MR. HAGERMAN: If you think what’s up 

9 there right now is the actual performance levels 

10 that you’re trying to meet, right? 

11 MR. RAMIREZ: Well, isn’t that –- that’s 

12 part of what -- the 2015 that we're going to have 

13 to walk through. 

14 MR. HAGERMAN: That’s right. 

15 MR. RAMIREZ: And it sounds like there's 

16 going to be a number of walk-throughs on that. 

17 MR. HAGERMAN: I just want to make it 

18 more explicit that you’re going to have to be 

19 picking levels. 

20 MR. RAMIREZ: Okay. 

21 MR. HAGERMAN: It’s not just the act of 

22 saying are we going to have three paths, it’s 
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1 we're going to have three paths or two paths or 

2 one path, and then we're going to pick the levels 

3 of the paths. 

4 MR. RAMIREZ: Okay. 

5 MR. HAGERMAN: For each of them, right, 

6 just to make crystal clear. 

7 MR. RAMIREZ: I’ll put for all paths. If 

8 it’s one, it’s one. If it’s two, it’s two. If 

9 it’s three, it’s three. 

10 MR. LEVY: Javier, Emanuel, I just wanted 

11 to mention again that what Robin talked about 

12 earlier, the bifurcated standard, a decision to 

13 go in that direction is rather important in terms 

14 of the amount of work you’re talking about, or 

15 potentially important. So I would think that 

16 that probably has to be on the critical path. 

17 MR. RAMIREZ: So in the notes section 

18 there of the one that Ted just highlighted, we 

19 need to put for all product types. I think 

20 that’s what you’re -– is that what you were 

21 getting at when –- at the end there? 

22 MR. LEVY: Yeah. 
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1 MR. SCHNEIDER: This is Peter. Just under 

2 other discussion, I overheard the discussions 

3 about U values and solar heat gain coefficients. 

4 And I apologize if I missed it, but window type 

5 and HUD not allowing encasements and awnings and 

6 that those certainly should be allowable window 

7 types, compression (unintelligible) and 

8 beneficial from an air leakage standpoint, 

9 overall performance. So I wanted to make sure 

10 that that was included in our discussion. 

11 MR. RAMIREZ: Is that something that 

12 we're going to hit when we’re going through the 

13 different 2015 pieces? 

14 MR. HAGERMAN: Joe Hagerman, DOE. 

15 MR. SCHNEIDER: Yes. 

16 MR. HAGERMAN: Joe Hagerman, DOE. I 

17 think Emanuel Levy has a white paper in a Straw 

18 Man on solar heat gain coefficients -- 

19 MR. RAMIREZ: Okay. 

20 MR. HAGERMAN: -- that he's going to 

21 discuss tomorrow. Is that correct, Emanuel? So 

22 we will have the discussion. 
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1 MR. LUBLINER: This is Mike Lubliner. I 

2 think that we're making progress with the solar 

3 heat gain. One question that I have, and this 

4 jumps back -– are we going to be able to get cost 

5 data for the analysis that would allow us to 

6 compare solar heat gain coefficient of a single 

7 low-heat coating with the more expensive products 

8 that gets you a better heat gain coefficient? 

9 That's something that (unintelligible). 

10 It may be useful to try to get what the 

11 incremental costs for those two different 

12 (unintelligible) coatings that achieve different 

13 solar heat gain coefficents so that we can focus 

14 our discussion on which is the appropriate one in 

15 which climate zone. 

16 Is that cost data we're going to break 

17 down, Emanuel, do you know? 

18 MR. LUBLINER: Just to answer your -– 

19 Mike, just to answer your question, yes, we will 

20 have cost data for the different window and 

21 different solar heat gain coefficents. 

22 The question I think we'll have to 
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1 grapple with tomorrow is whether the decision 

2 about solar heat gain coefficient is 

3 predicated -– will be predicated on cost, cost 

4 benefit or other considerations. 

5 MR. HAGERMAN: Thank you. 

6 MR. LUBLINER: That will be part of the 

7 discussion tomorrow. 

8 MR. LUTER: This is Robert Luter, if I 

9 could comment. 

10 MR. RAMIREZ: Okay. 

11 MR. LUTER: This wasn’t quite as timely 

12 as I intended. I was muted and didn’t realize 

13 it. 

14 With regards to casement awning and 

15 compression seal windows, historically those have 

16 not been permissible in a HUD application based 

17 on egress considerations, having to crank them 

18 open as opposed to simply throwing a couple of 

19 latches and opening the sash. 

20 Now, I don't know if that’s a good thing 

21 or bad thing, but it’s a thing. If those were to 

22 be considered going forward, it would be quite a 
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1 paradigm shift. Thank you. 

2 MR. RAMIREZ: Okay. 

3 MR. SANTANA: This is Manny with Cavco. 

4 MR. RAMIREZ: Yeah. 

5 MR. SANTANA: You know, I’d like to get 

6 something cleared up. You know, when we talk 

7 about a term sheet, you know, does that 

8 necessarily mean that it’s a completed energy 

9 code, or are these just suggestions as far as we 

10 can take them that we are going to provide to 

11 DOE. 

12 You know, I'll give you an example, 

13 instead of -- instead of determining what the 

14 exact solar heat gain coefficient level has to 

15 be, and in what areas it has to apply, if we 

16 can’t come to any kind of consensus can we just 

17 all agree to say, you know, solar heat gain 

18 coefficients need to be included and considered? 

19 You know, if we can’t determine what type 

20 of U value it is that we need to end up with can 

21 the term sheet item just say consider both 

22 prescriptive and the UO based performance path? 
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1 Or, you know, do we have to have 

2 everything down and have all of the words figured 

3 out, or can the term sheet just be a loose 

4 conglomeration of concepts and suggestions? 

5 MR. HAGERMAN: So -- Joe Hagerman, DOE. 

6 So not to give you a non-answer, but I think the 

7 correct answer is we would like that term sheet 

8 to be as complete as this group can possibly make 

9 it given the time constraints. 

10 Now, notwithstanding if there's some 

11 factor like solar heat gain coefficient that you 

12 think the department needs to consider, but 

13 there’s not enough time to consider it, or there 

14 is more analysis that needs to be done, then we 

15 can go back to -– you can make the recommendation 

16 to extend the duration of this work group, or you 

17 could just say we don’t need to extend it, DOE 

18 just needs to decide or put that out for public 

19 comment. 

20 Does that make sense? 

21 MR. SANTANA: Yeah, that makes sense. 

22 You know, and the reason why I bring it up is, 
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1 you know, in line with what Javier has called 

2 paralysis (unintelligible) analysis -- you know, 

3 we’re asking for a whole bunch of surveys and a 

4 whole bunch of, you know, analyses to be done 

5 and, you know, numbers to be crunched. And 

6 rightfully so, I think. 

7 But, you know, without -- without having 

8 something finalized, I think we can agree on 

9 broad subjects, and then if we can whittle them 

10 down and -- or, you know, get them, you know, 

11 sharpened, that’s good. But if not, at least we 

12 have the broad concepts of what it is that we 

13 think we need. 

14 MR. HAGERMAN: This is Joe Hagerman. 

15 Absolutely. So, I mean, you are all here because 

16 you’re professional experts in this. So, you 

17 know, I don’t think the group needs to do so much 

18 analysis that we get paralyzed, but that we can 

19 take enough of this first analysis and then make 

20 our professional judgments to write the best 

21 standard. And get a very, very good standard 

22 through this discussion. 
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1 So that is -- that is the meat of a 

2 negotiated rule making, right? You’re here, 

3 you’re experts, you discuss it from your vantage 

4 points, so -– 

5 MR. RAMIREZ: I'll have one comment on 

6 that, but let’s get Mark first. 

7 MR. WEISS: Well, my comment was 

8 (unintelligible). 

9 MR. RAMIREZ: I guess you have to keep in 

10 mind too is, if we don’t reach agreement, what’s 

11 the default? 

12 And that’s – that’s the one concern that 

13 I would have for the group, right? 

14 So -- and look, I'll just put it out 

15 there, I kind of get in trouble sometimes for 

16 being the bull in the china shop, as small as I 

17 am, but it’s -– we know what the default is. 

18 And more likely than not, you’re going to 

19 get something that’s very close to the 2015 IECC 

20 if you all can’t agree on some other number, 

21 right? So just keep that in mind as we’re 

22 working. 
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1 Mark? 

2 MR. WEISS: Thanks. Mark Weiss, MAHR. 

3 Two things, first on affordability. I just want 

4 to be clear that issues relating to affordability 

5 go beyond what Robin has discussed today. The 

6 way I look at it, what Robin outlined today is 

7 it’s an approach to affordability. But there are 

8 issues, potentially significant issues, like 

9 extremely important issues that go beyond what he 

10 has outlined. And I just want to make sure that 

11 we're clear on that. 

12 The other thing in terms of a possible 

13 addition is, based on the statute, is input from 

14 HUD. You know, I think we need input from HUD, 

15 and I've said this before, at a meaningful stage 

16 in the proceedings. And I think the sooner we 

17 get that input, the better it’s going to be for 

18 everybody concerned. 

19 I know DOE, OGC has a view of that. But I 

20 think that as part of this process we can at 

21 least begin to get some of that input. 

22 MR. RAMIREZ: Okay. What else, what else 
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1 do we need to put on here? 

2 MR. UNGAR: This is Lowell. I hesitate to 

3 raise this, but it seems to me on the actual 

4 performance levels, I've heard two very different 

5 approaches for how people want to get there. And 

6 I don't know whether -– I don't know how we deal 

7 with that, I guess, as to whether we pursue both 

8 of them and see whether they end up in the same 

9 place or a different place, or whether we try to 

10 figure out a path forward. 

11 But it seems to me there is one path of 

12 trying to find a minimum life cycle cost and 

13 incremental savings until we get there, and 

14 another approach of start from 2015 IECC and 

15 modify that package until there's something that 

16 we agree on. 

17 And I haven’t heard any agreement on 

18 either –- you know, both of them seem workable 

19 approaches potentially. But I assume I haven’t 

20 heard agreement as to which one or how we use 

21 both of them if we’re going to use them. 

22 MR. RAMIREZ: Yeah, and that’s a scary 
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1 conversation, you know. And the reason I say 

2 that is that I’m afraid of getting tied down in a 

3 process where we might be able to look at some of 

4 the numbers. And I think that once we get some of 

5 the costing data, I think that might help bring 

6 some focus. 

7 If we come to a point where we end up 

8 getting log jammed, then we may have to –- we, 

9 meaning the facilitators, may have to strong arm 

10 you a little it and say, you know what, this is 

11 the way we're going to do it. 

12 You know, as far as a process goes. You 

13 all are still controlling the content, but we may 

14 have to exert a little bit more control as far as 

15 possibly we might say, you know what, we're using 

16 the 2015 and we're going to base it off of this. 

17 But let’s just see how things go first 

18 and see if we can make sufficient progress once 

19 we get the actual numbers. Does that sound all 

20 right? 

21 MS. HOFFMAN: Yeah. Also there’s -– 

22 Eileen Hoffman. There's legitimate backing for 
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1 either of those approaches that you mentioned. 

2 MR. RAMIREZ: Yeah. 

3 MS. HOFFMAN: So we can wrestle with it. 

4 MR. HAGERMAN: I hate -- this is Joe 

5 Hagerman. I hate to say this, especially knowing 

6 that it’s going on the record, but the meeting 

7 that you missed, Robin said it’s like 

8 pornography, we'll know it when we see it, right? 

9 And I think that -– 

10 MS. HOFFMAN: Robin does not remember 

11 saying that. 

12 MR. ROY: I would like to have the record 

13 reviewed, please. 

14 MS. STARKEY: Lois from MHI. Yes, I 

15 would like to -– could we agree that we put it in 

16 the parking lot, that whole issue? 

17 I mean, you said that we're going to, you 

18 know, leave it at -– but I'd just kind of like to 

19 have it clear that –- I think I'd like to have 

20 some discussions with my members, you know, 

21 tonight maybe about how much, you know, they -- 

22 what they think about it. Because I think 
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1 they've been thinking along the lines of what 

2 they do. And that’s a performance way of doing 

3 things. And that means incremental costs 

4 approach. 

5 MR. RAMIREZ: Okay. 

6 MS. STARKEY: So I think if we could 

7 just, you know, put it in the parking lot for -– 

8 and I think, as you say, as things -– as we move 

9 forward I think that'll come clear, but -– 

10 MR. RAMIREZ: So the approach for 

11 analyzing the data? 

12 MS. STARKEY: Yeah. 

13 MR. RAMIREZ: Yeah. And again, if we get 

14 bogged down, if we get bogged down on -- if at 

15 some point we just get stuck, and then that’s 

16 when we'll just have to come in and pull that 

17 trigger. 

18 Okay. So what else do we need to put up 

19 here? And I’m saying what else –- I’m not saying 

20 like, oh, my gosh, you guys missed something, 

21 right? 

22 But what I’m saying is, is there anything 
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1 that we need to absolutely have on here in order 

2 to get to this term sheet, or is this -– is this 

3 the road map? 

4 MR. LUBLINER: This is Mike Lubliner. 

5 I’m wondering whether or not we need to be 

6 looking beyond what the factory does. And as we 

7 make these changes, what are the implications, if 

8 any, for the installation manual or the retailer 

9 that’s setting up the home? 

10 And I don't know if that needs to be in 

11 the parking lot but, you know, what we find in 

12 the manufactured housing industry is there's a 

13 chain of responsibility all the way to the 

14 homeowner, who also has some responsibility for 

15 operating their home. 

16 And quite often the manufacturer can 

17 build a great unit, nice tight duct work, good 

18 envelope, commission ventilation, HVAC system, 

19 and then the retailer is required to do things to 

20 make sure that is successful, and -- using a 

21 setup code for that, either a minimum HUD 

22 mandated or state mandated code in accordance 
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1 with the manufacturer’s installation manual. 

2 And I’m just wondering, do folks feel 

3 like that’s beyond the scope. And if so, let’s 

4 state it, or should it be part of some discussion 

5 either here or as we get into future discussions 

6 or work groups that may get into enforcement? 

7 MR. RAMIREZ: You’re saying to have an 

8 owner’s manual, is that what you’re saying? 

9 MS. HOFFMAN: I think he’s saying the 

10 chain of responsibility after the manufactured 

11 house leaves the -– leaves the factory, what 

12 happens to it and what kind of care, et cetera. 

13 It seems to me, just a thought, we could 

14 put it in the parking lot and we can deal with 

15 it -- we've got to deal with other things first. 

16 But that would be my suggestion. 

17 MR. HAGERMAN: This is Joe Hagerman. I 

18 think it’s clearly beyond the current scope. And 

19 that’s why I come back to that. If you want to 

20 ask for permission to, you know, extend this 

21 working group to -– to, you know, explore other 

22 items, then make that recommendation to ASRAC. 
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1 But they need to approve that before we continue. 

2 I mean, we need to be focused on the 

3 standard. That’s plenty -- plenty to do in our 

4 remaining, you know, two meetings. 

5 MR. LUBLINER: I would agree. I think at 

6 a minimum in the parking lot, possibly could be 

7 spun off if there is an initiative to go beyond 

8 what happens in the factory. Because as I said, 

9 one of the weak links in the chain, if it breaks, 

10 we lose everything we've done in the code, or a 

11 good chunk of the energy savings we're trying to 

12 get. 

13 I think you're absolutely right, Joe, we 

14 need to prioritize the mission at hand. I just 

15 didn’t want folks to forget about the importance 

16 of good clarity and -– and installation practices 

17 per the manufacturer's installation manual and 

18 state or federal law. 

19 MR. RAMIREZ: Okay. I put on there chain 

20 of responsibility in the parking lot. 

21 MR. LUBLINER: Thank you. 

22 MR. RAMIREZ: All right. And then as 
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1 long as we hit these points here, then we have 

2 our term sheet. Correct? 

3 All right. Then as far as tomorrow goes, 

4 we're going to start off with Manny’s report on 

5 2015 IECC. And then we'll go into Emanuel’s Straw 

6 Man’s – or Straw Boys, as he has prepared. 

7 Are there any additional LCC runs that 

8 you would like for Navigant to run? 

9 Are there any different variables that 

10 you would want to put in there to take a look at? 

11 Because as we saw, the spreadsheet is fairly 

12 dynamic. And it looks like we can get some pretty 

13 quick turnarounds if you all wanted to look at 

14 something different. 

15 MR. ROY: I haven’t looked enough, but do 

16 you have different window -– window area 

17 definitions in the spreadsheet now? That would 

18 be really very interesting. 

19 MR. WALKER: From the LCC’s perspective, 

20 the answer is no because it pulls in the energy 

21 data developed by PN&L and the energy plus model. 

22 And so the way to analyze what you’re talking 
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1 about is to first get the energy data, attach 

2 cost data to it. 

3 MR. HAGERMAN: Well, we do have energy 

4 data -– 

5 MR. WALKER: That’s true. 

6 MR. HAGERMAN: -- for the different, you 

7 know, window to floor ratios, or window to wall 

8 ratios, I forget the metric they used. So you 

9 could pull from that data. You'd have to come up 

10 with some costs, but you have the square foot 

11 costs of windows. 

12 MR. ROY: That’s in one of our documents 

13 somewhere? 

14 MR. HAGERMAN: That’s in -– yeah, we 

15 circulated that. 

16 MR. ROY: Okay, great. 

17 MR. HAGERMAN: There’s a lot -- there's a 

18 lot out there. And so there’s also -– I hate to 

19 put Matthew on the spot here, but we also have 

20 those other simulation runs, like the Kiss-Lubey 

21 proposal, right? Do you remember that one? 

22 That’s not currently in the LCC. 
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1 I mean, I don't know if Matthew -– if you 

2 have enough time to populate the LCC tonight with 

3 that data and run some costs –- you know, make up 

4 some cost number –- not make up, sorry -- take a 

5 good guess at what the cost numbers would be for 

6 those -– for those measures. We could at least 

7 see that being populated with the window stuff as 

8 well. 

9 MR. WALKER: And this is Matthew. I'll 

10 certainly take a look. I do remember from 

11 looking at the energy models that the –- 

12 MR. HAGERMAN: It’s pretty close. 

13 MR. WALKER: -- Kiss-Lubey run is very, 

14 very similar to some of the other codes, as 

15 opposed to the larger incremental difference 

16 between the different IECC’s. But we'll take a 

17 look and see what we can do. 

18 MR. HAGERMAN: I think it’s pretty 

19 similar with the window ratios too, if I remember 

20 correctly. There wasn’t a huge spread on the 

21 annual energy consumption. 

22 Do you remember, we went -- we modeled 
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1 ten percent, twelve percent, and I think fourteen 

2 percent. You can pull up those spreadsheets. 

3 MR. RAMIREZ: All right. So if Matthew 

4 is able -– Matthew, you don’t have anything else 

5 to do tonight, right? 

6 You would rather not do anything else, 

7 right? 

8 MS. HOFFMAN: He’s not on Robin’s 

9 committee so –- 

10 MR. RAMIREZ: All right. So if Matthew 

11 is able to get that done by tomorrow then we 

12 would look at any additional LCC runs. Navigant 

13 will also have the term sheet, and so we'll take 

14 a look at that, as well as any definitions. And 

15 then the public comments and the next steps. 

16 Okay. So then -- 

17 MR. LEVY: Javier, I just want to -- I'm 

18 sorry, it’s Emanuel. I just want to interject 

19 one question for Matthew. 

20 Matthew, could you share with us the 

21 input assumptions you made with the runs, things 

22 like orientation, internal loads, set points, 
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1 those kinds of things? 

2 MR. WALKER: I can –- I think I’m 

3 understanding your question. It sounds like a lot 

4 of those inputs would be described in PN&L’s 

5 energy modeling assumptions document. 

6 MR. HAGERMAN: So this is Joe Hagerman, 

7 DOE. 

8 MR. LEVY: Do we have that? 

9 MR. HAGERMAN: You have -– we circulated 

10 the modeling document, I think maybe two days 

11 after the last meeting. 

12 MR. LEVY: Okay. Sorry. 

13 MR. HAGERMAN: Maybe it was a Saturday or 

14 Sunday, or maybe a Monday, something like that, 

15 right after the meeting. And I’m pretty sure 

16 that in that document it includes the set points. 

17 I believe they used -– they specified the 

18 Building America set points. And they give you a 

19 reference to where those set points are located. 

20 MR. LEVY: Okay. Thanks. 

21 MR. RAMIREZ: All right. 

22 MR. UNGAR: Yeah, to be kind to Matthew’s 
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1 evening, it -- I’m sorry, this is Lowell. It 

2 seems to me that for a lot of these -- I mean, 

3 people seem to want the cost to populate the 

4 actual cost data. And until then, doing –- I 

5 mean, I think it will be very useful once we have 

6 that. And until then it may not be so useful to 

7 look at a lot of runs, you know, unless people 

8 are willing to accept the Straw Man numbers that 

9 are in there now, in which case we should by all 

10 means look at it. 

11 MR. RAMIREZ: That will be up for review 

12 then, right? Not get bogged down on -– 

13 MR. UNGAR: Yeah. I think to get those 

14 and for people to review, you know, I say -– I 

15 think there were some question about what the 

16 assumptions were for the -– for Lubey’s Straw 

17 Man. 

18 So to get those assumptions right and 

19 make sure we are looking -– we agree on what the 

20 data is, then it will be more useful to examine 

21 it. 

22 MR. RAMIREZ: All right. So you owe him a 
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1 beer tonight so -– 

2 MR. WALKER: Yeah. Thank you, Lowell. 

3 MR. UNGAR: You’re welcome. 

4 MR. HAGERMAN: So as Ed was pulling up 

5 the additional runs of the Kiss-Lubey proposal, 

6 they're not –- they are three KBTU’s per square 

7 foot difference, right? I mean, it’s –- 

8 MR. RAMIREZ: Yeah. So I think it’s more 

9 important for -– 

10 MR. HAGERMAN: It’s not huge. 

11 MR. RAMIREZ: -- Lubey in particular to 

12 look at the exact assumptions and make sure it is 

13 in fact modeling his proposals. And then -– and 

14 then have the right cost data. And then let’s 

15 look at it. 

16 MR. HAGERMAN: And Lubey is not shy, so 

17 we've not heard any complaints thus far. 

18 MR. RAMIREZ: Well, I did hear -– I think 

19 he had to have -- I heard that he did have 

20 concerns about it. 

21 MR. HAGERMAN: Okay. 

22 MR. RAMIREZ: But that may -- that may 
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1 require discussion. But I think that needs to 

2 happen soon so that we can trust that the 

3 modeling is what we think it is. 

4 MR. LUBLINER: This is Lubey, I think 

5 we're pretty close –- I think we're pretty close. 

6 The only question remaining was -– had to do with 

7 the displacement of insulation from the tapering. 

8 And the issue of whether or not the compression 

9 of the floor insulation -- so that we’re not 

10 forcing the manufacturer to go to a two by eight 

11 floor. Those were the big remaining issues for 

12 me. 

13 And Joe is right, I think it’s going to 

14 come in pretty close to what has been analyzed on 

15 other scenarios that we've seen. 

16 I just want to make sure that the cost 

17 assumptions are commiserate with this package. 

18 And that the technical issues associated with 

19 compression and height restrictions that have 

20 been articulated are adequately addressed in the 

21 U values. 

22 And I think we're getting there. The 
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1 only remaining questions are the ones that I left 

2 for Dave regarding the compression issues. And I 

3 think, from what I've seen, that PN&L has 

4 accounted for those. And so I think we're pretty 

5 close. 

6 MR. RAMIREZ: All right. 

7 MR. LUBLINER: I just need to know if -– 

8 if it’s been accounted for. In other words, that 

9 the tapering of insulation has been addressed in 

10 the U values, because there's less insulation now 

11 because of the tapering, that we're not paying 

12 for that insulation in the cost side of things. 

13 MR. HAGERMAN: Right, Michael. And this 

14 is Joe Hagerman. Maybe the easiest way to 

15 resolve this is I just have a phone call with 

16 Mike Lubliner and the PN&L team to quickly answer 

17 those questions. 

18 MR. LUBLINER: That would be great. 

19 Fantastic, Joe. Thank you very much. I will 

20 take off. 

21 MR. RAMIREZ: But to Lowell’s point then, 

22 just to make sure that we're clear, I struck out 
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1 the review of new LCC runs and additional 

2 analysis for tomorrow because we need -– the team 

3 is saying that we want some actual costs data, 

4 some real cost data in order to have a serious 

5 look at that. 

6 Everyone on the same page there? 

7 All right. Yeah, so that would be the -– 

8 so there is the agenda for tomorrow. The times 

9 obviously will vary a bit here because, you know, 

10 we got through quite a bit today. 

11 MR. HAGERMAN: And I don’t think you need 

12 to go through the term sheet/structure 

13 definitions of Navigant because your mine map 

14 that you just put up there really covers that. 

15 MS. HOFFMAN: I think you still think 

16 sending out -– 

17 MR. HAGERMAN: He is going to circulate 

18 the document. I mean, it’s just an outline, it 

19 doesn’t have any meat to it. It’s basically that 

20 mine map up there. 

21 MR. RAMIREZ: What about definitions, is 

22 there anything under definitions? 
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1 MR. HAGERMAN: It just says definitions. 

2 MR. RAMIREZ: Okay. We need to make sure 

3 we get them, right? 

4 Okay. All right. Okay. Then anything 

5 from public comment? 

6 Do you have anything else? 

7 MS. HOFFMAN: I think we can formally 

8 adjourn for tonight -– for today. And we'll be 

9 back here tomorrow at 9:00 a.m. I’m looking 

10 forward to seeing you all. 

11 And let me just ask folks on the line, it 

12 sounded like the communication problems were -– 

13 many of them were resolved. It was better -- 

14 better reception. Are they all muted? 

15 MR. HAGERMAN: I think we keep on having 

16 a problem with Michael Wade -- 

17 MS. HOFFMAN: Oh, okay. 

18 MR. HAGERMAN: -- in Alabama, so – 

19 MS. HOFFMAN: Okay. 

20 MR. LUTER: This is Rob Luter. It’s been 

21 much, much better, much less echo. There's still 

22 been some episodes. 
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1 MS. HOFFMAN: Thank you, Rob. 

2 MR. LUBLINER: Ditto from Lubey. 

3 MS. HOFFMAN: Yeah, we’ve heard you 

4 Lubey, great, good. 

5 MR. LUTER: Interestingly enough, you 

6 know, Mike Lubliner on my end has been echoing 

7 quite a bit. He isn’t right now, but earlier it 

8 was pretty bad. 

9 MS. DICKENS: This is Ishbel from 

10 (unintelligible). I think this afternoon after 

11 lunch, whatever people did over lunch has really 

12 made a difference. There's been no echo at all 

13 this afternoon. There certainly was this 

14 morning. 

15 And even this morning when some of the 

16 participants in the room were talking, there was 

17 one part where I couldn’t make out what Lois 

18 Starkey was saying. And also I think Mark Weiss 

19 who immediately followed her. And it was very 

20 muffled and staticky. But it seemed much, much 

21 better in the afternoon. 

22 MS. HOFFMAN: We'll see what they ate for 
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1 lunch. 

2 MR. RAMIREZ: Yeah, I think everyone was 

3 sleeping after lunch. All right. 

4 MS. HOFFMAN: Well, thank you. And so we 

5 will see you all tomorrow at 9:00 a.m. 

6 Thank you. 

7 (Proceedings adjourned at 4:01 p.m.) 

8 

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294 

1 CERTIFICATE OF NOTARY PUBLIC 

2 I, Brian Knieser, Notary Public in and 

3 for the District of Columbia, the officer before 

4 whom the foregoing testimony was taken, do hereby 

s certify that the testimony which appears in the 

6 foregoing transcript was taken by me and 

7 thereafter reduced to typewriting under my 

s direction; that said testimony is a true record 

9 of the testimony given; that I am neither counsel 

10 for, related to, nor employed by any of the 

11 parties to the action in which this testimony is 

12 taken; and, further, that I am not a relative or 

13 employee of any of the parties hereto, nor 

14 financially or otherwise interested in the 

15 outcome of the action. 

16 

17 

18 BRIAN KNIESER 

19 Notary Public in and for 

21 Commission Expires: 

The District of Colum~J,a'.'~~··~iZ~ ' ,-r. ...... uf' . ,.,.,._ .. ·· ·· .. ,,-.. f f ·>:>'/ oiA,~1- · •. \ : : ~ . ·. ~» 

• { [I/· 031\4/2019 E * : l' . • . 

OLENDER REPORTING, INC. ",~·· •. t>UB\..\(, ./~/\ 

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03.14.2019 

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