Page 1 of 48 

## Commercial and Industrial Pumps

Manufacturer’s Interview GuideCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 2 of 48 INTRODUCTION

Thank you for expressing interest in participa ting in The U.S. Department of Energy (DOE) Manufacturer Impact Analysis for the commerci al and industrial pumps rulemaking. Currently, there are no established energy conservation standards for comm ercial and industrial pumps. DOE has initiated a rulemaking process to develop such standards based on the authority described below. The rulemaking process typically includes four major phases:

1. The publication of a framework document in which DOE describes the overall approach it is considering in developi ng potential energy conservation standards for a particular product or equipment;

2. The publication of a preliminary analysis that focuses on the analytical methodology DOE is considering in setting potential standards;

3. The issuance of a notice of proposed rulemaking (NOPR); and

4. The issuance of a final rule.

At each of the first three steps, DOE holds a public meeting and solicits comments from the on issues relevant to the developmen t of potential standards. It shoul d also be noted that a separate rulemaking process to establish a test procedure fo r the covered equipment will run in parallel to the energy conservation standards rulemaking. The re sulting test procedure will establish both a metric and method for measuring the en ergy consumption of the equipment.

History of this rulemaking to date:

The framework document for commercial and in dustrial pumps was published in February 2013 and comments on the framework were accepted until May 2, 2013. The next phase of the rulemaking is the preliminary analysis during which DOE will consider feedback on the approach presented in the framework and explor e methods to establish candidate, or draft, standards levels (CSLs). CSLs span the range of efficiencies from the most basic equipment to the most efficient technology (max-tech) that is both feasible and cost effective. DOE conducts an engineering analysis to determine the costs associated with increasing efficiency from the baseline to various highe r levels of efficiency.

Authority: Title III of the Energy Policy and Conservati on Act of 1975 (EPCA), as amended (42 U.S.C. 6291 et seq.), sets forth various provisions design ed to improve energy efficiency. Part C of Title III of EPCA (42 U.S.C. 6311-6317) (re-designated as part A-1 upon codification in the U.S. Code), establishes the "Energy Conservation Pr ogram for Certain Industr ial Equipment," which covers electric motors and pumps. Under EPCA , any new or amended standards must achieve the maximum improvement in energy efficien cy that is technologically feasible and economically justified. The DOE Appliances and Equipment Standards Program, within the Office of Energy Efficiency and Renewable Energy’s Building Technol ogies Office (BTO), develops and promulgates these pote ntial energy conser vation standards.

Method: One method by which DOE collects information on costs is through interviews between DOE

contractors and manufacturers. Due to concerns regarding the Freedom of Information Act and its potential for disclosures, DOE has hired Na vigant Consulting, Inc. (Navigant) and Lawrence Berkley National Laboratory (LBNL) to interview manufacturers and aggregate responses acrossCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 3 of 48 the industry. These aggregated responses prot ect individual sources while also allowing rulemaking stakeholders an insight into i ssues that are sensiti ve for manufacturers.

During an interview, the contra ctor asks a series of questi ons relating to production costs, historical shipment data, capital conversion expe nditures, marketing costs, R&D investment, and the potential impact of standards on a manufacturer.

The above approach enables Navigant and LBNL to characterize the cost -efficiency relationship for all pumps equipment categories. This approa ch also allows the public to examine aggregate cost and design assumptions that underlie the cost-efficiency estimates, while maintaining the confidentiality of each manufacturer’s proprie tary data. Understanding the cost-efficiency relationship will inform downstream evaluation of the CSLs and help DOE determine whether an energy conservation standard is ec onomically justified. Manufacturer participation is needed for potential impacts and costs to the industry to be accurately captured and presented to decisionmakers.

Confidentiality: In order to maintain confidentiality of any sens itive data submitted, the two DOE contractors for this rulemaking, Navigant and LBNL, will treat a ny submitted or discussed data per the terms of any agreement reached with a manufacturer. Any material shared with either DOE contractor

under the terms of a non-disclosure will not be shar ed with DOE, other than in aggregate for an industry, obfuscating the sources for the data. Ma terials submitted to DOE may be subject to a variety of laws and regulations governing the disclosure of Federal agency information. Information submitted to DOE will be protected in accordance with all applicable federal laws, rules, or regulations, including but not limited to the Trade Secrets Act, 18 U.S.C. §1905, and the Freedom of Information Act (FOIA), 5 U.S.C. §552, and DOE's implementing regulations at 10

CFR 1004.

To aid the manufacturer interview process, Naviga nt and LBNL have developed this “interview guide” with sets of questions regarding the aforementioned topics. Navigant and LBNL welcome pre-prepared responses to help f acilitate discussion. The guide is broken into three sections: A) the Engineering Analysis, B) the Market Ques tionnaire, and C) the Manufacturer Impact Questionnaire. Each section provides details de scribing the analysis and its contribution to the overall rulemaking process.Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 4 of 48 Navigant and LBNL have prepared the followi ng manufacturer’s inte rview guide with the understanding that certain information asked below is sensitive to the manufacturer. Therefore, Navigant and LBNL wish to en ter into a non-disclosure agreem ent with your company in order to ensure any data you provide in response to this guide is held in the strictest confidence. Navigant and LBNL will combine your response with responses from several other companies to develop a representative indus try ‘average’ response.

If you have any questions, please contact:

Callie Reis Daniel Weintraub

781.270.8326 781.270.8397 callie.reis@navigant.com daniel.weintraub@navigant.comCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 5 of 48 A. ENGINEERING ANALYSIS

The purpose of the engineering analysis is to estimate the relationship between manufacturer selling price (MSP) of a pump and its correspond ing efficiency rating. In determining the costefficiency relationship, DOE estimates the increase in MSP associated with design changes that increase the efficiency of pump s relative to the baseline models . In most cases, baseline models are defined as the most typical low efficiency equipment currently sold on the market. This relationship serves as the basis for the subse quent cost-benefit calculations for individual consumers, manufacturers, and the nation.

The MSP is determined by multiplying manufact urer production costs (MPC) by a markup. MPC includes direct production costs such as materials, labor , maintenance, depreciation, and taxes. The markup represents the portion ofthe MSP used to cover profit margins and nonproduction costs.

MSP typically does not include non-recurring expenses, know n as Conversion Costs. These costs are generally broken into two sub-categor ies; Product Conversion Costs (PCC) and Capital Conversion Costs (CCC). PCC re presents the cost to redesi gn and test products, while CCC represents the cost of capital investments needed to manufacture products meeting new standards. Questions regarding these costs can be found in Secti on C, Manufacturer Impact. An opportunity to discuss costs associated with hydraulic redesign will be provided there.

DOE is currently considering clean-water, centr ifugal pumps less than 200 horsepower (HP) for coverage in this rulemaking, includi ng pumps of fractional horsepower. In this and other sections, please provide responses for the fu ll range of horsepower, 0-200 HP, as directed.Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 6 of 48 Below is a table of DOE’s considered equi pment categories and their corresponding EU and ANSI/HI terminology.

Table A.1 Commercial and Industrial Pump Equipment Categories

Equipment Category (DOE Terminology) Stage EU Terminology ANSI/HI

Nomenclature

End Suction Close Coupled (ESCC) Single ESCC OH7

End Suction Frame Mounted (ESFM) Single End Suction Own Bearing (ESOB) OH0, OH1

In-Line (IL) Single ESCCi (+ Flexibly and rigidly coupled pumps) OH3, OH4, OH5

Double Suction (DS) Single N/A BB1 (1 stage)

Axially Split Multi-Stage (AS) Multi N/A BB1 (2 stage),

BB3 Radially Split Multi-Stage Horizontal (RS-H) Multi MS-V (+ Flexibly Coupled) BB2 (2 stage),

BB4 Radially Split Multi-Stage Vertical (RS-V) Multi MS-V (+ Flexibly Coupled) VS8

Vertical Turbine (VT) Any N/A VS1

Submersible (VT-S) Any MSS VS0

Axial/Propeller and Mixed (A-M) Any N/A OH00

Wet-running Circulators (CIRC) * Single Glandless Circulators

-

* This category typically ranges from 0-3HP

A.Q.1. Please comment on whether the “Equipment Ca tegory” description in column one of Table A.1 matches your definition under the ANSI/HI nomenclature listed in column

four.Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 7 of 48 A.Q.2. To help DOE understand the market and the relative importance of various equipment categories to specific manufacturers, please disaggregate your annual unit shipments for each product category as shown in the table below. Please indicate whether you purchase these products from other manufacturer s and what fraction of your product is manufactured in the United States. Please prov ide your answers in the table below (Table A.2)

Table A.2 Market Share and Domestic Manufacturing

Equipment

Category ANSI/HI

Nomenclature Yearly Shipments

(2012) Market Share (% of total pump market) % Made % Bought % Made in

U.S.A

ESCC OH7

ESFM OH0, OH1

IL OH3, OH4,

OH5

DS BB1 (1 stage)

AS BB1 (2 stage),

BB3

RS-H BB2 (2 stage), BB4,

RS-V VS8

VT VS1

VT-S VS0

A-M OH00Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 8 of 48 A.Q.3. DOE is also considering coverage of we t-running circulators which range from
approximately 0-3 HP. For the wet-running ci rculators you produce, please disaggregate
your annual unit shipments for each product cate gory as shown in the table below. Please
indicate whether you purchase these products fr om other manufacturers and what fraction
of your product is manufactured in the United States.

Table A.3 Market Share and Domestic Manufacturing

Equipment

Category ANSI/HI

Nomenclature Yearly Shipments

(2012) Market Share (% of total pump market) % Made % Bought % Made in

U.S.A

CIRC

A.Q.4. If your company produces non-wet-running (EU: gl anded) circulators, please circle the
equipment categories that would include t hose circulators as cl assified by the DOE
terminology above.

ESCC ESFM IL DS AS RS VT VT-S A-M

Please provide the HP range of the non-we t-running circulator s you manufacture:Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 9 of 48 A.Q.5. How many pump series do you offer in each equipment category and how many models are there typically in each pump series?

Table A.4 Pump Series by Equipment Category

Equipment

Category # of Series # Models per Series

ESCC

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 10 of 48 A.1 Incremental Efficiency Leve ls and the EU Method

To establish a set of preliminary efficiency crit eria, DOE is considering the European Directive 2009/125/EC as a starting point for developing cost -efficiency relationships. The EU regulation sets minimum efficiency requirements for certain types of pumps with the goal of preventing a set percentage of inefficient pumps from being so ld in the marketplace. This minimum efficiency requirement is dependent on a pump’s specific sp eed and flow rate and can be calculated by using the following equation:

where C is determined by the pump type, design speed , and the desired percentage of pumps to be “cut-off” (removed) from the marketplace. Q is flow in m 3 /h and n s is specific speed in metric

units.

The percentage of pumps cut-off by a certain C value is represented by the Minimum Efficiency Index (MEI). For example, an MEI of 0.4 indicate s that 40% of pumps sold in the EU (based on efficiencies available in the 2008 market) w ould be removed by the minimum efficiency requirement.

The EU regulation increases the MEI on a biennial basis. The first requirement, MEI 0.1, went into effect in January 2013. This requirement will increase to MEI 0.4 in January 2015.

The EU regulation also evaluate s pumps not only at best effici ency point (BEP) but also 75% BEP flow and 110% BEP flow, allowing lower efficien cy levels for these flows. If a pump fails to meet efficiency criteria at any one fl ow, it is not compliant with the regulation.Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 11 of 48 A.Q.6. DOE would like to quantify differences betw een US and EU product offerings. Please use Table A.5 to provide the number of SKUs sold in one region, but not the other. In addition, please provide the revenue s associated with these SKUs.

Table A.5 Unique US and EU Product Offerings

Sold in EU but not sold

in US Sold in both the EU

and US Sold in US but not sold

in EU

SKUs (#)

SKUs as a Percent of Total US & EU SKUs (%)

Revenues for Listed SKUs ($)

What are the major differences between the EU and US market that cause you to develop

different SKUs?

A.Q.7. By 2016, in absence of a US standard, how do you anticipate the ra nge of efficiency of pumps sold in the US may have changed due to the EU regulation?

A.Q.8. In absence of a US standard , do you anticipate discontinuing th e sale of certain products or product lines in the US because they do not meet EU efficiency requirements?Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 12 of 48 A.Q.9. What percentage of your current US products would be cut-off for the following MEIs, and of those, what percentage would be re designed? What percentage would be dropped all together? How many individual m odels do these numbers represent?

Table A.6 Percentage of pumps removed by EU standards
% of Pumps removed by EU Effi ciency Equation (10, 40, 70) Equipment

Category MEI = 0.1 MEI = 0.4 MEI = 0.7

ESCC e.g., 13% cut-off (3 pump models) 5% redesigned

ESFM

IL

DS

AS

RS - H

RS - V

VT

VT-S

A-M

CIRC

A.Q.10. To meet a US standard, will you be able to ut ilize design or other modifications made to comply with the EU standard?Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 13 of 48 A.2 Design Options

Historically, DOE considers differe nt design options that increase pr oduct efficiency in order to analyze the relationship between manufacturer sell ing price and the efficiency of the product. DOE is aware that other approaches may need to be considered for pumps, but still seeks information on how certain design options impact efficiency.

A.Q.11. Please comment on the estimated gain in efficiency offered by each of the design options listed below. For what type or si ze of pumps are these gains realistic? It is understood that gains may or may not be additive.

 Smoothing Surface Finish: 1-3% increase

 Reducing running clearances: up to 3% increase

 Reducing mechanical friction in seals: < 1%

 Reducing other volumetric losses: 1-3%

 Hydraulic redesign: 10-12% (Includes impeller design/geometry, and volute design/geometry)

 Please list any other design options that you may implement, along with associated estimated gains in efficiency.Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 14 of 48 A.Q.12. Do any of these efficiency gains vary with capacity, specific speed, or other parameter? If so, how? (i.e. lower at low Ns , higher in small pumps, etc.)

A.Q.13. Please provide an estimated range of cost, per unit, for implementing the above design options. Please provide your ranges in terms of example pumps. Please specify model numbers, or flows, heads, and speed. W ill these costs vary by equipment category?

 Smoothing surface finish:

 Reducing running clearances:

 Reducing mechanical fr iction in seals:

 Reducing other volumetric losses:

 Hydraulic redesign:

 Other:Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 15 of 48 A.Q.14. Do any of these design options have issues related to:

1. Degradation (e.g., surfaces become rough or clearances widen after a few months use)

2. Additional maintenance burden

3. Increased rate of failure/decrea sed time between repair (MTBR)

4. Installation constraints (i.e. only work if the pump user follows specific practices)

5. Adverse impacts on consumer utility

6. Increase installation cost to the user? Why and by how much?

Please indicate your answer in Ta ble A.7 and describe the estima ted magnitude of the issue.

Table A.7 Barriers to design option implementation

Design Option Degradation Maintenance MTBR Install.

Constraints Utility Installation

Cost

Smoothing

Surface Finish

Reducing running

clearances

Reducing

mechanical

friction in seals

Reducing other

volumetric losses

Hydraulic redesign

Other (Please Specify)Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 16 of 48 A.Q.15. Which of the above options would you be likely to implement? What determines your

choice?

A.Q.16. In the absence of efficiency regulations, wh at were your key design priorities, and how did they generally rank. For example, durabi lity/reliability, costs, efficiency, etc.?Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 17 of 48 A.Q.17. Assuming DOE were to use the EU efficien cy equation and MEI values for the US market, what ranges of incremental change s in manufacturing production costs (MPC)

would be associated with each increase in MEI? This assumes you decide to redesign non-compliant pumps, rather than discontinue them.

Please provide your ranges in terms of example pumps Please specify model numbers, or flows, heads, and speed.

Table A.8 Incremental costs associated w ith improvements in efficiency
% of Pumps removed by EU Effi ciency Equation (10, 40, 70) Equipment

Category MEI = 0.1 MEI = 0.4 MEI = 0.7

ESCC e.g., Smoothing operation on volute, $2-$6 / (100-1000gpm, 50- 150ft, 1800RPM, models 123-128)

ESFM

IL

DS

AS

RS-H

RS - V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 18 of 48 A.Q.18. What design features currently differentiate efficient pumps from those that may not

meet new standards? Do these feat ures differ by equipment category?

A.3 Pump Motor and Control System

A.Q.19. Is the same pump, in terms of hydraulic desi gn, sold with the intent of being used at multiple design speeds? Do you indicate the design speed/speed range of the pump on the nameplate when sold without a motor? With a motor?

A.Q.20. Are there hydraulic (or other) design cha nges that could be made to reduce the net positive suction head required (NPSHr) for hi gher speed pumps so that a higher design speed and specific speed pump could be used for typically low specific speed applications?

A.Q.21. In your opinion how important is it that pumps are able to be sold without a motor specified or distributed by the manufacturer? What is the utility to the consumer of a bare pump? What about the utility of a pum p and motor without VS D or other controls?Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 19 of 48 A.4 Materials, Manufacturing, Sourcing, and Assembly

A.Q.22. From what materials are the following com ponents typically manuf actured? Please use Table A.9 to specify by equipment category. Be as specific as possible with metal alloys.

Table A.9 Component Materials
Equipment

Category Impeller Volute Wear Ri ngs Shaft Shaft Sleeve

ESCC Example:

316 Stainless Steel

C903 Tin Bronze

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 20 of 48 A.Q.23. For the following product categories, please de scribe the extent to which you purchase components from outside vendor s or manufacture in-house.

Specifically, please try to an swer the following questions:

 Are these parts cast in-house?

 Are these parts finish machined in-house?
Or;

 Do these parts arrive completely finished and ready for assembly?

Table A.10 Make vs. Buy
Equipment

Category Impeller Volute Wear Ri ngs Shaft Shaft Sleeve

ESCC Example: Purchased casting

Machined inhouse Example:

Purchased complete from

vendor Example:

Machined inhouse from barstock

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 21 of 48 A.Q.24. What factors drive your Make vs. Buy decisi on making process? What type of premium do you typically pay to have a component made out of house, versus in-house? Have you switched any of these components recently?

A.Q.25. For components cast in-house:

 Please provide the bulk costs for the raw materials listed in Table A.10. Cost should represent the delivered cost of ingot and like raw materials, inclusive of all shipping and processing fees.

 What is the average reject-r ate for your casting process?

 Is the same cast used for multiple pump models, such as those of different

materials?Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 22 of 48 A.Q.26. For components that are finish-machined in-house: What are the key manufacturing processe s that each component goes through after casting? What types of machines are used in these processes? Please note if any specific processes are outsourced.

Impeller:

Volute:

Wear Rings:

Shaft Sleeves:

Shaft:

A.Q.27. What are your key manufactur ing investments? e.g. Casti ng, Machining, Grinding, etc. How much would it cost to set up a new line for each, from scratch?Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 23 of 48 A.Q.28. For components that are cast and/or finish ed by outside vendors, please describe the price range for each component or manufacturing process, as well as the material. Please provide your answer in terms of exam ple pumps. Please specify model number, or flow, head, and speed. Cost should repr esent the delivered co st, inclusive of all shipping and processing fees.

Table A.11 Purchased Part and Outside Processing Costs
Equipment

Category Impeller Volute Wear Ri ngs Shaft Shaft Sleeve

ESCC Example: Unit: 100gpm, 50ft, model 123 Casting: $25 - $100

Bronze C903

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 24 of 48 A.Q.29. For components made by outside vendors, do you provide full designs and specifications to vendors, or do you purchase their designs?

A.Q.30. Can you list your key raw material, casting, and machining suppliers?

Manufacturing Costs versus Pump Features

A.Q.31. Are there certain costs that do not sc ale directly with pump size/capacity?

A.Q.32. How do manufacturing costs relate to, or vary with, specific speed?

Do mixed flow pump impellers cost mo re to manufacture than radial flow?Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 25 of 48 A.Q.33. How do costs vary for pumps across a series?

A.Q.34. Are there specific “break points,” or disc ontinuities, where a pump costs more to manufacture? Possible examples:

 At a certain size the pump becomes too la rge to handle without overhead cranes

 At a certain size the pump is too big to fit into standard sized machine toolsCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 26 of 48 Purchased Parts

A.Q.35. Please provide the range of typical motor costs for those packaged with pumps, before markups, in the table below. Please provide your answers in terms of particular pumps, and specify the model numbers, head, and fl ow range. Motor type could be 3-phase induction, brushless DC electric motor (ECM), etc.

Table A.12 Pump motor costs
Equipment

Category Series Designation & Flow Range (gpm) Motor Type HP Motor Cost

ESCC e.g., Unit: 100gpm, 50ft,

model 123 25 – 100 gpm e.g., 0 – 7 HP $ - $$

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRC

A.Q.36. Do you sell any products with a variab le (or adjustable) speed drive?Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 27 of 48 A.Q.37. Which equipment categories are typically pair ed with a variable (or adjustable) speed

drive? Please circle.

ESCC ESFM IL DS AS RS VT VT-S A-M

A.Q.38. Please provide a range of typical variable speed (or adjustable speed) drive costs for those packaged with pumps before markups in the table below. Please provide your answers in terms of a particular pump or pumps, and specify the model numbers, head, and flow range.

Table A.13 Pump adjustable speed drive costs
Equipment

Category Series Designation & Flow Range (gpm) Adjustable Speed Drive Type Cost

ESCC e.g., Unit: Model 123 25 – 100 gpm $ - $$

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 28 of 48 A.Q.39. Please provide the typical costs of seals used in your pumps. Please describe seal type and supplier(s). Please provide your answers in terms of a particular pump or pumps, and specify the model numbers, head, and flow range.

Table A.14 Pump seal costs
Equipment

Category Seal Type Supplier Cost

ESCC $ - $$

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 29 of 48 A.5 Markups, and Labor Rates

Markups

DOE also assesses the impact of energy conserva tion standards on industry profitability. DOE would like to understand the current markup structure of the industry and how energy conservation standards would impact your compa ny’s markup structure and profitability. Please consider the following definitions when preparing your response.

The Manufacturer Production Cost (MPC) is the sum of all materials, labor, overhead, and depreciation directly associated with manufacturing a product.

The Manufacturer Selling Price (MSP) is the price manufact urers charge their first customers. This does not include additional costs incurred along the distribution

channels and as such does not reflect the manufacturer s uggested retail price (MSRP).

The Manufacturer Markup is the ratio of MSP to MPC. It covers non-production costs such as SG&A and R&D, as well as profit, but does not directly reflect the profit margin.

A.Q.40. How are markups and margins determined in this industry? How would standards potentially impact the pricing or margin structure?

A.Q.41. Based on publicly available data, DOE estim ates an industry average markup of 1.57 across all equipment types. Please provide an average baseline markup (prior to any regulation) for each product category th at is representative of your industry.

Table A.15 Baseline Manufacturer Markups by Equipment Category

Equipment Category Av erage Baseline Markup

ESCC

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 30 of 48 A.Q.42. One of the possible scenarios DOE uses to m odel impacts on industry profitability is the impact of commoditization of premium produc ts. Because market disruptions caused by standards can alter the pricing of premium products, DOE is interested in understanding if efficiency is a feature that earns a premium. Within each product category, does markup vary by efficiency level? If yes, pl ease provide information about the markup at higher efficiencies.

A.Q.43. What other factors or product attributes, su ch as size or capacity, affect the markup of pumps within an equipment category?

A.Q.44. Would you expect changes in your estimated profitability followi ng the introduction of an energy conservation standard ? If so, please explain why.Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 31 of 48 Labor Rates

A.Q.45. DOE used information gathered from its analysis of common industry practices to formulate factory parameters for manufactur ers. Please comment on the following factory parameter assumptions.

Table A.16 Factory Parameters

Parameter Estimate Manufacturer Feedback

Total Annual Production Volume (units/year) Work Days Per Year (days) Assembly Shifts Per Day (shifts) Fabrication Shifts Per Day (shifts) Fabrication Labor Wages ($/hr) Assembly Labor Wages ($/hr) Fringe Benefits Ratio Burdened Assembly Labor Wage ($/hr) Supervisor Span (workers/supervisor) Supervisor Wage Premium (over fabrication and assembly wage)

Indirect to Direct Labor Ratio Length of Shift (hrs) Average Worker Downtime per

shift Average Equipment Installation Cost (% of purchase price) Average Scrap Recovery Value (using base material value) Building Life (in years)Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 32 of 48 B. MARKET QUESTIONNAIRE

B.Q.1. Do you have information on the most common duty points for which customers select pumps, and how closely BEP of the pump model selected by the customer matches that duty point?

If not, can you connect us with an affiliated distributor who may be able to answer this and similar questions?

B.1 Shipment Estimates

B.Q.2. Earlier you provided your 2012 shipments by equipment category. Please provide an estimated disaggregation of those shipment s by horsepower range. Please also note if you serve particular category nich es that would make your distri butions significantly different from the rest of the industry.

Table B.1 Yearly Shipments by Horsepower

Equipment

Category ANSI/HI

Nomenclature 0-1 HP 1-3 HP 3-10

HP 10-25

HP 25-50

HP 50-100

HP 100-200

HP 200-500

HP >500

HP

ESCC OH7

ESFM OH0, OH1

IL OH3, OH4,

OH5

DS BB1 (1 stage)

AS BB1 (2 stage),

BB3

RS BB2 (2 stage), BB4, VS8

VT VS1

VT-S VS0

A-M OH00

CIRC -Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 33 of 48 B.Q.3. Can model availability be used as a proxy of sales, as in the EU?

If not, what types of pumps tend to sell more high efficiency units? For example, is high efficiency more desirable in a larger pump than a smaller pump?

B.Q.4. For each equipment category, please provide shipments by customer-provided duty point. (Or BEP if customer duty point is not available.)

Equipment Category:________ Flow (gpm)

25 50 100 250 500 1,000 2,000 5,000 10,000 50,000 >50,000Head (Feet) 25

50

100

250

459

750

1,000

2,000

>2,000Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 34 of 48 B.2 Shipment Projections

B.Q.5. How would you expect shipments to change for the industry as a whole, as a function of standards, and why?

B.Q.6. In order to determine the price-elasticity of pump demand versus price, feedback is requested on your estimates for changes in demand as pump prices increase. We encourage the use of historical data to inform these estimates. Shipment trends during the recent run up, and retreat from, high comm odity prices may serve as a relevant starting point.

Looking at price/cost effects only, how woul d you expect shipments to change for a 5%, 10%, 25%, or 50% manufacturer price/cost in crease? Please provi de your data as a percent decrease from the baselines provided in Table A.2.

Table B.2 Change in shipments expected for manufacturer price/cost increases

Change in Shipments for % MPC increase

Equipment

Category 5% 10% 25% 50%

ESCC

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 35 of 48 B.Q.7. Looking at price/cost effects only, how woul d you expect shipments to change for a 0.1, 0.4, and 0.7 MEI? Please provide your data as a percent decrease from the baselines provided in Table A.2.

Table B.3 Change in shipment s expected at MEI levels

Equipment

Category MEI = 0.1 MEI = 0.4 MEI = 0.7

ESCC

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 36 of 48 B.Q.8. Which equipment categories are currently avai lable to ship from your factory packaged with a motor? For these equi pment categories, what percent are shipped with motor and

without motors?

Table B.4 Packaged (motor only) pump shipments

Equipment

Category Available to ship packaged w/ motor? % packaged w/ motor? % w/o motor?

ESCC

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 37 of 48 B.Q.9. Which equipment categories are currently avai lable to ship from your factory packaged with a VSD or other adjustable speed driv e? For these equipment categories, what percent are shipped with a VSD or other adjustable speed drive?

Table B.5 Packaged (motor + VSD) pump shipments

Equipment

Category Available to ship packaged w/ VSD? % packaged w/ VSD? (by type of drive as appropriate) % w/o VSD?

ESCC

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRC

B.Q.10. If your company produces wet-running circulat ors what percentage of these products are always shipped with a motor? with a VSD? What percentage of wet-running circulators are sold with a high-efficiency motor and integrated controls, such as an ECM?

B.Q.11. Please list all pump motor suppliers that you are aware of in the industry, indicating which ones you currently use.Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 38 of 48 B.Q.12. Please list all VSD or other ad justable speed drive suppliers that you are aware of in the industry, indicating which ones you currently use.

B.3 Product Mix and Profitability

B.Q.13. How would your company’s product mix and mark et strategy change with changes in the efficiency standard?

B.4 Market Shares and Industry Consolidation

B.Q.14. How would new standards affect your ability to compete?

B.Q.15. Could new standards disproportionately adva nce or harm the competitive positions of

some firms?

B.5 Distribution Channels

B.Q.16. Pump sales are often made to consumers by a distributor or sales representative. Please describe the relationship with your distributors.Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 39 of 48 B.Q.17. What are your distribution channels and wh at percentage of your products go through

each channel?

B.Q.18. How common is it for distributors or sales representative and their engineering teams to assemble or design a pump + motor + VSD package independent of the manufacturer?

B.Q.19. Are pump/motor or pump/motor/VSD packages assembled and sold by authorized distributors considered as packaged sales in your shipment estimates?

B.Q.20. Does your company make recommendations to distributors on how to package pumps?

B.Q.21. If a pump is sold as a package with a moto r and VSD is the package setup and installed on site by the distri butor or by a representative fr om the manufacturer? Who is responsible for implementing the co rrect control/feedback scheme?Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 40 of 48 C. MANUFACTURER IMPACTS

During the Preliminary Analysis phase of the rulemaking, DOE attempts to characterize pump manufacturer impacts on a high level. This includ es any relevant issues manufacturers may face resulting from increased efficiency standards. During the next phase of the rulemaking, the Notice of Proposed Rulemaking (NOPR) phase, DOE will perform an in-depth analysis of the impacts on manufacturers.

C.1 Conversion Costs

Energy conservation standards may cause your co mpany to incur capital and product conversion costs. These are the costs needed to redesign existing products and make changes or upgrades to production lines, in order to comply with th e energy conservation standard. Depending on the magnitude, the conversion costs may have a subs tantial impact on the ou tputs used by DOE to evaluate the industry impacts and the economic viability of a particul ar standard level.

In this analysis, DOE considers two types of conversion costs.

Capital conversion costs (CCCs) are one-time investments in plant, property, and equipment (PPE) necessitated by an ener gy conservation standard. These may be incremental changes to existing PPE or th e replacement of existing PPE. Included are expenditures on buildings, equipment, and tooling.

Product conversion costs (PCCs) include the related research, product development, testing, marketing, and othe r non-capital costs necessary to bring products into compliance with a new energy conservation standard.

C.Q.1. Are hydraulic redesigns conducted at the individual model level, or at the series level?

If some pumps in a series meet the new sta ndard, but some don’t, would the whole series be redesigned?

Would some re-designed volutes /housings be used with different impeller types for nonwater applications?Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 41 of 48 C.Q.2. What product conversion costs would you exp ect to incur to manufacture products compliant with efficiency standards? Please describe what these ac tivities would be and provide your best estimate on their resp ective magnitudes. Magnitudes represent aggregate cost to redesign all pumps effected in a given product category.

Table C.1 Product conversion costs, n eeded to comply with a certain MEI
Equipment

Category MEI = 0.1 MEI = 0.4 MEI = 0.7

ESCC

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 42 of 48 C.Q.3. Capital conversion costs ( CCCs) are one-time investment s in plant, property, and equipment (PPE) necessitated by an ener gy conservation standard. These may be incremental changes to existing PPE or th e replacement of existing PPE. Included are expenditures on buildings, equipment, and tooling. Please describe what these investments would be and provi de your best estimate on th eir respective magnitudes. Magnitudes represent aggregate cost to redesign all pumps effected in a given product

category.

Table C.2 Capital conversion costs, n eeded to comply with a certain MEI

Equipment

Category MEI = 0.1 MEI = 0.4 MEI = 0.7

ESCC

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 43 of 48 C.Q.4. How would the imposition of new energy c onservation standards affect capacity utilization or production levels at your domestic production facilities? Would throughput

be affected?

C.Q.5. Would a new standard result in stranded capital assets? Stranded assets include machinery that would become obsolete if an energy conservation standard were adopted.

Please report the value of any un-depreciated assets that would be stranded at the following standard levels:

Table C.3 Stranded capital assets resulting from an energy conservation standard

Equipment

Category MEI = 0.1 MEI = 0.4 MEI = 0.7

ESCC

ESFM

IL

DS

AS

RS-H

RS-V

VT

VT-S

A-M

CIRCCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 44 of 48 C.Q.6. At what MEI (0.1, 0.4, 0.7) do you expect to:

 Close current manufacturing plan ts rather than upgrade them to make higher-efficiency products? (e.g. moving production to new facilit ies, out-sourcing, or ceasing operations altogether).

 Require the development of a “clean sheet” produ ct platform to meet higher efficiency

levels?

C.Q.7. For products produced abroad, do you own the factories in which you manufacture these products, or do you OEM from other product manufacturers?

C.Q.8. How might a new standard impact product innovation?Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 45 of 48 C.Q.9. Financial Parameters. Please compare your company’s commercial & industrial pump equipment financial parameters to the GRIM parameters tabulated below.

DOE will conduct an industry-wide cash-flow analysis using the GRIM, identify and analyze subgroups of manufacturers whose businesses vary significantly from the industry as a whole, perform a competi tive impacts assessment, and review the cumulative regulatory burden for the industry.

C.2 General Manufacturer Impact

C.Q.10. Key Issues : What are the key issues for your company regarding any new energy conservation standards for pumps?

C.Q.11. Your Company’s Niches : What are your product lines, nich es and relative strengths in the pumps market? GRIM Input Definition Industry Estimated

Value Your Actual

Income Tax

Rate Corporate effective income tax paid (percentage of earnings before taxes, EBT)

Discount Rate Weighted average cost of capital (inflation

‐ adjusted weighted average of corporate cost

of debt and return on equity) Working Capital Current assets less current liabilities (percentage of revenues)

SG&A Selling, general, and administrative expenses (percentage of revenues)

R&D Research and development expenses (percentage of revenues)
Depreciation Amortization of fixed assets (percentage of
revenues) Capital Expenditures Outlay of cash to acquire or improve capital

assets (percentage of revenues, not including
acquisition or sale of business units)

Cost of Goods

Sold Includes material, labor, overhead, and depreciation (percentage of revenues)Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 46 of 48 C.Q.12. Company Demographics : Where are your production facil ities located, and what is the product mix manufactured at each locatio n? Does the bulk of your company’s production occur domestically? What are your employment levels at these facilities? Are there any manufacturing or empl oyment issues that DOE should be aware of in terms of producing more energy efficient pumps at your facil ity/facilities?

Table C.4 Manufacturing Facilities

Facility Location Equipment Categories

Manufactured Employees Annual Shipments

Example Brunswick, ME ESCC, ESFM 125 8,500

1

2

3

4

5

C.Q.13. Direct Employment Impacts: Would your domestic employment levels be expected to change significantly under amended ener gy conservation standard s? If so, please identify particular standard levels wh ich may trigger changes in employment.

Other Impacts: Generally how would new efficiency standards on pumps impact your customer mix, distribution channels and co rresponding profit margins? Please explain.

C.Q.14. In your industry, a small business is de fined as a company with less than 500 employees. Below is a list of small business identified by DOE. Please list any

additional small businesses of which you are aware.

Afton Pumps Gusher Pump All-Flo Pump Company,

Inc. Vaughn Pump

Ardox MWI Pumps Blacoh Fluid Controls,

Inc. Discflow

Carver Price Pump Gilbert Gilkes & Gordon

Ltd Hayward Gordon

Cascade Simflow Hayward Ty ler, Inc. Carter Pump

ChemPump Smith & Loveless Inc. PumpWorks 610 Vanton

Essco Pumps Vertiflo Pump Reddy-Buffaloes Pump,

Inc.
FPI Wilfley Wanner Engineering, IncCommercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 47 of 48 C.Q.15. Small Businesses: To what extent will new standards require small businesses to acquire new equipment or cause manufacturi ng process changes that could destabilize

their business?

C.Q.16. Depreciation: What are the depreciation periods for the three types of capital expenditures (building, equipment, and tooling)?

C.Q.17. Exports and Competition: Would new standards change your projected export sales? Would new standards have an impact on th e portion of the domestic market served by foreign competition?

C.Q.18. Industry Consolidation: In the absence of new standard s, do you expect any industry

consolidation?

C.Q.19. IP Issues: Are there concerns over intellectual property, pate nt licensing, or other

related issues? Is th ere any intellectual property that would disproportionally advantage one company over another with respect to energy conservation standards?Commercial and Industrial Pumps Preliminary Analysis Interview Guide

Page 48 of 48 C.Q.20. Impacts on Consumers: Could new standards result in disproportionate economic or performance penalties for particular consumer/user subgroups? Beyond price and energy efficiency, could new standards result in products that will be more or less desirable to consumers due to changes in produc t functionality, utility or other features?

C.Q.21. Regulatory Burden: Will the current and proposed EU regulations on pumps or related products (Lot 11, 28, and 29) create regulatory bur den on the industry in the US? Are there any other regula tions that contribute to cumulative regulatory burden, thus making it more difficult for pump manufact urers to respond to energy conservation standards, if the US were to adopt them? What is the tota l expected impact of those other regulations? Are there regulatio ns on anything else you manufacture?