Small Manufacturer Survey OverviewThe Parker Ranch installation in HawaiiDistribution TransformersDecember 20, 2011Low Voltage DryType1 | Building Technologies Programeere.energy.govg y ypSmall Business Analysis•Definition:A distribution transformer manufacturer and its affiliates mayemploy no more than 750 employees to be considered a small business.• DOE consulted several sources to identify manufacturers:• Past rulemaking contactsSBA d t b•SBAdatabase• Asked manufacturers during interviews about small businesses• DOE’s certification and compliance databaseNEMA b li t•NEMAmemberlists• This search yielded 56 unique manufacturers:Of th 35 d t d LVDT t f b d•Ofthese,35appearedto produceLVDTtransformersbasedon aninitial screening and contacts. Upon further investigation, DOE found 6of these to be either distributors or engineering firms only, leaving 29potential manufacturers.2 | Building Technologies Programeere.energy.govpotentialmanufacturers.Small Businesses in LDVT Market141129CompaniesIdentifedasLVDTManufacturers4LargeMktShare14MeetUSSmallBizDefinitionLow‐volume,ButDon'tMeetDefinitionLargeMktShareandDon'tMeetSmallBizDefR hd5R hdeachedeached8• Of the 29 potential LVDT manufacturers DOE identified:4 fi l i ith l k t h–4firms arelarge companies withlarge marketshare– 14 firms met the definition of a small business• Of these, DOE successfully reached 8 (2 of which said DOE-covered werenot meaningful to their business)notmeaningfultotheirbusiness).– 11 firms could be considered low-volume players in the industrybut do NOT* meet the definition of a U.S. small business•Of these DOE successfully reached 53 | Building Technologies Programeere.energy.govOfthese,DOEsuccessfullyreached5.* Six of these 11 had parent companies with more than 750 employees; the other five operated primarily outside the US).Survey Summary•Of the 6 US Small businesses DOE reached:– 4/6 produce in the U.S.; however, the majority of thevolumeproduced by these six is produced outside the countryproducedbythesesixisproducedoutsidethecountry.– 3/6 also compete in MVDT market also.– 3/6 have in-house mitering or wound core construction capability.•Of all 11 low-volume businesses surveyed:–6/11produce in US;however,the majorityof thevolume; , jyproduced by these six isproduced outside the country.– 5/11 compete in MVDT market also.–7/11 have in-house mitering or wound core construction7/11haveinhousemiteringorwoundcoreconstructioncapability.– 4 made nearly all cores in-house; 2 sourced all cores; 5 had amix4 | Building Technologies Programeere.energy.govIssue:Answers to each question are scrambled in each row to protectconfidentiality. A given column does NOT represent onemanufacturer’s complete set of answers.Revenue fromDOE-coveredLVDT35% 25% 20% 5% 65% 80%Significanti tbtExpectedImpact andResponse to astandard set atNEMAUnsure. Butprobably don’thave ability totNo impact.Not a significantimpact.Probably wouldsource cores;d dWould probablyexit product line.Minimum of$750Ki t tiimpact,butwould likelyinvest to makein house,althoughUnsure. Ifcapital toogreat, they’dexit the LVDTaNEMAPremium Levelmeet.depends onsteel prices.investmentinnew machinery.gsource agreater shareof cores.market.Also in MVDT? Yes No Yes No. No Yes.Produce in US? Yes No. No Yes Yes Yes.Share of coressourced100% 0%Variesdepending on 0% 20% 0%currently.pricing.In-housemitering orwound corebilit ?*Yes. Yes. No. Yes. No. No.5 | Building Technologies Programeere.energy.govcapability?*Capital andone-time R&DinvestmentsUnknown$1.6 M forNEMA PremiumNot provided.Not a concern.$0 Unknown$750K to$1.5MIssue:Answers to each question are scrambled in each row to protectconfidentiality. A given column does NOT represent onemanufacturer’s complete set of answers.Share of Revenuefrom DOE-coveredLVDT100% Up to 40% 100% 35% 35%Expected Impactand Response to astandard set at aNEMA PremiumUnclear; significantinvestment in thatthere would beinvestment would beNo Impact.Already in highefficiency focusNo Impact.Already in highefficiency focusNo Impact.Already in highefficiency focusBig Impact.Would likelysource coresNEMAPremiumLevelR&D for newdesigns.efficiencyfocus.efficiencyfocus.efficiencyfocus.sourcecores.Also in MVDTMk?NoNoYesNoNoMarket?NoNoYesNoNoProduce in US? No No Yes No YesShare of coresShareofcoressourced currently100% 0% Varies 0% VariesIn-house fullmitering or woundcore capability?*Yes Yes Yes No Yes6 | Building Technologies Programeere.energy.govcorecapability?*Capital and onetime R&Dinvestments$0 $1.5M minimumUnknown butsignificant R&D$0 $0Survey Conclusions•The wide range of responses from small manufacturers makesclear summary statements difficult come by.– Five manufacturers thought there would be no significant impact for them atNEMA Premium levels.• Two of these companies expressed some ambivalence about CSLs higher thanNEMA Premium because of the trade-off between the potential for increasedmarket share versus the prospect of the commoditization of their high-efficiencyniche.– Six manufacturers thought the impact would be significant or was toouncertain to comment on at this time. Of these 6 companies:uncertaintocommentonatthistime.Ofthese6companies:• Three said they might exit the DOE-covered LVDT product line or source theircores after considering the costs of compliance.7 | Building Technologies Programeere.energy.gov• One business indicated any change in standards would threaten their businessaltogether.