EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 1 UNITED STATES DEPARTMENT OF ENERGY

PUBLIC MEETING ON THE ENERGY CONSERVATION STANDARD FRAMEWORK DOCUMENT FOR COMMERCIAL REFRIGERATION EQUIPMENT

U.S. Department of Energy

Room 8E

– 089 1000 Independence Avenue, Southwest

Washington, D.C.

Tuesday, May 18, 2010 9:00 a.m.

Participants

DOUG BROOKMAN, Facilitator

MASOOD ALI Kysor/Warren

ERIC ANDERSEN PNNL

VIKTOR ANDERSON, P.E. Structural Concepts

KARIM AMRANE, Ph.D. AHRI

TIMOTHY BALLO Earthjustice

JEFF BAUMAN Continental

MICHELLE BRITT Pacific Northwest National Laboratory

JOHN DAVIS Traulsen

REBECCA DUFF ICF International

BURT M. FINKELSTEIN Kason Industries, Inc.

CHARLES HON TrueEXECUTIVE COURT REPORTERS, INC. (301) 565-0064 2

Participants

CONSUELO GUZMAN-LEONG Pacific Northwest

DR. DAN MANOLE Ingersoll Rand

ARISTOTLE MARANTAN, Ph.D. Navigant Consulting

JOANNA MAUER ASAP

JOHN McHUGH, PE McHugh Energy Consultants

ANDREW NAWROCKI Navigant Consulting

MASSOUD NESHAN Southern Store Fixtures, Inc.

GRAHAM B. PARKER Pacific Northwest

MARYLINE RASSI AHRI

DEVIN RAUSS Southern California Edison

CARL ROBERTS Zero Zone, Inc.

R. DOUGLAS ROBERTS ThermoCor

HARVEY SACHS, Ph.D. ACEEE

STEPHEN SCHAEFER HOSHIZAKI America, Inc.

CHARLIE STEPHENS Adjuvant ConsultingEXECUTIVE COURT REPORTERS, INC. (301) 565-0064 3 Participants

COLLIN WEBER Navigant Consulting

SARAH WIDDER Pacific Northwest

DAVID WINIARSKI Pacific Northwest National Laboratory

JOHN CYMBALSKY DOE

BETSY KOHL DOE

CHARLES LLENZA DOEEXECUTIVE COURT REPORTERS, INC. (301) 565-0064 4 A G E N D A

AGENDA ITEM : PAGE :

Welcome, Introductions, Agenda Review and Opening Statements

Doug Brookman 6

Rulemaking Overview

Charles Llenza 17

Rulemaking Scope

Dave Winiarski 25

Test Procedure Background and Potential Changes

Sarah Widder 58

Market and Technology Assessment

Collin Weber 72

Screening and Engineering Analysis

Collin Weber 90

Afternoon Session

Energy Use Characterization and Markups

Dave Winiarski

Life Cycle Cost and Payback Period Analysis, Shipments Analysis, and National Impact Analysis

Dave Winiarski

Life Cycle Subgroup Analysis and Manufacturer Impact Analysis

Dave Winiarski Collin WeberEXECUTIVE COURT REPORTERS, INC. (301) 565-0064 5

A G E N D A

AGENDA ITEM : PAGE :

Utility Impact Analysis, Employment Analysis, Environmental Assessment, and Regulatory Impact Analysis

Dave Winiarski

Other Issues, Questions & comments/Closing Remarks

Doug Brookman

1EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 6

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

9:06 a.m. 2

WELCOME 3

DOUG BROOKMAN 4

MR. BROOKMAN: Good morning, everybody, and 5

welcome. Glad you could join us. This is the U.S. 6

Department of Energy’s Public Meeting on the Energy 7

Conservation Standard Framework Document for Commercial 8

Refrigeration Equipment. Today is Tuesday, March 18 th 9

(sic). Glad you could join us. My name is Doug 10

Brookman from Public Solutions in Baltimore. 11

We are fortunate this morning to have John 12

Cymbalsky from the Department of Energy to also make 13

welcoming remarks. 14

WELCOME 15

JOHN CYMBALSKY 16

MR. CYMBALSKY: Thank you, Doug. This 17

morning before I left the house I was thinking, what do 18

I know about commercial refrigeration equipment. And 19

it turns out I have one in my house and I looked at it. 20

It's a 5.5 cubic foot Summit model that looks something 21

like that one on the left, but it has a stainless steel 22

handle. And I'm glad I looked at it because I realized 23

I'm woefully short of beer. 24

(Laughter.) 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 7

MR. CYMBALSKY: And probably not running very 1

efficiently being empty the way it is. 2

But, welcome to the meeting. It looks like 3

we have a decent schedule today running to 3:30, so I 4

don't think we're going to be too crunched for time. 5

And as always, please submit written comments to the 6

extent that you can. 7

MR. BROOKMAN: Thank you. 8

It is our tradition to do introductions 9

around the room. I think all of you registered as you 10

entered the Department of Energy, so the Department 11

knows who is here and they will produce a photocopy of 12

everybody's business cards. So, we're going to go 13

around the room and do introductions. For those of you 14

who have microphones, the little green LED light needs 15

to be on for you to be captured by the record. 16

For those of you who don't have a microphone, 17

that's okay, we know who is here. 18

We will start here, your name and 19

organization affiliation. We'll go around the room. 20

MR. DAVIS: John Davis with Charleston. 21

MR. MANOLE: Dan Manole with Hussmann 22

Ingersoll Rand. 23

MR. McHUGH: John McHugh with McHugh Energy 24

representing the California Statewide Codes and 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 8

Standards Program. 1

MR. BALLO: Tim Ballo with Earthjustice. 2

MS. MAUER: Joanna Mauer with the Appliance 3

Standards Awareness Project. 4

MR. AMRANE: Karim Amrane, Air Conditioning, 5

Heating and Refrigeration Institute. 6

MR. SACHS: Harvey Sachs, American Council 7

for an Energy Efficient Economy. 8

MS. KOHL: Betsy Kohl, Department of Energy 9

General Counsel's office. 10

MR. CYMBALSKY: John Cymbalsky, DOE Appliance 11

Standards. 12

MR. LLENZA: Charles Llenza, DOE Appliance 13

Standards. 14

MR. WEBER: Collin Weber, Navigant 15

Consulting. 16

MS. WIDDER: Sarah Widder, Pacific Northwest 17

National Lab. 18

MR. NAWROCKI: Andrew Nawrocki, Navigant 19

Consulting. 20

MR. DOUG ROBERTS: Doug Roberts, Thermocore. 21

MR. HON: Charlie Hon, True Manufacturing. 22

MR. CARL ROBERTS: Carl Roberts, ZeroZone. 23

MR. ANDERSON: Viktor Anderson, Structural 24

Concepts. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 9

MR. RAUSS: Devin Rauss, Southern California 1

Edison. 2

MR. FINKELSTEIN: Burl Finkelstein, Kason 3

Industries. 4

MR. BAUMAN: Jeff Bauman, Continental 5

Refrigerator. 6

MR. STEPHENS: Charlie Stephens, Adjuvant 7

Consulting. 8

MR. NESHAN: Massoud Neshan. 9

MR. SCHAEFER: Steven Schaefer, Hoshizaki 10

America. 11

MS. DUFF: Rebecca Duff, ICF International on 12

behalf of Energy Star. 13

MS. BRITT: Michelle Britt, Pacific 14

Northwest. 15

MR. PARKER: Graham Parker, Pacific Northwest 16

National Laboratory. 17

MR. BROOKMAN: Great. Did everybody get a 18

chance? 19

(No response.) 20

MR. BROOKMAN: I'm going to do a very brief 21

agenda review and then we're going to go from there 22

straight into an opportunity for opening remarks. 23

Immediately following this agenda review, as 24

I said, there is an opportunity for anybody that wishes 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 10

to do so, to make brief statements on any issues that 1

matter to them, short, concise statements, we hope. 2

Following that, Charles Llenza will provide a 3

rulemaking overview and then we'll go straight into the 4

heart of the matter, the rulemaking scope. We will 5

take a break midmorning around about 10:30 or so. Then 6

from there an overview on test procedure background and 7

potential changes following that market and technology 8

assessment, screening and engineering analysis. I hope 9

all of you got a copy of this agenda as you walked in 10

as well the PowerPoint slides. That's what I'm 11

referring to. 12

We'll break for lunch midday around about 13

12:15 or so. 14

When we return from lunch, energy use 15

characterization and markups. Following that, life 16

cycle cost and payback period analysis, shipments 17

analysis and national impact analysis. 18

We'll break midafternoon around about 2:15 or 19

so and then returning, life cycle cost subgroup 20

analysis and manufacturer impact analysis and then 21

following on utility impact analysis, employment impact 22

analysis, environmental impact analysis, environmental 23

assessment, and regulatory impact analysis. And then 24

there is an opportunity once again at the end of the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 11

day for any person to raise any additional issues that 1

they might wish to do and make other statements that 2

haven't been made already. So that's an opportunity or 3

yet another opportunity for comment at the end of the 4

day. 5

We intend to adjourn today around about 3:30. 6

The Department is trying hard to make sure 7

the meetings are run efficiently and not waste 8

anybody's time. So, appreciate your efforts to help 9

make that happen. 10

I'd ask for your consideration, simple ground 11

rules that have emerged for these meetings, please 12

speak one at a time. Please say your name for the 13

record. There will be a complete transcript of this 14

meeting posted on the EERE website all in the span of 15

say, seven or no more than ten days, I think. 16

I'm going to be cueing people as best I can 17

by name to speak. We also wish to encourage follow-on 18

comments. Sometimes the back and forth is very useful 19

to the Department to hear diversity of views. Please 20

say your name every time you speak. You don't need to 21

say your organization or affiliation, if you want to or 22

you're in the habit, that's okay. But, please say your 23

name and I'll be prompting you as best I can. If you 24

can keep the focus here, please turn your cell phones 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 12

on silent mode. 1

If you need to have a sidebar conversation 2

with anybody, make it brief, or take it up out of the 3

room. And, please, if you can, be concise, share the 4

air time. There's a lot to be said in the span of this 5

meeting today. 6

So that's what I would suggest as what I 7

think is common courtesy. Comments and questions here 8

before we get going with brief opening remarks? 9

(No response.) 10

MR. BROOKMAN: Okay. So let's do that. I 11

know a few individuals have requested that they get a 12

chance to speak here at the opening segment and one of 13

them is John McHugh. 14

MR. McHUGH: Thanks. Good morning. These 15

are my opening comments in support of -- or on behalf 16

of the California Statewide Investor Owned Utility and 17

Standards Program. This program serves a tenth of the 18

population of the United States, they're the Southern 19

California Edison, Pacific Gas and Electric, and San 20

Diego Gas and Electric. Commercial refrigeration is 21

very important to us in that commercial refrigeration 22

uses approximately as much electricity as does 23

commercial air conditioning. And so it's not a niche 24

market, it's a fairly substantial fraction of our 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 13

energy consumption in the state. And during the prior 1

rulemaking on commercial refrigeration DOE did not look 2

at a number of efficiency measures due to the fact that 3

they couldn't be modeled in the ASHRE Standard 72 test 4

method which is a steady-state test method. And 5

unfortunately that test method, because of steady-state 6

doesn't look at things that are affected by transient 7

conditions. And so there's a number of different 8

measures that potentially should be evaluated since 9

they have significant energy savings. So we need to 10

consider the test methods and our overall 11

responsibility to try to reduce energy consumption as 12

much as possible. So this is from Chapter 4 of the 13

last TSD. 14

One of those measures is liquid suction heat 15

exchangers. And for the walk-in proceeding I sent DOE 16

a copy of the Kline -- Drs. Kline and Rendell from the 17

University of Wisconsin, the description of evaluating 18

the efficiency impacts of liquid suction heat 19

exchangers. And briefly the liquid suction heat 20

exchanger what it does is it transfers heat from the 21

fluid leaving the condenser and subcools that fluid by 22

exchanging heat from -- or cool from the refrigerant 23

leaving the evaporator. And this is especially 24

desirable because in addition to the efficiency 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 14

benefits of doing this, it also makes sure that we 1

fully evaporate the gas -- hopefully there's no liquid, 2

but we make sure that it's fully evaporated before it 3

enters the compressor and so has a reliability benefit 4

for the compressors as well. 5

And if you look at the -- you know, this is 6

actually something that used to be done a number of 7

years ago and then when we shifted to R22 refrigerant, 8

liquid suction heat exchangers sort of fell out of use. 9

They don't have -- with R22 the benefits are not that 10

great and also there are issues about the discharge 11

temperatures increasing. 12

As DOE has noticed that, you know, the most 13

common refrigerants for remote condensing are 507A and 14

404A. Those are the refrigerants that have the most 15

benefits from liquid suction heat exchangers. And also 16

134 is the most common for self-contained. So these 17

are the types of refrigerants that benefit from this 18

technology. 19

Currently the walk-in proceeding hasn't 20

evaluated this technology. Certainly we would want in 21

setting new standards that this technology be part of 22

the measures considered. 23

I just returned from Light Fair which is the 24

lighting industry commercial meeting where all the new 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 15

technologies are unveiled and this year we could have 1

called it LED fair because almost all the technology 2

that we saw at Light Fair are LEDs. They are really 3

expanding dramatically. There's been a number of 4

different studies that have identified that LED 5

lighting substantially reduces the energy consumption 6

in display cases. And also they can be easily 7

controlled and so considering both LED lighting and 8

also motion sensing. And there's been a number of 9

retailers including Wal-Mart, Kroger, Target, just 10

about every large supermarket chain has been evaluating 11

this technology. 12

The last time I came and described -- or 13

during the last proceeding brought up the issue that 14

essentially vertical open display cases is like having 15

a refrigerator and taking the door off of it. And in 16

terms of an efficiency measure, doors on display cases 17

have a huge savings. And even if we can't agree on the 18

issue about medium temperature display cases, when we 19

look at low temperature display cases, you know, the 20

energy impacts are just so phenomenal that it would 21

just be ridiculous to consider having an open low 22

temperature vertical display case. So our 23

recommendation is that DOE consider either merging 24

those categories or at least setting the same energy 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 16

targets for open and closed low temperature vertical 1

display cases. 2

Finally, we want to make sure that the test 3

methods and standards are reflected market enforceable 4

and so as part of this I think it's really important 5

for DOE to understand how these products are sold. 6

As has been done in the past we want to make 7

sure that efficiency is enforceable at the level of the 8

product catalogue. We would like to see third party 9

certified rating so that the playing field is level. 10

And we would be interested in understanding how the -- 11

not only what the regulations are, but what the intent 12

is in terms of enforcement and, you know, that we look 13

at these various technologies, liquid suction heat 14

exchangers, LED lighting with occupancy sensors and 15

infiltration controls which includes windows. 16

Now, the other thing that I think is fairly 17

clear if you look at this standard right now it just 18

regulates the display case and in the case that you 19

have a self-contained condenser also the condenser is 20

part of that rating. And I think the other thing that 21

the industry needs is repeatable separate condenser 22

ratings. And this would be appropriate not only for 23

display cases in commercial refrigeration but also for 24

walk-ins. They are often sold separately. They can 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 17

serve multiple loads. So having a specific condenser 1

rating for a particular end-use piece of equipment 2

attached doesn't make as much sense as just regulating 3

that piece of equipment having a specific test method 4

and a way for the market to differentiate itself in 5

terms of energy efficiency. 6

So I think that it is appropriate that DOE 7

look at having a separate refrigerant condenser and 8

condensing unit standard that's outside of this 9

particular scope. And that display cases when they're 10

rated they're rated to accept a variety of different 11

refrigerant conditions to reflect the use of floating 12

head controls. Thank you. 13

MR. BROOKMAN: Thank you. 14

Other brief opening remarks here at the 15

outset? 16

(No response.) 17

MR. BROOKMAN: No additional opening 18

statements before we proceed with the program? 19

(No response.) 20

MR. BROOKMAN: Okay. Then we are going to 21

keep right on going. Charles Llenza. 22

RULEMAKING OVERVIEW 23

(PowerPoint presentation) 24

MR. LLENZA: Hi, I'm Charles Llenza the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 18

project manager for commercial refrigeration equipment 1

here at the Department of Energy and I welcome you all 2

back to the Department to start the rulemaking process 3

for commercial refrigeration equipment. 4

What I wanted to emphasize here, is that you 5

will see in the presentation throughout a request for 6

comment box. And there are two sets of questions in 7

terms of questions to the stakeholders. 8

You will see two types of questions, ones 9

that were laid out in the framework as the ones that 10

are numbered throughout and then we have another series 11

of questions that we have that are lettered as you go 12

through the presentation. They are laid out in this 13

comment box here so we would appreciate stakeholder 14

comments as we go through the presentation for the 15

public record. And if you would like to file written 16

comments you can do subsequently after this meeting up 17

to June 7 th

. 18

Okay. I'm going to talk about the rulemaking 19

overview. The regulatory history is kind of clear, 20

we've been through this before. EPCA 1975 established 21

the Energy Conservation Program and EPACT 2005 amended 22

EPCA and prescribed standards for self-contained 23

equipment with doors effective January 1 st , 2010. It 24

also directed the Department to develop and publish by 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 19

January 1 st , 2009, standards for commercial 1

refrigeration equipment. In addition to that, and 2

that's why we are here today, it directed the 3

Department to determine whether to amend the standards 4

both by DOE and prescribed by EPCA, if the Department 5

determined there was a “ positive determination ” to 6

publish amended standards by January 1 st , 2013 through 7

a second rulemaking process and that's what brings us 8

here today. 9

Let me emphasize this last bullet. The 10

situation the Department is in, is as we go through 11

this determination/rulemaking, is that at by the time 12

we determine that we are to amend the standards, if we 13

determine that, we are to also to complete a 14

rulemaking. So that's why the Department at this point 15

in time has decided to start a rulemaking process in 16

order to get to that determination, whether it be 17

negative or positive, we have to actually start the 18

process of a rulemaking with the analysis to back us up 19

in terms of the findings for the Department. So it 20

doesn't give us a lot of time to do a determination and 21

then flip over and do a rulemaking. So we are in the 22

position to have to actually start a rulemaking process 23

at this point in time in order to complete it by 2013. 24

DOE published a final rule on January 9, 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 20

2009, with an effective date of January 1 st , 2012. And 1

today we initiate this process with this framework 2

document which addresses the second directive from 3

EPACT 2005. 4

Again, the emphasis is that DOE must publish 5

a rule amending standards by January 1 st , 2013. If it 6

determines to amend the standards, which, again, puts 7

us in the position that we have to go through a 8

rulemaking process to determine that. And the problem 9

is that once you go through a determination to get 10

there on the schedule we actually have to go through a 11

rulemaking process. So that's why we are here today. 12

With the last bullet here I wanted to 13

emphasize that we have a little bit of discretion in 14

terms of the effective date for the second rulemaking 15

process. And we have -- we usually have a three-year 16

timeframe in terms of the effective date, but if it's 17

determined we need more time we can go up to five 18

years. 19

Again, the EPCA factors will be used 20

throughout the rulemaking process to -- the Department 21

will consider the seven factors for setting energy 22

conservation standards and you see the list here and 23

the corresponding DOE analysis for each of the seven 24

factors. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 21

Here is a description of the process that we 1

will go through. We are at the framework today. We 2

will have a preliminary analysis, notice of proposed 3

rulemaking and a final rule. 4

I encourage your comments to be submitted by 5

June 7 th , 2010 for the framework document. And the 6

website is at the bottom of this slide. 7

I am just going to go through a few of the 8

chevrons here describing these sequential steps for us 9

getting to the standard. We're at the framework part 10

of the process and we will in the next several months 11

develop a preliminary analysis. And as you can see, 12

it's quite intricate. There will be several areas that 13

we'll be working on. Market technology, screening 14

analysis, engineering analysis, markups, energy use 15

characterizations, we'll be working on life cycle cost 16

analysis and payback period analysis, shipment 17

analysis, and national impacts analysis. And you can 18

see the flow of how all these different analyses works 19

in the preliminary analysis phase. 20

Subsequently we'll get to a phase of the 21

notice of proposed rulemaking and once the preliminary 22

analysis is out, we'll have another meeting. We will 23

collect stakeholder comments and we will revise the 24

preliminary analysis accordingly. And as you can see 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 22

we revise all the different analyses to update them to 1

the current information provided by the stakeholders 2

and in terms of the analysis as we go through the 3

process. And then we will generate a final rule which 4

revises the NOPR and concludes into a final rule by 5

2013; January 1 st , 2013. 6

Here's the timeline that we developed for 7

this rule, the second rule for commercial refrigeration 8

equipment. 9

At this point I would like to just -- if 10

anybody has any comments that they can provide their 11

comments here on the scheduling and the overview of the 12

rulemaking. 13

MR. BROOKMAN: Karim. 14

MR. AMRANE: Karim Amrane, AHRI. I guess I 15

would like to go back to the fact that DOE now has 16

started a rulemaking on both the self-contained and the 17

remote condensing display cases. For those of you who 18

were not involved about five years ago, we, the 19

industry -- not just the industry, but AHRI and others 20

went to Congress and enacted legislation to basically 21

establish some federal minimum standard for the self22

contained product and directed DOE to do rulemaking on 23

the other products, the remote cases. 24

Our consensus agreement in 2005 directed DOE 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 23

to review the self-contained standard by 2013, but 1

never intended to apply this effective date to the 2

remote cases. It was not part of the consensus 3

agreement that was reached back in 2005. 4

Now, it's true that Congress, the language 5

that Congress enacted requires DOE to do rulemaking and 6

I vaguely remember that the reason why it was written 7

that way was to make, I think, the language a little 8

bit cleaner. Otherwise commercial refrigeration 9

equipment would be handled in two different rulemaking 10

cycles. But the real intent was not for DOE to start 11

rulemaking, you know, two years ahead of the effective 12

date of the previous standard. I believe that's never 13

happened in the history of the parent state of 14

rulemaking process. When DOE started the rulemaking to 15

which the standards aren't effective yet. So, again, 16

for us I think it makes absolutely no sense for DOE to 17

do this rulemaking on the remote cases. And hope that 18

others agree with us that this was never the intent. 19

Thank you. 20

MR. BROOKMAN: Thank you. Michael McCabe. 21

MR. McCABE: Michael McCabe, Department of 22

Energy. Mr. Amrane, if I can follow up on your 23

comment. I can appreciate your recollection as to what 24

the parties had negotiated and offered the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 24

recommendation to Congress. But in your reading of the 1

legislation as it stands, what do you believe the 2

legislation would require? 3

MR. AMRANE: Again, I'm not questioning the 4

language. I think DOE has the right interpretation of 5

what the language says. Yes, you have to start the 6

rulemaking. But, again, the language says that DOE 7

may. And, again, I believe that there is no need for 8

DOE to establish new standards given the fact that the 9

standards that were regulated just a year ago are not 10

yet effective. And now we are talking about revising 11

standards that are not even in place yet. So as far as 12

I'm concerned it does not make a lot of sense. And for 13

those of us who negotiated the language back then, it 14

was never the intent. 15

MR. McCABE: Yeah, this is Michael McCabe. I 16

don't have a copy of the text in front of me, but you 17

used the term "may" and it does -- does EPCA use the 18

term "may" in that language? 19

MR. AMRANE: I don't know. 20

MR. BROOKMAN: Betsy? 21

MS. KOHL: Yeah. This is Betsy Kohl from DOE 22

GC. It does direct DOE to consider whether to amend 23

the standards. So the determination is part, of as 24

Charlie was explaining, the process. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 25

MR. BROOKMAN: Karim, do you want to follow 1

on? 2

MR. AMRANE: No. 3

MR. BROOKMAN: Okay. Thank you. Thank you. 4

Dave Winiarski. 5

(Pause.) 6

MR. BROOKMAN: Harvey Sachs. 7

MR. SACHS: Harvey Sachs. While Dave's 8

getting in place, ACEEE does not have a comment at this 9

time on the question of the interpretation Mr. Amrane 10

has raised. We have not prepared a comment on that. 11

MR. BROOKMAN: Did you participate in those 12

negotiations? 13

MR. SACHS: I did not participate in those 14

negotiations. Therefore, I'm not familiar with the 15

context. 16

MR. BROOKMAN: Thank you. 17

MR. SACHS: I should have said that. 18

MR. BROOKMAN: Dave Winiarski. 19

RULEMAKING SCOPE 20

MR. WINIARSKI: My name is Dave Winiarski I 21

am a researcher with Pacific Northwest Laboratory and 22

I'll be presenting scope and some of the other analyses 23

discussed in this framework presentation. 24

This slide is a little bit about the history 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 26

that's already been discussed. In EPACT 2005 it 1

prescribes standard for six classes of commercial 2

refrigeration equipment. Those are shown here along 3

with the standards. These are for self-contained 4

products. In 2009 -- let me go back. 5

Essentially what we have here are 6

refrigerators and freezers that are self-contained 7

either with solid or transparent doors. We also have 8

what is an effective combination product, a 9

refrigerator/freezer with both capabilities only with 10

solid doors. And a separate class of what we call 11

"self-contained refrigerator with transparent doors 12

that has been designed for a pull-down temperature 13

application. If you actually look at the numbers, 14

these are slightly different in terms of the standards 15

than the refrigerator with transparent doors. 16

So we start with these six classes. These 17

will certainly be in the scope of this rulemaking. 18

Karim, with respect to your comments right here, DOE 19

also set new standards for the remote condensing 20

commercial refrigeration equipment, self-contained 21

equipment without doors. So I want to say the class of 22

equipment referred to as an ice cream freezer 23

specifically designed for an ice cream application. 24

Those are in effect January 1 st , 2012. So we are not 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 27

there yet. But DOE intends at this point to include in 1

the scope of the current proposed rulemaking here both 2

the products that were established in EPACT 2005 as 3

well as the equipment classes that were established and 4

for which standards were set in 2009. 5

In addition to that DOE is looking at some 6

other issues that were brought up through legislation. 7

EISA 2007 which also modified EPCA directed the DOE to 8

consider the incorporation of standby and off mode 9

standards where that was needed for classes of 10

equipment. Tentatively DOE has analyzed that and 11

commercial refrigeration equipment is typically 12

designed to operate on a 24-hour basis. And because of 13

that although the actual compressors and stuff may 14

cycle during that period, DOE doesn't feel that there 15

is a clear standby or a clear off mode period for which 16

it can establish separate standards. And that only the 17

active mode of energy consumption is applicable. For 18

that reason it at this time does not currently plan to 19

establish separate standby and off mode standards for 20

the equipment. 21

But we certainly welcome comments from 22

stakeholders as to whether that's an appropriate 23

interpretation. If it's not an appropriate 24

interpretation we will have to consider how we would 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 28

modify the test procedure for commercial refrigeration 1

equipment to separately characterize either a standby 2

or an off mode period and measure the energy 3

consumption during that period as well as figure out 4

how to incorporate that in any future analysis for any 5

new conservation standard. 6

MR. BROOKMAN: So that is the content that 7

you can see listed in slide 22, additional comment B. 8

So let's take comments in response to that request for 9

comments. 10

MR. McCABE: Michael McCabe, DOE. Mr. 11

Winiarski, if you could back up one slide and I would 12

like to put a question both to Mr. McHugh as a follow 13

up to your remarks and Mr. Amrane. 14

Mr. McHugh, when you commented you were 15

urging the Department to take, as I understand, the 16

products without doors, the freezer compartment 17

products and combine them with -- in a single class 18

with those with doors. I can appreciate the energy 19

impact on that and you recognize that yourself. 20

The Energy Policy and Conservation Act as 21

amended set standards for 18 classes of refrigerators, 22

refrigerator freezers and freezers recognizing the 23

design of where the door was placed, whether or not it 24

had an icemaker or not, and then subsequent amendments 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 29

to EPCA established separate categories of products 1

with -- in this case commercial refrigeration equipment 2

with and without doors. 3

EPCA also directs the Department in 4

considering standards to first go through a process to 5

determine what the classes of products are. And it 6

talks about classes as to whether or not it uses 7

different forms of energy, electricity, natural gas, or 8

oil, and then whether or not it has different utility 9

features that affect the performance of the product. 10

The legislation -- the history of the 11

legislation clearly recognizes geometry, placement of 12

doors, and the like in defining a utility and it would 13

seem that the legislation makes a very good case for 14

keeping the products in separate classes. You, 15

yourself, in talking about it talked about the energy 16

efficiency potential of those units with doors being 17

much higher than it is without doors. 18

If in your comments, or if you are prepared 19

to comment right now, you can offer why you think we 20

could combine then into a single class given the 21

requirements that are in the legislation. 22

MR. BROOKMAN: John McHugh. 23

MR. McHUGH: Thanks. John McHugh. Yes, I 24

think that there are two ways of addressing the issue 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 30

that's been brought up and it's a question of if you 1

look at sort of the history of air conditioning, for 2

instance, we have a couple of system types that 3

essentially are no longer allowed in our building code. 4

So, for instance, multi-zone systems that 5

simultaneously heat and cool the air in the space are 6

no longer allowed just because the efficiency is so 7

low. So similarly with low temperature display cases - 8

- vertical display cases the inefficiency of an open, 9

low temperature display case is so low that it raises 10

the question about whether or not there should be a 11

product category that includes open, low temperature 12

vertical display cases. 13

As an alternative you could just set the 14

standard to be identical for open and closed display 15

cases. And if there is some new technology that allows 16

someone to make an open display case that has 17

comparable energy consumption to a closed display case 18

certainly we wouldn't be opposed. But it's -- you 19

know, we are too far down the path of recognizing the 20

impacts of excessive energy consumption. This is a 21

kind of a fairly blatant method or blatant example of 22

saying, I have enough money, I can use as much energy 23

as I want for this. 24

And if you look at the modern supermarkets, 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 31

because of the energy impacts, and also because of the 1

product quality impacts, there just aren't that many 2

open, low-temperature vertical display cases anymore. 3

I don't know if that answered the question. 4

MR. McCABE: No, I don't think it entirely 5

did. We, under this program we are bound by the law. 6

And so if you can take a look at what the legislation 7

discusses as far as classes of products, and what we 8

have to consider, I think in your comments I think 9

you've made a case that with and without doors are 10

separate classes. And then we would have to consider 11

them separately and then we would have to set the 12

standards for each class to the maximum improvement 13

that is technically feasible and economically justified 14

for that class. It's theoretically possible to set the 15

same level for both classes if that level meets the 16

legislative requirement for, you know, each class 17

separately. 18

But, we couldn't do it -- you know, it's 19

arguable as to whether or not we can do what you are 20

proposing. And I would encourage you in your written 21

comments to take a look at the legislation and what we 22

are allowed to do and how we can accomplish your 23

objectives. 24

MR. McHUGH: So related to that -- 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 32

MR. BROOKMAN: Let's just clarify. John 1

McHugh. 2

MR. McHUGH: John McHugh. Related to the 3

comment, you know, clearly the intent of these 4

efficiency acts are to enhance the efficiency of 5

products. What capability does DOE have in 6

recommending that certain classes of equipment be 7

eliminated due to their extremely high energy 8

consumption? So I guess that's the question to you 9

folks, how you see that. 10

MR. McCABE: This is Mike McCabe, if you have 11

any comments on how we could consider that within the 12

scope of the existing law we would appreciate that. 13

Similarly, addressing the same topic as Mr. Amrane, why 14

shouldn't we take and collapse the classes? Is there a 15

separate and distinct utility for without doors? 16

MR. AMRANE: I think there is and that's why 17

the language is clear, the legislative language is 18

clear. It defines those product classes. So I think 19

DOE is bound by the language that Congress enacted to 20

recognize those product categories and to establish the 21

efficiency of the level that technology could justify 22

and feasible and justified. That's -- so, yeah. 23

MR. McCABE: Michael McCabe again. What is 24

the utility of no door? What is the utility of a door? 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 33

If in your comments we would appreciate going into that 1

because that would certainly help us in looking at the 2

requirements within EPCA in establishing separate 3

classes. 4

MR. AMRANE: And we would in our comments. 5

MR. BROOKMAN: Thank you. Thank you. Harvey 6

Sachs? 7

MR. SACHS: Harvey Sachs. Mike, I believe 8

there is at least one loose precedent in the sunsetting 9

of through the wall air conditioning category which 10

took effect January 1s of this year. This was an 11

obsolete category, inherently inefficient of small 12

manufacturing volume and it was rolled into another 13

class. Thank you. 14

MR. BROOKMAN: Tim Ballo. 15

MR. BALLO: Tim Ballo, Earthjustice. Just 16

quickly on the intent of Congress. I think we heard 17

already today that the intent of Congress in 2005 was 18

to codify standards that had been agreed upon through a 19

negotiated process. I don't think we can infer from 20

that any intent of Congress regarding the utility of 21

doors or a lack of doors on a product. 22

It seems to me that a real value would be 23

data on sales in the -- in the retail market from 24

equipment with doors or without doors to see if the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 34

doors actually have an impact on the end user of the 1

product whether you consider that to be the market, the 2

retailer, or the person who is going to the market to 3

purchase goods. I think we will be arguing that 4

there's no utility for doors on any equipment. But, 5

you know, the Department certainly does have some 6

discretion there. But it is certainly reasonable to 7

read the statute in a way that would define the product 8

class as refrigeration equipment with or without doors. 9

MR. BROOKMAN: Okay. Thank you. Yes, 10

please. Say your name for the record. 11

MR. CARL ROBERTS: Carl Roberts. There is 12

some research regarding the utility of doors or the 13

difference between open and closed display 14

merchandisers with glass doors. I would say it extends 15

to medium temp as well. There's no need to limit it to 16

low temp. A refrigerator is a refrigerator; a 17

merchandiser is a merchandiser and there is no evidence 18

that the presence or absence of doors impacts the 19

productivity of that equipment. 20

In fact, recent research has dispelled that 21

myth and ASHRI Research Project 1402 would be a good 22

example to show that there isn't any productivity 23

difference between vertical open cases and vertical 24

cases with glass doors. And the energy differences are 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 35

huge, about two or three times the energy goes into an 1

open case. 2

So if our goal is to achieve the maximum 3

improvement in energy efficiency that is 4

technologically feasible and economically justified, 5

why should we encourage the use of open display cases? 6

MR. BROOKMAN: Thank you. Yes, please. Say 7

your name for the record. 8

MR. HON: Charlie Hon. I have three comments 9

to make. First, the speaker indicated that the 10

commercial refrigerators are “ typically designed ”; 11

there is no such thing as "typical" they are designed 12

to run around the clock, so nobody manufactures a 13

commercial refrigerator that “ typically ” would be 14

running. You know, it has to run around the clock. 15

Number two comment is in regard to the 16

comment that was just made about the ASHRAE Research. 17

The ASHRAE research was done, unfortunately it's not 18

complete and I want to make sure that people 19

understand, that research program does not truly 20

indicate that there is no difference whether there are 21

doors or no doors as far as the productivity of the 22

case is concerned. There is no denying there is energy 23

savings, however, the other conclusions that are made 24

are inconclusive and are not to be taken as final. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 36

Number three, I want to talk about the 1

standards that actually are in place and are going to 2

go into effective January 1 st , 2012. There is a major 3

flaw in this standard, if I may. Commercial 4

refrigerators that are manufactured that are used in 5

supermarkets, as is stated in the standard, it is also 6

stated in the AHRI Standard 1200 and also discussed by 7

the FDA food code and the ASHRAE Standards. 8

ASHRAE standard establishes two -- I'm sorry, 9

FDA and NSF-7 standard establishes two operating 10

conditions. One is 75 degrees, room temperature, the 11

other one is 80 degrees room temperature. 12

Unfortunately, this standard only addresses the 75 13

degree room temperature ambient condition. That only 14

applies to supermarket operating conditions and not 15

convenience stores, restaurants, and the rest. 16

As the convenience stores are getting more 17

and more into the food side of the business their 18

operating conditions are not 75 degree dry temperature, 19

55 percent humidity, by far they are higher. And the 20

current standard does not address that and consequently 21

has a major impact on the performance of the commercial 22

refrigerators and consequently the applicability of 23

these cases indoor conditions and something needs to be 24

done about it. Otherwise, come January 1 st , 2012, 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 37

those cases could not be sold to convenience stores and 1

restaurants. 2

MR. BROOKMAN: Thank you. Other comments in 3

this stream before we move on? 4

(No response.) 5

MR. BROOKMAN: Okay. We're going to keep 6

going then. 7

MR. WINIARSKI: Okay. And in addition to 8

establishing -- or in addition to what we think of as 9

more typical systems in supermarket type applications 10

where a refrigerant is circulated from a remote 11

condensing application out to display cases and 12

commercial refrigeration equipment out in the sales 13

area, there is a second method of essentially providing 14

cooling to those display cases which we refer to here 15

as secondary coolant systems. 16

A secondary coolant system essentially 17

instead of distributing a liquid refrigerant out to 18

those display cases precools a secondary fluid, 19

typically a brine solution or I think in some cases CO2 20

solution out through the cases and back. In the 2009 21

final rule DOE determined that the language that was 22

called out in EPCA essentially precluded DOE covering 23

those secondary coolant systems in the scope of that 24

rulemaking. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 38

There were some back and forth stakeholder 1

comments on it. I believe that those systems 2

currently, or at the time, represented something like 5 3

percent or 10 percent of the market. DOE also noted at 4

the time that the standard that had been adopted as a 5

test procedure, AHRI 1200-2006 also specifically 6

excluded secondary coolant systems in the coverage of 7

that test procedure. 8

So what I wanted to do here is just 9

reemphasize that that is in fact DOE's understanding of 10

the current legislation. And they have no plans at 11

this point to cover those secondary coolant systems in 12

the course of this rulemaking. But we certainly 13

welcome comments on how the very presence of secondary 14

coolant systems could be considered in the course of 15

the rulemaking, because obviously we are looking at 16

regulating one type of a product and not another type 17

of product that may serve essentially the same general 18

use. 19

MR. BROOKMAN: So, comments? You see the 20

issue box regarding the relevance of secondary coolant 21

applications to this rulemaking. Yes, please. If you 22

would say your name. 23

MR. HON: Charlie Hon. There are several 24

issues here that I think are misleading on that slide. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 39

Number one is that AHRI standard 1200 also excludes 1

several other things that are covered in the rulemaking 2

quite clearly. If you read over all the exclusions in 3

1200 there are several of the presently regulated 4

products which are covered. 5

MR. WINIARSKI: That is true. 6

MR. HON: So I think it's rather erroneous 7

that we have some that basically tell you these are 8

excluded and now we are taking part of the exclusion 9

and part of it not. 10

The second issue is that there are secondary 11

coolant loops, there's a difficult factor which we are 12

addressing right now. Secondary coolant loops can be, 13

in some cases, tested under ASHRAE 72 which is the test 14

method under 1200 only if there's a complete -- if 15

there's no changes to a condition or there's complete 16

changes to a condition. If it starts out as a liquid 17

and stays a liquid, it can be tested under the test 18

method. If it starts out as a liquid and turns 19

completely to a gas, it can be tested under the test 20

method. With CO2 secondary loops and transcritical 21

conditions they start out as a slurry and maintain a 22

slurry, but change ratio of gas and liquid in the 23

slurry. And as such, at this time there's no 24

finalization of a test method which would allow that to 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 40

be rated. And we are looking at it right now under 1

this test standard. But at this moment it does not 2

exist. 3

MR. BROOKMAN: John McHugh. 4

MR. McHUGH: John McHugh. Related to the 5

issue of secondary coolant applications, the California 6

Air Resources Board is working on standards to address 7

leakage of refrigerant from supermarket refrigeration. 8

And this is a huge issue in that the global warming 9

potential of the modern refrigerants are about 2,000 10

times that of CO2. And current research indicates that 11

typical leakage rates in supermarkets are on the order 12

of 18 percent of the full refrigerant charge. And so 13

the greenhouse gas or global warming impact of 14

refrigerant leakage in supermarkets is fairly 15

significant. And I have a question for DOE about 16

whether or not mitigating greenhouse gas emissions 17

through refrigerant leakage is within the scope of this 18

proceeding and potentially issues around testing 19

equipment for leakage and that sort of thing? 20

MR. BROOKMAN: Betsy Kohl. 21

MS. KOHL: Betsy Kohl, DOE GC. The standards 22

are for energy efficiency. I mean, it could 23

potentially, maybe in the seven factor test, be 24

something that we consider. But the standards, you 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 41

know, the legal benchmark is this maximum improvement 1

that's technology feasible and economically justified. 2

MR. McHUGH: John McHugh, a follow up 3

question. Is it your understanding that federal 4

preemption would prohibit states from having additional 5

requirements for commercial refrigeration -- additional 6

requirements specifically around leakage or 7

specifically requiring secondary refrigerants or 8

regulations requiring distributed refrigerant systems 9

to minimize leakage? Is there anything in the 10

standards that would prohibit the states exercising 11

their rights to eliminate greenhouse gas from 12

supermarkets? 13

MR. BROOKMAN: Betsy Kohl. 14

MS. KOHL: Thank you. That's something that 15

we would have to think about. I'm not sure about that 16

right now. I mean, if it impacts the efficiency you 17

may run into problems, but that's something we would 18

have to think about. 19

MR. McHUGH: Thanks. 20

MR. LLENZA: This is Charles Llenza, 21

Department of Energy. Under current statute the thing 22

that we strive towards is the energy efficiency of the 23

equipment. Now, in tightening the efficiency standards 24

for this equipment that may impact the coolant in terms 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 42

of if there's leakage, that the equipment can't meet 1

the standards and you can't meet the efficiency levels. 2

But my understanding is that we don't cover the remote 3

condensing units and the actual refrigerant leakage 4

issues unless they are relevant to the standard. And I 5

don't think they are. I mean, in the case of a leakage 6

what happens is that it will end up with more service, 7

the unit gets charged up more to maintain the level of 8

performance. That doesn't help that leakage issue 9

though. 10

MR. CYMBALSKY: John Cymbalsky, Department of 11

Energy. I think this is true for any residential 12

cooling system in general. Right. Your air 13

conditioner can leak refrigerant as well. And this is 14

a general maintenance issue of the units, in my 15

opinion. 16

MR. McHUGH: John McHugh. My understanding 17

is that there is not anywhere close to the magnitude of 18

leakage for residential systems. If that was the case 19

you would be completely out of refrigerant after five 20

years, you know, at 18 percent leakage rate. So this 21

is fairly significant. The California Air Resources 22

Board has identified this as a significant source of 23

greenhouse gas emissions. And, you know, potentially 24

there's something that's inherently different about 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 43

commercial refrigeration equipment that has resulted in 1

these high leakage rates. 2

MR. BROOKMAN: So, John, in your written 3

comments, if you would address this. 4

MR. McHUGH: Yes. 5

MR. BROOKMAN: Harvey Sachs. 6

MR. SACHS: John, be careful what you -- this 7

is Harvey Sachs. Be careful what you wish for. 8

I do have a slightly different question. If 9

I move from a self-contained air-cooled system to a 10

self-contained water-cooled system with a remote tower 11

for cooling, is this within the scope of the regulation 12

or are these separate classes? Are we eliminating 13

these? Where do they stand? 14

(Simultaneous conversation.) 15

MR. BROOKMAN: Dave Winiarski. 16

MR. WINIARSKI: Dave Winiarski, I have not 17

thought about that issue. I don't believe, and Betsy 18

could maybe correct me here, but I don't believe that 19

the language that was put into EPACT 2005 specifically 20

addresses an issue of a self-contained piece of 21

equipment with a water-cooled condenser. And that 22

would have to be something we would look into. 23

MR. SACHS: Harvey Sachs again. We certainly 24

see such equipment in icemakers, and would not be 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 44

surprised to see the emergence of this kind of 1

equipment in conjunction with water-cooled heat pump 2

systems for a variety of applications, a specialized 3

case in brine perhaps. 4

MR. BROOKMAN: Charles Llenza. 5

MR. LLENZA: Charles Llenza, Department of 6

Energy. I guess this would be under the secondary 7

coolant application characterization of the equipment; 8

right? 9

MR. SACHS: I think that's a good idea, but, 10

again the difference between a conventional secondary 11

coolant system and what I'm describing is that the 12

compressor is at the -- at the end unit, the commercial 13

refrigeration device whereas with a typical secondary 14

coolant system the compressor has a rack outside. 15

MR. LLENZA: Okay. 16

MR. SACHS: So it's much more analogous to 17

self -- it is a self-contained system except for 18

ejecting to a water loop instead of the ambient air in 19

the store. 20

MR. WINIARSKI: David Winiarski real quick. 21

I believe one of the things to look at would be the 22

actual text of the legislation to see whether in the 23

definition of self-contained equipment the condenser is 24

assumed to be directly connected to the compressor unit 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 45

as a single entity. 1

MR. BROOKMAN: Tim Ballo. 2

MR. BALLO: Tim Ballo, Earthjustice. Just 3

wanted to encourage the Department to revisit its legal 4

conclusion from the earlier rulemaking about secondary 5

coolant equipment. And if there are test procedure 6

issues, this final rule is not due until 2013, so maybe 7

those could be worked out in time for the Department to 8

issue a standard for that equipment. 9

MR. BROOKMAN: And would you be more 10

specific? What would you encourage them to reconsider? 11

MR. BALLO: I haven't looked closely at the 12

Department's legal conclusion from the 2009 rulemaking, 13

but I'll be looking at that to see if there's anything 14

that we can do about getting the Department to revisit 15

that. 16

MR. BROOKMAN: Thank you. This gentleman 17

here. Did you have a comment, sir? Yes, you. Your 18

name again, please? 19

MR. NESHAN: Massoud Neshan. I want to ask 20

you a question. This 18 percent leak that is being 21

stated, is it average 18 percent for the state of 22

California? 23

MR. MCHUGH: Yes, I believe that's the case. 24

These are a couple of studies, I don't know if they 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 46

were across the state or is that a national? Eighteen 1

in the state of California. 2

MR. BROOKMAN: Thank you. You can keep 3

going. 4

MR. NESHAN: Thank you for that information. 5

But 18 percent, that also includes a lot of old 6

condensing units, a lot of older stores. The new -- 7

the way the systems are designed by far, have less leak 8

rate than the 18 percent that was stated. There's a 9

lot of work being done to make sure that they're 10

leaking less refrigerant than the 18 percent, that's 11

for the record. 12

Number two, I want to ask a question. It was 13

stated -- actually it was stated that this open low 14

temperature case have less efficiency why don't we get 15

rid of them basically. A question I would like to pose 16

here is that, you know that the medium temperature 17

secondary cooling system where you use glycol, they are 18

less efficient than the DXes. Then why aren't we 19

talking about eliminating that? It is known that it 20

uses more energy period. So why are we promoting it? 21

If the DOE's responsibility is to only look at the 22

energy efficiency side of the system, then why are we 23

talking about having a standard even for secondary? 24

Why not eliminate it altogether? Because you know it 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 47

is less efficient. 1

MR. BROOKMAN: Thank you. Yes, sir, please 2

say your name for the record. 3

MR. ALI: Sure. Masood Ali. Just to 4

Massoud's question on that, are a concern about 5

eliminating this. We are a manufacturer of 6

refrigeration systems and display cases. We are driven 7

by the needs of the customer to deliver the equipment 8

they need. We are not going to say that this is less 9

efficient, you cannot use it. It is dictated by their 10

demands. There is no doubt -- there is no doubt that 11

secondary systems that are open, freezer cases that are 12

open, display cases consume more energy. But it is the 13

merchandising needs that is needed to do it. So I 14

don't think we should be contemplating to eliminate 15

those things. 16

MR. BROOKMAN: Okay. Thank you. Yes, John 17

McHugh. 18

MR. McHUGH: John McHugh. It's true that the 19

brine systems are less efficient, but the CO2 systems 20

are more efficient. And there's a number of studies 21

about that. 22

MR. BROOKMAN: Go ahead, follow on. Your 23

name again. 24

MR. ALI: John, this is Masood. With the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 48

experience we have with the CO2 systems I don't think 1

it is energy efficient with the recent experience. 2

MR. BROOKMAN: Okay. Yes. 3

MR. CARL ROBERTS: Carl Roberts. It's also a 4

matter of degree. The differences with a secondary 5

system are on the order of, you know, a few percent 6

efficiency. The difference with open versus door is 7

huge. It's been estimated that if most of the 8

supermarkets nationwide used doors instead of open 9

cases it would eliminate the need for several coal10

fired power plants, which I think you have to consider 11

the degree. 12

MR. BROOKMAN: Okay. Okay. I think we are 13

ready to move on then. 14

MR. WINIARSKI: We titled this slide 15

"Stakeholder Equipment Issues." Primarily these are 16

issues that have come up since or right around January 17

1 st , 2010 regarding compliance with those standards 18

that were put in place in EPACT 2005. DOE has received 19

a number of letters from manufacturers of what we call 20

self-contained equipment, with a service-over-counter 21

type application where you've got someone behind the 22

counter, they're selling a product to someone in the 23

sales area and both sides typically want to look at 24

what's inside the case, so these have lots of glass. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 49

It's not clear how -- that these are the issues in 1

terms of the amount of energy lost through that glazed 2

area was considered in the EPACT 2005 requirements. 3

That's been a contention of manufacturers and they've 4

also contended at different points that maybe these 5

were never meant to be covered. 6

In addition there's a self-contained under7

counter refrigeration unit. These typically have solid 8

doors but are small products. So there's a large 9

surface area for the amount of volume that's 10

refrigerated. And there have been some concerns from 11

manufacturers that they cannot meet the EPACT 2005 12

standards for these products. 13

Several manufacturers, I guess, went to OHA 14

and OHA basically reviews requests for exemption and 15

OHA said that we cannot grant a request for exemption 16

or exception for these products the standards were set 17

in the EPACT 2005 and not directly by DOE. 18

I'm not going to talk a lot about that, 19

that's a legal issue that has to be taken into account 20

between DOE and the manufacturers. However, one of the 21

important things for this upcoming rulemaking is how 22

should we consider that type of equipment design? Does 23

that require separate classifications in order to look 24

at it for other standards, future standards. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 50

In addition, another issue that has come up 1

very recently is EPACT set requirements for equipment 2

with solid doors and equipment with transparent doors. 3

It was not very explicit on what requirements apply to 4

a solid door with a window cut into it. And so the 5

Department -- what I call a "hybrid door" -- so this is 6

another sort of classification issue that the 7

Department is struggling with and we certainly welcome 8

stakeholder comments on how we should treat both the 9

issue about the solid and transparent doors and those 10

particular classes of equipment that need special 11

consideration for this rulemaking. 12

MR. BROOKMAN: Yes, please. 13

MR. HON: Charlie Hon. The ASHRAE Committee, 14

test standard committee is looking at the mixed door 15

situation. This is tentative, but tentatively our 16

proposal will be coming out that any time you have more 17

than 50 percent of the door area as glass it would be 18

considered as transparent doors throughout the entire 19

system. Anything less than that would be considered 20

solid doors because we didn't want people taking the 21

full glass door and putting a little peephole window 22

and classifying it as a glass door; because that's not 23

inherently what we consider a reasonable test. 24

So the test standard probably will be 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 51

modified to take care of that last bullet point. 1

MR. BROOKMAN: Charlie, what is your 2

timetable for ASHRAE? 3

MR. HON: Our tentative target of conclusion 4

of discussions is January of next year. That is our 5

timeline for submittal to ANSI. 6

MR. BROOKMAN: January of 2011? 7

MR. HON: Yes. 8

MR. BROOKMAN: Okay. 9

MR. LLENZA: Charles Llenza, Department of 10

Energy. As part of the process that we are going 11

through, we will be looking at updating the test 12

procedure and these are some of the issues that, you 13

know, that we have with our rulemaking now. I 14

understand, that we are already been set for the 2012 15

standards when they become effective. But this 16

rulemaking also gives us an opportunity to revise the 17

test procedure to get some of the intricacies that we 18

are finding that we are not exactly covered by the 19

current test procedure. 20

MR. HON: Charlie Hon again. The rulemaking 21

is open meetings and they are ASHRAE meetings. The 22

next one will be the last Sunday of June in 23

Albuquerque, New Mexico. It is an open meeting. So 24

anyone who wishes to come may. And then the last -- I 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 52

think it's the last Sunday of January that will be the 1

final meeting. But I have to look at that schedule. 2

One other comment there, extremely small, 3

under counter or self-contained units, those were 4

considered originally in California's negotiations 5

because that's how the initial lines and structures 6

were established and that's where those correction 7

factors of two or three kilowatts were allowed is to 8

allow for the loss of efficiency due to change of 9

external surface area. So I don't know that that is 10

that big an issue other than a few manufacturers 11

claiming that it is. 12

Service-over-counter is a very touchy subject 13

as well because there are multiple different designs 14

that fall under that category. I know that the ones 15

that are presently under review are what are considered 16

curved front for delis. That is because there is a 17

cleaning mechanism set into those products where the 18

glass itself opens up and makes it very easy to clean 19

the product which makes it very conducive to NSF design 20

but leaves huge amounts of air gaps. And that's the 21

problem with it. 22

There are old style frame structured designs 23

with flat panels in them that can meet the standard but 24

just barely and only certain sizes of those. If you 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 53

get very big it doesn't work. So, that's a touchy 1

subject, but that's a legal issue there. But I do not 2

understand the comment about the small, self-contained. 3

Because if you look at the standard, it allows 4

substantial energy -- a glass-front unit could be using 5

3.34 kilowatts of power with no internal volume 6

whatsoever. Just by the correction factors that were 7

built into the lines. 8

MR. BROOKMAN: Harvey Sachs. 9

MR. SACHS: Harvey Sachs. Just to suggest 10

and request for the ASHRAE Committee on the hybrid 11

doors it would seem to be the one rational approach to 12

consider would be the area weighted minimum compliant 13

thermal conductivity for the transparent and solid 14

portions of the door. That would seem to give an 15

approach which maximizes flexibility for design 16

options. 17

MR. BROOKMAN: Charlie. 18

MR. HON: Charlie Hon. We've looked at it 19

extensively and thermal efficiencies are a set of tasks 20

which may or may not be relevant because the standard 21

is written to check the entire energy consumption of 22

the entire product. And we do not, at this time make 23

any special recognition of any component or special 24

method of componentry because the standard does allow 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 54

for water-cooled condensing. It allows for air-cooled 1

condensing. We do not wish to specify individual 2

components. 3

MR. BROOKMAN: Yes, Karim. 4

MR. AMRANE: Karim Amrane, AHRI. Regarding 5

the service-over-the-counter issue, there is a 6

legislative fix. We have some language that we 7

negotiated with -- and others and this is an amendment 8

to the Energy Bill and hopefully that language will 9

establish a product class for service-over-the-counter 10

with an efficiency standard. So we will be 11

recommending that there be a separate product class for 12

service-over-the-counter moving forward. Thanks. 13

MR. BROOKMAN: In the preceding discussion 14

we've talked a lot about the scope of rulemaking and 15

now specifically regarding classification issues, are 16

there final comments on classification issues? Since 17

we are about to move on towards test procedures. Yes, 18

please. 19

MR. DAVIS: Yes, John Davis with Traulsen. I 20

think Charlie and I probably disagree on one of the 21

categories and that's the small under counter unit. 22

And I just would recommend that as we go forward with 23

this we give that close scrutiny. I think when the 24

initial standards were adopted there were probably some 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 55

assumptions back in 2005. So, just as we go forward, I 1

just want to make sure you know that there's a balance 2

to that argument, I guess. 3

MR. BROOKMAN: Is there another place to take 4

that up, or should we describe that now? 5

MR. LLENZA: Describe it now. 6

MR. BROOKMAN: This is the place. Do you 7

want to say more about it now? 8

MR. DAVIS: No, I don't have all the 9

technical details. I mean, clearly Charlie talks about 10

there is an offset. I think it's 2.02 or something of 11

that. I don't have all the technical details, I'm just 12

saying that our information is telling us -- and 13

specifically, when they say refrigerators they mean 14

freezers. 15

MR. BROOKMAN: Yes. 16

MR. DAVIS: That's where the issue was. And 17

we would say that small under counter freezers in the 18

current standard for the DOE is a technical challenge 19

when you take in all the factors and the set 20

requirements, et cetera. So, as we -- if this is the 21

chance for us to consider that, I'm just saying, we 22

need to look into different sizes of units and 23

different standards. 24

MR. BROOKMAN: I see. And, of course, your 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 56

detailed written comments would be much appreciated by 1

the Department. Charlie, do you want to add in here. 2

MR. HON: Just a history. This was -- these 3

lines were not actually developed by the Department of 4

Energy. These were developed by the California Energy 5

Commission and then it was part of the negotiations and 6

they were accepted as national standards rather than 7

just be California standards. 8

The history of it goes back far enough that 9

California did not have a very good database with very 10

small sized units which may be part of the problem we 11

faced. But they did have some database when they 12

established the line. 13

MR. LLENZA: This is Charles Llenza, 14

Department of Energy. My understanding is also that in 15

the California regulations they had some exceptions 16

which they did not carry forth in the language in 17

EPACT. And that's the current technical fix that we 18

were hoping the Hill was working on. 19

MR. BROOKMAN: Final comments on these 20

classification issues? Yes, please. Your name for the 21

record. 22

MR. ANDERSON: Viktor Anderson, Structural 23

Concepts. We have one issue with application 24

temperatures not regarding any of this. Candy cases 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 57

and wine cases run 60 degrees, 55 degrees. To meet the 1

standard we would have to design that to run at the 38 2

degree in the average and when doing that they will not 3

pass the energy for that. It kind of goes hand in hand 4

with the door, no door type situation. 5

MR. BROOKMAN: Is that mostly a no-door 6

application? 7

MR. ANDERSON: It's in a doored 8

configuration. So that this standard for 2012 will 9

totally eliminate that class. Actually the 2010 10

standard eliminates that class. 11

MR. BROOKMAN: Okay. Thank you. 12

Final comments on these classification 13

issues? 14

(No response.) 15

MR. BROOKMAN: I want to encourage you, John, 16

we are about to take a break. And to keep the record 17

as complete and continuous as possible, when we return 18

from the break if you want to add some additional 19

thoughts we'll give you an opportunity to do that. 20

MR. DAVIS: Fine, we'll put it in writing. 21

MR. BROOKMAN: Okay. Great. Let's do that 22

then. 23

So it's now 10:25. By our schedule we were 24

scheduled to take a break, let's do that. It takes 15 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 58

minutes typically on a good day to get back here from a 1

break. So we will resume at 10:40. 2

(Brief recess taken at 10:25 a.m.) 3

MR. BROOKMAN: Please take your seats. 4

We are going to take up test procedure 5

background and potential changes. Sarah Widder. 6

TEST PROCEDURE BACKGROUND AND POTENTIAL CHANGES 7

MS. WIDDER: Okay. Welcome back everyone. 8

Thank you. Again, as Doug said, I'm Sarah Widder. I'm 9

from Pacific Northwest National Laboratory and I'm 10

going to talk a little bit about a separate, but 11

related rulemaking that has already come up today which 12

is the test procedure. And it's designed to occur 13

concurrent with the energy conservation standard. 14

Right here is the schedule. You can see we are in the 15

framework document stage right now and so we are just 16

beginning the test procedure analysis. We plan on 17

publishing the test procedure NOPR concurrent with the 18

energy conservation standard preliminary analysis. And 19

those meetings, those public meetings, will occur, 20

hopefully, at a convenient similar time, either back to 21

back on the same day or possibly on two separate days. 22

But just for everyone's convenience since they are so 23

related. That will be in the spring of 2011; hopefully. 24

And then the test procedure final rule will 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 59

be published prior to the publication of the energy 1

conservation standard NOPR. 2

So just what DOE is thinking about doing with 3

their test procedure, this is a little history. The 4

previous or current DOE test procedure published in 5

2006 in a large publication of many test procedures 6

adapted to ANSI/ARI Standard 1200 2006 as the DOE test 7

procedure. And that standard, as many of you know, 8

references ASHRE 72 2005 version as the method of test 9

in AHAM Standard HRF1 2004 for measuring the 10

refrigerated compartment volume. 11

And since then ARI has become AHRI and has 12

published a new, revised test procedure in 2008. And 13

after reviewing that standard, there are a few changes 14

that have basically brought the test procedure in line 15

with the changes that DOE initially incorporated which 16

are relatively minor but now the two test procedures 17

agree fairly well. And it also references the updated 18

AHAM standard 2008. 19

DOE, because they are so similar now, is 20

considering adapting the revised AHRI version. 21

We are also considering a few other changes 22

to the test procedure that you've already heard 23

mentioned, accommodating some specific energy 24

conservation technologies that previously were not 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 60

covered in any existing test procedure. These would be 1

lighting sensors and controls, infiltration reduction 2

devices like night curtains, as you can see here, or 3

any other method that might try and keep the cool air 4

in the compartment. And then other energy management 5

controls or part-load testing as John McHugh mentioned. 6

As we said, the current DOE test procedures 7

don't quantify these energy conservation features. 8

They don't treat them at all. And so we are 9

considering amending the test procedure to accommodate 10

these technologies. And to address that we are 11

considering three potential methods. And these 12

potential methods, I'm going to go through them each a 13

little bit more in depth in the next few slides. But 14

just to mention now, these three methods, it could be 15

that an energy technology device will be treated by 16

specific method and another energy technology device 17

would be treated by a different method. And so we 18

could use all three of these or only one or some of 19

both. And just think about that, they're not mutually 20

exclusive at all. 21

So the first one I'm going to talk about is 22

analytical methods. This would be similar to the AHRI 23

test procedure. It would specify a percent time off or 24

some sort of scaling factor based on industry data by 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 61

which a manufacturer would use to calculate the daily 1

energy consumption. 2

And this is similar to AHRI ’s alternate 3

component indirect effects. The advantage of this is 4

it's consistent across all manufacturers and across all 5

technologies and that it's simple to calculate. So 6

there's not a large increase in burden. The limitation 7

is that it's dependent on data which may or may not be 8

readily available and also does not capture differences 9

in energy technologies for a similar use. So different 10

types of lighting sensor that may use different amounts 11

of energy would receive the same scaling factor. 12

Another method would be physical testing. 13

This would be to specify a triggering schedule or some 14

sort of alternate test conditions. And you've heard 15

that mentioned. This would be similar to a triggering 16

schedule, similar to the doors in ASHRE 72. You could 17

do that for night curtains, for example, specify a 18

certain number of hours you would pull a night curtain 19

on a unit down for. Or different test conditions for 20

wine coolers, for example, or different loading of the 21

case. 22

This would potentially require a different 23

24-hour test. So then the limitation there would be it 24

would be an increased burden, it may be impractical and 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 62

would be expensive. However, it would have the 1

advantages of being very accurate and very accurately 2

characterize energy use associated with the device or 3

the energy conservation, and would represent the 4

difference in energy technologies. 5

And then the third would be a combination of 6

these methods. And so it would have limited additional 7

testing and then use that data with some sort of 8

calculation method to result in a daily energy 9

consumption. And so that would decrease the burden of 10

testing, but it would still have some limitations in 11

how you calculate it. It may not treat different 12

technologies. It may treat them similarly and not 13

recognize those energy conservation differences and 14

would also have some additional testing and so there 15

would be some additional burden there. 16

Then the last advantage is unlike the 17

complete physical testing method, it wouldn't introduce 18

additional complexities to the current tests, so we 19

already have to open doors, now how do we open doors 20

and pull down night curtains and trigger lighting and 21

everything. So with that, that's just a brief overview 22

of what we've been thinking and we would like to 23

welcome comments regarding the development of test 24

procedures for this equipment covered in this 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 63

rulemaking. And we are also especially interested in 1

specific ways we might test these equipment if we 2

should test any of these equipment. If there's 3

addition equipment that we are not mentioning here that 4

may be an issue and also other test procedures that are 5

currently in industry that might treat these or data 6

that would help us in the development of test 7

procedures. 8

MR. BROOKMAN: Charlie? 9

MR. HON: Charlie Hon. We have -- I have one 10

comment here that's very important. Number one is that 11

we need to have a baseline number because we have a 12

minimum energy efficiency standard and some of these 13

energy efficiency devices may or may not be functional 14

depending on activities near them. So I think no 15

matter how you test these, units, you have to test them 16

with all functions on for the full 24-hour test to 17

verify that that unit is still capable of competing in 18

the market itself rather than having some other 19

doctrine to remember to change the number. So we have 20

to have a baseline that says it is legally meeting that 21

standard in the worst case scenario under these 22

temperature conditions. Then we may be able to apply 23

some other standard adjustments to them, but 24

unfortunately with some of the previous DOE history in 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 64

the home refrigerator market we know that things change 1

sometimes with specialty devices, unfortunately, not 2

always to the positive. 3

MR. LLENZA: This is Charles Llenza, 4

Department of Energy. What you are saying is that you 5

are talking about a 24/7 standard, basically, some 6

baseline that if the unit is operating 24 hours? 7

MR. HON: Yeah, basically after a 72-type 8

test with all functions on for the full 24 hours under 9

normal condition not allowing for it to shut lights 10

off, not allowing for it to shut the compressor down 11

for extended periods of time, so that it meets the 12

standard test criteria for the base 24 hours so that 13

there is some benchmark parallel test to verify that 14

that unit is always capable of meeting the energy 15

requirements of the code. 16

MR. BROOKMAN: Charlie, I don't want to put 17

you on the spot, but Sarah laid out three approaches to 18

this test procedure. Would you make a comment on that? 19

MR. HON: Charlie Hon again. There are -- 20

those are open discussions, every one of those because 21

we have never found a perfect answer for those. We've 22

run tests in our company on different energy management 23

devices because we technically do not make our own 24

controllers. We buy them outside and a lot of our 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 65

customers buy special controllers of different natures, 1

some of which are much more efficient than others. 2

Some of which have many different features than others 3

depending on the product nature. The most simple unit 4

is a motion sensor which turns off external marketing 5

lighting if no customer is near the unit over a period 6

of time. The only thing it turns off is the lighting. 7

Then you go to the other extreme which turns 8

the compressors off for extended periods of time and 9

you run a risk of crossing food zone safety issues, 10

those are only being applied, at this moment, on our 11

units for non-food zone type products. There are 12

products which we market for non-critical, non13

contamination type products and we can use those at 14

that level. But we don't choose to ever use them on 15

anything that would have food zone temperature losses. 16

There's major safety issues. 17

MR. BROOKMAN: Thank you. Yes, Tim Ballo. 18

MR. BALLO: Tim Ballo, Earthjustice. There's 19

always problems with trying to in a test procedure 20

account for things that are dependent on the end user 21

of the product actually employing a particular 22

technology in the field. And so if the Department 23

finds that this is a non-workable situation where you 24

are not able to accurately depict the energy use in the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 66

field in the test procedure, the Department could use a 1

design requirement in the standards to require night 2

curtains or require lighting sensors and controls for 3

this equipment. 4

MR. BROOKMAN: Thank you. Yes, please. 5

MR. NESHAN: Massoud Neshan again. One 6

caution I have, the intent for this what you are 7

proposing is night -- for example, night curtain, is it 8

to incorporate that into the standard as an energy9

saving device? 10

MS. WIDDER: Yes. The goal would be to be 11

able to treat those technologies as design features in 12

the conservation standard. 13

MR. NESHAN: Okay. The caution is then how 14

do you address the stores that are open 24 hours a day? 15

I mean, because you cannot enforce this. If the store 16

is going to be open, if this device or this energy 17

saving device absolutely would have no meaning. And 18

you see that not only in supermarkets, but also in 19

convenience stores that are open around the clock. 20

MS. WIDDER: We appreciate that comment. DOE 21

is considering that and is talking to some of the night 22

curtain manufacturers who have some sales in 24-hour 23

stores and it could possibly be an optional test. But 24

we are still considering that. And I can't give a more 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 67

definitive answer. 1

MR. NESHAN: If I may make one comment, the 2

question is, why are you talking to night curtain 3

manufacturers? Obviously they have a lot of interest 4

in making sure that that comes into your standard. You 5

should be talking to the end users who really would be 6

impacted by the standard. 7

MR. BROOKMAN: Thank you for that. 8

MS. WIDDER: Thank you. 9

MR. BROOKMAN: Please make detailed comments 10

in your written remarks, okay? 11

MR. NESHAN: Yes. 12

MR. BROOKMAN: Harvey Sachs. 13

MR. SACHS: Harvey Sachs. And I guess it's 14

pretty low threshold, but you have succeeded in 15

confusing me. 16

(Laughter.) 17

MR. SACHS: And the first question is whether 18

we're talking just about the test method, in which case 19

it might be that some of these features like lighting 20

sensors become part of the technologies that are 21

assumed in doing the rating for the equipment. On the 22

other hand it could be that you are talking about 23

having these as prescriptive measures such as the 24

prescriptive requirements within the scope of the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 68

energy standard. 1

MS. WIDDER: We are not anticipating having 2

prescriptive requirements of any kind. 3

MR. SACHS: Okay. Thank you. 4

MR. BROOKMAN: Charles Llenza. 5

MR. LLENZA: This is Charles Llenza. I think 6

that what we are trying to do in the test procedure is 7

to provide the means of getting -- of testing these 8

particular add-ons which in the past we don't have a 9

means to and to provide credit on the equipment based 10

on use. 11

For example, if the lights go off and on with 12

a control, right now there is nothing in the test 13

procedure that would allow us to take credit for that 14

particular application. So part of what we are trying 15

to do is upgrade the test procedures so that you would 16

have different options in the test procedures for 17

testing these kinds of devices. 18

MR. SACHS: Thank you. This s Harvey Sachs 19

again. Thank you, Charles and I do owe a debt now to 20

both Charleses in the room or two of them and I think 21

you all have made the case very strongly that a single 22

metric is not adequate to describe this equipment that 23

at a minimum, and I appreciate seeing Charlie Hon's 24

head nod, at minimum things that look like part load 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 69

and full load are absolutely required. So Charles 1

Llenza, the charge to you is to try to help our 2

colleague to my left, Ms. Kohl, understand that we 3

can't regulate if she insists that we cannot do 4

multiple metrics. Thank you. 5

MR. BROOKMAN: Thank you. Karim. 6

MR. AMRANE: Let her respond. 7

(Laughter.) 8

MS. KOHL: Did I hear a question there? 9

(Laughter.) 10

MS. KOHL: I didn't hear the question. 11

MR. SACHS: The question is -- this is Harvey 12

Sachs again. The question is, how DOE proposes to 13

handle the necessity for at least two metrics to 14

describe the performance of this equipment with its 15

stance in some regulatory proceedings but not by any 16

means all. The Department cannot require multiple 17

metrics, nor can it require both a prescriptive and a 18

performance metric. And this is an ongoing issue for 19

which Mr. Ballo is far more well versed than I, but we 20

need to make the point that you can't do intelligent 21

regulation with a pinched interpretation of the 22

regulation. 23

MR. BROOKMAN: I think you've now made the 24

point. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 70

MR. SACHS: Thank you. 1

(Laughter.) 2

MR. BROOKMAN: Karim. 3

MR. AMRANE: Karim Amrane, AHRI. I guess I 4

have a question about the mechanics here. So DOE is 5

thinking of adopting AHRI 1200, but in addition to that 6

have additional test procedures requirements? 7

MS. WIDDER: Yes, the ideal would be we would 8

adapt AHRI 1200 2008 version and then have these 9

potentially additional tests that may or may not be 10

optional whether the equipment has that feature or not. 11

It's something we're still exploring. Clearly we are 12

in the beginning of understanding how this test 13

procedure would work, but I think that's the current 14

thinking is that we would adopt the AHRI version and 15

similar reference to ASHRAE and AHAM standards and then 16

have additional potentially optional tests on top of 17

that. 18

MR. AMRANE: Of course, I mean, AHRI 1200 is 19

revised continuously and we will be opening up a 20

standard for major revisions and that might be the time 21

to talk about those issues. And as we did it before, 22

we will -- all of you in this room are invited to 23

participate in the process. And we will make sure that 24

all of you know about it. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 71

MS. WIDDER: Thank you. 1

(Laughter.) 2

MR. BROOKMAN: Dave Winiarski. 3

MR. WINIARSKI: Dave Winiarski, Pacific 4

Northwest Laboratory. You know, one of the things I 5

want to emphasize for people who are looking at 6

commenting on this is we've actually had some serious 7

thinking about this issue. One of the problems here is 8

while you would like to have a test procedure that will 9

incentivize some of these technologies, we also want to 10

make sure that we don't give credit for technologies 11

that may in fact not be used in the field at the extent 12

that we give credit for them in the test procedure. 13

And as we can get comments from stakeholders on that 14

particular issue with regard to each of these different 15

technologies that would be great. 16

MR. BROOKMAN: Thank you. Other comments on 17

this series of test procedure issues? Charlie? 18

MR. HON: If the Department of Energy wishes 19

to add certain test procedures to AHAM or AHRI 20

standards we would encourage you guys as well to submit 21

written comments-- 22

(Laughter.) 23

MR. HON: -- so that we can incorporate those 24

into the standard as well. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 72

MR. BROOKMAN: You would welcome them at your 1

meetings? 2

MR. HON: Yes. I have already extended that 3

invitation. 4

(Laughter.) 5

MR. HON: And quite often they come. But I 6

also extend the invitation to submit information which 7

may be relevant because we would very much like to have 8

that same information more standardized in our 9

standards as well so that even if you are not using it 10

for federal mandates, and you're not looking under 11

federal code, you will still see the alternate test 12

methods. 13

MR. BROOKMAN: Thank you. Appreciate that. 14

Are we finished with test procedures now? 15

We're about to move on. Good job. 16

MARKET AND TECHNOLOGY ASSESSMENT 17

MR. WEBER: Good morning. Collin Weber, 18

Navigant Consulting, and I would like to discuss some 19

of the individual analyses which DOE plans to perform 20

as part of the preliminary analysis phase of this 21

rulemaking process and also by discussing the market 22

technology assessment. 23

The purpose of the market technology 24

assessment is simply to characterize the markets of the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 73

commercial refrigeration equipment industry as a whole 1

and potential technological measures that could be 2

implemented within such equipment in order to improve 3

equipment efficiency. 4

The method that the Department plans to 5

utilize is first identify and characterize 6

manufacturers of commercial refrigeration equipment 7

comprising the entirety of the industry. That's to 8

make shipments and trends of equipment within the 9

market, to identify both regulatory and non-regulatory 10

initiatives intended to improve the efficiency of the 11

equipment that will be applicable to this rulemaking 12

and finally to identify particular specific 13

technologies that could potentially be utilized to 14

improve equipment efficiency. 15

This diagram here just shows the relation of 16

the market and technology assessment to several of the 17

other analyses and assessments performed as part of 18

this process. You can see the market and technology 19

assessment has two outputs. One of them is a set of 20

equipment classes and the other is a set of technology 21

options that could potentially be utilized to improve 22

equipment efficiency. 23

The technology options are fed through the 24

screening analysis which I will discuss momentarily. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 74

And produce a result of design options to improve 1

equipment efficiency. This coupled with the equipment 2

classes determined in the market technology assessments 3

serve as inputs into the forthcoming engineering 4

analysis. 5

At this point DOE would welcome any input or 6

data, especially, regarding estimates of market shares, 7

equipment features, and efficiency trends for the 8

commercial refrigeration equipment covered under the 9

scope of this rulemaking. DOE also seeks inputs on any 10

-- gladly seeks and welcomes -- data regarding shipment 11

estimates of commercial refrigeration equipment and DOE 12

also welcomes input regarding the manufacturers 13

comprising this industry of covered equipment as well 14

as particular distribution channels used for the sales 15

of this equipment. 16

MR. BROOKMAN: Where is Karim when we need 17

him? 18

Comments on this comment box? 19

MR. NESHAN: A comment? 20

MR. BROOKMAN: Yes, please. 21

MR. NESHAN: Massoud Neshan again. Is there 22

any plan to do engineering analysis, all the screening 23

process you go through, is there any plan to discuss 24

with end users the impact of these whatever we are 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 75

talking about on them and their operation and the costs 1

on them? 2

MR. WEBER: The Department would certainly 3

take that into consideration, the potential to do so. 4

Aris, would you like to speak to that? 5

MR. MARANTAN: Aris Marantan, Navigant 6

Consulting. I can tell you that during the last round 7

of rulemaking the Department did contact end users of 8

this equipment and we certainly plan on doing so again 9

for this round. 10

MR. BROOKMAN: Thank you, Aris. Okay. 11

MR. WEBER: Any further comments? 12

(No response.) 13

MR. WEBER: I would now like to speak to the 14

subject of equipment classes. DOE, in such rulemakings 15

as this rulemaking process, divides covered equipment 16

into specific classes based on inherent performance 17

related features that would justify different standard 18

levels between subsets of equipment. This would be, 19

for example, as discussed earlier, the features 20

affecting consumer utility. DOE will then establish 21

separate energy conservation standards for each 22

equipment class. 23

In its 2009 final rule DOE established 24

equipment classes for the equipment that was covered by 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 76

that rulemaking. And also included equipment class 1

designations and essentially nomenclature for the 2

equipment for which standards were prescribed by EPCA, 3

but for which DOE was not setting standards as part of 4

that rulemaking. 5

DOE also, I should note, could potentially 6

further subdivide existing classes that are currently 7

named -- warranted due to discovered inherent 8

difference within equipment that is currently covered 9

and subsumed within a single class. 10

At this time DOE welcomes comments on 11

equipment classes for commercial refrigeration 12

equipment as well as regarding approaches to defining 13

classes in accordance with the statutory requirements. 14

MR. BROOKMAN: Comments on DOE's approach to 15

classes? Yes, John. 16

MR. DAVIS: John Davis with Traulsen. Maybe 17

we're getting to nitpicky here, but I did notice a 18

comment on the pull-down units and their consideration 19

for solid doors. I don't know if this is the right 20

time to comment. My understanding is the way it was 21

originally written is for glass door units to pull down 22

of bottled sodas and things like that. And I just want 23

to make sure as this is written as we go forward be 24

careful because there are blast-chill products that 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 77

have solid doors which are made to pull down hot foods 1

through the danger zone. So someone might call them a 2

pull-down product and it's a totally different product. 3

So, we just want to make sure that it's not 4

inadvertently pulled into the -- 5

MR. BROOKMAN: Is there a definitional nuance 6

there that you can add? 7

MR. DAVIS: I would say, yeah, you pull hot 8

food through the danger zone from 135 and down into 40. 9

MR. BROOKMAN: Yeah, Aris? 10

I had neglected when we returned from the 11

break to invite any of you that are sitting in the back 12

to come down and join us at the table, if you wish. 13

Especially if you are going to be commenting on a 14

consistent basis. So, please do so. 15

Aris? 16

MR. MARANTAN: Yeah, Aris Marantan. I just 17

do want to point out to address your comment that pull18

down equipment is covered under this rulemaking as you 19

described. Those are the merchandiser equipment that 20

we've seen. The blaster is specifically excluded from 21

coverage. 22

MR. DAVIS: Okay. Thank you. 23

MR. BROOKMAN: Yes, please. 24

MR. ANDERSON: Viktor Anderson. This is 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 78

where my previous statement on candy cases and floral 1

cases application temperature should be inserted. 2

MR. BROOKMAN: Okay. Thanks for raising that 3

again. 4

Other comments with respect to this class? 5

This is important these class issues now. So, Harvey, 6

please. 7

MR. SACHS: Harvey Sachs. Again, I apologize 8

for my ignorance, but certainly this is an issue that 9

came up with walk-in coolers and freezers and if the 10

Department is able to establish that there are classes 11

of products that are not designed to operate at 12

temperatures we associate with refrigeration such as 13

food safety issues, we are certainly open to the idea 14

that there is a separate classification for floral and 15

candy things so they are excluded from this rulemaking 16

if that's what has to be done. It makes no sense to do 17

an inappropriate design to be able to test a 60 degree 18

unit at 35 degrees. 19

MR. BROOKMAN: Viktor, do you want to follow 20

up? Or are you okay? Are you okay? 21

Charlie? 22

MR. HON: That category also includes even a 23

much bigger one which is called wine. There's two 24

different temperatures for wine service. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 79

PARTICIPANT: One red and one white. 1

(Laughter.) 2

MR. BROOKMAN: Let's hear from David 3

Winiarski. 4

MR. WINIARSKI: David Winiarski. I wanted to 5

offer a quick suggestion that currently while EPACT 6

2005 has provided an exemption for blast chillers, 7

specifically, it did not define what that actually 8

meant. And so for the manufacturers, if you could 9

provide DOE with a potential definition, that might be 10

useful. 11

MR. BROOKMAN: Thanks, David. 12

Massoud. 13

MR. NESHAN: I would like to restate the 14

comment I made regarding class one and class two type 15

refrigerators. Those are designed to work under 75 16

degree ambient temperature and those are designed to 17

work in 80 degree room temperature, especially for 18

self-contained cases. That's critical since the 75- 19

degree room temperature cases would not operate 20

properly in an 80-degree room condition. And the 21

energy requirement for both are according to the 22

standard is the same which is not going to work. 23

MR. BROOKMAN: Okay. Thank you. 24

Yes, Viktor. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 80

MR. ANDERSON: I'd like to -- at the last FMI 1

we brought a case that had sliding doors on it that did 2

not meet any equipment class available today. It was 3

essentially doors on an open case, semi-vertical open 4

case that has minimal -- it has rear doors -- it still 5

had rear doors on the back for loading. It may or may 6

not have rear doors on the back. It is an option much 7

like a night curtain would be, but without the strict 8

formulas that would have to be met by self-contained 9

refrigerators with transparent doors. It had a sliding 10

glass mechanism for ease of accessibility by the 11

merchant or the shopper. This type of equipment I can 12

provide pictures for, but it would be an energy 13

efficient alternative to an open case if the consumer 14

so chose. 15

MR. BROOKMAN: That's a class that's not 16

captured here. 17

MR. ANDERSON: Correct. 18

MR. BROOKMAN: Okay. Thank you. 19

Yes, John. 20

MR. DAVIS: Yeah, John Davis with Traulsen. 21

To follow up to that, there's probably also a need for 22

say custom equipment, customers that come to you with a 23

specific need, very high ambient conditions, with 24

special temperatures, special design so that they can 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 81

access it and there are time where you're building a 1

unit and you might only build two ever. But you have 2

to be aware of these legal requirements. So if there's 3

any way to -- I don't know how to capture the rest of 4

the universe in this document, but if you can do that, 5

that would be -- 6

(Laughter.) 7

MR. BROOKMAN: Can you describe in your 8

written comments the other features that would make 9

them unique? 10

MR. DAVIS: Usually it has to do -- we can do 11

that, to answer your question. But usually it has to 12

do with specific holding temperatures or display 13

requirements or there's no one set of criteria. You 14

don't know what the next request is going to be. So we 15

can attempt to clarify them as examples. But to 16

capture the world of custom, or at least protect it 17

because it's going to happen, would be helpful. 18

MR. BROOKMAN: Okay. Thank you. 19

John McHugh. 20

MR. McHUGH: John McHugh. Just briefly, for 21

the manufacturers we have exemptions for blast-freezers 22

in California's Title 24 and it's based on the BTU 23

rating of the coil per square foot of space. You may 24

want to look at that per square foot or per cubic foot 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 82

of space when you provide information to DOE. 1

MR. BROOKMAN: Thank you. Harvey Sachs. 2

MR. SACHS: Harvey Sachs. A question about 3

custom units. And, again, pardon my ignorance. But is 4

this something which could be addressed through perhaps 5

even exemptions for up to X units so we are dealing 6

with truly custom units if you are making fewer than 7

five of this particular kind of thing and it really is 8

different and those terms would have to be defined that 9

it's simply exempt because you are clearly dealing with 10

a knowledgeable customer. 11

MR. BROOKMAN: John. 12

MR. DAVIS: I guess it's really up to the 13

Department of Energy where they want to set that 14

number. But you can have a specific customer who 15

requests one, but they could then find an application 16

that works and the customer has a thousand stores. So, 17

it's still custom, it's still unique, but you might not 18

-- you design it once for that application and then you 19

have a customer who wants to buy your product and now 20

you're at risk. I don't know where you draw the line. 21

MR. SACHS: Well, John, I think that's an 22

important observation. Again, trying to achieve 23

flexibility and energy efficiency with that transition 24

would it be appropriate to ask the manufacturer to 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 83

develop an engineering basis for regulating that unit, 1

but it moves into essentially a production process. 2

MR. BROOKMAN: Charles Llenza. 3

MR. LLENZA: The Department will take that 4

into consideration. I think the other issue is, if 5

we're looking at custom units, potentially the 6

Department could regulate components of those units, 7

for example that you have triple-pane glass, you may 8

have certain compressors, a certain condenser unit 9

type, refrigeration system that meet certain efficiency 10

levels, etc. So that if you are putting together these 11

custom units that do not fall within any of the other 12

classes, that we are defining in our regulation at 13

least at the component level they have to meet certain 14

minimum requirements. 15

MR. BROOKMAN: Michael McCabe. 16

MR. McCABE: Michael McCabe, DOE. I want to 17

follow up on Mr. Sach's proposal with regard to custom 18

units and exempting them. The legislation deals with a 19

variety of commercial and residential products. The 20

history of the program dealt with high-volume 21

residential products, high-volume product residential 22

products initially, but in the commercial sector a lot 23

of products have been added that are in many cases one 24

of a kind because, an example, large electric utility 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 84

distribution transformers, large electric motors, some 1

of the heating and air conditioning products. In light 2

of the legislation and all that it applies to, is there 3

any way that within the legislative confines that any 4

custom unit or one-of-a-kind unit could be exempted 5

from the standard? 6

MR. SACHS: Harvey Sachs, sir, that's the 7

question I was asking you. 8

(Laughter.) 9

MR. McCABE: Today we haven't -- the 10

legislation talks about the energy conservation 11

standards apply to the manufacturer of covered products 12

in the case of the residential products and commercial 13

and industrial equipment in the case of the products 14

for which this is -- and it does not provide, as far as 15

we can tell, any exemption. And if you have some 16

thoughts as to how it could, under the existing 17

legislative authority, we appreciate your input. 18

MR. BROOKMAN: Massoud? 19

MR. NESHAN: Well, how could you know exempt 20

if it is not covered under the standard? If the 21

standard doesn’t have enough category to cover a piece 22

of equipment, then what do you do with it? The 23

question is, do you exempt it or do you create a new 24

category? And how long it takes to create a new 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 85

category? In the meantime those who manufacture it 1

have to stand by for three or four years until the 2

standard is developed. 3

MR. BROOKMAN: Charles Llenza. 4

MR. LLENZA: No. I think part of the 5

experience here was in developing the categories for 6

the first standard that we issued January 2009. And 7

what we found is that there are a couple of cases that 8

are not completely covered. So, now we are regulating 9

this equipment again with another standard and part of 10

the task now is to pick up on some of those issues that 11

we didn't think about. Basically, you know, the 12

Department tries to anticipate all the different 13

combinations. What you find out is that you cannot 14

cover everything. 15

Therefore, for equipment that does not meet 16

one of the developed categories, the Department does 17

not have any authority to regulate that equipment. 18

But, that's why we redo the rules. We go back and look 19

and determine if the equipment merits further 20

regulation and analysis. And in this case what we are 21

hoping to do is to capture some of the comments that 22

are being provided here in this meeting where you have 23

customized equipment, how do you regulate that? 24

So in terms of anticipating what potential 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 86

issues you may come up with. I'm sure that's part of 1

what we are going to go through here in thinking for 2

this next standard that the Department is going to come 3

up with for this equipment. 4

MR. NESHAN: I will appreciate that and I 5

will also make the following comment that we -- our 6

company manufacturers nothing but custom-designed 7

equipment. On an average basis we introduce over 100 8

different models every year into the market. I hope 9

you can keep up with us as we introduce new -- 10

(Laughter.) 11

MR. NESHAN: -- because that is really a 12

serious issue for us. We manufacture, for example, a 13

display case, a commercial refrigerator that half of it 14

is hot, half of it is cold. Of the cold, half is 15

frozen, half of it is medium temperature. How do you - 16

- and we do this on a daily basis. 17

MR. BROOKMAN: SO this then reinforces 18

Michael McCabe's request, especially for manufacturers, 19

that you in your written comments tell the Department 20

how you would wish for them to keep up with you. 21

MR. NESHAN: Please don't. We just keep on 22

manufacturing -- 23

(Laughter.) 24

MR. BROOKMAN: To use your words, "Keep up 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 87

with you." Viktor. 1

MR. ANDERSON: Yes, I would like to include 2

the SOC.SC.M. as an equipment class that was left out. 3

MR. BROOKMAN: Okay. This has been 4

productive. We don't want to cut this short. Charlie. 5

MR. HON: Okay. There's two other majors 6

that have not been discussed yet. The first is chef 7

bases which are unusual little creatures, but they're 8

always under severe condition because they are usually 9

under a grill, a refrigerator placed directly under a 10

grill. They have not been discussed previously, but 11

the energy requirements are very, very bad. But they 12

serve a very, very useful purpose as far as keeping 13

meats at a serving temperature and very close to the 14

grill so that they are not transported constantly 15

traipsing back and forth. 16

And the largest category that is not 17

presently being discussed is food preparation tables 18

which is a nightmare to try and consider. Because 19

there's a half which is always open, during all serving 20

hours which has food components which have to be 21

maintained at food temperature. Usually used in making 22

pizza prep tables, sandwich tables, things like that. 23

And we've had no discussion of those at all from the 24

Department of Energy. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 88

MR. BROOKMAN: Yeah. Thank you. Other 1

comments on this subject? David Winiarski? 2

MR. WINIARSKI: David Winiarski. I just 3

wanted to recommend that particularly with regard, I 4

think, to the Type II NSF equipment, if you could be 5

very specific in your reasons for why or why not that 6

should be separated out as a product class from a type 7

of class that would be very useful to the Department. 8

MR. LLENZA: This is Charles Llenza, 9

Department of Energy. Also in your comments to the 10

Department on these particular types of equipment, it 11

would be of great benefit if you can give the 12

Department an idea of what size of market we're talking 13

about, what kind of shipments are we talking about? 14

Because in categorizing the equipment and doing the 15

analysis, part of our function is to try to see how 16

much energy is being lost by not regulating that type 17

of equipment. 18

MR. BROOKMAN: Harvey Sachs? 19

MR. SACHS: Mr. Hon, one question for you, is 20

there any indication that these non-covered products 21

such as food prep tables have a range of -- a wide 22

range of efficiencies in the market such that 23

manufacturers who make better products are hindered in 24

competing with those who make less good products? 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 89

MR. BROOKMAN: Charlie? 1

MR. HON: I do not know that answer. We have 2

tested out own units and we know where they fall and 3

they certainly consume more kilowatt-hours than a 4

standard unit. But any time you have an open top on 5

it, we assume that's going to happen. But do we have a 6

definitive comparison to other people's units? No. 7

But I have heard comments from our sales force that we 8

have had people who could not keep the -- they've 9

replaced other people's equipment with our equipment 10

because of power consumption issues. 11

MR. SACHS: So, again, this is Harvey 12

Sachs. It seems like an implicit request of the 13

Department is getting a better understanding of this 14

class of equipment. 15

MR. HON: It is a very difficult topic 16

because the service nature of this product you can have 17

a small interior volume with a very, very large top 18

area which is open or a very, very small top area which 19

is open, far exceeding the issues we face with glass 20

versus solid doors. Probably ten-fold difference 21

there. And so it's going to be a very difficult thing 22

to get ahold of because until there is a true test 23

standard which right now is being evolved in 24

California, Pacific Gas and Electric and Food Service 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 90

Technology Center is working on issues at that level 1

trying to bring those into California's regulations 2

which will then at that time bring about a database. 3

We don't know where we're headed with that. 4

MR. BROOKMAN: Thank you. We're going to 5

move on now. 6

MARKET AND TECHNOLOGY ASSESSMENT 7

MR. WEBER: Thank you. So one of the other 8

aspects of the market and technology assessment is the 9

discussion of technology options that are under 10

consideration and this sample here just presents the 11

technology options outlined in the framework as being 12

applicable to all commercial refrigeration equipment. 13

And at this time anyone can make comment regarding that 14

if anyone has any. 15

(No response.) 16

MR. BROOKMAN: And, of course, your paper 17

copy of the PowerPoint slides you can see two screens 18

there and not just the one projected. 19

MR. WEBER: Yes, similarly these two tables 20

also show technology options that are applicable 21

specifically to equipment without doors and 22

specifically to self-contained equipment. 23

PARTICIPANT: Where is this in the TSD 24

document? MR. WEBER: In the previous rulemaking that 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 91

would be in Chapter 3 of the market and technology 1

assessment. 2

MR. BROOKMAN: Yes, Tim. 3

MR. BALLO: Just two quick -- sorry, Tim 4

Ballo with Justice. Just two quick points on this 5

slide. The fact that the Department is considering 6

strip curtains as a design option for without doors 7

sort of reinforces a point I made earlier about the 8

lack of utility for a case without doors. If you can 9

have a strip curtain that sort of creates a barrier for 10

the people coming into your store, or to access food 11

that's in the case, it seems unreasonable to say that 12

you couldn't have a strip curtain, but not a door. 13

And then just one other point. Technology 14

options applicable to self-contained equipment only, as 15

in a similar point I raised earlier, I just want to 16

encourage the Department to revisit its legal 17

interpretation that it does not have the authority to 18

cover the remote condensing equipment as part of the 19

standards. 20

MR. BROOKMAN: Harvey Sachs? 21

MR. SACHS: Harvey Sachs. On slide 40 we 22

have reference to higher efficiency compressors. The 23

higher efficiency compressor in my mind generally means 24

a modulating compressor or stage compressor whose 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 92

benefits show up at part load. In other rulemakings 1

DOE has screened these out. And I'm specifically 2

asking that these be considered within the technology 3

assessment. 4

MR. BROOKMAN: Thank you for your comment. 5

MR. SACHS: And I'll beat you up if they're 6

not. 7

(Laughter.) 8

MR. BROOKMAN: Viktor. 9

MR. ANDERSON: A lot of these technologies up 10

here -- I have two comments. They lend themselves more 11

to a rack design than to say a self-contained equipment 12

class. Putting a variable speed condenser fan motor on 13

a self-contained case is going to cost a lot. The 14

customer will not pay for something like that. And the 15

benefit of that will not be realized for several years 16

if not a hundred years for the cost. 17

MR. BROOKMAN: Okay. 18

MR. ANDERSON: My suggestion is to please 19

look at a cost to benefit ratio for a lot of these 20

units up here. 21

MR. BROOKMAN: Okay. Thank you. Massoud. 22

MR. NESHAN: Yes, if you go back to slide 23

number 39, if I recall, when you were working on the 24

standard when category one, two, three, four, five, 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 93

those classes were defined or -- 1

MR. WEBER: This? 2

MR. NESHAN: Yes. Some of these were already 3

included when those minimum energy efficiency standards 4

were established. 5

For example, in the door cases, LED lights 6

were included. Fans were already included. So I'm not 7

sure why we are looking at this again since it's 8

already embedded in the original standard. Number one. 9

Comment number two, as Viktor mentioned, on 10

the self-contained cases, some of the issues that or 11

some of the recommendations here, again, they apply to 12

a more of a remote type of a display case. Since the 13

inside is store, ambient conditions do not change. 14

There is no change really in ambient temperature. So 15

really you cannot do a whole lot with a condenser unit 16

that is underneath the case. All these variable speeds 17

or variable condenser fan and all that really applies 18

to when there is change in ambient conditions and not 19

for a constant operating conditions. 20

MR. BROOKMAN: Yes, Sarah. 21

MS. WIDDER: Sarah Widder, Northwest Pacific 22

National Lab. If the manufacturers could take some 23

time to review these and then respond specifically to 24

each of their utility or lack thereof in different 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 94

types of equipment, that would be very helpful in the 1

Department's analysis. 2

MR. LLENZA: This is Charles Llenza, the 3

Department of Energy. Part of the reason why we list 4

some of these things that we've already considered in 5

the past, and they are part of this standard, is that 6

because we are adding to the list, it's actually the 7

mix and matches of the old and the new that might 8

provide you higher level standards that you can 9

achieve. Part of what the Department does is to not 10

define what technology options you need to use to 11

achieve those levels. So, the reason you include the 12

old is because you can combine them with some of the 13

new features and maybe reach those levels that the 14

Department might end up instituting in 2013. 15

MR. BROOKMAN: Massoud? 16

MR. NESHAN: Just one follow up. I 17

appreciate the comments, but I want to make also the 18

following comment in that earlier it was stated we need 19

to establish some test procedures to see whether the 20

energy savings of these -- if you do not know whether 21

the energy savings impacts or not, why are you 22

including it in these standards? You need to do the 23

testing first, get all that before you make your 24

recommendation. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 95

MR. LLENZA: We're doing both at the same 1

time. I mean, that's why the test procedure runs in 2

parallel with the standard. And then -- and then what 3

we are trying to do is update the test procedure so 4

that you have a methodology that is standard throughout 5

the industry for testing the energy use of particular 6

features or components that the system may use. So 7

that then when we impose a standard and you're trying 8

to get credit for the different components that you 9

will be able to measure that. And so it will run 10

subsequently with the standard. 11

MR. BROOKMAN: Thank you, Charles. 12

John McHugh. 13

MR. McHUGH: Yes. I think you had mentioned 14

earlier motion controls or occupancy controls. I don't 15

see that on this list so I'm assuming this may just be 16

an oversight. 17

In addition, for evaporator fan motor 18

controllers, hopefully you'll be looking at not just 19

cycling controls, but also variable speed controls, 20

especially if you are looking, you know, in conjunction 21

with ECM motors, the ability to adjust the speed is 22

markedly less expensive. 23

And then finally for the liquid suction heat 24

exchangers, this is something that wouldn't necessarily 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 96

just be applicable to self-contained equipment only, 1

but could be applied to equipment that are attached to 2

rack systems. 3

MR. BROOKMAN: Michael McCabe? 4

MR. McCABE: Michael McCabe, DOE. As a quick 5

follow up to the gentleman's recommendation that we 6

look at the benefit cost ratio in considering 7

technologies. In the early '80s DOE issued a final 8

rule where we had a five-year payback included in our 9

engineering analysis. Any design option had to have a 10

five-year payback for us to consider it. In the NRDC 11

vs. Harrington lawsuit the courts found that we were in 12

error in having an arbitrary consideration of the five 13

year payback and that the legislation requires us to 14

look at design options that are technologically 15

feasible. And so as Charlie Llenza has said, we have 16

tried to capture technologies, since the standard is a 17

performance standard, and you can trade off design 18

options, and we are trying to capture the technologies 19

that we are aware of that are in the marketplace, 20

either as a prototype or in products. In some cases 21

they may be in a product that is related, but not in 22

that particular class, but could be applied to that 23

class. So comments on the technology and whether or 24

not they are applicable, you know, and should be 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 97

considered for different classes would be quite useful 1

in this part of the -- 2

MR. BROOKMAN: Thank you. 3

Additional comments? David? 4

MR. WINIARSKI: Dave Winiarski. One 5

question. This is in regard to some of the variable 6

speed compressor, variable speed condenser fan 7

technologies. We are aware that in general the -- and 8

for instance in open case application it's a very 9

steady-state type of application and there may be 10

relatively little variation in load. When you start 11

looking both at cases with doors and door openings, 12

it's not clear that that's true as well as there may be 13

some ancillary issues when we look potential 14

technologies that will reduce the refrigerator load 15

like night curtains and lights over time, we certainly 16

welcome people to provide input on that. 17

MR. BROOKMAN: Thank you. Harvey Sachs? 18

MR. SACHS: Harvey Sachs. David, I guess I'm 19

missing things. I'm missing something again and that's 20

my problem. But it seems to me that the refrigeration 21

systems of cases like almost all other refrigeration 22

systems are almost always oversized because otherwise 23

since we've heard this morning, they're not meeting 24

safety requirements. Anything which is oversized looks 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 98

to me like it will benefit from having modulating 1

capabilities on the fans and compressors. For the 2

Department to arbitrarily exclude those from evaluation 3

is nuts. I'm sorry, that's not diplomatic. 4

MR. BROOKMAN: Other comments on these 5

technology options? I think that we have described 6

both the rationale and also the confidential 7

applications. John. 8

MR. McHUGH: Just a follow up question for 9

Mr. McCabe. Is it the case that even though you're not 10

allowed to look at a five-year simple payback you're 11

still required to look at a reduction in the life cycle 12

cost of the equipment as the basis to the standard? 13

MR. McCABE: This is Michael McCabe. We 14

cannot have an arbitrary value for determining whether 15

or not to consider a design option or not. But in our 16

rulemaking we are certainly required to look at the 17

lifecycle cost impacts of the efficiency improvement 18

and we do that as we structure our engineering curves 19

we often are -- in some cases we are taking a design 20

option approach where we identify a baseline unit and 21

we incrementally add technology. So we can look at a 22

point and say what the impact on the life cycle -- on 23

life cycle cost a particular technology will have and 24

add that point on the curve. Because obvious if you 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 99

reorder the technologies as you add them to a product, 1

they're going to have different impacts on the life 2

cycle costs. If it's the last design option added, 3

there will be less energy saving possible than if it 4

were the first design option added. 5

MR. BROOKMAN: We're going to keep moving on 6

here. 7

MR. WEBER: Thank you for your comments. 8

Next I would like to discuss the screening 9

analysis. 10

The function of the screening analysis is 11

simply to screen out technology options that DOE will 12

not consider further as part of the engineering 13

analysis for this rulemaking and commercial 14

refrigeration equipment. And in doing so -- excuse me 15

-- the Department will evaluate each technology option 16

based on the following four criteria: The options' 17

technological feasibility, it's practicability to 18

manufacture, install, and service any part of this 19

equipment, potential impacts on equipment utility or 20

availability to consumers, and finally any potential 21

adverse or other impacts on health or safety. 22

At this time the Department welcomes comments 23

on how the four aforementioned screening criteria might 24

apply to any additional technology options that an 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 100

interested party could recommend to DOE. 1

MR. BROOKMAN: Four screening criteria. 2

Harvey Sachs. 3

MR. SACHS: Harvey Sachs. With respect to 4

point one, technological feasibility we've seen 5

variable band width filters applied by the Department 6

in different regulatory contexts. We feel pretty 7

strongly that it would be inappropriate to screen out 8

any technology option which is commercially available 9

internationally for the relevant equipment. That this 10

is a global -- refrigeration is a global industry and 11

to arbitrarily restrict assessments to those technology 12

options which are already in use in U.S. equipment of 13

this class we feel is not providing long-term service 14

to the country or even to the manufacturers. 15

MR. BROOKMAN: Other comments? 16

(No response.) 17

MR. BROOKMAN: No additional comments in 18

these technology options? 19

MR. WEBER: I believe we have one. 20

MR. BROOKMAN: Did I miss somebody? Yes, 21

please. 22

MR. CARL ROBERTS: Carl Roberts. I think 23

it's also important to consider the reliability of 24

these technologies too. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 101

MR. BROOKMAN: Thank you. 1

MR. WEBER: Ready to move on? 2

MR. BROOKMAN: Yes. Charlie's got one more. 3

Charlie. 4

MR. HON: I have one question. Why do we 5

discuss it at all? Because what happens between this 6

rulemaking cycle and some other rulemaking cycle 7

somebody comes with a completely new technology that 8

innovates the industry? Then what? Are we going to 9

ignore it for several years? 10

MR. BROOKMAN: Let's hear from the 11

Department. 12

MR. LLENZA: The rulemaking takes three 13

years. And so we are -- up to the NOPR stage, I think, 14

we are pretty much committed to be flexible in terms of 15

what we consider. There's a certain period of time 16

where you have to move forward so you have to freeze 17

what you have. It doesn't preclude the industry in 18

itself to use that innovation to further their cause 19

for their equipment in terms of energy efficiency. And 20

that's what gives them the advantage over other 21

producers of equipment that meet the standard, but they 22

don't have that innovation to get the extra energy 23

efficiency out of the equipment. That's why we also 24

have a cycle for reviewing the standards every so often 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 102

and that's why we're here today. 1

MR. BROOKMAN: Harvey Sachs? 2

MR. SACHS: Charlie, as an advocate -- Harvey 3

Sachs -- I would suggest you could parody my position 4

as wanting to have this process onerous enough to 5

encourage innovation that slashes the costs and raises 6

the efficiency. We would hope that the outcome would 7

be that you find a way that's completely different from 8

what the Department evaluated that actually delivers 9

much more efficiency and much more reliability for your 10

customers. It's a wild hope, but it underlies a lot. 11

Thank you. 12

MR. WEBER: I might also add that the 13

Department's treatment of proprietary technologies will 14

be mentioned shortly in discussion of the engineering 15

analysis. 16

MR. BROOKMAN: Thank you. 17

MR. WEBER: Ready to move forward? 18

MR. BROOKMAN: Uh-huh. 19

MR. WEBER: At this point I will begin 20

discussing engineering analysis. 21

A key factor in setting any efficiency 22

standard is to analyze and produce a relationship 23

between the increase of costs that traditionally goes 24

along with producing more efficient equipment. And the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 103

engineering analysis seeks to determine this 1

relationship between equipment costs and efficiency or 2

energy consumption. Excuse me. 3

The graph on the left shows purely 4

hypothetical relationship between manufacturers' 5

selling price and equipment efficiency. And this feeds 6

into some of the downstream rulemaking analysis 7

including the life cycle costs and payback period 8

analysis, the manufacturer impact analysis, and the 9

employment impact analysis. With regards to the 10

methodology that the Department will employ in its 11

engineering analysis a number of steps are outlined and 12

briefly summarized here. 13

First the Department will choose equipment 14

classes that represent high shipment volume pieces of 15

equipment for the engineering analysis. And these will 16

be classes or subsets within the market which the 17

Department will analyze specifically and base its 18

analyses off of. 19

It will then define characteristics of models 20

within these chosen representative classes that will 21

serve as reference points to assess changes due to more 22

stringent standard levels. These are baseline features 23

of minimally compliant current equipment. 24

The Department will then identify more 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 104

efficient substitutes in increased efficiency equipment 1

using the design option approach -- design option 2

approach methodology which is discussed in further 3

detail in the framework document itself. 4

From there the Department will determine 5

manufacturer production costs for baseline equipment as 6

well as for the more efficient equipment with further 7

design options implemented. It will then develop 8

selling prices -- manufacturers' selling prices based 9

on these production costs and markups determined within 10

a separate analysis. 11

After this candidate standard levels will be 12

developed which will span the range of equipment 13

efficiencies from baseline, minimally compliant current 14

equipment to maximum technologically feasible 15

equipment. 16

And finally the Department will scale the 17

results form these specific analyses to apply to 18

equipment classes which were not specifically analyzed. 19

And at this time DOE welcomes comments on its 20

intended preliminary engineering analysis methodology. 21

MR. BROOKMAN: Yes, Karim. 22

MR. AMRANE: Karim Amrane, AHRI. I guess I 23

would look to know from DOE what's the baseline you're 24

going to be using for all the commercial refrigeration 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 105

equipment for which the standard will become effective 1

in 2012? 2

MR. WEBER: At this point it would be 3

equipment which is compliant with the current minimum 4

standards which are in effect. In the case of EPACT 5

equipment it would be compliant with EPACT. 6

MR. AMRANE: And those for which there is no 7

standard today? The remote -- 8

MR. WEBER: Aris, maybe you could speak to 9

that. My understanding is that we would use the 10

standards set within the first year of rulemaking as 11

our current baseline even though the effective date has 12

not come to pass yet. 13

MR. MARANTAN: Aris Marantan. Yes, I'll 14

confirm that. Our intent is to use the baseline that 15

was established in the first round of rulemaking with 16

the possible adjustment of anything having to do with 17

the test procedure that's being conducted concurrently. 18

MR. BROOKMAN: Harvey Sachs? 19

MR. SACHS: Harvey Sachs. I want to again 20

comment on the graphic on the left side of slide 46. 21

The imputed manufacturers' selling price versus 22

efficiency level. The Department has relied upon this 23

framework for decades. We've had decades of 24

rulemaking. The peer-reviewed literature in this area 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 106

is sparse but suggests that if you move from this time 1

and variance snapshot into the time series of actual 2

revealed prices as a function of efficiency that the 3

relationship does not look like this. Although much of 4

the product covered in this rulemaking is done in very 5

small production runs, as a general matter, Mr. McCabe, 6

I believe it's appropriate to start doing some 7

retrospective analysis of the revealed prices in the 8

market as efficiency levels mandated have changed. 9

Thank you. 10

MR. BROOKMAN: Thank you, Harvey. 11

MR. WEBER: Thank you for your comment. I 12

would like to clarify that this is a purely 13

hypothetical graphic for illustrative purposes only. 14

MR. SACHS: I'm sorry, this is not a purely 15

hypothetical and this is the underlying hypothesis 16

under which you work just as the geologists in 1950 17

worked with a model of the earth that comprised of a 18

thin crust on a thicker mantle and as a result it was 19

impossible for them to conceive the continental drift. 20

Your model precludes consideration in any 21

sophisticated sense of learning curves. Thank you. 22

MR. BROOKMAN: John Cymbalsky. 23

MR. CYMBALSKY: John Cymbalsky, DOE. 24

Actually, Harvey, I'm not sure which product it is, but 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 107

there is a graph that has a declining cost for an 1

efficiency point that one of our teams showed me. So, 2

as was mentioned, this is just illustrative and does 3

not exactly follow every pattern for every product. 4

MR. BROOKMAN: Michael McCabe. 5

MR. McCABE: Michael McCabe, DOE. This issue 6

has been raised in many forums already. There's very 7

limited data as to retrospective data on this. Some of 8

that shows -- that I have seen shows different response 9

to regulations. But one of the questions that we've 10

raised in previous proceedings is the relationship 11

between the past and whether or not it can be 12

considered prolonged. And I'll use as a specific 13

example with a product that is not the subject of 14

today's proceeding and that's residential clothes 15

washers that we had made certain assumptions with 16

regards to the manufacturer design and what the cost of 17

that more efficient product would be. 18

In response -- arguably in response to the 19

standard, manufacturers redesigned the product and the 20

resulting product was more efficient and less costly 21

than what we had estimated. So the past certainly was 22

in -- the experience was different than what we had 23

forecast. 24

However, one of the ways that the industry 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 108

was able to take out costs was to change the product 1

approach, they went to a very automated process and 2

took out a lot of labor. They also changed the product 3

design so that the product ended up having literally 4

one half the number of parts to it. And the question 5

would be, with those changes made, how much is left to 6

be made where any cost savings could be had? And those 7

were the sorts of data that we would need that would be 8

beneficial to this rulemaking is to what we could 9

expect would be the cost impact. 10

Because in our cost analysis, you know, we 11

are making assumptions that there will be some 12

economies of scale, that the compressors -- the more 13

efficient compressors or the more efficient lighting, 14

whatever the different technology options which are not 15

common in products today would become common and as a 16

result the costs would be lower than what they are 17

today, but not as low as what in some cases we have 18

seen with some previous rulemakings. It is those sorts 19

of data that we will find very useful in helping 20

structure this part of the analysis. 21

MR. BROOKMAN: Harvey Sachs? 22

MR. SACHS: Harvey Sachs. Thank you. I know 23

we have to move on and I welcome this new approach and 24

wish we had seen more of that in the last time LEDs, 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 109

for example, were evaluated. Thank you. 1

MR. WEBER: Thank you. 2

I would next like to discuss some other 3

issues contained within the engineering analysis. One 4

of these that I alluded to earlier was that of 5

proprietary designs. In the course of the engineering 6

analysis, the Department will evaluate all design 7

options that are commercially available or present in a 8

working prototype. And I'd like to point out that this 9

does include proprietary designs and technologies. 10

However, with the caveat that such proprietary designs 11

will only be considered if they do not present a unique 12

path to a given efficiency level. That is, if a 13

certain level of efficiency can only be attained by 14

utilizing a design that's proprietary technology to a 15

specific manufacturer, then the Department will not 16

consider this as a candidate standard level, for 17

example. 18

And, of course, in considering any such 19

proprietary technologies, the confidentiality of all 20

manufacturers will be maintained at all times. 21

At this time DOE seeks any information or 22

input on proprietary designs that it should be aware of 23

within this industry. And if such proprietary designs 24

exist how the Department can acquire example cost data 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 110

necessary for evaluating them within the cost 1

efficiency relationship. 2

MR. BROOKMAN: No comments on proprietary 3

design. 4

So perhaps this is something for written 5

comments. 6

Okay. Go ahead. 7

MR. WEBER: Thank you. In the engineering 8

analysis the Department will also select equipment 9

models which it feels best represent typical offerings 10

within each class. And a selection of representative 11

sizes will then allow for the analyses to model the 12

majority from a shipments' perspective of the equipment 13

within the specific classes analyzed. 14

As part of it's 2009 final rule for 15

commercial refrigeration equipment, the Department 16

developed representative equipment sizes and at this 17

time the Department does intend to use those sizes, 18

those capacities -- or excuse me, those sizes as 19

starting values for this rulemaking's engineering 20

analysis. And DOE welcomes, of course, any comment on 21

the selection of -- excuse me -- representative 22

equipment sizes for the equipment under consideration 23

as part of this rulemaking. 24

(Pause.) 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 111

MR. WEBER: All right. If there are no 1

comments, I'll proceed. 2

And one other additional engineering topic is 3

the subject of normalization metrics. The standards 4

prescribed by EPCA and as amended by EPACT 2005 use a 5

metric of refrigerated compartment volume for both 6

types of equipment in that those that have both 7

transparent and solid doors. In the 2009 rulemaking, 8

however, the Department chose to develop standards 9

based on two different metrics for different classes of 10

equipment. A total display area metric was used for 11

open cases and for equipment with transparent doors. 12

However, refrigerated compartment volume was used for 13

equipment with solid doors. 14

In this rulemaking however, DOE could 15

consider using a consistent normalization metric for 16

equipment classes which exhibit similar features such 17

as having solid doors, for example, regardless of what 18

metric is currently applicable to those types of 19

equipment. 20

However, DOE would need to develop a 21

conversion between an existing volume metric and a 22

total display area metric in order to translate the 23

existing EPCA standards in terms of a total display 24

area metric for equipment with transparent doors. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 112

DOE seeks comment regarding mapping between 1

the volume and total display area metrics as well as 2

any methodology that would need to be employed to 3

translate the baseline energy consumption values 4

between the said two metrics. And DOE also request 5

feedback regarding any specific equipment classes which 6

could potentially foresee the need to be subdivided or 7

equipment categories which could potentially need their 8

own equipment classes due to inherent features of the 9

equipment. 10

Should revised normalization metrics be 11

utilized as part of the course of this rulemaking? 12

MR. BROOKMAN: Massoud? 13

MR. NESHAN: Yes, welcome this part of this 14

procedure in that we currently, for example, 15

manufacture display case that's extremely deep and 16

there's no way that we can accommodate -- that we can 17

incorporate that step into the analysis because we are 18

only relying on the TDA part of the display case. 19

Whether the case is 20 inches deep or 60 inches deep, 20

we are allowed to use the same amount of energy whereas 21

in reality that is not the case. And something needs 22

to be done. 23

MR. BROOKMAN: Thank you. 24

MR. WEBER: Okay. So your comments on that 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 113

and specifically how the Department might address that. 1

Charlie. 2

MR. HON: Charlie Hon. There's two different 3

issues here. First off is that presently it's divided 4

into basically self-contained equipment versus remote 5

equipment. The self-contained equipment being internal 6

volume, the remote systems almost with a few exceptions 7

being TDA. Do you agree with that statement? 8

MR. BROOKMAN: I'm seeing a lot of 9

headshaking, yes. 10

MR. HON: But that's basically from a 11

historical viewpoint. That's because the California 12

Energy Commission had established those criteria and 13

the test standards were established and all the 14

databases were built off of that. We are getting into 15

a new section here where we did not have the database 16

available for development and then all the remote 17

systems, the TDA became the instrument of choice by the 18

manufacturers. And now we are running across the 19

inherent problem within the system. It's only one 20

surface, so there's going to be real issues here. 21

There's going to be real problems because of that. 22

When do you decide and just say too deep is too deep? 23

Is 20 inches too deep? Is 40 inches too deep? Is 60 24

inches too deep? That's something that I don't know 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 114

how you're going to get around. 1

MR. BROOKMAN: John McHugh. 2

MR. McHUGH: John McHugh. Potentially DOE 3

might want to consider, you know, something that 4

reflects back to its physical energy consumption and 5

consider the concept of surface area as one variable 6

and glazing area or display area as the other variable. 7

Because that's really what's driving the energy 8

consumption. And to have a metric like that, then you 9

wouldn't have all the errors and the need to set 10

something high so that you can actually fit things that 11

are on the edge of the category. 12

MR. BROOKMAN: Thank you. Did you all 13

address the two approaches to the metrics aside from 14

saying it might be tough? Is there a way to -- can you 15

say more about how the Department might do this? 16

MR. CARL ROBERTS: Yes. Using AHAM never 17

did work very well for the product of display cases. 18

Using TDA works well. The energy consumption of the 19

display equipment is governed mainly by TDA and very 20

little by depth. But if you wanted to use a 21

combination of TDA and shelf depth that might work 22

well. 23

MR. BROOKMAN: And would you also -- just to 24

follow on, with the points being made in slide 51, are 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 115

you suggesting that it's possible for DOE to do this -- 1

to do the conversion to -- maybe we need to have this 2

in written comments. 3

Viktor, go ahead. 4

MR. ANDERSON: Mine may be in a written 5

comment as well, but there's a third metric as far as 6

the height of the case when it concerns open cases and 7

the efficiency of the air curtain. So there's yet 8

another metric that with Structural Concepts and others 9

being custom cases maybe specific to a custom case 10

manufacturer in that regard. 11

MR. BROOKMAN: Charlie? 12

MR. HON: Charlie Hon. Basically I disagree 13

with a couple things said here because of the 14

difference in customer bases, there's a different 15

viewpoint here. We have many customers who decide 16

which case they're going to buy whether it be a solid 17

door or a glass door by the energy efficiency numbers 18

and comparable internal volume. They say, okay, how 19

much will it save me if I have a solid door on there in 20

my kitchen versus how much will I draw an advantage of 21

the chef coming up and seeing what he wants through the 22

glass door and pulling it out quickly? And they're 23

comparing internal volumes only. How much can we put 24

in the case? 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 116

So there is a different viewpoint. In 1

supermarkets, display area is very, very critical. In 2

a kitchen that is not always the case. So it is very 3

difficult because there are different market 4

techniques, different markets totally within this 5

rulemaking process which are diametrically opposed by 6

the way they are put together. 7

MR. BROOKMAN: Thank you. Other comments on 8

this series of issues? (Off microphone.) 9

MR. WEBER: I would just like to mention the 10

Department takes into consideration the effects upon 11

manufacturers of other regulatory changes outside of 12

the standards rulemaking process and with regards to 13

that DOE welcomes comments on any regulatory burdens or 14

changes that should be considered in the engineering 15

analysis for this equipment. And also welcome comments 16

on any other general engineering issues that could 17

affect the engineering analysis at this point. 18

MR. BROOKMAN: Comments, outside regulatory 19

changes? Karim. 20

MR. AMRANE: Karim Amrane. I guess, not 21

necessarily outside this regulatory process, but since 22

we are talking her about a category of product that 23

will have to be redesigned to meet the 2012 standard 24

and eventually will have to be redesigned again, you 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 117

know, three years later or four years later, is DOE 1

going to account for the burden on manufacturers that 2

will have to redesign twice in four years? 3

MR. WEBER: The Department does intend to 4

assess manufacturer impacts as part of its analyses 5

during the rulemaking. 6

MR. AMRANE: Okay. 7

MR. BROOKMAN: Addition comments? 8

(No response.) 9

MR. BROOKMAN: It's proposed at this point we 10

pause for lunch. And I think now is a good time to do 11

it. It's now five minutes after 12. We are just 12

running a little bit ahead of schedule which is 13

remarkable. 14

(Laughter.) 15

MR. BROOKMAN: So I'm going to suggest we 16

pause for lunch. We will return -- we will resume at 17

five minutes after one. This room will be locked. You 18

can leave your stuff here. 19

(Whereupon, at 12:05 p.m., the meeting was 20

recessed to be reconvened this same day at 1:05 p.m.) 21

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25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 1 18

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6EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 119

. A F T E R N O O N S E S S I O N 1

1:09 p.m. 2

MR. BROOKMAN: Dave, you’re next. Hope you 3

enjoyed your lunch. Brenda, do we have any 4

housekeeping items? 5

(Answer off mike.) 6

MR. BROOKMAN: So, we had a very good block 7

of discussions in the morning, and we’re going to 8

proceed with the agenda as written, energy use 9

characterization. 10

ENERGY USE CHARACTERIZATION AND MARKUPS 11

MR. WINIARSKI: Hi again. Quickly, you’ll 12

have a fair amount of time this afternoon. I’ll be 13

discussing the energy use characterization, life cycle 14

cost, pay-back period, shipments, through a national 15

impact analysis. This will take us through the 16

preliminary analysis stage of the rulemaking. 17

As background, one of t he things I’m going to 18

do is since we’ve already gone through a rulemaking on 19

this product, I’m going to put up a lot of the 20

assumptions, in some cases simplifying assumptions that 21

went into that first rule, and we’ll be asking for 22

comment on whether those assumptions should still be 23

used or are effectively valid, or whether they should 24

be changed in this upcoming rule. And it may be a 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 120

different issue with regards to equipment that is used 1

in food sales-type applications, supermarket-type 2

applications versus a food service-type application. 3

So as you consider comments, we’d appreciate 4

you think about those issues. 5

First we’ll talk about the energy use 6

characterization. The purpose of this part of the 7

analysis is to try to characterize the energy use of 8

t he equipment that’s being regulated at different 9

efficiency levels that DOE is considering in the energy 10

analysis. We also, if necessary, we’ll look at the 11

peak electrical demand characteristics that might 12

influence the energy price, and hence impact the LCC 13

analysis that’s ongoing. 14

The -- I think this slide talks about using 15

the demand characteristics for buildings. We’ll talk a 16

little bit more about that in detail, but virtually all 17

this equipment is effectively used within the confines 18

of a building structure and in that building there are 19

other electrical things going on that have to be 20

considered in the analysis. 21

As background, for the 2009 final rule, 22

something like 92 percent of the shipments in that rule 23

were remote condensing cases, which are primarily used 24

in a food sales-type application. And the self25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 121

contained products, those open display, open without 1

doors, self-contained equipment also is typically 2

considered if not a majority use, at least a 3

significant portion are used in a food sales 4

application. So some of the assumptions that were made 5

were considering that market specifically. 6

The actual rulemaking was developed using 7

energy consumption estimates that came from the 8

engineering analysis. The engineering analysis 9

estimates come from what is, in effect, implementation 10

of the test procedure on those products. And DOE has a 11

-- there’s a new test procedure at DOE. They actually 12

had some questions as to whether the test procedure 13

adequately reflected the energy use in the field. So 14

we did some whole building simulation analysis, to look 15

at both how the energy savings going from one level to 16

another, as measured by the test procedure, compared 17

with that as determined using a whole building 18

simulation tool. We looked at that both with regards 19

to the, what I call the direct loads on the 20

refrigerated cases, the lighting, the anti-sweat 21

heaters, things like that, as well as the combined 22

energy use of that with the remote condensing units 23

that were not being regulated. 24

And we also looked at the impacts on the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 122

building heating, ventilation, and air conditioning 1

equipment in the building. One of the issues is 2

because most of this was remote cases and much of the 3

load on the remote cases is rejected through the 4

condenser outside the building, we determined that the 5

overall effects on the building HVAC loads was fairly 6

negligible, and that using the test procedure we got 7

numbers that compared fairly well with what we came up 8

with in the building simulation analysis. 9

That assumption may be less true when we look 10

at other building types, for instance, restaurants and 11

we certainly welcome comment as to that. 12

In addition, during that rule, the test 13

procedure essentially assumed that the lighting in the 14

display case operated 24 hours a day. We brought that 15

up in public forums, whether there was any data and on 16

lighting operating hours, we did not get a lot of 17

comment at the framework, so we continued with that 18

assumption. We did do a sensitivity analysis, which 19

looked at assuming a 24, a 20 hour, and I think a 16 20

hour lighting level, and obviously that has an impact 21

on the savings from the technology, and the details of 22

that are found in the previous rule technical support 23

document. 24

But when we brought it back up during the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 123

ANOPR public meeting, there was large number of 1

comments that said 24 hours was a reasonable assumption 2

for the purpose of the rulemaking. 3

As I said, this new rule now will have a 4

considerably larger share of self-contained equipment 5

and that equipment, because all of the electrical 6

energy basically manifests itself as heat within the 7

building, that may have a greater impact on building 8

HVAC loads. Because a lot of the studies that we got 9

from the previous rulemaking again focused on remote 10

condensing equipment, to the extent that we can get 11

better data on the impact of the self-contained 12

equipment in buildings, that would be very useful for 13

the Department. 14

There’s a second issue here which has to do 15

with the lighting operating hour assumptions again. 16

During that rulemaking, again, we used a 24 hour 17

lighting operating assumption. For fluorescent 18

lighting, we got comments that said, yeah, that’s not a 19

bad number. Historically there have been issues with 20

restart of fluorescent lights. There have also been 21

maintenance issues with moisture condensation on 22

contacts and things like that. DOE did not -- well, 23

DOE looked at LED lighting from an efficiency 24

improvement standpoint, but it did not look at it from 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 124

a change of the operating hour standpoint. And LED 1

lighting is at least perceived to not have issues with 2

regards to restart. It seems to like being in a cold 3

environment. And it also has other options, for 4

instance, it can -- you can use automatic shut-off at 5

night. You can dim the lights and make them useful in 6

conjunction with occupancy sensors. And to the extent 7

that stakeholders can provide data that would better 8

characterize both sort of a baseline lighting 9

assumption that may be based on the use of fluorescent 10

technologies and appropriate assumptions for LED 11

technologies, that would be useful for the Department. 12

So, number of requests for comment. I kind 13

of alluded to those, basically. The Department seeks 14

input on whether it should be looking at the impact on 15

space conditioning loads within the building, and if 16

so, what options are there in order to take that into 17

account? For instance, one option is building 18

simulation, but perhaps there’s already data available 19

that might provide a different path to estimate the 20

impact of that load. 21

We look for whatever data is available to 22

characterize operating hour assumptions for lighting. 23

And in general, other data sources that could be used 24

to sort of corroborate the actual energy use of 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 125

commercial refrigeration equipment in the field. And 1

in general, we seek just feedback on what’s sort of the 2

best approach for measuring the energy consumption of 3

this equipment in the field, both in terms of the 4

different types of cases, and maybe in terms of 5

different applications for different food service 6

versus food sales buildings. 7

MR. BROOKMAN: So, several requests for 8

comment there. Let’s start with 6 -1 first, reflections 9

on how this might affect space conditioning loads. 10

Yes, please. Your name again. 11

MR. ALI: I’m Masood Ali. 12

MR. BROOKMAN: You need to get close to that 13

microphone. 14

MR. ALI: All right. 15

MR. BROOKMAN: Masood, it’s not on. Turn it 16

on, please. 17

MR. ALI: Excuse me. I’m Masood Ali. I’m a 18

little bit confused. They’re saying, going back to 19

Karim’s point. Are we looking at only the self

20

contained equipment in this rulemaking, or are we 21

considering the remote display cases too? 22

MR. WINIARSKI: Currently, DOE’s scope 23

considers both type of equipment. 24

MR. ALI: Right, then in that context, in 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 126

your previous slide you mentioned in your studies you 1

did not find any impact of commercial refrigerating 2

equipment CREs performance on the HVAC loads. But take 3

any open display case, in the supermarket, every open 4

display case will spill about 25 cubic feet per minute 5

of air at 45 degrees into those sinks, so that may not 6

be insignificant. 7

Now, I’m just going to give you a suggestion. 8

There is low hanging fruit, I mean, our intent, or the 9

intent of the Department is to minimize the energy 10

performance, but the store conditions have a tremendous 11

impact, and the Friends of Southern California have 12

done several studies, including DOE, that a percent 13

reduction in the relative humidity in a supermarket can 14

reduce two percent of the energy. Some of the grocery 15

chains are already doing it, instead of 55 percent RH, 16

if they m aintain it at 45 percent, you’re talking about 17

20 percent reduction in the refrigeration energy, while 18

we were referencing to the technologies for improvement 19

like going from a standard shaded pole motor to a high 20

efficiency motor, you’re talking about po int two to 21

point three percent savings in the energy. Whereas 22

with this kind of low handing fruit that in terms of 23

the relative humidity, you can get significant energy 24

savings. Thank you. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 127

MR. BROOKMAN: Thank you. 1

MR. WINIARSKI: If I can follow up on that 2

just briefly. The Department is aware of some of the 3

studies that you refer to about humidity within the 4

building, and your comment is well received. 5

Unfortunately, the control in the HVAC system in the 6

building is not within the scope of this effort. 7

However, what is very important is as we make -- if we 8

go down the route of something like building modeling, 9

making appropriate assumptions in the course of that 10

modeling as to what should be the humidity within a 11

typical supermarket-type space is very important and 12

will, obviously, affect the energy use of the 13

equipment. 14

MR. BROOKMAN: Harvey Sachs. 15

MR. SACHS: Harvey Sachs. David, did I 16

misunderstand that the principal impact on HVAC was 17

studied for supermarkets? 18

MR. WINIARSKI: For the previous rulemaking, 19

it was, yes. 20

MR. SACHS: And the plan for this one? 21

MR. WINIARSKI: The current plan is a little 22

in flux. We are considering doing a building 23

simulation of other building types, for instance, 24

restaurants, which are obviously a key venue for some 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 128

of the self-contained equipment. 1

MR. SACHS: Again, Harvey Sachs. It seems to 2

me that in terms of impact on HVAC, one of the extreme 3

cases might be convenience stores, and I don’t have a 4

sense of the relative energy use in convenience stores 5

compared with restaurants and supermarkets. But it 6

certainly seems important to show that they’re not 7

significant before we toss them out, since apparently 8

these are predominantly self-contained units that are 9

discharging their heat into a relatively small space. 10

MR. BROOKMAN: Okay. Yes, Carl. 11

MR. ROBERTS: Carl Roberts. The University 12

of Colorado is currently doing a research project 1467, 13

and that may be a good source of information. 14

MR. BROOKMAN: Thank you. Of course the data 15

is making the general -- pardon me, the Department’s 16

making a general appeal for data in this block here, so 17

thank you for being responsive to that. Other thoughts 18

on -- you can see the issue boxes listed here. 19

Charlie. 20

MR. HON: The issues are long, okay. Number 21

one, is that you’re characterizing grocery stores as 22

the first characterization. That’s fine and dandy, for 23

remote equipment. But non-consequential for the rest 24

of the world. The discussions of restaurants is a 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 129

serious issue, in the world of free-standing equipment, 1

convenience stores and restaurants are very, very big 2

players. But also there are a lot of other conditions 3

which are common, and they’re certainly not easy to 4

deal with. 5

There’s a town called Orlando that has a lot 6

of remote equipment in it, and it’s usually in very, 7

very adverse conditions because of the 95 percent 8

relative humidity in the middle of the summer, with 95 9

degrees Fahrenheit. So it’s a mess. But that’s part 10

of the formulas we have to deal with because we test a 11

unit at 75/55 and then place it in Disney World at 12

95/95 and it is a different beast. It certainly does 13

consume, but it does not add to a heat load because the 14

majority of that equipment is outside. Yet, you go 15

into the walk-in venues and you have slightly different 16

conditions. 17

Then you get into convenience stores and 18

there’s a big change in recent years in convenience 19

stores. In the 2005-2006 period, most of the equipment 20

in the convenience stores was self-contained. They 21

have made a major shift into a walk-in environment with 22

roll-up trays to the glass doors, which has reduced the 23

refrigeration load from self-contained by 75 or 80 24

percent. And most of the recent-built convenience 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 130

stores in the major chains have gone that way because 1

they are more efficient. So you’ve got to -- you’d 2

better look at recent data, if you’re looking at 3

convenience stores. 4

MR. BROOKMAN: Wonderful. Thank you. Harvey 5

Sachs. I would invite you, please, look at these 6

comment boxes, 6.1, 2, 3, and 4, have we talked about 7

end use characterization fully enough yet, I think -- 8

to make certain that we get all the comment possible on 9

these. Yes, Carl. 10

MR. ROBERTS: Carl Roberts. We’re in the 11

process of testing all of our products for the current 12

energy standard, and that’s a huge job in itself. And 13

it’s tempting, looking at issues like humidity, it’s 14

tempting to say that we need to test at a different, 15

say three different humidities or something like that, 16

but that would make it nearly impossible for us to get 17

through the testing that we need to be through by 2012. 18

I think testing at 75/55 is a good place to be. It 19

allows for fair and repeatable testing, especially if a 20

third party is involved in that testing. I would urge 21

us not to multiply the number of tests that we need to 22

conduct. 23

MR. BROOKMAN: Okay. Thank you. Additional 24

comments? We’re about to move on. Harvey Sachs. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 131

MR. SACHS: Carl, this is Harvey Sachs. 1

Again, a little knowledge is very dangerous. The 2

concern I have is that some of the remote stuff in 3

places like Orlando, if it’s DX, it’s not really even 4

in a 95, 55 or 95, 95, but the rooftop environment can 5

be substantially more adverse. With 410A, we may get 6

into some performance questions. 7

I think the question is whether there needs 8

to be a rating point under really adverse conditions. 9

I don’t have an answer, but I’m asking the industry 10

that. 11

MR. BROOKMAN: Charlie? 12

MR. HON: We’re getting into an area which is 13

very difficult because there’s cost involvement, major 14

cost. European standards have multiple standard 15

conditions. You can rate your product to different 16

standards, A, B, C, D, E. There’s seven different 17

classifications, which include tropical swamp 18

basically, is what it is. No, worse than Orlando, 19

actually. Testing at 110 degrees Fahrenheit is pretty 20

nasty stuff, and high humidity. 21

But the problem here is cost. We presently 22

are looking at very possibly third party certification 23

for our Energy Star. We looking at additional cost 24

every time we do this. And an average test for those 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 132

of you who haven’t set one up, by the time you put it 1

in your test room and you take it out of your test room 2

on a first time basis, you’ve consumed about a week. 3

There’s no way around that. By the time you set your 4

temperatures, try to run a test and you miss your 5

temperature points, you set it again. Stabilize it 6

again. You’ve eaten up a week of the lab time. And 7

for those of us who have several hundreds and hundreds 8

of products, if we go to multiple condition testing, 9

we’re looking at amplifying our capacity to test three 10

or four-fold, and our costs are astronomical. 11

MR. BROOKMAN: What have you done to respond 12

to the European schema? 13

MR. HON: We test. 14

MR. BROOKMAN: At this significant additional 15

cost? 16

MR. HON: Yes. 17

MR. BROOKMAN: Okay. 18

MR. HON: Because there’s no optio n. When 19

you have a customer demand for condition C, you have to 20

prove that you meet condition C. Or if you have a 21

condition E, you really have to prove you meet it. 22

It’s like any other certification we have to sign off 23

on, you have to meet the certs. 24

MR. BROOKMAN: Okay. Massoud. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 133

MR. NESHAN: One comment. If we decide not 1

to go through additional testing for different ambient 2

or operating conditions, in this remote or self3

contained, other than 75/55, that will require, of 4

course, that any equipment that is used in an 5

environment that is outside of that to be exempted from 6

any ruling that any standard that you might have. I 7

mean, that’s it. Either you have a standard, or it has 8

to be exempted. It can’t be somewhere in between. 9

MR. BROOKMAN: Additional comments on these 10

boxes. Then also data sources. John. 11

MR. McHUGH: Kind of following up on 12

Charlie’s -- John McHugh -- following up on Charlie’s 13

comments. If we have equipment that is using floating 14

head pressure control, surely we want to make sure that 15

the DX and the rest of the equipment are actually going 16

to be capable of operating under those conditions. You 17

have problems with testing under multiple entering 18

evaporator conditions? 19

MR. BROOKMAN: Charlie? 20

MR. HON: Charlie Hon. We do. Any time you 21

change the conditions, you learn from experience how to 22

set your machine to get the integrated average 23

temperature that meets the final result at the end of 24

the test, the plus or minus two degrees Fahrenheit. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 134

But if you change the conditions, th en you’re learning 1

again, and they traditionally do not respond in the 2

same way. 3

There is another source which you may want to 4

look at. ASHRI has recently released standard 189.1, 5

which is a building standard, which does a lot of 6

comparative analysis of different types of 7

refrigerators in different types of environments. And 8

the only caveat that’s built into that system is that 9

if they -- this is designed to be codified-type items 10

so that it could readily be incorporated into local or 11

state codes, is that that particular standard 12

specifically bars the use of open front equipment that 13

does not contain air curtains. Give you an idea of 14

where they’re headed with it, because of the constant 15

consumption of power in that condition. 16

MR. BROOKMAN: Massoud. 17

MR. NESHAN: One comment in response to the 18

floating head issue. Floating head, as far as the 19

supermarkets are concerned, has been in use for at 20

least 25 to 30 years that I’m aware of. So it’s 21

nothing new or unique, and we’ve been able to handle 22

the technology available, the rudimentary technology 23

available that allows you to use a floating head. 24

However, there are limitations. There are certain 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 135

limits that you cannot drop the head pressure below 1

that, but the technology is there and we have been 2

coping wi th that. But that’s only if we have the right 3

condensing unit or compressor rack available to do 4

that. For self-contained or a small installation, that 5

would be very difficult to attain. 6

MR. WINIARSKI: Just to follow up on that for 7

a second. There’s b een a lot of discussion here about 8

testing. For those of you who remember the ARI-1200 9

test procedure, assumes essentially a compressor rack 10

efficiency already built into that. When we actually 11

did our buildings analysis years ago, we basically took 12

data for those particular compressors that were in fact 13

used, to establish the requirements of ARI1200, and we 14

implemented a floating head pressure type control to 15

examine the impact of different climates. And so 16

that’s kind of built in there, and yes, there is an 17

impact on the energy use, but we examined it across a 18

number of climates and it seemed to be that, one, that 19

was not something that we had control over in terms of 20

the actual requirements of the standard; and two, it 21

was not hugely significant in terms of the energy 22

benefits on a national average basis. 23

MR. BROOKMAN: Charlie, I thought you had 24

maybe one more comment. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 136

MR. HON: No. 1

MR. BROOKMAN: Okay. 2

MR. WINIARSKI: Next I’ll talk a little about 3

what’s called the markup analysis. Markups here refer 4

to the markups in the distribution chain, the chain 5

going from when the equipment leaves, essentially, the 6

manufacturer’s dock, to the end user. 7

DOE, the previous rule established markups 8

for that chain by looking at that distribution channels 9

individually for how that equipment moves, and then 10

identified three different distribution channels. 11

Those channels are shown here. Essentially some 12

product goes directly from a manufacturer to a 13

distributor, from a distributor to a contractor through 14

the mechanical refrigeration contractor, who then 15

installs it and may mark the price of the equipment up 16

before it gets to the final customer. 17

Two other channels that were noticed, 18

distribution channel two here, is sales from a 19

manufacturer to a distributor or wholesaler, and the 20

consumer then buys directly from that customer. 21

And the third distribution channel used was a 22

national account where essentially sales go directly 23

from the manufacturer to the end customer who pays the 24

price. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 137

DOE established -- I don’t have them up here, 1

but DOE established percentages of the estimated market 2

for the equipment covered under that rule, and asked 3

for comment from stakeholders. That data is available 4

in the former TSD, but essentially for remote 5

condensing equipment, the assumption was that 70 6

percent went through the national account channel, with 7

the remainder divided equally, fifteen percent going 8

through the channel one there, and fifteen percent 9

going through channel two. 10

For the self-contained equipment, DOE 11

established that essentially 35 percent through 12

distribution channel one, distribution channel two, and 13

about 30 percent went through national accounts. We 14

certainly welcome people’s input on whether those 15

numbers hold true and whether that would be appropriate 16

assumptions for the ongoing analysis. 17

And again, at each stage we’re going to talk 18

about, there will be a markup that’s applied at each 19

stage to give an overall markup for each channel, which 20

will then be weighted with those shipment percentages 21

to give you sort of an average markup for the 22

equipment. 23

In discussing markups, DOE does two types of 24

markups, typically, when it does these rulemakings. It 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 138

does an analysis of what we call baseline markups, 1

typically the distribution markups for the current 2

baseline equipment in the rule. In general, the 3

markups at each stage reflect the impact of the price 4

leaving that stage to the cost of goods sold in that 5

stage, so there’s an overall markup that reflects the 6

factor relating the consumer price at the end to the 7

manufacturer’s selling price at the beginning. The 8

baseline markups basically cover all of the 9

distributors or contractors expenses in that chain, 10

plus whatever profit they make. 11

DOE realizes that as you move up, as you 12

increase standard levels, the cost of the equipment may 13

increase, and if the cost of the equipment does 14

increase, then if you applied a constant markup factor, 15

there would be more money flowing into the distribution 16

channels, more -- either in the form of profits, or 17

just basically more money to cover those expenses. 18

And so DOE does an analysis to try to develop 19

what’s called an incremental markup. The incremental 20

markups relate the incremental change in the consumer 21

price at the end of the distribution chain, to the 22

incremental cost at the beginning of the distribution 23

chain, or incremental sales price of the equipment. 24

DOE expects that certain costs, examples here 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 139

may be things like salaries, payroll, and for some 1

equipment, rental and occupancy expenses, would not 2

change for the distributors in that chain, or the 3

contractors in that chain. But there may be other 4

expenses that would, in fact, change with the cost of 5

goods sold. For example there might be, like, 6

insurance costs, or if the equipment got physically 7

larger, maybe warehousing costs would change. And so 8

DOE uses available data to try to develop both baseline 9

markups that reflect the overall distribution chain, as 10

well as these incremental markups to establish what 11

costs would, in fact, increase, in proportion with cost 12

of goods sold. 13

So we have a number of items and requests for 14

comment from the industry. DOE, as I said, requests 15

information on the fraction of shipments that would go 16

to each of these distribution channels and whether or 17

not those in fact are the most correct channels for the 18

purposes of this rulemaking, and for the different 19

equipment that’s being regulated. 20

Specifically, we talked about whether the 21

distribution channels for food sales reflect those for 22

food service establishments and potentially a 23

difference between the different type of food sales, 24

for example, convenience stores versus supermarkets. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 140

DOE requests feedback on the general approach 1

to using incremental distribution channel markups, and 2

other sources of relevant data from the industry that 3

could be used to characterize markups in this industry. 4

Other sources -- in the previous rule, one of the main 5

sources for distributor’s markup came from the Heating, 6

Air-conditioner, and Refrigeration Distributors 7

International, or HARDI data, which covers distributors 8

of the equipment. Obviously, that doesn’t actually 9

deal with the direct sales from the manufacturer, so we 10

had to make some assumptions there. I think the actual 11

assumption there was that the markup to -- from -- for 12

direct sales would have been something like 50 percent 13

of that from the -- through the distributor channel. 14

And we also used census data for the contractors. 15

MR. BROOKMAN: Let’s hear from the folks here 16

in the room. 17

MR. WINIARSKI: Sure. 18

MR. BROOKMAN: Several requests for comment. 19

Please take a peek. What about the fraction of 20

shipments? Do you think that was a fair 21

representation? Charlie. 22

MR. HON: In today’s market, I do not believe 23

that’s a statement that’s accurate. In the downturn in 24

recent times, distributor activity has decreased, while 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 141

national chains have maintained, so -- because if you 1

look at the restaurant bills, private individual 2

restaurants are really not being built right now, so 3

the distribution is skewed at this time more toward the 4

direct national accounts. 5

MR. BROOKMAN: Would you venture a number? 6

MR. HON: I would have to say it’s 7

proprietary information. 8

MR. BROOKMAN: But if -- Karim, do you have? 9

No? Okay, none of that. Okay. 10

MR. WINIARSKI: And of course, one of the 11

issues is whether that would be a trend that would be 12

expected to continue into the future. 13

MR. BROOKMAN: Charlie. 14

MR. HON: And we have not seen an increase in 15

construction permits at this time, so restaurant builds 16

are still a year or more, maybe two years away. 17

MR. BROOKMAN: Even better than his comment 18

is the notion that if construction was to rebound, will 19

it return to the former distribution network? 20

MR. HON: I do not believe we will ever 21

return to that distribution network completely. 22

Because I do not believe the American populace for the 23

next several years will attempt to continue to eat out 24

as much as they used to. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 142

MR. BROOKMAN: Okay, thank you. Yes. 1

Massoud. 2

MR. NESHAN: Not only we are seeing a 3

reduction in several part of through distributors and 4

dealers, we are seeing a trend that is not -- which we 5

really don’t like -- and that is that our customers are 6

asking us to supply display cases to them using certain 7

components that are supplied to us and paid by them 8

directly. So we cannot even mark up those components. 9

So it’s only labor content that goes into this display 10

case. 11

MR. BROOKMAN: Wow. 12

MR. NESHAN: So really they are squeezing 13

any way they can, so that needs to be kind of 14

considered to some extent. 15

MR. BROOKMAN: And so -- okay. That’s a 16

distinct thread there that I won’t pursue. Charlie, go 17

ahead. 18

MR. HON: Charlie Hon. And there’s one other 19

factor that’s happened in the last three to four years, 20

and that is an increase in items which are considered 21

point of sale, walk-by at the checkout counter, because 22

the increased proportion used to -- the soft drinks 23

now, it’s soft drinks, energy drinks, ice cream bars. 24

There’s an increasing market for point of sale items in 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 143

the last five to seven years. 1

MR. BROOKMAN: Okay. Yes, Carl. 2

MR. SACHS: I would say for the remote 3

condensing unit equipment that those numbers agree with 4

our experience, and they’re moving in the direction of 5

the national accounts. 6

MR. BROOKMAN: Okay. Thank you. 7

MR. McHUGH: Dave, could you describe how 8

this analysis -- 9

MR. BROOKMAN: You’re not on. 10

MR. McHUGH: Oh, sorry. John McHugh. Dave, 11

could you describe how this analysis captures the 12

commoditification of products that are currently 13

premium products, and potentially as the standards are 14

increased, that now these are commodity products that 15

have more competition at that particular level? 16

MR. WINIARSKI: This particular analysis 17

deals with the distribution channel, and to the extent 18

that what I discussed how -- that we use incremental 19

markups, the idea being that there will be a base -- 20

there will be some fraction of the costs that are held 21

constant effectively through the distribution channel, 22

and then there will be a certain fraction, depending on 23

particular activities in that channel that may 24

incr ease. I’m not sure if your question is more 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 144

related to the distribution channel markups or perhaps 1

to the manufacturer markups that are done in the 2

engineering analysis. 3

MR. McHUGH: John McHugh. I think this has 4

to do with the manufacturer’s markup and the issue of, 5

you know, the incremental markups by the manufacturer 6

of products that are in the competitive market, as 7

opposed to the premium product line. 8

MR. WINIARSKI: I may have to get Aris to 9

comment on that, but I will say that my understanding 10

is that the markups that are developed within the 11

manufacturing analysis are typically done based on the 12

costs to actually build product using the sources of 13

data that were discussed previously, and the income to 14

those manufacturers. And I think it therefore is 15

better reflective of an average markup for the entire 16

suite of efficiencies that are produced. 17

MR. McHUGH: Thanks. 18

MR. BROOKMAN: Okay. Yes, please. Yes, make 19

sure it’s on. Just tap it. Nope. Try that one, 20

hopefully that’s on. 21

MR. BAUMAN: Jeff Bauman, Continental 22

Refrigerator. I guess just a couple points. The 23

question earlier, I think Charlie raised about the 24

distribution channel changing, and your question about 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 145

whether that -- plans for that would be to continue. I 1

think we’re seeing th e same thing on our side, and I 2

think part of the reasoning that it’s not likely to 3

come back ever, the way it is now, is that the value 4

being added by those distribution channels are seen as 5

not cost effective. So once companies come and they 6

see they ca n save money by skipping that step, they’re 7

going to be hard pressed to go back to it, unless 8

there’s real value being added there. 9

Another, I just want to offer too, a number 10

of manufacturers here remembers the National 11

Association for Food Equipment Manufacturers, NAFEM, 12

they do annual surveys and such, and we’ll contact 13

them, and actually we have a meeting with them next 14

week, and try to share in the information they do as 15

far as the size of the industry and some of these other 16

questions that are being raised. 17

MR. BROOKMAN: The Department’s got lots of 18

ways to receive that data, if the proprietary -- if 19

confidentiality is an issue. 20

MR. WINIARSKI: Yeah, I’d like to, if I can, 21

follow up a little bit. This is Dave Winiarski again. 22

As I alluded to earlier, there are a couple of sources 23

that the Department has relied on for markups to 24

contractors, markups through the distribution channels. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 146

Obviously, as we start to look at bigger fractions of 1

the market that are national accounts, the agreements 2

between the end user and the national accounts on how 3

they’re going to markup is kind of a sensitive area. 4

So we welcome any suggestions as to what approaches DOE 5

could use to sort of estimate that in the course of 6

this rulemaking. 7

MR. BROOKMAN: Okay. Let’s m ove on. 8

LIFE CYCLE COST AND PAYBACK PERIOD ANALYSIS 9

MR. WINIARSKI: So, going through here, the 10

next stage is the life cycle cost and payback period 11

analysis. The purpose of this analysis is to assess 12

the net life cycle cost benefits for higher standard 13

levels, and it also calculates the payback period for 14

those higher efficiency standard levels. 15

To get some quick background, the life cycle 16

cost, LCC here, is essentially calculated as the 17

consumer price, or the first cost of the equipment 18

including installation, plus the operating cost over 19

the life of the equipment, discounted to a present 20

value -- or discounted to a present value year. Those 21

are added together to develop the consumer life cycle 22

cost, and then DOE expresses the results of this 23

analysis as life cycle cost savings for each standard 24

level that’s being considered. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 147

The analysis is done, again, from the 1

perspective of the end customer. It’s implemented in 2

an Excel spreadsheet which the Department will post 3

online, both for the preliminary analysis and for the 4

NOPR. 5

The rules -- let’s see here -- oh, and as I 6

said before, we calculate simple payback. Simple 7

payback is calculated as the incremental first cost of 8

the equipment divided by the operating cost savings, 9

typically in the first year for the equipment. We may 10

amortize things like maintenance expenses to 11

accommodate that. 12

This is a much more detailed flow chart that 13

describes how the analysis is actually carried out. 14

The yellow boxes shown here are the inputs to the 15

analysis. Typically, those inputs come from the 16

engineering, from the markups analysis work, and from 17

the work involved in the energy use characterization. 18

The green boxes are intermediate analyses, so we 19

essentially bring the markups and the engineering cost 20

curves together to get consumer prices. Those prices 21

join with the installation cost to get total installed 22

costs. On the lower half, we take the energy 23

consumption and, where necessary, the impact of demand 24

and electricity prices to develop annual energy 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 148

expenses for the operation of equipment at each 1

standard level. To that we add repair costs and 2

maintenance costs over the life of the equipment, to 3

develop annual operating expenses and those operating 4

expenses are discounted over the lifetime of the 5

equipment, and we take into account electricity price 6

trends into the future over the life of the equipment, 7

starting with the implementation date of the rule. 8

And from those we generate a life cycle cost 9

as well as our payback period, which get reported in 10

the TSD and the NOPR and preliminary analyses. 11

As I said, we have these energy prices, those 12

are necessary to convert the energy use to energy 13

costs. For the previous rule and the current intent 14

for this rule, was to use regional average electricity 15

prices appropriate to the commercial sector, and more 16

explicitly, to the particular building types that 17

utilize this equipment. And for the projections, DOE 18

relies on the energy information administration’s 19

annual energy outlook projections, which it will update 20

to the most recent projections available for each step 21

of the analysis. 22

We welcome any input on electricity price 23

assumptions here. One general comment is that part of 24

the reason for the assumption for using average 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 149

electricity prices instead of marginal prices in the 1

previous rule, was that for the supermarket type 2

applications, the load profiles are generally fairly 3

flat from the electricity standpoint. Again, that may 4

be less true when we look at other types of building 5

applications. 6

MR. BROOKMAN: Charlie. 7

MR. STEPHENS: I’m Charlie Stephens. Dave, 8

do you fold in demand charges into those prices, or do 9

you just ignore those? 10

MR. WINIARSKI: The average electricity 11

prices come from EIA surveys and they have already have 12

the demand cost folded into them. 13

MR. STEPHENS: Okay, and you don’t try to do 14

that by scale or -- and when you say average, you’re 15

talking about just the average across an entire sector? 16

MR. WINIARSKI: The way it was actually done 17

in the previous rule is we took the commercial sector 18

average electricity prices that are available from EIA 19

at a regional level. We then scaled those and we 20

scaled them using data from CBECs that were essentially 21

based on the ratio of the electricity prices paid on 22

average for a given sector, like supermarkets, as 23

reported in CBECs, to the overall commercial sector 24

average. So we had these multipliers for each building 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 150

type we applied to the commercial average energy use. 1

MR. STEPHENS: Good. Thank you. 2

MR. BROOKMAN: Yes, Massoud. 3

MR. NESHAN: Yes, Massoud Neshan. One 4

question. If you go back to your slide number 64, 5

where you have the baseline manufacturing price and 6

also a standard level manufacturing price. Obviously, 7

you’re looking at the manufacturing cost, but there’s a 8

lot of costs associated to the development, design, 9

testing, and certification process of these equipment 10

before we even get to this point. Where do you include 11

that in your analysis? 12

MR. WINIARSKI: That is included in the 13

engineering analysis. 14

MR. NESHAN: Thank you. 15

MR. WINIARSKI: Because there is typically a 16

preference for saving money now rather than in the 17

future for most commercial industries, we have to use 18

what’s called a discount rate to discount the energy 19

savings from future -- over the life of the equipment 20

back to a present value. DOE derives life cycle costs 21

discount rates based on what’s called the weighted 22

average cost of capital, which takes into account the 23

costs a business has either in terms of having to issue 24

equity or issue debt to the business as the discount 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 151

rate that that business sees on an overall basis. DOE 1

looks in particular for this rulemaking for the 2

corporation types that use this particular equipment. 3

The data source is from a New York college professor, a 4

Dr. Damodaran who publishes a lot of this type of data 5

on business finances on line. And DOE has relied on 6

that for a lot of the commercial rulemaking work. 7

Again, for the previous rule, we looked at 8

four types of businesses and tried to assess discount 9

rates for those four types, primarily I think we had 10

small grocery stores, large grocery stores, some food 11

service I think was in that mix as well. But we do 12

certainly seek comment on whether that’s an appropriate 13

method, using the weighted average cost of capital and 14

whether or not there are other entities besides grocery 15

stores and restaurants that should be considered here. 16

In particular, one of the questions that has 17

come up in other products is whether there’s enough 18

government purchases of this type of equipment to 19

warrant including them as a separate category of end 20

user. 21

MR. BROOKMAN: Yes, Dan. 22

MR. MANOLE: Dan Manole. If you would take 23

us to the previous slide. 24

MR. WINIARSKI: Previous to this one? 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 152

MR. MANOLE: Have you included in the 1

engineering analysis also the cost of additional 2

testing? We talked today about night curtains and 3

multiple temperature testing, that will add for every, 4

or for two of a kind products, you may need to make 5

testing. That will add cost. Have you included that 6

one? That will be -- 7

MR. WINIARSKI: I will let Aris Marantan 8

respond to that. 9

MR. MARANTAN: Aris Marantan. For the 10

engineering analysis we do expect to talk to 11

manufacturers to get their input on how much they 12

expect to pay for testing, and these are definitely 13

topics of discussion when we come around after the 14

framework document, to visit manufacturers. So we can 15

get into your estimated costs for testing. 16

MR. BROOKMAN: Other comments on the 17

Department’s approach to discount rates? You see the 18

specific questions, and the way the y’ve arrayed their 19

approach with different store types? Charlie? 20

MR. HON: There’s an additional factor in our 21

market which is used equipment, and the very, very low 22

end purchasers do not buy new equipment. National 23

Restaurant Association ran a survey that said the 24

average kitchen refrigerator will be owned seven times 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 153

before it’s scrapped. And unfortunately, that’s a real 1

entity within the markets because mom and pop shops 2

open a restaurant on a shoestring, and do not buy new 3

equipment, while chains buy new equipment and maintain 4

it at the same location for many years. So there’s an 5

entity in here that’s happening, a nd if we start 6

driving up the price of high efficiency equipment too 7

much, as the higher prices go up on new equipment, the 8

market increas es for used equipment. We’ve got to be 9

very cognizant of that because it’s a very ugly 10

situation. There are rules and regulations which 11

sometimes impede that market. California has discussed 12

possibility of regulating used equipment as well as new 13

equipment and has gotten into all sorts of legal 14

battles over it and gave up, I think. 15

But there’s a real issue there because 16

inherently the used equipment is also the old 17

equipment, which is also the most inefficient 18

equipment, so you have a real issue there . And it’s a 19

non-traceable -- it’s just everywhere. 20

MR. BROOKMAN: Thank you. Other comments 21

regarding this approach? 22

(No response.) 23

MR. WINIARSKI: So going on here, for the LCC 24

analysis, DOE also has to account for installation, 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 154

maintenance and repair costs. In the approach used in 1

the 2009 rulemaking for this was that installation 2

costs for any of the equipment covered were not 3

expected to change with the increase in equipment 4

efficiency. The actual baseline installation costs 5

were developed largely from input from the public 6

meetings for the final rule, at least. 7

In addition, DOE develops the maintenance 8

from repair costs. The source for the maintenance 9

costs were RS Means Facilities Maintenance Handbook, 10

and Repair Cost Data Handbook. The assumptions used in 11

that rulemaking for maintenance costs were that it 12

could be broken down into what’s called preventative 13

maintenance, basically, things like cleaning cases and 14

such like that. And in addition there was a -- because 15

lighting was known to be replaced on certain regular 16

intervals, we had a separate category for what we 17

called lighting maintenance. And I think the 18

assumptions at the time were that fluorescent lightings 19

would be replaced on an average, every two years. When 20

we looked at analyzing LEDs, I think we used a 50,000 21

hour life time, but we did assume that the, in a 22

baseline, those LEDs were actually on 24 hours, so 23

there’s some issues with those assumptions. 24

We welcome feedback, both on the assumption 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 155

that the maintenance expenses were essentially constant 1

for preventative maintenance. Oh, I forgot to mention 2

that we actually looked at repair costs in terms of the 3

particular design options that were being incorporated. 4

For instance, if one of the design options was an ECM 5

motor, and that ECM motor was expected to last five 6

years and then have to be replaced, we tried to gather 7

cost for an ECM motor for a field replacement and 8

include that in the base assumptions. 9

So anyway, we certainly would like feedback 10

on whether the assumptions that the installation cost 11

changes would be negligible and that preventative 12

maintenance would be effectively negligible. And if 13

those are not reasonable assumptions, we welcome input 14

on what would be better alternatives for DOE use. 15

MR. BROOKMAN: Massoud. 16

MR. NESHAN: Massoud Neshan. I do not have 17

any number to share with you, but as we make these 18

cases more efficient, as we add more bells and whistles 19

to make them more efficient, obviously the maintenance 20

costs will go up, and also installation costs will go 21

up, as they have to provide more electronic controls. 22

There would be additional wiring, probably, possibly 23

that needs to be tied into a central energy management 24

system. As they do things of that nature, most of the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 156

-- actually installation costs as well as the service 1

and maintenance of the equipment. 2

MR. BROOKMAN: Okay. Yes, please, Paul -- 3

Carl. 4

MR. ROBERTS: Carl Roberts. Yes, I agree 5

with Massoud that the installation costs generally go 6

up, especially if you’re talking about electron ic 7

controls. The maintenance costs often go up, although 8

there’s notable exceptions, such as LED, where the 9

maintenance costs actually go down. But I think as a 10

general rule it would be safer to assume that the 11

maintenance and installation costs go up slightly. 12

MR. BROOKMAN: Could you say how much, 13

speculate? And with -- what? 14

MR. ROBERTS: Probably -- I would guess 15

something in the range of ten to 20 percent. 16

MR. BROOKMAN: Massoud, you’re shaking your 17

head. 18

MR. NESHAN: No, no, I agree. I would also, 19

in addition to that -- 20

MR. BROOKMAN: That’s what I meant to note 21

for the record. You agree. 22

MR. NESHAN: Yes, I agree to that. Also in 23

addition to that, as the equipment becomes more 24

complicated, you need to have a higher trained 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 157

technician that tends to cost more. The hourly rate 1

for those technicians goes up, and they’re not 2

available in every market. You might find them in the 3

big cities, but the smaller markets, it’s very 4

difficult and it tends to force manufacturers to send 5

their own people, which adds a lot of cost to the 6

maintenance of that piece of equipment. 7

MR. BROOKMAN: In that condition, where you 8

don’t have sophisticated personnel to maintain it, does 9

the equipment operate if it’s sub -optimized, or -- 10

MR. NESHAN: No, it does not. 11

MR. BROOKMAN: It just stops operating. 12

MR. NESHAN: ... that it would be running, but 13

you really don’t utilize -- basically it does not fine14

tune, you know, or run the way it should be. 15

MR. BROOKMAN: Okay, thank you. Additional 16

comments on these? Yes, Karim. 17

MR. AMRANE: Karim Amrane. I guess I have a 18

question for Dave, because we did make those comments 19

several times in the past, but every time DOE, I guess, 20

has not taken those comments into account. What do you 21

need from us, or what do we need to do at least, to 22

satisfy yourself, you know, that you’re right or that 23

you’re wrong? Because I think it’s an issue that comes 24

every time, every rulemaking hearings and every time 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 158

DOE does something else. 1

MR. BROOKMAN: Every time DOE reflects that 2

they assume that the costs remain constant? 3

MR. AMRANE: Yes. 4

MR. BROOKMAN: I see. Just wanted to make 5

sure we understood your comment. 6

MR. WINIARSKI: I can respond to that a 7

little bit. With the previous rulemaking, for instance 8

with the repair cost data, as we moved into the NOPR 9

stage, we went through a process where we contacted a 10

number of different store owners and managers of the 11

mechanical systems to make some estimates for how much 12

that cost might increase based on frequency of 13

replacement of the equipment, and we provided those 14

estimates back in our TSD for comment at the NOPR 15

stage. To the extent -- one of the issues here, a lot 16

of times the data may be available to manufacturers or 17

to, for instance, FMI storeowner-types, and for DOE 18

it’s very ne bulous as to exactly what types of numbers 19

we should be applying here. 20

So, for instance, a number like ten percent 21

is something we can build into the analysis, and 22

hopefully we’ll get comments on all sides and we’ll try 23

to come up with a compromise if we don’t have actual 24

data. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 159

MR. BROOKMAN: Thank you. Final comments on 1

this series of comment boxes? 2

(No response.) 3

MR. BROOKMAN: Okay. 4

MR. WINIARSKI: We also had to deal with 5

equipment lifetime here. Equipment lifetime is 6

actually a fairly difficul t thing to get unless you’ve 7

got a lot of hard data on it. For the previous 8

rulemaking we contacted a number of different sources 9

within the industry, as well as looked at studies in 10

the literature which suggested that there can be a 11

broad range of, quote , “average lifetimes” for the 12

equipment, sometimes as low as five years, sometimes as 13

much as twenty, often depending upon who did the 14

surveys and what stores the equipment was going into, 15

et cetera. 16

We used some relatively simplified 17

assumptions for the previous rulemaking, one that the 18

equipment lasted ten years for large grocery store 19

chains, and multi-line retailers, like for instance a 20

super Target-type, Walmart-type application. For 21

smaller stores, we assume that they would hold the 22

equipment longer, just from not having the capital 23

available, and that a 15-year life was more 24

appropriate. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 160

And so we seek comments on whether those are 1

appropriate assumptions for this rulemaking and if 2

whether any new data has surfaced in the industry that 3

we should be looking at. 4

MR. BROOKMAN: Yes, Carl 5

MR. ROBERTS: Carl Roberts. I think we can 6

probably all think of examples where the equipment life 7

was a lot shorter or longer, but I think that those 8

numbers are good. 9

MR. BROOKMAN: Do you spot any trend-line 10

difference? 11

MR. ROBERTS: Over time? 12

MR. BROOKMAN: Yes. Or projected into the 13

future with new technology? 14

MR. ROBERTS: No, I wouldn’t see any trend at 15

this point. 16

MR. BROOKMAN: Okay. Charlie. 17

MR. STEPHENS: Charlie Stephens. In another 18

rulemaking that DOE’s conducting right now that will 19

remain nameless from my perspective anyway, there was 20

quite an interesting interaction between the 21

assumptions about the lifetime of the product and 22

shipments, to the point where once you ran the 23

assumption for the shipments through the shipments 24

model, what came out the other side was attested to by 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 161

all the industry people sitting around the table as 1

just preposterous. 2

And as Charlie pointed out here, Charlie Hon, 3

about some equipment being owned seven times before it 4

finally finds its way to the recycling bin, I think 5

there is quite a range, and I would suggest that if 6

you’re going to make some hard and fast assumptions 7

like that, instead of using a distribution of lifetimes 8

in your analysis, which I would highly recommend, 9

you’re going to get some pretty strange shipment 10

results by the time you do that. 11

So I think some of us are going to be most 12

happy if your assumption about the lifetime of the 13

equipment produces a reasonable shipments average that 14

the industry agrees is pretty close to what’s actually 15

happening. 16

MR. BROOKMAN: I was wondering if there’s 17

other data out there. 18

MR. NESHAN: Massoud Neshan. One thing about 19

the trend as far as the equipment is used in the 20

stores. We are seeing that the convenience stores, by 21

that I mean national chai ns, and I don’t want to 22

mention names, but they are getting more and more into 23

food service type of equipment. They’re offering more 24

fresh food in their establishment. So we are seeing a 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 162

lot of that equipment going to the convenience stores, 1

and these are not -- these are open-type display cases. 2

As a result, they tend to remodel their stores more 3

often, rather than -- if you have a cooler box with 4

doors, those tend to stay and not much is going to 5

change there. But these food service type, we see more 6

and more, going to the convenience stores. 7

MR. BROOKMAN: Charlie. 8

MR. HON: Charlie Hon. There’s going to be 9

one trend that people don’t want to talk about and 10

that’s the fact that because we’re becoming more 11

energy-efficient, the units are more correctly sized. 12

They don’t have excess capacity. They’re actually 13

running harder because of that. So I think you’re 14

going to see a downturn in the life cycle for several 15

reasons. Number one, is there’s an increase in t he 16

importation of lower-cost products from overseas that 17

are, shall we say, less quality products; and the fact 18

that, due to our energy efficiency driving, we’re 19

making them work a little bit harder proportionately to 20

where they’ve been before. Expected l ife expectancy 21

decline. 22

MR. BROOKMAN: That makes sense. 23

MR. WINIARSKI: One quick comment related to 24

your comment earlier about the used equipment market. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 163

We haven’t discussed that here, but obviously, as we 1

start to look at restaurants, that’s going t o be an 2

issue. I’m assuming for the preliminary analysis that 3

we are going to consider that the equipment still 4

lives, essentially the same lifetime, unless you have 5

other assumptions, that there is effectively, when the 6

equipment is resold into that mark et, it’s resold at a 7

higher value, and so that the initial cost increment is 8

sort of captured in that whole resale market throughout 9

the lifetime. If you have any data on any appropriate 10

way to handle that, that would be helpful. 11

MR. BROOKMAN: I was wondering if the data in 12

this chart in 68 does reflect -- I guess, Carl, you 13

said a moment ago that this would be a fair average in 14

a real distribution. Is this -- yes, that was 15

essentially what you implied, I thought. 16

MR. ROBERTS: Yes, though I agree with 17

Charlie. 18

MR. BROOKMAN: Okay. Harvey Sachs. 19

MR. SACHS: Question for Massoud, if I might. 20

This is Harvey Sachs. As you’re seeing the extension 21

of supermarket-type equipment into convenience stores, 22

are these moving to remote condensers as well? 23

MR. NESHAN: It’s a mix of both self

24

contained and remote. It really depends on if it’s a 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 164

brand new installation, they tend to go remote, but if 1

it’s a remodel, it’s a whole lot less expensive and 2

less time consuming to go with the self-contained. 3

MR. BROOKMAN: Charlie? 4

MR. HON: Another factor involved in that is 5

rental property. If they own the property, they will 6

tend to put self-contained in it. If they do not own 7

the property, because of penalties of poking holes in 8

walls, they do not wish to do that. A lot of contracts 9

do not allow them to do that, so rental property, 10

especially in a larger building, such as a mall or 11

anything like that almost exclusively goes self12

contained. 13

MR. BROOKMAN: Okay, thank you. Let’s move 14

on. 15

SHIPMENTS ANALYSIS 16

MR. WINIARSKI: So following up from life 17

cycle cost, we also do a shipments analysis. We’ve had 18

some discussions about the issues involved in that. 19

The purpose is to estimate shipments, both at the 20

baseline level and going out into the future. DOE uses 21

a 30 year analysis period from the implementation data 22

of the affected standard, going outward. And one of 23

the things we want to characterize, not only the base 24

case shipments, but how those shipments may change over 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 165

time. That change may occur because of growth in the 1

basic building market that’s being served, that has 2

typically happened. There may also be shifts, either 3

due to the implementation of new standards which 4

increase costs for the equipment that may move the 5

baseline shipments projection to a different projection 6

for different standard level, and we want to try to 7

consider that where possible. There may also be trends 8

within the market, people moving from self-contained to 9

remote cases, for instance, as has been discussed here. 10

DOE has used in the past, some general data 11

sources to establish baseline shipments. Data has come 12

from AHRI, from the previous rulemaking. We’ve also 13

looked at data from Appliance Magazine, Fredonia, which 14

is a private source for that type of data, and the U.S. 15

Census bureau. Generally the data is at a high level 16

for the refrigeration industry and doesn’t really get 17

into particular product classes. And so in the 18

previous rulemaking we used a fixed disaggregation by 19

product class that came from the original AHRI 20

submission. We hope to get similar data like that for 21

this rulemaking, as well as any new or historical data 22

on shipments that might be available. 23

We talked about we do the base case forecast 24

and then what’s the effect of energy standards, as well 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 166

as how it might change between equipment classes. 1

Typically, what DOE has done in the past for this rule 2

is we try to develop a shipments model. That model 3

takes into account, in the previous rulemaking it takes 4

into account the building -- the use of the equipment 5

and how that building stock changes over the next 30 6

years. In the previous -- we established essentially 7

an estimated saturation rate for how many equipment go 8

to, like, per square foot of floor area of a given 9

building type, and then using the necessary -- using 10

the lifetime of the equipment, we figure how much of 11

the equipment and the stock has to be replaced over 12

time, as well as how much equipment has to be shifted 13

to new construction. Adding those together we develop 14

a shipment curve going into the future. And then where 15

possible, we’d like to quantify the sensitivity of that 16

shipment curve to changes that are introduced due to 17

standards or from other forces in the market. 18

MR. BROOKMAN: So we’re not going to read 19

these comment boxes. You can read them yourselves. 20

Please take a peak: historical shipments, 21

representative saturation rates, and potential impact 22

of new energy conservation standards on equipment 23

shipments. Thoughts on those questions? Yes, Carl. 24

MR. ROBERTS: Carl Roberts. One of the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 167

technologies that will become a key part of meeting the 1

energy standard is high efficiency glass doors. They 2

conserve energy by a number of means, but one of them 3

is cutting it closer on anti-sweat protection. And so 4

there will be some customers who wo n’t have had as 5

satisfactory performance from cases with high 6

efficiency doors, and in those areas, say -- and a lot 7

of those are C-store applications or geographic areas 8

like Houston. They may have a strong incentive to stay 9

with their old equipment. 10

MR. BROOKMAN: Okay. Interesting. Okay, 11

other comments on these? 9.1, 9.2, and 9.3. Okay, 12

we’re going to keep moving on. 13

NATIONAL IMPACT ANALYSIS 14

MR. WINIARSKI: Okay. So DOE then takes data 15

from both the shipments which represent the entire U.S. 16

market, as well as economic data that comes from 17

lifecycle cost analysis, and develops what it calls a 18

National Impact Analysis. The goal of the National 19

Impact Analysis is two-fold. It estimates, first, the 20

national energy savings that are projected to occur at 21

different standard levels that DOE may consider, as 22

well as what’s called the national net present value, 23

which tries to assess the economic impact on the nation 24

for the adoption of different standard levels. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 168

One of the issues that DOE wants to basically 1

address here early on is that often in other products, 2

DOE does what’s called a rebound effect analysis. The 3

rebound effect is essentially if a product is -- if the 4

efficiency goes up, then it costs less to operate, and 5

if it costs less to operate for some products, there is 6

a belief that those products will also be used more. 7

An example might be if you have an air conditioner, and 8

it’s really cheap to operate, I may air condition for 9

more hours of the year. 10

DOE stated in the previous rulemaking that it 11

didn’t believe that such a rebound effect really 12

existed with this product, because it typically 13

operates on a constant basis -- I use the word 14

“ typically ” again -- it operated on a constant basis 15

throughout the year and therefore there isn’t a lot of 16

opportunity to use it more. The rebound effect 17

analysis does not specifically take into account the 18

effects of increased shipments that might occur due to 19

it being cheaper to operate one class of equipment or 20

the other. 21

So, anyway, DOE develops what’s ca lled a 22

National Energy spreadsheet -- National Energy Savings 23

spreadsheet for the calculation of these, and again, 24

posts it for review online at the preliminary analysis 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 169

and NOPR stages. 1

The National Energy Savings is done comparing 2

the base case in each higher efficiency standard level. 3

DOE calculates that on a year-by-year basis over the 4

30-year analysis period. 5

One of the things that’s a little bit 6

different from the LCC is DOE reports the numbers here 7

in terms of what’s called primary energy saving s, not 8

energy savings in terms of kilowatt hours at the site, 9

but rather in terms of primary energy use to feed the 10

power plants that are providing that electricity. And 11

DOE uses site to source, or site to primary conversion 12

factors to establish that difference in -- between the 13

site and the primary energy. It typically has gone to 14

EIA ’ s National Energy Modeling System to try to get 15

good estimates for what that is for the U.S. on an 16

average over all. 17

DOE does the net present value analysis for 18

savings at the customer level, however, in contrast to 19

the life cycle cost analyst, for the NPV analysis, DOE 20

is obligated to use two distinct discount rate 21

assumptions, one at three, and one at seven percent. 22

Those requirements come from the Office of Management 23

and Budget and are the same assumptions for all its 24

rulemaking activities. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 170

MR. BROOKMAN: So you can see the comment box 1

there. Comments on national impact analysis? 2

(No response.) 3

MR. BROOKMAN: So then we are going to press 4

on. We were thinking tha t perhaps we’d take a break 5

now, but we’re going to keep pressing on for now. 6

Anybody that is discomfited can leave the room and 7

rejoin us as quickly as possible. Yes, so let’s keep 8

going. 9

LIFE CYCLE COST SUBGROUP ANALYSIS 10

MR. WINIARSKI: So quickly, I’ ve described 11

what DOE does in the preliminary analysis. DOE has a 12

couple more steps that it goes through that are 13

essentially looking at first revising its preliminary 14

analysis based on whatever comments arrive from 15

stakeholders at the presentation of that analysis, and 16

it goes into its NOPR analysis. 17

And in the NOPR, one of the first steps is 18

DOE does what’s called a lifecycle cost subgroup 19

analysis. The subgroup analysis is essentially 20

designed to analyze economic impacts on particular 21

subgroups of the user population for the equipment. 22

And in particular, try to identify subgroups who may be 23

disproportionately impacted by new standards compared 24

to the overall user base. Subgroups in other rules 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 171

include things like small businesses, ethnic, 1

minorities, low income consumers, and senior citizens. 2

A lot of that is based on what we call consumer 3

products. 4

For commercial products, often DOE is focused 5

on small businesses and the analysis in the previous 6

rule looked at potential impacts on small businesses. 7

These are examined as a subgroup. For this rulemaking, 8

independent restaurant owners could be another example, 9

compared to chains, as a subgroup to be analyzed. 10

One of the interesting things that came out 11

of the rule is because some of the small businesses 12

were assumed to hold onto their equipment longer, they 13

have a longer opportunity to actually get savings from 14

higher efficiency equipment. That’s sort of an 15

interesting development of this analysis, and we 16

certainly welcome comments on how it might do a more -- 17

I won’t say more accurate, but a subgroup analysis that 18

really looks at who is, in fact, going to be impacted 19

disproportionately compared to the main user base. 20

MR. BROOKMAN: So reflections on that? 21

Subgroups that might be affected either 22

disproportionately or as you would describe them. 23

Massoud, do you have something? No. Charlie. 24

MR. HON: Charlie Hon. I think you’re going 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 172

to run into a real hornet’s nest. I think you would 1

need to go to NRA, National Restaurant Association, 2

because small businesses in the restaurant industry, 3

traditionally are ethnic in their nature. You will 4

have Asian-type foods entering the market and leaving 5

the market, Mexican foods, all the different subgroup 6

ethnically-based food categories tend to pop up in 7

small businesses and small restaurants, non-chain. 8

MR. BROOKMAN: Would you say that one 9

subgroup would be disproportionately influenced? 10

That’s part of what’s embedded here, correct? 11

MR. HON: That’s something I’m not sure of, 12

but I’m afraid it may be. 13

MR. BROOKMAN: Okay. Harvey? 14

MR. SACHS: Harvey Sachs. It seems to me 15

that, at least anecdotally, there’s a fair subclass of 16

brokers in used equipment for restaurants and for other 17

sectors. Might be worthwhile trying to understand 18

things from their perspective and might offer some 19

insights that none of the rest of us has. 20

MR. BROOKMAN: I wonder if they have an 21

association. 22

MR. SACHS: You could form it, Doug. 23

MR. BROOKMAN: Not my intention. I was just 24

curious if there would be data or some such thing. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 173

Okay. Yes, John. 1

MR. DAVIS: John Davis. The only 2

organization I could think of would be the -- almost 3

the opposite of the used brokers, and that would be 4

FEDA, Food Equipment Distributors Association, but they 5

represent more of the larger chains, but that would be 6

the closest thing that I could think of that would 7

possibly represent the distributor channel. 8

MR. BROOKMAN: Okay. Yes, Charlie. 9

MR. HON: Charlie Hon. There’s also a couple 10

of dealers’ associations which deal in new and used 11

equipment, and they may be able to give you some data, 12

although I’m not sure about that. 13

MR. BROOKMAN: You know the name of them? 14

MR. HON: I’d have to try and find them. 15

MR. BROOKMAN: Okay. 16

MR. WINIARSKI: With that I’ll turn this over 17

to Collin here who will present the manufacturer’s 18

impact analysis. 19

LIFE CYCLE SUBGROUP ANALYSIS AND 20

MANUFACTURER IMPACT ANALYSIS 21

MR. WEBER: Thank you. Collin Weber from 22

Navigant Consulting. Just like to give a brief 23

introduction to the manufacturer impact analysis, 24

another NOPR analysis. The function of the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 174

manufacturer impact analysis is to assess the impacts 1

of proposed or potential standards on manufacturers 2

within the commercial refrigeration equipment industry. 3

To identify and quantify, estimate impacts on specific 4

manufacturer subgroups that may be more severely or 5

disproportionately impacted than the industry as a 6

whole, such as for example, smaller manufacturers 7

independent manufacturers. And to examine the impact 8

of cumulative regulatory burden on the industry as a 9

whole. 10

The method employed will be to analyze 11

industry cash flow and net present value through the 12

use of a tool known as the Government Regulatory Impact 13

Model, or GRIM, and also this will be coupled with 14

interviews of manufacturers within this industry, which 15

will be used -- the data from this will be used to 16

refine the inputs to the GRIM, to develop analysis with 17

respect to the particular subgroups, and also to 18

address general qualitative issues based on things that 19

might be presented during those discussions with 20

manufacturers in the industry. 21

The outputs listed here are, industry net 22

present value impacts, subgroup, individual subgroup 23

net present value impacts, and also other quantified 24

impacts. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 175

The diagram here shows the three main phases 1

of the manufacturer impact analysis. The first of 2

these occurring during the preliminary analysis period 3

in which DOE seeks to develop an industry profile and 4

conduct some preliminary MIA interviews. The second of 5

these occurring prior to the NOPR will be to develop a 6

straw man or outline GRIM, and also to develop an 7

interview guide for use later in the process. And then 8

the final -- third and final phase after the 9

publication of the NOPR, DOE seeks to interview and to 10

-- interview manufacturers and to develop an industry11

wide set of subgroup analyses. And then finally, to 12

assess direct employment and competition and cumulative 13

regulatory burden impacts. 14

At this time, DOE seeks comment regarding any 15

potential subgroups of commercial refrigeration 16

equipment manufacturers that should be aware of and 17

consider specifically in such a manufacturer subgroup 18

analysis. And also seeks comment regarding any 19

regulations or pending regulations that DOE should 20

consider in an analysis of cumulative regulatory 21

burden. 22

MR. BROOKMAN: Massoud. 23

MR. NESHAN: Massoud Neshan. One subgroup 24

that has a major impact on the performance of the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 176

display cases are compressor manufacturers. That would 1

be one subgroup that you should be contacting. What 2

are you doing to improve efficiency of those 3

compressors. 4

MR. BROOKMAN: Thank you. Other subgroups, 5

and particularly -- yes, Karim. 6

MR. AMRANE: Karim Amrane. Not subgroups, 7

but talk about the regulatory burden here. Of course 8

there is this ongoing rumor here on walk-ins, I think 9

it’s going to impact several manufacturers while making 10

those type of products. But as far as regulation, 11

there is some legislation, but there is some pending 12

legislation on climate change that could have an 13

impact, significant impact on the cost of refrigerant 14

if it passes, because it will reduce significantly the 15

amount of HFCs that will be available for the industry 16

and that will have an impact on the price of HFCs, so I 17

think that’s something that DOE should look at as well. 18

MR. BROOKMAN: Thank you. Harvey Sachs. 19

MR. SACHS: Harvey Sachs. Karim raises an 20

important point, and it cuts several different ways as 21

one perspective of major manufacturers of allied 22

equipment is SNAP applications, significant new 23

application, whatever, significant for the use of 24

hydrocarbons in self-contained equipment as is European 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 177

practice today, which would go in the opposite 1

direction. At the same time accelerated fade-out of 2

HFCs, or phase-down of HFCs could have enormous impact. 3

And we also have energy and climate legislation in the 4

hopper. And it seems to me that the only way that DOE 5

can do justice to the several uncertainties is with 6

some sort of a scenario analysis that tries to look at 7

the bundled impacts, worst case, best case, and average 8

case, of all of these uncertain appellate policy 9

developments. 10

MR. BROOKMAN: Okay. Thank you. A 11

challenge. That would be a challenge. 12

MR. WEBER: Other comments on these two 13

issues before we move on? If not, I’ll turn it back to 14

Dave, then. 15

UTILITY IMPACT ANALYSIS, EMPLOYMENT ANALYSIS, 16

ENVIRONMENTAL ASSESSMENT, AND 17

REGULATORY IMPACT ANALYSIS 18

MR. WINIARSKI: So at this point I’ll talk a 19

little about the utility impact analysis that DOE does. 20

Essentially, the purpose of this is to make an 21

assessment of the overall impact on the electric 22

utility industry, in particular, looking at what’s the 23

impact on number of power plants that might be put in 24

place, and how that number will change just as a 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 178

function just of this rule. 1

The methodology that DOE looks at here is 2

they take the EIA’s National Energy Modeling System 3

which has particular -- this is developed by EIA and 4

used to prepare their annual energy outlook, which 5

develops projections of future prices of electricity 6

and future use of electricity within the nation. What 7

we do in that analysis is we take that model and we 8

modify the commercial sector demand curve, which is the 9

curve which reflects how much demand the commercial 10

sector is going to have for electricity. We say that 11

using the results from the national energy analysis, 12

which includes all the shipments from new equipment and 13

such, we reduce or decrement that demand curve and then 14

that decrement in electricity demand is then propagated 15

through the model to result in impacts on the cost of 16

electricity and impacts on the number of power plants 17

that are expected to be put in place. 18

DOE has relied on that process for a number 19

of its rulemakings, but we certainly welcome any input 20

from parties on whether that’s the appropriate 21

methodology or whether there ’s other techniques that 22

DOE could use to sort of get at this level of power 23

plant production. 24

MR. BROOKMAN: Confirmations and/or different 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 179

ideas? Charlie. 1

MR. STEPHENS: Charlie Stephens. Dave, you 2

kind of passed over it quickly, but did I hear you say 3

that NEMS model is going to look on the impact of the 4

price of electricity overall, or just the number of 5

power plants that -- 6

MR. WINIARSKI: DOE primarily looks at, for 7

this analysis, historically looked at the number of 8

power plants. The model will, in fact propagate out 9

for other variables, including price of electricity, 10

including amount, for instance, of coal that’s 11

purchased, things like that. But for this analysis, 12

DOE is certainly focused on the impact of the power 13

plants. 14

MR. STEPHENS: Okay. Because we -- in past 15

rulemakings, I know my client has repeatedly noted 16

their own modeling which looks at what the price of 17

electricity would be in the Pacific Northwest, my 18

clients being 139 electric utilities in the Pacific 19

Northwest who do this kind of planning all the time, 20

and they look at what the price would be absent the 21

conservation that results from all of these things, and 22

inevitably, the cost of conservation is lower by a lot 23

than whatever our supply options are, and the effect is 24

almost always to lower the price of electricity from 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 180

what it would otherwise be for everyone, not just the 1

consumers of refrigeration equipment, but for everyone 2

in the Pacific Northwest. Basically, it has a 3

dampening effect on rates. 4

And so, I’ve never seen th at, and my client 5

continually urges DOE to take a look at that, but so 6

far that has not explicitly showed up in any of DOE’s 7

analyses, or the results of those analyses, and we 8

would appreciate it if one day they did what the 9

Pacific Northwest does and actually quantify that or 10

make an attempt to quantify it, to look at what 11

consumers generally will save through the dampening 12

effect of electric rates. 13

MR. BROOKMAN: Charlie, could you say three 14

sentences of how that would be applied nationally? 15

MR. STEPHEN S: Well, basically, there’s an 16

average commercial price of electricity, and the 17

Pacific Northwest looks at this from a residential, 18

commercial, industrial and agricultural sector prices. 19

But the models we use, and I’m sure NEMS can do this, 20

basically project out demand, apply electricity at a 21

cost, a levelized cost per kilowatt hours essentially, 22

and basically the model just says if we build power 23

plants, this is what the levelized cost of power will 24

be over this period. And if we reduce our demand, then 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 181

you get a different levelized cost by not having built 1

power plants that cost this much. And each power plant 2

-- and it’s a menu of power that’s applied. It’s not 3

just coal plants, it’s not just wind power. It’s 4

everything. It’s all of the stuff that we can 5

conceivably build instead. And when you apply the 6

conservation, you typically get a lower number. And 7

then you apply that to the various sector, to the rates 8

in the appropriate weight, if you will, and you get a 9

lower -- you get millions of dollars saved annually by 10

every customer. Every customer. 11

MR. BROOKMAN: Okay. Thank you. Let’s move 12

on to employment impact analysis. 13

MR. WINIARSKI: DOE does what’s called an 14

employment impact analysis, which is an attempt to 15

assess what the overall impact on employment in the 16

nation is as a response to new energy conservation 17

standards. DOE actually does two employment analyses, 18

one which looks at direct employment impacts on 19

manufacturers, and those numerical estimates come out 20

of the manufacturing impact analysis that Collin 21

discussed. The other impact, or other analysis, looks 22

at what we call indirect employment analysis. And 23

basically, there are changes in employment that are due 24

to shifting purchases of goods and services within the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 1 82

national economy as a whole, and response to standards, 1

as well as potentially higher income is available 2

because less of the expense -- there are less total 3

expenditures for energy within the economy. 4

DOE uses a model called the Impact of Sector 5

Energy Technologies to do these estimates. That model 6

is actually used throughout BT for doing this type of 7

analysis for a number of programs, including the 8

appliance standard program. 9

DOE requests any feedback on whether there 10

are reasons that DOE should or should not continue to 11

use that model for this analysis. 12

MR. BROOKMAN: Comments on employment impact 13

analysis? 14

(No response.) 15

MR. BROOKMAN: Okay. 16

MR. WINIARSKI: DOE also does what’s called 17

an environmental assessment in the course of its 18

rulemaking. The environmental assessment is designed 19

to consider, and where possible, quantify the impacts 20

on the environment of new energy standards that might 21

go in place for the equipment. DOE typically focuses 22

on emissions in that analysis, emissions at the power 23

plant. In the case of this equipment, the particular 24

emissions that DOE looks at in the analysis include 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 183

carbon dioxide, sulfur dioxide, nitrogen oxides, 1

mercury, and particulate matter. 2

DOE uses the NEMS model. We actually refer 3

to it as NEMS-BT, because we have modified the model in 4

terms of those commercial sector demand curves that I 5

discussed in the utility analysis. And we use it to 6

calculate all the emission reductions that are 7

considered. And then the net benefit of the standard 8

in the environmental assessment is the difference 9

between the emissions calculated at each standard level 10

and the AEO reference case emissions. 11

DOE also has, in recent rulemakings, taken to 12

do some monetization of the different types of 13

emissions that occur. Some of that guidance for how 14

you monetize it is done at a government-wide level, and 15

so we take into account interagency agreements on which 16

emissions to monetize and what, in fact, numbers for 17

the cost or benefit of per unit emission reduction the 18

nation will see. 19

MR. BRO OKMAN: So let’s take comments on the 20

environmental assessment and the things that the 21

Department should consider in this case. 22

(No comment.) 23

MR. BROOKMAN: No comments on that. Okay. 24

Yes, turn your microphone on. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 184

MR. ALI: ... but I am for making assu mptions, 1

so I’d like to hear the answer. We talk about CO2 2

emissions. CO2 can be a secondary coolant. If it is 3

used as a secondary coolant and we have power failure, 4

we pretty much vent the CO2 in the atmosphere. How 5

does that go along with CO2 emission? Is that 6

calculated? Added in any calculation? How -- probably 7

a simple answer, but to have it for the records. 8

MR. BROOKMAN: Charles. 9

MR. LLENZA: Charles Llenza, Department of 10

Energy. I think that currently, in the U.S. market, 11

that’s not the situation, so we don’t have a scheme. 12

We have never faced that, I don’t think, unless Dave 13

has some other -- 14

MR. WINIARSKI: Yes, I was going to say we 15

have not considered that, primarily for the reason that 16

we have not been considering the secondary loop 17

a pplications in this rulemaking, so that issue hasn’t 18

come up. 19

MR. LLENZA: Yeah, I think that in the future 20

if this is something that becomes -- because that’s a 21

coolant methodology that’s fairly new, but it’s 22

starting to gain some traction in Europe especially for 23

individual units. My understanding is that it has 24

larger compressors because the transfer ratio from heat 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 185

to cool is a little -- it’s lagging. It’s not as 1

efficient, so you need bigger compressors. It’s a 2

little bit of a different system that has to be set up. 3

So I assume that at some point in the future it will 4

be coming this way. But right now we just haven’t 5

really haven’t thought about it, quite honestly. 6

MR. BROOKMAN: Okay. Charlie. 7

MR. HON: Recent SNAP rules have allowed it, 8

that is now legal in the United States, just last fall. 9

But the problem is it’s not just coming to the United 10

States, it’s here. Several of my cohorts on the A SHRAE 11

committees are working on these projects on a daily 12

basis, so that I know it’s a very active t hing because 13

in certain conditions it is more efficient than a 14

standard unit. 15

MR. BROOKMAN: Harvey Sachs. 16

MR. SACHS: Certainly -- Harvey Sachs. 17

Certainly the question of venting CO2 is one that ought 18

to be looked at. The instinctive reaction is that 19

unless I get into very, very frequent venting of the 20

entire refrigerant charge, the venting of the charge, 21

even in a distributed system, is likely to be small 22

relative to the CO2 contribution during operations with 23

today’s generation mix. I could be wrong with that, 24

which is why I’m glad you brought it up. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 186

MR. BROOKMAN: Yes, Charlie. 1

MR. STEPHENS: Charlie Stephens. I’ve been 2

following this since about 1993, so I’ve had a long 3

time to think about this, but it still does. The thing 4

is, when you get dow n to it, all the CO2 we’re putting 5

in these machines, to the extent there are some now, it 6

comes from the atmosphere. We’re just sequestering it 7

a little while, and if it leaks back out, we have to go 8

get it back out of the atmosphere, and use a little 9

energy, and then put it back in the machine again. And 10

given that its GWP is one, versus 1700 or 1900 for some 11

of the other refrigerants, it’s actually quite a nice 12

equation. But the net effect, it’s kind of like 13

biomass in a way, in some cases. It comes from the air 14

and then if it leaks, it goes back to the air, and we 15

just keep moving it on. 16

MR. BROOKMAN: Okay. Other comments on 17

environmental assessment, because we’re moving to the 18

regulatory impact analysis. 19

(No comment.) 20

MR. WINIARSKI: Finally, as part of its 21

rulemaking, DOE does what’s called a regulatory impact 22

analysis, which is not clearly appropriately named 23

because the purpose of this analysis really has been to 24

look at non-regulatory alternatives to putting forth 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 187

new standards. For instance, DOE recognizes that there 1

are voluntary programs, particularly in this case with 2

the self-contained market, which, like Energy Star and 3

things like that, that advance the state of the art in 4

terms of what’s used in the market. And these can have 5

benefits that may be considered as alternatives to 6

actually setting forth new standards. There are 7

programs whereby DOE may be able to incentivize some of 8

these other approaches to getting the energy savings. 9

And so DOE tries to consider the impacts of initiatives 10

that are out there on the market as well as initiatives 11

that are suggested that DOE may want to consider as 12

non-regulatory alternatives, and we certainly welcome 13

any comment on existing programs or programs that we 14

could examine as optional alternatives in terms of 15

their energy-savings benefit to the nation. 16

MR. BROOKMAN: Yes, Charlie. 17

MR. HON: One thing which would be very 18

interesting for you to look at is get a hold of Hydro19

Quebec. Hydro-Quebec did a program recently that was 20

very, very successful in the self-contained equipment, 21

whereby they gave substantial rebates, much larger than 22

you’ve seen in the United States, but with one very 23

strict condition that the unit that was removed, it had 24

to be a replacement type design. If you bought a new 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 188

unit and replaced an old one, the old one had to be 1

taken out of the system completely, and taken to full 2

recycle. That guaranteed that your project was net 3

positive because you were getting a very old piece -- 4

usually very old piece of equipment being replaced, and 5

it wasn’t going into the used market to further hang 6

around and bother people. That was the key issue, that 7

they had to have it out of the market completely, and 8

had to be able to show through a licensed recycler, 9

that it was handled that way. 10

MR. BROOKMAN: And was this for commercial 11

refrigeration equipment? 12

MR. HON: Yes. 13

MR. BROOKMAN: Okay. 14

MR. HON: Traditionally, our rebate programs 15

in the United States are $150, $250 dollars per unit. 16

Hydro-Quebec was at $750. 17

MR. BROOKMAN: Wow. 18

MR. HON: And they were cost-justifying it 19

within the first two years. 20

MR. WINIARSKI: A general comment here in 21

terms of analyzing the impact of that. I think DOE, in 22

a lot of cases has focused on whether it can achieve 23

some more levels of energy savings. In a program like 24

that, there’s also the -- there’s a need to calculate 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 189

sort of what the net present value impact is, and in a 1

case like that, money is coming from somewhere to 2

purchase that equipment. And so that’s sort of taken 3

into account in this analysis. 4

MR. HON: There were two reasons why they did 5

it. I was involved in it, but the first is, they did 6

not wish to build. The second is that there were some 7

huge regulatory activities that affect them, that is 8

that a lot of states have passed minimum renewable 9

energy standards. And Hydro-Quebec happens to be 80 10

percent hydroelectric. They have great wind farms as 11

well. Between the two of them, they’re 80 to 90 12

percent renewable energy, and as such, they’re selling 13

it to the United States at a very, very big markup, and 14

still showing a great impact on their own economy. 15

MR. BROOKMAN: They’re net exporters. Yes. 16

MR. HON: And it is very ugly when you look 17

at the dollars and see how much we’re sending north. 18

MR. BROOKMAN: Okay. Final comment perhaps, 19

so -- while you’re moving, Harvey go ahead while this 20

gentleman’s getting to the microphone. 21

MR. SACHS: Charlie, I appreciate that, and 22

if you follow U.S. legislation, AHRI and ACEEE have 23

introduced legislation that would have a similar effect 24

on the old and most obsolete CFC chillers with very 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 190

significant incentives. 1

MR. HON: Nice. 2

MR. BROOKMAN: Please. 3

MR. BAUMAN: Jeff Bauman from Continental. I 4

guess two comments on -- you mentioned earlier about 5

incentivized programs and Energy Star specifically. I 6

think one of the things that overall I believe would 7

really help the Energy Star program would be to unify 8

the test standards that are being used by DOE and by 9

Energy Star. I know that we had meetings with Energy 10

Star last week and they said there are efforts towards 11

that, but I would just strongly urge that toward 12

everybody out there. 13

The other thing I think we’d like to see too 14

is when DOE gets the data, that a public database, or 15

the information be publicly available for people to 16

look at. Energy Star has a very nice list now that you 17

can go on and see who’s out there on all the different 18

product categories, but there’s not really anything as 19

far as basically, all the information that’s out there 20

to capture everything, and then the concept would be 21

that DOE maybe even maintains the databases of all 22

products, whether they’re Energy Star or not, and then 23

Energy Star would have a subgroup of that that says, 24

okay, these are the Energy Star. But everybody would 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 191

agree, and hopefully we’re al l talking to each other. 1

Thank you. That’s helpful. That’s good. Final 2

comments on this segment? 3

(No comment) 4

MR. BROOKMAN: Let’s move forward to the 5

final comments slide. 6

OTHER ISSUES, QUESTIONS, & COMMENTS 7

MR. BROOKMAN: We, the Department, wanted to 8

provide, and I promised you at the outset an 9

opportunity now at the end of the day, to make final 10

comments, raise additional issues that haven’t been 11

raised fully to this point, so now is your opportunity 12

to raise any additional issues, should anybody wish to 13

have any now. Yes, please say your name. 14

MR. OWEN: Kenny Owen, Master-Bilt Products. 15

I apologize for being late for the meeting. Didn’t 16

get to comment on some of the things this morning, but 17

I appreciate all the effort that’s going on here and 18

the opportunity to participate in this rulemaking. 19

The thing that concerns my company most is 20

the regulatory burden, which is going to be possibly 21

put on by additional legislation here, or rulings. 22

Just as an example, for the 2012 regulations that are 23

in effect now or will be in effect 2012, my company is 24

going to have to do 200-plus tests. As Mr. Hon pointed 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 192

out, those tests are going to take at least a week in 1

the lab, and what he didn’t say was that’s a week if it 2

passes the test just like it is. If you have to 3

redesign, if you have to change motors, change 4

compressors, do anything extra, you can run into six, 5

seven, eight weeks a lot of times. W e estimate it’s 6

going to cost over a half million dollars. 7

Now, we’re a relatively small company. Th ere 8

are a lot of companies that are smaller than we are. 9

If we go to third party requirement, third party test, 10

those costs will more than double for us, we think, 11

based on past experience. So we’d ask that you please 12

take that into consideration. We, as manufacturers, 13

struggle every day to compete with other companies 14

across the world. A lot of our equipment is being 15

imported that we have to compete with, and anything we 16

do to burden our industry with further, what I would 17

call, non-productive or non-profitable things that we 18

have to do, makes it harder for us to compete. 19

The goal here at DOE is to save energy. The 20

goal at our company is to stay alive and keep Americans 21

employed. So please keep that in consideration. Look 22

at the big picture. 23

MR. BROOKMAN: Charlie. 24

MR. HON: One difficult factor we’re all 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 193

facing in the industry is the continued increasing 1

testing and increasing cost of testing because of the 2

demand for the third party certification by certain 3

groups, that would include Energy Star, which has just 4

recently put that consideration in, but also for the 5

Canadians. All Canadian units require third party 6

certification. So that is a burden which, because the 7

Energy Star is primarily behind them, it is not -- 8

Energy Star is not actually putting the burden on us, 9

but the Canadian government is putting the burden on 10

us. So it’s not just this nation’s regulatory 11

activities, but it is also Canada’s and other nations’ 12

regulatory activities which are putting a huge burden 13

on us as well. So wh atever burden you guys think we’re 14

getting from you, double or triple that effect, because 15

there are other forces in the world as well. 16

MR. BROOKMAN: Carl. 17

MR. ROBERTS: Carl Roberts. We’re very 18

grateful for the opportunity to come here and comment. 19

I t’s a very good thing to have input at this point in 20

the process. For us, as a manufacturer, it’s a -- it’s 21

quite a burden of work to test all these cases, but 22

reducing our energy consumption is something that we’re 23

on board with. 24

One item that I think could get lost in the 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 194

shuffle, and showed up in the PowerPoint presentation 1

that wasn’t in the original documentation, was the 2

issue of secondary coolant applications. And I think 3

it would be a big mistake to neglect secondary coolant 4

applications in this rulemaking. It would open a huge 5

loop-hole that would basically give everyone a free 6

ticket out of the regulation if they use secondary 7

coolant. And the method of test is in place for single 8

phase secondaries, and probably will be in place for 9

multiple phase, two-phase secondaries, by the time 10

these rules take effect. Thanks again. 11

MR. BROOKMAN: Thank you. Harvey Sachs. 12

MR. SACHS: Harvey Sachs. I too wish to 13

express my appreciation to the Department and to the 14

industry for its help to me in understanding the world 15

a little better. But I want to turn back to this 16

question of certification, certification burdens and 17

third party certification. What’s resonating in my 18

mind is a couple threads that I pull out of the recent 19

comments just now. One of them is increasing 20

international competition, and the other that’s been 21

less spoken is that the independent certification 22

programs are what has discovered skullduggery by some 23

of the importers. So the question is how best to help 24

American industry become increasingly competitive in an 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 195

increasingly global industry, even for these products? 1

And the only things I can think about are not to 2

abandon the third party certification, but to try to 3

get the simplest certification and rating methods that 4

satisfy the need. 5

MR. BROOKMAN: Follow-on. Please. 6

MR. OWEN: Kenny Owen. Harvey, I understand 7

what you’re saying, and you’re correct in that the 8

third party certification has helped unearth some 9

things. What we would like to see is a spot-check, if 10

you will. You know, a certain percentage, maybe a few 11

models or something, but DOE or the third party has the 12

opportunity to come in and say, okay, you’ve got these 13

50 models. I want to test this one, this one, and this 14

one to make sure that you’re playing by the rules. I’m 15

perfectly okay with having somebody check us, just to 16

go through 100 percent inspection, you know, third 17

party is overly burdensome to us. 18

MR. BROOKMAN: I see Karim, and then back to 19

Charlie. 20

MR. AMRANE: I just wanted to say we do have 21

a third party certification program for commercial 22

refrigeration equipment, and we don’t test everything. 23

We spot-check. And so I think we can address those 24

needs, those concerns about the cost of testing. So 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 196

Kenny, we do have a program, and please join the 1

program. 2

MR. BROOKMAN: Charlie. 3

MR. HON: I would like to ask that you also 4

may consider a secondary process similar to what NSF 5

runs. NSF runs a process, any product that they list 6

can be questioned at any given time by a competitive 7

manufacturer, which is s a cost burden on the 8

competitive manufacturer, but for the $25,000, if I 9

find a blatant cheater, it’s worth it. 10

MR. BROOKMAN: Got you. 11

MR. HON: And I don’t have to pay it by the 12

time it’s all said and done, anyway, if it’s a blatant 13

cheater. 14

MR . BROOKMAN: Okay. Viktor, you’re next. 15

MR. ANDERSON: Yes, Viktor Anderson. I want 16

to kind of expound on what Kenny said. We too have a 17

couple hundred models to test, and they do -- there are 18

several of those that don’t meet those formulas where 19

we have to apply even what was introduced here on the 20

board. Karim also said that we’re raising -- early on, 21

we’re raising the bar on a standard that we haven’t 22

even implemented yet. So in the self-contained arena 23

of this, or aspect of this, a lot of that equipment is 24

based on calculation and there’s not a lot of empirical 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 197

data. So I would urge the DOE, before we raise the bar 1

on anything, understand that data or collect that data 2

from several of us to make sure that calculations are 3

correct. 4

MR. BROOKMAN: Okay, thank you. So then -- 5

yes, Massoud. 6

MR. NESHAN: One comment. First of all, 7

thanks for the opportunity to be here and present our 8

ideas and comments. One thing that we are constantly 9

faced with, aside from complying with the energy 10

requirements, is the customer requirements to reduce 11

the labor content of their side of the business. I 12

mean, they are coming to us asking for new designs 13

because they would like to reduce their costs. Energy 14

cost is not the only cost that they have to consider. 15

Labor cost is the largest cost component of a 16

supermarket -- in a supermarket population, because 17

it’s the labor costs and the benefits and so on. So we 18

are constantly forced to, or pushed in the direction of 19

making it simple for their operators, regardless of the 20

equipment cost or the energy consumption, 21

unfortunately, I have to say. But that’s something 22

that we need to be aware of that is an activity cost 23

that they’re looking to reduce, and not necessarily 24

just the energy. 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 198

MR. BROOKMAN: Thank you. And so expanding 1

on that in your written remarks I think would be 2

helpful to the Department. 3

So for my part, I thank all of you for these 4

closing remarks. I think this was a very, very 5

constructive meeting. I very appreciate the 6

thoughtfulness and the quality of the comment here 7

today, and I’ll turn it back to Charles. 8

MR. LLENZA: I want to thank everybody for 9

attending the meeting today, and your comments have 10

been duly noted, and we’ve had some very interesting 11

comments. I think this meeting was well worth it. 12

There was plenty of items to discuss and there’s 13

certain areas of improvement that the Department would 14

appreciate your comments and your continued interaction 15

with the Department as we go through this rulemaking 16

process. 17

Please be reminded the comment period ends 18

June 7 th , and in the back of your slides you can see 19

where you can be submitting your comments via email, 20

postal carrier, and in terms of comments for -- at this 21

point, you could submit comments not only on the 22

standard, but on the test procedure as well. 23

I n addition to that, there’s some material on 24

relevant web pages and points of contacts here on this 25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 199

slide . I’m available and at the disposal here for 1

everybody to send me your comments or questions. Here 2

are the addresses. 3

H ere’s some relevant information, the web 4

pages et cetera, also my supervisor could be contacted 5

for this too. So thank you all for coming today. 6

(Whereupon, at 3:00 p.m., the above captioned 7

meeting was adjourned.) 8

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23 REPORTER'S CERTIFICATE 24

25EXECUTIVE COURT REPORTERS, INC. (301) 565-0064 200 This is to certify that the attached proceedings 1

before: 2

U.S. DEPARTMENT OF ENERGY 3

In the Matter of: 4

PUBLIC MEETING ON THE ENERGY CONSERVATION STANDARD

FRAMEWORK DOCUMENT FOR COMMERCIAL REFRIGERATION EQUIPMENT 5 6 Were held as herein appears and that this is the 7

original transcript thereof for the file of the 8

Department, Commission, Board, Administrative Law Judge 9

or the Agency. 10

Further, I am neither counsel for or related to any 11

party to the above proceedings. 12

13

14 

### Wenfy Greene 15 Official Reporter 16 17

Dated: May 19, 2010 18