### Capital Reporting Company

The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 1

THE MANUFACTURED HOUSING WORKING GROUP MEETING

August 5, 2014

Department of Energy Forrestal Building 1000 Independence Avenue, SW Washington, DC 20585

Reported by: Natalia Thomas, Capital Reporting Company

### Capital Reporting Company

The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 2 1 A P P E A R A N C E S 2 John Cymbalsky U.S. Department of Energy 3 Javier Ramirez 4 Federal Mediation and Conciliation Service 5 Robert Luter Lippert Components 6 Michael Lubliner 7 Peter Schneider 8 Efficiency Vermont 9 Eileen Hoffman 10 Mark Weiss 11 Manufactured Housing Association for Regulatory Reform 12 Ishbel Dickens 13 National Manufactured Home Owners Association 14 Manuel Santana 15 Cavco Industries, Inc. 16 David Tompos NTA 17 Lowell Ungar, Ph.D. 18 Eric Lacey 19 Rob Roy 20 Natural Resources Defense Council 21 Joseph Hagerman U.S. Department of Energy 22

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 3 1 A P P E A R A N C E S 2 Mike Jensen 3 Keith Dennis 4 Lois Starkey 5 Mark Ezzo 6 Emanuel Levy 7 Stacey Epperson Next Step 8 Bert Kessler 9 10 11 12 13 14 15 16 17 18 19 20 21 22

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 4 1 P R O C E E D I N G S 2 MODERATOR HOFFMAN: Okay, we're going to 3 get started and before we officially begin, we 4 just want to have the people in the audience to 5 just go up to the microphone and say you are, 6 where you're from. Thank you. 7 MS. FREIMUTH: Janet Freimuth, I'm from 8 the Department of Energy's office of conflict 9 prevention and resolution. 10 MODERATOR HOFFMAN: Thank you. 11 MR. SURRENA: I'm Don Surrena, I'm with 12 the the National Association of Home Builders. 13 I'm with the Codes and Standards Department. I'm 14 a program manager in energy efficiency. 15 MR. MARTIN: I'm James Martin, I'm with 16 HUDs Office of Manufacturing Housing Programs. 17 MR. MENDLIN: Rick Mendlin, Office of 18 Manufactured Housing Programs at HUD. 19 MODERATOR HOFFMAN: All right, thank 20 you. Okay, we're formally back after lunch and a 21 couple of announcements I think before we get 22 started from Joe.

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 5 1 MR. HAGERMAN: Yes, so I just -- this is 2 Joe Hagerman. I wanted to over lunch just 3 reconfirm with the national labs the analysis 4 they're doing since a lot of questions have come 5 up on it, so I did that. And I think it's been 6 consistent with what it is that everybody's 7 expecting, so what they're going to show is single 8 wide -- single section, sorry, unit and a double 9 section unit modeled in all the IECC climate zones 10 for the various IECC versions from 2015, 2012, 11 2009, 2006, and so forth. 12 And then they've also modeled a unit 13 based off of the manufactured housing code, just 14 straight. And then the things we're going to show 15 you are the annual energy results from that and 16 they're also going to give you clear definition on 17 things like the finistration U factor, the ceiling 18 R value, the wall R value, the floor R value and 19 the glazing solar heat gain co-efficent as well. 20 So if you know of some other levels or 21 any other variables that you'd like them to show 22 in that analysis, then let me know and, you know,

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 6 1 we can ask them to add that, and in hopes that 2 once I -- in hopes that they can, you know, 3 quickly turn that around and not delay getting us 4 the whole package. 5 MR. POTTS: Richard Potts. Do you want 6 that information now or just offline as far as the 7 variables and whenever? Maybe fuel types, you 8 know, just throw in samplings of different fuel 9 different fuel types; whether it's gas, obviously 10 electric, propone and maybe that's all that comes 11 to mind. 12 MR. HAGERMAN: So fuel types. We'll ask 13 for that, anything else? 14 MR. UNGAR: This is Lowell. I don't 15 have a specific request but I'll just note that it 16 sounds like it's all 2005 1590CC or lower, of 17 course, when you can also consider improvements to 18 it, so we might just as we go along consider if 19 there's at least, I don't know that there's a 20 broad standard above it that we would consider as 21 much as if there may be specific improvements that 22 would make sense to model as well.

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 7 1 MR. HAGERMAN: Right. I was hoping that 2 somebody might -- a manufacturer might say, well, 3 you know, we use the following U factor and wall, 4 our value and ceiling our value, and we can go 5 ahead and model that pretty easily. So if there's 6 somebody out there that knows what they ship and 7 it's not, you know, it's a variant of any of those 8 things, let us know and we can do that analysis as 9 well. 10 MR. SCHNEIDER: Yeah, and I -- Peter 11 Schneider, certainly mechanical option quickly a 12 duct with many split to replace the traditionally 13 ducted system combined with heat pump water 14 heater, just make sure that options like that 15 again improving upon 2005 and looking at value 16 engineering and ways to significantly improve 17 efficiency through very low cost measures. 18 MODERATOR HOFFMAN: Let's see, Javier, 19 you want to pave the way? 20 MR. RAMIREZ: Yeah, all right, so what 21 we want to try to do is, first of all, Eileen and 22 I with the assistance of a few folks that were

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 8 1 eating while we're working on this -- 2 MODERATOR HOFFMAN: Took advantage of 3 Subway to come up here. 4 MR. RAMIREZ: Yeah, so we try to group 5 these into the four larger groups that we had 6 identified earlier and we want to see if you agree 7 with how we've grouped them. So we passed them 8 out so that you would have them in front of you. 9 So what we could do is we could go one at a time. 10 So looking at the envelope of building, do these 11 six and the subparts of them belong here or do any 12 of these belong anywhere else? 13 MR. LUTER: I might suggest the addition 14 of one -- Robert Luter, sorry, infiltration. 15 MODERATOR HOFFMAN: And where would it 16 go, is it not just a number? 17 MR. LUTER: As 1.7. There's a -- my 18 rational is there's a certain amount of 19 infiltration inherent with the fenestration with 20 windows and doors. 21 MR. RAMIREZ: Okay. 22 MR. LUTER: And it will need to be

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 9 1 considered. 2 MR. SCHNEIDER: Yeah, this is Peter 3 Schneider. I think there's 1.3 and I don't know 4 what that includes, but duct less would be 5 something to evaluate and what it would take to 6 get to duct with and then with regards to windows, 7 I would say single and double-hung windows are 8 inherently leaky, so what it would take to go to 9 casement and awnings with compression gasgeting 10 that is far better from both a performance 11 standpoint day one, but also durability long-run. 12 MR. LUTER: Robert Luter. Those are 13 currently prohibited by the HUD Code, there's an 14 egress issue. Crank operated windows are not 15 allowed. 16 MR. SCHNEIDER: That's why I was 17 throwing it out there. 18 MR. RAMIREZ: Okay, so do I -- is there 19 anything that needs to be changed on here? 20 MR. LUTER: For the record, I don't 21 disagree with your -- your position that a 22 compression sealed window is superior.

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 10 1 MR. SCHNEIDER: Yeah, great. So I don't 2 think 1.4 glazing captures type of window. 3 MR. HAGERMAN: This is Joe Hagerman. 4 Also, I think I heard you say 1.3 should read duct 5 and ductless; is that right? So ductless -- 6 MR. SCHNEIDER: Right. 7 MR. HAGERMAN: -- typically reminds -- 8 you're typically talking about a -- like a heat 9 pump, a ductless heat pump -- 10 MR. SCHNEIDER: Right. 11 MR. HAGERMAN: -- and then ducts are 12 thinking about, you know, the actual ducts, not 13 the mechanical system? 14 MR. SCHNEIDER: That's right, 15 absolutely, yeah, so there could be two different, 16 you know, categories together cause duct comes 17 inherent with all sorts of issues, duct with -- is 18 another strategy all together that other 19 requirement are -- a more comprehensive approach 20 is required to make that work. 21 MR. HAGERMAN: Right, so I'm just trying 22 to advocate that maybe we leave duct in 1.3 and

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 11 1 then put ductless equipment in section 2. 2 MR. SCHNEIDER: That sounds good. 3 MR. RAMIREZ: All right. So -- okay, so 4 how does this look? 5 MR. LUTER: I might suggest infiltration 6 be changed to air leakage because I think that's 7 the actual language that's -- that's used. 8 MODERATOR HOFFMAN: After I corrected 9 spelling. 10 MR. LUTER: Yes. 11 MODERATOR HOFFMAN: Okay. 12 MR. RAMIREZ: Okay. Does this look -- 13 does this look good? Yeah. 14 MR. POTTS: Not to split hairs, Richard 15 Potts. Looking at thinking about ducts, to me 16 ducts aren't really an architectural detail that 17 might -- I mean, it's a component of the 18 mechanical system. I don't know if everyone would 19 agree with me, but that might be moved into 20 mechanical as well. 21 MODERATOR HOFFMAN: Actually, I had 22 asked that question to a couple of folks that were

### Capital Reporting Company

The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 12 1 in the room and the answer to that was, it depends 2 on what you're talking about with the ducts is 3 what was the answer. So should we put it in both? 4 Should we leave it here and then put it into the 5 other one as well? 6 MR. SCHNEIDER: I'd advocate for both. 7 There've been some great studies Michael could 8 speak to, you know, where these ducts were brought 9 inside the envelope, so they're certainly a part 10 of the thermal envelope right now except in the 11 rare occasion where there was a demonstration 12 project that brought them into a chase within the 13 thermal envelope, so I think it -- so they do 14 belong in both places. 15 MR. RAMIREZ: So are we good with 1 16 then? I'm sorry, Emanuel. 17 MR. LEVY: Emanuel. Don't want to split 18 hairs, but 1 and 1.2 (inaudible) are the same. 19 You value as a measure of thermal and it probably 20 -- what we really mean by thermal there is the 21 envelope, the thermal envelope. 22 MR. RAMIREZ: Okay, so it's under the

### Capital Reporting Company

The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 13 1 heading of envelope of building, so do we need to 2 clarify that up here? We could -- we could put in 3 parenthesis up here you value. 4 MR. LEVY: But the thermal requirements 5 can apply to the other terms on that list, too, so 6 if you're breaking out glazing, you could call one 7 opaque envelope materials or products or systems. 8 Specifically we're talking about the amount of 9 insulation in the wall, floor and ceiling. 10 MR. SCHNEIDER: And this is Peter 11 Schneider. I'm not sure if this fits under that 12 heading, but the idea of advanced framing, 13 structural requirements that, you know, or I 14 should say, structural engineering that needs to 15 be done to really evaluate the amount of lumber 16 we're putting in these walls and whether it's 17 really required or not. 18 MODERATOR HOFFMAN: Envelope what? 19 MR. LEVY: Opaque envelope. 20 MODERATOR HOFFMAN: And then? 21 MR. LEVY: I'm sorry, and that would 22 subsume Peter's point about framing.

### Capital Reporting Company

The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 14 1 MODERATOR HOFFMAN: And then we could 2 strike this one? 3 MR. LEVY: Yeah. 4 MODERATOR HOFFMAN: Peter, is your point 5 reflected there? 6 MR. SCHNEIDER: Yeah, that's great, I 7 just, yeah, just evaluate the actual framing of 8 these homes. I think that that's -- just so it's 9 not forgotten. 10 MR. RAMIREZ: Okay. And so right now, 11 all we're trying to do is put them into 12 categories. The next step is going to be what do 13 we need, right what information do we need on all 14 these, okay. So if everyone's good with that, 15 we'll move on 2 and we'll come back if we need to. 16 How does that look? 17 MODERATOR HOFFMAN: Can you all see -- 18 can you all see it? Do you want him to read it? 19 MR. RAMIREZ: I guess, Matthew, you're 20 pretty far back there. Can you see? Okay. 21 MR. WALKER: I have good eyesight. 22 MR. LEVY: Let me suggest a couple

### Capital Reporting Company

The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 15 1 clean-up items. Probably DHW should be its own 2 item, and maybe even appliances should be its own 3 item. They're separately and they're different 4 issues associated with them. 5 MR. RAMIREZ: Okay. So DHW and 6 appliances (inaudible)? 7 MR. LEVY: I would suggest that. And 8 the duct and ductless -- let me slow down here. 9 MR. RAMIREZ: Okay. 10 MR. LEVY: And the duct and ductless are 11 characteristic of the HVC equipment so they could 12 be subsets of that -- a number of 2.1. Not 13 acoustics. 14 MODERATOR HOFFMAN: Where would 15 acoustics go? 16 MR. LEVY: I suppose acoustics could be 17 part of that because I think we're talking about 18 how much noise is generated by the HV's. 19 MR. RAMIREZ: Yeah, the note yesterday 20 was referring to that, the noise that it makes. 21 Everyone go with this one then? 22 MR. UNGAR: This is Lowell. I just note

### Capital Reporting Company

The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 16 1 we have indoor air quality later on. 2 MR. RAMIREZ: Right. 3 MR. UNGAR: I don't know if (inaudible) 4 we want here or under building performance or 5 both. I don't know that it matters, but. 6 MR. RAMIREZ: I mean, we could -- we 7 could put it in both, I mean, if -- if it is dealt 8 with completely under 1, then it's an easy fix in 9 a second. Is everyone comfortable putting them in 10 both? Okay. Yeah? 11 MS. DICKENS: Sorry, this is Ishbel. 12 Under the main heading is DWH and then in the 13 subheading it's DHW. Is that just a type or are 14 they different things? 15 MODERATOR HOFFMAN: I think it's a typ. 16 MR. RAMIREZ: So what is it supposed to 17 be? 18 UNIDENTIFIED SPEAKER: DHW. 19 MODERATOR HOFFMAN: So change it there, 20 yeah. 21 MS. DICKENS: Sorry, thank you. 22 MR. SCHNEIDER: This is Peter.

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 17 1 Equipment HVAC, I mean, it could be equipment 2 heating and cooling and then have, you know, 3 instead of HVAC, referencing ventilation at that 4 separate so HVAC might misrepresent what the focus 5 would be there, so it would be heating and air 6 conditioning and then ventilation under 2.2. 7 MR. RAMIREZ: So, I'm sorry, what do you 8 need there? 9 MR. SCHNEIDER: Well, 2.1 would indicate 10 equipment heating ventilation and air conditioning 11 and I'm wondering if we want to specify instead of 12 using the acronym HVAC equipment heating and 13 cooling or heating and cooling equipment and then 14 2.2 is really dealing with ventilation. Just a 15 suggestion for the group. 16 MR. RAMIREZ: Good for you all? It's 17 the -- show with hands if you're okay with 2. And 18 this is just for the groupings, right? 19 MR. HAGERMAN: Can I suggest that you 20 maybe zoom out since we've had some new people 21 rejoin us, or some people rejoin us so they can 22 get caught up real quick?

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 18 1 MR. RAMIREZ: So what we're trying to do 2 here is for the group -- for the folks that just 3 came back, yeah, my head was on the computer here, 4 I wasn't -- my head wasn't up. 5 So what we're going here is we passed 6 out -- what we're trying to do is just clean it up 7 a little bit to try to see if everything fits into 8 those four categories. So we put the four 9 categories in there and while you're eating, we 10 made an initial attempt -- Eileen and I made an 11 initial to group them. So we're just reviewing 12 right now to make sure that it does fit, okay, so 13 that's all we're doing right now. Okay. 14 MR. HAGERMAN: Can I -- one more 15 suggestion, too. Can I make just a -- can I throw 16 an idea out here maybe that after we clean up the 17 different, you know, items, that erase the things 18 that are in parenthesis underneath? 19 MR. RAMIREZ: Okay. 20 MR. HAGERMAN: Do you follow me? So 21 where you have envelope and billings. 22 MR. RAMIREZ: These right over here?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 19 1 MR. HAGERMAN: Yeah, it seems kind of 2 redundant since that's kind of explained and -- 3 MR. RAMIREZ: Both of the topics that 4 are in there. 5 MR. HAGERMAN: I think it's a legacy 6 thing. 7 MR. RAMIREZ: Okay. I could do that as 8 we go so this one's done. 9 MR. LUBLINER: This is Mike Lubliner. 10 Can anybody hear me? 11 MODERATOR HOFFMAN: Yes. 12 MR. RAMIREZ: Yeah. 13 MR. LUBLINER: Okay. I've been muted 14 for the whole afternoon so -- 15 MODERATOR HOFFMAN: Oh. 16 MR. LUBLINER: -- I think we're on the 17 right track. I do have a comment on the ducts 18 thing. We've been working with manufacturers and 19 to move their ducts in the condition space or not 20 use them at all and use ductless grip, and I want 21 to make sure that we have the opportunity to look 22 at that. I guess I have a major question related

### Capital Reporting Company

The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 20 1 to that and it's probably a question for HUD or 2 the manufacturers of the (inaudible), but in the 3 UO calculation, does it include the crossover duct 4 surface area and heat loss? I haven't been able to 5 get clarity on that, but it seems like you have a 6 couple different ways of doing it. You have the 7 crossover duct or you have the through the rim 8 system or you have no ducts at all or you have 9 ducts in the condition space. And I want to make 10 sure that manufacturers have resources and 11 incentives and aren't constrained to be able to 12 evaluate and utilize these different systems, so 13 thank you. 14 MR. RAMIREZ: Okay. Yeah, and I think 15 that's some of the stuff that we'll be getting 16 into right once we start digging into it. 17 MR. EZZO: Do you want me to answer? 18 MR. RAMIREZ: Or do you want to answer 19 right now? 20 MR. EZZO: Hey, Mike, it's Mark Ezzo. 21 Yeah, to answer your question, yeah, we account 22 for the crossover duct between multi-section homes

### Capital Reporting Company

The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 21 1 and the heat loss calc. 2 MR. LUBLINER: Thanks, Mark. So I make 3 sure that PN & L is doing that in the analysis 4 job. 5 MR. RAMIREZ: So now we'll look at No. 6 3. How does this look? I guess what I'm looking 7 for here is to make sure that everything is in its 8 right place or if we've really missed something. 9 MR. LACEY: Eric Lacy, I just had a 10 question. I'm trying to remember what 11 justification meant. Just standing alone, 12 justification, what is that? 13 MR. RAMIREZ: Yeah, if I remember 14 correctly, that one was talking about any changes 15 that we do, is the cost justified? In other 16 words, is the financial benefit justified. 17 MR. LACEY: Okay. So like a cost 18 effectiveness or cost justification. 19 MR. RAMIREZ: Right. 20 MR. LACEY: Okay. That makes sense. 21 MR. RAMIREZ: At least that's how I 22 remember, unless anybody remembers it different.

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 22 1 Mark? 2 MR. WEISS: I was just going to say if 3 you're taking out the parenthetical as Joe 4 suggested, I think you need to shift at least some 5 of these over to, you know, 3. Something. 6 MR. RAMIREZ: Okay. Which ones? 7 MR. WEISS: Well, just the word 8 affordability itself should show up here 9 somewhere. Financing you already have, 3.2. 10 Affordability/purchase price, OM cost, something 11 like -- just something under there so you still 12 have that terminology. 13 MR. SCHNEIDER: This is Peter, I was 14 thinking total cost of ownership should be maybe 15 with affordability. 16 MR. RAMIREZ: Okay. 17 MR. WEISS: Well, I -- my suggestion 18 would just be make affordability 3.6 and you have 19 operation and maintenance under purchase under 20 that or put it all together, either way. 21 MR. RAMIREZ: And you said this 3.6 22 should be off of here as well?

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 23 1 MR. WEISS: I'm sorry? 2 MR. RAMIREZ: This one should be off of 3 affordability, operation and maintenance and our 4 purchase should be off -- 5 MR. WEISS: Yeah. 6 MR. RAMIREZ: Okay. And then operation 7 maintenance, okay, that's there. All right, so 8 with that we could get rid of all this. 9 MR. SCHNEIDER: Would appraisal be a 10 category that would fit here that I'm not seeing 11 elsewhere? 12 MR. RAMIREZ: I guess in relation to 13 what we're going here. I don't know, let me as 14 the group? 15 MR. LUTER: So an appraisal wouldn't 16 (inaudible) 17 MS. EPPERSON: Stacey next up. We find 18 that appraisals really often matter when we're 19 doing Energy Star homes new, making sure we're 20 getting value in the marketplace, it tends to be 21 an issue for us. And then under financing, we 22 need to look at chattel, just call it out

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 24 1 separately from mortgage financing since it's two 2 different -- and I've kind of lost sight of what 3 nontraditional financing means. 4 MR. RAMIREZ: So, I'm sorry, what do you 5 want to do here? 6 MS. EPPERSON: I think chattel as a 7 category and mortgage financing, two different 8 products. 9 MODERATOR HOFFMAN: Under financing. 10 MS. EPPERSON: Under financing, if the 11 group agrees. 12 MODERATOR HOFFMAN: And chattel. 13 MS. EPPERSON: Then I need clarification 14 on what nontraditional means. 15 MR. RAMIREZ: Yeah, I think that was -- 16 MODERATOR HOFFMAN: Yeah, because it 17 says example -- 18 MR. SCHNEIDER: I think that replaces 3, 19 2, 20 1. 21 MR. RAMIREZ: You said shadow? 22 MODERATOR HOFFMAN: Chattle. C-h-a-t-t-

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 25 1 e-l, when women were once considered. 2 UNIDENTIFIED SPEAKER: e-l-e. a-l. 3 MR. RAMIREZ: That? 4 MODERATOR HOFFMAN: You had asked about 5 nontraditional, though. 6 MS. EPPERSON: Just for clarification, 7 what a nontraditional -- 8 MR. SCHNEIDER: What is it? 9 MODERATOR: Peter, is that Peter 10 Schneider? 11 MR. SCHNEIDER: Well, yeah, this is 12 Peter here. Really, this is traditional which 13 would be, again, this is manufactured homes on 14 leased land would be tradition in my mind; 15 nontraditional would be where we're going, which 16 is getting traditional financing, which would be 17 the mortgage. So getting mortgages would be 18 nontraditional which is with a new product that 19 the lenders deem as equivalent to a typical stick 20 built modular home and chattel loan being 21 traditional method for manufactured housing on 22 leased land. That's what I view there.

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 26 1 MS. STARKEY: This is Lois from MHI. I 2 think from as long as the HUD code has been in 3 existence, we've been making conventional 4 mortgages on real property and it's about 30, 5 maybe 30 percent of the market right now is 6 conventional financing, so I would suggest you use 7 conventional versus personal property or chattel. 8 We like to use the term personal property 9 financing. That's how it's used in the FHA 10 program, for example. The personal 11 property/chattel and then conventional financing 12 and you've covered the whole market. 13 MR. SCHNEIDER: Yeah, the two 14 categories, they are not great. 15 MR. LUBLINER: Mike Lubliner has a 16 question here. It's a scoping question. Do we 17 want to be looking at the implication of the tax 18 credits, energy tax credits in terms of how this 19 might help in the affordability gap as part of our 20 scope? And if so, I might suggest that we look at 21 utility/federal energy tax credits. Perhaps it 22 could be part of the analysis that could help to

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 27 1 inform and mitigate some of the issues associated 2 with the first costs for the affordable housing 3 portion of the sectors that we're looking at. 4 MR. HANGER: This is Rick Hanger, state 5 of Colorado. I would also second that. I think 6 that the -- the possibilities of other financing 7 mechanisms, including utility rebates, would be a 8 good piece to include here. 9 MODERATOR HOFFMAN: So you think that 10 personal and chattel are the same, personal and 11 slash chattel? Personal property, PRO, you know, 12 personal property slash chattel. 13 MR. RAMIREZ: So it is basically other 14 here 15

-- 16 MR. LUBLINER: Yeah, so this is here, I 17 was just going to summarize. 18 UNIDENTIFIED SPEAKER: (Inaudible). 19 MODERATOR HOFFMAN: Only two, okay. 20 MR. LUBLINER: Yeah, I think 3, 2, 1 21 could be removed because 3, 2, 2, 1 and 3, 2, 2, 22 2, that's redundant. And then I think under

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 28 1 other, if that were 3 -- if that becomes 3, 2, 1 2 mortgage and 3, 2, 2 could be other because it's 3 not under mortgage, it would actually be related 4 to tax credit, other grants, onbill financing, all 5 the things that are happening at least up here 6 locally that should be considered. 7 MR. RAMIREZ: Okay. Did I capture that 8 accurately? Okay. 9 MR. LUBLINER: How about cash sales? 10 What percentage of the homes are purchased with 11 cash and is that something we want to evaluate? 12 MR. RAMIREZ: Well, is that -- is that 13 under or do we need a separate one for cash? 14 MR. LUBLINER: I'll leave that to the 15 group. 16 MS. DICKENS: It could just be slashed 17 with personal property slash chattel slash cash, 18 just another purchasing option. 19 MS. HOFFMAN: And, Lois, do you -- 20 MS. STARKEY: Yeah, no, I really if you 21 do personal property slash chattel, conventional 22 slash mortgage or conventional mortgage if that

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 29 1 makes it clearer, and the third one would be other 2 where you have utility incentives, other kinds of 3 assisted financing which I think is worth talking 4 about. And then I think you've covered 5 everything. 6 MR. UNGAR: This is Lowell. But others 7 not under mortgage, there would have to be a 8 separate -- 9 MS. STARKEY: Yeah, I mean, cause you're 10 usually combining it -- 11 MR. UNGAR: -- because you're talking 12 about incentives -- 13 MS. STARKEY: You're usually combining 14 it with some other form of financing. 15 MR. LUBLINER: This is Mike Lubliner. 16 I'd like to see some explicitly broken out under 17 other; maybe tax credits is one, utility 18 incentives is another and cash purchases. Oh, you 19 have cash up there, never mind. Just tax credits 20 for utility incentives and utility incentives is 21 the next one and then other after that. Or just 22 do --

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 30 1 MS. DICKENS: Actually, I would like to 2 support Mike and food cash and his other 3 categorigation (sic) go under chattel, I'm sorry, 4 my mistake. 5 MODERATOR HOFFMAN: You've got tax 6 credit? 7 MR. LUBLINER: I'd say federal or state 8 tax credits and the second would be utility 9 incentives, and then a final one would be HUD 10 grants or other affordable housing grants. Thank 11 you. 12 MODERATOR HOFFMAN: And do you want to 13 put cash under that? 14 MS. HANGER: Yeah, this is Rick from 15 Colorado. I would also expand that beyond just 16 HUD grants to include other grant resources. 17 MODERATOR HOFFMAN: So HUD and other 18 grants. 19 UNIDENTIFIED SPEAKER: (Inaudible). 20 MS. EPPERSON: This is Stacey from Next 21 Step Support. Just other because there is a 22 laundry list long of HUD grants, USDA grants, it

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The Manufactured Housing Working Group Meeting 08-05-2014

(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 31 1 goes on and on. 2 MR. RAMIREZ: So let me sure I got this 3 right. So what I'm hearing is just delete all 4 this -- let me do it over so they can see that. 5 You're saying just delete all this and leave just 6 other? 7 MS. EPPERSON: Correct. I concur. 8 MR. RAMIREZ: All right, folks -- 9 UNIDENTIFIED SPEAKER: (Inaudible). 10 UNIDENTIFIED SPEAKER: (Inaudible) the 11 whole list. 12 UNIDENTIFIED SPEAKER: I think that's a 13 good idea. I think it will be helpful for 14 (inaudible). 15 MR. RAMIREZ: So is this a good 16 representation then for what we're talking about, 17 to leave it like this? 18 MODERATOR HOFFMAN: I'm hearing two 19 different views. 20 UNIDENTIFIED SPEAKER: (Inaudible). 21 MODERATOR HOFFMAN: You could put et 22 cetera and deal with it for purposes of today.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 32 1 MR. KESSLER: This is Bert Kessler 2 (inaudible). I'm not too sure that tax credits 3 and/or utility incentives need to be part of -- 4 part of this. They're not controlled by anything. 5 There's really no longitivity that you can assign 6 to it and it's, you know, if you can get it, good 7 for you. But I don't know that they would be 8 available to a great number of people, you know, 9 and it's regional too. You know, Mike up there in 10 the pacific northwest, they've got a bunch of it. 11 We don't have hardly anything here in Texas. 12 MS. LUBLINER: Yeah, that's why I'm 13 interested in arguing to make sure that it's 14 considered in the analysis, or at least parametric 15 analysis done to see what the implications are. 16 I guess what I was thinking, Bert there, 17 is cause I agree with you that they come and they 18 go on the whim of Congress, but I would like to 19 make sure that the silos within HUD and to 20 Congress, the feedback from this group is for the 21 affordable housing sector of this industry, that 22 these kind of things are extremely important in

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 33 1 helping to set the energy levels and make sure 2 that people at the low end aren't losing out from 3 their opportunities to purchase energy efficient 4 homes. I was hoping that the analysis would help 5 make the case for industry to Congress and to HUD 6 FHA to continue to support these things. Thank 7 you. 8 MR. CYMBALSKY: So this is John -- 9 MR. KESSLER: Bert again. I don't 10 disagree with you, Mike, but I don't think it 11 needs to be part of any kind of a standard. 12 MR. LUBLINER: Oh, I agree, it should 13 not be 14

-- 15 MR. CYMBALSKY: Excuse me, fellows, this 16 is John from DOE representing Azrac. The charter, 17 this has gone beyond the charter, in my opinion. 18 I understand the important of tax credits and 19 rebates and grants, whatever may have you, 20 however, when we do the analysis it's going to be 21 sort of clean of that, right, and we're going to 22 negotiate standards based on what the normal costs

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 34 1 are to do this manufactured housing. I appreciate 2 the sidebars about how other policies, federal or 3 otherwise, could impact efficiency here, but it's 4 not part of our charter and we really need to move 5 off this discussion point. 6 MR. RAMIREZ: So I was just ELMO'd, 7 right, so everyone okay with that, moving on? 8 All right. So financial as a group 9 here, good enough to look at the last one? 10 MR. TOMPOS: I think we should add 11 capital investment by the manufacturer in regards 12 to testing equipment for changes in their process 13 that may or may not happen. 14 MR. RAMIREZ: It capital investment 15 enough to jog memory on that by manufacturer? 16 MR. TOMPOS: Yeah, by manufacturer. 17 MS. DICKENS: This is Ishbel. Can I 18 just add that relevant environmental 19 externalities, you just make it climate change? 20 MR. LUTER: This is Rob -- 21 MS. DICKENS: So we all know what that 22 means.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 35 1 MR. LUTER: Could I suggest that that's 2 beyond our charter as well? 3.5 should be 3 omitted, just like tax credits and utility 4 incentives. 5 MR. LUBLINER: This is Mike Lubliner. I 6 think that there's a distinction I'd like to make 7 between what we include in the analysis in the way 8 of tax credits or these other things, versus what 9 we actually put in the standard. If it's 10 possible, and, John, I'm going to refer back to 11 you, having PNL do this parametric sensitivity 12 study of what these implications of these external 13 things are, I think would be useful. 14 But again, if it's beyond the scope, 15 fine, but I think this is the only chance HUD and 16 DOE are going to get to look at this in this 17 context, so I'm hoping that that will come 18 through. I'm good either way though. 19 MR. RAMIREZ: Okay. So this 3.5, it was 20 suggested that what are we going to deal with that 21 and the suggestion was to eliminate it or modify 22 it to just climate change.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 36 1 MODERATOR HOFFMAN: Eric. 2 MR. LACEY: Eric Lacy. Yeah, I mean, 3 environmental impact seems important but it might 4 be outside the scope of here. But there are other 5 externalities that I'm wondering where these could 6 capture. One -- one would be peak electricity 7 use, and I don't know if that's -- I mean, energy 8 use is obviously part of the charter, but peak 9 energy use is important, I assume, to utilities 10 and to the people paying the rates. 11 I'm wondering if that fits into general 12 externalities, sort of a calculation we were 13 talking about cost effectiveness or whether that 14 belongs somewhere else. But before we completely 15 delete externalities, I wanted to throw that out 16 there. It's important at the state level, I'll 17 tell you, where you have to site new power plants 18 to meet rising peak demands but, you know, I'm 19 wondering if we can capture that somewhere. 20 MR. RAMIREZ: Peak energy usage, is that 21 what you're saying? 22 MR. DENNIS: I'll second that. I mean,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 37 1 I've been assuming that that would be included in 2 costs and also in energy efficiency. I mean, not 3 -- demand, using energy at the wrong time is 4 inefficient use of energy too, so I'm hoping that 5 that's -- that's kind of -- that's why I haven't 6 been chiming in, but that's very important to the 7 national interest use in energy, so. 8 MR. CYMBALSKY: This is John at DOE. So 9 the rule making itself, I don't think is things we 10 need to worry about in terms of negotiating 11 positions. However, I think a lot of these things 12 that were just brought up are very important, sort 13 of impacts the rule we'll have on. So, for 14 example, we do have certain requirements we must 15 do in a rule making to address environmental 16 impact, we will do that. 17 We will include the social cost of 18 carbon as a natural fall-out from the impact of 19 the rule. Peak energy is we, you know, in the 20 appliance world we definitely talk about it in the 21 rule but, again, I think we recognize it as 22 important here but I still don't think that's

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 38 1 something that needs to get muddled in this 2 discussion right now. 3 MR. RAMIREZ: Yeah, I'll tell you, as 4 far that goes, we're trying to take it step by 5 step. I know sometimes it's difficult because you 6 want to eat the elephant in one bit, right, so did 7 you ever hear how to eat an elephant, all right, 8 one bite at a time? So that's what we're trying to 9 do, we're trying to serve it to you little by 10 little here. 11 And these items, although they're up 12 here, we may never even discuss them, right? 13 Because like say, for example, these two that were 14 crossed out, the tax credits and utility 15 incentives, if this doesn't have an impact on it 16 when we go to prioritize them, they're just going 17 to be at the very bottom, right, we're not -- we 18 may not get to them, all right. So it's okay that 19 they're up here but the next -- the next step when 20 we start to prioritize them is where they may -- 21 they might fall to the wayside. Right? 22 MODERATOR HOFFMAN: Well, I just have a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 39 1 question then on the tax credits and utility 2 incentives. Should they be up there at all or 3 out, I don't, I mean, just to -- 4 MR. RAMIREZ: Let me see -- let me see 5 if (inaudible) just striking it to clean it up a 6 little bit. 7 UNIDENTIFIED SPEAKER: To strike it? 8 MR. RAMIREZ: To strike it, to eliminate 9 it. 10 MS. HOFFMAN: Okay, thank you. 11 MR. RAMIREZ: Okay, I didn't see any 12 thumbs down, so. 13 MS. HOFFMAN: Okay. And Brian Rocky has 14 a comment. You want to -- you're on the phone, 15 right? 16 MR. ROCKY: Yes, I am, thank you. Just, 17 and I think it's already been answered, but the 18 discussion on the energy efficiency measures that 19 the department is moving forward with on equipment 20 always includes social cost of carbon now as part 21 of the economic justification. And so the 22 environmental change impact does become a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 40 1 significant part of the financial considerations 2 for this and I believe that was already answered 3 by DOE here in the last minute or so. 4 MODERATOR HOFFMAN: Okay, thank you. 5 Moving right along. 6 MR. ROCKY: Thank you. 7 MR. RAMIREZ: Okay. Then we'll go with 8 financial. All right, so. . . Number 4, ability 9 performance. Do these all fit? 10 MODERATOR HOFFMAN: And can you all see 11 them? Matthew, yeah? Okay. 12 MR. RAMIREZ: You have to get out of 13 your (inaudible) seat if you want to. 14 MS. EPPERSON: Stacey from Next Step. 15 What you have parenthetically, some of that does 16 need to move over. 17 MR. RAMIREZ: Okay, which ones. 18 MS. EPPERSON: So I'm not seeing 19 durability as one. I don't see Energy Star 20 rating, comfort. 21 MR. RAMIREZ: Everything else is there? 22 MS. EPPERSON: I don't see energy

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 41 1 consumption. Is it there? 2 MR. RAMIREZ: Is it here? 3 UNIDENTIFIED SPEAKER: (Inaudible). 4 MR. RAMIREZ: What number is it? 5 UNIDENTIFIED SPEAKER: (Inaudible). 6 MR. RAMIREZ: Oh. 7 MS. EPPERSON: We're moving yellow over. 8 UNIDENTIFIED SPEAKER: (Inaudible). 9 MODERATOR HOFFMAN: Operations and 10 maintenance, is that there? Is that part of this? 11 MS. EPPERSON: But isn't that in 12 financial? 13 UNIDENTIFIED SPEAKER: That's under 14 financial. 15 MODERATOR HOFFMAN: Okay, we don't need 16 it here? 17 MS. EPPERSON: We need to delete here. 18 MODERATOR HOFFMAN: Okay. 19 MR. RAMIREZ: That's a nice clean up. 20 And does that look good? 21 MS. DICKENS: I just have a question why 22 4.2 is climate zone impacts and then 4.2.1 is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 42 1 single (inaudible) double others -- I don't know 2 if those -- that the subs under 4.2 are actually 3 in the right place. 4 MR. RAMIREZ: Yeah, when we're cleaning 5 it up, those were subsets of that so I just 6 brought them over. If they're not, do we 7 eliminate them from here? Do we put them somewhere 8 else or just delete them? 9 MS. DICKENS: I mean, is that -- is that 10 where you'd have -- where the impact would be, a 11 single versus double would be a climate zone issue 12 rather than any other zone issue, or any other 13 head -- I just don't know. 14 MR. POTTS: I think that's where Joe 15 said that they were going to look at those 16 different variables within the climate zones, so 17 maybe that's why -- 18 MR. RAMIREZ: Okay. 19 MR. POTTS: -- they're included in 20 there. 21 MR. RAMIREZ: So for, you know what, it 22 sounds like for our purposes though we may not

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 43 1 necessarily -- I'll just do a strike through 2 keeping there just in case there was a purpose 3 that we didn't -- that we can't think of right 4 now. Is that okay with everyone? Okay. 5 Now, what I'd like to do is go through 6 here and look at these categories and see what 7 information do we need? What data do we need? 8 Who's going to get it and by when, right, we need 9 to be realistic with this. I would suggest that 10 we take a quick break, do a one function break, 11 right, and then when we come back, let's look at 12 all this. You know what, maybe we could even try 13 to get a printout of this so that we have a clean 14 copy in front of you and then we'll start to try 15 to identify the information. Sound good? 10 16 minutes? 17 (WHEREUPON, a brief recess was 18 taken.) 19 MR. RAMIREZ: Okay. Did it feel good to 20 stretch the legs for a little bit? It felt good 21 to stretch the mind a little bit for me. I think 22 I scrambled it a little bit.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 44 1 All right. So what we want to do next 2 is that we want to look at -- we want to look at 3 these and we'll blow them up as we're talking to 4 you about them. But we want to identify what 5 information or data do we need and who's going to 6 provide it and is it a realistic -- well, two 7 things. Is it a necessary request and is it a 8 realistic request meaning that, first of all, 9 necessary -- do we really need it for what we're 10 going versus it's nice to have? I would say we 11 eliminate the nice to have's versus what we need. 12 And then the realistic part is that can 13 we actually get it on time, right, are we going to 14 request them to just sole voluminous that we just 15 can't put -- assemble it, you know, on time. 16 So that's the kind of information we're 17 looking for. What data or information do we need 18 in order to truly problem solve this? And I think 19 the way to go through this would be to go one by 20 one and we'll just take that envelope of building 21 and if we could make that one as a local -- we'll 22 put notes in that envelope of building. I just

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 45 1 showed them how to use this this morning, just a 2 couple of minutes and we can buzz it around. 3 Okay. So what information do we need, 4 or data do we need in regards to this issue? 5 MODERATOR HOFFMAN: Can they see the 6 whole thing? 7 MR. RAMIREZ: Yeah, they have copies in 8 front of them too. 9 MODERATOR HOFFMAN: Oh, okay. 10 MR. RAMIREZ: I put out new copies. 11 MODERATOR HOFFMAN: Got it. 12 MR. RAMIREZ: You know, and as I'm 13 looking at this, if there are -- if there's 14 information and some of the builders (inaudible), 15 right, when this was thrown out there. But if 16 there's information that you all as, what I would 17 say, practitioner's data or information that you 18 have that could be put into the study that's being 19 done, give Joe a little scenario so that way he 20 could plug it in. 21 MODERATOR HOFFMAN: We're just asking 22 about data.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 46 1 UNIDENTIFIED SPEAKER: (Inaudible). 2 MR. RAMIREZ: You're good. That was 3 (inaudible). 4 UNIDENTIFIED SPEAKER: Thought I heard 5 my name. 6 MR. RAMIREZ: A far side -- a far side I 7 think went through my head, but all right. Yeah, 8 Eric? 9 MR. LACEY: Eric Lacey. This seems to 10 be the category for which PN & L is going to be 11 providing a lot of information, so, I mean, things 12 like the efficiency of the various opaque envelope 13 components and the fenestration you factor in SHGC 14 and all those things are kind of included in 15 there. I didn't see anything in here that I 16 didn't hear was going to be included in that 17 report. 18 MODERATOR HOFFMAN: Okay, great. 19 MR. LACY: I think there are other 20 categories that may have bigger needs, but I think 21 this is on that's -- 22 MR. HAGERMAN: So this -- this is Joe

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 47 1 Hagerman. So this is the primary category, I 2 would say, that you're going to see the PNL 3 analysis based off of. However, just to keep in 4 mind, they're going to base that strictly off the 5 code, right, so they're not going to -- nobody's 6 asked to do an Energy Star analysis or, you know, 7 anything like that, what you normally ship, et 8 cetera, et cetera, nobody's asked for that so 9 they're not going to do anything like that. 10 So if we have a request for somebody to 11 say model this U factor, this R, give it to us and 12 we'll do it. Absent of request, though, we're 13 just going to provide what we've been consistently 14 talked about. 15 MR. RAMIREZ: So you guys -- at least 16 from an outsider, it seems like if guys have some 17 of that practices that you're doing or some ideas 18 for him to run, it seems like that would be a 19 valuable information. 20 MR. HAGERMAN: And you don't have to 21 give those to me today, right, as long as we get 22 those, you know, by, let's say, Wednesday,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 48 1 tomorrow, close of business, early Thursday, we 2 can start including this. And it can be an 3 individual request from a (inaudible) number. 4 MR. SANTANA: This is Manny with Cavco. 5 I think without seeing what, you know, what 6 information DOE or people have developed already, 7 it's hard to know what's missing, you know, so 8 once we get some information to start analyzing, 9 then I think the ideas are going to start coming 10 through of, oh, we need this, we need that, we 11 need this other thing. 12 MR. LUTER: Rob Luter to expound on 13 that. I really do think as well that we're going 14 to need to see what they come up with. There's 15 going to be a baseline that's provided. We'll 16 call it -- been calling it the HUD baseline. Will 17 that HUD baseline reflect what's really being 18 produced or the lowest common denominator that can 19 be produced? Don't know. I'm prepared to do some 20 research on my own and offer up to that group 21 statistics on what from the fenestration side is 22 actually being sold most often.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 49 1 We know there's -- there's products out 2 there that are quite poor performers, but they're 3 in the distinct minority and have very limited 4 use. I'd hate for their analysis to reflect that 5 those are really the primary products that are 6 used simply because they can be used. 7 MR. HAGERMAN: Yeah, so appreciate that. 8 So whatever information you give us -- 9 MR. LUTER: Okay. We'll model that. 10 MR. HAGERMAN: -- we'll forward this to 11 you. Just forward it to me. 12 MR. LUTER: I can say the current, you 13 know, baseline that they're using is just a 14 straight -- a straight manufactured house that 15 meets the HUD code, right, so, you know, to what 16 John said -- 17 MR. HAGERMAN: Well, as we discussed, it 18 being -- it being a performance-based code, 19 there's lots of ways to skin that cat. 20 MR. LUTER: Right. 21 MR. HAGERMAN: So the end result, well, 22 it winds up being the same amount of energy used

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 50 1 can look very different in a lot of respects, so. 2 MR. RAMIREZ: So just before I get to 3 Mark - 4 - 5 MODERATOR HOFFMAN: (Inaudible). 6 MR. CYMBALSKY: So just to address the 7 analytics a little bit, so, you know, how we 8 generally set these up in -- in sort of the 9 appliance world and I think it will fit here 10 pretty -- map pretty well, you'll have the 11 baseline how -- like the one that's the least 12 efficient but legally meets the code, so that will 13 be what I'll call the baseline for lack of a 14 better term. 15 And then what we do is, you know, there 16 are options to get to these different levels that 17 we're going to pick and I think what we've kind of 18 focused on is different bumps up in the code 19 levels. And so normally what we do in the 20 appliance world, we do tear downs and I know it's 21 a lot different than the house at this point, but 22 we normally try to pick the -- what would be the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 51 1 cheapest way to achieve that level of efficiency 2 and then that's how we'll bundle the different 3 choices for the analysis. 4 It's not to say we have to do it that 5 way here. If you guys have data, that suggests, 6 you know, the way we do it to meet the 2006 is 7 this way and the way we would do it for 2008 is 8 that way, you know, knowing that there's lots of 9 different ways to do it, but I'm assuming that 10 businesses that -- in the manufactured housing 11 industry isn't too much different in that they're 12 trying to control costs, you know, and increase 13 their profit margins which, you know, that's what 14 we do here. 15 So I'm hoping I'm not too far out by 16 saying what you guys will bundle things together 17 most cost effectively for your business and that's 18 how you would do it. I mean, that's kind of the 19 assumption that we make when we do the analysis. 20 MODERATOR HOFFMAN: Okay. I'm sorry, 21 Mark. 22 MR. WEISS: Question first -- Mark

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 52 1 Weiss, MHIR. Working from the more general to the 2 more specific, how voluminous are the relevant 3 sections of the IECC that we're talking about 4 here? 5 UNIDENTIFIED SPEAKER: Not very. 6 MR. WEISS: Not very? Okay, thank you. 7 I mean, I'd like to see it again not be a 8 technical person. What I'd like to see just in 9 general to begin with is a copy of the relevant 10 portions of the IECC and then send a copy of the 11 HUD standards -- 12 MR. CYMBALSKY: For copies of relevant. 13 Let's make sure we get it down, copies of relevant 14 IECC. 15 MR. WEISS: Relevant sections of the 16 IECC. If we need to look at 15 in the previous 17 iterations, they should be included as well to see 18 the evolution of that standard and the relevant 19 portions from the HUD standard. And then going 20 back to something that Robin raised yesterday and 21 I asked Joe about it at lunch, I think we need to 22 see what DOE generated previously since 2007,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 53 1 draft proposed rule on the information developed 2 as part of that process to see where they were at 3 that point. 4 MR. CYMBALSKY: I'm sorry, why is that 5 relevant necessarily here? 6 MR. WEISS: I'm sorry? 7 MR. CYMBALSKY: I'm trying to figure out 8 the relevance of the old rule that kind of we've 9 moved past that and we're doing new stuff now, so 10 I guess -- 11 UNIDENTIFIED SPEAKER: (Inaudible). 12 MR. CYMBALSKY: Yeah, you know, we'll 13 have - - we're going to hand out analysis as 14 quickly as possible and there will be a bunch of 15 numbers for you to look at, but, you know, what 16 was done for the (inaudible) that was then 17 withdrawn from (inaudible) is kind of, that's 18 history in my opinion, I think. 19 MR. WEISS: Well, our legal opinion -- 20 MR. RAMIREZ: All right. So let me 21 chime in here so -- just to make sure that I'm 22 clear. What you're talking about is a 2012 piece,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 54 1 is that what you're talking about? 2 MR. WEISS: I've never seen it. I 3 assume it's 2012. 4 MR. RAMIREZ: But is that what you're 5 talking about? 6 MR. WEISS: I believe so. 7 MR. RAMIREZ: Okay. 8 MR. CYMBALSKY: He means the 2012. You 9 want an analysis with the 2012 code or do you want 10 to look at the old Noper (ph) analysis? I'm 11 sorry, I may have misheard you. 12 MR. WEISS: No, what I'm referring to is 13 what I think we discussed yesterday which was the 14 draft proposed rule developed by DOE and -- 15 MR. CYMBALSKY: Yeah, we're not going to 16 hand that out anything. 17 MR. WEISS: And any -- well, let me just 18 finish -- any related analysis. 19 MR. CYMBALSKY: Right, we're not going 20 to -- we're not -- we've moved past that, right, 21 so we're going to have all new data, all new 22 numbers and we will provide that as a basis to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 55 1 talk about. 2 MR. LUTER: It was suggested yesterday 3 (inaudible). 4 MR. CYMBALSKY: Not at this point. I 5 mean, I think we're hoping in a few days to a 6 week's time we'll have a bunch of numbers to hand 7 out. 8 MR. WEISS: Well, if I may just respond. 9 You say it's history and that's fine, but I don't 10 know if it's history or not, okay, I don't know -- 11 I don't know what it was and how it might relate 12 to where we start from here. So I understand 13 you're saying it's history but I don't know one 14 way or the other. And I think to have a clear 15 record in this proceeding, given the fact that DOE 16 spent quite some time working on this prior to 17 this proceeding and then we're only talking about 18 two months here potentially, I think we need to 19 see where you were before and where we're going in 20 relation to that. 21 MR. RAMIREZ: Let me -- let me chip in 22 real quick cause I don't think --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 56 1 UNIDENTIFIED SPEAKER: (Inaudible). 2 MR. JENSEN: I just have -- this is Mike 3 Jensen from DOE GC. I just have two comments in 4 that regard. As far as we're concerned, the 5 document that was sent to OIRA in October 2011 is 6 still a pre- decisional document. I understand 7 that it was impermissibly distributed to many 8 people in this room. But as far as we're 9 concerned, that that's history. We're starting -- 10 we're hitting the reset button and we are 11 beginning negotiations again today. 12 That information, the proposed rule and 13 the accompanying documents are still pre14 decisional at this point, will not be distributed 15 outside of DOE. 16 On a slightly, just to move slightly to 17 a separate issue that I think I'd just like to 18 address and then I'll put it out there for 19 everyone's consideration is that there was a 20 discussion about two or three minutes ago about 21 the need for DOE to set forth the relevant 22 provisions of the IECC for all of the committee to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 57 1 understand what provisions we're actually working 2 with. 3 There are certain provisions of the IECC 4 that may or may not be energy efficiency related, 5 depending on what this committee deems those to 6 be. For example, mechanical ventilation or light 7 in. You know, these are issues that I think that 8 the -- the committee needs to address to determine 9 exactly which provisions of the IECC DOE needs to 10 come back and give data to all of you about. 11 MR. RAMIREZ: Yeah. 12 MR. WEISS: Two questions. First of 13 all, can you specify OIRA, what that refers to? 14 MR. JENSEN: Excuse me. In October of 15 2011, DOE transmitted our pre-decisional draft of 16 the rule making at that time to the Office of 17 Management and Budget. There's a section in OMB, 18 the Office of Information and Regulatory Affairs, 19 which is OIRA. That document was never intended to 20 be released to the public and was for OMB's 21 review. That document has since been kicked back 22 to DOE to -- with the instructions to begin the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 58 1 process anew, so that's why we're here today. 2 MR. LUTER: And your position, OGC's 3 position is that regardless of the disclosure to 4 others outside of DOE, that that's still pre5 decisional and still exempt from disclosure? 6 MR. JENSEN: That's correct. 7 MR. RAMIREZ: So there was -- what 8 exactly is the status of PNL? 9 MR. CYMBALSKY: That's the national 10 laboratory. 11 MR. RAMIREZ: Okay. 12 MR. CYMBALSKY: Pacific Northwest 13 National Laboratory. 14 MR. RAMIREZ: Okay. So another piece 15 then would be the PNL study. 16 MODERATOR HOFFMAN: And is Eric -- is 17 that up there for -- you want to speak? 18 MR. LACEY: Yeah. 19 MODERATOR HOFFMAN: Okay. 20 MR. LACEY: Eric Lacey. Just two 21 issues. Don Surrena back here with NAHB reminded 22 me that there are some free resources available if

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 59 1 you've not seen the IECC. The ICC (sic) website 2 has, and it's kind of hard to find on the ICC 3 website so if you want this, let me know and I'll 4 show you how to get there. 5 Also, on our organization's website, 6 RECA_codes.com, you can get a copy of state by 7 state what the requirements are for various 8 additions of the IECC. We don't yet have the 2015 9 up, but it will be the same for 2012. 10 Anyway, if you don't have a copy of the 11 code and want to see one of these resources, come 12 grab me and I'll point you to one of those. 13 MR. RAMIREZ: Let me pause you right 14 there - 15 - 16 MR. LACEY: Okay. 17 MR. RAMIREZ: -- because can you just 18 send that link out, do a reply all to one of the 19 group emails and just send that out to everybody? 20 MODERATOR HOFFMAN: And also I believe 21 you should have a copy of the ground rules, 22 they're been sent out to everyone as well.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 60 1 MR. RAMIREZ: You can do a reply all to 2 that one. 3 MODERATOR HOFFMAN: Cause that includes 4 all the working group members. 5 MR. LACEY: Okay. 6 MODERATOR HOFFMAN: Thank you. 7 MR. LACEY: The second issue, going back 8 again to what the statute and what the scope is 9 under the statute, you're asking whether there's 10 anything in addition to what PNL is already 11 looking at. PNL is going, you know, 2015, 2012, 12 2009, 2006. You know, are there standards that go 13 beyond the 2015 that could be looked at? 14 On fenestration, you know Energy Star 15 version 6.6 might be something to look at in terms 16 of, you know, I'm trying to complete this curve 17 that Emanuel outlined for us. At what point do we 18 reach diminishing returns? If we haven't looked 19 at the standard yet, maybe it's good to throw 20 something in beyond the 2015 IECC just to see 21 where it goes, you know, if it's going to take a 22 lot of resources to get there, then maybe it's not

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 61 1 worth it. But it seems like the statute wants us 2 to go to, you know, more cost effective, you know, 3 go beyond it if it's cost effective or to go below 4 if it's not cost effective. 5 So I don't know if there's a comparable 6 standard for the opaque envelope, you know, 7 building America or something else, but at least 8 on the windows I think there's a slight 9 improvement by going through Energy Star Windows. 10 MR. RAMIREZ: So the question is, is 11 there any information that would provide 12 efficiencies for beyond 2015, if there's any data 13 on that? 14 MR. LACEY: Right. If we haven't gotten 15 all the cost effective energy savings out of 16 windows that we can, would it be worthwhile to 17 look at Energy Star version 6 or windows. 18 MR. RAMIREZ: Is there -- is there 19 anything out there like that? 20 MR. CYMBALSKY: No, sir, that's what Joe 21 described before, that as we get in -- more into 22 the negotiations, people say well that's great,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 62 1 but what if we do "X", "Y" and "Z". And so one of 2 the X's could be we go higher on windows and maybe 3 a little lower here, I don't know how you guys 4 want to do it, but we're higher on everything. 5 You can have, you know, a stretch code, for 6 example, that you want to see analyzed. 7 MODERATOR HOFFMAN: But in terms of 8 time, though, I just wanted to check -- Eileen 9 Hoffman -- is this a request for PNL to run 10 numbers for Energy Star 6 for windows? 11 MR. HAGERMAN: Or can we make a request 12 that you form some type of a, you know, 13 subcommittee and then get us a proposal on what 14 you'd like us to run in addition to what we've 15 already run. 16 MR. LACEY: That's fine, and this is 17 mostly more of a general comment that, you know, 18 maybe we're all assuming the 2015 IECC is the end 19 of that curve when maybe it's not and, you know. 20 UNIDENTIFIED SPEAKER: It's a good 21 comment. 22 MR. LACEY: That was just one example I

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 63 1 thought of. 2 MR. RAMIREZ: All right. So -- but now 3 what's come out of that though is the idea of 4 maybe forming a subcommittee where some of you get 5 together and put together different scenarios that 6 they could through the PNL study. Is there any 7 traction on that, some of you want to get together 8 and assemble different scenarios for that? 9 MR. LUBLINER: This is Mike Lubliner. 10 MR. RAMIREZ: Go ahead. 11 MR. LUBLINER: I'd like to suggest along 12 with windows, we work with the Building America 13 Program and I know (inaudible) does too the areas 14 that might be of interest. We're putting triple 15 pane windows in demonstration homes now. 16 But I think the other areas are -- and 17 this also in the cold climates zone -- foam 18 shooting on the walls, moving the ducts into the 19 conditioned space which would be -- 20 MR. RAMIREZ: Michael, let me -- let me 21 cut you off there because that's, I think, 22 something that the subcommittee would work on,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 64 1 right, those things that you're running through 2 right now, putting together scenarios like that 3 that could be run through the study. Is that 4 accurate? 5 MR. LUBLINER: Correct. 6 MR. HAGERMAN: Right. So this is Joe 7 Hagerman. 8 MR. LUBLINER: Right. I speak in 9 support of the subcommittee, I just want to be 10 clear as to, you know, what the four technologies 11 that the subcommittee might be looking at besides 12 the one that was mentioned by windows. I had 13 three others I was hoping to share but it's not -- 14 MR. RAMIREZ: That's not (inaudible) 15 limiting at all. Whatever you can come up with. 16 MR. HAGERMAN: Right. So let me 17 interrupt real quick. So I have a real trouble 18 just, you know, modeling some generic language, 19 right, I need a specific proposal. So maybe if, 20 you know, you could form a subcommittee, or you 21 and (inaudible) form a subcommittee and gin up a 22 max tack home, right, maximum technology's out

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 65 1 there, so we can look at that as an example, 2 right? 3 Or if you want to say what is -- what is 4 an Energy Star manufactured home, you want to give 5 us that, we can run that. Or if Cavco says we 6 have a, you know, Cavco extra special home, or a 7 next up home, right, you know, if you want to put 8 a straw man out there, we'll model it so you can 9 see where it falls against all the other. 10 MR. RAMIREZ: Michael, was that a -- was 11 that a volunteer to be on that subcommittee? 12 MR. LUBLINER: Sure, you know, I was 13 hoping to get a little scope of kind of where the 14 areas are so we don't go off on a tangent but, 15 yeah, I'm very happy with overseeing that 16 subcommittee. 17 I think the big one that I want to make 18 sure doesn't get (inaudible) an analysis because I 19 know that some of the energy plus analysis won't 20 do some of the things that we may want to do, we 21 found this in Building America, particularly the 22 heat pump water heater one. It's important -- I

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 66 1 think it's an important one. So I'll leave it at 2 that and I'll take -- accept any task necessary to 3 scope those things out. Appreciate that, thanks, 4 Joe. 5 MR. RAMIREZ: Who would like to get 6 together with Michael to put together -- 7 MODERATOR HOFFMAN: And Eric. 8 MR. RAMIREZ: Eric Lacy? 9 MODERATOR HOFFMAN: Emanuel. 10 MR. RAMIREZ: Emanuel Levy. 11 MODERATOR HOFFMAN: So we have Michael, 12 Eric, Emanuel. 13 UNIDENTIFIED SPEAKER: Your Honor, 14 (inaudible) designate someone. 15 MR. RAMIREZ: Lowell Ungar. 16 MODERATOR HOFFMAN: Okay. Lowell were 17 his designee, okay. And this is a subcommittee. 18 What would you call it, subcommittee on? 19 MR. RAMIREZ: I called it the 20 subcommittee for PNL scenarios. 21 MR. CYMBALSKY: Yeah, I would just call 22 -- yeah, I would just call it trial standard

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 67 1 levels for the standard negotiations. 2 MR. UNGAR: Can I ask a question about 3 that? This is Lowell. I wonder how this is going 4 to work in two ways, actually. One is, right now 5 we only have energy savings. If we don't have 6 costs in these, I think this group is going to 7 have a very hard time dealing with what it means. 8 And, yes, it will clear enough to save energy, but 9 so what? 10 The other piece of that is, I mean, one 11 could come up with a max tech home and which one 12 does 10 different things to improve the energy 13 efficiency. I think in the end we're going to be 14 looking at a lot of things separately and I don't 15 know how we're going to evaluate it unless we can 16 do -- look at each of the individual measures 17 separately, but then I don't know if that becomes 18 a completely unwieldy analytical task if you have, 19 you know, 10 measures above and maybe 50 or 100 20 different measures going below 2015 IECC as to how 21 we -- do we try to put together packages that we 22 think are most likely? Do we then need to figure

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 68 1 out what is within scope? 2 It may be if we're -- if we're going to 3 limit the analysis, we made need to figure out 4 what we can do within a standard as opposed to 5 things which would just may be real hard to deal 6 with in a standard even if they make technical 7 sense. It just seems to me before we -- before we 8 start putting this together, we have to have a 9 clear picture of what's going to be useful to do. 10 MR. HAGERMAN: Yeah, so this is Joe 11 Hagerman. So likely by, you know, they're going 12 to -- they're supposed to give me the analysis 13 Thursday or Friday so if you could give us maybe 14 two packages, right, just as a straw man, I think 15 that would be something that they could reasonable 16 get accomplished by then. 17 I mean, they do have the capability of, 18 you know, modeling increments of values but it is 19 very time-consuming. All right? 20 MR. RAMIREZ: Let me -- I'll throw this 21 out there. It might (inaudible) up the works, but 22

--

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 69 1 UNIDENTIFIED SPEAKER: (Inaudible). 2 MODERATOR HOFFMAN: Oh, Robin. Oh, yes. 3 MR. ROY: It's the same thing I've said 4 a few times, it's nothing new. 5 MR. RAMIREZ: You know what, Robin, just 6 really quick though. That's new to us, putting 7 the placard like that. 8 MR. ROY: Is it? 9 MR. RAMIREZ: I like it. I'm just not 10 used to it. 11 MR. ROY: Okay. 12 MODERATOR HOFFMAN: Oh, yeah, cause we 13 have a manual also. 14 MR. RAMIREZ: Yeah, okay. We're just 15 not used to it, we're not ignoring. 16 MODERATOR HOFFMAN: Maybe that should be 17 a rule, a ground rule we didn't -- 18 MR. ROY: I'm sorry. 19 MODERATOR HOFFMAN: -- you've done 20 before without us. 21 MR. ROY: Can we use this as a sign in 22 the future?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 70 1 MODERATOR HOFFMAN: Yes. 2 MR. RAMIREZ: Yeah, yeah. 3 MR. ROY: It's sort of further to 4 Lowell's point. It's very useful to have more 5 cost information sooner than later and I 6 appreciate the PNL is not working towards any cost 7 information. But perhaps it can be -- maybe we 8 can make a request as a working group of DOE to 9 start populating to the best of Navigant or PNL. 10 I'm not sure who you'd want to delegate this 11 assignment to, populating the incremental cost 12 associated with a different efficiency levels that 13 are being represented in this PNL work. 14 We will undoubtedly have many comments 15 on those -- those proposed costs, but it would be 16 very useful to have that structure and to have 17 that starting point information of what DOE has 18 been able to glean and DOE's contract has been 19 able to glean. And it's not going back to the -- 20 to the old 2010, '11 analysis, it's what you're 21 thinking now. So it's just another assignment to 22 give to your consultants.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 71 1 Would we think that's a useful thing for 2 them to start populating? Can we show a thumbs? 3 MR. HAGERMAN: All right. So this is 4 Joe Hagerman. Absolutely double thumbs up on 5 that. The only cost that I'm aware of that we've 6 received is in the RFI and it was pretty thin. So 7 if manufactures could again the route to sign an 8 NDA with Navigant and supply some cost and 9 shipment data, that would be great, or you can 10 just submit it through the, you know, public 11 comment -- I mean, the comment process too, so. 12 MR. ROY: Robin again. I'd also suggest 13 that these PNL and Navigant folks are incredibly 14 bright and cross a lot of information and I would 15 love to see what their hunches are even if they 16 can't refer to something specifically within this 17 docket. As a starting point, it would be useful. 18 They have all sorts of resources and experience 19 and, you know, if they start populating that. If 20 you wait, it's not going to go faster. 21 MODERATOR HOFFMAN: So are you -- is 22 this a suggestion --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 72 1 MR. ROY: It's a -- it's a continuation 2 of my original one which I was asking for a thumbs 3 up from for -- 4 MODERATOR HOFFMAN: That is asking of 5 DOE but also with some assistance if needed? 6 MR. ROY: All the magic that PNL and 7 Navigant usually brings to a problem. They bring 8 great genius to most problems. I think they make 9 a few phone calls. Sometimes you won't get 10 information thrown over the (inaudible) and 11 they'll have to go out and solicit it. I think 12 they're incredibly capable of doing so. 13 MODERATOR HOFFMAN: Is this a request 14 that has the endorsement of the entire working 15 group? That's what -- is this -- does everyone 16 understand the request? 17 MR. LUTER: There was a lot of words 18 coming out of your mouth. 19 MR. ROY: Cogent (sic) queries and 20 requests are not my forte. 21 MR. RAMIREZ: Headline. 22 MR. ROY: Headline.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 73 1 MODERATOR HOFFMAN: Elevator speech. 2 MR. ROY: Yeah, the working group is 3 requesting the Department of Energy to begin 4 populating its energy models with a first -- a 5 first estimate of incremental costs for the 6 measures that are going beyond the current HUD 7 code. 8 MR. LUBLINER: This is Mike Lubliner. 9 We've got costs dated I thought we submitted 10 during the RO5. This is work we did for the 11 Department of Energy, (inaudible) administration. 12 We surveyed all the manufactured region that's in 13 partnership on energy and were able to get some 14 reasonably good cost data on those things. So, 15 Joe, if you don't have that, I can get it to you 16 or you can get it from BPA. 17 MR. HAGERMAN: So thank you, Michael. 18 The general counsel's office just helped me 19 remember something. So in 2011 I think their 20 office and DOE reached out to a lot of the 21 manufactures asking for a call stata, and all 22 their discussions should be on the docket, some

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 74 1 docket, right. So maybe we could circulate that 2 document and see if we should update the 3 information that you already provided. 4 MR. LUBLINER: Sure. 5 MR. JENSEN: Just to echo that point, 6 this is Michael Jensen from the DOE Office of the 7 General Counsel. We about four years ago we 8 reached out to half dozen, a dozen or so 9 manufactured home owners and manufacturers and 10 many of you who are maybe represented in this 11 room, and we received quite good information and 12 all that's published on regulations.gov, dewey's 13 docket, and there's a manufactured housing website 14 on the DOE Office of Energy Efficiency and 15 Reliable energy home page that contains a link to 16 that document where you can see the conversations 17 that we did have back in 2011. So it would be 18 helpful for DOE if we could actually -- if those 19 of you that we did have conversations with could 20 review those -- that information at this point and 21 let us know if there's any information that needs 22 to be updated.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 75 1 MS. DICKENS: Could you share that link 2 with all of that, please? I don't know what 3 you're talking about. 4 MR. JENSEN: I don't know the exact link 5 offhand. 6 MR. RAMIREZ: Could it be sent out to 7 the work group? 8 MS. DICKENS: Could it be sent out to 9 our group though? 10 MR. JENSEN: It can be sent out. 11 MS. DICKENS: Yeah, thank you. 12 MR. JENSEN: It's on the DOEERE 13 manufactured housing website and I'll send a link 14 after this (inaudible). 15 MODERATOR HOFFMAN: You'll send it to 16 Emily and to Javier and we can send it to 17 everyone? 18 MR. JENSEN: Yes. 19 MR. ROY: Robin Roy. That's fantastic, 20 that will be very useful. But I now having heard 21 that, I doubly implore DOE to start populating 22 with costs and urge it not take the approach --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 76 1 DOE not take the approach that the members of this 2 subcommittee or this working group pour through a 3 docket that's several years old to try to update 4 pieces of it. It would be much, much more 5 effective of everybody's time if DOE would start 6 populating a model on its own much more concise 7 for everybody's input. 8 MR. LUBLINER: This is Mike Lubliner. I 9 agree with Robin also. Resources that you might 10 be able to get cost data from -- including I 11 suggest you look at NAIMA for insulation, also 12 insulation prices in the kind of bulk procurement 13 quantities that this industry's used to procuring 14 them. So that might handle a lot of the 15 insulation, both the floor, the wall and the 16 ceiling insulation. 17 Then for windows, we have Rob at NFRC 18 might be an organization that could help provide. 19 Some of these individual insulation window 20 manufacturers are uncomfortable sharing their own 21 information, they like to go through their own 22 organizations for -- to avoid a perception of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 77 1 collusion on prices and stuff. 2 So those would be two areas, NFRC and 3 the NAIMA group for insulation. 4 MR. RAMIREZ: So there's a couple 5 things. I need to back up here because I want to 6 tighten this up a little bit so that way these 7 ideas aren't just thrown out there and these are 8 great ideas but nobody's following up on them. 9 All right. So on the subcommittee, it sounds like 10 Michael's going to take the lead on that and we 11 have Eric Lacy, Emanuel Levy and Lowell Ungar. 12 Now if I'm understanding everyone's role 13 here, who's the builder rep on there? Is there a 14 builder rep on there? I think that's missing, 15 right? 16 MR. LUBLINER: I hope I didn't scare 17 these guys away. 18 MR. RAMIREZ: What I'm getting at is if, 19 look, if you're going to be throwing some possible 20 scenarios to have the study in there, I think it 21 might be worthwhile having a builder rep in that 22 subcommittee.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 78 1 MR. LUBLINER: I totally agree. I don't 2 want to be preaching to the choir here, I want to 3 get a good dialogue on this committee with the 4 industry. 5 MR. SANTANA: I would have volunteered 6 to join. I can see the initial -- 7 MODERATOR HOFFMAN: Push your button. 8 MR. SANTANA: Yeah, it's pushed, it's 9 just too far from my mouth. You know, I'd like to 10 see the original reports that DOE came up with, 11 then I can see what's missing before we just throw 12 out some pie in the sky stuff. 13 MR. RAMIREZ: And from what I 14 understand, that's going to be coming out pretty 15 soon. I think -- I think the whole subcommittee 16 wants that to get an idea of how that looks and 17 then to be able to create a scenario. So, yeah, 18 you would the -- 19 MR. SANTANA: It just looked a little 20 preemptive to set it up and, you know, we wouldn't 21 be able to do anything we validate the report. 22 MR. RAMIREZ: Right, you probably

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 79 1 wouldn't meet until you get that. So is it safe 2 to put your name on there? 3 MR. SANTANA: Yeah. 4 MR. RAMIREZ: Great, so we'll put Manual 5 Santana. 6 MODERATOR HOFFMAN: All right, Eric. 7 MR. LACEY: Eric Lacey. Just for the 8 sake of scope, my intention is not to put out the 9 extreme potential for every single component of 10 the building, but maybe to find a handful of areas 11 where we think either there's an existing that 12 goes beyond or a commonly used standard or 13 something where we think -- or a product or 14 something that we think would work. And for that, 15 I think the input of the manufacturers and 16 builders would be very helpful, you know. The 17 could point out that, you know, without endorsing 18 a specific practice could say here's an area where 19 you might test out, you know, whether this is cost 20 effective. But at least I wouldn't see us going 21 into every single aspect of the building and 22 asking PNL to go and, you know, give us

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 80 1 calculations on everything. 2 MR. HAGERMAN: Maybe with Emanuel's 3 placard up, that means he's nominated himself to 4 help you guys. 5 MODERATOR HOFFMAN: He's already on it. 6 MR. HAGERMAN: Oh, you're already on it? 7 MR. RAMIREZ: Emanuel's been patient. 8 He's been -- I was just trying to back up and 9 tighten some of this stuff up. 10 MODERATOR HOFFMAN: Yeah. 11 MR. RAMIREZ: But go ahead, go ahead. 12 MR. LEVY: Emanuel Levy. A couple 13 things. Lowell had brought up the issue about how 14 do you organize this process and I just want to 15 throw one more thing on the table just to add 16 confusion to the - - to the mix. There's another 17 program called BEopt which is run by another 18 laboratory which generates curves like that. It 19 does the same thing Energy Plus does and it does a 20 cost benefit curve. 21 And the way -- so that might be worth 22 looking at too and PNL can run that software, it's

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 81 1 called BEopt. 2 What they need, and I think it's been 3 discussed around the table, is both energy 4 information which, you know, can generate, and 5 cost information in which some of which they have, 6 some of which we can provide as industry. Some of 7 which we're going to have to be more creative 8 about because there are a lot of options that Eric 9 and Lowell alluded to more efficient items that 10 are typically considered now for which if we --- 11 we were going to include them, we'd have to come 12 up with the price and it would have to be a price 13 that is comparable to the price that we're going 14 to quote for insulation, which means car load 15 quantities sold to the industry and that's as much 16 art as science to come up with that information, 17 so it would be good to have somebody from industry 18 who participates in that process and can 19 contribute to that discussion. 20 But I don't think -- I think what we're 21 coming up with here is a series of a larger group 22 of actions that we can, we don't have to worry

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 82 1 about it whether it fits within IECC or just a 2 series of options so that we can create a spectrum 3 and a curve like what you see up here. It doesn't 4 have to be part of a standard today, so we don't 5 have to worry specifically what's in the 6 standards. 7 Later on we can go back and show on any 8 one curve that we generate where the standard 9 falls. But right now I think we're only concerned 10 with a series - - largest series of options that 11 we can put together, for which we can get both 12 energy, use information and cost. 13 MR. DENNIS: So it seems like, you know, 14 we have the ability to model the energy components 15 of some of these kind of above like ICC codes. 16 But the cost analysis is kind of a separate 17 component. And, you know, before throwing a much 18 of max tech information into the energy models, it 19 might be good to also pair those with the cost 20 that we could all kind of review and say, okay, 21 now we're not going to just do analysis and we 22 don't have the cost and have five analysis and

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 83 1 then say, oh, this one, let's just do cost on this 2 one. It might make sense to have line item, you 3 know, things and costs and kind of go through it 4 and say, we're not, you know, running it and then 5 later saying, well, the cost of this is actually 6 because a subgroup looked at it or there was no 7 cost in it and they just wanted to see what the 8 max tech would look on energy. 9 And like Lowell was saying, it's in a 10 vacuum. How much energy you save doesn't relate 11 to cost effectiveness without the cost part. So 12 it might make sense to kind of come up with, you 13 know, these scenarios for the model also with cost 14 before spending the time and resources to run the 15 models when we're not sure we're going to have the 16 cost or they're going be technology. 17 And the other thing besides cost is also 18 practical considerations that might, you know, not 19 allow a technology. We've seen it in other 20 standards like transformers or something where the 21 cost might look a certain way but there's a, you 22 know, some kind of supply chain problem or, you

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 84 1 know, all these things could maybe be worked out 2 so that we're not just working in an ideal world 3 where, you know, it's max tech but. 4 MR. CYMBALSKY: Yeah, this John from 5 DOE. So all of that will come in at some point, 6 but you got to start somewhere. There's no reason 7 to sit around and wait for things to happen. 8 Clearly, you know, if we don't know the 9 cost of something, you're not going to set a 10 standard around it, I don't think, so. 11 MR. RAMIREZ: So it sounds like we're 12 going top start off with the initial study, it's 13 about done. That's going to go out soon. And then 14 the subcommittee will, once they have it, look at 15 it and see what other scenarios they would like to 16 see run. 17 But could I suggest, Emanuel, that work 18 with Joe and if there are things on the study that 19 you would like to see, can it look like this, can 20 you do that? Can you work with him on that to try 21 to capture some of the points that have been 22 discussed here?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 85 1 MODERATOR HOFFMAN: And also, I'd just 2 add we have a consensus request, I guess, to begin 3 populating energy models with, what does that say, 4 first estimates of incremental costs from measures 5 to ask DOA -- DOE to help with, and the whole 6 committee has asked you to do that, so hopefully. 7 MR. ROY: Just to clarify the last line 8 of the sentence up there, it's not just to use the 9 2011 information to populate the study, but it's 10 to use that in other sources that the geniuses at 11 Navigant and PNL and DOE can bring to bear. They 12 do amazing work whenever given such commission. 13 MODERATOR HOFFMAN: And any questions on 14 that? 15 MR. CYMBALSKY: I mean this is standard 16 fair for these guys. There's nothing earth 17 shattering here, we do it all the time. 18 MODERATOR HOFFMAN: Okay. 19 MR. CYMBALSKY: We just need to get, you 20 know, need to find the data and so that's where 21 again any information the manufacturers can 22 provide, whether it be by the NDA route or public

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 86 1 route, either way you want to do it, that's going 2 to help. Otherwise we'll go with what we have, 3 just like we do in other rankings. 4 MR. ROY: Can I request, and I 5 understand it's very hard to do, but if it's 6 possible at all to get that in two weeks before we 7 come back here because we're coming back here two 8 weeks from tomorrow. 9 MODERATOR HOFFMAN: Right. 10 MR. ROY: Wow, how much fun. If we 11 don't have that, it's going to be a much less 12 productive session that it will be with it. And 13 even recognizing that it will probably be 14 populated with a lot of things that we'll all have 15 many comments on. That would be very helpful. 16 MR. HAGERMAN: Yes, this is Joe Hagerman 17 and I totally agree with you and John and I have 18 discussed about seeing if PNL could go ahead and 19 add costs, whatever costs that they have already, 20 go ahead and add that to the analysis they're 21 going to deliver at the end of the week. 22 MODERATOR HOFFMAN: How do you feel now?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 87 1 MR. HAGERMAN: We're not trying to slow 2 -- trying to slow things down here, right. Those 3 geniuses can work faster. 4 MODERATOR HOFFMAN: Almost dismissed, a 5 couple of things. We're not dismissed yet. 6 MR. RAMIREZ: No, no, we're not 7 dismissed. No, just a -- on a happy note. 8 MODERATOR HOFFMAN: Yeah, right. Yeah, 9 because we also have at 3:00, we said we'd have 10 public comments so we -- yeah. 11 MR. RAMIREZ: Oh, you know what? We -- 12 the group yesterday talked about possibly staying 13 till 5:00 if we needed to, right. But on the 14 agenda we had that at 3:00 was going to be public 15 comment. 16 MODERATOR HOFFMAN: So we should honor - 17 - I think we should honor that. The 3:00 public 18 comment you can -- people who've been listening 19 and waiting in the back, if they have any 20 questions and, yeah. 21 MR. RAMIREZ: Let me see if we could 22 finish this.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 88 1 MODERATOR HOFFMAN: Sure. 2 MR. RAMIREZ: I think we're almost done 3 with this one, right, and then we go to public 4 comment. So is it -- Joe, it sounds like you got 5 your hands full as far as communicating some stuff 6 to PNL, but is that good enough for number one at 7 least for now, as far as information needed? So 8 we have the subcommittee that's going to be 9 working and probably running out some different 10 studies but -- and Emanuel's going to work with 11 Joe once they get the study, say look, could we 12 tweak it this way or that way so that we could use 13 that information the best that we can. 14 MODERATOR HOFFMAN: And that's for 15 number one envelope of the building? 16 MR. RAMIREZ: Yeah. 17 MODERATOR HOFFMAN: That's the one, 18 okay. 19 MR. RAMIREZ: Okay? 20 MODERATOR HOFFMAN: Yes, Lowell. 21 MR. UNGAR: Just mention I -- it seems 22 to me eventually we're likely to need perhaps like

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 89 1 a sensitivity analysis on -- particularly on air 2 leakage and possible glazing percentage, and I 3 think it's probably premature to do anything on 4 that now. I think we should wait to see what 5 assumptions PNL is making, but I suspect that will 6 then come into the discussions. We'll need some 7 way of determining what 8

-- 9 MR. RAMIREZ: Is that under building 10 performance? 11 MODERATOR HOFFMAN: Or an envelope for 12 the building? 13 MR. UNGAR: Or envelope or both, I don't 14 know. 15 MR. RAMIREZ: Okay, okay. But either 16 way, that would not be number one? 17 MR. UNGAR: I'm just saying I don't -- I 18 don't -- I'm not saying we should do anything 19 about it now, I just think those are going -- you 20 know, the question will come not just for these 21 packages, but how do you deal with, you know, when 22 we get down to these issues, I think those are

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 90 1 going to be -- come into play, we'll need to work 2 it out somehow. 3 MR. RAMIREZ: Make that comment again 4 when we get there so we can add it in there. 5 MR. LUTER: Rob Luter. 6 MR. LUBLINER: This is Mike Lubliner. 7 I'm sorry, Rob. Go ahead, Rob. 8 MR. LUTER: Just briefly, the HUD Co 9 does have some prescriptive minimums for a glazed 10 area based as a function of square foot. I would 11 hope that the lab's following those minimums. One 12 would assume, right? 13 MR. HAGERMAN: One would assume that 14 geniuses would be following those minimums. 15 MR. LUTER: Well, but it's part of the 16 HUD Code, it's not part of the IECC, so. 17 MR. HAGERMAN: Right, they're making a 18 HUD Cole model as your base line. 19 MR. RAMIREZ: Okay. So I want to try to 20 keep you folks in cause that sounds like that's 21 under one of the other bullets, right? 22 MR. HAGERMAN: I sort of think we're at

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 91 1 ELMO situation with the analysis, right? 2 MR. RAMIREZ: That's what's I'm trying - 3

- 4 MODERATOR HOFFMAN: Right. We're moving 5 ahead. 6 MR. RAMIREZ: That's what I'm trying to 7 get (inaudible), yeah. 8 MR. HAGERMAN: Okay. I think we've 9 beaten the dead horse like four times already. Is 10 there a rule about that, too? 11 MODERATOR HOFFMAN: Yeah. 12 MR. RAMIREZ: I'm sorry, Michael, do you 13 have something? 14 MR. LUBLINER: Yeah, I just wanted to 15 get clear on how we're going to look at mark-ups 16 from material cost to retail. There has been 17 historically values that the industry's shared and 18 we've used to take, say, the crude cost of 19 material, factor in their overhead profits and 20 costs and then the retails profits so that we get 21 something that's more closer akin to what the 22 consumer's going to see in price.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 92 1 So that's an area that I would hope that 2 we're going to get into as well as the mark-ups 3 from materials. And I understand that can be 4 confidential so we need to be sensitive to the 5 industry on that stuff. 6 MODERATOR HOFFMAN: Okay. 7 MR. RAMIREZ: Okay. Public comment and 8 then once we're done with public comment we'll 9 take a break and then come back. 10 MR. SURRENA: Don Surrena, National 11 Association of Home Builders. 12 Today when you were talking about the 13 impact, the increase in cost for manufactured 14 housing, I had our economics department run some 15 numbers. And we estimate that in 2014, the 16 average price of -- this is for entry level, not 17 some of the more specialty things -- for 18 manufactured homes, including the cost of lot 19 development is about $53,000 for single homes and 20 $100,000 for double homes. 21 The increase of the price for a single 22 manufactured by $1,000 will disqualify 347,901

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 93 1 households from being able to afford these homes. 2 Similarly, if the price of a new double 3 manufactured homes raises $1,000, 315,385 4 households will be priced out of the market. 5 The effects are not cumulative since 6 they're based on the same income distribution of 7 all U.S. 8 households. There are not effects on 9 sales -- these are not effects on sales, rather 10 only on the ability to qualify for a mortgage. 11 So when you raise the cost of housing, 12 irrespective of whether it's manufactured housing 13 or single-family housing, there are people who 14 just won't be able to qualify for it. If you 15 qualify them out of the market, then they stay in 16 the same older energy inefficient homes that 17 they're in already. 18 And if you raise the bar too high, they 19 won't go in at all. But if you raise it at level 20 where they could still get in but they're in 21 better housing than they were, the energy 22 efficiency of the country improves. The carbon

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 94 1 footprint is better if you can't keep those things 2 in mind. 3 When we talked about the IECC, and I 4 understand it's already in legislation, the IECC 5 was made and designed for stick built single6 family detached housing. It never had any 7 intention of being covered for manufactured 8 housing. There are just some things that you 9 can't do in manufactured housing, especially the 10 single wide, that you can do with a stick build or 11 even a double wide. 12 The buyers of manufactured housing are 13 affected to a large degree for qualifying for 14 mortgages. They aren't mortgages of standard 15 housing, they're a lower income bracket. And 16 being able to afford a home for people living in 17 older homes is what we're trying to do. That's 18 what HUD was mandated to do, was to follow low 19 income or affordable housing. Not affordable 20 housing for myself or affordable housing for 21 possibly some of us in this room, but for people 22 who can't get a single-family detached home or

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 95 1 they just need housing in an area for replacement 2 housing. 3 We talked about comfort. Comfort is not 4 an enforceable or a buildable result. It is the 5 determination of each individual. The codes, the 6 building code and the residential code, set a 7 minimum for the minimum amount of heat that is 8 required to be in a home to make it livable. 9 There's nothing that goes on the opposite scale to 10 say what the minimum cooling is. There's no 11 requirement in the codes for cooling. There's 12 talk of it but it hasn't occurred yet. 13 And fenestration in the codes again is 14 set for standard housing where the width and depth 15 of the frame is not conducive to single-wide 16 housing, manufactured housing. It's just not 17 there with the fenestration that is called out in 18 the codes. 19 I just wanted the working group to be 20 aware of these things and have them there to think 21 about and talk about. And if you would have any 22 questions, feel free to email me. I'd be glad to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 96 1 get my email address out to whoever would like to 2 have it. Thank you very much for this time. 3 MODERATOR HOFFMAN: Thank you. Thank 4 you very much for your comments. 5 Okay, anyone else? Well, then, given 6 that we want to take a, how long, 10? A 10-minute 7 break, we come back, we'll be finishing up. Okay, 8 so come back in 10 minutes please. 9 (WHEREUPON, a brief recess was 10 taken.) 11 MODERATOR HOFFMAN: Okay, we're back 12 from break. A couple of small announcements. One 13 is that there's a very nice list that Brenda from 14 DOE has put together of everyone's business card, 15 so if you want a copy of who was here for today, 16 it's out there. 17 Okay. Second, we're hopeful we might 18 end at around 4:00 or earlier. We had originally 19 said we'd leave at 3:30, but we got a request to 20 stay till 5:00 and my sense is the energy level is 21 such that we'll see what we can do. But really 22 what we want to do know is go through and see if

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 97 1 there are anymore assignments or data and then 2 just recap, tell you about the next meetings and 3 tell you sort of a tentative agenda that we're 4 thinking of. Okay? 5 MR. RAMIREZ: All right. So looking at 6 2, 3 and 4 and I'll put that out there broadly, 7 right? What information do you think you 8 absolutely need that you could identify at this 9 moment? It's not like if you don't mention it 10 today, the door's closed, all right, but at least 11 for now, what information have you been able to 12 identify for those areas? 13 MR. LUTER: Can we zoom in a little more 14 (inaudible). 15 MODERATOR HOFFMAN: Yeah. 16 MR. RAMIREZ: So let's start with 2. 17 Yeah? 18 MR. WEISS: Well, just consistent with 19 what I've asked for previously, if we could get 20 the relevant sections of AShrae 62.2 or what folks 21 think is relevant, believe is relevant, that would 22 be helpful.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 98 1 MR. RAMIREZ: Joe has something that -- 2 MR. HAGERMAN: Yes. Both the AShrae and 3 the ICEE are copyrighted, so we'll have to think 4 about how to provide copies of that, but we're 5 looking at that. We've talked to both our 6 contractors about it. 7 MR. LUTER: Rob with Lippert. Are we 8 looking for the information we would like to 9 evaluate how these bullet points are going to 10 effect our end energy analysis or -- for example, 11 are these items addressed in the IECC right now? 12 My understanding is IECC is construction. Do we 13 have appliances or heat, you know? 14 UNIDENTIFIED SPEAKER: So I think some 15 facets of everything that's up there is addressed 16 in the ICC. I mean, the ICC doesn't cover 17 appliances. They don't cover hot water heaters or 18 water heaters, but they do cover things like the 19 insulation on water heaters. 20 MR. LUTER: Okay. 21 UNIDENTIFIED SPEAKER: Or insulation on 22 pipes that deliver hot water.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 99 1 MR. LUTER: So the context would be what 2 information are we looking at as these things 3 apply -- 4 UNIDENTIFIED SPEAKER: Yeah, absolutely. 5 MR. LUTTER: -- to the IECC currently, 6 okay. 7 UNIDENTIFIED SPEAKER: I think I 8 understand the intent, too. 9 MODERATOR HOFFMAN: Mark? 10 MR. WEISS: Yeah, I think I understand, 11 too. I mean, this is not a final statement of 12 what's relevant to the encore necessarily. 13 MR. RAMIREZ: Good for 2? This is the 14 auction. Going once, going twice. 15 MR. HAGERMAN: I will say that I will, 16 you know, I just ask PNL to provide the -- 17 whatever costs they have to their analysis as well 18 and I'll get them to tell you what the sources of 19 for their costs, so that's the best I can do 20 without you all submitting information. 21 MR. RAMIREZ: All right. So, Emanuel. 22 MR. LEVY: I just realize as we're

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 100 1 talking about this. In terms -- if we want to get 2 to cost benefit analysis, we need more than just 3 the cost of the items, we need the economic 4 assumptions that go into the (inaudible) cost 5 calculation. Things like discount rates, rule 6 escalation rates, rule rates, energy costs and 7 those kind of things. So I think there's probably 8 a longer laundry list of financial assumptions 9 that go into the cost benefit analysis that we 10 need to get ahold of. 11 MR. RAMIREZ: All right. And I think I 12 picked the right person then, huh, to work with 13 Joe? 14 MR. HAGERMAN: Let us first -- let us 15 try to answer that because, you know, we get a lot 16 of the -- a lot of the fuel costs, for example, 17 from EIA projections and everything, so. So let 18 us try to just respond to all this and show you 19 how we're responding before you just litter us 20 with a lot of information like that. There's a 21 stuff that the department already does in terms of 22 energy costs.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 101 1 MR. RAMIREZ: Some of it may be doable, 2 some may not, but I think that if you -- once you 3 get it, see what's missing, work with it. 4 MR. LEVY: Anything specific under 5 financial? 6 MS. EPPERSON: Stacey, Next Step. I 7 think we're going to have to have data to 8 understand the current income levels, people 9 buying manufactured homes, so I think there's a 10 couple we can go for that to industry and some 11 other studies that have been done since this data 12 and I volunteer to help work on that. 13 MODERATOR HOFFMAN: Is there someone -- 14 would you like someone to work with you on that? 15 MS. EPPERSON: It might be appropriate 16 to form a subcommittee -- 17 MODERATOR HOFFMAN: Subcommittee. 18 MS. EPPERSON: -- in this area since 19 it's such a large area to look at. 20 MR. RAMIREZ: All right. And let's do a 21 new subcommittee -- subcommittee to gather 22 financial data.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 102 1 MS. EPPERSON: Financial data. Then 2 we're also going to have to look at financing 3 that's available. You might as well look at that 4 at the same time and look at averages with what's 5 going on in the industry, look both at personal 6 property finance and conventional mortgage 7 financing what's available and what those rates 8 are. 9 MODERATOR HOFFMAN: Who would like to 10 work - 11 - 12 MR. RAMIREZ: Stacey Epperson. 13 MODERATOR HOFFMAN: And also guess who? 14 Lois. 15 MR. RAMIREZ: Robin Roy. 16 MODERATOR HOFFMAN: And, wait, Robin and 17 Mark. 18 MS. DICKENS: And Ishbel. 19 MODERATOR HOFFMAN: And Ishbel, a 20 popular group, okay. 21 MS. DICKENS: Because I think that I'd 22 like to just know standard prices of homes

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 103 1 themselves. I don't know even what homes cost. 2 MODERATOR HOFFMAN: Okay. 3 MR. RAMIREZ: Okay. So I have Stacey, 4 Robin, Mark, Ishbel -- 5 MODERATOR HOFFMAN: And Lois. 6 MR. RAMIREZ: -- and Lois. Was that it? 7 MODERATOR HOFFMAN: I think so. 8 MR. RAMIREZ: And Stacey, is it okay to 9 put you as the point person on that to reach out 10 to them and -- 11 MS. EPPERSON: Yes. 12 MR. RAMIREZ: Okay, then is that it for 13 3? 4? Anything we need here or a lot of this 14 covered under No. 1, but is there anything 15 additional you think under 4? 16 MR. EZZO: This is Mark. I think the 17 main we're going to need is a copy of the 18 residential section of the 2015 IECC because a lot 19 of what's under 4 is covered in the code. And I 20 think, Mark, you mentioned, it's not, you know the 21 IECC 2015 is -- it's maybe a couple hundred pages, 22 but the residential section is not huge, it's 20

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 104 1 pages. 2 So I know someone was saying, I think 3 Joe might have said it's copyrighted. You can't 4 just make a photocopy of it and PDF it to 5 everybody, but it's available on line, you can buy 6 it and probably have it in your office in a week. 7 UNIDENTIFIED SPEAKER: (Inaudible). 8 MR. EZZO: Okay. 9 MR. LUTER: Let me add something, if I 10 could. Rob with Lippert. The notion of an 11 organization like the Code Counsel or AShrae or 12 anybody furnishing free of charge a copy of the 13 publication for use with a group like this, it's 14 not without precedent, it goes on all the time. 15 They come out watermarked on the -- electronically 16 watermarked just as if we'd buy it and it's for 17 the common good. 18 I would reach out to them and find out. 19 I mean, they can say no or not. 20 MR. RAMIREZ: Sometimes my hearing isn't 21 too good. Did you say you're going to reach out 22 to them?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 105 1 MR. LUTER: Well, I would suggest that 2 the DOE reach out to them. I mean that's -- 3 MR. HAGERMAN: Yeah, that's what we're 4 going to do. That's the process. 5 MR. LUTER: I would not be surprised if 6 they would say no, we'd be glad for you. 7 MR. HAGERMAN: Yeah, worst case, we just 8 buy you all a copy. 9 MODERATOR HOFFMAN: And the third thing 10 is Eric I think has a copy. 11 MR. HAGERMAN: I mean, it's like 30 12 bucks, yeah. 13 MODERATOR HOFFMAN: Eric has one he can 14 send us. 15 MR. HAGERMAN: It's only 30 bucks, so 16 we're going to resolve it. All right? 17 MODERATOR HOFFMAN: Okay. We'll go with 18 that first. 19 MR. HAGERMAN: I'm not going to promise 20 tomorrow. I mean, you all are giving me a, you 21 know, a lot of action items I dare to say. 22 MODERATOR HOFFMAN: The to-do list to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 106 1 die for, there it is. Well, that's great. 2 MR. DENNIS: Just background. On 3 durability, one of the problems that we find is 4 that the housing stock, you know, they're designed 5 a certain way and then they kind of start 6 deteriorating and then we have energy problems 7 with, you know, a lot of demand and a lot of 8 consumption. So there is a real value to having a 9 durable product in terms of not having a 10 (inaudible) as an existing home later. I don't 11 know how that's incorporated into the standard, 12 but is that something that is factored in? And I 13 mean our problem ends up being with existing -- 14 that we try to go retrofit and it's so expensive, 15 but we have so high bills that we need to do it. 16 So that upfront durability, whether or 17 not there's a heat pump or whatever, if the ducks 18 are falling or something like that five, 10 years 19 down the road, we run into a lot of problems. So 20 there's a value to durability. I don't know if 21 it's financial or how that's incorporated. Any 22 background would be appreciated, but that's a real

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 107 1 consideration for us, I know. 2 MR. RAMIREZ: So what -- what do we -- 3 what could be gathered here, who would get that? 4 MR. DENNIS: Well, there's a metrics 5 that's taken into account. I don't know if there 6 any data that we use or what has historically been 7 done. Is it just a kind of qualitative statement 8 or qualitative statement or, you know, if the 9 measures are going to - - you know, certain 10 measures are not going to work if the envelope's 11 falling apart, whether or not it's appliance or 12 heating HVAC. It's important that there's a 13 durable envelope as well as, you know, a thick 14 envelope. 15 MR. RAMIREZ: So has anybody has that 16 information? 17 MODERATOR HOFFMAN: Data or is there any 18 data or metrics on durability (discernible)? 19 MR. CYMBALSKY: No, I mean, I would look 20 to the manufacturers and others for that. We 21 typically don't -- they could speak to a -- the 22 DOE's not going to speak to that.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 108 1 MR. RAMIREZ: So let's ask the group. 2 Is there -- is it that out there? 3 MR. LUBLINER: This is Mike Lubliner. 4 MR. RAMIREZ: Go ahead, Mike. 5 MR. LUBLINER: The durability, I think 6 one of the things we might want to do is look at 7 the ICC codes and their recommendation for pan 8 flashing of windows and a weather-resistant 9 barrier. We introduced this discussion to the 10 consensus committee about four years ago, the HUD 11 consensus committee and has nowhere as far as I 12 understand. 13 But if we're going to talk about being 14 equivalent to site built in terms of durability so 15 that we can get the kind of financing that site 16 built gets, I think it's important to look at 17 what's in their code for durability and see what 18 the costs are even if we can't calculate the 19 economic intangibles in the life cut cycle cost 20 analysis. Thank you. 21 MR. RAMIREZ: Michael, what's the name 22 of that group that you said?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 109 1 MODERATOR HOFFMAN: Or that's the 2 manufacturer's consensus. But you do another one, 3 site built? 4 MR. LUBLINER: If you go to the eye 5 codes, the ICC and you'll see in the precise built 6 building codes, there's a requirement for weather7 resistant barriers, that keep rain and moisture, 8 things like tie vac, all the manufacturers have 9 them. I know that the industry uses them in 10 modular and so they probably have the cost 11 associated with it and some experience as far as 12 callbacks and durability issues that they see from 13 using those products. 14 But I think it gets back to the previous 15 commoners that we need to be able to track these 16 benefits even though we can't use them in the 17 economic analysis per se. 18 MR. RAMIREZ: Okay, Emanuel. 19 MR. LEVY: Yeah, Emanuel. Yeah, there 20 are a couple different aspects of that question. 21 One is the durability you could include under that 22 lifetime of certain measures; for example, certain

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 110 1 kinds of equipment are going to have a shorter 2 lifetime than the life of the home. Maybe 3 compression lasts 10 years. That kind of 4 information there is some track record on and it 5 can be included in the analysis, the cost of 6 changing that equipment out. 7 But the durability of the home, I think 8 we have some anecdotal data but it's not 9 substantial enough to be the basis of an economic 10 analysis and you have to tease that of the 11 discussion of durability, the issue of 12 maintenance, how well people maintain their homes 13 because that could be the cause of a lot of 14 failures that we see, even if we're just talking 15 about the energy component, energy-related 16 components. 17 But things like insulation which is -- 18 which comes down, falls down from the wall so you 19 have thermal breaks, that is -- that's entirely 20 anecdotal from what we can -- we can see. There's 21 no good data saying what percentage of the homes 22 has that happened in and our experience is not

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 111 1 common but it happens. 2 MR. RAMIREZ: So I'm still struggling of 3 how do we gather this data? Is that something 4 that's just going to have to be -- if you're 5 interested you gather it or where do we go from 6 here as far as assembling that? 7 MR. WEISS: Part of it depends on what 8 you mean by durability for this particular 9 purpose. I mean, durability's a word that's used 10 in the HUD law but -- and I know what context and 11 what that means within that context, but I don't 12 know who raised durability as a part of this but 13 you better define it before you start trying to 14 gather data on it. 15 MR. CYMBALSKY: This is John from -- 16 MR. WEISS: If it's relevant at all. 17 MR. CYMBALSKY: The durability is what 18 it is, right, the market does what it does, the 19 units last some expected lifetime based on 20 durability or whatever it is. I think what we're 21 interested here in terms of the term is how 22 whatever we do for efficiency upgrades off of the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 112 1 baseline would impact the life expectancy. I 2 think that's what -- I don't know, I'm not putting 3 words in Keith's mouth but that's what we do in 4 other rule makings, is if you make that efficiency 5 upgrade, does it impact the useful life of the 6 product, in this case a manufactured home. 7 You know, again I'm not an expert in 8 this subject, but the things we discussed in here 9 I don't see how, you know, if we put in better 10 windows does the product become less durable? I 11 think everyone would say no. If we make the walls 12 a little thicker and does it make it less durable? 13 No. 14 But maybe there are efficiency upgrades 15 that will do that, but otherwise I would suggest 16 we leave this table, this issue of durability 17 unless and what we're doing in terms of -- 18 MR. LUBLINER: I got a -- 19 MR. CYMBALSKY: -- packaging our 20 efficiency upgrades together would impact it and 21 impact consumer utility based on that. 22 MR. RAMIREZ: So it's very much

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 113 1 situational. If whatever scenario we're talking 2 about, if durability is impacted by it at that 3 time, we could gather the data then? 4 MR. CYMBALSKY: Yeah, I mean, I think 5 that's how we should think about it. It's an idea 6 but if someone else has a different idea. 7 MR. DENNIS: Yeah, and I would just 8 suggest in the back of everyone's head, you know, 9 if there is something that is a little 10 modification to say like belly board, which we 11 have a lot of problems with we end up fixing, that 12 makes -- changes the life span to make sure that 13 that's captured so that, you know, one's going to 14 last 10 years and one is going to last 20 years 15 and all it takes is an extra couple of bolts or 16 something, that it's a different technology with a 17 different, you know, life span so that we can do 18 what we can to get that in there. 19 I don't know if -- we're working within 20 the confines of whatever analysis and data we 21 have, but that's something that is a community 22 that ends of retrofitting this real issue in terms

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 114 1 of issues. 2 MODERATOR HOFFMAN: What's a belly 3 board? 4 MR. DENNIS: The underbelly of, I guess, 5 maybe older manufactured homes or mobile homes. 6 I'm not really a super expert at that either. 7 MODERATOR HOFFMAN: Okay, all right. 8 MR. DENNIS: But that's what I -- that's 9 what we have a lot of problems with. 10 MODERATOR HOFFMAN: Okay. 11 MR. LUBLINER: This is Mike Lubliner. 12 I'd like to make another comment when I can. 13 MR. RAMIREZ: Yeah, go ahead. 14 MR. LUBLINER: We did a -- thank you. 15 We did a study in the northwest to investigate why 16 we weren't getting the preferential lending for 17 the HUD Code industry that we get for site bill. 18 There's a recent study and I'd be happy to share 19 it with you guys. I think it was funded by Bona 20 Bill DOE (phonetic). 21 Anyway, the study of -- one of the 22 findings was is that these lenders and appraisers

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 115 1 were more interested in durability in terms of 2 added value or not depreciating the home. It was 3 more important that it had a weather-resistant 4 barrier than the energy efficiency. And so that's 5 one point and I'd be happy to provide that data. 6 The second thing I want to direct 7 towards Joe in terms of our understanding of the 8 way we do building science within the Building 9 American Program, we take a systems approach where 10 we looked at indoor air quality, durability and 11 energy efficiency as a package. Now I understand 12 for rulemaking here we're focused on life cycle 13 frost and energy, but I don't think we can ignore 14 the impacts of durability whether it's worse -- 15 making it worse or making it better. 16 I for one have been living in a 17 manufactured home 15 years, I have a first-hand 18 experience with durability and the impacts of 19 belly insulation that falls out because the tape 20 fall off and the rodents get in. I can give you a 21 thousand different scenarios and I'm not going to 22 do that now. But I don't think we should totally

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 116 1 discard in the discussion, even if it comes in as 2 an added point for the preamble. But I think it's 3 very important, thank you. 4 MR. RAMIREZ: Michael, I don't think 5 that we're talking about that at all. I think 6 what we're saying was we'll deal with it as it -- 7 as it occurs. We're very situational. I think 8 that's the only, we weren't talking about 9 ignoring. 10 MR. LUBLINER: Thank you, I appreciate 11 that, thank you. 12 MR. RAMIREZ: Sure. Is there someone 13 else on line that wanted to -- 14 MR. HANGER: This is Rick with the state 15 of Colorado. I would also perhaps add the word 16 resiliency to this discussion. It is very 17 important in Colorado as move forward out of our 18 flooding how and when we can use the manufactured 19 product as we rebuild. The durability of that 20 product, the resiliency of that product, it is 21 ultimately going to be very important just how 22 much of that product even gets used in Colorado in

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 117 1 the future, so thanks. 2 MR. RAMIREZ: What's the difference 3 between durability and resiliency as it relates to 4 manufactured housing? Is there a big enough 5 different that we need to -- let's leave it on 6 there, all right. Let's leave it on there. 7 MODERATOR HOFFMAN: Yeah. 8 MR. RAMIREZ: Okay. We'll cross that 9 bridge when we get there. 10 Any other broad information that we -- 11 that we need? Okay. Then there's a lot of 12 homework that needs to be done and there were a 13 couple items on here that we just weren't quite 14 sure if -- 5, 6 and 7, we weren't exactly sure 15 where to put those. These were items that were on 16 the original map, so we had that energy labeling, 17 compliance and field versus factor performance 18 testing. How are these thing implemented. 19 MS. DICKENS: I wonder if -- this is 20 Ishbel -- I wonder if these are things that are 21 kind of after we've got the analysis and the data, 22 we then -- they're kind of criteria against which

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 118 1 we'll measure things as opposed to items that 2 actually need research at this point. 3 You know, once you get -- once you 4 figure out how, you know, some of the energy 5 standards are put together, so how would they be 6 implemented performance rather than prescriptive, 7 or why would manufactured homes have to be dealt 8 with differently based on this data analysis. So 9 it might be that there are -- 10 MODERATOR HOFFMAN: We can just save 11 that for next steps. 12 MS. DICKENS: -- next steps. If that's 13 agreeable, we'll put it aside, then we've got a 14 lot on our plate but I just wanted to make sure we 15 have it. And it is in our chart so it's not lost. 16 MR. RAMIREZ: Right, it won't fall off 17 the table. 18 MODERATOR HOFFMAN: Okay. 19 MR. RAMIREZ: Then as far as homework, 20 Joe, you have a lot. 21 MODERATOR HOFFMAN: Any more for Joe? 22 MR. RAMIREZ: And then we have the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 119 1 financial subcommittee and PNL -- what I'll call 2 the PNL subcommittee, right, they're going to do 3 some scenarios. And I guess on the financial end 4 if there's information that you gather that the 5 group will find useful, if you would get that out 6 to the group as possible. You could either send 7 it to Eileen or Joe and we'll forward that on. 8 And then, Emanuel, that's going to be a 9 little later on as far as how to tweet the result 10 of the study or if there's anything needed to be 11 modified or include in there, but that's a little 12 bit later once we see what those initial studies 13 look like. 14 As far as the next meeting goes, we're 15 looking at August 21st, right? We have August 16 21st, August 22nd, September 9, 10, 22, 23 and 17 October 1st and 2nd. But we're not going to need 18 September 21st or 2nd because we're going to get 19 it done by the 22nd, right? 20 MODERATOR HOFFMAN: Right. 21 MR. RAMIREZ: So I think those October 22 dates will work but, you know, we'll see if we

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 120 1 need them or not. 2 So for October 21st, and we will have to 3 send out the exact location. I understand that 4 we're looking at alternate meeting rooms, space so 5 we'll have to get that out to you. It's going to 6 be somewhere in D.C., right, but we'll have to 7 figure that out. 8 MODERATOR HOFFMAN: And you'll also have 9 the go to meeting approach to participate. And 10 you see there's not two levels of citizens. 11 People on -- on line have been just as valuable as 12 they are to folks here. 13 MR. RAMIREZ: And they are -- somebody 14 did ask can they see the map and things like that, 15 and the answer is yes, they can see that. 16 Okay. Then as far as the agenda for the 17 next meeting, I think that it would make sense to 18 start off with any questions on the data receipt, 19 right, we're going to be getting quit a bit of 20 data. Does anyone need explanation on that? And 21 then on these issues here, are we going to be 22 dealing with envelope of building first? Is this

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 121 1 the order for 2nd, 3rd, 4th, and I don't know if 2 it is because I was just typing them in there, so 3 I'm asking you all. 4 Is this the order or how do we need to 5 move it? Are we going to deal with envelope of 6 building first with equipment including 7 appliances; financial or building performance? 8 MODERATOR HOFFMAN: Any thoughts, I see 9 you're nodding 10 MR. LEVY: Emanuel. I think we're 11 probably, if you look at how the standards are put 12 together, we pretty much focus on the envelope is 13 usually the first item out of the gate. 14 MODERATOR HOFFMAN: Okay. 15 MR. LEVY: But it's hard, and then 16 equipment plays into that eventually. But I think 17 there's a -- the discussion about financial 18 probably has to keep a pace of that because those 19 two things play off of each other. So I don't see 20 how you can actually put these in the priority 21 list, priority order, I think they're all kind of 22 dealt with simultaneously.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 122 1 MR. RAMIREZ: Okay, so, well, let me ask 2 you this. So what if we put 4 -- so it would be 3 envelope of building, equipment, building 4 performance, leaving financial at the end but 5 knowing that that conversation on financial is 6 going to be all throughout? 7 MR. SANTANA: This is Manny with Cavco. 8 You know, I think that if you do with the 9 envelope, the building performance and you get 10 those out, but things like cost, durability and 11 how they're supposed to be built and implemented 12 are probably going to apply to most of those items 13 one by one, you know, so I think that you get 14 through the envelope and the building performance 15 first and then a lot of other stuff is going to 16 apply, you know, to each of the items. 17 MR. KESSLER: This is Bert at Palm 18 Harbor. I agree with Manny. I think before we can 19 even think about cost and durability and some of 20 the other issues that we've discussed, we need to 21 know a couple of things; number one, what are the 22 minimum requirements and whether that is expressed

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 123 1 in the form of a UO or prescriptive. And by the 2 way, the IECC does provide for UO alternates and 3 the industry's used to you dealing with that. 4 And then I think the rest of it is all 5 going to be a function of what is being determined 6 through envelope and whether we're going to go 7 performance or prescriptive. 8 MR. RAMIREZ: Okay. So then that change 9 in the -- the slight change in order that we did 10 here with envelope building equipment and 11 financial understanding that those conversations, 12 financial and prescriptive versus performance are 13 going to be sprinkled throughout, is everyone okay 14 with that order? 15 MR. KESSLER: And, quite frankly, I 16 think the first thing we need to do is decide on 17 the thermal zones and, you know, some kind of a 18 minimum requirement for each before we can do any 19 of the other stuff. 20 MR. RAMIREZ: We had some of that -- 21 MR. KESSLER: I mean, if I want to -- 22 MR. RAMIREZ: I'm sorry, go ahead.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 124 1 MR. KESSLER: If I want to evaluate the 2 envelope of a building, I need to know what it 3 needs to be. 4 MR. RAMIREZ: We had some conversation 5 on that where the folks want to look at the data 6 first before we engage in that discussion, but 7 then I also heard there was a second part of that 8 where we also need to get an idea of what we're 9 talking about as far as some of these changes to 10 see how big of a cost it's going to have depending 11 on the number of zones that you ultimately agree 12 upon. 13 So I hear what you're saying. I think 14 the group was already thinking that we might need 15 to start processing some of this out before we 16 nail down the zone. Am I right in that takeaway? 17 Okay. Okay. Then we will get to it. I think the 18 group will decide exactly when. I think you'll 19 know when is the time to nail that one down, but 20 obviously that's going to be on our minds while 21 we're discussing this. 22 MODERATOR HOFFMAN: And I know we're

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 125 1 giving you a lot of homework also, but -- and some 2 of you have done a lot of homework before you came 3 here. There was a lot of other thoughts coming out 4 about this and if you have some thoughts about how 5 to solve these things, bring them with you for 6 next time. 7 But it's a good idea, I'm glad people 8 are holding back a little to see the new data and 9 see how things work. And there's also a synergy 10 being in the room, seeing people and being able to 11 try out ideas and learn from each other. So if 12 you can all possibly get here, or remotely, I 13 think you'll find it's been helpful. 14 And one last comment from me, I know 15 that for many of you, you're used to things 16 happening a lot faster and I don't say that 17 Washington has a -- not really? Oh, good. So the 18 paint is drying in this room, okay. Anyway, I was 19 going to say you will see us moving a little 20 faster next time. But having the data is also 21 helpful but also a common understanding is 22 critical for this.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 126 1 MR. RAMIREZ: You know what -- we talked 2 about the ELMO, right? 3 MODERATOR HOFFMAN: Yeah. 4 MR. RAMIREZ: But if we're going to be 5 pushing you to go a little bit quicker, you know, 6 you need to tell us on the ELMO right, and you 7 have and I appreciate that but you need to 8 exercise that a little bit more. But also the 9 brake. Because if Eileen and starting pushing 10 you, you know, hey let's move this, you know if 11 you're saying, Javier, I think you're going too 12 fast you need to slow down, we're not going to be 13 offended by that. 14 MODERATOR HOFFMAN: Yea. 15 MR. RAMIREZ: I tell folks I'm skinny 16 but I have thick skin, all right, so don't be 17 afraid to tell us if we need to do something 18 different. 19 MODERATOR HOFFMAN: Yeah, and I want to 20 thank all of you as well as well as our incredible 21 support staff -- 22 MR. RAMIREZ: Yes.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 127 1 MODERATOR HOFFMAN: -- from DOE. What? 2 UNIDENTIFIED SPEAKER: And security. 3 UNIDENTIFIED SPEAKER: Did you thank 4 them? 5 MODERATOR HOFFMAN: And security? I'm 6 not that -- it's no offense here, it's on the 7 record here but anyway we'll look forward to 8 seeing you in just a couple of weeks and you can 9 reach us, by the way, through email and everything 10 else. 11 MR. RAMIREZ: So just to end on a 12 somewhat happy note, having been through a few 13 these already, I think we've actually made a lot 14 more progress in the two days in this group than 15 we have in other groups in terms of getting 16 through the process part of the discussion. We 17 focused on quite a bit of discussion. We focused 18 on quite a bit of content, which I'm a little 19 surprised we got through as much as we did. And 20 once we put the data out there and you all see the 21 numbers, I really think we'll pick up the pace on 22 the meat of the matter here and I really am

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 128 1 optimistic for some good things to come out here, 2 so. 3 MODERATOR HOFFMAN: And just so you're 4 all aware, Eileen snuck in a homework assignment 5 for you, I want to make sure that it's clear, 6 right, where she said you all need to gather 7 options or ideas for possible resolutions. Right. 8 And I'm being careful and Eileen was too as far as 9 the verbiage, options, right, and ideas not 10 positions, right, not demands. Options and ideas, 11 right? Keep the mind open and there may be other 12 ways to do it, but at least let's hopefully you 13 come in with some starter points for us to 14 discuss. 15 MODERATOR HOFFMAN: I want to thank you 16 all, especially Emanuel for your wonderful lecture 17 this morning, presentation and it will be on 18 YouTube tomorrow so thank you. 19 MR. RAMIREZ: Thank you very much. 20 (A LUNCH RECESS WAS TAKE) 21 MR. RAMIREZ: Let's go ahead and get 22 started. Poor Ishbel had to do some additional

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 129 1 security screening. So she is here, but she is 2 going to have to join us in progress. We have no 3 idea how long it is going to take or if we are 4 going to have to have her dial in Guantanamo. I'm 5 not sure how -- 6 MS. HOFFMAN: No, no, no, no. She said 7 the Washington State license, driver license, is 8 somehow not accepted. So we will figure that one 9 out. 10 (Simultaneous speaking.) 11 MR. RAMIREZ: Hold on a second. The 12 court reporter over here is having some -- her 13 head is about to pop, and it's too early for that. 14 MS. HOFFMAN: It is. 15 MR. RAMIREZ: So let's use the mikes. 16 So yes, that is exactly what it is. The 17 new standards went into effect. I guess today is 18 the day; right? 19 MS. HOFFMAN: Okay. But she was able to 20 get in yesterday. 21 MR. RAMIREZ: Yes. 22 MS. HOFFMAN: But yes. One way, Joe was

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 130 1 saying we might meet at a building that is a 2 little easier to get into than this one, less 3 secure, a little easier to get into. Anyway, so 4 we're going to start officially, but we may have 5 some folks joining us a little bit later. 6 MR. RAMIREZ: Do we have some folks 7 online? 8 MR. FREEMAN: Yes. 9 MR. RAMIREZ: Okay. So let's do this. 10 Let's go around. Everyone introduce yourself 11 again, just your name and organization, so that 12 the folks online know who is in the room. And 13 then we'll also have the folks online introduce 14 themselves. Okay. So let's start off here with 15 Keith. 16 MR. DENNIS: Keith Dennis, National 17 Rural Electric Cooperative Association. 18 MR. DRAKE: Scott Drake, East Kentucky 19 Power Cooperative. 20 MS. EPPERSON: Stacey Epperson, Next 21 Step Network. 22 MR. EZZO: Mark Ezzo, Clayton Homes.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 131 1 MR. UNGAR: Lowell Ungar, American 2 Council for an Energy-Efficient Economy. 3 MR. LACEY: Eric Lacey, Responsible 4 Energy Codes Alliance. 5 MR. SANTANA: Manny Santana, Cavco 6 Homes. 7 MR. LUTER: Rob Luter, Lippert 8 Components. 9 MR. POTTS: Richard Potts, Virginia 10 Department of Housing and Community Development. 11 MR. ROY: Robin Roy, Natural Resources 12 Defense Council. 13 MR. WEISS: Mark Weiss, Manufactured 14 Housing Association for Regulatory Reform. 15 MR. TOMPOS: Dave Tompos, NTA. 16 MR. LEVY: Emanuel Levy, Systems 17 Building Research Alliance. 18 MR. HAGERMAN: Joe Hagerman, DOE. 19 MS. HOFFMAN: And Eileen Hoffman, FMCS, 20 one of your facilitators. 21 MR. BARBOUR: Ed Barbour, Navigant 22 Consulting.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 132 1 MR. RAMIREZ: And Javier Ramirez, 2 facilitator. And, Jeremiah, could we get the 3 folks -- 4 MR. FREEMAN: Yes. I'm going to read 5 off the names. 6 MR. RAMIREZ: Would you introduce 7 yourself? 8 MR. FREEMAN: Yes. I'm sorry. Jeremiah 9 Freeman, New West Technologies. 10 MR. HAGERMAN: Jeremiah is the guy who 11 has been emailing you all the stuff. So if you 12 need any help, Jeremiah is great. 13 MR. RAMIREZ: And Alex is with the same 14 group here; right? 15 MR. FREEMAN: With Energetics. 16 MR. RAMIREZ: Okay. 17 MR. FREEMAN: Do we have Bert Kessler on 18 the line? Bryan Rocky? 19 MR. RAMIREZ: Where are they from? 20 MR. FREEMAN: I don't have that 21 information. 22 MR. RAMIREZ: Is there a way to unmute

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 133 1 them and let them -- 2 MR. FREEMAN: You can if you would like 3 to try it that way. 4 MS. HOFFMAN: Yes. 5 MR. HAGERMAN: I think Bert Kessler is 6 with Palm Harbor. 7 MR. ROCKY: Good morning. This is Bryan 8 Rocky. Can you hear me? 9 MR. SCHNEIDER: Peter Schneider from 10 Efficiency Vermont. 11 MR. ROCKY: Bryan Rocky from Johnson 12 Controls. I'm also one of the members of the 13 ASRAC group for the regional efficiency standards 14 activities. 15 MS. HOFFMAN: Is there anyone else? 16 MR. FREEMAN: Yes. Caija Owens, who 17 doesn't have the ability to be unmated -- they 18 haven't been given their PIN number -- and Michael 19 Lubliner. 20 MR. RAMIREZ: So of the folks that are 21 online, which of you are voting members? 22 MR. FREEMAN: Bert Kessler, Michael

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 134 1 Lubliner, and Peter Schneider. 2 MR. RAMIREZ: Okay. So we have 16 3 people today. If we are going to be formally 4 voting on anything, 16 is the base number that we 5 are going to be using. All right. 6 Then what we want to do today, we wanted 7 to finish going over, make sure there's nothing 8 else that you want to add to the mind map here. 9 And, if you notice, there are a few highlighted 10 pieces on there. We're going to go over that in a 11 little bit. We're anticipating that that is 12 probably going to -- we'll actually take a little 13 bit of time. It's not necessarily just adding 14 pieces on there because once they're all on there, 15 we're going to take a look, make sure that how we 16 are prioritizing them or putting them into the 17 queue if that's the word that we want to process 18 them in, but we also want to identify information. 19 What information are we going to need? What data 20 are we going to need? Who is going to get it? 21 And by when; right, if we're going to truly 22 problem-solve these issues?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 135 1 The other thing that we wanted to do was 2 Emanuel had offered to take about five minutes or 3 so to explain how a standard is developed. Is 4 that accurate? And so we thought there might be 5 some value to doing that up front for some folks 6 who may not be familiar with that. So the floor 7 is yours for now. 8 MS. HOFFMAN: Great. Do you need a 9 mike? 10 MR. LEVY: It's been about 30 years 11 since this process. We have developed this 12 process as part of an ASHRAE effort. And this 13 method that I am just going to go through quickly 14 -- I'm sure many of you are already familiar with 15 this, but I think it's helpful if you're not -- 16 MR. UNGAR: Can you start off by saying 17 what kind of standard? 18 MR. LEVY: Yes. 19 MR. UNGAR: So this is Lowell Ungar. 20 Just so we know what kind of standard you're 21 talking about. 22 MR. LEVY: I'm going to just talk about

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 136 1 how the technical requirements were developed for 2 the manufactured housing standard, specifically 3 the use of o values. 4 MR. UNGAR: You mean for the HUD code, 5 the 6

-- 7 MR. LEVY: For the HUD code. Right. 8 MR. UNGAR: -- manufactured housing 9 standards? 10 MR. LEVY: The methodology is generally 11 applicable to development of cost-effective 12 standards. If your criteria is cost-effectiveness, 13 then what I am going to explain very briefly is 14 the process that has kind of been adapted over the 15 years for standard setting for manufactured 16 housing, specifically in how the decisions are 17 made about the zones and what the Uo values are 18 for the zones. Was this useful? Okay. 19 This came out of some work that was done 20 by ASHRAE, ASHRAE SP-53 Committee. And that work 21 still stands, but it was way ahead of its time in 22 terms of the concept of it developing a piece of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 137 1 software that allowed you to update your 2 requirements, your cost information, and your 3 energy requirements. And it would automatically 4 repopulate the requirements for that moment in 5 time as to what they should be for the Uo values. 6 But this is still the method that is used by PNNL 7 when they develop the standards and what we used 8 back in the early '80s to develop the original 9 manufactured housing variations on the standard. 10 And it's based upon this concept. And this will I 11 think come up a lot in our discussions. 12 The industry typically uses Uo value as 13 a way for setting what the thermal requirement is 14 for the entire structure, the entire envelope of 15 the building, not equipment, just the envelope 16 requirements; that is, the windows, the insulation 17 on the walls and the floors and ceilings and the 18 ducts. And it's all rolled together into one 19 single number, which is the Uo value. We often 20 refer to that -- it's confusing -- as a 21 performance standard because it regulates the -- 22 it sets the performance target for the entire

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 138 1 building, as opposed to the IECC, which says the 2 walls must be R this and the ceiling must be R 3 that. Instead, the manufactured housing standard 4 has forever been based upon a Uo value for the 5 entire structure. And any manufacturer can meet 6 that in any way they want as long as they get to 7 that Uo value. 8 The Uo value was somewhat proportional 9 assuming that the equipment is fixed, somewhat 10 proportional, to energy use. And the process that 11 is followed in terms of determining what the 12 standard should be is finding the least-cost point 13 for any particular home. So, for example, if you 14 are in a place like Cleveland and you want to find 15 out for a manufactured housing that's, let's say, 16 a double- sectioned home, 24 by 66, how that home 17 should be built in order to get to the minimum 18 lifestyle cost value and that is the point at 19 which the homeowner's cost will be minimized over 20 the life of the home -- yes? 21 MR. WEISS: Hold on a second. Minimum 22 what value?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 139 1 MR. LEVY: Lifecycle cost. 2 MR. WEISS: Okay. 3 MR. LEVY: Okay? Lifecycle cost 4 basically -- sorry for the detail here, but this 5 is kind of the thinking behind the standard 6 generally. Lifecycle cost is taking all of the 7 costs associated with the measures; that is, the 8 cost of buying the efficiency items, like the 9 insulation, and the maintenance costs and any 10 other costs that would be associated with all of 11 the measures that are being considered, and the 12 energy savings. So if the energy savings is 13 greater than over some period, let's say a 30-year 14 period if that is what your period of analysis is, 15 if the energy savings accumulated over 30 years 16 for a whole series of measures equals the cost of 17 those measures, the first cost of those measures 18 and whatever the cost is of embedding those 19 measures into the loan, the total cost to the 20 homeowner over some period of time if the energy 21 cost savings and the cost of those measures is 22 equal, you come out with this point here, which is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 140 1 considered the minimum point. This is usually how 2 standards are set. You try to find what the 3 minimum cost is. 4 And the way you start is you start with 5 a home. Let's say this is today a minimum home in 6 Cleveland. And let's say for argument's sake that 7 would be double glass, R-28 in the ceiling, R-28 8 in the floor, and R-11 in the walls. If that is 9 your starting package for the features of the 10 home, then you might consider increasing that by, 11 let's say, going up a little bit higher with the 12 insulation value in the wall to R-13 or R-19. So 13 what this curve is is incremental increases in 14 performance by adding in measures. Again, if you 15 start here with 28, 11, 28; and then you go up to 16 28, 13, 28; the next change is 28, 19, 28, what 17 you are doing here is incrementally adding 18 measures. And each measure you are adding is 19 increasing the cost of the home and increasing the 20 mortgage by some amount. But at the same time, it 21 is decreasing the amount of energy that is being 22 used by the home. And these measures will return

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 141 1 more in terms of energy savings than their cost. 2 So every incremental increase will improve, will 3 make the lifecycle cost analysis lower, will make 4 the cost of operating the home lower, and make the 5 energy use obviously lower until you reach this 6 point. 7 At this point, every incremental change 8 you make -- and let's say at this point you 9 haven't included, let's say, argon-filled glazing 10 in Cleveland. And the cost of adding that measure 11 is over a lifecycle cost more than the energy 12 savings it returns. It will increase the energy 13 efficiency. It will drive down the energy 14 efficiency by adding that measure, but it will 15 increase the lifecycle cost. So from the 16 standpoint of benefit, this is not going to pay 17 for itself. From the homeowner's perspective, if 18 they buy that additional measure, it is going to 19 increase their cost. So it's considered to be not 20 cost-effective. 21 Yes? 22 MR. WEISS: I'm sorry. I don't mean to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 142 1 interrupt. Are you referring to a specific HUD 2 standard? 3 MR. LEVY: No. I'm saying this is the 4 method that was used to determine the values in 5 the standard. 6 MR. WEISS: Okay. Which standard? 7 MR. LEVY: The one you hold in your 8 hand. 9 MR. WEISS: Well, which section? Five10 o- eight? 11 MR. LEVY: Yes. 12 MR. WEISS: Okay. 13 MR. LEVY: The Uo values. But this 14 underpins the entire philosophy of standards 15 development, where the cost associated with a 16 measure should be returned to you in energy 17 savings. If you're looking at it from the 18 perspective of the homeowner to make a good 19 investment, they want to make sure that whatever 20 they are investing in, the next measure they are 21 investing in is going to have a positive return 22 over some lifecycle cost.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 143 1 Yes? 2 MR. SANTANA: So now when you say the 3 lifecycle cost, each of the measures is going to 4 increase the purchase price on the initial price 5 of the home. 6 MR. LEVY: That's right. 7 MR. SANTANA: So each thing that you add 8 is going to make the house more expensive, but 9 when you take into account energy costs, operating 10 costs, interest on the original loan, it's still 11 overall adding more value up until it gets to a 12 point; right? And that is the minimum point that 13 you have there; right? 14 MR. LEVY: That's right. That is this 15 point. It will continue to drive down the total 16 overall net cost to the homeowner until you reach 17 this point. You can get to zero, but the zero 18 might be way up here. And it would cost the 19 homeowner more money. They would never get back in 20 terms of energy savings what they put out in terms 21 of cost. 22 Mark?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 144 1 MR. EZZO: Mark Ezzo. I think it might 2 be helpful if you just below that put the formula 3 for lifecycle cost now. 4 MR. LEVY: Yes. 5 MR. EZZO: So if I'm writing it on my 6 own piece of paper, I've got down the price, cost 7 of the home, initial price of the home, plus 8 utility bill, plus maintenance. Is that it? 9 MR. LEVY: Well, this is the way it is 10 typically done. The principal, the interest, 11 taxes, the -- 12 MR. EZZO: Okay. 13 MR. LEVY: -- and the energy. These are 14 all the costs but accumulated over some period of 15 time. And one of the things we can argue is what 16 should that period of time be. Typically when 17 these are set and I think was the case with the 18 last standard update is they assumed that the 19 period was 30 years, 30-year lifecycle cost, which 20 means the energy benefits were accumulated over 30 21 years. That can make a lot of things cost22 effective.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 145 1 MR. WEISS: I'm sorry. You said, 2 "they." Who's "they"? 3 MR. LEVY: When HUD set this, they had 4 PNNL do the analysis. And that was the method 5 that they used. 6 MR. DENNIS: I understand the concept 7 like when something doesn't pay back over a set 8 term. Are there times when something is a quick 9 payback? You mentioned that -- 10 MR. LEVY: These are quick paybacks. 11 MR. DENNIS: So do you always keep going 12 until you hit the zero point or do you sometimes 13 stop before you get -- like if something pays back 14 in 10 years, it's 15 years, but that's kind of -- 15 so you've got 5 years worth of actually paying you 16 back. Do you then have to keep going until you 17 get to zero or do you stop at that point in some 18 way? 19 MR. LEVY: From a standard-setting 20 standpoint, philosophical standpoint, this point 21 is the point that optimizes the benefit for the 22 homeowner. So this is the point that you stop and

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 146 1 say, "Okay. What is my use of o value at that 2 point?" And here it gets a little bit messy. 3 MR. DENNIS: So it might not always be 4 exactly the day that it pays back? It's just the 5 optimal of whatever the equation is? 6 MR. LEVY: You mean it might be here or 7 it might be here because they are increments? Is 8 that what your question is? 9 MR. DENNIS: Well, I am just wondering 10 if that zero point, that kind of inflection point, 11 is always when that energy cost payback is the 12 same time as the measure or sometimes that 13 inflection point comes when the payback might be 14 before the life of the measure. 15 MR. LEVY: Payback is a different way of 16 looking at benefit. And payback means it just 17 pays back in a certain number of years, but that 18 is an artificial measure. This -- 19 MR. LEVY: Or when lifecycle cost is I 20 guess negative? 21 MR. LEVY: Right. Well, this point is 22 the point that objectively provides the greatest

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 147 1 benefit for the homeowner. Any more investments, 2 they're going to lose money. Any less investment, 3 there are going to be opportunity costs that they 4 are not going to ever realize. 5 And the way this is then used is at this 6 point -- and, again, let's say this is Cleveland. 7 And let's just say for argument's sake that this 8 value is .070 as a Uo value. The way that this 9 information is then used is that this point is 10 calculated for homes in Cleveland that are single11 wides, a typical single- wide, a typical multi12 section home, home with gas heating, home with 13 electric heating because those will all produce 14 different numbers, different use of o values. 15 Electric will generate much more benefit because 16 electric costs are higher generally. So the 17 optimum use of o value for an electric home will 18 be lower than a gas in general. 19 But the way you develop a standard from 20 this is you come up with these values for all the 21 different parameters. You do sensitivity studies, 22 in other words. And you start to aggregate them

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 148 1 over areas. So you would take the Cleveland value 2 and combine that value with the same kinds of 3 values throughout Ohio. You come up with a use of 4 o value which is kind of a balanced use of o value 5 for Ohio. And typically they're weighted by the 6 number of units of that particular kind. So the 7 number of electric units in Ohio, if there were a 8 lot of electric units, would drive the use of 9 average value for Ohio further down. 10 Once you have Ohio, -- this is how we 11 did it 30 years ago -- you would do it for all of 12 the other states. And you would start to 13 aggregate states together based upon similarities 14 of use of o value. And what you find is that -- 15 sorry for that. Here is the HUD map today. And 16 you have use of o value, let's say, of 079 here 17 today, 096, 116. These are the requirements today 18 for the three zones. But if you actually look 19 carefully at the values here for the states here, 20 they might be 060. And the ones down here might 21 be 083. 22 MR. DENNIS: Basic question. I don't

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 149 1 want to say better or worse, but use of o higher 2 is -- 3 MR. LEVY: Higher is less efficient. 4 MR. DENNIS: Higher is less efficient? 5 MR. LEVY: Yes. There is a U value. So 6 the lower the value, the more efficient the home. 7 MR. LUBLINER: Emanuel, this is Mike 8 Lubliner. Hello? 9 MR. RAMIREZ: Yes? Yes, Mike? 10 MS. HOFFMAN: Yes, Mike? 11 MR. LUBLINER: Yes. I just wanted to 12 say, you know, there is a distinction, I believe, 13 between the cost of propane and the cost of 14 natural gas. So you would be able to afford with 15 the lifecycle cost models more conservation with 16 propane than natural gas, a similar analogy to the 17 electric? 18 MR. LEVY: Right. So I guess the point 19 here is that if you create a zone that looks like 20 the zones we have today, you have made the 21 decision that people in Montana are going to get 22 too little conservation and people in Ohio are

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 150 1 going to get too much for what is really cost2 effective for them. Those are the sacrifices you 3 make when you start putting things together 4 because you are no longer at the optimum for any 5 one homeowner everywhere in the country. Does 6 that make sense? 7 MS. HOFFMAN: Thank you. 8 MR. RAMIREZ: Yes. And so we will 9 probably keep that chart up there because you may 10 have to refer back to that or it may be beneficial 11 to refer back to that when we get to that number 12 one discussion; right, and maybe even throughout 13 some of the other pieces as far as the formula of 14 the zone, also the formula there. 15 MR. LEVY: May I just add one small 16 detail here? The question was asked about 17 lifecycle cost, about economic parameters. If you 18 say instead that, instead of a 30-year lifecycle 19 cost analysis, that you are only going to 20 accumulate the energy benefits over 20 years or 7 21 years because that is the average term of 22 homeownership, this curve moves backwards. This

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 151 1 curve will move like this. So this point is a 2 function of all of your assumptions. And if you 3 don't take a long time to pay back, take a shorter 4 term, the use of o value that is cost-effective is 5 going to be higher. So one of the discussions I 6 think we need to have is what should be the 7 economic assumptions. 8 MR. LUBLINER: Emanuel? Mike Lubliner 9 again. 10 MR. RAMIREZ: Yes? Go ahead, Mike. 11 MR. LUBLINER: I wanted to say if the 12 term of the analysis is 30 years for the lifecycle 13 cost and the homeowner moves out after 7 years, 14 then there's still residual value in the 15 investment that the homeowner accrues through the 16 equity in that investment. We see this in the 17 resale value in chattel mortgage loans of energy18 efficient homes. I think if we're going to use a 19 shorter term than the life of the home, we need to 20 recognize the salvage or resale value. I've 21 typically done a lifecycle cost analysis. 22 MR. ROY: Robin Roy. I think that is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 152 1 sensible, but I think a better way to deal with 2 the life of the home is not to try to assess what 3 the resale value is at year seven. I think what 4 we want to do is look at the life of the home and 5 all the occupants of it over that home's 6 productive life, so trying to figure out, well, 7 what is the split between the first buyer's and 8 the second buyer's benefits from the energy 9 savings. It's very complicated. Let's figure out 10 what the life of the home is. 11 MR. LUBLINER: I totally agree with what 12 Robin just said there. I think the other point I 13 would like to make on the term of the loan is if 14 you do it for 30 years or longer, what tends to 15 happen because you are discounting it to present 16 value is that what happens out at 30 years has 17 very little impact on the actual cost-effective 18 package. But that's a sensitivity study that we 19 could have DOE do for us. 20 Thank you. 21 MS. HOFFMAN: All right. Thank you. 22 MR. RAMIREZ: Yes, Lowell?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 153 1 MR. UNGAR: Yes. What he just said, 2 just know that it's discounted. The savings 3 through the years from now are not worth the same 4 as the cost of the home today. You put in a 5 discount rate to take that into account. 6 MR. RAMIREZ: Mark? 7 MR. EZZO: Mark Ezzo. What term was 8 used when HUD developed this back in '94? 9 MR. LEVY: Thirty years. 10 MR. EZZO: They used 30 years? 11 MR. LEVY: Yes. 12 MR. EZZO: Okay. And I lost you on if 13 you reduce the length of time, the curve moved to 14 the left. Is that correct? 15 MR. LEVY: Yes. 16 MR. EZZO: So if the curve moved to the 17 left, the optimum point for Uo goes down? 18 MR. LEVY: It goes up. I'm sorry. This 19 curve has the zero energy to the right. So Uo 20 goes down to the right. 21 MR. EZZO: Gotcha. Okay. Thank you. 22 MS. HOFFMAN: Keith, did you have --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 154 1 MR. DENNIS: That was the same question 2 I had. Thanks. 3 MS. HOFFMAN: All right. Thank you. 4 Was it helpful? Okay. Good. 5 MR. RAMIREZ: Okay. Great. 6 MS. HOFFMAN: Actually, this is your 7 meeting, too. We're facilitating. But if there 8 is something critical that you want to make sure 9 we get to, we're going to do it. 10 And let me just summarize. It was a 11 very productive day yesterday, even if it was sort 12 of frustrating. We reached some agreement on our 13 ground rules. We also reached agreement on what 14 is consensus. You got to know each other if you 15 hadn't before. And we're going to move ahead now 16 today on -- and we also did a sort of a rough 17 identification of key issues. What we're going to 18 hone in now is how to organize this, look at 19 definitions, and look at how to -- actually what 20 kind of data we need, who can give it to us on 21 these issues for this standard. 22 MR. ROY: Robin Roy.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 155 1 MS. HOFFMAN: Yes? 2 MR. ROY: A quick question. This is 3 great. I love it. This is one definition of what 4 might comply with the statutory requirements of 5 setting the energy levels based on cost6 effectiveness, which is some not-quite-well7 defined combination of lifecycle cost and purchase 8 price. The way the location is written is a 9 little bit odd; right? It doesn't say, "minimum 10 lifecycle cost," which I think is part of why we 11 start having these discussions so much moving 12 quickly away from lifecycle costs or cost13 effectiveness to things like affordability. It's 14 a very popular term. It came up yesterday, 15 "affordability," which is, again, not well16 defined. Does that mean minimum first cost? Does 17 it mean minimum lifecycle cost? I think it is 18 something that is not defined in law. It's one of 19 the reasons it shows up on this page that you've 20 got behind you. Yet, it doesn't show up in the law 21 or anywhere else. It's very interesting. 22 That's an aside. We need to figure out

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 156 1 what exactly our objective function is. That is 2 cool. But I'm curious. On air infiltration, 3 would you use the same sort of approach as you 4 would use on setting the U value because you can 5 put in additional measures to reduce air 6 infiltration, which is another driver of energy 7 consumption; right? 8 MR. LEVY: If you could quantify the 9 cost and the benefit. 10 MR. ROY: Right. Okay. I mean, in 11 principle, it seems like a fine way to approach 12 air infiltration as well. 13 MR. RAMIREZ: Okay. Mike, you had a 14 question or a comment? 15 MR. LUBLINER: Yes. I want to just 16 comment. Yes. I believe that infiltration and 17 other energy measures should be considered there. 18 I wanted to give a little background. 19 Emanuel, let me know if I am getting this right. 20 This is back in '94. What I understand is that 21 Congress had designated that we go in in '94 and 22 come up with a cost-effective upgrade to the Uos

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 157 1 that hadn't been updated since '74. And I believe 2 there is Senate testimony that defined lifecycle 3 cost and also defined need to be technically 4 feasible. Those were the two parameters that 5 Congress gave you guys in '94 to work off of. 6 I believe we got a little more guidance 7 from 8 Congress in 2008 where they also said 9 they wanted to look at the purchase price, the 10 impact of purchase price and the impact on the 11 manufacturers. So that is my recollection of what 12 guidance we have gotten over the years: lifecycle 13 cost for technical feasibility in '94 and then 14 looking at the impact of purchase price. 15 And people typically use a price 16 elasticity economic model that looks at the impact 17 on the manufacturers' sales to address the 18 purchase price implications. 19 Thank you. 20 MR. WEISS: Mark Weiss, MHARR. If you 21 look at the statute itself under section 604, 22 Congress said back in 1994 "The energy

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 158 1 conservation standards established under this 2 subsection shall be cost- effective energy 3 conservation performance standards designed to 4 ensure the lowest total of construction and 5 operating costs." 6 There is further reference in the ISA 7 statutes specifically to the purchase price of 8 manufactured housing. So it's really an amalgam 9 of all of these things, but, again, as I indicated 10 yesterday, if price is an entry barrier to 11 accessing housing that's supposed to be deemed by 12 Congress to be affordable, that seems to me to be 13 a very important consideration, if not the most 14 important consideration. 15 MR. RAMIREZ: All right. So let's try 16 to put a little bit of focus on the conversation 17 here because a comment was made yesterday. And I 18 think it was glossed over pretty quick. I want to 19 make sure that I guess we are kind of on the same 20 page here. Let me make this a bit larger here. 21 One of the comments made was "What are 22 we trying to do here?"; right? And I think that

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 159 1 the summary was to increase energy and efficiency 2 in manufactured housing while maintaining its 3 affordability; right? And one of the placers that 4 we left off yesterday was, can we have a 5 conversation about what is affordability? 6 And so all of this kind of blending into 7 three points here; right: what are we trying to 8 do, this conversation of affordability, and also 9 to remember right at the very beginning, when I 10 was talking about consensus, you all agreed. I 11 mean, it's consensus. You said let's agree on 12 what important words mean; right, the definitions. 13 That goes into that affordability piece. And that 14 was what you all wanted to do, was have a 15 conversation on affordability. 16 Now, what I would suggest is that we 17 time- box this; right, because we could probably 18 take the entire day and talk about it, but let's 19 do our best to try to keep it focused and come up 20 with some common definition or agreement of what 21 we mean by affordability. I think that is where 22 the group wanted to go yesterday. Is that

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 160 1 accurate? 2 MS. HOFFMAN: Yes. I think Robin has 3 got a point. Yes? 4 MR. ROY: To add a little bit -- 5 MS. HOFFMAN: Yes? 6 MR. ROY: -- I think I threw that out. 7 I think I withdrew that one. 8 MS. HOFFMAN: Yes. 9 MR. RAMIREZ: Someone did it, yes. 10 MR. ROY: I suspect in the title, we 11 should be more explicitly referencing the language 12 that is in the law. 13 MS. HOFFMAN: Yes. 14 MR. ROY: So, instead of saying, 15 "affordability," we should say, "cost-effective," 16 which is some combination of purchase price, 17 lifecycle construction, operating cost. 18 MS. HOFFMAN: Say that slowly because 19 the word "affordability" isn't in the -- 20 MR. ROY: It is not. That's right. 21 MS. HOFFMAN: It's not there. Okay. 22 MR. ROY: While I would put the word in

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 161 1 "optimizing" because they're saying go higher or 2 lower, I think it's a fair word, optimizing cost3 effectiveness is defined as some combination of 4 lifecycle cost and purchase price. And then we 5 have to decide -- 6 MS. HOFFMAN: Yes. 7 MR. ROY: -- to help interpret what 8 Congress' intent was there, I suppose. 9 MR. RAMIREZ: Lifecycle and -- 10 MR. ROY: Lifecycle cost and purchase 11 price. What they added in the ISA in 2007 was 12 purchase price. Before that, we had been talking 13 about lifecycle cost. So they added something, 14 reflecting Mark's point that there must have been 15 some sense that there was inadequate attention to 16 that first cost hurdle that buyers experience, 17 maybe. 18 MR. WEISS: Mark Weiss. And it also -- 19 MR. ROY: Did I overstate Congress' -- 20 MR. RAMIREZ: Before we get on there, 21 though -- and I'll get you, Mark. You're next. 22 But time limit. How much time do we want to put

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 162 1 on this for this conversation -- 2 MR. WEISS: It's a very good question. 3 MR. RAMIREZ: -- knowing that we still 4 have a quite a bit that we need to do with the 5 rest of the agenda? 6 MS. HOFFMAN: Or is it a threshold 7 conversation? 8 MR. WEISS: I think it is. 9 PARTICIPANT: What is the objective 10 function? 11 MS. HOFFMAN: You mean we can do all of 12 this without our objectives? All right. What 13 about we see where we are in about an hour, you 14 know. Okay? By then, we'll take a break also. 15 All right? 16 MR. RAMIREZ: Okay. All right. We go 17 until we need a break. All right. That sounds 18 good. 19 MS. HOFFMAN: Oh, by the way, just in 20 terms of that, if you do need a break, let us know 21 earlier, but let's say there will be an hour 22 discussion. Okay.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 163 1 MR. RAMIREZ: Okay. Great. 2 MS. HOFFMAN: All right. 3 MR. RAMIREZ: All right. Mark? 4 MR. WEISS: Yes. We need to define need 5 maybe. But, anyway, the point I was going to make 6 very quickly is the reflection of purchase price 7 in the ISA statute is also consistent with the 8 statute that HUD operates under for establishing 9 our standards, which talks about the price of the 10 home to the consumer. And I don't remember the 11 section off the top of my head. 12 MR. LUBLINER: Mike Lubliner. I think 13 that we could look at the price elasticity models, 14 economic models, to address that. I think that 15 should be part of the discussion when we get into 16 the analysis. The price elasticity model for 17 those who don't understand I'm talking about is 18 for every dollar you raise the cost of the home, 19 you lose so many people in sales. And what this 20 does is allows you to evaluate the impact on the 21 manufacturer based on an increase in purchase 22 price. So if we are going to be using that in the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 164 1 overall definition of affordability, I would 2 encourage that technical analysis to help to 3 determine that. 4 And, last, there was one other thing 5 that happened in '74. Congress not only said 6 lifecycle cost but said technically feasible, 7 which means you couldn't come up with a product. 8 The manufacturers had to be able to build it. I 9 think you might want to add that to the points. 10 Thank you. 11 MR. RAMIREZ: All right. So can you 12 capture those in bullets for us so we could -- 13 what were those points? 14 MR. LUBLINER: Technical feasibility, 15 lowest lifecycle costs, and impact on purchase 16 price. And my recommendation was to use a price 17 elasticity model for the last one. 18 MR. EZZO: Mark Ezzo. Mike, can you go 19 over again what you -- you kind of defined the 20 price elasticity model, something to the effect of 21 it's a number to where X amount of people can no 22 longer afford. Can you go over that again?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 165 1 MR. LUBLINER: I sure can. And I think 2 that if we were able to get some of the analysis 3 that has been done, it would give us some 4 specifics. But I know of a couple of different 5 studies that have been done to look at what price 6 elasticity should be for the manufactured housing 7 industry. I think MHI sponsored Carol Meeks, Dr. 8 Meeks, to do that years on single-section, double9 section homes. And there was some work done by 10 researchers in Washington State University that 11 was published on price elasticity in the 12 manufactured housing sector. And basically what 13 we're talking about is if I raise the price of a 14 home by $1,000, what percentage of the market do I 15 lose to those at the entry level that can't fit 16 into that home. And there is a financial cost to 17 the manufacturer that needs to be considered 18 there. That's part of trying to get a sense of how 19 many sales are you going to lose, like Mark says, 20 and how do we quantify that? 21 I think as soon as we get some analysis, 22 we will be able to actually look at if they use

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 166 1 the price elasticity model the specifics and see 2 if we're all comfortable with those assumptions. 3 I hope that helps, Mark. 4 MR. CYMBALSKY: This is John from DOE. 5 I would just like to give a little primer on what 6 we do for appliance standards. What he is 7 discussing is what we call the shipments model for 8 appliance standards. And what we do there is, you 9 know, we have a model that projects the shipments 10 without standards. So that will be kind of our 11 baseline going in. So we will say this is the 12 shipments of manufactured homes for the next 30 13 years absent any intervention from standards. 14 We will also have the modeling. And it 15 uses price elasticity. So the gentleman on the 16 phone is correct. That is how we do it. It will 17 show what we think the impact is of shipments with 18 the standard in place. And you can run different 19 efficiency levels of standards that we are looking 20 at to see the impact of each one of those 21 different standards we think will have on the 22 market. And you could do kind of a manufacturer

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 167 1 impact analysis, like we do in standards. 2 So I think we will get there. And, 3 obviously, we don't have all of those numbers yet, 4 but I think, you know, he is exactly right. Those 5 are the types of things that we are going to look 6 at and be the basis of the negotiation. 7 MR. RAMIREZ: At least to me, that 8 sounds complicated. What kind of timeframe are 9 you talking about that you would be able to have 10 that type of data? 11 MR. CYMBALSKY: You know, this is the 12 analysis we will be doing as we go along. So I'm 13 going to pin a tail on the donkey here, but, you 14 know 15

-- 16 MR. RAMIREZ: I guess what I'm looking 17 at is for our next meeting, which is scheduled on 18 the 21st, is it a possibility to have it? 19 MR. CYMBALSKY: Right. So I think we 20 mentioned yesterday that we are working on getting 21 some data together based off the 2015 IECC. And 22 we're hoping to get the lifecycle costs and all of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 168 1 the different analyses in order by then. 2 MS. HOFFMAN: Perhaps by our next 3 meeting, then? 4 MR. CYMBALSKY: Hopefully prior to that 5 so that before people come into the room, they'll 6 have a chance, at least a few days or maybe 7 hopefully a week or two, to look at the numbers. 8 MS. HOFFMAN: Okay. Mark and then Eric. 9 MR. WEISS: And this was mentioned 10 yesterday. I think it was Mike. Financing is 11 also an aspect of this, particularly when you're 12 dealing with manufactured housing and particularly 13 given some of the changes that we have been 14 through in recent years with the availability of 15 financing and also new regulations that have come 16 into effect under the Dodd Frank law. It's a very 17 different financing market than it was probably 18 back when previous studies were done regarding 19 affordability, and I think that definitely has to 20 be factored into it as well. If you can't get 21 financing, most people, you are not going to be 22 able to buy the home.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 169 1 MR. ROY: Is it possible to get Ishbel 2 in here someplace, perhaps by phone? She would 3 really care about this conversation. 4 MS. HOFFMAN: Oh, right. 5 MR. ROY: This is so core to what she 6 thinks about. 7 MS. HOFFMAN: Before we continue, any 8 status on Ishbel? 9 MR. CYMBALSKY: We are still trying to 10 get her access into the building. It takes a 11 little time, but -- 12 MS. HOFFMAN: Can she communicate via -- 13 MR. FREEMAN: That's why I brought her 14 laptop. 15 MR. LUBLINER: Mike Lubliner here. It 16 may be useful as backup research to get a copy of 17 some of the existing price elasticity analysis 18 that has been done in the manufactured housing 19 sector so you, Mark, and you always can get a 20 sense of what the models have suggested. 21 The two studies that I would recommend 22 was one that Dr. Meeks at MHI probably has. The

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 170 1 other one was a Professor Marsh, Dr. Marsh, from 2 Washington State University. I would be happy to 3 share that. What he found was that there are two 4 price elasticity decision points. One is by the 5 purchaser, and one is by the retailer. So, you 6 know, I think that this is an opportunity here to 7 work with industry to get updated data that would 8 reflect the current climate in the funding and see 9 if we can come to agreement on what those price 10 elasticity factors are so that we could use that 11 approach in this rulemaking negotiation. 12 Thank you. 13 MS. HOFFMAN: All right. Eric, you had 14 a question or concern. 15 MR. LACEY: Thank you. 16 I kind of want to circle back to what 17 Robin said earlier, and then I do have a comment 18 about price elasticity or demand because that 19 comes up frequently in state code adoption 20 debates. First, I think I agree mostly with what 21 Robin has said, but I wanted to go back to the 22 statute because I think that is a standard by

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 171 1 which this core group will be judged and 2 ultimately the NOPR will have to -- you know, the 3 hurdle that we will have to clear. And the one 4 tweak I would make to kind of the scope of work is 5 the first clause in the statute related to 6 updating the standard says, "The energy 7 conservation standards established under this 8 section shall be based on the most recent version 9 of the IECC." So, as a starter, that is kind of 10 the starter. And then there are some exceptions 11 to that. I just wanted to make sure that we keep 12 that in mind that what the statute requires is the 13 most recent version of the IECC except in cases, 14 and there are the exceptions where the Secretary 15 finds the code is not cost-effective or a more 16 stringent standard would be more cost-effective. 17 And this is judged by based on the impact of the 18 code on purchase price of manufactured housing and 19 on total lifecycle construction costs, 20 construction and operating costs. 21 So I agree, you know, with what Robin 22 says. You know, we need to look at cost-

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 172 1 effectiveness, both on the lifecycle and on the 2 purchase price, but within keeping the 2015 IECC 3 kind of as a starting point. And I think that was 4 referenced yesterday. I don't want to lose sight 5 of that as we're kind of charging ahead. 6 And the second point I wanted to make 7 was on price elasticity. It's been a long time 8 since I took economics, but this is a challenging 9 question because there are some who will assume a 10 price elasticity of - 1, where you will have one 11 seller and all of the same item and if you 12 increase the price by one penny, it knocks out X 13 number of buyers because they are buying at the 14 absolute limit of their credit or whatever when, 15 in reality, there are several options. There are 16 several suppliers out there. Not everyone is 17 maxxing out the purchase capabilities. And so the 18 price elasticity is something less than that 19 fixed, straight-line amount. 20 So this is a very complicated sort of 21 question. And, you know, it does need to come up 22 later on when you are talking about purchase

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 173 1 price, but I don't think that there is a set -- 2 it's as complicated as any of the other cost3 effectiveness issues. 4 So, anyway, I just wanted to, you know, 5 circle back on the 2015 IECC as kind of the that's 6 the base case unless it meets an exception. 7 MS. HOFFMAN: No. Thank you. Lowell? 8 Thank you very much. 9 MR. UNGAR: Yes. I also wanted to go 10 back for a moment to the statute. I am not an 11 expert on the technical aspects of manufactured 12 housing, but I do know something about Congress 13 and the laws. And I wanted, one, to note I think 14 the discussion of the statute from I assume it's 15 '92 probably for HUD is illustrative, but know 16 that that, again, is not a governing statute. 17 That one was the old HUD code. In fact, we were 18 involved and recommenced modifying that. Congress 19 chose not to do that. Congress chose to do a new 20 statute with a different agency. So I want you to 21 take that for illustration but not as something 22 governing this standard.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 174 1 And, you know, my sense in terms of the 2 language was not that they were trying to 3 introduce new factors. As Mark pointed out, these 4 factors had been under consideration. And I think 5 that my read of that is they are talking about 6 lifecycle costs. And they were trying to say what 7 lifecycle cost means. In particularly, as Eric 8 can say, there's been a lot of discussions in 9 terms of the IECC about what to look at. And 10 they're saying they think lifecycle cost is a way 11 to look at these questions. 12 Thanks. 13 MS. HOFFMAN: Thank you. 14 I have just heard from Joe that Ishbel 15 should be back in 15 minutes. So here's hoping on 16 that score. 17 Yes, Emanuel? 18 MR. LEVY: I think Eric put his finger 19 on the key, the key language here. And this is a 20 point of debate. The language in the EISA law is 21 confusing. It is actually a dichotomy because it 22 says IECC, on the one hand, and lifecycle cost, on

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 175 1 the other. Those two things are never going to 2 match up. Why should a consensus standard that 3 was developed for site-built be cost-effective for 4 manufactured housing? And it's not to say that 5 what is cost-effective today -- and this is a 6 point for our debate -- is less or more than the 7 IECC 2015 or 2012 or any version of the IECC. It 8 may be that the 2015 or something close to it is 9 cost- effective in one part of the country and not 10 another part of the country, but from what Eric 11 said, the way I interpret it is that if it's not 12 cost-effective, cost-effectiveness should dictate. 13 And the question is whether if it's not cost14 effective but less stringent than 2015, is that 15 acceptable? Is that the way you would interpret 16 it, that we could go less than 2015 or even less 17 than 2012 if it's shown through our own analysis 18 to be cost-effective to be at those lower levels? 19 MR. UNGAR: Yes. So I should have 20 mentioned that. I think the intent of Congress 21 here is -- and in 2007, the HUD code on energy 22 issues had not been updated for 13 years by that

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 176 1 point. Congress felt that that was not 2 acceptable. It was falling behind building 3 science and practice. And they looked and said, 4 "IECC is getting updated every three years. There 5 is actual that, and it has gone well beyond where 6 the HUD code is," And it wasn't clear. You know, 7 they felt that there was no reason manufactured 8 housing in general could not be as good as stick9 built homes. And so they said, "Let's take that 10 as a basis that you should look to that at least 11 as a starting point," but recognizing that there 12 could be differences for manufactured homes and 13 that yes, absolutely, that what makes sense -- 14 either that you may either be able to get to 15 higher levels or lower levels and that if it 16 didn't make sense for manufactured homes, if DOE 17 could demonstrate that that wasn't a good standard 18 for manufactured homes, they should go above or 19 below, as warranted, but take that as a starting 20 point because, you know, not, say, an old HUD code 21 at that point was old and now is even older, but 22 take IECC as a basis and look, only if there is a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 177 1 good justification why you need to go above or 2 below, use that. 3 MS. HOFFMAN: Manny? 4 MR. SANTANA: Yes. This is Manny with 5 Cavco. Understanding that the mandate DOE has is 6 to develop a standard based on the most recent 7 IECC, you know, I don't think they meant that 8 should be our starting point. I think they have 9 that as the goal. 10 You know, so, again, I think we can't 11 ignore where HUD code construction currently 12 stands. You know, because we use words like 13 "affordability." We're saying, "cost-effective," 14 but we don't know. We don't have a number 15 associated with that. So we don't know exactly 16 what that means. That is not very well- defined. 17 You know, so what we have to use instead is 18 minimum occurring construction standards when it 19 comes to energy. That defines cost-effectiveness. 20 So I think we have to start with what we currently 21 have and then say the most recent International 22 Energy Conservation Code is the goal and then take

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 178 1 it in increments and see, well, how far can we get 2 before costs really start to rise? You know, I 3 think that if we start at the 2015 IECC and then, 4 you know, try to give a cost to that and compare 5 that to the cost of where we're at, it's going to 6 be impossible to come up any kind of comparisons. 7 MR. RAMIREZ: I think Stacey and Keith 8 had their hands up first. 9 MS. EPPERSON: So this is on a different 10 subject, maybe a question for Emanuel. It's 11 lifecycle cost, the PITI plus energy. Originally 12 did we also look at lot rent as part of the 13 lifecycle cost? Because for the 50,000 14 manufactured housing communities -- okay. Thank 15 you. 16 MR. DENNIS: Mine might be a question 17 for Emanuel, too. So when looking at the price 18 elasticity and saying, you know, looking at 19 affordability and you say you raise the cost by 20 $1,000, this many people don't buy the house, is 21 that then compared to an energy baseline, like 22 what they have now, like so you're losing that

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 179 1 energy savings if they had bought that house or is 2 that just strictly financial to the manufacturer, 3 financial losses, factored in? Like is it energy 4 analysis that you are talking about when you are 5 losing that new increment to the new house or is 6 it just a financial loss to the manufacturer and 7 the retail market? 8 MR. LEVY: You might be mixing two 9 things. What we were talking about -- 10 MR. LUBLINER: Okay. Well -- 11 MS. HOFFMAN: Emanuel is answering 12 first, Mike. Okay. Go ahead. 13 MR. LUBLINER: Thank you. 14 MR. LEVY: What we were talking about 15 here is simply determining, indifferent to whether 16 the homeowner can afford the home or not, what 17 level of energy efficiency is cost-effective. 18 MR. DENNIS: Right. 19 MR. LEVY: Mike brought up the other 20 issue. If the cost of doing these things is three 21 or four thousand dollars, there are going to be 22 people who can no longer afford to buy a home if

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 180 1 the price of that home goes up by that amount of 2 money. So you are, in effect, knocking those 3 people out of the market entirely or the ability 4 to purchase a home. How should that consideration 5 enter into our decision- making? 6 MR. DENNIS: Right. And then do you see 7 that as a loss of energy compared to the homes 8 that they are in now because they're not 9 purchasing the new? I mean, is that part of the 10 equation? No. 11 MR. LEVY: You mean the fact that they 12 have to continue to rent, instead of buy a home? 13 MR. DENNIS: Rent their older home? No. 14 That's not -- 15 MR. LEVY: It's very difficult to 16 quantify that. 17 MR. LUBLINER: Yes. I concur with what 18 Emanuel said. 19 MR. RAMIREZ: Mark? 20 MR. WEISS: Hi. I just wanted to 21 address a point that Lowell made earlier. And he 22 is correct in pointing out that the Congress in

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 181 1 the EISA law went beyond what HUD has 2 traditionally done with respect to energy. But 3 the fact that Congress chose to legislate with 4 respect to energy doesn't change or doesn't negate 5 other aspects of federal law that were already in 6 place, including the HUD Act, the Federal 7 Manufactured Housing Act, which specifically 8 refers to the availability of affordable housing 9 and manufactured housing as affordable housing. 10 So I just want to make clear that that specific 11 legislation or regulation does not alter the other 12 requirements that we operate under with respect to 13 the affordability of manufactured housing. And 14 there is a nexus between the two in the 2000 EISA 15 statute, where it says that DOE shall act in 16 consultation with HUD. 17 MS. HOFFMAN: Eric? 18 MR. LACEY: Eric Lacey. I hate to 19 disagree with my seat mate here, Manny, but I do 20 think the starting place needs to be the IECC, 21 just because of what the statute says. And it may 22 be as simple as using Mr. Levy's chart there, you

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 182 1 might put your first point on there and say, "This 2 is the U of o for the 2015 IECC." You know, if we 3 move it to the left or to the right, is this more 4 cost-effective, less cost- effective? 5 I mean, Congress decided to start 6 somewhere, I think. And I think your illustration 7 is very good here. It may be as simple as that 8 that this is where the 2015 IECC would be. They 9 needed a frame of reference that was more recent 10 than 1994. And so this is what they picked. They 11 picked the IECC because it applies to, you know, 12 single-family homes. And obviously it's not going 13 to be the same in every case because the homes are 14 different. But they needed a point of reference, 15 and they chose not to reference the old HUD 16 standard. They chose to reference the energy 17 code. And, you know, taking into consideration 18 the differences of the home and the different, 19 some of the very unique characteristics, this is 20 kind of where they intended to start. That is my 21 reading of that statute. 22 MS. HOFFMAN: Joe?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 183 1 MR. HAGERMAN: Yes. So not to confuse 2 anything but just to offer up maybe some helpful 3 suggestion or whatever, the analysis that we are 4 going to be providing is going to be based on the 5 2015. So we're going to show everybody that, of 6 course. And then we are going to show you also 7 how it compares to 2012, 2009, 2006, et cetera, et 8 cetera; right? But I agree. I think we should 9 start with 2015 as a starting place and then 10 discuss backwards. 11 MR. RAMIREZ: Yes. Before we get to 12 Richard, I am not hearing too much of a 13 difference. It's just a matter of how we are doing 14 it; right, whether it be reverse engineering or 15 forward lighting; right? What you are saying is 16 go forward, using this and go forward. What 17 they're saying is let's go here and go backwards. 18 So either way, I think that you end up dealing 19 with the same components is kind of what I am 20 hearing there. But the preference is to start off 21 with 2015 IECC. 22 Go ahead.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 184 1 MR. POTTS: Richard Potts. Not to put 2 him on the spot, but I don't know if the HUD reps 3 are here to observe and report or if they can 4 weigh in on or if we need any clarification. 5 MR. RAMIREZ: At this point, the 6 observers will have a moment for comment at the 7 end of the day. We're trying to keep it with the 8 Working Group. 9 MR. HAGERMAN: Yes. Just to be clear, 10 HUD is just a member of the public in this Working 11 Group meeting? They're not a Working Group 12 member? 13 MS. HOFFMAN: Right, but at a break, if 14 you want to talk to the people, sure. 15 MR. HAGERMAN: Maybe clarifications on 16 things and -- 17 MS. HOFFMAN: Sure. 18 MR. RAMIREZ: I'm sure they wouldn't 19 mind if you picked their brain during the break. 20 MS. HOFFMAN: Yes. We'll make sure 21 there's a break as well. Okay. 22 MR. RAMIREZ: Let's get Robert and Mark.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 185 1 MS. HOFFMAN: Yes. 2 MR. LUTER: Rob Luter with Lippert 3 Components. In this discussion, are we to assume 4 that it is the intent of Congress or DOE that once 5 we have an end product here, all things thermal in 6 the current HUD code will be discarded? Are we to 7 not consider those at all, the methodology? 8 MR. RAMIREZ: I think it's up to you. 9 MR. LUTER: Is this going to be a DOE 10 code? It is going to be a HUD code? What's it 11 going to be? 12 MR. HAGERMAN: It is definitely a DOE 13 standard. 14 MR. LUTER: Okay. 15 MR. HAGERMAN: And I would assume that 16 the levels that are selected would be superior 17 than what is in the current HUD code. So you 18 would by default 19

-- 20 MR. WEISS: So it would supersede the 21 HUD code. 22 MR. HAGERMAN: Yes. By default, you

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 186 1 would already meet the requirements of the HUD 2 code. 3 MS. HOFFMAN: Does that answer your 4 question, Rob? 5 MR. LUTER: Kind of. Yes. Sure. 6 MS. HOFFMAN: Who is next? 7 MR. RAMIREZ: Manny. 8 MS. HOFFMAN: Manny? 9 MR. SANTANA: Yes. Manny with Cavco. 10 You know, going back, you know, just a little bit, 11 still on the point of how to start and which way 12 to go, you know, one reason why I think that it is 13 important to start with the HUD code, you know, 14 again, is because that is where we are. And we 15 need to see this thing in terms of improvement. 16 Anything that we do is going to be an improvement. 17 You know, anything that we do is going to be an 18 improvement, potentially is going to add cost, you 19 know. So I think it would be easier to see it in 20 "Okay. This is where we are at. This is how we 21 are going to improve. This is how much it is 22 going to cost. This is how we are going to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 187 1 improve again. This is how much that is going to 2 cost. This is how we are going to improve again. 3 This is how much that is going to cost." 4 If we start at 2015 and start taking 5 away, it is going to be harder to quantify "This 6 is how much we are going to save" because we're 7 not actually going to save anything. So if we go 8 back down, how much are we going to save then? 9 We're still going to have to go back and figure 10 out how much of a cost increase that is. 11 So, again, starting with the HUD code, 12 this is what we add. This is what we increase in 13 cost. This is what we add. This is what that cost 14 is. It will be easier than saying, "This is where 15 we are in 2015. We're going to take this away. 16 What is that going to cost us? Then we are going 17 to take that away. Now how much less is that 18 going to cost?" You are still going to have to -- 19 you know, I can draw you a chart, I think, of what 20 I have in my head. But I think it would be easier 21 to start at the HUD and then come in because 22 everything is increasing.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 188 1 MR. HAGERMAN: In the analysis we 2 provide, you can do that. All right? You will be 3 able to take -- you know, you were working from 4 the left side of the table to the right. And I 5 think Eric is working from the right to the left. 6 But you will have all of the data there; right? 7 And you can run all of your costs off that data. 8 MR. RAMIREZ: Let's get Mark. And then 9 we'll get you, Rob. 10 MR. WEISS: Yes. Just to go back to 11 Rob's question, I think what you were asking, it 12 goes back to why the statute says "in consultation 13 with HUD." I think they have to have input into 14 this and, you know, as I have said before, input 15 at a meaningful point so that they can relate this 16 to the existing HUD code and make relevant points 17 with respect to that. 18 As far as Rick or anybody from HUD 19 participating, I don't have the new ground rules 20 in front of me, but I believe they said yesterday 21 that a participant can call on another individual 22 to elaborate on a relevant point.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 189 1 MS. HOFFMAN: Right. 2 MR. WEISS: And I think that is what 3 Richard was talking about. 4 MS. HOFFMAN: Okay. Who's next? Rob? 5 MR. RAMIREZ: Rob. 6 MS. HOFFMAN: Rob, yes? Okay. Richard? 7 MR. POTTS: Richard Potts. I might have 8 used up my 17 seconds of attention span, but what 9 are we trying to resolve or reach at this point? 10 Are we just kind of going over some ideas or 11 issues that people have or are we trying to figure 12 out, are we going to use the IECC or the HUD code 13 as a starting point? I'm trying to figure out -- 14 MR. RAMIREZ: Yes. At this point -- 15 MR. POTTS: -- how we're getting into 16 this point. 17 MR. RAMIREZ: Yes because we are getting 18 a bit off -- 19 MR. POTTS: Okay. 20 MR. RAMIREZ: -- as far as where we are 21 going into the process. You all want to talk 22 about what we are calling affordability, which

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 190 1 later on was clarified to be increase the 2 efficiency of manufactured homes while optimizing 3 cost-effectiveness as in cost-effectiveness and 4 lifecycle cost and purchase price. So there is 5 more going towards that cost-effectiveness. What 6 is it? We need to make sure that we are all on 7 the same page. That is where the conversation was 8 hopefully going. I think we saw a squirrel at 9 some point and got diverted. 10 MS. HOFFMAN: Yes. 11 MR. LUTER: Very quickly. I was at my 12 18 seconds. That's why I lost it. The exchange 13 between Joe and Manny, Manny is advocating for 14 starting at the HUD code. Joe and others are 15 advocating for starting at the 2015 IECC. And Joe 16 indicated that we would be receiving analysis from 17 PNNL that we could have a starting point. It is 18 my understanding that the analysis that is being 19 done isn't even including the current HUD code. 20 It's various releases of the IECC. Now, did I 21 misunderstand or will there be an analysis based 22 on the current HUD code?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 191 1 MR. HAGERMAN: Yes. So I believe they 2 start with a HUD baseline, but you would have to 3 review all of the assumptions that they made. My 4 understanding is they modeled. So it's an energy5 plus model. It's a 3D model of a building with 6 all the insulation and everything. So what they 7 have done is they have taken, you know, some 8 geometry and then modeled that following the HUD 9 code, -- 10 MR. LUTER: Sure. 11 MR. HAGERMAN: -- run that simulation. 12 Then they do the same for the 2006. 13 MR. LUTER: Okay. Okay. 14 MR. HAGERMAN: So then you see an apples 15 to apples comparison. 16 MR. LUTER: Whichever way we approach 17 this, I think it's going to be important that we 18 can very clearly relate it back to today's HUD 19 baseline, if, for nothing else, to toot our horn 20 that we did a great job and look what we have 21 achieved here. 22 So all right. Thank you.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 192 1 MR. CYMBALSKY: This is John from DOE. 2 So I would like to query the people in the room. 3 What is the shipped average today? So I think in 4 my mind, when we think about the baseline and how 5 to do national energy savings from our work here, 6 we do need to know what is the average being 7 shipped right now. So I'm hearing the HUD 8 baseline. I'm hearing different versions of IECC. 9 If you took a shipment- weighted average of the U 10 factor, do we know what that is? So how efficient 11 are the homes that are being shipped today? 12 MR. LUBLINER: This is Mike Lubliner. 13 MR. EZZO: Mark Ezzo. So what you are 14 saying is take the 60,000 shipments that industry 15 did last year and what is the average actual use 16 of o of each? Okay. I see what you are saying. 17 MR. CYMBALSKY: In my mind, so that is 18 what we do in appliances. Right? So the federal 19 minimum could be 300 kWh per year, let's say. But 20 industry because of ENERGY STAR and other things, 21 they could produce above the baseline more 22 efficient. And so when we go to do our national

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 193 1 energy savings, we don't want to refer back to the 2 HUD code that may be irrelevant to what is 3 actually -- I mean, it's relevant in a sense that 4 people follow it, but they also exceed it to some 5 degree. I may be wrong, but I hope that is the 6 case. And if it is the case, we want to get the 7 arithmetic right. We want to be able to say our 8 work here saves, you know, X btus, it costs $X to 9 do that. I mean, that's the nitty-gritty of what 10 we are trying to compare and negotiate around, I 11 think. 12 MS. HOFFMAN: I think, Emanuel, you have 13

-- 14 MR. LEVY: Yes. We have been asked that 15 question a number of times. And the answer is 16 pretty much the same. We don't know for sure, but 17 we know a couple of things that might help answer 18 the question. One is that about ten percent of the 19 homes that are being built today are ENERGY STAR 20 homes. We know exactly how each one of those 21 homes is built because we have a database of all 22 of those homes.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 194 1 The second thing is if you asked that 2 question five years ago or ten years ago, you 3 would get a different answer than today because 4 the market became much more competitive, as Mark 5 will tell you. And, as a result, builders started 6 building closer to the HUD minimum. And over that 7 period, as the competition kicked in and price 8 became a much bigger factor and people were 9 willing to pay less, so over time, that has 10 changed. Just anecdotally, it has gotten lower, 11 but it is probably headed back up right now. 12 In some parts of the market, there will 13 always be low-cost product. HUD minimum product, 14 Mark and Manny and others can comment better than 15 I can where that product is being built in what 16 proportion, single-section units. By and large, 17 if you drew a triangle, I think, between, let's 18 say, Kentucky, Virginia, and Florida, within that 19 triangular area, you would have the least-cost 20 product being built today. 21 MR. LUBLINER: This is Mike Lubliner. 22 MR. RAMIREZ: Go ahead, Mike.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 195 1 MR. LUBLINER: Yes. I kind of concur 2 with Manny that if we were to go ahead and look at 3 the ENERGY STAR as kind of a weighted current 4 process, so, you know, X is ten percent ENERGY 5 STAR with this Uo and the rest are minimum HUD, 6 that may be a good starting point for this 7 analysis. One thing to caution, though, is with 8 the ENERGY STAR package, at least historically, 9 that was subsidized, in part, by tax credits by 10 all the taxpayers in the United States. So when 11 the tax credits aren't there, you might not get as 12 high a percentage of ENERGY STAR homes. And I 13 defer to Emanuel to assist us with that, but I do 14 think it is appropriate. 15 And, finally, on this point, I would 16 like to point out that, you know, getting back to 17 Mark's comments about affordability and the entry18 level buyer, one thing to think about if we're 19 looking at that area, those entry-level buyers 20 don't typically opt for anything beyond the 21 minimum. So my recommendation is to try to stick 22 as close to the HUD minimum unless we have data

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 196 1 like ENERGY STAR or other manufacturer data that 2 supports a higher what we'll call current practice 3 baseline. 4 Thank you. 5 MS. HOFFMAN: Okay. Okay. My thought 6 is just a thought. I think we should take like a 7 15- minute break. When we come back, we will look 8 at this and then take a look at that as well. 9 MR. CYMBALSKY: Can I just add one item 10 here? 11 MS. HOFFMAN: Yes, sure. 12 MR. CYMBALSKY: And then we'll break. 13 So in appliance standards, we have our consultants 14 have the opportunity to sign nondisclosure 15 agreements with manufacturers to collect data. 16 That data is not disclosed to the federal 17 government. It is rolled up to be used in our 18 analyses. And the public only gets to see sort of 19 industry-wide data. I bring this up because if 20 there are manufacturers who may be willing or 21 organizations be willing to sign the NDAs and 22 provide data they otherwise might not want to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 197 1 provide and make public, that vehicle does exist. 2 That data does a really good job of framing our 3 analyses and making a better analysis when we get 4 into the nitty- gritty. So I just want to throw 5 that out there. And if you have questions, I 6 would be happy to take them about that. 7 MS. HOFFMAN: Okay. Okay. So we are 8 going to take a 15-minute break and come back 9 refreshed and continue. Thank you. 10 (Off the record.) 11 (On the record.) 12 MS. HOFFMAN: First we want to welcome 13 Ishbel back. And, Stacey, thank you for 14 summarizing what had happened. And maybe at 15 lunch, Ishbel, you can get the same wonderful 16 presentation from Emanuel that we had. Oh. Well, 17 then another time. 18 The other thing is in talking with the 19 folks from Navigant, we'll send out a list of 20 those states where you may have to bring if we're 21 back meeting here alternative IDs beyond your 22 driver's license.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 198 1 MR. RAMIREZ: It's not just Washington 2 that's caught up in that. 3 MS. HOFFMAN: Yes. We found out quite a 4 few states. So we'll definitely make sure 5 everybody is aware of that and for alternative 6 methods of identification get in. Okay. 7 Also, there was a question about 8 relationship of talking with folks in the 9 audience; right? And did you have a -- 10 MR. CYMBALSKY: Mike Jensen is going to 11 come back and explain. 12 MS. HOFFMAN: And explain. Okay. On 13 that score. 14 Where we are now has been a discussion a 15 little bit about, really, the charter for this 16 group, which is what to apply and how to do it. 17 And we haven't reached total consensus on that, 18 but we have had a discussion about the 19 International Energy Conservation Code and the use 20 of the most recent publication of that document. 21 And also we'll be receiving the numbers, which we 22 can go over in time for the next meeting using

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 199 1 whatever approach you want to use, which we'll do. 2 I'm going to turn it over to Javier now 3 because I think we might want to look at some of 4 the things we started with yesterday. 5 MR. RAMIREZ: Yes. Because probably I 6 guess what I'm struggling with is that yesterday 7 when we were outlined the whole scope over here 8 and even before then, it was my understanding that 9 we were over here to talk about a DOE standard. 10 And also yesterday this was for a -- we were only 11 going to be using the 2015, 2015 IECC, as a 12 starting point. And, Manny, I hear you loud and 13 clear. In my head, I think it's just seriously 14 which way you attack it. I don't think anyone is 15 dismissing at all what you are saying as far as 16 but where are we at; right? So I'm not seeing 17 that as a big problem. It's just a matter of do 18 we make sure that we are looking at both of those 19 values; right? 20 MR. SANTANA: You know, I think that is 21 going to depend on whether -- 22 MR. SCHNEIDER: Peter Schneider.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 200 1 MR. RAMIREZ: I'm sorry, Peter. Hold on 2 one second. Manny? 3 MR. SANTANA: That just depends on 4 whether or not the analysis includes, you know, 5 the versions of the IECC as well as the HUD 6 baseline. And that does. And then it would be 7 easy to see where we are at. 8 MR. RAMIREZ: Okay. I believe we are 9 going to get some of that. 10 MR. HAGERMAN: Yes, absolutely. And let 11 me just add, too, if you know that there are some 12 items that are, you know, specific to manufactured 13 homes that would have to be changed to meet the 14 2012, like you know, you have already done the 15 analysis yourself and you know if you go from -- 16 MS. HOFFMAN: Do you mean 2012 or 2014? 17 MR. HAGERMAN: No. I mean 2012 just 18 right now -- 19 MS. HOFFMAN: Okay. Sorry. 20 MR. HAGERMAN: -- as an example or 2006 21 or 2009, whatever code we're talking about here. 22 If you know there are changes, give those to me.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 201 1 And we'll have the analysts run those as well; 2 right? I mean, they stand ready to -- you know, 3 if this group talks and says the U value in this 4 climate zone should be this number, they're ready 5 to spin up the models and give you results of the, 6 you know, annual energy consumption overnight. 7 MR. RAMIREZ: So, Peter, I'm sorry. You 8 had something? 9 MR. SCHNEIDER: Yes, just in regards to 10 next steps. I had submitted a question yesterday 11 just in regards to what climate zones are going to 12 be utilized in the energy modeling assuming that 13 our next steps are to utilize a 30-year lifecycle 14 for our cost- effectiveness analysis, which HUD 15 did originally and the DOE does, and then 16 utilizing that energy modeling. I just want to 17 make sure that we are not disadvantaging, for 18 instance, a heating-dominated climate, like in 19 Vermont, that is currently put in the same block 20 as Virginia. That would disadvantage, you know, 21 the argument for efficiency and affordability. 22 MR. RAMIREZ: Okay. And it seems like

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 202 1 everyone really wants to get to that first one; 2 right? I want to make sure that you all want to 3 have that discussion of affordability, but we kept 4 veering off. It always seemed like we kept trying 5 to go to that climate zone and really starting to 6 dig into some of the issues. Go you want to 7 continue that discussion on affordability with 8 hopefully developing some type of understanding or 9 do you want to move on to that first issue? 10 MR. SCHNEIDER: Well, this is Peter 11 again from efficiency. But, now, just one 12 additional comment, just in regards to the idea of 13 like where do we start. This idea that we would 14 start at HUD and move up, I think that starting 15 with the 2015 IECC is the right approach because 16 we are talking about a comprehensive package. You 17 know, at the end of the day, if that standard is 18 to be met and can be met by our manufactured 19 housing industry, a whole different assortment of 20 benefits come into play in regards to the way that 21 we heat and cool and dehumidify these spaces, the 22 way we ventilate these spaces. And if we just

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 203 1 take the current HUD standard and start adding one 2 piece at a time, we lose the comprehensive nature 3 of that package. And I think that that is where 4 we should start. 5 I mean, I am confident that the 6 manufactured housing industry can build to that. 7 So the question just comes back, I think, to the 8 energy modeling and the cost analysis in regards 9 to what really makes sense and then factoring in, 10 as Michael said, when we start looking at the 11 shipment model or the price elasticity. 12 MS. HOFFMAN: Thank you. 13 MR. RAMIREZ: My original question still 14 stands, though. Do you want to continue talking 15 about affordability or do you want to move on to 16 the first issue? Robert? 17 MS. HOFFMAN: I'll just throw this out. 18 Do you want to decide today or talk about starting 19 with the 2015 model and working with that? Yes? 20 MR. LUTER: The caller kind of prompted 21 a thought on my part. And I would like to throw 22 something out.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 204 1 MS. HOFFMAN: Sure. 2 MR. LUTER: In addition to -- 3 MS. HOFFMAN: This is Rob Luter. 4 MR. LUTER: I'm sorry. Rob Luter with 5 Lippert. In addition to the overall 6 impact on affordability, bullet 4 up there, I 7 would like to consider consumer awareness from a 8 couple of perspectives: one, that the consumer 9 understand that their potential larger investment 10 could pay off in the end; and, secondly, that the 11 consumer of today even be aware that there are no 12 barriers that exist right now for a customer today 13 buying a home that meets the 2015 IECC. All they 14 have to do is ask for the performance. Products 15 are available. In perhaps some very rare cases 16 with respect to a particular size home, there 17 might be, but all these building science products 18 exist so that if a customer could write the check, 19 they could have a home today that met the 2015 20 IECC. And it's all about customer awareness. 21 MR. RAMIREZ: Okay. Let's -- 22 MR. LUBLINER: This is Mike Lubliner.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 205 1 MR. RAMIREZ: Mike? Hold on one second, 2 Mike. 3 MR. LUBLINER: Okay. 4 MR. CYMBALSKY: So this is John from 5 DOE. That's great news, actually. I think hearing 6 that piece of news actually gives me confidence 7 that the analysis and the numbers that we provide 8 to negotiate upon are -- are based on what the 9 market conditions are and the potential for the 10 efficiency gains are there, so that's good. 11 What we're going to, again, talk about 12 is how much does it cost to build that home, and 13 we're going to do the -- we're going to look at 14 the trade- off for upfront cost versus life-cycle 15 operating cost savings generically, so I know that 16 says life-cycle cost and purchase price, but I'm 17 not sure if we meant to say that, because we all 18 know that purchase price is part of life-cycle 19 cost, right? 20 MR. RAMIREZ: So how would that be 21 better captured? 22 MR. CYMBALSKY: I think -- I think what

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 206 1 Robin said was the life-cycle operating cost and 2 purchase price. 3 MR. RAMIREZ: Oh. 4 MR. LUTER: Perhaps inclusive of 5 purchase price. 6 MR. LUBLINER: Correct. This is Mike 7 Lubliner. I want -- I want to follow-up on Rob's 8 comment, if appropriate, here. 9 MR. RAMIREZ: Yeah. Yeah, go ahead, 10 Mike. 11 MR. LUBLINER: Okay. So I totally agree 12 with what Rob's saying. I want to give the 13 Northwest experience. We've had a partnership 14 with the manufactured housing industry since the 15 '80s, and as a consumer in Washington State, I can 16 go into a manufactured home retailer lot, and the 17 majority of homes that are on that lot are pretty 18 close to the 2012 and even, in some cases, 19 exclusive to the 2016 IECC. We're typically 20 seeing in the marketplace, in dealer lots, R33 in 21 the floor, R38 in the lid, an R19 to R21 wall, and 22 a U-value of -- equivalent to a vinyl low-E

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 207 1 window. And this is probably 60 percent of the 2 market, and then a good chunk of the remaining is 3 well above the HUD code minimum. 4 So I do think that the market, at least 5 in the Northwest, where we've had a partnership 6 and really done a lot of consumer awareness with 7 industry, has shown an example of if you build it, 8 they will come. Thank you. 9 MR. RAMIREZ: Okay. Rob? 10 MR. LUTER: Just a follow-up comment. 11 My point was not -- how can I articulate this 12 properly -- that -- it's been suggested by some 13 that the state of the current HUD energy code 14 presents a barrier for the consumer to get this 15 kind of performance, and it doesn't. It creates a 16 floor, minimum performance level. The barrier 17 does not exist to this. 18 MR. RAMIREZ: Uh-huh. 19 MR. LUTER: There may be some elements 20 of the marketplace where if you build it, they 21 will come. I agree, but I think if the public is 22 aware that it will come if they ask for it, they

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 208 1 can get it today. That was my point. 2 MR. RAMIREZ: Okay. 3 MR. LUBLINER: And it -- 4 MR. RAMIREZ: Yeah, go ahead. 5 MR. LUBLINER: I was going to say it's a 6 kind of a chicken-or-the-egg thing. If you offer 7 it, you'll find that many will take it. If you go 8 to a retailer lot and all there is is minimum HUD 9 and there's no buyer education, then exactly 10 that's what happens. They don't know, they don't 11 ask. They go inside. There's no label that says 12 what the energy standard is, so they can't compare 13 one to another effectively. And I think that's 14 what we'll be talking about here over the next few 15 months here. 16 MR. RAMIREZ: Mark, then -- 17 MR. SCHNEIDER: Peter Schneider from 18 Efficiency Vermont. I just want to concur with 19 Michael's comments with my experience in the 20 Northeast. 21 MS. HOFFMAN: Okay. We've got Mark, and 22 then Manny.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 209 1 MR. WEISS: But the point is, is, as Rob 2 was indicating, the manufacturers right now can 3 provide whatever level of energy efficiency the 4 consumer wants as a matter of consumer free 5 choice. It's a different matter when you start 6 talking about mandating particular criteria 7 standards for across the board and what impact 8 that's going to have on the purchaser. But these 9 things are all available right now as a matter of 10 choice. 11 MR. RAMIREZ: Ishbel? 12 MALE SPEAKER: Yeah, Rob, again -- 13 MR. RAMIREZ: I'm sorry, hold on a 14 second. Ishbel has a -- 15 MS. DICKENS: Thank you. So apologize 16 again for not being here this morning. This is 17 Ishbel from National Manufactured Home Owners 18 Association. So I think -- having missed this 19 morning's conversation, I think we're getting to 20 the rub, though, in terms of, yes, the options may 21 be available, Rob, as you say, if you're willing 22 to sign the check, but I think the idea for this

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 210 1 group is to make the -- make it not an option, but 2 just a normal part of doing business, that energy3 efficient homes are available at a cost that as 4 many people as possible can afford to pay. 5 And I don't know enough about the 6 industry, so I apologize for the very naivete of 7 my assumption, but it seems to me that when you 8 get to an economy of scale, there's an assumption 9 on my part, anyway, that the cost will be less 10 than an individual customer coming and asking for 11 a custom-built home. 12 And so my sense is that we would try to 13 get to a place where affordability and energy 14 efficiency have this magic meeting point that 15 makes the home attractive for the long term in 16 terms of energy savings, but also equally 17 attractive to as many consumers as possible 18 wanting to purchase new homes. So I don't want it 19 just to be those who can afford to get the Prius, 20 I think we called it yesterday, but that everyone 21 can afford the Honda Civic that's pretty 22 efficient.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 211 1 MS. HOFFMAN: And Manny was next. 2 MR. SANTANA: Yeah, this is Manny with 3 Cavco. You know, I don't think it's so much a 4 question of if you build it, they will come. Some 5 people will. You know, but I think when we talk 6 about what's affordable and what's cost-effective, 7 you know, the importance behind that isn't in just 8 the additional cost to the manufacturer. The 9 importance in that is how many people are no 10 longer going to be able to buy a house. 11 And that's -- so if you build it, they 12 will come, but if you build it and they come and 13 they can't afford it, that doesn't do them any 14 good. You know, so we -- I'd like to find out if 15 there's any way we can determine just what segment 16 of the population or what segment of the people 17 looking for affordable housing will no longer be 18 able to afford it if we get to certain increases 19 in the cost. That's what we're trying to get to, 20 you know. If we find out that's a very small 21 number, you know, and, you know, small enough to 22 be insignificant and -- then, good, that'll make

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 212 1 our job a lot easier. But if we find out that's a 2 very large number, you know, I think it's 3 important for us to quantify just what that is. 4 MR. SCHNEIDER: This is Peter Schneider 5 from Efficiency Vermont. I just want to speak to 6 what's happening in Vermont, just as an example, 7 with our -- what's called the High-Performance 8 Mobile Home Replacement Program. I think we need 9 to think outside the box of where we need to go, 10 and once you start changing the financing picture, 11 you start changing the appraisal picture -- as an 12 example, our high- performance mobile home 13 replacement units are getting traditional 14 financing, so we have under 5 percent interest 15 rates with 30-year terms being offered statewide 16 for this product in our mobile home parks on 17 rented land. It's not an issue on privately owned 18 land. 19 We have appraisers that are trained in 20 evaluating sustainable building, so they're using 21 the Energy-Efficient and Green Addendum, and 22 they're valuing these homes far above utilizing

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 213 1 the tools that the Institute of Appraisers have 2 developed for these types of buildings. So I feel 3 like we need to think about things outside of 4 just, you know, straight cost- effectiveness. 5 And I also just wanted to speak to, you 6 know, recently, the DOE did a study for Vermont as 7 we rewrite our energy code, going from basically 8 2009 IECC to 2012. The findings were that using a 9 30-year life cycle, you know, we're looking at 10 over $12,000 in savings to that homeowner, a 3.3- 11 year payback, and energy savings of over $705 per 12 year. 13 So, you know, again, I'd come back to 14 affordability. We need to be evaluating these 15 regional climates and not disadvantaging places 16 like the Northeast and the heating-dominated 17 climates or even the real cooling-dominated 18 climates by having these real broad HUD climate 19 zone. 20 MR. RAMIREZ: Okay, so -- 21 MR. LUBLINER: This is -- 22 MR. RAMIREZ: Go ahead.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 214 1 MR. LUBLINER: Thank you. I want to 2 just back up what Peter just said. In the 3 Northwest, since we've built over 125,000 high4 performance manufactured HUD code homes, we've 5 worked with NADA, who's the appraisal guide for 6 manufactured homes and chattel mortgage, which is 7 the most challenging area for us to improve upon, 8 and they actually have recognized values for 9 Energy Star homes and other high-efficiency values 10 that, if communicated toe the buyer, may induce 11 more buyers to take the option. 12 And back to what Ishbel was saying, 13 we're trying to get more product on the market so 14 that consumer has a choice to buy that, you know, 15 in a volume purchasing price, which is why this 16 industry is so good. They can compete pricewise 17 because they bulk buy (ph). So if we build all 18 the homes to a certain standard and that standard 19 is higher, then the consumer's going to get a 20 better price on the home, and the manufacturer, I 21 believe, will sell more homes. 22 But I would go back to the NADA

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 215 1 documentation as an example of added value that is 2 in the chattel mortgage industry for energy 3 efficiency. Thank you. 4 MS. HOFFMAN: Okay. We've got two 5 folks, David and Lowell, and then we may want to 6 move around a little bit. David, please. 7 MR. TOMPOS: Dave Tompos from NTA. I 8 just want to point out that this industry has 9 changed a lot in the last 10 to 15 years. 10 Manufacturers aren't building as many stock homes. 11 I don't know what the percentage is. We'd have to 12 find out from a manufacturer, but most of these 13 homes are custom homes. The consumer comes in and 14 asks for whatever options they want. There's not 15 a lot of homes sitting in lots that -- most homes 16 that are sold are sold because they have an order 17 for that home from a consumer, so there's not 18 stock units just sitting out on lots anymore. 19 MS. HOFFMAN: And -- 20 MR. LUBLINER: Hey, Dave, Mike here. 21 Just follow-up on that, if it's appropriate here. 22 Do you find that that's the case for the entry-

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 216 1 level home, the single-wide entry-level home, or 2 for the higher- priced multi-section home, 3 generally? Do you see a lot of distinction there 4 in terms of custom orders versus what they buy off 5 the lot? 6 MR. TOMPOS: I think it's across the 7 board. I mean, I'm sure you're going to see more 8 of that with the higher-cost units, but from what 9 I've heard from manufacturers recently is almost 10 all of their orders now are because they have an 11 order for it. It's not a stock unit. 12 MS. HOFFMAN: Okay. Lowell? Thank you. 13 DR. UNGAR: Thanks. There's two things. 14 One is on impact on who can afford it. I think 15 that's an interesting question. I would just add 16 we should also look at the impact of being able to 17 afford to keep the home, of the being able to 18 afford the energy bills, assuming our 19 understanding that for some of these homes, 20 particularly older homes, there are some very high 21 energy bills and have been a real problem for some 22 of the homeowners who may have the home to be able

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 217 1 to actually heat and cool them. So that just 2 needs to be taken into account as well. 3 On the question of being available on 4 the market and need for a standard, it's great if 5 people can build these home. That sounds like the 6 technical capability that Mike has referred to may 7 not be an issue, which certainly would make our 8 job easier. The -- I mean, there's long debates 9 about standards and need for them. I'm happy to 10 bring in some of the literature on economic 11 barriers and on the impact of -- particularly in 12 appliance standards as well as vehicle standards. 13 There's been a lot of literature on historical 14 impact and such. 15 In the end, I mean, if we conclude that 16 there's no standard necessary, that's not very 17 much help to DOE, because DOE is under mandate to 18 set a standard. I mean, Congress has already 19 decided there needs to be an energy standard, and 20 our work will be more useful if we say what the 21 best way to set it is than if we spend our time 22 debating the need for one.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 218 1 MR. RAMIREZ: Yeah, that's what -- 2 that's what I was going at initially when we came 3 back from break, and I want to go back there, 4 because it seems like, even though we had some 5 discussion on the affordability, we're not going 6 to be able to necessarily agree on, you know, 7 common definitions, because I think there's too 8 many moving pieces, where it might be applied to 9 each component as we're going through. Right? 10 So instead of actually trying to nail 11 down what's the definition of cost-effectiveness, 12 I think in general, we're talking about life-cycle 13 operating cost and purchase price, a combination 14 of that. With that general understanding, are you 15 all okay with moving on to that first issue? 16 MR. WEISS: Well, what I wanted to say 17 was I think that we cannot get away from this 18 issue totally without having some understanding of 19 the financing climate, because that's directly 20 relevant to affordability, no matter how you look 21 at -- from which perspective you look at it, 22 that's very relevant information. And part of the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 219 1 purpose of the discussion, as we know from the 2 beginning, is we want to be able to have -- we 3 want to identify the information we need in order 4 to have the conversation that we need to have. So 5 I think we need information on financing and the 6 current market conditions for financing. 7 MR. RAMIREZ: Okay. So what I wanted to 8 do -- there were a few things. One of them is if 9 you notice on Number 13, you all didn't see these 10 11, 12, 13, 14 points yesterday or even this 11 common definition. But on that 13, it's financial 12 and has the financing -- and if you could go -- 13 yeah, then view, and then single it out, just to 14 enlarge it, and then fit to window. Yeah. 15 MS. HOFFMAN: Better, yeah? 16 MR. RAMIREZ: Better for me. I was 17 right up here. That's why it's paused. 18 MS. HOFFMAN: How many fingers am I 19 holding up? 20 MR. RAMIREZ: Yeah. All right. So -- 21 no, that's not the one. 22 MS. HOFFMAN: That's not the financing -

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- 2 MR. RAMIREZ: No, go back to the -- all 3 topics. Yeah, 13. I'm sorry. And then -- yeah, 4 it's just a few clicks here. All right. So what 5 you're talking about, we're going to get there, 6 right, because the financing is in that component 7 there. So we go back to all topics. 8 What I wanted to do was to, at some 9 point today -- I think we might be better off 10 seeing if we can't maybe get agreement on one, but 11 at some point, I want to see if we could put these 12 topics into four broader categories, right, one of 13 them being envelope of building, which includes 14 flashing windows, skylights, insulation, et 15 cetera. That would be one. 16 Equipment, including appliances, HVAC, 17 DWH (ph), ducts, ventilation, et cetera. 18 Financial, which we just saw, and then building 19 performance, operating and maintenance, 20 durability, climate zones, energy consumption, 21 comfort, indoor air quality, Energy Star Rating, 22 things like that.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 221 1 Do those broad categories make sense to 2 you? And, you know, go in and enlarge it and put 3 them up like this goes over here, and you can 4 slide it too. Yeah, go ahead and make it bigger, 5 and then you can use the bars here to center it. 6 Yeah, that's what I want to focus on, the four 7 highlights. The four highlights at the center. Do 8 those four broad categories make sense? We could 9 add others or tweak them if need be. 10 MR. CYMBALSKY: Since I'm here for John 11 Caskey and he sent the email, just say yes, 12 because he wrote in his email to everybody -- 13 well, at least to a few of us -- that these are 14 the four categories that he thinks are what we 15 should focus on. And he also mentioned we should 16 start with the climate zones at some point. 17 MR. RAMIREZ: Yeah, I want -- 18 MS. HOFFMAN: But we're going to get to 19 that. Don't worry. 20 MR. RAMIREZ: Yeah, the -- 21 MS. HOFFMAN: Yeah. 22 MR. RAMIREZ: The group definitely

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 222 1 identified that one as the -- what I call the low2 hanging fruit, right, something that we could 3 probably reach agreement on. So we'll -- we can 4 come back to this and see if we can get what we've 5 already put on here into an offset of one of these 6 four categories, right? But are you all okay -- 7 so the first question, are you okay with the 8 general understanding of affordability that we had 9 discussed, which is at the very top? 10 MS. HOFFMAN: Where would the consumer 11 awareness come in? Thirteen? 12 MR. RAMIREZ: Yeah. 13 MS. HOFFMAN: So you might add consumer 14 awareness there. 15 MR. RAMIREZ: Yeah, that -- 16 MS. HOFFMAN: What -- by the way, we did 17 get that email. I realize it wasn't everyone. 18 For a minute, I thought it was. He's sorry he 19 can't be here today. We do have John Cymbalsky 20 instead. But he thought maybe it would be easier 21 to get our arms around things if we had a broader 22 four categories instead of all of those, but we'll

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-- 2 MR. RAMIREZ: We'll still deal with 3 these issues. 4 MS. HOFFMAN: We'll still get to them -- 5 MR. RAMIREZ: Right. 6 MS. HOFFMAN: -- all of them. 7 MR. RAMIREZ: So let me back up and take 8 it up by pieces, right? So the first one, is 9 everyone okay with just broadly that life -- that 10 operating cost effectiveness is life-cycle 11 operating cost and purchase price? Let me see a 12 show of thumbs if we're okay with that as a broad 13 understanding. And then dealing with cost14 effectiveness on each issue. Eric? 15 MR. LACEY: Just going back to the 16 statute, it says on -- 17 MS. HOFFMAN: Push your button. 18 MR. RAMIREZ: Mic? 19 MR. LACEY: Oh, I'm sorry. I'm sorry. 20 Eric Lacey. Going back to the statute, it does 21 say, on the purchase price in manufactured housing 22 and on total life-cycle, construction, and

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 224 1 operating costs, just a minor thing, could you add 2 construction and operating costs and purchase 3 price? Minor thing. 4 MS. HOFFMAN: Construction before 5 operating costs, right? 6 MR. LACEY: Yeah. 7 MS. HOFFMAN: Life-cycle, comma -- 8 MR. LACEY: Yeah, right there. 9 MS. HOFFMAN: -- construction, and 10 operating costs? 11 MR. LACEY: Life-cycle, construction, 12 and operating costs. 13 MS. HOFFMAN: Okay. 14 MR. LACEY: And purchase price. 15 MR. ROY: Yeah, Rob Roy. A question -- 16 MR. LUBLINER: Mike Lubliner here. 17 MR. ROY: Question for Joe. The 18 analysis you're getting from PNNL, that will give 19 us four different efficiency levels, total 20 purchase price implication, or total cost, as well 21 as life-cycle costs? 22 MR. HAGERMAN: There's no cost. It's

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 225 1 just -- 2 MR. ROY: No cost? 3 MR. HAGERMAN: -- annual energy. 4 MR. ROY: Just the annual energy. 5 MR. HAGERMAN: Yeah. 6 MR. RAMIREZ: All right. So backing it 7 up again -- 8 MR. HAGERMAN: Yeah, I'm sorry. Hold 9 on. Annual energy, and then you'll see all the 10 inputs that were used, so you'll see what the 11 selection was for each model in terms of window 12 and, you know, amount of insulation, so 13 MR. RAMIREZ: So with that modification 14 to that understanding of cost-effectiveness, is 15 everyone okay with that general understanding to 16 move on? Let me see a show of thumbs again. 17 MR. LUBLINER: Yes. 18 MR. RAMIREZ: Okay. All right. Then -- 19 and I'll tell you what. For the folks who are 20 online, if you object, just speak up; otherwise, 21 we'll assume that you're on board. Okay? 22 MALE SPEAKER: You've got it.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 226 1 MR. RAMIREZ: So then, moving on, let's 2 look at that -- let's look at that first topic up 3 there. And let me try something here. If you go 4 to "Tool," and then -- 5 MS. HOFFMAN: You mean HUD or this one, 6 Number 1? 7 MR. RAMIREZ: Yeah, uh-huh. 8 MS. HOFFMAN: Yeah. 9 MR. RAMIREZ: And then split. Uh-huh. 10 MS. HOFFMAN: Because I believe that Joe 11 has some information to distribute on climate 12 change. 13 MR. HAGERMAN: On climate zone. 14 MS. HOFFMAN: Climate zone. 15 MR. HAGERMAN: Climate zone information. 16 MS. HOFFMAN: Climate zone. 17 MR. HAGERMAN: So I pulled some analysis 18 -- or last night, late last night, on the climate 19 zone discussion. So it's an energy analysis 20 methodology -- it's a report from PNNL, the 21 climate zone mapping between HUD and the IECC, so 22 I'll give you this. It's just three figures and a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 227 1 little description. 2 MR. RAMIREZ: All right. So we'll take 3 a few minutes and read that before we -- 4 MS. HOFFMAN: Talk about it. 5 MR. RAMIREZ: -- start the conversation. 6 MR. HAGERMAN: And we're going to -- 7 Jeremiah just sent -- should have just sent that 8 out to everybody so you have a copy of it. 9 MR. LUBLINER: This is Mike Lubliner. 10 MS. HOFFMAN: Yes, Mike? 11 MR. LUBLINER: I was wondering if we may 12 be able to solve this climate zone one pretty 13 quickly here, and so I was wondering at some point 14 after we read this, if we could do kind of a straw 15 poll on how many people would think that it's 16 appropriate to retain the HUD climate zones. We 17 may be able to get through this one real quick. 18 MS. HOFFMAN: Well, let's let everybody 19 read them first, okay, and -- 20 MR. LUBLINER: Sure. Sure. 21 MS. HOFFMAN: -- then we'll see. I hear 22 what you're saying, though.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 228 1 MR. LUBLINER: And I wanted to just 2 comment to Peter, it's my understanding the HUD -- 3 the Climate Zone 3 is Vermont, so it's the most 4 stringent climate zone for HUD code. 5 MR. SCHNEIDER: Hey, Michael, this is 6 Peter. I was just suggesting that it's the same as 7 Virginia, and that was a problem. 8 MR. LUBLINER: Oh, I'm sorry. 9 MS. HOFFMAN: Hi. I'm just going to 10 interrupt your reading just for a moment, and 11 we'll go back to it in a second. I want to 12 introduce Mike Jensen, who's with the General 13 Counsel's office at Department of Energy, and 14 we're going to ask him to talk about the 15 relationship between this committee and the 16 audience and the public. 17 MR. JENSEN: Good morning, everyone. 18 I've just been asked to talk briefly. A 19 procedural issue came to mind, and I thought I 20 would give you my 30- second spiel, and that is 21 the relationship between the committee that we 22 have here and members of the public.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 229 1 Based -- it came to my attention that 2 there was some misunderstanding of how there was 3 the relationship between whether this committee 4 could actually interact with members of the public 5 and have a back-and-forth dialogue. Based on what 6 it seems in the charter that we agreed to 7 yesterday, it lays out that any working group 8 member may call upon another individual to 9 elaborate on a relevant point, and that extends to 10 members of the audience, including other agencies 11 that are represented as members of the audience 12 today. 13 I also understand that the way that the 14 schedule is laid out today, that there'll be a 15 period at the end of the session this afternoon -- 16 MS. HOFFMAN: Uh-huh. 17 MR. JENSEN: -- where members of the 18 audience, including other agencies, can offer 19 their opinions. We only ask that members of the 20 audience identify whether they're speaking on 21 behalf of a particular agency, identify 22 themselves, or identify as to whether they're

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 230 1 submitting a comment as a member of the public. 2 And this committee should just keep in 3 mind that the ASRAC and -- the committee is 4 presenting, I guess, a path forward for the 5 secretary to make a decision on how to accept 6 proposals are a rulemaking, so we should consider 7 each member of the audience's opinions as that -- 8 as an opinion as one idea or issue that we should 9 take into consideration moving forward towards 10 achieving that consensus. So with that -- 11 MS. HOFFMAN: Uh-huh. 12 MR. JENSEN: -- that's all that I wanted 13 to add. 14 MS. HOFFMAN: All right. Thank you. 15 MR. JENSEN: Is there any -- does anyone 16 have any questions as to how we should proceed 17 moving forward with the relationship between 18 members of the public and this committee today or 19 in future meetings? 20 MR. LUBLINER: This is Mike Lubliner. I 21 had a question. I understand that HUD is part of 22 the public, and so that's what I heard today. I

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 231 1 want to just confirm that. 2 MR. JENSEN: Yes, for -- 3 MR. LUBLINER: Because if so, I'd like 4 to be able to -- if HUD is going to speak during 5 public comment, I'd like to be able to provide -- 6 ask some questions to help inform the committee of 7 HUD. So I'm trying to figure out when it would be 8 best to dialogue and ask my questions of HUD. 9 MR. JENSEN: Yes. For those of you that 10 are on the phone, well, there is a representative 11 from HUD in the audience, and any of you in the 12 room or on the phone may ask questions of HUD as 13 we move throughout the negotiation, and HUD may 14 offer its input on any -- on clarification on any 15 particular issue. If there are opinions that HUD 16 would like to state, or any member of the public 17 would like to state on behalf of a particular 18 organization, agency, or just individual, we ask 19 that we -- that those positions hold off until the 20 session at the end of this afternoon. 21 MS. HOFFMAN: Yeah, we do have a 22 specific time at three o'clock, actually, a half-

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 232 1 hour, so -- for discussion, and we had something 2 similar yesterday at 4:30. 3 MR. RAMIREZ: Yeah, and I guess to be -- 4 MR. LUBLINER: Thank you. 5 MR. RAMIREZ: -- a little more clear on 6 that, Mike, yeah, you -- if there is a moment at - 7 - during that time, if you want to ask a question, 8 we would facilitate that. 9 MS. HOFFMAN: Uh-huh. 10 MR. LUBLINER: Thank you. 11 MS. HOFFMAN: Okay. Thank you. And 12 right now, let's go back to reading this so we can 13 look at climate zones. Thank you, Mike. 14 MR. RAMIREZ: All right. Do you want a 15 few minutes, or are we ready to start talking 16 about this? All right. So I'm pretty grateful 17 that I don't have to understand this sheet, but 18 you all do, so let me start off with are there any 19 questions for understanding? We could ask other 20 type of questions, right, but so just to 21 understand what we're looking at. 22 MR. DENNIS: Yeah, I have a very basic

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 233 1 question. So if a -- if, say, the group chose the 2 HUD zones, and then ICC -- IECC 2015 is certified 3 by DOE and a state chooses to adopt it, does that 4 not cover manufactured housing, so it wouldn't 5 preempt the HUD standard? Okay. And then on a 6 state level, I know some states are probably going 7 above ICC (sic) code. Would they be able to go -- 8 if they chose a code above IECC, would they have 9 to specifically mention a code for manufacturing 10 above whatever we choose, and then -- but that's 11 possible. They're allowed to do that? Just -- 12 that's a floor -- so just kind of an overview of 13 how that works. 14 MS. STARKEY: No, the HUD code is 15 preemptive. Now, there was a recent issue in 16 Minnesota with respect to a requirement of site 17 built and modular to do duct blower door testing 18 on-site. That ruling just came down from HUD, 19 saying, no, that even though that provision is not 20 in the HUD code, there's no aspect of performance 21 for blower door testing at this point, the HUD 22 code does address energy standards, thermal

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 234 1 performance, and therefore it is preemptive, so 2 Minnesota could not implement that aspect. In 3 general, the HUD code is preemptive. In every 4 aspect of performance that is in the HUD code, 5 generally a state cannot adopt anything for that 6 HUD code. It has to adopt the HUD code. 7 MR. LUBLINER: This is Mike Lubliner. 8 Lois, I was just wondering, on the Minnesota 9 thing, I think that's something for the parking 10 lot that we should follow up with, but I did -- 11 wondered if DOE's legal counsel has looked at 12 HUD's interpretation, because I've had numerous 13 legal people look at HUD's interpretation on the 14 blower door requirements in Minnesota, and they 15 have different spins. So I would be interested in 16 getting HUD's interpretation to legal counsel, if 17 it hasn't happened, to see if we concur, and then 18 we can talk about that when we get to the blower 19 door discussion. 20 But I concur with you that it's a 21 preemptive -- the HUD code is preemptive, and so 22 it's -- in the Northwest, we've had a lot of lost

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 235 1 opportunities, as compared to our site build (ph) 2 code because of the preemptive nature of the code, 3 and that's one of the reasons we're here. 4 MR. CYMBALSKY: So this is John from 5 DOE. So the DOE GC is not going to opine on HUD's 6 decision at this point. Just leave it at that. 7 MS. HOFFMAN: Go ahead. 8 MR. TOMPOS: Dave Tompos. I just wanted 9 to make sure everybody understands that the 10 consumer can still choose to do that blower door 11 testing anywhere in the country. It's not 12 required, but they can always choose to do that, 13 and we do do that with the Energy Star homes. 14 MS. STARKEY: And if I might clarify 15 too, a lot of local jurisdictions will, as they 16 have done in Vermont with smoke detectors or -- 17 they will say, "Well, we don't care what the HUD 18 code says. If you want to put your house in this 19 jurisdiction, you need to have this particular 20 smoke detector." And unless a manufacturer or a 21 retailer or a homeowner is -- you know, is going 22 to protest, most of the time -- you know, so it

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 236 1 doesn't -- you know, consumer wants to have that 2 house there, and the manufacturer will put the 3 smoke detector in. 4 MR. RAMIREZ: Eric? 5 MR. LACEY: My comment is not about the 6 Minnesota issue. I don't know if anyone else 7 wanted -- 8 MS. HOFFMAN: Yeah. 9 MR. LACEY: -- to say anything else 10 about that. 11 MS. HOFFMAN: I would just deal with 12 climate zones -- 13 MR. LACEY: Okay. Well -- 14 MS. HOFFMAN: -- in this -- 15 MR. LACEY: -- then I -- 16 MS. HOFFMAN: -- (inaudible). 17 MR. LACEY: -- I had a question. I have 18 some thoughts on -- when we get to discussing, you 19 know -- 20 MS. HOFFMAN: Yeah. 21 MR. LACEY: -- you know, our opinions on 22 the climate zone map, but I had a question for the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 237 1 manufacturers of the homes. I see that there are 2 -- there are three, you know, climate zones here. 3 The Climate Zone 2 seems to be a really narrow 4 little swath, and I'm curious as to whether you 5 build that specifically to each of the three 6 different climate zones or whether you would build 7 something that's good in two or three of the 8 climate zones. 9 I -- my experience with specific product 10 manufacturers, you have some examples in the 11 window industry, for example, where, you know, the 12 Energy Star map is a little different than the 13 IECC climate zone map. Again, it's, you know, a 14 few -- or a few climate zones as opposed to eight. 15 But in reality, some of them make a window that's 16 good in all climate zones or in northern climate 17 zones and southern climate zones. They'll make 18 two different -- so I'm curious. I don't know if 19 this is something you can say, but do you very 20 specifically go for one specific climate zone, or 21 do you sometimes make a home that's good in two or 22 three climate zones? I don't know this.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 238 1 MR. SANTANA: This is Manny with Cavco. 2 You know, if -- anything that's good for Climate 3 Zone -- or Thermal Zone (ph) 3 is good for 2 and 4 1. So anything -- yeah, 2 is good in 1; 1 is only 5 good in 1. 6 MR. RAMIREZ: So let me back it up 7 again. Are there any additional questions as far 8 as for clarity, clarity of what we're looking at? 9 MR. WEISS: I would just appreciate if 10 perhaps -- if Joe could just go over this and just 11 give a general -- 12 MS. HOFFMAN: Yeah. 13 MR. WEISS: -- for the non-technical 14 folks here. 15 MR. RAMIREZ: Yeah. 16 MS. HOFFMAN: Sure. 17 MR. RAMIREZ: Okay, sure. 18 MS. HOFFMAN: Joe or John, can you walk 19 us through this? 20 MR. CYMBALSKY: No, no. No John. 21 MS. HOFFMAN: No John? All right. 22 MR. CYMBALSKY: I can pick out the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 239 1 states on the map. 2 MS. HOFFMAN: All right. Thank you. 3 MR. CYMBALSKY: And -- 4 MS. HOFFMAN: Okay. 5 MR. CYMBALSKY: And I can name the 6 capitals. I remember -- 7 MS. HOFFMAN: Okay. Joe, can you walk 8 us all through this, please? 9 MR. HAGERMAN: Yeah, so what PNNL tried 10 to do here was -- and you correct me. The HUD 11 code experts, with the HUD code, correct me where 12 I make some mistakes here, but my understanding is 13 like for Figure 1, what they've tried to draw here 14 is one of the HUD climate zones; is that correct? 15 MR. TOMPOS: Yeah, I mean -- 16 MR. HAGERMAN: Yeah. 17 MR. TOMPOS: -- (inaudible). 18 MR. HAGERMAN: What page is that, or 19 what 20 MR. TOMPOS: Well, it's going to be 21 different. 22 MR. HAGERMAN: Okay. Well, what

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 240 1 section? 2 MR. TOMPOS: Section 506. 3 MR. HAGERMAN: So the climate zones are 4 in Section 506 of the HUD code, right? 5 MR. TOMPOS: Yeah. 6 MR. HAGERMAN: So what they've tried to 7 do here is they take the HUD climate zone, and 8 then they overlay on top of that HUD climate zone 9 the different IECC climate zones that are in the 10 IECC, right? So here in -- this is where John 11 needs to help me here with that northern part of 12 Texas is Zone 4, right? And the lower part of 13 Texas is Zone 2, and the tip of Florida is Zone 1, 14 right? 15 And then what they've tried to do on top 16 of that is overlay the percentage of -- of 17 building codes or some type of distribution of, 18 you know, how many shipments are going into these 19 different areas, right? So that's what the 20 percentages are. So you see in that Zone 4, top 21 part of Texas is 1.8 percent, and then Zone 2 is 22 48.3. It's kind of hard to read, 48.3. And then

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 241 1 that middle band, the IECC Zone 3 is 47 percent, 2 and then that bottom tip of Florida is 2.9 3 percent. 4 MR. TOMPOS: (Inaudible). 5 MR. HAGERMAN: Yeah, that should be 100 6 percent, yeah. 7 MR. TOMPOS: (Inaudible). 8 MR. HAGERMAN: I see in this other 9 write-up that it's 2002. 10 MR. TOMPOS: That one? 11 MR. HAGERMAN: That one, yeah, right. 12 No, 2002 shipments, yeah. I can't explain why 13 they use that number, to be honest with you. So 14 then Figure 1 is for whatever HUD zone -- climate 15 zone that is, 1. Oh, yeah, there it is on my 16 figure. Thank you. 17 And then Figure 2 is for Zone 2 and 18 Figure 3 is for Zone 3. So that is just a 19 straight kind of engineering comparison of the two 20 codes, right? It doesn't take into account, I 21 think, you know, how manufacturers ship, 22 necessarily, outside of how the HUD code already

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 242 1 deals with that. 2 MR. LUBLINER: Joe? Mike Lubliner. 3 MR. HAGERMAN: Hey, Mike. 4 MR. LUBLINER: Hey, I have a -- I -- 5 when I'm looking through this, it's looking pretty 6 much like -- there's this small -- the -- if we go 7 to stay with the HUD three climate zones, it makes 8 a pretty small impact in energy savings relative 9 to the benefits to the industry of staying with 10 the same climate zones. Am I reading this right? 11 And -- and I guess the point is I did 12 some research published in papers, peer-reviewed 13 research in Engineering Journal and ASHRAE with my 14 colleagues and some industry folks that concluded 15 the same thing, looked at the impact of staying -- 16 keep it simple and stay with the existing climate 17 zones and reduce the burden on the industry and 18 engineering and changing and the challenges. 19 So I think that this is some good 20 information here. I'd like to get some input from 21 the industry and you. 22 MR. EZZO: Mark Ezzo. I guess the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 243 1 $64,000 question on all this is if you lump it -- 2 if we lump it into three zones like we've got it 3 now -- let's just take HUD Zone 1, Figure 1. So 4 if we decide, okay, we're going to do that, we're 5 going to base the new standard on the same 6 boundaries we have now, which ICC -- IECC zone are 7 we going to assign to the current HUD Zone 1 8 boundary? 9 So, you know, and it's a pretty big 10 range. It goes from IECC Zone 1 all the way up to 11 IECC Zone 4. And if you look in the -- in the 12 IECC code, there's some pretty significant 13 differences from Zone 1 to Zone 4 in terms of 14 construction. 15 So I guess that's my question, is are we 16 going to average it? Are we going to pick the 17 worst zone, hardest to hit, if we keep the 18 boundaries the way they are? I mean, from a 19 retailer's perspective, they're absolutely going 20 to want us to keep the same zones we have now, but 21 I'm afraid that we may be doing them a disservice 22 if the zones end up being more restrictive than

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 244 1 what they could otherwise be, especially when you 2 look at Zone -- HUD Current Zone 3 on the 3 flipside. I mean, if we were forcing homes in, 4 you know, lower Illinois that is right now -- or 5 worst case would be in Nevada, right? You've got 6 some IECC Zone 3 of Nevada. If we were to say, 7 "Well, all HUD Zone 3 is going to be based on IECC 8 Zone 7," that would have a huge impact for those 9 lower areas of Nevada. 10 MR. CYMBALSKY: Yes. I think this comes 11 back to the question that Manny addressed a few 12 minutes ago, was that do the manufacturers build 13 three different types of homes currently, or do 14 they -- do they build to one and over-comply in 15 maybe another one? Or like -- you know, I don't 16 know -- I'm going to plead complete ignorance, but 17 I'm assuming the northern ones are more stringent 18 in its energy requirement than the southern ones, 19 so -- 20 MR. EZZO: This is Mark Ezzo. I can 21 tell you it's -- for our company, because we're 22 all over the country, it's all over the board. So

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 245 1 if I pick a couple of our plants in North Carolina 2 -- for instance, look at Figure 2 -- their 3 distribution is all three zones. Right? It's not 4 too difficult for them to ship into a HUD Zone 3. 5 They're obviously located in Zone 2. And then, 6 you know, one state south, they're in Zone 1. 7 So those plants are offering all three 8 zones. If I point to a plant in Sacramento, 9 California, it's typically a higher-end plant, 10 okay, higher-end customer, kind of like what Mike 11 Lubliner was saying. Their base house is all HUD 12 Zone 3. They don't even mess with 2 because 13 they're going into Nevada, they're going into 14 Oregon. So it depends on location. 15 MR. CYMBALSKY: Okay. So, I mean, in 16 the examples that you just presented -- and I'm 17 not putting words in your mouth, so correct me, 18 but it seems to me that it wouldn't be a stretch 19 if -- let's just assume everyone says, "Let's use 20 the IECC zones." It sounds to me that the plants 21 that -- at least that you described have the 22 capability to run the gamut of IECC; is that

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 246 1 correct? 2 MR. EZZO: Yes. 3 MR. CYMBALSKY: Okay. Thank you. 4 MR. RAMIREZ: Eric? 5 MR. LACEY: Thanks. Eric Lacey. I 6 recognize there are going to be some regulatory 7 efficiency from keeping the three HUD zones, and I 8 think that's probably the best approach, you know, 9 for expressing opinions right now. You know, one 10 of my concerns was that, you know, a lot of this 11 depends on what the number actually is, and I 12 think that's what you're saying. We may have to 13 revisit this later. If you're picking the high 14 number or the low number, those three climate 15 zones may sound like a really bad idea at the end 16 of this debate. But I think -- I think at least - 17 - for me, at least, I'm comfortable moving forward 18 with the three climate zones. 19 I think, looking at -- I know the IECC 20 fairly well and have, you know, getting an 21 adoption in a lot of states, and I can tell you 22 that they're not eight different product

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 247 1 classifications for eight different climate zones. 2 There's kind of groupings of products. You know, 3 there's kind of three basic types of windows that 4 are required around the country. There's northern 5 windows, there's kind of middle of the country, 6 and there's southern windows. 7 And the same thing for insulation. 8 There's really kind of three different groupings 9 of insulation products, and so I think, for the 10 most part, you know, they match up fairly well 11 with these, not perfectly. You know, especially 12 this northernmost zone is really big, and there's 13 probably two different wall types that are 14 specified in the IECC. But I think for the most 15 part, you find in the IECC there are pretty broad 16 groupings of products, and you -- I think in a lot 17 of cases, it won't be that hard to say, "This is 18 the product that should probably apply," if your 19 starting point is the 2015 IECC. You know, and 20 you can ratchet that up or down, as we discussed 21 earlier, but I think it won't be quite as 22 complicated when we start looking at the -- you

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 248 1 know, matching up the code with these climate 2 zones. 3 MR. RAMIREZ: Let me get Manny, then 4 Mark. 5 MR. SANTANA: Hi. Manny with Cavco. 6 You know, I'd like to answer a little bit of John 7 -- what John asked with -- you know, and I'd like 8 to explain, in a general sense, manufacturers 9 don't determine what thermal zone you're going to 10 build to. That's per request. 11 Usually -- and Mark can correct me, but, 12 you know, so the retailer, he knows where he's 13 going to sell, you know. And that has changed 14 over the years when -- before the economy tanked 15 and when times were good, you guys might be 16 familiar with the phenomenon of stock homes. You 17 know, so what that means is that a dealer or 18 retailer would -- you know, he was anticipating 19 having a certain amount of sales, so he would buy 20 homes that didn't have -- that weren't sold yet, 21 and he'd have them because he'd know he would sell 22 them.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 249 1 So when you have that scenario, you want 2 to increase your range of options with who you can 3 sell to and where you can go to. So then you 4 might have more of a -- you know, he might be 5 building to a more stringent thermal zone because 6 he didn't want to risk not being able to sell 7 there, but now, as Dave pointed out, most of the 8 homes that are built there are already built with 9 a customer in mind. There's already an order on 10 that. 11 Now, that's starting to change a little 12 bit, you know, and hopefully, this starts to -- 13 that trend continues towards more ordering stock 14 homes, but, you know, right now, I think 15 manufacturers build for whatever zone the house is 16 going to because you generally know where the 17 house is going to, so you won't overbuild it if 18 you know where it's going to, and that's per 19 request. You know, if every request that came 20 into the plant was, you know, Thermal Zone 3, 21 Thermal Zone 3, the manufacturer's not going to 22 say, "Well, you only need one. I mean, we're not

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 250 1 going to give you three." They're going to build 2 whatever they request, because they charge for 3 that. 4 MR. RAMIREZ: Mark? 5 MR. WEISS: Sorry. Mark Weiss, MHARR. 6 To to back to John's original question and then 7 Mark's response to that, that's one area where 8 there's a significant difference between a larger 9 manufacturer like Clayton, with multiple plants 10 serving essentially a nationwide market as opposed 11 to some of the folks we represent who are smaller 12 manufacturers with maybe one plant, maybe a couple 13 plants, that are primarily serving a regional 14 market, a much smaller area. And, you know, the 15 economies of scale and efficiencies there go way 16 down from what you're talking about with a large 17 company like Clayton or some others. 18 MR. RAMIREZ: Let me get -- I'm sorry. 19 MR. CYMBALSKY: So I think just to 20 finish this thought -- 21 MR. RAMIREZ: Yeah. 22 MR. CYMBALSKY: So I think -- it was

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 251 1 brought up, so I want to just reinforce that I 2 think what we're trying to balance here with this 3 climate zone thing just is probably obvious by 4 now, but it's -- you know, to keep the burden on 5 manufacturers in check, but also, you know, try to 6 squeeze as much energy efficiency out of this as 7 possible, minimizing, of course, that burden to 8 the manufacturers. So that's, you know, kind of 9 what we do in appliance standards all the time, so 10 I think if we kind of tee it up that way, you 11 know, think about it that way, we could probably, 12 you know, hit that spot, I hope. 13 MR. RAMIREZ: Let me get Emanuel, Robin. 14 Do you want to give a quick reply to that? 15 MR. WEISS: Just a very brief and a very 16 specific point. John mentioned the appliance 17 standards, and I know that's where he's been doing 18 his work, but I think it's important for all of us 19 to keep in mind there's a difference between 20 standards appliances -- appliance standards, 21 excuse me, and standards for manufactured housing 22 in that we're specifically recognized in law as

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 252 1 affordable housing, we serve specific purposes, 2 and it will recognize as such by -- as affordable 3 by law. So there's a difference, you know, apples 4 and oranges, as far as we perceive it between the 5 two. 6 MS. HOFFMAN: That was your point? 7 MR. SCHNEIDER: Can you explain that? I 8 didn't quite understand that. This is Peter from 9 Efficiency Vermont. 10 MR. WEISS: Well, Mark Weiss again. 11 What I'm saying is manufactured housing is 12 specifically recognized in federal law, and 13 specifically the act that HUD operates under, as 14 affordable housing as serving specific purposes as 15 -- specifically national housing policy purposes 16 as affordable housing. And, therefore, I think 17 it's distinguishable from appliances generically 18 that don't have that sort of recognize in federal 19 law. 20 MR. RAMIREZ: Emanuel? 21 MR. SCHNEIDER: This is Peter Schneider 22 again. I mean, I think we defined affordable

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 253 1 housing, you know, a little bit differently than 2 just first cost, if that's what you're implying. 3 So, you know, the idea that, you know, we need to 4 look at total cost of ownership, and I don't want 5 to move forward for convenience sake and ignore 6 building science, you know, when we have drastic 7 climate differences between, you know, the lower 8 part of, you know, one climate zone and the top of 9 that. 10 You know, so I'd like to accommodate 11 these climate regional differences, definitely 12 into the energy modeling, and as we look at, you 13 know, millions of BTUs used or saved as we do our 14 cost analysis and our life-cycle analysis, but, 15 you know, just from a -- a building science 16 standpoint, I think, you know, that's where the 17 discussion lies. Are we serving these customers 18 and delivering homes that are suitable for the 19 environment in which they're set? 20 And right now, I think that, you know, 21 the northern tier customers are -- you know, are 22 not receiving a product that is suitable for their

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 254 1 climate. There was a lot of discussion earlier 2 that you can get anything you want. Well, I've 3 spent a ton of time visiting dealers and modeling 4 homes on dealer lots all around the Northeast, and 5 I'll tell you that there is nothing available 6 beyond, you know, sort of the HUD code minimum, 7 and I would argue that the Energy Star, you know, 8 version of the HUD home is not much different than 9 that either, at least what's sitting on our lots 10 up here and labeled as such. 11 So I just don't want to ignore building 12 science for convenience when we're talking about 13 developing these standards and, almost more 14 importantly, this cost of -- 15 MR. RAMIREZ: Thank you. 16 MR. LUBLINER: This is Mike Lubliner. I 17 concur -- 18 MR. RAMIREZ: Oh, sorry, Mike, hold on a 19 second. Emanuel's been very patient over here. 20 MR. LUBLINER: Okay. 21 MR. RAMIREZ: Go ahead -- 22 MR. LUBLINER: Sorry, Manny.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 255 1 MR. LEVY: I think Peter and Mark made 2 comments that I want to just weigh in on. Right 3 now, our experience has been that -- manufacturers 4 who are in Zone 2 in North Carolina being a 5 perfect example -- are very circumspect about 6 building a Zone 3 home and won't build it if it's 7 going to Zone 3. They won't build it routinely 8 because they want to have a product that they 9 could ship anywhere. And the reason for that is 10 the cost difference between 2 and 3 is relatively 11 significant and they don't want to add the cost in 12 unless it's absolutely necessary. 13 I think what we're -- we're talking 14 about the next generation of standards in which 15 those cost differences are going to be even more 16 substantial. So and that, I think, plays into the 17 point that Peter's making, Mark made it, and that 18 is that the zone determination should continue to 19 be on the table for the time being until we can 20 see, as Eric pointed out, what the real 21 implication is of having two zones butting up 22 against each other with significantly different

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 256 1 requirements. 2 So I think my takeaway from this is this 3 is an important issue, let's keep it on the table, 4 let's not make a decision about it quite yet. We 5 can make a preliminary decision and see what the 6 implication is, but with the full recognition we 7 may want to revisit that and change our mind 8 later. 9 MR. RAMIREZ: And we can do something 10 like that. Let me get Robin, and then Lois. 11 MR. ROY: Robin. Emanuel, I thought 12 that -- that kind of summed up what I was thinking 13 too. The real question is do we have the analytic 14 capabilities to differentiate between the IECC 15 zones? Joe, the model that PNNL was working 16 towards, it presumably will eventually be filled 17 out with some cost information as well that can be 18 desegregated (ph) and chopped and changed and then 19 stuffed back into the HUD zones. 20 So maybe the right thing to do is just 21 proceed with the analysis and let the numbers talk 22 for themselves as we learn something about what

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 257 1 the implication would be of going different ways. 2 At the same time, I think it's very important to 3 take the MHARR perspective into some real 4 consideration and see if we can come up with some 5 sort of quantification of the challenges that your 6 members will be -- the burden that -- the 7 quantified burden that your members would be 8 facing so we can put that into our calculus (ph) 9 once we get the understanding of the energy 10 impacts, the economic consumer impacts. We'll see 11 how that all relates together. Of course, 12 interested in the larger manufacturers' costs as 13 well, but it sounds to me like those might be more 14 controllable than they would be for the smaller 15 folks, so I'm seconding your opinion, Emanuel. 16 MR. RAMIREZ: Okay. Lois, and then 17 Robert? 18 MS. HOFFMAN: And I also think Joe 19 wanted to respond, so -- 20 MS. STARKEY: Just -- 21 MS. HOFFMAN: -- but Lois first. 22 MS. STARKEY: Just --

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 258 1 MR. HAGERMAN: I just wanted to say just 2 real quick -- Lois, I'm sorry -- you're absolutely 3 right about the analysis. This is going to be 4 presented. And, you know, we're doing this in 5 hopes, after you see it, that you'll say, "Hey, 6 this is right. This is wrong. Go do this 7 analysis. Here's some cost information." We're 8 trying to -- you know, we need information from 9 everybody, right? Or you're just going to use the 10 assumptions that the labs come up with, which are 11 sometimes right, sometimes wrong, right, so 12 MR. RAMIREZ: Okay. Lois? 13 MS. STARKEY: Just -- I just wanted to 14 talk about the small manufacturer, because MHI 15 also represents small manufacturers, and what 16 we've found on the energy side is that there are - 17 - and Emanuel's comments notwithstanding -- the 18 smaller manufacturers who do deal, perhaps, maybe 19 only in three states, they may very well make the 20 choice to go to that one single zone that's going 21 to impact all those states, that Zone 3. Also, 22 they tend to be, you know, very, very sensitive to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 259 1 that, as they all are, but they've focused on a 2 market that they're going for, and so they may 3 very well be just at the higher end of the market, 4 and these issues are not an issue. 5 And we have some members that are 6 sitting there saying, "We're still talking about, 7 you know, 1994 standards?" So, you know, I want 8 to be on record that MHI is, you know, very 9 interested. We also certainly want to maintain 10 that affordability, but also understand that, you 11 know, small manufacturers, you know, they'll 12 compensate for the market. 13 MR. RAMIREZ: Okay. Robert? 14 MR. SCHNEIDER: Peter Schneider here. I 15 was just quickly -- is there anything that we can 16 gain in regards to insights from the modular 17 manufacturers in regards to having to meet these 18 requirements and what a burden it is on them and 19 that that can help guide the discussion here? 20 MR. EZZO: It's Mark Ezzo. I mean, we 21 do have a lot of facilities that build modular 22 homes, and, of course, they have to comply with

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 260 1 the IECC tables, depending on whether it's Zone 1 2 or Zone 7, and, like it's been said before, a 3 hundred percent of what they do is a retail-sold 4 home. They're not building any inventory. So 5 when the request comes in to the facility for a 6 modular home, it's they want this home, and here's 7 the address it's going to, and our engineering 8 team knows that it's going to be in Zone 1 or Zone 9 7. They run the energy calculation, and it's not 10 all that cumbersome. 11 MR. SCHNEIDER: So we should look at, 12 you know, how many homes are not being custom13 ordered in the manufactured housing industry, 14 because if that is the majority of homes, I don't 15 see a difference between the requirements for 16 modular and manufactured, unless there's a real 17 high percentage that are just, you know, built 18 basically to be delivered to dealers to sell on19 site. 20 MR. SANTANA: You know, this is Manny, 21 you know, again, and, you know, to answer your 22 first question, I think it comes down to what I

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 261 1 said earlier about it isn't so much a question of 2 manufacturer's ability to build to different 3 climate zones or their ability to build to more 4 conservative energy standards. It's about the -- 5 the -- the customer's ability to pay. So that -- 6 that -- that's what it comes down to. You know, 7 there's also -- you know, there's additional costs 8 with the modular just because of regulatory, you 9 know -- in addition to energy and other 10 considerations. 11 So, you know, again, it doesn't come 12 down to can a manufacturer build it. It comes 13 down to, you know, who the customer is. 14 MR. RAMIREZ: Let me get Robert. 15 MR. LUTER: Thank you. Rob with 16 Lippert. Just one observation I wanted to make 17 with regard to the comparison between the two 18 zones and the opportunities for consolidation of 19 IECC zones or splitting up of HUD zones. The HUD 20 zones are reflective of U-Sub-O (ph). There's no 21 consideration given to solar heat gain. IECC 22 considers solar heat gain coefficient as well, and

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 262 1 those two performance ratings move in opposite 2 directions, depending on where you are. 3 So a window that is designed to meet the 4 U- value needs of the North and the solar heat 5 gain needs of the South generally is a window 6 that's not very well-suited to anywhere. It does 7 meet both goals, but there are much more cost8 effective ways to address the specific performance 9 required, either in that northernmost zone or 10 southernmost zone. So just an awareness that the 11 HUD zones don't consider solar heat gain at this 12 point. 13 MR. RAMIREZ: Let me get Stacey, then 14 Mark 15 MS. EPPERSON: I'm Stacey Epperson, Next 16 Step network. At Next Step, we spec a Zone 3 home 17 an Energy Star home, but when -- I want to follow 18 up on Manny's point. It's what the customer can 19 afford. I just want everyone to know that we're 20 having to subsidize these to afford these energy 21 upgrades most of the time, so I just want to make 22 that a point of affordability as what we're doing

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 263 1 here. 2 MR. RAMIREZ: Mark? 3 MR. WEISS: To go back to the original 4 question, I just don't think modular -- the 5 modular market is comparable to different market 6 with different price points, different buyer, and 7 a different size of the overall market, for one 8 thing. Manufactured housing, traditionally, has 9 been a much bigger market. So, again, that goes 10 back to the point I made earlier about the apples 11 and oranges and the specific recognition of 12 manufactured housing as affordable housing, which 13 modular does not -- 14 MR. RAMIREZ: Okay. Yeah. 15 MR. LEVY: Emanuel Levy. Just one last 16 point -- 17 MR. LUBLINER: Mike Lubliner. 18 MR. LEVY: -- that Rob has raised. The 19 IECC zones are dictated by climate, climate 20 considerations. The HUD zones are dictated by 21 cost-effective levels of efficiency. Those are 22 different things, and, therefore, the IECC overlay

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 264 1 is kind of a limited utility. It might be 2 demonstrated -- and I'm expecting this will be the 3 case -- Virginia may have a lower use of O-value 4 (ph) than Vermont. It's possible, simply because 5 Virginia has a lot of electrically heated homes 6 and Vermont has mostly gas- heated homes. 7 So if you look at those from a cost8 benefit standpoint, it could prove that Virginia 9 should have a lower use of O-value. So I think we 10 should be careful about how we use the IECC zones. 11 MS. DICKENS: Just anecdotally -- this 12 is Ishbel. I'm staying with my vice president in 13 a manufactured home in Virginia right now, and her 14 A/C is electric, so her -- she's a paying $165 a 15 month on A/C during the summer. She heats her 16 home with gas during the winter, so she has both, 17 yeah. 18 MR. RAMIREZ: All right. So -- 19 MR. LUBLINER: And my -- this is Mike 20 Lubliner. I wanted to add that my understanding 21 is even when there's gas available, 90 percent of 22 the homes still have electric water heating. Is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 265 1 that your industry findings? 2 MR. SCHNEIDER: That's definitely the 3 case in Vermont. We have propane furnaces because 4 we don't have natural gas, for the most part, in 5 Vermont, and a lot of the Northeast, including 6 Maine, and we have electric hot waters in a 7 hundred percent of the homes. 8 MR. LUBLINER: And is the propane more 9 expensive in Vermont than the electricity, or are 10 they comparable? 11 MR. SCHNEIDER: It depends on the year, 12 but more expensive right now. 13 MR. LUBLINER: Thank you. 14 MR. RAMIREZ: All right. So it seems 15 like the group is saying -- we like to do what I 16 call a temperature check, right, to get an idea of 17 where you're leaning without being locked into it, 18 depending on how some of the stuff works out 19 later. And it sounded like, at least to my ears, 20 that initially it looked like you were adopting 21 the HUD zones, but then -- but let's be careful. 22 Let's not, you know, rush to this, right?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 266 1 So as far as a temperature check, as far 2 as proceeding, and keeping in mind that maybe it 3 is going to be HUD, is that where you're going 4 right now? Let me see a show of thumbs if you're 5 looking at going under the understanding of 6 applying it towards HUD zones. 7 MS. HOFFMAN: Oh, I see no 8 MR. RAMIREZ: That's okay. Okay. Is -- 9 so is that why your thumb is down, because of the 10 data? All right. So (inaudible)? 11 MS. HOFFMAN: Yeah. So maybe the 12 parking lot and -- or no? 13 MR. RAMIREZ: No, no. You know what? 14 The reason I'm saying no to the parking lot is 15 this. 16 MS. HOFFMAN: Uh-huh. 17 MR. RAMIREZ: This is exactly why, when 18 we're putting together the agenda -- if you look 19 at the original agenda, it says to identify the 20 issues, talk about them, identify information 21 that's needed, and then to prioritize. Right? 22 Because we were thinking that it was going to be

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 267 1 awfully hard for you all to start problem-solving 2 without the information that you're going to need. 3 Right? But we're hearing from the group, "Whoa, 4 we could do this," right? Yeah, it's -- now you're 5 seeing some of the road blocks that we were 6 anticipating. 7 MS. STARKEY: I might suggest, I think 8 if you ask the question fewer zones rather than 9 more zones at this point, I think you'd get a 10 different response. 11 MR. RAMIREZ: All right. Excellent. 12 Let me -- let's try it. 13 MR. LUBLINER: Can you share with me 14 what the response is? Because we can't see the 15 hands here. 16 MR. RAMIREZ: Yeah. You know what? 17 Everyone was sideways, with the exception of 18 Robin, who was a thumbs-down, but everyone else 19 was sideways. From what I could tell, it was 20 because they needed more information. That's why 21 Robin's thumb was down. 22 MR. LUBLINER: Okay.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 268 1 MR. RAMIREZ: Oh, Manny was thumb-down 2 also. Same reason. Okay. 3 MS. HOFFMAN: More information. 4 MR. RAMIREZ: So there were a couple 5 thumbs- down, and overall, it just seemed like 6 people needed information. 7 MS. HOFFMAN: Right. 8 MR. ROY: Probably it's more 9 information, and second is we don't need to make a 10 decision -- a determination on that because PNNL's 11 work and the rest of the analysis is going to roll 12 through that information, not giving anything up. 13 MS. HOFFMAN: I see. 14 MR. SCHNEIDER: Can you just tell us 15 what energy modeling is going to come back? Are 16 we going to have every IECC climate zone modeled 17 with -- I'm just -- I'm still confused as to what 18 modeling will come back. I've posed that question 19 before. Is that going to include all IECC zones 20 so we can evaluate what the difference is between 21 these? 22 MR. HAGERMAN: Yes. This is Joe

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 269 1 Hagerman at DOE. Absolutely. So what they've 2 done is they've built a model of a manufactured 3 home, and then -- or multiple manufactured homes 4 and placed that -- one unit in every climate zone, 5 and then -- so they get that annual energy 6 consumption for that model, and then they rotate 7 it 90 degrees and run it again, and they rotate it 8 90 degrees, and they run it again. They rotate it 9 90 degrees, and then they run it again. So then 10 they pick the worst case, right? So you get the 11 worst-case answer. 12 MR. SCHNEIDER: And how were the fuels - 13 - yeah, and how were the fuels chosen -- 14 MR. HAGERMAN: I don't know that. 15 MR. SCHNEIDER: -- for those? 16 MR. HAGERMAN: I -- yeah, I'd have to 17 see how they ran that, depending on the model. 18 And then, two, they've run it for the 2015 code. 19 They've done that same thing for the 2015 code, 20 2012 code, 2009 code, 2006 code, et cetera, et 21 cetera, so -- and we're trying -- we're working as 22 hard as we can to get you all those numbers.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 270 1 MS. HOFFMAN: And thank you. 2 MR. SCHNEIDER: (Inaudible) percent -- 3 MR. HAGERMAN: Yes, it -- 4 MR. SCHNEIDER: -- is just -- 5 MR. HAGERMAN: Right. 6 MS. HOFFMAN: Now, Lois, you had a 7 point. 8 MR. RAMIREZ: Yeah, the -- okay. 9 MR. CYMBALSKY: So just to -- I mean, 10 this was valuable, from my point of view, just to 11 understand how the manufacturers can or cannot, 12 you know, do this differentiation. So, I mean, 13 that's where I was coming from with trying to 14 understand the climate zones, not necessarily 15 wanting to make a decision today on that, but just 16 trying to understand how the manufacturers can or 17 cannot adopt more or less, you know, requirements 18 upon that, so -- and I think we got that 19 information from both the large guys and the small 20 guys. 21 MR. LUBLINER: Mike Lubliner here. 22 MR. RAMIREZ: Go ahead, Michael.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 271 1 MR. LUBLINER: A question for Joe. Joe, 2 what I heard before when you were explaining this 3 is that in terms of setting -- comparing the 4 climate zones from the HUD to the I codes (ph), 5 that you looked at a weighting based on 6 production, and I wonder if people are comfortable 7 with that methodology. I think that's the best 8 methodology, and I wanted to clarify it, that 9 we're weighting it by production as we try to 10 investigate whether we should be going with more 11 climate zones or less, as Lois has characterized. 12 And I think it would be useful to get a sense from 13 the group if that methodology is an acceptable 14 one; in other words, you know, if one home is 15 built in Fargo, North Dakota, it gets a smaller 16 weighting in terms of the cut on climate zone than 17 thousands of homes in another portion of that Zone 18 3 area, where there is more weighting. Thank you. 19 MR. RAMIREZ: Comments? 20 MR. SCHNEIDER: Well, this is Peter 21 Schneider from Efficiency Vermont. We certainly 22 haven't seen that serve Vermont very well.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 272 1 MS. HOFFMAN: Any other comments from 2 members of the committee, working group? 3 MR. RAMIREZ: All right. Well, then, 4 let's just -- 5 MR. KESSLER: This is Bert. I've been 6 quiet so far, but 7 MS. HOFFMAN: All right. Bert Kessler. 8 MR. KESSLER: -- I think I'm going to 9 comment on this issue here. I believe that we 10 should stick with the three zones that we 11 currently have. At the end of the day, what's 12 really going to control the performance will be 13 what use of O's (ph) will assign to those 14 different zones, and I think at that point in 15 time, it would be more of an issue to dissect the 16 individual zones into, you know, something like 17 what we're looking at here with the IECC zones and 18 analyze and see just how much difference there is. 19 MR. RAMIREZ: All right. So let's see a 20 show of thumbs on the idea of looking at fewer 21 zones than more zones as we have our discussions 22 going forward.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 273 1 MR. SCHNEIDER: This is Peter Schneider. 2 I'd say thumbs down on that. 3 MALE SPEAKER: (Inaudible). 4 MR. RAMIREZ: Yeah. As we're going 5 forward, the group would prefer to have less zones 6 than more zones; in other words, leaning more 7 towards three versus seven as we're going forward. 8 MR. LEVY: As a philosophical goal. 9 MR. RAMIREZ: Yes, just as we're going 10 forward, but we're going to have to look at the 11 information. 12 MS. HOFFMAN: Yeah. 13 MALE SPEAKER: (Inaudible). 14 MR. SCHNEIDER: But that'll be very 15 different for the cost analysis, where we'll be 16 looking at the most zones and evaluating specifics 17 of that regional climate and the fuel sources 18 there, correct? 19 MS. HOFFMAN: It sounds like there's a 20 lot more information that's needed for making a 21 decision, but, first, thank you for this as a 22 start, very much. And what I'm thinking is you're

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 274 1 right, not in the parking lot. 2 MR. RAMIREZ: Yeah, yeah, we're going to 3 have to deal with this up here. 4 MS. HOFFMAN: We're going to have 5 to deal with it, but subject to further analysis. 6 That's what I'm hearing, because it's going to be 7 critical, and it is in our charter, what we need 8 to do for the working group. Any other comments 9 on this before we move on or make a -- actually, 10 we might break for lunch in a few moments, but how 11 is the pace going? Let me do a process check. 12 Are you frustrated, or you feel we're moving 13 ahead, or any of the above, or not? Good -- well, 14 we're getting good information. That's good. And 15 we're not rushing to make decisions, because we 16 want to get as much information. On the other 17 hand, if you felt like we should have made a 18 decision, I'm sorry about that. Any other 19 comments, though, about how the process is 20 MALE SPEAKER: (Inaudible). 21 MS. HOFFMAN: Oh. Sixty days is on your 22 mind. Right. Okay.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 275 1 MALE SPEAKER: (Inaudible). 2 MS. HOFFMAN: Okay. What we can do 3 through lunch, the facilitators, is come up with 4 maybe an idea for how to move it ahead, okay, for 5 you to look at. But, again, we will need 6 information, and that sounds like it's going to 7 come in time for our next meeting. Yes, Rob? 8 MR. LUTER: Just one observation 9 regarding the direction we're going to head. 10 MS. HOFFMAN: Uh-huh. 11 MR. LUTER: To Bert's comment, you know, 12 U- sub-o's going to be important. Three zones 13 would make more sense. I've heard commentary so 14 far that would suggest that U-sub-o's is not going 15 to be relevant, because the energy portions of the 16 HUD code are going to be gone. So if that's truly 17 the case, let's man up and say that's what's going 18 to happen so we can head down the right path. If 19 it's still uncertain, okay, let's continue that 20 conversation, but we really need to know which 21 direction this is heading. If this is going to be 22 a carved-up IECC, let's just say that's what it's

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 276 1 going to be and start working on it. If the HUD 2 code or elements of it are still going to be 3 relevant, let's identify which ones those are 4 going to be so we can go down the right path and 5 not waste any time. Again, 60 days. 6 MS. HOFFMAN: Manny? 7 MR. SANTANA: Manny with Cavco. You 8 know, I like the point that Emanuel brought up, 9 that the HUD zones and the IECC zones aren't 10 exactly apples and apples. You know, one is based 11 on purely energy considerations, and another one 12 is based on optimal energy versus life costs. You 13 know, what are we supposed to do to make a 14 decision going forward? Are we going to also have 15 numbers on life cost versus energy, or is it going 16 to be only energy-based? Because that'll have a 17 determination on what zones we end up with. 18 MS. HOFFMAN: Okay. Any other comments? 19 MS. DICKENS: Yes, remind us of the 60- 20 day thing, the 90 percent of the what and the 10 21 percent of the why, so I think we're okay where we 22 are right now.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 277 1 MR. RAMIREZ: Yeah. Everyone understand 2 what she's talking about? Hopefully we spend more 3 time understanding what the issue is and the 4 problem, and that will speed up the problem5 solving component. 6 MR. WEISS: (Inaudible) I think there's 7 value discussing these issues and circling back to 8 (inaudible). 9 MS. HOFFMAN: Uh-huh. True. 10 MR. RAMIREZ: Okay. 11 MS. HOFFMAN: Okay. So I would suggest 12 lunch, come back at -- oh, Emanuel? Yeah. 13 MR. LEVY: Emanuel Levy. I just want to 14 make one quick comment in terms of timing and what 15 the next steps are from what the laboratory's 16 going to furnish. I think the energy 17 information's going to be interesting and useful. 18 I think ultimately what we're looking for is what 19 levels of efficiency are cost- effective, and 20 that's going to be the time when I think is -- 21 where the time is placed, and I would see if we 22 can put some more urgency on doing that part of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 278 1 the analysis, taking the energy information, but 2 overlaying on top of that cost-benefit, the costs 3 and ultimately the cost-benefits and breaking that 4 down by climate. That is where we're headed. 5 MR. CYMBALSKY: Right, so -- 6 MR. SCHNEIDER: And this is Peter 7 Schneider. I was just wondering if Emanuel or 8 somebody else has good cost data that we can start 9 to build upon so once -- you know, we already have 10 these model packages, correct? So to begin 11 working on a cost associated with these energy12 efficiency upgrades, ventilation upgrades and so 13 forth, it would be really helpful if we began 14 building that database so we could utilize that as 15 soon as possible, because the -- you know, the 16 energy analysis is really one half of what we 17 need. 18 MR. HAGERMAN: Right, so this is Joe 19 Hagerman, DOE. And so that's why we recommended, 20 wherever possible, where you have data on 21 shipment, costs, whatever data that you think is 22 relevant, you know, sign an agreement with

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 279 1 Navigant and give it to them, and those analysts 2 can start helping us consider that the -- in all 3 the stuff that we've prepared, so 4 MS. HOFFMAN: And the question -- 5 MR. SCHNEIDER: Do we know who -- has 6 that been provided yet? Do we know what may be 7 currently available? I mean, ultimately I know 8 there's a lot of partners of this working group 9 right now that have done significant work in this 10 arena. Next steps, Emanuel, I was just wondering 11 what we currently do have and we can expect, come 12 Friday, as an example. 13 MR. RAMIREZ: You have information? 14 MR. LEVY: We do have data. 15 MR. RAMIREZ: Okay, great. 16 MS. HOFFMAN: And you could share -- 17 MR. LUBLINER: This is Mike Lubliner. I 18 had a question on cost. 19 MR. RAMIREZ: Go ahead, Mike. 20 MR. LUBLINER: Okay. Joe, we did a -- 21 you did an ANOPR (ph), and you did an RFI, and if 22 I -- I think we provided costs from our regional

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 280 1 programs. We have a little track record and worked 2 with the manufacturers. I'm just wondering, a lot 3 of these manufacturers are building modular, and 4 they have experiences. Did you get sufficient 5 costs data from the RFI or the ANOPR from 6 industry, or are we now trying to get additional 7 information? 8 MR. HAGERMAN: We're looking for 9 additional information, but you are correct -- 10 MR. LUBLINER: Thank you. 11 MR. HAGERMAN: -- that if -- absent of 12 information, we'll use the information we've 13 already received. 14 MR. LUBLINER: So I'd like to follow 15 that up by asking the industry folks since you 16 didn't provide cost data during the ANOPR and 17 limited cost data during the RFI, are you now 18 going to sit down and share cost data with us so 19 that we make sure that we have the benefit of your 20 expertise and costs? 21 MS. STARKEY: This is Lois from NHI. 22 We'll do the best to -- that -- you know, to get

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 281 1 the information that you need. As Emanuel 2 suggested, we have done some work. We haven't 3 just been putting our head in the sand since the 4 DOE proposal first came out. So we do have some 5 information we can share. Now, whether or not -- 6 MR. LUBLINER: Thank -- 7 MS. STARKEY: -- we can go to every 8 manufacturer -- because I think manufacturers are 9 struggling with the kinds of data that they 10 collect and how to get the data that you would 11 really like to have, and that is how many homes 12 that Clayton ships every year, for example, go to, 13 you know, Zone 1, go to Zone 2, go to Zone 3, and 14 what kind of energy standards do they actually 15 have? How efficient are they? Because, you know, 16 that's just -- I would say -- correct me if I'm 17 wrong -- that that's not really information that 18 they currently correct (ph). But we have looked 19 at component costs of going to different kinds of 20 energy standards, and we can get that. 21 MS. HOFFMAN: Great. 22 MR. LUBLINER: Thank you, Lois.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 282 1 MS. HOFFMAN: Great. Okay. Well, with 2 that, let's come back at one o'clock. Thank you. 3 (Whereupon, at 3:54 p.m., the 4 meeting was concluded.) 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

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283 1 CERTIFICATE OF COURT REPORTER 2 I, NATALIA THOMAS, the reporter before whom the 3 foregoing hearing was taken, do hereby certify 4 that the witness whose testimony appears in the 5 foregoing deposition was duly sworn by me; that 6 the testimony of said witness was recorded by me 7 and thereafter reduced to typewriting under my 8 direction; that said deposition is a true record 9 of the testimony given by said witness; that I am 10 neither counsel for, related to, nor employed by 11 any of the parties to the action in which this 12 deposition was taken; and, further, that I am not 13 a relative or employee of any counsel or attorney 14 employed by the parties hereto, nor financially or 15 otherwise interested in the outcome of this 16 17 18 19 20 21 22 action.

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284 1 CERTIFICATE OF TRANSCRIPTION 2 3 4 I, VONDA WEBER, hereby certify that I am the Court 5 Reporter who reported the following proceeding and 6 that I have typed the transcript of this 7 proceeding using the Court Reporter's notes and 8 recordings. The foregoing/attached transcript is 9 a true, correct, and complete transcription of 10 said proceeding. 11 12 13 14 15 16 17 18 19 20 21 22

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285 1 CERTIFICATE OF TRANSCRIPTION 2 3 4 I, SARAH VEACH, hereby certify that I am the Court 5 Reporter who reported the following proceeding and 6 that I have typed the transcript of this 7 proceeding using the Court Reporter's notes and 8 recordings. The foregoing/attached transcript is 9 a true, correct, and complete transcription of 10 said proceeding. 11 12 13 14 15 16 17 18 19 20 21 22

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286 1 CERTIFICATE OF TRANSCRIPTION 2 3 4 I, MARY E. YOUNG, hereby certify that I am not the 5 Court Reporter who reported the following 6 proceeding and that I have typed the transcript of 7 this proceeding using the Court Reporter's notes 8 and recordings. The foregoing/attached transcript 9 is a true, correct, and complete transcription of 10 said proceeding. 11 12 13 14 15 16 17 18 19 20 21 22 

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 197:7,12 198:3,12 200:16,19 203:12,17 204:1,3 208:21 211:1 215:4,19 216:12 219:15,18,22 221:18,21 222:10,13,16 223:4,6,17 224:4,7,9,13 226:5,8,10,14,1 6 227:4,10,18,21 228:9 229:16 230:11,14 231:21 232:9,11 235:7 236:8,11,14,16, 20 238:12,16,18,21 239:2,4,7 252:6 257:18,21 266:7,11,16 268:3,7,13 270:1,6 272:1,7 273:12,19 274:4,21 275:2,10 276:6,18 277:9,11 279:4,16 281:21 282:1 hold 129:11 138:21 142:7 200:1 205:1 209:13 225:8 231:19 254:18 holding 125:8 219:19 home2:13 4:12 25:20 64:22 65:4,6,7 67:11 74:9,15 92:11 94:16,22 95:8 106:10 110:2,7 112:6 115:2,17 138:13,16,20 140:5,10,19,22 141:4 143:5 144:7 147:12,17 149:6 151:19 152:2,4,10 153:4 163:10,18 165:14,16 168:22 179:16,22 180:1,4,12,13 182:18 204:13,16,19 205:12 206:16 209:17 210:11,15 212:8,12,16 214:20 215:17 216:1,2,17,22 217:5 237:21 254:8 255:6 260:4,6 262:16,17 264:13,16 269:3 271:14 homeowner 139:20 142:18 143:16,19 145:22 147:1 150:5 151:13,15 179:16 213:10 235:21 homeowners 216:22 homeowner's 138:19 141:17 homeownership 150:22 homes 14:8 20:22 23:19 25:13 28:10 33:4 63:15 92:18,19,20 93:1,3,16 94:17 101:9 102:22 103:1 110:12,21 114:5 118:7 147:10 151:18 165:9 166:12 176:9,12,16,18 180:7 182:12,13 190:2 192:11 193:19,20,21,22 195:12 200:13 206:17 210:3,18 212:22 214:4,6,9,18,21 215:10,13,15 216:19,20 235:13 237:1 244:3,13 248:16,20 249:8,14 253:18 254:4 259:22 260:12,14 264:5,6,22 265:7 269:3 271:17 281:11 home's 152:5 Homes 130:22 131:6 homework

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### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 158:8,11 159:2 165:6,12 168:12 169:18 171:18 173:12 175:4 176:8 178:14 181:7,8,9,13 202:19 203:6 206:14 211:17 223:21 233:4 251:21 252:1,11,14,15, 16 253:1 260:13 263:8,12 HUD 4:18 9:13 20:1 26:2 30:9,16,17,22 32:19 33:5 35:15 48:16,17 49:15 52:11,19 73:6 90:8,16,18 94:18 108:10 111:10 114:17 136:4,7 142:1 145:3 148:15 153:8 163:8 173:15,17 175:21 176:6,20 177:11 181:1,6,16 182:15 184:2,10 185:6,10,17,21 186:1,13 187:11,21 188:13,16,18 189:12 190:14,19,22 191:2,8,18 192:7 193:2 194:6,13 195:5,22 200:5 201:14 202:14 203:1 207:3,13 208:8 213:18 214:4 226:5,21 227:16 228:2,4 230:21 231:4,7,8,11,12, 13,15 233:2,5,14,18,2 0,21 234:3,4,6,21 235:17 239:10,11,14 240:4,7,8 241:14,22 242:7 243:3,7 244:2,7 245:4,11 246:7 252:13 254:6,8 256:19 261:19 262:11 263:20 265:21 266:3,6 271:4 275:16 276:1,9 HUDs 4:16 HUD's 234:12,13,16 235:5 huge 103:22 244:8 huh 100:12 hunches 71:15 hundred 103:21 260:3 265:7 hurdle 161:16 171:3 HVAC 17:1,3,4,12 107:12 220:16 HVC 15:11 HV's 15:18 I ICC 59:1,2 82:15 98:16 108:7 109:5 233:2,7 243:6 ICEE 98:3

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 231:10 represented 70:13 74:10 229:11 representing 33:16 represents 258:15 reps 184:2 request6:15 44:7,8,14 47:10,12 48:3 62:9,11 70:8 72:13,16 85:2 86:4 96:19 248:10 249:19 250:2 260:5 requesting73:3 requests 72:20 required 10:20 13:17 95:8 235:12 247:4 262:9 requirement 10:19 95:11 109:6 123:18 137:13 233:16 244:18 requirements 13:4,13 37:14 59:7 122:22 136:1 137:2,3,4,16 148:17 155:4 181:12 186:1 234:14 256:1 259:18 260:15 270:17 requires 171:12 resale151:17,20 152:3 research 48:20 118:2 131:17 169:16 242:12,13 researchers 165:10 reset 56:10 residential95:6 103:18,22 residual151:14 resiliency 116:16,20 117:3 resistant 109:7 resolution 4:9 resolutions 128:7 resolve105:16 189:9 resources 2:20 20:10 30:16 58:22 59:11 60:22 71:18 76:9 83:14 131:11 respect 181:2,4,12 188:17 204:16 233:16 respects 50:1 respond 55:8 100:18 257:19 responding 100:19 response250:7 267:10,14 Responsible 131:3 rest 123:4 162:5 195:5 268:11 restrictive 243:22 result49:21 95:4 119:9 194:5 results 5:15 201:5

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### Capital Reporting Company

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### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 42:1,11 79:9,21 92:19,21 94:5,10 137:19 147:10,11 219:13 258:20 single-family 93:13 94:22 182:12 single-section 165:8 194:16 single-wide 95:15 216:1 sir61:20 sit84:7 280:18 site 36:17 108:14,15 109:3 114:17 233:16 235:1 260:19 site-built175:3 sitting 215:15,18 254:9 259:6 situation 91:1 situational113:1 116:7 six 8:11 Sixty274:21 size 204:16 263:7 skin 49:19 126:16 skinny 126:15 sky78:12 skylights 220:14 slash 27:11,12 28:17,21,22 slashed 28:16 slide 221:4 slight61:8 123:9 slightly56:16 slow 15:8 87:1,2 126:12 slowly 160:18 small 96:12 150:15 211:20,21 242:6,8 258:14,15 259:11 270:19 smaller 250:11,14 257:14 258:18 271:15 smoke235:16,20 236:3 snuck 128:4 social37:17 39:20 software 80:22 137:1 solar5:19 261:21,22 262:4,11 sold 48:22 81:15 215:16 248:20 sole 44:14 solicit72:11 solve 44:18 125:5 227:12 solving 277:5 somebody7:2,6 47:10 81:17 120:13 278:8 somehow 90:2 129:8 someone 66:14 101:13,14 104:2 113:6 116:12 160:9 someplace 169:2 somewhat127:12 138:8,9 somewhere 22:9 36:14,19 42:7 84:6 120:6 182:6 sooner70:5 sorry 5:8 8:14 12:16 13:21 16:11,21 17:7 23:1 24:4 30:3 51:20 53:4,6 54:11 69:18 90:7 91:12 123:22 132:8 139:4 141:22 145:1 148:15 153:18 200:1,19 201:7 204:4 209:13 220:3 222:18 223:19 225:8 228:8 250:5,18 254:18,22 258:2 274:18 sort33:21 36:12 37:12 50:8 70:3 90:22 97:3 154:11,16 156:3 172:20 196:18 252:18 254:6 257:5 sorts 10:17 71:18 sound 43:15 246:15 sounded 265:19 sounds 6:16 11:2 42:22 77:9 84:11 88:4 90:20 162:17 167:8 217:5 245:20 257:13 273:19 275:6

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 142:1 181:10 200:12 231:22 237:9,20 251:16 252:1,14 262:8 263:11 specifically13:8 71:16 82:5 136:2,16 158:7 181:7 233:9 237:5,20 251:22 252:12,13,15 specifics 165:4 166:1 273:16 specified 247:14 specify17:11 57:13 spectrum82:2 speech 73:1 speed 277:4 spelling 11:9 spend 217:21 277:2 spending 83:14 spent55:16 254:3 spiel228:20 spin 201:5 spins 234:15 split7:12 11:14 12:17 152:7 226:9 splitting 261:19 sponsored 165:7 spot184:2 251:12 sprinkled 123:13 square 90:10 squeeze251:6 squirrel190:8 Stacey 3:7 23:17 30:20 40:14 101:6 102:12 103:3,8 130:20 178:7 197:13 262:13,15 staff 126:21 stand 201:2 standard 6:20 33:11 35:9 52:18,19 60:19 61:6 66:22 67:1 68:4,6 79:12 82:4,8 84:10 85:15 94:14 95:14 102:22 106:11 135:3,17,20 136:2,15 137:9,21 138:3,12 139:5 142:2,5,6 144:18 147:19 154:21 166:18 170:22 171:6,16 173:22 175:2 176:17 177:6 182:16 185:13 199:9 202:17 203:1 208:12 214:18 217:4,16,18,19 233:5 243:5 standards 4:13 33:22 52:11 60:12 82:6 83:20 118:5 121:11 129:17 133:13 136:9,12 137:7 140:2 142:14 158:1,3 163:9 166:6,8,10,13,1 9,21 167:1

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### Capital Reporting Company

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### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2014 117:14 118:14 128:5 129:5 134:7,15 135:14 142:19 154:8 158:19 165:1 171:11 184:14,17,18,20 186:5 190:6 191:10 193:16 196:11 198:4 199:18 201:17 202:2 204:1 205:17 216:7 227:20 235:9 238:16,17 280:19 surface 20:4 surprised 105:5 127:19 Surrena4:11 58:21 92:10 surveyed73:12 suspect89:5 160:10 sustainable 212:20 SW1:13 swath 237:4 sworn 283:5 synergy125:9 system7:13 10:13 11:18 20:8 systems 13:7 20:12 115:9 131:16 T table 80:15 81:3 112:16 118:17 188:4 255:19 256:3

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### Capital Reporting Company

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