From: Hyland, Mike [mailto:MHyland@publicpower.org]

Sent: Wednesday, November 30, 2011 1:10 AM

To: Eckman, Tom; Hirsch, Bruce R; 'Corkran, Jerry L'; Steve Nadel; Robert Berman; John Caskey

Cc: Eric.Petersen@aksteel.com; jerry.schoen@aksteel.com; Maxine (EMAB) Savitz;

Raymond.Polinski@ATImetals.com; maheshsampat@bellsouth.net; tpetrosino@carolina.rr.com;

dbrender@cda.copper.org; James.Lass@cleco.com; chris.brown@cogentpowerinc.com;

frank.guilbault@cogentpowerinc.com; ted.johnstone@cogentpowerinc.com; Meyers, Aaron; Trujillo,

Antonio; Moore, Jack C; tballo@earthjustice.org; carlosgsiqueiros@eaton.com;

eduardorobles@eaton.com; Emily (CO NTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org; DYoung@energy

‐ solution.com; rick.anderson@faypwc.com;

bsmith@federalpacific.com; rgreeson@federalpacific.com; carlos.gaytan@ge.com;

artrosenfeld@gmail.com; greg.coulter405@gmail.com; ned.efbrush@gmail.com; Richard Parker;

Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen; Phil Hopkinson; cabolduc@lbl.gov;

gjrosenquist@lbl.gov; kcoughlin@lbl.gov; ScottB@LVMetals.com; dave.millure@metglas.com;

kwinder@mleainc.com; jrossetti@mlgw.org; Brian Coffey; Caitlin Johnson; Matthew Nardotti; Michael

Rivest; Zhimei Luo; Jim Creevy; mwaltner@nrdc.org; rroy@nrdc.org; robert.saint@nreca.coop;

vijay.tendulkar@onyxpower.com; gbf1@pge.com; chuck .simmons@pgnmail.com; Hofmann, Alex;

Kumar, Puesh; adelaski@standardsASAP.org; jmauer@standardsasap.org; wes.patterson@us.abb.com;

chad.kennedy@us.schneider

‐ electric.com; thomas.patzner@us.schneider

‐ electric.com;

charlied@uus.org; Trujillo, Antonio; Moore, Jack C

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Thanks Tom,

For those on the list

– here’s the link to read up: http://ees.ead.lbl.gov

But

– Tom’s understanding is not universally accepted or without challenge. Words like”.. must provide

the Nation with significant energy savings and be economically justified” amongst other pages and

paragraphs are not easily agreed upon. Hence

– why I mentioned UMRA, SBA, and other agencies and

laws that must be involved

– if not no w –then soon. A complete analysis on the “economically feasible

for (and by) consumers” is an arguable point.

Bruce

– you make an excellent point.

From: Eckman, Tom [ mailto:teckman@nwcouncil.org ]

Sent: Wednesday, November 30, 2011 12:24 AM

To: Hirsch, Bruce R; 'Corkran, Jerry L'; Steve Nadel; Robert Berman; John Caskey

Cc: Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB) Savitz; Hyland, Mike;

Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ; tpetrosino@carolina.rr.com ;

dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogentpowerinc.com ;

frank.guilbault@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.com ; Meyers, Aaron; Trujillo,

Antonio; Moore, Jack C; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ;

eduardorobles@eaton.com ; Emily (CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energy

‐ solution.com ; rick.anderson@faypwc.com ;

bsmith@federalpacific.com ; rgreeson@federalpacific.com ; carlos.gaytan@ge.com ;

artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ; Richard Parker;

Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel Cohen; Phil Hopkinson; cabolduc@lbl.gov ;

gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millure@metglas.com ;

kwinder@mleainc.com ; jrossetti@mlgw.org ; brian.coffey@navigant.com ;caitlin.johnson@navigant.com ; matthew.nardotti@navigant.com ; mrivest@navigant.com ;

zhimei.luo@navigant.com ; Jim Creevy; mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ;

Eckman, Tom; vijay.tendulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@pgnmail.com ;

Hofmann, Alex; Kumar, Puesh; adelaski@standardsASAP.org ; jmauer@standardsasap.org ;

wes.patterson@us.abb.com ; chad.kennedy@us.schneider

‐ electric.com ; thomas.patzner@us.schneider

‐

electric.com ; charlied@uus.org ; Trujillo, Antonio; Moore, Jack C

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Bruce,

DOE is charged by the federal standards law to achieve the maximum level of energy savings that are

economically feasible for consumers. The parties to this negotiation (as in all rulemakings) have

differing interpretations of what is “eco nomically feasible.” Your position is that we should interpret

this to mean the “most cost

‐ effective savings” when compared to other energy efficiency options.

Others, myself included, prefer that it be interpreted to mean “all cost

‐ effective savings” on the

grounds that failing to achieve all savings that cost less than the co st of new generation means that

electricity consumers will end up paying more for their service than otherwise should be the case. We

can debate what levels of transformer efficiency meet either interpretation, but it is my view that the

cost of investments in new capacity to supply electricity de mand is the appropriate metric against which

power savings from transformers should be measured, not the cost of other efficiency programs.

Tom

From: Hirsch, Bruce R [ mailto:Bruce.R.Hirsch@bge.com ]

Sent: Tuesday, November 29, 2011 5:29 AM

To: 'Corkran, Jerry L'; Steve Nadel; Robert Berman; John Caskey

Cc: Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB) Savitz;

mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ;

tpetrosino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ;

chris.brown@cogentpowerinc.com ; frank.guilbault@cogentpowerinc.com ;

ted.johnstone@cogentpowerinc.com ; Meyers, Aaron; Trujillo, Antonio; Moore, Jack C;

tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily (CONTR)

Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org ;

DYoung@energy

‐ solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ;

rgreeson@federalpacific.com ; carlos.gaytan@ge.com ; artrosenfeld@gmail.com ;

greg.coulter405@gmail.com ; ned.efbrush@gmail.com ; Richard Parker; Paul.Ryan@hitmet.com ;

jhodge@howard.com ; Daniel Cohen; Phil Hopkinson; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ;

kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millure@metglas.com ; kwinder@mleainc.com ;

jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnson@navigant.com ;

matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ; Jim Creevy;

mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ; Eckman, Tom;

vijay.tendulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@pgnmail.com ;

ahofmann@publicpower.org ; pkumar@publicpower.org ; adelaski@standardsASAP.org ;

jmauer@standardsasap.org ; wes.patterson@us.abb.com ; chad.kennedy@us.schneider

‐ electric.com ;

thomas.patzner@us.schneider

‐ electric.com ; charlied@uus.org ; Trujillo, Antonio; Moore, Jack C

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers TeleconferenceI believe the key question here is

–

Does DOE want utilities to employ energy efficient programs that are the most cost effective?

Or does DOE simply want to increase energy efficiency of transformers regardless of the cost?

A sampling of four utilities (BGE, DP&L,AEP and Centerpoint) show that utility energy efficiency

programs are costing be tween 14 and 21 cents per watt! These programs give a much bigger bang for

the dollars spent. It seems unfathomable to force utilities (and their customers) to spend their energy

efficiency dollars on an extremely high cost programs regardless of the pay back.

Lets step back and look at the big pictur e and truly value the effects of increasing the energy efficiency

of MV transformers. The probability is that any increase will actually reduce the net energy savings

being made by other more cost effective programs.

Bruce

From: Corkran, Jerry L [ mailto:Jerry.Corkran@CooperIndustries.com ]

Sent: Thursday, November 17, 2011 5:40 PM

To: Steve Nadel; Hirsch, Bruce R; Robert Berman; John Caskey

Cc: Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB) Savitz;

mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ;

tpetrosino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ;

chris.brown@cogentpowerinc.com ; frank.guilbault@cogentpowerinc.com ;

ted.johnstone@cogentpowerinc.com ; Meyers, Aaron; Trujillo, Antonio; Moore, Jack C;

tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily (CONTR)

Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org ;

DYoung@energy

‐ solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ;

rgreeson@federalpacific.com ; carlos.gaytan@ge.com ; artrosenfeld@gmail.com ;

greg.coulter405@gmail.com ; ned.efbrush@gmail.com ; Richard Parker; Paul.Ryan@hitmet.com ;

jhodge@howard.com ; Daniel Cohen; Phil Hopkinson; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ;

kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millure@metglas.com ; kwinder@mleainc.com ;

jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnson@navigant.com ;

matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ; Jim Creevy;

mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ; Teckman@nwcouncil.org ;

vijay.tendulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@pgnmail.com ;

ahofmann@publicpower.org ; pkumar@publicpower.org ; adelaski@standardsASAP.org ;

jmauer@standardsasap.org ; wes.patterson@us.abb.com ; chad.kennedy@us.schneider

‐ electric.com ;

thomas.patzner@us.schneider

‐ electric.com ; charlied@uus.org ; Trujillo, Antonio; Moore, Jack C

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Steve and the DOE WG– Utilities have used the dollars per watt evaluation A and B factors with good

success for the past 30 years. You tend to disregard the dollars per watt numbers as being unimportant

without any techni cal basis for disregarding this method of loss evaluation. This is a much more straight

forward method of determining if the purchase price is worth the dollars required than the DOE’s

undefined payback calculations. The DOE payback calculations lack any true road map of what steps

they used to come up wi th the various payback times. We have been attempting to find out what load

cycles they used to come up with the payback numbers published. I have requested details of thecalculations they used to come up the payback times, because I doubt that the payback times are

correct.

The DOE efficiency levels require the utilities to spend $20 per watt to get from the present DOE

efficiency levels to the first level and $30 per watt to get the level 2. Th e utility accountants can show

you that the watts saved are not worth the costs involved. Hopkinson’s report shows that the watts

saved are not worth anywhere near the costs involved.

Regards,

Jerry Corkran

From: Steve Nadel [ mailto:snadel@aceee.org ]

Sent: Tuesday, November 15, 2011 5:51 PM

To: Bruce R Hirsch; Robert Berman; John Caskey

Cc: Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB) Savitz;

mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ;

tpetrosino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ;

chris.brown@cogentpowerinc.com ; frank.guilbault@cogentpowerinc.com ;

ted.johnstone@cogentpowerinc.com ; Meyers, Aaron; Trujillo, Antonio; Moore, Jack C; Corkran, Jerry L;

tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily (CONTR)

Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org ;

DYoung@energy

‐ solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ;

rgreeson@federalpacific.com ; carlos.gaytan@ge.com ; artrosenfeld@gmail.com ;

greg.coulter405@gmail.com ; ned.efbrush@gmail.com ; Richard Parker; Paul.Ryan@hitmet.com ;

jhodge@howard.com ; Daniel Cohen; Phil Hopkinson; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ;

kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millure@metglas.com ; kwinder@mleainc.com ;

jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnson@navigant.com ;

matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ; Jim Creevy;

mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ; Teckman@nwcouncil.org ;

vijay.tendulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@pgnmail.com ;

ahofmann@publicpower.org ; pkumar@publicpower.org ; adelaski@standardsASAP.org ;

jmauer@standardsasap.org ; wes.patterson@us.abb.com ; chad.kennedy@us.schneider

‐ electric.com ;

thomas.patzner@us.schneider

‐ electric.com ; charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Bruce,

Our sense is that at EL1, M3 will dominate. We're looking to go farther up the curve.

The group agreed to have DOE calculate $/W because some people wanted that info because that's a

metric they are used to. $/kW is not a decision crite ria for us, nor do I expect it to be one for DOE.

Decisions need to be made on the full life

‐ cycle cost analysis and not simple metrics, be they $/kW or

even $/kWh.

Steve>>> "Hirsch, Bruce R" < Bruce.R.Hirsch@bge.com > 11/15/2011 12:30 PM >>>

Steve,

From a user standpoint, I agree that having a competitive market (between M3 and amorphous) is

desirable. From all the testimony I have heard, this comes at the EL1 level. Even Wes said that the

changeover is between the EL1 and EL2 levels so going to EL2 sways the usage to amorphous.

‐‐‐ And I

understan d ABB can meet EL3 and EL4 with M3 but it is not competitive.

I thought we had agreed to look at the cost from a $/watt basis. If not then we need to determine what

the comparison value should be. It ap pears you have suggested it should be $/kWh. I guess I am

interested in what others think of using $/kWh.

Bruce

From: Steve Nadel [ mailto:snadel@aceee.org ]

Sent: Tuesday, November 15, 2011 8:58 AM

To: Hirsch, Bruce R; Robert Berman; John Caskey

Cc: Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB) Savitz;

mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ;

tpetrosino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ;

chris.brown@cogentpowerinc.com ; frank.guilbault@cogentpowerinc.com ;

ted.johnstone@cogentpowerinc.com ; Aaron Meyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran;

tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily (CONTR)

Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org ;

DYoung@energy

‐ solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ;

rgreeson@federalpacific.com ; carlos.gaytan@ge.com ; artrosenfeld@gmail.com ;

greg.coulter405@gmail.com ; ned.efbrush@gmail.com ; Richard Parker; Paul.Ryan@hitmet.com ;

jhodge@howard.com ; Daniel Cohen; Phil Hopkinson; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ;

kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millure@metglas.com ; kwinder@mleainc.com ;

jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnson@navigant.com ;

matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ; Jim Creevy;

mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ; Teckman@nwcouncil.org ;

vijay.tendulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@pgnmail.com ;

ahofmann@publicpower.org ; pkumar@publicpower.org ; adelaski@standardsASAP.org ;

jmauer@standardsasap.org ; wes.patterson@us.abb.com ; chad.kennedy@us.schneider

‐ electric.com ;

thomas.patzner@us.schneider

‐ electric.com ; charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Two comments. First, some comments have focused on just the market for M3 and amorphous steel.

The two markets are linked

‐‐ we need competition between the two to keep the price of both in check.

We don't want a standard that strongly favors one over the other. The re vised DOE analysis on the mix

between M3 and amorphous at different standard levels should help us to address this. Second,

reducing transformer losses primarily affects baseload, not peak. So talking about cost per kW is

misleading. An efficient transformer is energized for more than 8000 hours pe r year. The average DSM

measure saves for about 3000 hours per year (although there is wide variation). If you want to

compare, you'd need to compare levelized cost per kWh saved over the measure lifetime.Steve

>>> "Hirsch, Bruce R" < Bruce.R.Hirsch@bge.com > 11/15/2011 7:37 AM >>>

John’s points are well taken. Keep in mind that the DOE numbers indicate a payback at EL4 only if

amorphous steel is used. Thus, to assume that because it can be built using M3 steel, all is well, is totally

untrue. In John’s auto analogy, at least the custom er has a choice of spending the extra money. In our

case, the customer will have no choice.

We all also need to understand that there is not an infinite supply of money to spend on efficiency

improvements. By forcing utilities to spend money on improving transformer efficiencies, we may very

well be taki ng money out of other efficiency programs which have a much higher payback than what is

being proposed here. In BGE’s case our package of efficiency programs cost us approximately $139 per

kilowatt saved. What is being proposed here is up to 100 times more costly. If BG E pulls back funds from

other efficiency programs to pay the high costs for transformer efficiencies, we would see a significant

decline in efficiency improvements overall.

Bruce

From: Caskey, John [ mailto:Joh_Caskey@nema.org ]

Sent: Monday, November 14, 2011 3:14 PM

To: Robert Berman; Hirsch, Bruce R

Cc: 'Steve Nadel'; Phil Hopkinson; Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine

(EMAB) Savitz; mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ;

maheshsampat@bellsouth.net ; tpetrosino@carolina.rr.com ; dbrender@cda.copper.org ;

James.Lass@cleco.com ; chris.brown@cogentpowerinc.com ; frank.guilbault@cogentpowerinc.com ;

ted.johnstone@cogentpowerinc.com ; Aaron Meyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran;

tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily (CONTR)

Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org ;

DYoung@energy

‐ solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ;

rgreeson@federalpacific.com ; carlos.gaytan@ge.com ; artrosenfeld@gmail.com ;

greg.coulter405@gmail.com ; ned.efbrush@gmail.com ; Richard Parker; Paul.Ryan@hitmet.com ;

jhodge@howard.com ; Daniel Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ;

ScottB@LVMetals.com ; dave.millure@metglas.com ; kwinder@mleainc.com ; jrossetti@mlgw.org ;

brian.coffey@navigant.com ; caitlin.johnson@navigant.com ; matthew.nardotti@navigant.com ;

mrivest@navigant.com ; zhimei.luo@navigant.com ; Creevy, Jim; mwaltner@nrdc.org ; rroy@nrdc.org ;

robert.saint@nreca.coop ; Teckman@nwcouncil.org ; vijay.tendulkar@onyxpower.com ; gbf1@pge.com ;

chuck.simmons@pgnmail.com ; ahofmann@publicpower.org ; pkumar@publicpower.org ;

adelaski@standardsASAP.org ; jmauer@standardsasap.org ; wes.patterson@us.abb.com ;

chad.kennedy@us.schneider

‐ electric.com ; thomas.patzner@us.schneider

‐ electric.com ;

charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Robert

You continue to reference the ABB data presented by Wes Patterson as indicating that since a

transformer was sold at the EL3 or EL4 efficiency level that this level is cost effective. Specifically, you

state “Market sales data, however, is quite real. In this case it u nambiguously says that the transformersat EL4 are an economically reasonable choice

‐‐ the market has, in fact, selected that choice on multiple

occasions”. This is simply NOT TRUE.

Just because a person buys as Jaguar for $100k that gets 25 mpg in place of a $40k Cadillac that gets 20

mpg; does NOT mean that the $60k del ta will ever be “economically reasonable” for the extra 5 mpg.

You seem to be assuming that all of the transformers purchased from ABB that meet the efficiency

levels were purchased for efficiency reasons. This is simply not fact. The fact is that one large

transformer manufacturer was able to produce distr ibution transformers at EL3 and EL4 using M3 steel.

To my knowledge, Wes did not state the price for these transformers. In addition, just because one

company can produce this product doesn’t mean that all transformer manufacturers can make this

product at this level using M3 steel.

My hope is th at we can all understand the facts and the analysis results better over the next few weeks

so that we can negotiate a solution that benefits the consumers, the ratepayers, the manufacturers, the

environment, etc. I plan to stay at the table till the end of the negotiation process.

Regards,

John

John F. C askey, CEM

Assistant Vice President, Industry Operations

National Electrical Manufacturers Assoc. (NEMA)

1300 North 17th Street

‐ Suite 1752

Rosslyn, VA 22209

john.caskey@nema.org

703

‐ 841

‐ 3233 Voice

703

‐ 841

‐ 3333 FAX

703

‐ 350

‐ 6886 Cell

From: Robert Berman [ mailto:bermaneconomics@gmail.com ]

Sent: Monday, November 14, 2011 1:19 PM

To: Hirsch, Bruce R

Cc: 'Steve Nadel'; Robert Berman; Phil Hopkinson; Eric.Petersen@aksteel.com ;

jerry.schoen@aksteel.com ; Maxine (EMAB) Savitz; mhyland@appanet.org ;

Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ; tpetrosino@carolina.rr.com ;

dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogentpowerinc.com ;

frank.guilbault@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.com ; Aaron Meyers; Antonio

Trujillo; Jack C Moore; Jerry L Corkran; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ;

eduardorobles@eaton.com ; Emily (CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energy

‐ solution.com ; rick.anderson@faypwc.com ;

bsmith@federalpacific.com ; rgreeson@federalpacific.com ; carlos.gaytan@ge.com ;

artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ; Richard Parker;

Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ;

kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millure@metglas.com ; kwinder@mleainc.com ;

jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnson@navigant.com ;

matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ; Creevy, Jim;

Caskey, John; mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ; Teckman@nwcouncil.org ;

vijay.tendulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@pgnmail.com ;ahofmann@publicpower.org ; pkumar@publicpower.org ; adelaski@standardsASAP.org ;

jmauer@standardsasap.org ; wes.patterson@us.abb.com ; chad.kennedy@us.schneider

‐ electric.com ;

thomas.patzner@us.schneider

‐ electric.com ; charlied@uus.org

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Bruce,

Those upfront transformer costs are compared to the fuel cost savings in the LCC approach. The

discounting process values fuel cost saving in the future at less than the costs incurred today. The

positive LCC means that that the efficiency advocates are not ignoring costs, bu t comparing them with

benefits and finding that the consumer is better off and will be paying less. One does not, however,

need to rely on the LBL analysis to see this. The ABB sales data shows M3 transformers being delivered

at EL4 efficiency. As a modeler, I am always skeptical of model results

‐‐ people do not live in computers

and certainly not on in some of the back

‐ of

‐ the

‐ envelope calculations that we have seen from others.

Market sales data, however, is quite real. In this case it unambiguously says that the transformers at EL4

are an e conomically reasonable choice

‐‐ the market has, in fact, selected that choice on multiple

occasions.

To the extent that there are dug

‐ in positions, again the evidence does not support that it is the

efficiency advocates that are dug

‐ in. Although EL4 is achievable and beneficial based both on market

data and LBL analyses, the proponents of greater efficiency indi cated a willingness to compromise. It is

certain representatives of the industry who have consistently said either no change, or a fractional

change. It is those industry representatives who appear to be advancing the "my position or nothing"

attitude. Although I happen to agree th at substantial movement towards more efficient distribution

systems, I also note that these are incredibly expensive meetings. We have a large number of very

senior people devoting substantial time to the meetings, their preparation and non

‐ trivial travel costs.

These people have other things competing for their time. If you and others hon estly believe that you

cannot agree to a higher standard, and place no value on regulatory certainty, then let's not waste

additional time and money. Let's just say that we gave it a good shot, cut our losses here, and make our

respective cases to DOE outside the ne gotiation process and let DOE make it's own decision. I believe

that they certainly have sufficient information to support their position in a February NOPR. I can't

imagine what else they would need.

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 14, 2011, at 11:49 AM, Hirsch, Bruce R wrote:

Steve,I am disappointed with your approach to this assignment.

It appears that negotiation to you is defined as agreeing with your position

‐‐‐ or calling it off. It is

unfortunate that you believe the American public, especially in these trying economic times, should be

expected to foot the (very large) bill for more efficient transformer s when it is still not certain that there

is value in doing so. You have clung to one suspect calculation that indicates there may be a payback

‐‐‐

in the distant future

‐‐‐ and only if all the assumptions being made pan out. You choose to ignore the

costs, not yet factored in, on US jobs, US busin esses and the reliability of supply of an item so

desperately needed for our economy to expand.

This is not a “cut and dried” economic decision but is one that needs to be taken seriously for the major

impact it could have on the electric supp ly of the US and the financial position of the American public. If

DOE makes the final decision on this, I would expect them to do “due diligence” in considering all the

effects there decision would have on US businesses and the US economy.

Let it be known that the Utili ty Industry has not pulled out of the negotiation process and will continue

to work with DOE to reach the right decision.

Bruce.

From: Steve Nadel [mailto:snadel@aceee.org]

Sent: Friday, November 11, 2011 2:16 PM

To: Robert Berman; Phil Hopkinson

Cc: Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB)

Savitz; mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ;

Hirsch, Bruce

R; tpetrosino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogent

powerinc.com ; frank.guilbault@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.com ; Aaron

Meyers; Antonio Trujillo; Jack C Moore; Jerry L

Corkran; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily

(CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energy

‐

solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ; rgreeson@federalpacific.com ; c

arlos.gaytan@ge.com ; artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ;

Richard Parker; Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel

Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millur

e@metglas.com ; kwinder@mleainc.com ; jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnso

n@navigant.com ; matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ;

Jim.creevy@nema.org ; john.caskey@nema.org ; mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nrec

a.coop ; Teckman@nwcouncil.org ; vijay.tendulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@p

gnmail.com ; ahofmann@publicpower.org ; pkumar@publicpower.org ; adelaski@standardsASAP.org ; jma

uer@standardsasap.org ; wes.patterson@us.abb.com ; chad.kennedy@us.schneider

‐

electric.com ; thomas.patzner@us.schneider

‐ electric.com ; charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Phil,We're in the middle of negotiations and some of us have made clear that no or little change to the

standard is not acceptable as the DOE analysis justifies higher standards (higher levels are technically

feasible and cost

‐ effective on a life

‐ cycle cost basis). The efficiency groups would rather leave th e

decision to DOE than agree to subpar standards. If you and other participants want to veto any

significant change in the standard, then we might as well save some time, break off negotiations and

just make our respective arguments to DOE. Is that what you want to do? If the answer is no, then let's

start talki ng about how to make higher standards acceptable rather than continue to make arguments

about why low standards are needed. We're all busy and if we're going to make progress we need to

break new ground and not rehash old ground.

Steve

>>> Phil Hopkinson < phop kinson@hvolt.com > 11/11/2011 1:16 PM >>>

Hello Robert and all:

You must not have looked at Jerry Corkran’s message because he found the cost to be $17/watt, which

is pretty close to my number, where both Jerry and I have used M3 core steel to derive the cost curve.

The fact is th at the cost curve is very steep with M3 and quickly hits the brick wall.

1. I have checked Carlos Gaytan’s cost curves as well and he is finding about the same relationship

with M3.

2. I have checked Wes Patterson’s data as well and he is finding an M3 cost curve about the same as

mine.

3. I have checked the OPS data with M3 as well and it too is very close to $20/watt.

a. For example, for design line 1 they show an efficiency at 50% load of 99.08% which translates to

232 watts of loss and sells for $1,960.73.

b. They show another M3 design with an efficiency of 99.26% which translates to 186 watts of loss

and sells for $2962.11.

c. The change in selling price is $2,962.11

‐ $1,906.11 or +$1,001.38

d. The change in watts is 232

‐ 186 or ‐ 46 watts.

e. The OPS $/watt is the refore, $1,001.38/46 watts or $21.77

f. Hence we see that all data sources are pointing to cost per watt of ~$20 /watt saved to go from

the current mandatory standard to EL1. I get $30/watt to go to EL2 and $53/watt to go to EL3

4. The fact is that M3 is about out of gas and the DOE did a good job in the la st rule making.

5. The fact also is that a push to anything beyond present does not show economic value and I do not

support it.

6. The fact also is that a push to hi gher efficiencies will kill the new transformer market and open up

the rebuild market, destroying jobs at the new transformer manufacturers and resulting in transformers

of lower efficiency which will cost energy and not save it.

Best regards,

Phil

Philip J Hopkinson, PE

President & CEO HVOLT Inc.

3704 High Ri dge Rd.

Charlotte, NC 28270phopkinson@hvolt.com

Ph 704

‐ 846

‐ 3290

Fx 704

‐ 845

‐ 2520

Cell 704

‐ 236

‐ 3320

www.hvolt.com

From: Robert Berman [mailto:bermaneconomics@gmail.com]

Sent: Friday, November 11, 2011 11:16 AM

To: Phil Hopkinson

Cc: Corkran, Jerry L; Richard Parker; Freeman, Jeremiah

(CONTR); rick.anderson@faypwc.com ; tballo@earthjustice.org ; ScottB@LVMetals.com ; john.caskey@ne

ma.org ; Cymbalsky,

John; adelaski@standardsASAP.org ; Teckman@nwcouncil.org ; gbf1@pge.com ; carlos.gaytan@ge.com ; r

greeson@federalpacific.com ; bruce.r.hirsch@bge.com ; jhodge@howard.com ; mhyland@appanet.org ; d

ave.millure@metglas.com ; snadel@aceee.org ; wes.patterson@us.abb.com ; Eric.Petersen@aksteel.com ;

Raymond.Polinski@ATImetals.com ; artrosenfeld@gmail.com ; srosenstock@eei.org ; rroy@nrdc.org ; rob

ert.saint@nreca.coop ; chuck.simmons@pgnmail.com ; kwinder@mleainc.com ; mwaltner@nrdc.org ; jerry

.schoen@aksteel.com ; Paul.Ryan@hitmet.com ; ahofmann@publicpower.org ; pkumar@publicpower.org

; bsmith@federalpacific.com ; greg.coulter405@gmail.com ; jmauer@standardsasap.org ; Cohen, Daniel;

Meyers,

Aaron; Jim.creevy@nema.org ; jrossetti@mlgw.org ; cabolduc@lbl.gov ; kcoughlin@lbl.gov ; brian.coffey@

navigant.com ; mrivest@navigant.com ; gjrosenquist@lbl.gov ; caitlin.johnson@navigant.com ; zhimei.luo

@navigant.com ; Marchetti, Emily (CONTR); charlied@uus.org ; DYoung@energy

‐

solution.com ; James.Lass@cleco.com ; maheshsampat@bellsouth.net ; matthew.nardotti@navigant.com ;

Raba, Jim; Savitz, Maxine

(EMAB); tpetrosino@carolina.rr.com ; chris.brown@cogentpowerinc.com ; ted.johnstone@cogentpoweri

nc.com ; frank.guilbault@cogentpowerinc.com ; ned.efbrush@gmail.com ; dbrender@cda.copper.org ; cha

d.kennedy@us.schneider

‐

electric.com ; eduardorobles@eaton.com ; vijay.tendulkar@onyxpower.com ; thomas.patzner@us.schnei

der

‐ electric.com ; carlosgsiqueiros@eaton.com ; Robert Berman; Trujillo, Antonio; Moore, Jack C

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Even if it were that high (and Mr. Hopkinson is the only one I've seen who has put the number anywhere

near that), the efficiency objective is saving Watt

‐ hours (energy) not Watts (the capacity to save energy )

. One Watt saved for 8,760 hours per year for 30 years is 262.8 kWh (not counting leap years). Even at

Mr. Hutchinson's $20, that's just over 7¢ / kWh. If Mr. Hutchinson will examine his electric bill, as he has

reported, he will see that even as hi gh as 7¢ it's a good buy, and that assumes we put a ZERO value on

any environmental benefits (which is why DOE agreed to reconsider its 2007 MEPS in the first place.

Indeed, the cost of losses per Watt (roughly the A factors that OPS has been using) are no wh ere near

the $20 claimed here. Moreover, as ABB and others have pointed out, the proper approach would have

been to minimize cost subject to efficiency, not A & B, which would have resulted in a lower, flatter

curve to the asymptote. ABB's actual market data

‐‐ physical transformers produced and delivered

‐‐

shows a competitive market for M3 transformers even at EL4 efficiency. You can make all the

hypothetical claims you want to, gentlemen, the market is the real world

.

Regards,Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 10, 2011, at 6:53 PM, Phil Hopkinson wrote:

Well stated Jerry

That is also what my analysis and report said. If you restrict to M3 then the cost of EL1 rises to about

$20/watt.

Phil

Phil Hopkinson,P.E.

HVolt Inc.

704

‐ 846

‐ 3290

F: 704

‐ 845

‐ 2520

C: 704

‐ 236

‐ 3320

phopkinson @hvolt.com

On Nov 10, 2011, at 18:04, "Corkran, Jerry L" < Jerry.Corkran@CooperIndustries.com > wrote:

To Mr. Parker and the DOE working group,

The reason for the request for the incremental cost of the losses is that the current DOE efficiency levels

can be obtained if the design is optimized at about $4 per core watt and $1 per winding watt at full

load. At the DOE 50% kVA rating, this is the same as evaluating th e losses or optimizing the design at

about $4 per total watts loss.

The present DOE efficiency loss level results in transformer designs about like many utilities were

purchasing their transformers before 2007. The utilities were purchasing the efficien cy levels that were

justified based on the cost of losses. A few utilities were purchasing higher efficiency that the 2007

efficiency rules because of the calculated cost of energy being higher than the $4/$1 loss evaluation.

What came up in the discussion last week was even for loss level 1, the incr emental cost of losses was

about $17 per watt for the design checked, between the present DOE losses an efficiency level of DEL1.

The added cost of $17 per watt is so much higher than the typical cost of the energy for the utilities,

that it is very questiona ble that the DOE payback estimates are accurate. A 3% interest rate may be a

factor in the payback calculations.

Jerry CorkranFrom: Richard Parker [mailto:richardparkerdc@gmail.com]

Sent: Thursday, November 10, 2011 3:23 PM

To: Robert Berman

Cc: Freeman, Jeremiah

(CONTR); rick.anderson@faypwc.com ; tballo@earthjustice.org ; ScottB@LVMetals.com ; john.caskey@ne

ma.org ; Corkran, Jerry L; Cymbalsky,

John; adelaski@standardsASAP.org ; Teckman@nwcouncil.org ; gbf1@pge.com ; carlos.gaytan@ge.com ; r

greeson@federalpacific.com ; bruce.r.hirsch@bge.com ; jhodge@howard.com ; mhyland@appanet.org ; d

ave.millure@metglas.com ; snadel@aceee.org ; wes.patterson@us.abb.com ; Eric.Petersen@aksteel.com ;

Raymond.Polinski@ATImetals.com ; artrosenfeld@gmail.com ; srosenstock@eei.org ; rroy@nrdc.org ; rob

ert.saint@nreca.coop ; chuck.simmons@pgnmail.com ; kwinder@mleainc.com ; mwaltner@nrdc.org ; jerry

.schoen@aksteel.com ; Paul.Ryan@hitmet.com ; ahofmann@publicpower.org ; pkumar@publicpower.org

; bsmith@federalpacific.com ; greg.coulter405@gmail.com ; jmauer@standardsasap.org ; Cohen, Daniel;

Meyers,

Aaron; Jim.creevy@nema.org ; jrossetti@mlgw.org ; cabolduc@lbl.gov ; kcoughlin@lbl.gov ; brian.coffey@

navigant.com ; mrivest@navigant.com ; gjrosenquist@lbl.gov ; caitlin.johnson@navigant.com ; zhimei.luo

@navigant.com ; Marchetti, Emily (CONTR); charlied@uus.org ; DYoung@energy

‐

solution.com ; James.Lass@cleco.com ; maheshsampat@bellsouth.net ; phopkinson@hvolt.com ; matthe

w.nardotti@navigant.com ; Raba, Jim; Savitz, Maxine

(EMAB); tpetrosino@carolina.rr.com ; chris.brown@cogentpowerinc.com ; ted.johnstone@cogentpoweri

nc.com ; frank.guilbault@cogentpowerinc.com ; ned.efbrush@gmail.com ; dbrender@cda.copper.org ; ch

ad.kennedy@us.schneider

‐

electric.com ; eduardorobles@eaton.com ; vijay.tendulkar@onyxpower.com ; thomas.patzner@us.schnei

der

‐ electric.com ; carlosgsiqueiros@eaton.com

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Robert,

I understand the DOE staff are working on the incremental Watts calculations and will get that out to

group as soon as it's ready.

best wishes,

Richard

On Thu, Nov 10, 2011 at 11:52 AM, Robert Berman < bermaneconomics@gmail.com > wrote:

Thank you Richard. That clarification is helpful.

In the liquid

‐ filled meeting we were told that we would receive an analysis of incremental Watts saved

by DL for all ELs, as well as the incremental cost. When will that analysis be available? For many of us,

that analysis is the basis for additional, perhaps e xtensive analyses, so it should come with enough lead

time before any additional meetings or teleconferences to that we can give it the required

consideration. It would be most helpful if the incremental cost were provided separately for transformer

and installation, with any pole component of the ins tallation identified.

For the MV Dry and LV Dry meetings, it would be most helpful if you would also circulate an agenda with

objectives, hopefully this week, so that we are able to prepare for those meetings.

Regards,Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 10, 2011, at 11:14 AM, Richard Parker wrote:

Dear Colleagues:

The telcon on the 17th is currently planned for medium

‐ voltage dry

‐ type and the telcon on the 21st is

reserved for low

‐ voltage. There will be revised analysis circulated in advance of both calls per our

discussion yesterday. Eac h call has substantial chunks of time allocated, though I hope we won't need

all that time.

It may be prudent to schedule a liquid

‐ filled call at some point as well, but I propose that we hold off on

that for day or so, until we can clarify wh en revised analysis for liquid

‐ filled will be ready.

Thanks for your very constructive participation in the meetings over the last two days.

Richard Parker

On Thu, Nov 10, 2011 at 10:05 AM, Freeman, Jeremiah (CONTR) < Jeremiah.Freeman@ee.doe.gov >

wrote:

When: Thursday, November 17, 2011 1:00 PM

‐ 5:00 PM (GMT

‐ 05:00) Eastern Time (US & Canada).

Where: Webinar and Phone

Note: The GMT offset above does not reflect daylight saving time adjustments.

*~*~*~*~*~*~*~*~*~*

Dear Colleagues,

This event is to save the time slot on your calendar based on our discussion at ye sterday's meeting.

Later today further information will be sent regarding the registration information for our November 17

and November 21 webinars. After registering you will get the link for the webinar and a toll free

number.

Please call with questions or concerns.

Very Respectfully,

Jeremiah Freeman

202

‐ 431

‐ 424 3 (cell)

202

‐ 586

‐ 1867 (office)>>> This e

‐ mail and any attachments are confidential, may contain legal,

professional or other privileged information, and are intended solely for the

addressee. If you are not the intended recipient, do not use the information

in this e

‐ mail in any way, delete this e

‐ mail and notify the sender. CEG

‐ IP2