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## U.S. DEPARTMENT OF ENERGY

**+ + + + + CENTRAL AIR CONDITIONER REGIONAL STANDARDS**  **ENFORCEMENT WORKING GROUP**

**+ + + + +**
**PUBLIC MEETING**

**+ + + + + Thursday**  **October 2, 2014**

**+ + + + +**

**The Public Meeting met in Suite 8E-089, 1000 Independence Avenue, S.W.,**  **Washington, D.C., at 9:00 a.m, Neil Eisner, Meeting Facilitator, presiding.** 

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## PRESENT **NEIL EISNER, Meeting Facilitator TIMOTHY BALLO, Earthjustice**  **JORDAN DORIA, Ingersoll Rand RAY ELLIS, Lincoln Electric Cooperative**  **GARY FERNSTROM, California Investor Owned Utilities**  **JOHN GIBBONS, Carrier Corporation JOHN HURST, Lennox International**  **MATTHEW LATTANZI, NORDYNE Inc. CHARLES McCRUDDEN, Air Conditioning**  **Contractors of America JON MELCHI, HARDI**  **KAREN MEYERS, Rheem Manufacturing Company ELIZABETH NOLL, Natural Resources Defense**  **Council DOUG RAWALD, U.S. Department of Energy,**  **General Counsel BRYAN ROCKY, Johnson Controls**  **ANIRUDDH ROY, Goodman Manufacturing Company HARVEY SACHS, American Council for an**  **Energy-Efficient Economy AMY SHEPHERD, Air-Conditioning, Heating and**  **Refrigeration Institute CHARLES WHITE, Plumbing-Heating-Cooling**  **Contractors - National Association DAVID WINNINGHAM, Allied Air Enterprises** 

**ALSO PRESENT KARIM AMRANE, Air-Conditioning, Heating, and**  **Refrigeration Institute GARY CLARK, Goodman Global** * **LAURA DEGITZ, Navigant Consulting JOHANNA HARIHARAN, U.S. Department of**  **Energy, General Counsel**  **DAVID HUNGERFORD, California Energy Commission** * **DAVID RANSOM, McDermott Will & Emergy LLP*** ***via teleconference**

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## 1 P-R-O-C-E-E-D-I-N-G-S **2 9:06 a.m. 3 MR. EISNER: All right, we are**  **4 going to get started. 5 A reminder, especially in the**  **6 morning, don't forget to turn your microphones 7 on when you are talking. You all remember**  **8 your names and your organization, but you 9 forget your microphones.**  **10 MR. FENSTROM: So, Neil, this is 11 Gary.**  **12 Do you think we ought to turn our 13 brains on, too.**  **14 MR. EISNER: Turn brains on. We 15 can take multiple breaks.**  **16 Nobody wants to caucus? 17 All right. We are through 21. Is**  **18 the preference to go back over the ones that 19 we --**  **20 MR. ROY: Neil, I would like to 21 interject.**  **22 Aniruddh Roy, Goodman.**

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## 1 We would like to, at least I would **2 like to propose that the manufacturers caucus 3 on slide 18.**  **4 MR. EISNER: Okay. 5 MR. ROY: And bring forward a**  **6 recommendation on that. 7 MR. EISNER: Okay. Before we take**  **8 that time to caucus, let me ask whether when 9 we do start talking, do we want to go back**  **10 over the slides that we didn't finish or do we 11 want to go through the rest of the slides and**  **12 then start over again, go through the ones we 13 didn't? Go through the rest? Okay.**  **14 All right. How long do you want 15 to caucus?**  **16 MR. ROY: It depends, and that's 17 Chuck's answer.**  **18 (Laughter.) 19 MR. RAWALD: So, this is Doug.**  **20 Could we possibly go through the 21 rest of the slides and, then, caucus on slide**  **22 18, or do you feel it is really important to**

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## 1 resolve that before we go through the rest of **2 the slides? 3 MR. ROY: It's important for**  **4 Goodman. 5 MR. RAWALD: Okay.**  **6 MR. EISNER: Okay. Take your 15 7 minutes or more, and let us know if you think**  **8 you're going to need a lot more, so people 9 know what they can do.**  **10 (Whereupon, the foregoing matter 11 went off the record at 9:08 a.m. and went back**  **12 on the record at 9:46 a.m.) 13 MS. SHEPHERD: Okay. So, we**  **14 obviously discussed this, and I think that the 15 issue that we have is that, as we discussed**  **16 yesterday, I think there is more clarity that 17 manufacturers need before they can sign off on**  **18 this particular slide. And what the 19 reasonable belief is and the scope of the**  **20 records will be based on the information that 21 DOE has.**  **22 So, I think that that is something**

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## 1 that we want to go back to the slide and **2 revisit and get more information from Doug to 3 exactly kind of how this is going to work, and**  **4 sort of like the when and where and how much; 5 at least to some degree some general idea or**  **6 boundary as to when these records are going to 7 be requested and what is going to be**  **8 requested, and how that will play into the 9 investigation.**  **10 Because, right now, this is very 11 vague as to what reasonable belief is going to**  **12 be and what is going to be expected of the 13 manufacturers in terms of the records. And**  **14 so, I think it is hard for them to make a 15 decision based on the information that we have**  **16 right now. 17 MR. RAWALD: Okay, let me push**  **18 because I have been pretty deferential. So, 19 right now, the Department has unfettered**  **20 discretion to subpoena for records that we 21 think are important.**  **22 I have pushed the Department to**

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## 1 adopt a standard that at least requires us to **2 have some sort of threshold. Most of that 3 deference is to the folks who are least able**  **4 to respond to records requests, and that I 5 think would be the contractors who are, by and**  **6 large, less sophisticated. 7 So, I am having a difficult time**  **8 understanding why the manufacturers are coming 9 back at this more vigorously than anyone else**  **10 when we have an established pattern of 11 practice with the manufacturers.**  **12 I think you see how the Department 13 is fairly judicious and I think careful before**  **14 asking for records in most cases. We are not 15 wasting a lot of people's time. So, I am a**  **16 little bit concerned that we will come to deal 17 with something that is actually more onerous**  **18 to us that you want even more. 19 And it is also difficult to accept**  **20 because I have heard you say yesterday, let 21 Doug do his job in a different context to**  **22 Gary's request. And so, here I am saying,**

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## 1 "Let me do my job." I am telling you I need **2 to have something. I am going to look for 3 something.**  **4 And the best way for me to 5 characterize it is reasonable belief, which is**  **6 an established item, before I have you spend 7 money to ship me product now, which obviously**  **8 is much more expensive in giving me a $5,000 9 product plus shipping costs than having you**  **10 look at records. 11 So, I think that we understand**  **12 what that term is, at least hopefully, from us 13 having done it with you folks for three years**  **14 now. So, I can't give you more specificity, 15 I don't think, unless you could propose it.**  **16 I can't give you a checklist. I can't give 17 you "You must have these five things."**  **18 What I can tell you is here are a 19 lot of things that I am looking at, and if I**  **20 have these things and I have a good number of 21 them, and I feel very confident that something**  **22 has happened, I am going to ask for records.**

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## 1 I am not going to waste people's time. But if **2 you want to propose to me some more language 3 that helps you feel better, I will listen to**  **4 it, but I have to let you know where I am 5 sitting here and what I have been fighting**  **6 with the Department to get here. And to hear 7 this is really difficult for me to take. So,**  **8 I want to make sure you guys understand where 9 I am coming from here.**  **10 MR. HURST: This is John Hurst 11 with Lennox.**  **12 I think it would be helpful if we 13 actually walked through a hypothetical**  **14 scenario of how you envision an investigation 15 taking place, what the Department would**  **16 request. 17 You know, we had a very simple**  **18 conversation like, "Okay, you get the phone 19 call." Who gets the phone call? What form do**  **20 the records have to be provided in? 21 It would be interesting, I think,**  **22 just to kind of talk through what an actual**

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## 1 hypothetical violation looks like and what **2 your standard would be for providing 3 information. That might clear up some of the**  **4 concerns. 5 MR. RAWALD: No, it's fair. And I**  **6 had hoped that I had walked people through 7 this last week, but I definitely don't mind**  **8 going through it again, and understanding that 9 we haven't done these cases. So, we are**  **10 hoping that can anticipate all things, but we 11 can't because we just haven't been in this**  **12 situation. 13 So, what I envision is -- and this**  **14 is based upon a complaint. So, we get a 15 complaint. And the Department is going to**  **16 follow up, hopefully, with the person 17 complaining, if they've identified to us. So,**  **18 we could, then, verify that. 19 And in most cases, the Department**  **20 is going to follow up with the person whose 21 home, if there is a home identified, to figure**  **22 out, okay, what's really there, because we**

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## 1 want to actually see if there is a "there" **2 there. 3 Now if we have a situation where**  **4 there is no home identified but just a pattern 5 of conduct, that is a little more complicated,**  **6 right? So, I want to look at that. 7 So, if I have a home, then I would**  **8 like to have the home address. I would like 9 to have the homeowner verify that the model**  **10 number XYZ is there. I would like to have a 11 picture of the unit in place, because I am**  **12 operating here from D.C. I can't see it 13 there. So, that would be kind of the helpful**  **14 thing to me. 15 And that would all meet Amy's**  **16 threshold requirement from yesterday. I think 17 that everyone will agree that's good enough.**  **18 But the more nebulous question is, 19 okay, we have an indication that this company**  **20 is doing something bad, but we don't have a 21 whole lot more. We don't have an actual place**  **22 identified. What could I do?**

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## 1 And so, I don't think we, as a **2 Department, have embraced a complete composite 3 investigation process for what we are going to**  **4 do, if I have 10 complaints from Miami, 5 Florida about one particular contractor**  **6 installing 13 SEER product, in trying to 7 figure out how that is going to take place.**  **8 So, what I would like to do is, if 9 I identify who the contractor is and I have a**  **10 number of complaints, and then, I am able to 11 cross-reference that through possibly going to**  **12 the distributor and saying, "Are you selling 13 13 SEER product to that person?" just in that**  **14 area. Then, I have something to go on. 15 So, that is a situation where**  **16 possibly a number of complaints might trigger 17 a record request. I don't want to do that,**  **18 though. I want to have more. So, I have to 19 really look at what else more could I get.**  **20 And so, if I could have physical 21 documentation from homeowners, it is helpful.**  **22 But, if I don't have any identified actual**

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## 1 installations, then I am going to want to try **2 to circle around this some way. 3 And I think going to the**  **4 distributors makes sense because they are more 5 likely to know who they sold to. So, I may**  **6 canvass or ask the distributors in that area, 7 "Do you sell to this person?" That would be**  **8 the record request. I mean, it would be very 9 basic. "Do you sell product to this person?"**  **10 "Okay, if you do, then have you sold them 11 products below 14 SEER?"**  **12 And it would be a very simple 13 record request. It wouldn't be, "Give me all**  **14 your records of all your sales for the last 15 five years." I want it to be very targeted,**  **16 and I want it to be very specific. 17 And then, if I find out that they**  **18 have done that and they have been selling to 19 this guy, then I am going to approach the**  **20 contractor. I am say, "Okay, Contractor, now 21 I've talked to the distributor. He's told me**  **22 he has sold you 13 SEER product. I have**

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## 1 information saying you're installing 13 SEER **2 product in Miami. Tell me, give me your 3 records for the last three years and show me**  **4 where you've installed this product, this 13 5 SEER product I know you have."**  **6 And then, possibly, if he has 7 given me some information that doesn't make**  **8 sense to me, saying, "Well, that product the 9 distributor says isn't really 13 SEER," then**  **10 I'll go to the manufacturer and I will say, 11 "Okay, Manufacturer, I'm hearing from the**  **12 distributor it's 13 SEER product. The 13 installer is, `No way, this is not 13 SEER**  **14 product.' Where do you guys come out on 15 this?"**  **16 So, I think the manufacturer is 17 really the last step in the road in that**  **18 particular case. So, they are the ones we are 19 going to bother the least.**  **20 There are very few occasions where 21 the investigation is going to start with the**  **22 manufacturer because there might be an**

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## 1 instance -- and I want to footnote that -- but **2 I can't see that right now, as I am thinking 3 here. I think the manufacturers are the least**  **4 ones who are going to be burdened by the 5 record request. It is really going to be**  **6 targeting to the contract and, then, possibly 7 the distributor, depending on what end I need**  **8 to go to. 9 MS. MEYERS: This is Karen with**  **10 Rheem. 11 That was very helpful, Doug. The**  **12 only part that I would disagree a little bit 13 or have a little trouble understanding is I**  **14 think nine times out of ten, when you get a 15 complaint, you are not going to know who that**  **16 contractor was that installed that unit. So, 17 then, what happens?**  **18 MR. RAWALD: Well, I don't have a 19 reasonable belief then. I need to have a**  **20 person. I need to have some sort of thing. 21 So, if I get 10 complaints saying, "Well,**  **22 there's something going on in Miami," I am**

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## 1 going to keep an eye on it, but I can't do **2 much with that. So, I am not going to just 3 request records because, well, somebody says**  **4 something is happening in Miami. That's not 5 enough. That's not enough from the**  **6 Department's point of view. Nobody is going 7 to think that is enough.**  **8 MS. MEYERS: But if a homeowner 9 says, "I have" -- you know, he buys this house**  **10 and there is an illegal unit installed. You 11 have proof that an illegal unit was installed,**  **12 but you have no idea who put it in. 13 MR. RAWALD: Right. So, that**  **14 might be an issue where I would go to the 15 manufacturer and say, "Manufacturer, I have**  **16 Model XYZ with Serial No. AB34578. Can you 17 tell me what distributor you sold that to?"**  **18 And that would be a very targeted, very 19 specific request.**  **20 And then, I would go to the 21 distributor.**  **22 MS. MEYERS: And I think we need**

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## 1 to understand that -- **2 MR. RAWALD: Yes. 3 MS. MEYERS: -- because I think**  **4 predominantly that is what is going to happen. 5 MR. RAWALD: Okay.**  **6 MS. MEYERS: And I think that is 7 part of the manufacturers' concern --**  **8 MR. RAWALD: Uh-hum. 9 MS. MEYERS: -- is that nine times**  **10 out of ten those are going to be the 11 investigations that you are having. That is**  **12 the process you are going to have to follow. 13 MR. RAWALD: Right.**  **14 MS. MEYERS: You're going to have 15 to go top-down.**  **16 MR. RAWALD: But, in order for 17 that to be effective, I have to have a serial**  **18 number, right? I can't go to a manufacturer 19 with a model number and say, "Tell me where in**  **20 the world you sent this?" because that is not 21 going to be a reasonable request.**  **22 I'm going to have to come to you**

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## 1 and say, "I have Model No. XYZ with a serial **2 number here. Tell me who you sold it to." 3 And then, I will have to go to the**  **4 distributor and say, "Tell me who you sold it**
**5 to." 6 That's the only way, but it is**  **7 going to be very targeted. I am not going to 8 go to the manufacturer and say, "Mrs. Smith**  **9 says she has Model ABC. She won't let me in 10 her back yard. She won't give me a serial**  **11 number. It's in Florida. Can you help me 12 out?" That's not enough. I can't do anything**  **13 with that. 14 And I'll have to go out to Mrs.**  **15 Smith and say, "Mrs. Smith, you need to tell 16 me something for me to work with. I need to**  **17 have a serial number here to go back, because, 18 otherwise, I can't track that on the train."**  **19 So, I don't see me saying to 20 Rheem, "Rheem, tell me where all 10,000" --**  **21 well, maybe that is too big of a number -- 22 "where all 1,000 of this model went in the** 

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## 1 past three years." **2 That is not going to do anybody 3 any good. I am going to be swamped with**  **4 paper, and it is going to get me nowhere. 5 You're going to be swamped with requests that**  **6 are not going to get anything. And I don't 7 think I have a reasonable belief that that is**  **8 going to be helping me get there. So, I am 9 not going to bother you with that.**  **10 MR. EISNER: Doug, is there a part 11 of your process where the manufacturer or the**  **12 other party from whom you are requesting 13 records can come to you and say, "This is a**  **14 big burden for us. Can we cut it back in some 15 way?"**  **16 MR. RAWALD: Yes. 17 MR. EISNER: Or, alternatively,**  **18 can you tell us more about what you're looking 19 for, why you have a reasonable belief? Maybe**  **20 there's an easier way for us to help you."? 21 MR. RAWALD: Right.**  **22 MR. EISNER: Maybe work some**

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## 1 different record request out? **2 MR. RAWALD: Sure. And so, I 3 guess we could write into here, if the request**  **4 appears to be overly burdensome to the 5 receiving party, they can respond and ask for**  **6 more information. But I still want to have 7 that clock running. "Hey, you should still be**  **8 working on it." 9 But we want to work with people.**  **10 I mean, I can't see into your database. So, 11 if you're saying to me, "Hey, Doug, what**  **12 you're asking for is a lot more complicated 13 than what you think it is," then tell me that.**  **14 That I can live with. That makes sense. 15 MR. HURST: Okay. I think the**  **16 point is -- and you covered it very well -- if 17 the request is specific to an investigation**  **18 versus provide the other alternative that you 19 said, 10,000 records or whatever, I think that**  **20 is really what we wanted clarification on. On 21 slide 16 where it says "Request records," the**  **22 records are pertaining to a specific**

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## 1 installation or investigation pertaining to a **2 specific installation -- 3 MR. RAWALD: Right.**  **4 MR. HURST: -- or a set of 5 installations.**  **6 MR. RAWALD: Right. We're not 7 fishing. I mean, I think is non-productive**  **8 because I am more like to catch a lot of water 9 than fish.**  **10 MR. HURST: That is the clarity we 11 needed.**  **12 MR. RAWALD: Yes. 13 MS. MEYERS: Maybe if we could**  **14 just detail it out a little bit or on the 15 slide? And we can come back to this. It is**  **16 my suggestion -- I don't know whether the rest 17 of the OEMs -- that we walk through the other**  **18 slides, and then, see if -- 19 MR. HURST: I think if you just**  **20 say, DOE must have reasonable belief to 21 request records specific to an ongoing**  **22 investigation or an investigation, or specific**

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## 1 to a violation, I think that is very **2 reasonable. 3 MR. RAWALD: Okay. I don't mind**  **4 adding that language to that. 5 MS. SHEPHERD: This is Amy**  **6 Shepherd. 7 And, Doug, to your earlier point,**  **8 I think there is a difference between the 9 existing regime and this regime. The existing**  **10 regime is talking about manufacturer conduct 11 and manufacturer responsibility for their own**  **12 conduct. 13 This is different because these**  **14 could be requests about things that the 15 manufacturers are doing that are their**  **16 everyday business, but the conduct that is bad 17 is by somebody else. And it is an**  **18 investigative process. So, DOE is going to be 19 seeking records from them for their customers**  **20 about this. 21 And so, the scenario is very**  **22 likely that the manufacturer gets a request**

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## 1 from DOE, submits those records. DOE then **2 goes to the distributor and requests records 3 from them, finds out it's not a routine**  **4 violation. But the relationship has been 5 poisoned between the manufacturer and the**  **6 distributor. 7 And so, we are not being**  **8 difficult. To us, I think this is 9 fundamentally a little different. And so,**  **10 there's more sensitivity to it. So, there is 11 a greater level of -- I don't know if**  **12 "discomfort" is the word -- from a vague, for 13 what we perceive is sort of vague requirements**  **14 for this request for records that is going to 15 have real impact. Just the request itself has**  **16 an impact beyond the manufacturer on its 17 business. And so, that is where this is all**  **18 coming from. 19 MR. RAWALD: Right. So, I guess**  **20 what I am hearing you -- and so, pardon me for 21 my misperception earlier -- it is not the**  **22 burden of the request; it is the effect of the**

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## 1 request on the relationship with the people **2 downstream that you are worried about. 3 MS. SHEPHERD: Well, it is more**  **4 than just the request, yes, absolutely. 5 MR. RAWALD: Okay.**  **6 MR. FENSTROM: So, this is Gary. 7 I understand how the manufacturers**  **8 feel about this. And I doubt that, to use 9 Doug's term, which I think is a really good**  **10 choice, "fishing" at the manufacturer level 11 would be very productive, anyway.**  **12 However, I think fishing at the 13 distributor level might be because at the**  **14 distributor level, through some sort of 15 minimal audit, you might find indication of**  **16 inappropriate equipment sold to contractors in 17 areas where it shouldn't be installed.**  **18 So, I don't want to see us move in 19 a direction where investigation is limited to**  **20 the same extent all the way up and down the 21 channel because investigations would be more**  **22 productive and useful at the contractor and**

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## 1 distributor level than perhaps the **2 manufacturer level, where they don't have any 3 relevant information that we would want to**  **4 have anyway. 5 MR. EISNER: Are you suggesting**  **6 that you are troubled by this additional 7 language or you think it is just a matter of**  **8 the way it is implemented? 9 MR. FENSTROM: I don't have any**  **10 trouble agreeing with the manufacturers' 11 concern about frivolous or non-productive**  **12 requests for records at their level. But, if 13 this same restriction were to apply at the**  **14 contractor and distributor level, I would have 15 a problem with it because it limits our**  **16 investigative ability. 17 MR. EISNER: Do you have any**  **18 language to suggest at those levels that would 19 make the request reasonable, even if it were**  **20 not limited to a specific -- 21 MR. FENSTROM: The only resolution**  **22 I can think of at this moment is**

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## 1 differentiating the criteria between the **2 different parties and the sales channel, 3 differentiating at the manufacturer,**  **4 distributor, and contractor level. 5 MR. RAWALD: So, Gary, if I**  **6 hear -- this is Doug -- you would like to see 7 reasonable belief basically look at different**  **8 factors depending on who is involved. Is that 9 what you are saying?**  **10 MR. FENSTROM: Exactly. 11 MR. RAWALD: Yes, and I think that**  **12 we would do that. So, there are factors that 13 are unique to every enterprise, right? I**  **14 mean, if I have complaints about a contractor, 15 I won't have those about a distributor. So,**  **16 those are unique things to the contractor. 17 If I have a distributor with** **18 seemingly a pallet full of inappropriately 19 rated product on their warehouse floor, that**  **20 is going to be unique to them. I think that 21 we are going to look at all the facts and**  **22 circumstances, which are going to be who is**

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## 1 the person we are looking at as well as what **2 the factors that we are aware of and what can 3 we investigate further. So, I think it will**  **4 vary, depending on where the party is in the 5 chain.**  **6 MR. FENSTROM: You see, this all 7 gets back to the proactive versus reactive.**  **8 And we are wanting to include the language 9 that we don't want DOE investigating without**  **10 cause. Well, okay, I can see how you might 11 not investigate at the manufacturer level**  **12 without cause because, if you were do that, 13 you wouldn't find anything anyway.**  **14 However, if we say you're not 15 going to investigate at the contractor level**  **16 without cause, that really limits us to 17 responding to complaints and does not allow**  **18 for proactive investigation. 19 MR. RAWALD: So, this is Doug.**  **20 I want a different -- that is part 21 of why we changed this from a threshold for**  **22 investigation to a threshold for a record**

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## 1 request. So, I don't want to randomly audit **2 contractor records. I think that is going to 3 be burdensome and not fruitful. I want to**  **4 have targeted auditing based upon detection of 5 anomalies. And I want to be both proactively**  **6 and reactively looking for anomalies. 7 And so, I am not going to be using**  **8 record requests to identify those anomalies 9 initially, however. I think that is going to**  **10 be too burdensome for both ends, for both them 11 and for me, because I will be spending a lot**  **12 of time looking at records, looking for a 13 needle in a haystack that may not exist.**  **14 And so, I want to be able to 15 proactively identify things by investigating**  **16 them and, then, only ask for records from 17 people when I think there is something there.**  **18 MR. FENSTROM: Okay. Thank you. 19 That explains the difference to me. It has to**  **20 do with what is required to initiate an 21 investigation versus what is required to**  **22 request records. Thank you.**

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## 1 MR. EISNER: Harvey? **2 MR. SACHS: This is Harvey. 3 Amy, your observations or comments**  **4 helped me a great deal, and I want to think 5 outloud with you and with John about this**  **6 question of poisoning the relationship. 7 From the outside, it looks as**  **8 though the relationship between manufacturer 9 and distributor is very, very different from**  **10 the relationship between distributor and 11 contractor, but I may be misunderstanding it.**  **12 The distributor and the manufacturer from the 13 outside look to be tied contractually, and we**  **14 could say codependently, as serving each other 15 on a more or less exclusive basis, recognizing**  **16 the distributor may carry overlapping lines. 17 Where the contractor in the best case**  **18 predominantly represents one brand and sells 19 one brand, but almost always will also handle**  **20 other brands. And consequently, as more 21 options to move his loyalty, a less-strong**  **22 usually-contract-free tie.**

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## 1 So that, if that is correct -- and **2 I don't know that it is -- it would suggest 3 that it takes a lot more to poison a**  **4 relationship between a manufacturer and a 5 distributor than between a distributor and a**  **6 contractor. 7 MR. HURST: Harvey, I would say**  **8 that -- this is John Hurst from Lennox -- I 9 think it runs the gamut. We have dealers or**  **10 contractors that we have had since the early 11 1900s, and they are part of the family. And**  **12 you would have a hard time switching them. 13 Some distributors we have great**  **14 relationships with and they have been with us 15 a long time. Some switch. I think the big**  **16 difference is, regardless of the level of the 17 relationship, the switching costs are**  **18 certainly much higher for a distributor than 19 they would be for a contractor.**  **20 But it would be hard for me to 21 lump all distributors and all -- I couldn't**  **22 stereotype them, if you will. I think it runs**

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## 1 the gamut. Some you have today; they're gone **2 tomorrow. Some have been with you for 100 3 years. And I think the same thing goes for**  **4 distribution as well. 5 MR. SACHS: John, this is Harvey.**  **6 That is helpful. You're telling 7 me it is not a line, but there is a frequency**  **8 distribution. I guess my question, then, 9 would be: am I roughly right about the**  **10 centroids or the medians? 11 (Laughter.)**  **12 MR. HURST: I can't speak to the 13 centroids, but -- (laughter) -- I would say**  **14 distributors are, from a process standpoint, 15 more sticky because it is harder to switch.**  **16 That said, there is an emotional 17 bond that goes long and deep with some of our**  **18 contractors or dealers that has gone for 19 decades. So, again, it is kind of hard to**  **20 lump either one into a stereotypical category. 21 MR. SACHS: This is Harvey.**  **22 Thanks, John. It is still very**

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## 1 helpful, and I think your term "stickiness," **2 relative stickiness, captures it pretty well 3 for me.**  **4 MR. HURST: Yes, the only thing I 5 would say is we talk about dealers,**  **6 contractors, distributors. We're each other's 7 customer. Whether you like somebody or not or**  **8 have a deep and abiding relationship with that 9 particular distributor or contractor, they are**  **10 our customers. 11 Anytime you are put into an**  **12 enforcement or a situation where you may have 13 to provide information that may be**  **14 uncomfortable for your customer to deal with, 15 it is just a very awkward situation for all of**  **16 us to be in, regardless of where you are in 17 the chain.**  **18 MR. SACHS: And I certainly didn't 19 mean to deprecate the term "poisoning it". It**  **20 captured a lot for me. 21 MS. SHEPHERD: Actually, I was**  **22 thinking of that scene in "The Godfather". Is**

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## 1 it three where he goes up to him and says, "I **2 know it was you."? 3 (Laughter.)**  **4 Is that two? Okay. 5 MR. EISNER: I mean, from the**  **6 perspective of the distributors and the 7 contractors in this area, when you talk about**  **8 doing the training, is this the kind of issue 9 you intend to focus some time on when you do**  **10 training for each other? Maybe it works out 11 in a way where it is more of an incentive to**  **12 ensure that you comply with this stuff because 13 we, the manufacturers, may have to give up**  **14 records showing what is going on? Or is this 15 something you hope to avoid having to talk**  **16 about during training? 17 MR. HURST: No, I think it would**  **18 be -- John Hurst from Lennox -- I think it is 19 helpful if all parties going in understand**  **20 what this means. So, there is a large 21 education piece, and I personally probably**  **22 will not be doing the training, but I could**

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## 1 see me talking to our salespeople, District **2 Managers, Territory Managers, to say, "Look, 3 it behooves all of us to understand exactly**  **4 what this means, and don't put me in a 5 position where I have to provide documentation**  **6 on us because you shouldn't put yourself in a 7 position where you're selling to a**  **8 contractor." And I think that education goes 9 up and down the chain.**  **10 MR. EISNER: This is something, 11 from my perspective, I think you might want to**  **12 talk about. It doesn't have to be part of the 13 negotiated agreement, but you might want to**  **14 think about language that you would want DOE 15 to put in the preamble that could help you in**  **16 that respect. In other words, some kind of a 17 message about the importance of working**  **18 together, et cetera, to make this an effective 19 program, whatever it might be. But you might**  **20 think about whether there is language you want 21 to suggest that you would all agree to.**  **22 Steve? (sic)**

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## 1 MR. MELCHI: Jon Melchi with **2 HARDI. 3 I think it is safe to say that we**  **4 will, as an association, make sure that we are 5 communicating to our members that the**  **6 manufacturers have a responsibility, so as not 7 to make it seem like it is coming directly**  **8 from you; that it is just part of this overall 9 scheme. So, we will make that commitment.**  **10 MR. EISNER: Thank you. 11 I've got to get your right name**  **12 tag up there. I look at you and I keep seeing 13 Steve, Steve, Steve.**  **14 Do we want to vote on this now? I 15 mean, yesterday there were some things you,**  **16 Doug, for example, wanted to think about. 17 MR. RAWALD: That was the issue.**  **18 MR. EISNER: That was the issue? 19 So, is everybody ready to vote on this? All**  **20 right. Does anybody have any objection to 21 unanimously approving this as it has been**  **22 amended?**

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## 1 MS. SHEPHERD: I guess I would **2 just ask, manufacturers, do we want to talk 3 about this later, and just make sure we are**  **4 all comfortable with it in a conversation? Or 5 are you all okay? Okay.**  **6 MR. EISNER: Okay? All right. 7 And nobody objects? This is adopted**  **8 unanimously. 9 All right, we agreed to start with**  **10 slide 22, DOE investigation and what it may 11 include.**  **12 Doug, anything you wanted to set 13 it up with?**  **14 MR. RAWALD: Right. So, this is 15 just a basic fact that I think I went over**  **16 last week, which is we are going to try to do 17 these things. There are other things we may**  **18 do as well, trying to look for other evidence, 19 talking to other people in the area, that kind**  **20 of thing. 21 But these are the main components**  **22 for people to be aware of. What I want people**

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## 1 to understand is, if we don't find a **2 violation, we are going to close the case. 3 And when we close a case, we send a letter to**  **4 the person and we say, "The case is closed," 5 assuming they had been contacted in the first**  **6 place. 7 I guess the question to me is, if**  **8 I never have contacted the contractor, and 9 they are not even aware that we investigated**  **10 them, do you want to still be put on notice 11 the case is closed or would you prefer -- or**  **12 a distributor, if we were investigating a 13 distributor -- or would you prefer just having**  **14 it be closed in our books and you never hear 15 of it anyway? What is the better approach**  **16 there? 17 So, case closed letters, we don't**  **18 as a matter of course ever publish the case 19 closed letters. We just give them to the**  **20 individual to let them know the case is over 21 when we are investigating the manufacturer at**  **22 the manufacturer level.**

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## 1 So, I guess I don't have any **2 druthers one way or the other. If we haven't 3 ever contacted the person because we found**  **4 that it was completely spurious, then I don't 5 see a reason really to send you a letter. But**  **6 if we contacted you, I would want to send you 7 a letter, so you would know I don't have to**  **8 sweat this anymore; it is over. So, that is 9 how I would approach it.**  **10 MR. WHITE: This is Chuck White. 11 I would not want to receive a**  **12 letter in the mail that said, "You're in the 13 clear" for something I had no idea about.**  **14 (Laughter.) 15 MR. RAWALD: Right. Okay.**  **16 MR. WHITE: That might not sit too 17 well that morning.**  **18 MR. RAWALD: Yes. 19 MR. WHITE: So, I mean, if we know**  **20 we are involved with something, I would 21 certainly want to know we are cleared. But,**  **22 if you haven't talked to us, I don't see any**

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## 1 reason to send me a letter. **2 MR. EISNER: Is there an in 3 between, Doug, where you have a problem with**  **4 a contractor. You contact the distributor. 5 But you have never publicly told the**  **6 contractor that there is an investigation? Do 7 you still need to put a letter in there**  **8 because the contractor might find out that 9 questions were asked? Do you have that kind**  **10 of in between? 11 MR. WHITE: I guess I am not sure**  **12 why you would be talking to a distributor 13 without talking to me as well.**  **14 This is Chuck White. 15 MR. RAWALD: Right. So, if I go**  **16 to the distributor, if I go and ask anyone for 17 records, I am going to talk to the contractor**  **18 because I think they need to be put on notice 19 about that.**  **20 So, I think the question I am 21 dealing with is, you know, I have looked**  **22 around and I went to Mrs. Smith's house. It**

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## 1 really wasn't a non-compliant unit. She is **2 completely wrong. And so, I don't need to 3 tell Chuck, "Well, she called up and**  **4 complained about you," unless you want me to 5 do that.**  **6 MR. WHITE: Probably I already 7 know.**  **8 (Laughter.) 9 But I would say I would think it**  **10 would be unfair for you to be going to levels 11 higher than me without having talked to me.**  **12 Now, if you can't find me, you had a unit that 13 has got a serial number but no known**  **14 contractor, then you come the other way down, 15 and I'm no longer in business or whatever that**  **16 might be. I think that is a different case. 17 But, if you know where I am and**  **18 you can talk to me, I think you need to not 19 be --**  **20 MR. EISNER: Chuck, what happens 21 when the customer calls you up and says, "This**  **22 is bad. This is horrible. I'm going to**

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## 1 complain about you to the Department of **2 Energy."? Hangs up the phone on you. He 3 doesn't know she has called you. Is there a**  **4 problem there? Do you want to know if she 5 ever filed a complaint? Do you want to know**  **6 if it is still there? 7 MR. WHITE: Well, I would assume,**  **8 if Doug feels it is a credible complaint, that 9 he is going to contact me.**  **10 MR. EISNER: Okay, but he doesn't. 11 But all you know is she said she was going to**  **12 complain to DOE. Maybe she even sends you a 13 copy of the letter, but you don't know that;**  **14 he doesn't know that you got a copy. 15 MR. WHITE: If she sends me a copy**  **16 of the letter and says she has contacted DOE, 17 I am going to be expecting to hear from them.**  **18 And some contractors might take a proactive 19 approach and contact the agency, but where I**  **20 am sitting, in the middle of Indiana -- this 21 is a very large building with lots of people.**  **22 I don't know, do I talk to Doug? I am going**

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## 1 to feel like I am going up against the U.S. **2 Government. I am not exactly sure who is 3 going to know an answer to be able to talk to.**  **4 So, I might do that. I might try 5 to head it off and say, "Hey, I've got a**  **6 customer that is mad about something." You 7 know, it is right. But my expectation would**  **8 be, if he, indeed, knows and feels it is 9 credible, that I will be getting some kind of**  **10 inquiry. 11 "Hey, I heard from so-and-so. Did**  **12 you put this in? Did you? Did you not? Do 13 you have any records, whatever that might be?**  **14 MR. RAWALD: Uh-hum. I guess 15 Neil's scenario is I get a letter from Mrs.**  **16 Smith, but I've gotten 20 letters from Mrs. 17 Smith and I know that she just is a perennial**  **18 complainer with actually no basis to her 19 complaints, and she has no evidence to support**  **20 it. And actually, when I ask her the model 21 number, it proves to be one that I know to be**  **22 14 SEER. So, I am not worried about it.**

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## 1 But she has sent you the letter **2 and told you she is going to go complain to 3 me. Would you want the Department to send you**  **4 a letter? So, that way, you know, oh, good, 5 the Department saw through Mrs. Smith; they're**  **6 not going with this anymore? It seems like 7 you probably would, just so you could get that**  **8 relief off you. 9 MR. WHITE: I guess I can see**  **10 personally I would rather not think you know 11 my name, but --**  **12 MR. RAWALD: Right. 13 MR. EISNER: You can always ask.**  **14 If you have got a letter, you can always -- 15 maybe you can provide an address or something.**  **16 MR. WHITE: I guess I am not 17 looking to make more burden for you, but not**  **18 knowing are you going to get 10 phone calls or 19 1,000 -- Mrs. Smith can be busy. It certainly**  **20 would not be a problem to get a letter that 21 says we had a complaint from Mrs. Smith and we**  **22 don't believe there is any action to be taken,**

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## 1 whatever that might be. **2 It would kind of serve, if I have 3 been doing things nefariously or if I know**  **4 other people, that might be a good 5 communication tool, that I am going to go to**  **6 the next meeting and say, "I got a letter from 7 DOE and somebody complained, and, by God, they**  **8 are looking into this." 9 MR. RAWALD: Yes, that would be**  **10 helpful, actually. 11 MR. WHITE: So, it might serve a**  **12 PR relationship for you as well. 13 MR. RAWALD: Yes, and like have a**  **14 little stock warning, a reminder of what 15 regional standards are and what the**  **16 applicability is and what the requirement is. 17 MR. WHITE: It keeps it on**  **18 people's radar. 19 MR. RAWALD: Right.**  **20 MR. WHITE: It keeps them 21 informed.**  **22 MR. RAWALD: Okay. I'm convinced.**

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## 1 MR. WHITE: There's certainly **2 nothing wrong with getting a letter that says 3 you're operating properly.**  **4 MR. EISNER: Any other comments on 5 slide 22?**  **6 MR. McCRUDDEN: This is Charlie 7 with the ACCA.**  **8 I have comments for slide 22, but 9 I want to raise them at slide 23.**  **10 (Laughter.) 11 And it will be more clear when we**  **12 get to 23. 13 MR. EISNER: Is there any**  **14 objection to slide 22? Or do you want us to 15 go to 23 and, then, come back to 22?**  **16 Okay, let's go to 23, unless 17 somebody else has something on 22.**  **18 Okay, slide 23 -- 19 MR. RAWALD: Well, I anticipate**  **20 Charlie's question is, if I replace the unit 21 that non-compliant before DOE issues their**  **22 public finding of violation, can I, then, not**

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## 1 have a public finding of violation. And the **2 answer would be yes. 3 MR. McCRUDDEN: So, my**  **4 recommendation would be, can we take the top 5 five bullets from 23 and insert them into**  **6 slide 22 between the first "if no violation is 7 found" and the second "if no violation is**  **8 found"? 9 And so, what I am describing here**  **10 is a situation where -- well, let me start 11 over. I think that when Doug does an**  **12 investigation, more than a complaint, but it 13 rises to a record request, whether it be at**  **14 the contractor or at the manufacturer coming 15 down, that when Doug gets to a contractor,**  **16 there's four outcomes. 17 The first one is that it is a**  **18 mistake. There is no violation found, and we 19 can issue the notice. They have had records**  **20 requested. They have double-checked, and 21 there is no violation. So, they can issue the**  **22 notice of no violation.**

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## 1 The second option is the **2 contractor realizes, oh, my gosh, I made a 3 mistake. And the contractor knows that it is**  **4 a one-off. And he remediates before the 5 official investigation closes, to Doug's**  **6 satisfaction in a way that the investigation 7 closes where there is no violation. There is**  **8 no need to make a public notification, and 9 then, there is no relationship that is**  **10 tainted, not poisoned, between a manufacturer. 11 Because let's assume Doug goes to**  **12 the manufacturer and traces the serial number 13 down. Now that manufacturer knows, well,**  **14 there may have been a mistake there. This may 15 be a contractor we should be leery of.**  **16 The other option is that the 17 contractor elects not to remediate. And at**  **18 that point, within a certain time, at that 19 time, I don't think they should be protected.**  **20 They should get the Notice of Violation. That 21 should be public because it has to be.**  **22 The other option is Doug finds a**

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## 1 routine violator right away. And I don't **2 think we're going to find an in between. I 3 think what Doug is going to find is honest**  **4 mistake and routine violator. This is sort of 5 an on/off situation for the contractor. And**  **6 it is unfortunate that it is that way, but my 7 guess is that that is sort of the way it is**  **8 going to play out. 9 And I think that one mistake is**  **10 probably going to lead to more mistakes or one 11 mistake is going to find others. And that is**  **12 the contractor we don't want to protect. They 13 get the routine violation status. And then,**  **14 they have to go through everything in the 15 following slides.**  **16 So, what my proposal is to see if 17 there is a way that we could -- and it sounds**  **18 like Doug has that flexibility -- allow the 19 contractor to remedy before the official**  **20 notification comes out. And then, 21 essentially, it happened, but nobody knows it**  **22 happened.**

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## 1 MR. RAWALD: Right. And this is **2 Doug. 3 This goes to Tim's point that he**  **4 raised before about trying to create 5 incentives for remediation. And this seems to**  **6 be a powerful one, right? So, if you know you 7 can avoid having been found to be violative at**  **8 all by fixing the issue before it ever gets to 9 that point, then the Department should at**  **10 least encourage that conduct by saying, "Okay, 11 well, then, there actually will be no Notice**  **12 of Violation." 13 But if we issue a Notice of**  **14 Violation and you say, "Man, now John Hurst 15 isn't taking my calls anymore. What do I**  **16 do?", then you know you can go back and fix 17 it. And then, John might pick up the phone**  **18 again. 19 So, I want to have both. I want**  **20 to have both the ability to remediate after a 21 Notice of Violation, so you could fix yourself**  **22 and get off the list, but also the incentive,**

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## 1 if you remediate when you find out about it **2 from DOE and you think "Gosh, I really missed 3 that," you can fix that, and then, we won't**  **4 sanction you by creating this Notice of 5 Violation.**  **6 I think that is fair. 7 MR. McCRUDDEN: And just to go a**  **8 little further in it, just because we haven't 9 really gone through slide 23. You know, all**  **10 the things we have talked about before, which 11 is it has to be at the contractor's cost, they**  **12 have to provide the serial numbers, so that 13 there is no issue where the manufacturer is**  **14 sort of essentially paying for it through a 15 warranty claim, as we discussed. I mean, all**  **16 of these things still hold. 17 MR. RAWALD: Right. So, let's go**  **18 back to slide 22, if we could. 19 And before the last bullet, if you**  **20 can insert a bullet, and what I would suggest 21 we add is, "If violation found but corrected**  **22 before DOE makes a finding" -- "remediated" is**

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## 1 fine. "Then, DOE will close the case with a **2 case closed letter." 3 Right. That's fine, uh-hum.**  **4 Right. So, if DOE says, well, it 5 is pretty clear this guy installed in Mrs.**  **6 Smith's house the wrong thing, but he has 7 already fixed it here, as soon as we even**  **8 brought it to his attention, then there is no 9 need for us to find him in violation because**  **10 it has been fixed. And that will be his 11 incentive to fix the matter before we ever get**  **12 there. 13 MR. EISNER: What does it need to**  **14 say, "If a violation found"? I'm sorry. "If 15 violation found before DOE makes a finding"**  **16 sounds like a contradiction. 17 MR. RAWALD: Okay. Okay. "If**  **18 there was a non-compliant installation" -- 19 MR. EISNER: How about "If a**  **20 potential violation is found before DOE makes 21 a finding"? "Improper installation remediated**  **22 before DOE finds in violation."**

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## 1 MR. RAWALD: Okay. **2 MR. BALLO: This is Tim. 3 Just as a practical matter, how**  **4 long is the gap between you discover a 5 violation and you issue a finding or make a**  **6 finding? 7 MR. RAWALD: Right. This is Doug.**  **8 And so, I don't think it will be 9 very long. So, I don't think they have a very**  **10 large period of time in which to do this. 11 What I envision something**  **12 happening is they get their record request. 13 They say, "Oops, that's right. Let me go fix**  **14 it today." And if they don't before I get 15 there, then that's too late. So, that is how**  **16 I envision it. 17 I don't think that we are going to**  **18 take very long to do these. So, that is how 19 I see it taking place.**  **20 MR. BALLO: I mean, I guess, given 21 my preference for the homeowner having the**  **22 product fixed, I guess I would recommend that,**

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## 1 if the contractor says, "I just need a couple **2 of days to get a guy out there to do that," 3 that you would hold off on making the Notice**  **4 in Violation. 5 MR. RAWALD: Right. We could be**  **6 reasonable about that. It is one of those 7 things where we keep hearing that. And so,**  **8 "I'll be there in a couple of days, I swear, 9 Doug. I really will."**  **10 (Laughter.) 11 MR. McCRUDDEN: Contractors never**  **12 say that. 13 MR. RAWALD: Which has happened to**  **14 me outside the context of contractors. But it 15 is just an interesting point.**  **16 I do want to bring this language 17 back to the people I work for to make sure**  **18 they are entirely comfortable with it before 19 I vote on it, but I think that we would be**  **20 comfortable, I think that this would be fine, 21 but I want to make sure that everyone is okay**  **22 with it.**

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## 1 MR. WHITE: Doug, this is Chuck **2 White. 3 Do you have a limit in mind as to**  **4 how many remediations you could do? You come 5 in, you find my records, and I've got 50 of**  **6 them. Are you going to let me go do all -- as 7 a hypothetical, if I went and remediated all**  **8 50, would that satisfy you? Or if it is 50 I 9 have done in the last three years, I don't**  **10 care if you fix them or not. Obviously, you 11 are doing routine violations.**  **12 MR. RAWALD: Let's limit this to 13 one time. Let's limit this to one time.**  **14 Let's say this is a one-time violation. I 15 mean, let's make this reasonable, which is if**  **16 there is one violation and you fix it, this is 17 the "Get Out of Jail Free" card.**  **18 MR. WHITE: Okay. 19 MR. RAWALD: But, if you have more**  **20 than one, you don't get the "Get Out of Jail 21 Free" card. How about that?**  **22 MR. WHITE: Yes, I just want to**

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## 1 clarify. **2 MR. RAWALD: Uh-hum. 3 MR. McCRUDDEN: And I think,**  **4 because on the next slide you talk about 5 routine violator, you look at number of**  **6 violations. And it says both found in current 7 investigations and in any past investigations.**  **8 I don't know if that means closed without a 9 finding, but I think it would be hard for you**  **10 not to factor that into it. 11 MR. RAWALD: It could be hard for**  **12 me to be blind to the past. So, I think that 13 it would at least factor in my mindset. It**  **14 might be of less importance, but if it was 15 only because I didn't find those 49 others and**  **16 now I did, then it would be important. 17 MR. HURST: Doug, John Hurst from**  **18 Lennox. 19 Is one defined as one unit or one**  **20 jobsite? Some houses have two-three units; 21 some multi-family?**  **22 MR. RAWALD: I think the people I**

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## 1 work with, it would be one unit. **2 MR. HURST: Okay. 3 MR. RAWALD: That would be what**  **4 they would be most comfortable with. But I 5 get what you are saying. Once again, a tract**  **6 housing situation where you may have that. 7 But I think we are talking about one. I think**  **8 that one unit is probably what most would be 9 comfortable with. Let me go back and see if**  **10 there is any flexibility there, but that is 11 what they would most be comfortable with.**  **12 MR. WHITE: This is Chuck White. 13 Following up on John, I am not**  **14 thinking tract subdivision. I am thinking 15 McMansion where --**  **16 MR. HURST: Yes, single dwelling. 17 MR. WHITE: -- I might have two or**  **18 three systems that all went as a package. And 19 you might have some latitude in a discussion.**  **20 I'm not doing it at 50 houses. It is just 21 what happened at this one. So, that might be**  **22 something you might have some latitude at.**

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## 1 MR. RAWALD: Yes, let me bring **2 that back. 3 MR. WHITE: But you don't want to**  **4 necessarily put it in this language, but you 5 could see your way clear.**  **6 MR. RAWALD: Okay. Let me bring 7 that back, and I will come back to you. But**  **8 I understand what you are saying, and I want 9 to make sure we have this appropriately**  **10 tailored. 11 MR. EISNER: Okay. Is the rest of**  **12 this slide okay with everyone? Or are there 13 other issues that we might have to check with,**  **14 have Doug check on? 15 MS. SHEPHERD: Can I ask a**  **16 clarification question? So, the request for 17 retained records, that is the records that are**  **18 going to be delineated in this enforcement 19 rule, is the ones they have to keep? Is that**  **20 right? 21 MR. RAWALD: Right.**  **22 MS. SHEPHERD: Okay.**

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## 1 MR. EISNER: Anything else on **2 this? 3 MR. BALLO: So, I guess maybe I**  **4 want to bounce this off the other efficiency 5 advocates. Are you all okay with this being**  **6 limited to a one-time violation or one 7 instance? Because, if what we are most**  **8 concerned with is getting remediation, if we 9 want to incentivize that, then maybe we do**  **10 prefer that even all 50 get remediated and you 11 can wipe away the violation with that?**  **12 MR. RAWALD: And then, just to be 13 clear, so the alternative to me is we still**  **14 have a finding of a one-time violation, but, 15 then, we issue a subsequent Notice of**  **16 Remediation. So, basically, they're out 17 there, that "Yeah, we had 50 of these. We**  **18 did, but we fixed them all." So, there is a 19 bad note and a good note on the public record.**  **20 What I want to do is I want to 21 minimize the number of cases that are not**  **22 publicly transparent, I think which is**

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## 1 something the advocates would probably want. **2 And I also want to incentivize the one guy who 3 makes a one-time mistake to really say, "I've**  **4 only done this once. I really did fix this 5 goofup. I don't want to have a public**  **6 finding." 7 But I don't want to reward the guy**  **8 who had 50 because he is very fast the way he 9 does it and he could fix them all. I want to**  **10 at least have some sort of public 11 accountability for him.**  **12 MR. SACHS: Now this is Harvey. 13 I am trying to think like this guy**  **14 who has done 50. I think I am going to have 15 a strong temptation to remediate with a**  **16 bankruptcy filing, that it is a whole lot 17 easier to get a new company name than it is to**  **18 remediate 50 units. 19 MR. EISNER: Other concerns,**  **20 questions, on 22? 21 (No response.)**  **22 Okay. We will hold off to vote**

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## 1 until Doug checks and see if we can fix 23 **2 before we take a break. 3 Is there anything people want to**  **4 raise on 23? We have already discussed a 5 little of it.**  **6 MR. BALLO: So, on the fifth 7 bullet, I think it is the fifth, "If clear,**  **8 violation will not count towards the finding 9 of routine violator," I guess I would want to**  **10 limit that to "unless repeated". So that, if 11 you come back six months later and they**  **12 installed another 50 units, even they 13 remediated the first 50, that at that point I**  **14 think they to be a routine violator. 15 MR. EISNER: Anything else? Any**  **16 comments on this? 17 MS. MEYERS: This is Karen with**  **18 Rheem. 19 What does the sub-bullet under**  **20 bullet 4 mean? 21 MR. RAWALD: So, that goes to, I**  **22 wanted some language from Bryan Rocky to**

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## 1 encompass broader than warranty claims because **2 there are some no-hassle things, some of the 3 stuff we discussed last week.**  **4 But, basically, it is we are going 5 to come back to the manufacturer and say, "You**  **6 guys didn't pay for this replacement, right? 7 The contractor did." And if you have record**  **8 that the contractor, through some other means, 9 as you mentioned last week, shooting up the**  **10 unit, is actually making sure the manufacturer 11 pays for the thing that he should be paying**  **12 for, then I am going to say, "Sorry, 13 Manufacturer" -- or "Installer, it doesn't cut**  **14 it." 15 MR. MELCHI: Doug, this is Jon**  **16 from HARDI. 17 If we could have that extended to**  **18 distributors, because oftentimes my 19 distributors will provide warranty coverage**  **20 beyond what the manufacturers do. 21 MR. RAWALD: Right. Actually, I**  **22 think Bryan mentioned that, and I think that**

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## 1 is fair. **2 MR. MELCHI: Thank you. 3 MR. RAWALD: So, there are some**  **4 no-hassle guarantee-type things. 5 MR. MELCHI: Uh-hum.**  **6 MR. RAWALD: So, that's fine. 7 MR. MELCHI: This is Jon with**  **8 HARDI. 9 Just a question, as I am thinking**  **10 about, in the event a distributor was trying 11 to remediate the problem, we obviously don't**  **12 do installs. My understanding, and what I 13 have told my members, is that if the**  **14 contractor has skipped town and you had a 15 branch manager colluding with the contractor,**  **16 that the distributor would, then, be on the 17 hook for paying for the installs.**  **18 Is that interpretation correct? 19 That is what we have assumed, but I wanted to**  **20 make sure that is correct? 21 MR. RAWALD: Right. I'm nodding**  **22 my head yes.**

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## 1 MR. MELCHI: Yes, okay. **2 MR. RAWALD: I agree with that. 3 MR. MELCHI: Thank you.**  **4 MR. RAWALD: That is what would 5 have to happen, for the distributor to be**  **6 deemed to have remediated. 7 MR. MELCHI: Okay. Thank you.**  **8 MR. EISNER: Anything else on this 9 slide?**  **10 MR. MELCHI: This is Jon with 11 HARDI.**  **12 Sorry, one last question. In the 13 event a homeowner reports that their unit is**  **14 not installed properly or they have an 15 improper unit, and they don't want Chuck's**  **16 company coming back out because they felt like 17 they were misled, but Chuck is offering to fix**  **18 this problem. How would the Department view 19 that scenario?**  **20 MR. RAWALD: Chuck I think talked 21 before about subcontracting a job. He would**  **22 call up his friend Bryan and say, "Bryan, I'm**

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## 1 going to give you the fee. Go ahead and do **2 this for me." 3 MR. MELCHI: Okay. Thank you.**  **4 MR. WHITE: I guess I don't have a 5 defense for it, but I would just like to bring**  **6 it out, that in some installations the 7 contractor is not the person who furnished the**  **8 equipment. So, you are the person installing 9 20 units in an apartment complex and they**  **10 rolled up on the truck from the owner. Or it 11 is actually very common in the apartment**  **12 industry. They buy stuff direct through their 13 own supply chain, and they just look for**  **14 somebody to take bids to install these 10 15 units.**  **16 So, are we saying -- and I just 17 want clarification -- are we saying that, if**  **18 I am the contractor and I am given this 19 equipment, that I either decline to install**  **20 them or face the music? 21 MR. RAWALD: Right. So, my**  **22 preference would be the latter. I don't want**

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## 1 contractors to be saying, "I don't want to do **2 this job," and walking off the job. But I 3 also, if they do the job, to hold both the**  **4 contractor and the guy who got the equipment 5 to them, because I think they meet the**  **6 definition of contractor, too, that we have 7 put out there to be held responsible.**  **8 So, they would share the kind of 9 remediation obligation if we went to that**  **10 juncture. But I want contractors to feel 11 empowered to say, "I don't want to install**  **12 this. This is not the right thing." And I 13 think it is a fair thought. I know some**  **14 won't, but I guess I don't want those guys 15 doing the jobs.**  **16 MR. WHITE: And I understand that. 17 I have in my career walked off a project and**  **18 said, "I can't do this." And I have walked 19 away from what could have been some money.**  **20 But money talks to a lot of people, and 21 especially coming out of not boom times,**  **22 people are very reluctant at times to walk**

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## 1 away from a project. **2 But I am not trying to defend it. 3 I just want to know, if I am going to write**  **4 something to tell people, "Look, Guys, if you 5 do it, it is certainly your choice, but you**  **6 are not excused from this section." 7 Really, as long as I know the**  **8 rule, as long as I am clear, I am okay with 9 that.**  **10 MR. RAWALD: Right. That is what 11 the rules are going to be.**  **12 MR. EISNER: Anything else on 23? 13 (No response.)**  **14 Are we ready to vote on this? 15 Anybody object to this being listed as**  **16 unanimously adopted? 17 (No response.)**  **18 Okay. Consider that one done. 19 And let's take a 15-minute break.**  **20 It's 20 of. 21 (Whereupon, the foregoing matter**  **22 went off the record at 10:39 a.m. and went**

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## 1 back on the record at 11:00 a.m.) **2 MR. EISNER: Doug wants to go back 3 to slide 21. I think he has got an insert in**  **4 there, I guess after talking to DOE people. 5 MR. RAWALD: Right, and it is**  **6 actually slide 22. 7 So, I teed this up. I ran into**  **8 the people who were concerned. Everyone is 9 comfortable with this caveat. So, I have**  **10 talked to Charlie and Chuck quickly about what 11 language would be most appropriate to narrow**  **12 it. 13 So, we have written it down as,**  **14 "If a non-compliant installation in one 15 residence" -- in one residence, so a McMansion**  **16 or a small house like mine -- "is remediated 17 before DOE makes a finding, then DOE will**  **18 issue a case closed letter to the party being 19 investigated."**  **20 So, that is the compromise that 21 they were willing to offer. I think it meets**  **22 everyone's needs. So, we are prepared to say**

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## 1 yes to this. **2 MR. EISNER: Does anybody have any 3 objection to adopting that language and the**  **4 entirety of slide 22? 5 (No response.)**  **6 Okay, hearing no objections, will 7 treat this one as unanimous.**  **8 And I think that brings us to 9 slide 24, routine violator.**  **10 MR. RAWALD: And this is Doug. 11 This is a lot of things that we**  **12 talked about last week. There isn't anything 13 new here, except at the very end where I**  **14 discuss about issuing the notice. 15 And so, we, as our current course**  **16 of conduct, have an enforcement website which 17 we keep things on. Because manufacturers are**  **18 going to have sort of possible liability for 19 dealing with these folks, we would want to**  **20 offer the option to send out a blast email if 21 people feel that is appropriate. So, I am**  **22 asking you if you would prefer that as opposed**

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## 1 to having to watch our website for current **2 events. We are open to providing that. We 3 can do that.**  **4 Those folks who are on our email 5 list already for rulemaking activity know that**  **6 that is a pretty easy process. And so, it 7 would be similar to that, where if we issue a**  **8 finding, you would get something in your email 9 box saying, "Oop, this is what has happened."**  **10 So, I hoping that, if people want 11 that, we can do it.**  **12 MR. MELCHI: This is Jon Melchi 13 with HARDI.**  **14 Doug, I am thinking of our 15 relationship with EPA. When there is a**  **16 violation or something regarding refrigerants, 17 the agency makes at least an effort to reach**  **18 out directly to the trade associations, 19 knowing that maybe a lot of our members aren't**  **20 on the DOE mailing list, but that we can make 21 sure to publicize that information to our**  **22 members in those areas.**

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## 1 Is that something the Department **2 can commit to doing? 3 MR. RAWALD: Right. So, what we**  **4 would say is, "You subscribe to our list," and 5 you would get it. And then, you could send it**  **6 out as you feel is appropriate. 7 MR. HURST: Doug, this is John**  **8 Hurst from Lennox. 9 I like the idea of having the**  **10 website and pushing, you know, if you have the 11 information.**  **12 The other question I would have 13 is, if you -- and this is back to slide 18.**  **14 I am not going to get into the weeds on it. 15 But when you request information from a**  **16 manufacturer, distributor, or contractor -- a 17 contractor is pretty easy. You go to the**  **18 proprietor. A manufacturer, who is the point 19 of contact and how do you establish that?**  **20 MR. RAWALD: Yes. So, typically, 21 when I reach out to a company, I call up the**  **22 company and I find out the appropriate person**

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## 1 for either receiving service of process, so we **2 look at the company records in the Secretary 3 of State database, or we will call the company**  **4 and say, "Who is the Vice President of 5 Engineering?" Because we are looking for data**  **6 usually. 7 So, I am open to different people**  **8 being the appropriate people. But we would 9 look at those two areas, typically, is how I**  **10 usually handle that. 11 Because we would be doing a**  **12 subpoena, I think we would just go with the 13 person who is listed as a service-of-process**  **14 person within the company. But if the company 15 wants to put forward a different person for**  **16 that, I guess we are amenable to that. It is 17 just going to be hard from 100,000 contractors**  **18 to submit an appropriate person to notify, 19 but, from the manufacturer's point of view, I**  **20 certainly think that we could look at that. 21 I mean, I want to make this**  **22 effective, right? So, I don't want the boss**

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## 1 and the bureaucracy of a company. So, if Dave **2 says to me, "It's really better just to email 3 me, and I'll be the person to accept it," then**  **4 we will do that. And that is how we will do 5 that, an interoffice record. And then, we**  **6 will make sure we follow up on that one when 7 we have an issue with Allied Air, for example.**  **8 MR. EISNER: Any other comments, 9 questions?**  **10 (No response.) 11 Should we take the question mark**  **12 out of the last line, then, and vote on this? 13 Anybody object to this being**  **14 unanimously adopted? 15 MS. SHEPHERD: I just have another**  **16 question. So, in terms of when DOE is trying 17 to find, when DOE is examining whether a**  **18 manufacturer knew of a routine violation, is 19 this the same analysis that is going to be**  **20 used? This could be tied into an issue I am 21 sure will come up regarding when exactly that**  **22 happens. But I guess that is my question.**

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## 1 MR. RAWALD: Right. So, assuming **2 that DOE required -- it is not only based upon 3 DOE's decision, but if prior to DOE finding a**  **4 routine violation, if we have reason to 5 believe that a manufacturer has sufficient**  **6 knowledge to decide if someone is a routine 7 violator and kept selling to that person,**  **8 anyway, what would be the factors that we 9 would look at?**  **10 These would certainly be the same 11 factors if we were to do that. So, I really**  **12 want to trust that I think when we get to that 13 part, we really want to look for actual**  **14 knowledge there. So, I think it is going to 15 be even harder than this.**  **16 MR. McCRUDDEN: This is Charlie 17 with ACCA.**  **18 How would a distributor become a 19 routine violator?**  **20 MR. RAWALD: Right. So, the 21 distributor has two different violations that**  **22 we have discussed. One of them is the knowing**

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## 1 collusion with somebody, essentially. So, if **2 somebody comes up to your desk, and always 3 people keep coming up to the desk and saying,**  **4 "I'm going to Mississippi," "I'm going to 5 Alabama," and you keep selling them products.**  **6 So, routinely you are doing that. That is one 7 way.**  **8 The second way is you are dealing 9 with someone who is on the list and you deal**  **10 with a lot of people who are on the list 11 already. So, it has to be routine, but it is**  **12 a pattern of conduct on the part of the 13 distributor of dealing with people who are on**  **14 the list already that we have said they are 15 routine violators.**  **16 MR. EISNER: Anything else? 17 (No response.)**  **18 Does anybody object to this being 19 unanimously adopted?**  **20 (No response.) 21 Hearing no objections, this is now**  **22 adopted.**

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## 1 That takes us to slide 25, the **2 right to appeal. 3 Any questions or comments?**  **4 MR. DORIA: Yes, this is Jordan. 5 Is this for both findings of**  **6 violations and finding of routine violations? 7 MR. RAWALD: Right. So, we are**  **8 only talking about appeals of finding of a 9 routine violator. So, if you are found to be**  **10 a routine violator, that is a point where you 11 could say, "All these violations I have aren't**  **12 correct. So, here's why." So, that is how we 13 envision it.**  **14 That is why the first bullet 15 there, "The party will have a right to**  **16 administrative appeal of finding of a routine 17 violator."**  **18 MR. MELCHI: This is Jon Melchi 19 with HARDI.**  **20 Is this information, distributors 21 having never received any sort of notice like**  **22 this before, are these steps outlined when the**

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## 1 Department would find a filing, how to appeal **2 it? 3 MR. RAWALD: Right. So, any**  **4 notice we would issue would include all the 5 remedies. And so, let's go back to Notice of**  **6 Violation. If I send someone a Notice of 7 Violation, it would include language saying,**  **8 "You may be able to remediate. The proper 9 process for remediation would be to do" X.**  **10 And then, following that, we will notice a 11 Notice of Remediation.**  **12 So, the same thing with, if I file 13 a Notice of Routine Violation, I will say,**  **14 "You have the ability to appeal. Your 15 appellate rights are the following." I would**  **16 say here's what you do and here is how you do 17 it.**  **18 So, we want to make sure people 19 have all the tools necessary to respond**  **20 appropriately. That is our obligation to you. 21 Manufacturers, once again, we have**  **22 this Notice of Non-Compliance for products,**

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## 1 and it outlines it out. So, you could look at **2 that example if you want, Jon, we have it 3 online. But it shows you how we do that.**  **4 MR. DORIA: This is Jordan again. 5 A question on the third bullet**  **6 saying, the sub-bullet there, "DOE still could 7 determine whether or not the appeal will go to**  **8 a next level within the Department or to an 9 independent hearing."**  **10 Can you comment on how DOE is 11 making that decision?**  **12 MR. RAWALD: So, it is a 13 bureaucratic issue. So, we have an**  **14 independent Office of Hearings and Appeals 15 that is run by somebody that I don't have any**  **16 authority over nor ability to require to do 17 anything. And so, we have to ask him if he**  **18 would want to take on this extra work. And if 19 they are, then I think this would be good,**  **20 appropriate place for it. If they are not, 21 then the next best thing is to have it go to**  **22 the next level within the Office of General**

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## 1 Counsel, who would be at least someone **2 independent, because they are not briefed on 3 all these things. They are just going to look**  **4 at it and say, okay, from a fresh set of eyes. 5 So, those are the kind of two**  **6 options we have bureaucratically. I think the 7 strong preference would be the independent**  **8 Hearing Office, but I can't commit them to it 9 until I talk to them and say -- I have asked**  **10 people who have the appropriate interaction 11 with these people to ask them, but it is a**  **12 bureaucratic issue. 13 So, I feel comfortable voting on**  **14 it, in that, either way, it is going to be a 15 good resolution, but if you folks want to wait**  **16 until we get there, you are going to have to 17 wait a little while before we get that**  **18 bureaucratic understanding worked out. 19 (Laughter.)**  **20 MS. SHEPHERD: And, Doug, this is 21 Amy.**  **22 So, just from the manufacturers'**

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## 1 perspective, then they just have the existing **2 statutory process under civil penalties? Is 3 that how it works?**  **4 MR. RAWALD: Right. What would 5 happen with a manufacturer, we would find a**  **6 civil penalty and we would say you could do 7 all the things that you do in a civil penalty**  **8 process. 9 MS. SHEPHERD: Okay.**  **10 MR. ROCKY: Doug, this is Bryan 11 from Johnson Controls.**  **12 So, we are talking about the right 13 to appeal on the publication and notice of a**  **14 violation. And on slide, I think, 31 we are 15 going to talk about manufacturers' rights.**  **16 But, from a timeline standpoint, a 17 manufacturer's liability, once a notice is**  **18 published, manufacturers are going to be 19 required to start taking action. But you have**  **20 an appeal process that can take up to 75 days 21 or more, roughly, to process an appeal.**  **22 And at that point, if the appeal**

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## 1 is denied, and if we have been doing business **2 with that contractor or that distributor, we 3 are still in violation, even though if the**  **4 appeal is denied, we should have stopped doing 5 business with them on day one. If the appeal**  **6 is upheld and we stop doing business with them 7 on day one, and they have been found to be**  **8 innocent, we have now put a significant 9 penalty on a customer for something that they**  **10 were proven innocent of doing. 11 MR. RAWALD: Right. I hear that.**  **12 MR. ROCKY: Can we talk about the 13 timeline?**  **14 MR. RAWALD: We can. 15 MR. ROCKY: We an address it as**  **16 part of slide 31. 17 MR. RAWALD: Right. That bullet**  **18 is squarely on slide 31. So, I mean, would 19 you want the timeline to be shorter for the**  **20 appeal? Is that why this is important to 21 hear, Bryan?**  **22 MR. ROCKY: I would just like**

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## 1 clarification of, during an appeal process, **2 what the Department expects manufacturers or 3 distributors to do.**  **4 MR. RAWALD: Right. So, the 5 Department has given them -- and this is teed**  **6 up for 31, but I might interplay here for the 7 timeline. So, I think it is important for**  **8 that purpose. 9 The Department's position going**  **10 into the negotiation is that we would want 11 manufacturers to make a choice. You know,**  **12 either we think this guy isn't really a 13 routine violator and we are supporting his**  **14 appeal, we are going to keep doing business 15 with him, or let's not do business with him**  **16 until this is sorted out. 17 And so, I think that is why I am**  **18 trying to have an accelerated timeline for 19 this. I think this is a pretty aggressive**  **20 timeline for the appeal process. But I want 21 to make sure that -- so, that is why I think**  **22 we need to have an aggressive -- but if you**

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## 1 think it needs to be more aggressive, that's **2 fine, because I think that is the important 3 piece of it to me.**  **4 MR. ROCKY: So, just to clarify, 5 then, we are going to talk about on slide 31.**  **6 But, from the date of a Notice of Violation, 7 what is the expected timeframe for a**  **8 manufacturer or distributor to actually take 9 action?**  **10 MR. RAWALD: So, once someone is 11 on notice that someone is a routine violator,**  **12 then they have knowledge. So, DOE could, 13 then, find that any units sold to that person**  **14 would be a commission of a prohibited act. 15 So, that would be from that moment of notice.**  **16 MR. ROCKY: So, if Friday 17 afternoon at 5:05 p.m. DOE publishes a notice,**  **18 then on Monday morning I have to stop any 19 sales activities and business transactions**  **20 with that entity that has been found in 21 violation and have no time to actually work**  **22 and do that? And anything that happens**

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## 1 Monday, Tuesday, Wednesday, et cetera, I am in **2 possible violation? 3 MR. RAWALD: Well, I think that we**  **4 are going to be reasonable about it. We have 5 penalty scheme that tries to take that into**  **6 consideration. But we don't want people to 7 drag their feet, either.**  **8 So, I think that I need to hear 9 from you guys what the constraints would be,**  **10 and then, we could talk about it some more. 11 I don't want to put the cart before the apple**  **12 horse (sic) because we could talk about this 13 for a long time. And we possibly could**  **14 resolve this issue of timing first. 15 So, for this slide's purposes, do**  **16 people feel like a more aggressive timeline or 17 a slower timeline would be better? Or is the**  **18 timeline we have put here good? 19 MS. SHEPHERD: Well, I think kind**  **20 of they dovetail, right? 21 MR. RAWALD: Okay.**  **22 MS. SHEPHERD: But what about 30**

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## 1 days because, if they don't appeal by 30 days, **2 they can't appeal, right? 3 MR. RAWALD: Right.**  **4 MS. SHEPHERD: So, what if the 5 Department said that "We won't kick this in**  **6 until 30 days."? Because at that point, 7 either they are appealing or not. But I guess**  **8 that doesn't solve it if they do decide to 9 appeal.**  **10 Because the issue I think we 11 really face is it is easy for the Department**  **12 to say, "Well, you have to decide whether you 13 think this person is a routine violator." We**  **14 don't have any of the information that you 15 guys have.**  **16 MR. RAWALD: Right. 17 MS. SHEPHERD: And it is like a**  **18 12-factor list. 19 MR. RAWALD: Right.**  **20 MS. SHEPHERD: And the downside 21 is, you know, you face a real legal liability**  **22 if you decide to cut people off from business**

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## 1 and, then, it turns out that they're innocent. **2 And then, they are going to come back and say, 3 okay, well, business torts, refusal to deal.**  **4 All kinds of stuff can happen. 5 MR. RAWALD: Uh-hum.**  **6 MS. SHEPHERD: So, I don't really 7 feel like that is a fair position. I think**  **8 that in 75 days I would really question how 9 much of this activity we really think is going**  **10 to be going on with this particular 11 distributor, given that they are in legal**  **12 proceedings with DOE, in terms of future harm. 13 So, I think it would make sense that, when it**  **14 is final and there is no appeal, that is when 15 it kicks in.**  **16 MR. RAWALD: So, what I am 17 hearing, then, is possibly 30 days or possibly**  **18 even longer if there is an appeal, for being 19 allowed to distribute.**  **20 MS. SHEPHERD: Yes. I mean, I 21 really think it has got to be until when the**  **22 appeal is final. Then, you have something**

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## 1 that you can say, "Well, I have to terminate **2 business with you." And when they sue you for 3 tortious interference with business or when**  **4 they sue you for refusal to deal, you could 5 say, "There was an issuance by the Department**  **6 of Energy that said we couldn't do that with 7 you."**  **8 MR. RAWALD: Okay. So, I will tee 9 that up at lunch for people to talk about. I**  **10 am glad we gave that some thought. 11 On this particular slide, would it**  **12 make you feel better if we accelerated or 13 decelerated the timeline, or is the timeline**  **14 at this point appropriate, absent the decision 15 on the other thing?**  **16 MR. DORIA: This is Jordan. 17 I will say, for me, whether it is**  **18 45, 75, 60, that is not really, I don't think, 19 the issue. I think it is the other thing we**  **20 were just talking about. 21 So, I am fine with the timeline**  **22 being what it is. And we can, I think,**

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## 1 discuss those issues further when we get to **2 slide 31. 3 MR. RAWALD: See, because from my**  **4 vantage point, if we are going to allow sales 5 during that timeframe, I would probably want**  **6 to give you only 15 days and decide your 7 appeal. Like I would want to make it shorter.**  **8 MR. McCRUDDEN: So, this is 9 Charlie with ACCA.**  **10 You know, obviously, this is a 11 routine violator. So, this person has**  **12 committed a lot of -- you know, bad folks. 13 And I don't pretend to support them.**  **14 But, in this case, I have to sort 15 of suggest, if it is potentially a 46-to-75-**  **16 day timeframe before the appeal is concluded, 17 and we are talking about central air**  **18 conditioners, if you suppose that this comes 19 down in May, that contractor is out for the**  **20 season. 21 And so, if there is a way to**  **22 accelerate -- and I realize that puts more**

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## 1 pressure on DOE -- but, if there is a way to **2 accelerate and get the appeal or the process 3 when you get to removal, and that is I know**  **4 the next slide, if you lose the season, that's 5 it.**  **6 MR. RAWALD: I would be content to 7 go to 15 days of notice, and appeal would be**  **8 decided within 30 days. And I think we could 9 do that.**  **10 MR. EISNER: Does anybody have a 11 good reason for it being at least 30 days?**  **12 Anybody think that is the shortest it can be? 13 How about the 15 days that Doug has suggested?**  **14 Is that still a little longer? Could it -- 15 MR. MELCHI: I am just trying to**  **16 put myself in the shoes of a business who has 17 never been through this before. I get this**  **18 notice, and, you know, you are trying to 19 think, well, okay, what do I do?**  **20 For instance, a lot of our 21 principals may be a little removed from the**  **22 business on a day-to-day basis. You may have**

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## 1 an owner of a company who is removed from it. **2 A letter comes. Fifteen days, that is not a 3 lot of time, and they would need to consult**  **4 with their attorneys and certain things. 5 I understand why we would want to**  **6 shorten the timeframe, but I am just concerned 7 for small businesses who haven't been through**  **8 this before, if that is just too fast of a 9 time for them to be able to comply.**  **10 MR. EISNER: What about a short 11 timeframe with the right to provide a**  **12 justifiable basis for a longer time? It's 15 13 days or it's 10 days, unless you come in with**  **14 justification for a longer period, the first 15 time I've had to do it. The second time you**  **16 shouldn't need it. 17 MR. MELCHI: Okay.**  **18 MR. EISNER: I mean, is that -- 19 MR. MELCHI: You mean is the**  **20 second -- you're only going to be a routine 21 violator one time. Well, you can be removed.**  **22 I guess I would probably have less sympathy**

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## 1 for somebody who is on line for No. 2. **2 But just the first one, this is 3 something that, again, I am just trying to**  **4 think of our members and our customers who 5 maybe aren't as prepared for something like**  **6 this. 7 MR. WHITE: Well, this is Chuck**  **8 White. 9 And thinking about it from the**  **10 contractor's perspective, probably I've talked 11 to Doug. I have sent him some paperwork. We**  **12 may have had a couple of phone calls. But 13 probably I haven't really talked to my**  **14 attorney. Maybe I have, but probably all I 15 have done is pulled records and sent them to**  **16 you. 17 And now, I get this routine**  **18 violator thing. Now I do need some legal 19 help. And maybe I have already talked to**  **20 them, but if I haven't, I have got to get on 21 his schedule. I have got to have some**  **22 meetings with him, and he has got to get**

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## 1 explained. I mean, that process is going to **2 take a bit. 3 And so, I don't think you probably**  **4 are realistic to do in 10 days. Thirty days 5 I think is probably fair. I wonder, as kind**  **6 of a stop-gap measure, if you could say, 7 "Pending an appeal or pending the result of an**  **8 appeal," whatever that might be, you limit 9 them to only complying equipment.**  **10 So, a manufacturer could still 11 sell to them 14 or better or the proper EER**  **12 equipment or better in that interim period 13 without completely cutting them off. You**  **14 cannot deal with them in product, but you 15 mitigate the possibility the possibility that**  **16 they are going to put the wrong stuff in 17 because you can't sell them the wrong stuff.**  **18 I am just throwing that out there. 19 MR. EISNER: Would it help if,**  **20 when the letter went out saying we are 21 investigating you and you could be found to be**  **22 a routine violator, if you are found by us to**

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## 1 be a routine violator, you have the right to **2 appeal, and they were told that at the 3 beginning of the process? They could think**  **4 about it at least instead of waiting until 5 they are actually found to be the routine**  **6 violator. Would that help? 7 MR. ELLIS: Doug, this is Ray from**  **8 Lincoln Electric. 9 I want to kind of back up to what**  **10 Tim had mentioned earlier with the big picture 11 here. It is that we want to make sure that**  **12 the appropriate units are installed in the 13 right areas. And if you don't necessarily**  **14 need to hold the manufacturers responsible for 15 that contractor until they have been proven**  **16 all the way through the appeals process that 17 they are a routine violator and they can no**  **18 longer be in business, but if during that 19 time, as Chuck had said, they have to install**  **20 compliant units, you know, I would think that 21 that still meets the overall criteria of what**  **22 we are trying to accomplish here, is that they**

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## 1 are installing the appropriate units. **2 I am kind of muddling along here, 3 but I think you understand what I am talking**  **4 about. 5 MR. RAWALD: I do.**  **6 MR. ELLIS: Because that is their 7 worry right now, even the distributors, that**  **8 if a rogue contractor is now kind of on trial 9 through this process, that he has been**  **10 installing the wrong units, that they can only 11 now sell him -- they are not going to give him**  **12 anything that they would jeopardize themselves 13 for at that point.**  **14 MR. RAWALD: No, I hear that. And 15 so, what I am going to do over lunch is I am**  **16 going to bring these ideas back on the 17 manufacturer liability piece. So, I think**  **18 that they are all fair suggestions. So, I 19 want to bring that back and come back to you**  **20 guys with some answers after lunch. 21 MS. MEYERS: This is Karen with**  **22 Rheem.**

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## 1 And kind of along the same line, **2 you publish something for a routine violator 3 on a contractor. Myself, as an OEM, in our**  **4 business model I would have no idea if he is 5 a customer of my distributor, of my customer,**  **6 or not. 7 So, okay, Joe's Heating and Air**  **8 has a violation. That tells me -- do I have 9 an obligation, then, to go investigate whether**  **10 my -- 11 MR. RAWALD: No, no, because the**  **12 statute limits your liability to selling to 13 that person. So, I can't use the transitive**  **14 property to say, "Well, you sold to John," or 15 sold to Joe, "so, therefore, you are**  **16 responsible." 17 What I think you would do, the one**  **18 smart thing is you would call up Jon and say, 19 "Jon, please don't deal with Joe because I**  **20 don't want to lose you, buddy. You know, 21 you're my customer. I want you to be smart.**  **22 So, please be careful with who you are dealing**

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## 1 with." **2 That is the one thing that I think 3 that you would want to do from a business**  **4 point of view. But, otherwise, I think if a 5 contractor is found to be not someone to be a**  **6 routine violator, and you don't deal with that 7 contractor for any number of reasons, you**  **8 don't have to worry about it. And if you 9 don't deal with the contractors at all, then**  **10 you really should not worry about it, unless 11 you want to take that kind of proactive step**  **12 of talking to your distributor and saying, 13 "Hey, Distributor, you know that you could be**  **14 found liable if you keep dealing with these 15 guys who are on a list for DOE."**  **16 MR. MELCHI: This is Jon with 17 HARDI.**  **18 That was the scenario that we were 19 talking about, why we want this public**  **20 information. Because somebody is cut off at 21 Store A, and then, they go to the next county**  **22 over to try to reestablish themselves. So, we**

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## 1 want to be able to try to communicate that **2 throughout all of our membership. 3 MR. RAWALD: So, I see this as a**  **4 kind of educational piece almost. So, you can 5 almost remind, "Hey, remember, Distributor,**  **6 this is the kind of thing that this could get 7 me in trouble."**  **8 MR. MELCHI: Yes. 9 MR. RAWALD: "So, be smart, so I**  **10 don't have to worry about what I'm doing." 11 MR. SACHS: Well, this is Harvey.**  **12 I am not finding it easy to 13 picture what your Notice of Routine**  **14 Violatorship looks like. But it seems to me 15 that, in terms of what I am hearing from the**  **16 upstream people, if that indicates -- David 17 has been found to be a routine violator by** **18 selling SEER 13 Brand X equipment in such-and 19 such a county.**  **20 MR. RAWALD: Right, we are not 21 doing that.**  **22 MR. SACHS: That would be much**

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## 1 more useful. **2 MR. RAWALD: Right. So, Karen has 3 previously asked -- and I think it is**  **4 appropriate -- not to advertise what 5 particular brand of equipment they were**  **6 selling because of the concern that it would 7 give the brand a bad name that wouldn't be**  **8 deserved. So, I think that is appropriate. 9 So, our goal in the notice would**  **10 be to say the person themselves has installed 11 units in a particular location. So, it would**  **12 identify the area, and that it didn't comply 13 with the standards. So, it would be what the**  **14 standard would be. But we would not go into 15 details of what unit it was, what model it**  **16 was, what brand it was. I don't think that 17 would be appropriate, nor germane really. It**  **18 wouldn't help. 19 So, while I hear that, I think**  **20 that the more concern is the brand negativity 21 that could go from such a notice. So, we**  **22 wouldn't want to do that.**

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## 1 MR. BALLO: This is Tim, and I **2 have some questions about this slide. 3 I am sorry for getting into the**  **4 weeds, but we are talking about appeals. As 5 a lawyer, I have to salivate a little bit.**  **6 (Laughter.) 7 First of all, it seems to be**  **8 structured only as an appeal of the finding of 9 routine violator. So, I take it from this**  **10 that there is no appeal for the initial 11 determination of a violation as to the**  **12 specific installation? 13 MR. RAWALD: Right. As designed**  **14 right now, that is correct. 15 MR. BALLO: Okay. The other**  **16 question I had is in the Office of Hearings 17 and Appeals process right now they have**  **18 something that they do that is not quite like 19 intervention, but it is an opportunity for**  **20 others to get involved, to participate, or 21 weigh-in on cases before them.**  **22 I don't know if that is something**

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## 1 you all have thought about, if you would like **2 to keep that process in place for this. But, 3 if you are trying to limit the timeline of an**  **4 appeal, that generally -- 5 MR. RAWALD: Right. So, that is**  **6 the constraint, right? They do do that. So, 7 what Tim is talking about, the Office of**  **8 Hearings and Appeals hears three different 9 issues that are germane to the Department.**  **10 The ones we care about here are for appliance 11 efficiency exceptions to standards.**  **12 So, when a company can say, "Hey, 13 I know this standard is in effect from the**  **14 Department of Energy, but, for these reasons, 15 we can't meet it. Can we have an exception**  **16 from that standard for a period of time?", 17 then the Office of Hearings and Appeals asks**  **18 for public comment. 19 Now they don't typically publish**  **20 it in the Federal Register the way that the 21 Department does other things, but they will**  **22 proactively contact the people who they think**

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## 1 are concerned and say, "Tell me what you think **2 of this." 3 But it takes a long time. And so,**  **4 that is why their decisions take a while. I 5 wouldn't see that being the case here, nor**  **6 would I think that it would be of value. 7 So, they have security clearance**  **8 cases they do, which are more like this, where 9 they revoke someone's security clearance**  **10 because of the actions they take, and then, 11 they have an appellate situation that they can**  **12 go to when someone wants to appeal the 13 decision.**  **14 So, this would be more akin to 15 that, which is we are making a finding. The**  **16 person can talk to the Office and let them 17 know their thoughts. And then, it would be**  **18 the Office would make a final decision. 19 Now I haven't worked out with them**  **20 that they would do this yet, but I think that 21 is how we would pitch to them, would be that**  **22 kind of process, because we want to keep it**

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## 1 streamlined and quick. **2 MR. BALLO: Okay. And I take it 3 that the outcome of that appeal would, then,**  **4 be subject to judicial review? 5 MR. RAWALD: Right. So, people**  **6 always have the opportunity to sue the 7 Department from an outcome. So, they could do**  **8 that. 9 And so, the problem is, when does**  **10 that end and how does that affect the 11 manufacturer liability? So, I don't know how**  **12 to parse that out. So, people could sue the 13 Department based upon an ultimate outcome of**  **14 a decision of the Department. 15 MR. DORIA: This is Jordan.**  **16 I just want to say that, not 17 unsurprisingly, I am definitely supportive of**  **18 going through the Office of Hearings and 19 Appeals. So, just to put a stake in the**  **20 ground on that. 21 The only other thing I would say,**  **22 and I understand that you can't control that,**

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## 1 but the only thing I really would not want is **2 for there to be a different process, that it 3 either always has to go to the Office of**  **4 General Counsel or all appeals have to go to 5 independent hearing. I wouldn't want there,**  **6 you know, by happenstance or bureaucratic 7 issues, that it sort of varied from time to**  **8 time, I wouldn't to see that. 9 MR. RAWALD: Right. It would be**  **10 uniform. 11 MR. EISNER: Any discussion on the**  **12 45-day timeframe? You haven't talked about 13 that. That is more of a burden probably on**  **14 the Department getting a decision out that 15 fast. So, you said you could accept 30?**  **16 MR. RAWALD: Well, I think if we 17 went to 15 days of notice, we could do 30 days**  **18 of filing, because I would presume that the 19 notice would probably -- the filing they would**  **20 have would probably be shorter, frankly. 21 (Laughter.)**  **22 But I have to think about it some**

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## 1 more. But I think the 45 days is a pretty **2 good number. Thirty days would be aggressive, 3 but we could do it, I think. But I am not the**  **4 one doing it, so I would be committing a lot 5 of people of doing things that they wouldn't**  **6 necessarily agree to. So, I have to ask back. 7 MR. EISNER: And would there be**  **8 any latitude for justification by the 9 Department for a longer period, that is, 45**  **10 days? 11 MR. RAWALD: Right. So, I think**  **12 that goes to the question of manufacturer 13 liability. If we are going to send that out,**  **14 and the manufacturers are going to be 15 operating in uncertainty, that wouldn't be**  **16 fair. So, if there is no liability attached 17 to us taking more time, then I think that it**  **18 would be more likely that we would be more 19 likely to extend the day.**  **20 So, I think that comes back to 21 that question on slide 31 about the liability**  **22 for dealing with these guys when they are in**

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## 1 that kind of pendency-of-appeal situation. **2 MR. EISNER: I mean, could there 3 be a process whereby you, the Government,**  **4 would have to ask the appellate decisionmaker 5 for authority to take 45 days?**  **6 MR. RAWALD: I'm not certain; I am 7 not sure I understand your question.**  **8 MR. EISNER: Well, we talked about 9 15 days for the public to file.**  **10 MR. RAWALD: Uh-hum. 11 MR. EISNER: But they, if given**  **12 justification, could extend it to 30 days, if 13 they needed it. I am saying, if you put it at**  **14 30 days, but you could get 45 days if whoever 15 was making the appellate decision approved**  **16 your request. 17 MR. RAWALD: Right.**  **18 MR. EISNER: Or the parties -- 19 MR. RAWALD: I guess we wouldn't**  **20 be making the request, right? The appellate 21 authority would say, "We need more time to**  **22 process this request. So, we are going to**

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## 1 take more time." So, they would be deciding **2 on their own, because the government is not 3 going to be -- we have our case already. So,**  **4 we are just going to give them the record that 5 we have established. We are not going to be**  **6 a party to the administrative process. 7 MR. EISNER: Okay.**  **8 MR. RAWALD: So, it is going to 9 be, "Here's the record we've established.**  **10 Here's our challenge to the administrative 11 process. What do you think?"**  **12 So, I don't see the Department 13 asking them to take more time. I could see**  **14 the body saying, "We need more time because 15 it's awfully complicated." But these**  **16 shouldn't be that complicated. So, the hope 17 is that wouldn't happen.**  **18 So, I wouldn't want to give them 19 the discretion to do that, especially if it**  **20 creates uncertainty for the manufacturers down 21 the chain. So, that is my concern.**  **22 MR. EISNER: And what,**

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## 1 traditionally, under your process would happen **2 if the adjudicator did not decide within 45 3 days?**  **4 MR. RAWALD: Yes, this is a case 5 of first impression, you know.**  **6 MR. EISNER: Anybody want to lower 7 the 45 days? Anybody suggest that? Or is**  **8 everybody comfortable with leaving it at 45? 9 MR. DORIA: Neil, I mean, I just**  **10 don't think we can entirely decide this 11 independent of some of the liability questions**  **12 and the issues on, you know, can we sell them 13 products 14 SEER and above. There is no way**  **14 I think that, at least as a representative of 15 Ingersoll Rand, that I can vote for this until**  **16 we get those other answers. 17 MR. EISNER: Through the later**  **18 slides? 19 Everybody agree with that? They**  **20 want to wait on this one? Okay. 21 All right. The next slide is**  **22 removal from routine violator list.**

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## 1 MR. McCRUDDEN: This is Charlie **2 with the ACCA. 3 Is it the 90 days? Is that a set**  **4 in-stone figure?**
**5 MR. RAWALD: No. 6 MR. McCRUDDEN: Okay. Is that a**  **7 typical -- does DOE -- 8 MR. RAWALD: There is no**  **9 typicality to it at all. This is a number. 10 MR. McCRUDDEN: So, what I am**  **11 thinking of is the case where a contractor 12 goes from zero to routine violator instantly,**  **13 but, yet, satisfies the first bullet 14 relatively quickly. Now is sitting around for**  **15 90 days pending whatever we decide about 16 whether they can get compliant equipment or**  **17 not or non-standard or non-subject to regional 18 standard equipment or not.**  **19 That just seems a long time. If 20 you have gotten to the first bullet, to get to**  **21 the second bullet it seems like a long time. 22 MR. RAWALD: And I am open to** 

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## 1 shortening that. So, this is in some way a **2 sanction, right, for not remediating earlier. 3 So, we are finally getting around to it now**  **4 that we have issued the final big one. So, if 5 you want to make it shorter, I think that**  **6 would be fine. I just want to hear from 7 folks.**  **8 MR. EISNER: Can you walk us 9 through what you would be doing after they**  **10 notified you that they had completed all 11 remediation that would take time?**  **12 MR. RAWALD: Waiting. 13 MR. HURST: Yes. So, I think I'm**  **14 fairly ambivalent. I think if the intent is 15 to put somebody out of business, which I don't**  **16 think it is, 90 days seems excessive. I think 17 if they are a routine violator and they have**  **18 had 20 instances, you think about what they 19 have to do. They have to not only expend the**  **20 labor to go out and remediate, but they also 21 have a dead piece of inventory that they**  **22 installed that there is relatively no market**

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## 1 for. **2 So, you are removing a used piece 3 of equipment. I wouldn't presume the**  **4 manufacture is going to take it back because 5 it is subject to a violation. The manufacture**  **6 is not going to take it back. So, you are not 7 only eating the labor, but you are eating the**  **8 cost of the equipment that you bought. 9 MR. RAWALD: How about 30 days?**  **10 MR. HURST: Yes, I think so. 11 MR. RAWALD: Okay.**  **12 MR. HURST: I would be more 13 supportive of a shorter time period because I**  **14 think the real punishment is in the 15 remediation because there is a huge cost to**  **16 it. 17 MR. RAWALD: That's fine.**  **18 MR. SACHS: This is Harvey. 19 And just in the general philosophy**  **20 we have been trying to do of keeping on 21 encouraging remediation, even at this stage,**  **22 you do it and you're out of jail is a good**

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## 1 signal to send. And I can't see any reason **2 why we would want 90 days instead of a much 3 shorter time, particularly if that 90 days**  **4 starts on the 1st of June. 5 MR. EISNER: Are you fine with 30?**  **6 MR. SACHS: I would only ask, if 7 we need as much as 30 to administratively**  **8 issue the notice -- 9 MS. MEYERS: This is Karen.**  **10 MR. SACHS: -- that Karen is no 11 longer a violator, a routine violator.**  **12 MS. MEYERS: Can we say, "No 13 longer than 30 days"?**  **14 MR. RAWALD: That's fine. 15 MS. MEYERS: So, I mean, it could**  **16 be done -- 17 MR. RAWALD: So, it could be done**  **18 earlier? Uh-hum. 19 MR. EISNER: Anybody object to**  **20 that? 21 (No response.)**  **22 Does anybody have any other**

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## 1 problems with any other language in slide 26? **2 MS. NOLL: I have a question. 3 This is Elizabeth.**  **4 On the removal of the routine 5 violator, is there any -- like the person**  **6 comes back a year later and remediates? Is 7 that still ability to get removed from the**  **8 list? 9 MR. RAWALD: In my opinion, yes.**  **10 MS. NOLL: Okay. 11 MR. EISNER: But you're saying, in**  **12 your opinion, they could not come back a year 13 later?**  **14 MR. RAWALD: No, I'm saying they 15 could.**  **16 MR. EISNER: They could come 17 back --**  **18 MR. RAWALD: I am saying someone 19 could come back at anytime and say, "Hey, I**  **20 have completed my remediation. Can I be 21 removed now?" And we say, "Yes. Great." And**  **22 we will within 30 days issue a notice saying**

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## 1 you have been remediating, after I have, of **2 course, cleared all the obstacles with the 3 manufacturers and everyone else.**  **4 MR. EISNER: Okay. Does anybody 5 have any objection?**  **6 MS. NOLL: So, in that scenario, 7 would 30 days be enough time for you to clear**  **8 all those obstacles? 9 MR. RAWALD: I think so.**  **10 MS. NOLL: Okay. 11 MR. EISNER: Would the second**  **12 bullet change from 90 to 30 days? 13 Does anybody object to slide 26**  **14 being adopted unanimously? 15 (No response.)**  **16 Okay. No one objects. We can go 17 on to slide 27, 28.**  **18 MR. RAWALD: Right. 19 MR. EISNER: Energy Guide Label.**  **20 MR. RAWALD: And this is what I 21 think AHRI was working on. And I don't know**  **22 if you guys presented something last week when**

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## 1 I wasn't here that had some sort of thought. **2 But I know that we had discussed 3 previously about our body making a**  **4 recommendation to FTC to streamline the label 5 to be consistent with what we have designed**  **6 here. So, I don't know if we have an outcome 7 we have already agreed to or not for how we**  **8 would do that. 9 MR. AMRANE: This is Karim with**  **10 AHRI. 11 I think you were not in the room,**  **12 Doug, but we showed the labels and everybody 13 has seen the labels. So, I am not sure if we**  **14 need to have further discussion on it. 15 MS. MEYERS: Karim, this is Karen.**  **16 I think he is talking about the 17 FTC mockup, Energy Guide mockup. Is that what**  **18 you -- 19 MR. AMRANE: Yes, yes, we did.**  **20 MR. RAWALD: Right. Because I 21 wasn't here last Wednesday when I know we were**  **22 talking about labeling. So, I am not sure if**

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## 1 everyone agreed with that or not. I haven't **2 seen it. So, if everyone is comfortable 3 with --**  **4 MR. EISNER: Does anybody want to 5 see the labels?**  **6 MR. SACHS: This is Harvey. 7 Karim sent the labels to me. I**  **8 circulated them to the advocates. I may have 9 forgotten Ray. But, otherwise, we have seen**  **10 them and had a chance to respond. I heard no 11 responses from our community.**  **12 MR. RAWALD: So, Harvey, does that 13 mean that you are content with the label that**  **14 AHRI proposed as being the one that we propose 15 that FTC adopt?**  **16 MR. SACHS: Well, this is Harvey, 17 and I would much prefer a deeper process with**  **18 focus groups and testing out alternatives, but 19 it ain't going to happen. So, yes.**  **20 MR. RAWALD: Okay. So, if we can 21 get an electronic copy? You gave it to Laura,**  **22 I guess, already. Okay, and we will**

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## 1 incorporate it in here. Okay. **2 MR. BALLO: So, this is Tim. 3 And I had flagged this earlier, I**  **4 guess, when we talked about the label. The 5 label that AHRI has circulated is fine except**  **6 that it does eliminate the indication of 7 capacity, which I think in comments on the**  **8 recent FTC proposed rule, a bunch of 9 efficiency organizations and consumer groups**  **10 had recommended something different rather 11 than eliminating capacity.**  **12 So, for the changes that are 13 crucial to this rulemaking, we are totally**  **14 fine with the depiction of the 14 SEER. Just 15 that capacity issue is -- I wouldn't want to**  **16 get people confused that we also endorsed 17 removing capacity from the label.**  **18 MR. RAWALD: And I guess, given 19 this is another Department's activity, I**  **20 really feel the Department doesn't have a 21 position on this. So, we are abstaining from**  **22 the vote on it, and we will let you guys**

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## 1 decide. And if you think it is appropriate to **2 push forward, then we will. 3 MR. ROCKY: So, this is Bryan.**  **4 In this discussion I am not going 5 to speak for every manufacturer, but I think**  **6 everyone is doing the same thing. We are 7 already today processing changes on the FTC**  **8 labels, per the FTC requirements for January 9 1. And if this Committee decides to do**  **10 something different, it means we are going 11 through that same process again and do the**  **12 same engineering work to change a label a 13 second time within a very short period.**  **14 And I only want to do this once. 15 So, I have no faith that FTC is going to**  **16 accept what this Committee recommends. So, at 17 this point, I have no option but to change to**  **18 what FTC requires. 19 MR. RAWALD: Right, I think that**  **20 is a fact, Bryan. Everyone has to be doing on 21 January 1st what is currently required by the**  **22 FTC. Any change we recommend will not be**

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## 1 effective before January 1st. So, you're **2 stuck with doing the label as is right now. 3 You're going to have to do it.**  **4 The question is whether we think 5 that we should go to FTC and say, "Do**  **6 something quickly, so we can get to something 7 that is going to be more effective in the near**  **8 future." 9 I don't know what their timelines**  **10 are. So, I think it is going to be a while 11 before they can act on it.**  **12 MR. ROCKY: So, doing something 13 quickly is likely to say, "Yeah, we can do**  **14 something quickly by the middle of 2015 or the 15 end of 2015," and we are going to redo**  **16 something we just redid and confuse our 17 customers through the entire chain to a little**  **18 more degree than we already have on something 19 that everyone thinks is one of the key factors**  **20 to help our customers understand whether they 21 are buying a complying product.**  **22 MR. RAWALD: So, Bryan, this is**

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## 1 Doug. **2 So, I guess to get down to brass 3 tacks, are you saying you would prefer the**  **4 Committee not make a recommendation to the FTC 5 and just live with what we have or make a**  **6 recommendation to the FTC? Those are kind of 7 the two options.**  **8 We have what we have. It is going 9 to be what is going to happen January 1st. We**  **10 are not going to be able to get FTC to change 11 before then. That is the reality.**  **12 So, either we can recommend a 13 change, understanding that is going to require**  **14 more on the part of the manufacturers to 15 change downstream, or we can just live with**  **16 what is already there. I guess it is the 17 question before the folks and the real board**  **18 today. 19 MR. AMRANE: This is Karim with**  **20 AHRI. 21 I think we should go ahead with**  **22 the recommendation, with the understanding**

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## 1 that, yes, FTC will have to do a rulemaking **2 and, yes, manufacturers will have to change 3 their labels, assuming that FTC agrees with**  **4 us. 5 MR. ROCKY: Yes, Doug, this is**  **6 Bryan. 7 I think we have to proceed with**  **8 making a recommendation request. But it is 9 just one more item of unexpected consequences.**  **10 We are all doing this twice, and we are going 11 to have to explain differences in labels**  **12 twice. And I am not sure the value added of 13 doing it now, but I am okay in continuing with**  **14 making a recommendation as part of this 15 activity.**  **16 MS. MEYERS: This is Karen with 17 Rheem.**  **18 Why is DOE going to abstain from 19 this? Because I think it would be helpful if**  **20 we could have DOE's endorsement of the AHRI 21 recommendation and this Committee's**  **22 recommendation.**

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## 1 MR. RAWALD: So, I need to go back **2 and talk to people about that. So, I will go 3 back and look at it. Frankly, I haven't even**  **4 looked at it myself because I wasn't here for 5 that meeting. So, I will ask Laura to email**  **6 it to me, and I will come back. And if I can 7 vote for it, I will.**  **8 MR. ROCKY: So, one last thing -- 9 this is Bryan -- Tim brought it up, as the**  **10 energy advocates have stated positions with 11 FTC regarding capacity. And we come up with**  **12 a different recommendation, as this Committee, 13 that is implying that the energy advocates are**  **14 accepting the final discussion of whether we 15 have a capacity as an item or not on that**  **16 label, right? 17 MR. BALLO: So, Doug, that is what**  **18 I was suggesting, that I wouldn't want to 19 confuse people about that. So, I agree with**  **20 the depiction of the SEER value. I don't have 21 authority to speak for the groups that signed**  **22 off on what we said about capacity.**

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## 1 MR. AMRANE: This is Karim with **2 AHRI. 3 I mean, we made the changes to the**  **4 label based on what the FTC has today. Okay? 5 And there is no capacity, and that is it. So,**  **6 we are not addressing the issue of capacity. 7 I think it is part of the comments for the**  **8 comment period. And if the FTC comes back 9 saying that we need to have capacity, then we**  **10 will have capacity on the label on this. 11 MR. RAWALD: Right. I would**  **12 recommend that anything that comes from the 13 Board be capacity-neutral; essentially, that**  **14 we have no position on the capacity issue, and 15 we are just looking at a way to recommend to**  **16 FTC appropriately to know what the SEER and 17 EER value, where required, through the label,**  **18 consistent with what we have come forward with 19 as our enforcement plan.**  **20 MR. EISNER: Any additional 21 discussion needed on the label, the FTC label?**  **22 MR. SACHS: Just clarification.**

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## 1 This is Harvey. **2 I am understanding that not 3 including capacity in our recommendation,**  **4 being capacity-neutral, means that advocates 5 during the comment period at FTC can still**  **6 reiterate their "ask" for that.**
**7 MR. RAWALD: Yes. 8 MR. SACHS: Thank you.**  **9 MR. RAWALD: Uh-hum. 10 MR. EISNER: Anything else?**  **11 MR. RAWALD: Okay. So, I want to 12 take this back over lunch and come back and**  **13 vote on it, because I want to make sure. 14 Karen has asked me to vote for it. So, I want**  **15 to go back and ask if I can. 16 So if Laura could email me the**  **17 label? 18 MS. DEGITZ: I can't --**  **19 MR. RAWALD: Okay. It's not 20 there? Okay. Somebody else can email me the**  **21 label possibly? 22 MS. DEGITZ: I can email it, just** 

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## 1 after -- **2 MR. RAWALD: Okay, okay. 3 MR. EISNER: Okay. Everybody fine**  **4 with that? 5 (No response.)**  **6 Okay, the next one is slide 29, 7 manufacturer voluntary label.**  **8 MR. RAWALD: This, hopefully, 9 bears on the discussion. Because when I asked**  **10 Laura if people wanted to discuss it 11 yesterday, apparently, she was told, "No,**  **12 we're happy with it." So, I assume everyone 13 is happy with it.**  **14 MR. EISNER: Anybody want to 15 comment on whether they are happy?**  **16 MR. ROCKY: So, Doug, the only 17 thing that has come up, in the examples that**  **18 I had presented, we had included -- there were 19 two versions, one that just had the text that**  **20 says, "Install prohibited in Southwest and 21 Southeast" or Southwest. And the other had**  **22 the option of the website reference.**

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## 1 And so, I think the discussion **2 was, would that website reference be required 3 as part of this versus the text?**  **4 Considerations for space requirements and 5 available text and everything else.**  **6 So, I am not sure if that was 7 brought up as it must include both components**  **8 or if it is just the verbiage of "install 9 prohibited" that is acceptable to everybody**  **10 other than the manufacturers. 11 MR. WHITE: This is Chuck White.** **12 This was an effort to make a down 13 and-dirty, fast, easy -- people aren't going**  **14 to have smartphones, so they can look at web 15 links and we can't trust that somebody knows**  **16 how to use a computer. So, it had to be 17 something simple. Boom, there it is, easy to**  **18 understand. 19 So, I don't see there is a**  **20 definite need to have that website there. We 21 have already said we couldn't rely on people**  **22 to have to go look on a website and find the**

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## 1 model number and all the stuff that is already **2 on that tag. 3 So, it seems like we have kind of**  **4 doubled-back on the argument, requiring to do 5 this simple language, if you are going to make**  **6 that requirement. 7 MR. ROCKY: So, Chuck, again,**  **8 coming back to this, this says/states, 9 "Install prohibited in pertinent regions".**  **10 That is the added text that everyone came up 11 with. And I just wanted to make sure that**  **12 this is not adding a reference to a website as 13 a requirement.**  **14 MR. WHITE: Right. I think that 15 the "Install prohibited" was the fast and**  **16 easy -- 17 MR. ROCKY: Right.**  **18 MR. WHITE: -- understandable, and 19 adding additional things like that, I don't**  **20 see the need to do that. 21 MR. EISNER: Does anybody object**  **22 to this approach and want more?**

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## 1 MR. SACHS: Bryan, I don't seem to **2 have brought my copy of your label. But 3 please remind me if that has either a graphic,**  **4 which I don't think it had, but it doesn't 5 have the list of states. It just has the**  **6 region, and you have to refer to the FTC 7 label.**  **8 MR. ROCKY: This is Bryan. 9 The version I just handed Harvey**  **10 just has the text. I am out of the other 11 version that had, below that text in the**  **12 smaller font was just "Refer to 13 www.productinfo.energy.gov for more**  **14 information." 15 If you have room for it, you can**  **16 put something there, but didn't want to make 17 that a requirement. So, that is just**  **18 verifying what is on the screen here. 19 MR. SACHS: This is Harvey again.**  **20 Thank you, and I particularly want 21 to thank the manufacturers for offering to do**  **22 this because I think it is enormously helpful.**

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## 1 I would find, as a consumer, that **2 "Southwest" is ambiguous. As a San Francisco 3 resident, I wouldn't think of myself as a**  **4 Southwestern. 5 And having reference, asterisks to**  **6 a website or something I think would be 7 helpful, if not mandatory. I would just as**  **8 soon have that included with the label. 9 MR. ROCKY: Well, this is Bryan.**  **10 Remember the discussion has been 11 that this is in addition to the FTC hang tags**  **12 that clearly delineate and define the regions. 13 And so, if you are a homeowner and you are**  **14 concerned about whether your unit meets that 15 region, you should have already received the**  **16 FTC hang tag on the equipment at the time of 17 purchase and kept it with your installation**  **18 instructions, user's manuals, maintenance 19 records, and all the rest of it.**  **20 MR. SACHS: And I very much 21 appreciate it, Bryan, but that doesn't help if**  **22 a year later we have a real estate transaction**

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## 1 and those items aren't available; the FTC **2 label is not on the condensing unit. 3 So, this in some sense has to at**  **4 least be minimally self-contained. And by the 5 asterisks, the easiest I can think of is not**  **6 to have the list of states, but an asterisk on 7 where you can get the definition of Southwest**  **8 and Southeast, that website. 9 Thank you.**  **10 MR. McCRUDDEN: So, this is 11 Charlie with the ACCA.**  **12 If you go to 13 productinfo.energy.gov, there is no list of**  **14 the states. It is basically the DOE's website 15 on -- it is where the DOE's more limited or**  **16 maybe more user-friendly version of AHRI's 17 directory.**  **18 So, I don't know; can you put that 19 on there or, if you can't, then is there a**  **20 point in using the website in determining 21 states?**  **22 MR. SACHS: You've got me in a**

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## 1 "gotcha". I had assumed that the product info **2 was actually a proxy, an invented name for a 3 site, a page that DOE would implement.**  **4 MR. ROCKY: So, this is Bryan. 5 The intent of that on this sample**  **6 was just to illustrate a website could be 7 referenced, and that that website does exist**  **8 with pertinent energy efficiency data. If the 9 Committee decides or DOE decides that this**  **10 enforcement website, or whatever else, is more 11 appropriate, that could be considered.**  **12 I am just coming back to a 13 manufacturer adding a reference to a website**  **14 is additional voluntary information versus a 15 requirement, as what we talked about for this**  **16 label. 17 MS. SHEPHERD: And this is Amy**  **18 from AHRI. 19 And I know this seems like simple**  **20 language, but it was really hard to get to. 21 So, I think that there is a distinction**  **22 between the Energy Guide as the consumer**

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## 1 information and this. I mean, like if I was **2 a homeowner and you have your homeowner's 3 inspection, right, before you have the sale.**  **4 It is not like you go around and do that. 5 And if the inspector sees "Install**  **6 prohibited," then, I mean, I think we are 7 assuming a certain level of sophistication**  **8 from this, but that is the intent of it. So, 9 I think that this fulfills that intent.**  **10 And then, if manufacturers want to 11 add other things, they can. But this language**  **12 in itself, it was hard to get folks to agree 13 to it, but they did.**  **14 MR. AMRANE: Right. This is Karim 15 with AHRI.**  **16 I think for some manufacturers, 17 maybe Bryan, JCI, they have space and they can**  **18 do it easily, and they are not fighting for 19 space. But, for other manufacturers, it is**  **20 going to be difficult to add more information. 21 So, we need to keep that in mind.**  **22 We can make it voluntary and,**

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## 1 then, just, yes, I can add or others can add **2 a website. But I think we really wanted to 3 limit the wording to the minimum possible**  **4 because of the space issue. 5 MS. MEYERS: Yes. And this is**  **6 Karen with Rheem. 7 If we make that mandatory, I can't** **8 vote on this because I am very space 9 constrained. So, that would mean that I**  **10 would, then, no longer support this label 11 until at a later time. I would have to go**  **12 back and check because it is another line, and 13 I am barely getting it in there now. Just so**  **14 you know. 15 MR. WHITE: So, this is Chuck**  **16 White. 17 Bryan, I have a question for you.**  **18 If I go to your company's website, will I find 19 those states listed on your website? I will**  **20 I be able to find that information from 21 whichever brand of your information?**  **22 So, I mean, the most likely thing**

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## 1 I am going to do, if I have your piece of **2 equipment, is go to your website. 3 MR. ROCKY: Yes, I think, Chuck,**  **4 that is a very reasonable discussion item, 5 that manufacturers will either list the**  **6 information or list a reference link to get 7 more information to the DOE website or the FTC**  **8 website because of the hang tags. 9 MR. AMRANE: And this is Karim**  **10 again. 11 Remember, there is the AHRI**  **12 website as well. And the AHRI website has the 13 label also for the equipment in particular,**  **14 you know. 15 MR. DORIA: This is Jordan.**  **16 I would say I am sort of in the 17 same position as Karen. What I would say is**  **18 that we, as manufacturers in AHRI, you know, 19 once the DOE collateral is finalized, I think**  **20 one of the things we talked about a few weeks 21 back was we should all reference the same**  **22 thing.**

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## 1 And maybe, whatever we put, it **2 should all be the same thing. We should all 3 commit to doing it in whatever space our**  **4 contractors/dealers most frequently go to help 5 address this issue.**  **6 Because, fundamentally, I agree 7 with Harvey. It would be nice to have that**  **8 additional piece of information because I 9 wouldn't know that Texas was Southeast. They**  **10 certainly don't think that, right? 11 So, I think that would be**  **12 valuable, but we are in the same position; I 13 just can't commit to putting it on there.**  **14 MR. EISNER: Any other comments on 15 this?**  **16 Karen? 17 MS. MEYERS: And I don't even know**  **18 what the website addresses officially. It is 19 supposed to be either -- I actually have got**  **20 like four emails asking me to sign off on the 21 rating plate changes right now. So, I need an**  **22 answer to this question right now.**

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## 1 MR. McCRUDDEN: This is Charlie. **2 You know, it is the same website 3 that is on the FTC label now. If it is**  **4 productinfo.energy.gov, it is the one that is 5 on the FTC label right now.**  **6 MR. ROCKY: And this is Bryan. 7 That's why I chose that. But,**  **8 again, if we have a different discussion, we 9 could have a different discussion, but in this**  **10 case, in parallel with what Karen said, my 11 engineering group is not adding the reference**  **12 to the website at this point because there has 13 been no decision on what that website should**  **14 be. 15 As Jordan said, we wanted to have**  **16 a consistent message in how we communicate to 17 our consumers and contractors and distribution**  **18 partners of where we want information to 19 reside.**  **20 MR. RAWALD: So, this is Doug. 21 I want to be very practical. You**  **22 guys have come to us with something that I**

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## 1 think is very helpful. And we don't have a **2 website for you to put on there currently that 3 would be helpful. We have a website, but it**  **4 is not going to be the most helpful 5 information. And I can offer no guarantees**  **6 that, by January 1st, when you will be rolling 7 these things out, that it will be the most**  **8 helpful information. So, I don't want you 9 using a website that would be unhelpful.**  **10 So, that being the fact, it seems 11 to me that the most helpful thing is to have**  **12 "Install prohibited" in the two regions, as 13 noted. And just note that is something more**  **14 than what we would have had otherwise and 15 accept that solution at the moment. I think**  **16 that is kind of where I am. 17 I appreciate the fact that I would**  **18 love to have a lot more things on there, but 19 I understand what we are dealing with here.**  **20 And I think this at least gets us somewhere 21 that we weren't before. And so, I am willing**  **22 to accept that fact.**

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## 1 MR. HUNGERFORD: This is David **2 Hungerford. Can you guys hear me? 3 MR. EISNER: Yes.**  **4 MR. HUNGERFORD: Yes, I just 5 wanted to -- Harvey was saying what I was**  **6 thinking, that, to be honest, people in 7 California don't regard themselves as part of**  **8 the Southwest. It is a sort of a causal sort 9 of description of where you are. So, there is**  **10 some potential for confusion, at least in my 11 State.**  **12 And that is, I think, what we are 13 really talking about. I think people in New**  **14 Mexico and Arizona do regard themselves as 15 being part of the Southwest. And whether**  **16 Texas, whether people in Texas feels 17 themselves part of the South and part of the**  **18 Southeast is sort of irrelevant here. 19 So, I would prefer having -- and**  **20 one of the mockups I saw, and I was digging 21 through my materials looking to see if I**  **22 actually had one, and I don't think I do.**

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## 1 There was a website; the idea behind that was **2 someone looking at the label, not having 3 access to the hang tag, would be able to**  **4 figure that out. So, I would prefer something 5 like that to be available.**  **6 MR. LATTANZI: This is Matt 7 Lattanzi with NORDYNE.**  **8 I am going to echo the comments of 9 both Jordan and Karen. Making this mandatory**  **10 at this point in time would force me into a 11 position of not being able to support the**  **12 label and having to bring this back home, 13 because we are very space-constrained as well.**  **14 And we are already moving forward under the 15 assumption that we are not having the website**  **16 at the bottom of the label. 17 MR. SACHS: I give up.**  **18 (Laughter.) 19 MR. EISNER: All right. Anybody**  **20 else have any comments? 21 MR. BALLO: This is Tim.**  **22 I have a question, just on how**

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## 1 this will be effectuated. I am a little **2 troubled by the manufacturer voluntary label 3 title for this slide because I would want it**  **4 to be a requirement, that if someone doesn't 5 put the label on their product, that that is**  **6 a violation of something. 7 So, I guess this is a question for**  **8 Doug. Is this going to be a DOE or FTC rule? 9 Doug's chair is empty. How about**  **10 that? 11 (Laughter.)**  **12 MR. EISNER: Would anybody, would 13 any of the manufacturers have problems with a**  **14 simple requirement that manufacturers will 15 install a label --**  **16 MR. HURST: No, but I think -- 17 Neil, this is John Hurst with Lennox -- I do**  **18 think it would be appropriate that the 19 manufacturers get some credit for voluntarily**  **20 submitting to a requirement. 21 (Laughter.)**  **22 MR. EISNER: Well --**

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## 1 MR. HURST: But I don't want it to **2 construe that we can pick and choose whether 3 or not to put it on there or not. I agree**  **4 with that. 5 MR. EISNER: No, but even what you**  **6 said wasn't exactly clear to me. Voluntarily 7 agree with a requirement? Would you agree to**  **8 a requirement in the rule that was described 9 in the preamble as something that the**  **10 manufacturers volunteered to do? 11 MR. HURST: Yes.**  **12 MR. EISNER: Anybody object to 13 that?**  **14 (No response.) 15 Do you know what we're talking**  **16 about? 17 (Laughter.)**  **18 MR. RAWALD: So, the Department 19 doesn't have legal authority to require this**  **20 particular label. The FTC does. So, we would 21 be acting outside of our authority to require**  **22 it. That is why I particularly appreciate the**

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## 1 fact that manufacturers are coming voluntarily **2 with this because I don't think that we can 3 require it.**  **4 Now the FTC in the past did make a 5 rule requesting nameplating; that they would**  **6 be interested in possibly doing that again if 7 we asked them to do that. But we couldn't**  **8 require it, and it wouldn't be done by January 9 1st of 2015.**  **10 So, in order for us to get there, 11 so we can have something that would really**  **12 work, it requires the manufacturers to come to 13 the table and volunteer, as they have, and for**  **14 us to be reasonable in what we expect for them 15 to do, given the fact they are volunteering.**  **16 And so, I am willing to accept the 17 75 percent solution because you guys are**  **18 giving it to us. And I am being very 19 practical. But I will listen to everyone else**  **20 here and see what they think, too. 21 MR. EISNER: Again, we could say**  **22 in the preamble, "The manufacturers have**

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## 1 voluntarily agreed to install a label doing **2 the following. The Committee agreed to 3 request that the FTC make this a mandate."**  **4 Period. 5 MR. DORIA: So, this is Jordan.**  **6 I guess I had, clearly now 7 wrongly, been operating under the assumption**  **8 that this would ultimately be a requirement on 9 us and that we volunteered it, right?**  **10 MR. EISNER: Yes. 11 MR. DORIA: I guess that was the**  **12 distinction I saw. 13 I have to say it gives me a little**  **14 bit of concern to think that it is just purely 15 voluntary. So, I, as a manufacturer, we are**  **16 putting this saying the install of this 17 product is prohibited. And then, a future**  **18 manufacturer decides they have a new 19 representative, and they say, "Well, no, I**  **20 don't think so." Now we are effectively 21 carrying what I would call to some extent a**  **22 black mark on our product saying you can't,**

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## 1 and they just decided, no, our products can go **2 everywhere, just by looking at the product. 3 That concerns me. I don't have an**  **4 answer, but we need to talk about that more, 5 I think.**  **6 MS. MEYERS: So, I have a 7 question. Doesn't the FTC only govern like**  **8 the Energy Guide Label? Or do they govern all 9 things that go on the unit? Because I don't**  **10 want this on the Energy Guide Label; I want 11 this on the rating plate. So, that is my**  **12 question. 13 MR. BALLO: They have authority**  **14 for marking as well for some products. Like 15 lightbulbs, they do have marking requirements.**  **16 But, for commercial products, DOE does the 17 marking requirements, but for residential it**  **18 is FTC. 19 MR. HURST: So, Doug, you might**  **20 not like this, but do we have to be specific 21 between voluntary and required? Can't we just**  **22 say, "Manufacturers agree to...."?**

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## 1 MR. RAWALD: I think so. **2 MR. HURST: Okay. And then, 3 somebody reading it down the road won't have**  **4 the benefit of us going through this 5 wordsmithing debate, but they will read it and**  **6 say, "We agree to do it." 7 MR. RAWALD: Right.**  **8 MR. EISNER: What I'm hearing is 9 "agree to" is wonderful, but they would also**  **10 like it to be added to a regulation. Would 11 you have any problem with the language saying,**  **12 "The Committee recommends that the FTC add 13 this as a requirement in their rule."? Would**  **14 that be enough for you, the concern you had? 15 Or do you want to wait and see if FTC is going**  **16 to do it? 17 MR. HURST: Yes, I think I am**  **18 worried that that could open up a whole 19 different can of worms, and they wouldn't**  **20 understand. They wouldn't have the benefit of 21 the intent of this discussion.**  **22 MR. EISNER: The FTC would not?**

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## 1 MR. HURST: Correct. **2 MR. EISNER: That is something I 3 think we could make sure they do understand,**  **4 whether it is Doug or inviting the 5 representative to come back to this meeting**  **6 and listen to us. 7 MR. AMRANE: As AHRI, I don't**  **8 think we are ready to request that the FTC do 9 rulemaking on this particular issue.**  **10 MR. DORIA: This is Jordan. 11 I would maybe just like a little**  **12 clarification on what exactly it is that the 13 Department believes it is prohibited from**  **14 doing and to think perhaps creatively about 15 ways we could maybe address that.**  **16 MR. RAWALD: Right. So, I will 17 have to talk more as a lawyer. As I**  **18 understand it, we don't view that we could 19 initiate a rulemaking requiring a label. So,**  **20 if the group decides they want to make it 21 we're going to do this, then we could, of**  **22 course, put out there in our rule that the**

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## 1 group has agreed to do this. **2 MS. MEYERS: But can we make it -- 3 this is Karen with Rheem -- as part of the**  **4 enforcement rule manufacturers will agree to 5 put this label on units that don't qualify?**  **6 So, it is really part of the enforcement rule. 7 MR. RAWALD: That's correct.**  **8 MS. MEYERS: Can you we do that? 9 MR. RAWALD: Yes.**  **10 MS. MEYERS: So that it is kind of 11 mandatory even though it is not -- I just**  **12 don't want FTC to come in here and say, "Well, 13 I want the words to say" this, this, this, and**  **14 this. 15 MR. RAWALD: First of all, I have**  **16 talked to Hampton, and they are cool, 17 essentially, with whatever we decide here.**  **18 (Laughter.) 19 They think it's great. They think**  **20 it's great. 21 Now the constraint is, if Karen**  **22 called me and said, "I bought John's unit and**

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## 1 it doesn't have the label on it and should," **2 I don't have the statutory authority to charge 3 John $200 for failing to put a label on there.**  **4 That is where the Department doesn't have the 5 authority.**  **6 I don't have the authority to 7 bring actions for failure to label products**  **8 properly that are residential. I can bring 9 actions against commercial products that**  **10 aren't labeled properly, but the statute 11 didn't give me that authority. So, I couldn't**  **12 charge you money for failing to do this. I 13 can require it all I want, but I can't have**  **14 that stick. That is the concern. 15 MR. DORIA: This is Jordan.**  **16 Just quickly for the other OEMs, I 17 mean, I think where we are is to put it**  **18 actually on the rating plate. Is that where 19 others are? I'm still entertaining a second**  **20 label. 21 MS. MEYERS: Mine will be a --**  **22 this is Karen -- mine is going to be a mixture**

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## 1 for a short time, because it is going to take **2 a while to get everything done. 3 MR. DORIA: I guess my question**  **4 is -- 5 MS. MEYERS: I will have a mixture**  **6 for a few months. 7 MR. DORIA: I guess the reason I**  **8 asked the question is, I was wondering, I 9 mean, are we getting hung on the word "label"?**  **10 If we called it something else, if we treated 11 it a little bit differently -- I mean, I don't**  **12 know; I am just trying to think of a solution 13 that does not require FTC's action.**  **14 MR. EISNER: Could DOE treat this 15 as a recordkeeping requirement? "The**  **16 manufacturers have agreed to put a plate on 17 the device that indicates that at the time it**  **18 was manufactured it could not be installed in 19 the South."?**  **20 MR. FENSTROM: This is Gary. 21 We have David Hungerford on the**  **22 phone. But, as I understand it, the**

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## 1 California Energy Commission requires marking **2 of products. That is not a label that 3 conflicts with what the FTC may or may not**  **4 require. 5 MR. ROCKY: This is Bryan.**  **6 So, the consensus of the 7 manufacturers that are represented here was**  **8 that we would do this. Unfortunately, this is 9 not the entirety of our industry. It is a**  **10 vast majority, but not an entirety. 11 So, if I am a smaller manufacturer**  **12 of the condensing unit, and there are a couple 13 of them out there, or I am an importer, and**  **14 there are a few of those, if this is not a 15 requirement from the Department or from the**  **16 FTC, it is likely not going to be 100 percent 17 adopted across the OEMs for this product**  **18 family. 19 And so, I am not sure how you get**  **20 there, Doug, but we need more than -- if this 21 is voluntary, I think you have assurances from**  **22 the manufacturers represented here that is**

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## 1 going to cover 90-some percent of the volume **2 that we are going to do this, and you are 3 going to have some small percentage of**  **4 manufacturers who might say, "I have no idea 5 what's going on. It is not a requirement, is**  **6 it?" 7 So, the better we can make this a**  **8 requirement of the enforcement act, the better 9 compliance you are going to have from**  **10 everybody who builds condensing units. 11 MR. AMRANE: This is Karim with**  **12 AHRI. 13 And I think maybe it is something**  **14 we can bring back to AHRI. You know, the 15 majority, the vast majority of manufacturers**  **16 are certified through AHRI, and we can make it 17 a requirement within the AHRI program. It is**  **18 something that would be a violation of a 19 certification program if you don't have this**  **20 labeled. It is something we can try, we can 21 do within AHRI. And I think that would be**  **22 very effective.**

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## 1 Now are we 100 percent? Do we **2 have 100 percent of all? No, but we have 99. 3 -- I don't know -- something.**  **4 MR. EISNER: So, we have had some 5 suggestions here. We can get 99 percent. Do**  **6 we need to get 100? Can we get 100 by 7 requiring it as a recordkeeping? Can we get**  **8 100 percent by some other -- 9 MS. SHEPHERD: This is Amy**  **10 Shepherd from AHRI. 11 I think we need to be very careful**  **12 about trying to get so creative to solve that 13 1 percent that we create an avenue that in the**  **14 future can be used for all kinds of things 15 that we didn't intend.**  **16 I think there is a reason that the 17 statute is set up the way it is with the**  **18 labeling responsibility, FTC, for residential 19 and DOE here. And I think we want to be very**  **20 careful about trying to expand that just to 21 fit this one particular situation.**  **22 MR. DORIA: This is Jordan.**

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## 1 The problem I see is also the way **2 we have constructed this label, right? What 3 we are basically saying is, if there is no**  **4 label, the product is good anywhere, right? 5 So now, somebody simply doesn't do it.**  **6 Magically, all their products are good 7 everywhere, right?**  **8 I am less concerned about the 9 importers and some of those; I am not as**  **10 concerned. And I think I like the suggestion 11 of something with the AHRI program.**  **12 This industry has seen sometimes 13 when there is something that could be called**  **14 a loophole, there is a race to the lowest 15 common denominator. I can remember that**  **16 faintly. 17 I like the idea of all of us**  **18 agreeing to do it. But the moment that 19 Goodman says, "Oh, we're not going to do it**  **20 anymore," that has a coercive effect on the 21 rest of us, not that you guys would do it or**  **22 anyone else, but --**

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## 1 (Laughter.) **2 You know, anyone who does it, or 3 it could be us. I mean, maybe I suggest it.**  **4 I don't know. 5 You know, that is the problem that**  **6 I see. So, I am not comfortable with it right**
**7 now. 8 MR. SACHS: This is Harvey.**  **9 And it pains me greatly, but I 10 can't think of a better, easier solution than**  **11 accepting AHRI's offer to require it on all 12 the products they certify. And it bothers me,**  **13 but I guess we can do it this time -- without 14 precedent, Amy.**  **15 (Laughter.) 16 MR. BALLO: I would still prefer**  **17 that we all trust Hampton to be a good guy and 18 do what everybody thinks is right.**  **19 But I think AHRI, having it as 20 part of their program, would be very helpful,**  **21 too. 22 MR. RAWALD: Right. So, the** 

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## 1 problem with waiting for an FTC rule is that **2 we are waiting for an FTC rule. So, it seems 3 to me that AHRI can move much more quickly**  **4 than the federal government, I would assume. 5 MS. MEYERS: There is already one**  **6 scheduled for October 22nd to get this 7 approved through the Certification Program.**  **8 So, we are already ahead of you. 9 MR. EISNER: Okay, I am not quite**  **10 sure where we are on this quite. How about if 11 the preamble said, "The manufacturers have**  **12 agreed to voluntarily install the label that 13 will do" X. "AHRI has advised the Committee**  **14 that it will require of its members, who 15 represent 99 percent of the industry, that it**  **16 will require" X. "The group also recommends 17 to the FTC that it require under its**  **18 authority...."? 19 Is there anybody who would object**  **20 even with those three points being made in the 21 preamble?**  **22 MR. AMRANE: What are we going to**

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## 1 require the FTC to do? **2 MR. EISNER: There would be three 3 things that DOE would say in the preamble.**  **4 One is that the manufacturers have voluntarily 5 agreed to put the label on. Two, that AHRI**  **6 has agreed to require of its membership, which 7 represents currently 99 percent of the**  **8 industry, that it will require that of its 9 members. Three, the group will ask the FTC or**  **10 the Committee will recommend to the FTC that, 11 under its authority, it require the label as**  **12 soon as it can. 13 MR. DORIA: This is Jordan.**  **14 Just a slight nuance. I think it 15 would have to be certification program**  **16 participants, not membership, right? 17 MR. AMRANE: That's correct, yes.**  **18 MS. SHEPHERD: Well, I would 19 prefer that we not have that language in there**  **20 about 99 percent. I don't see the value. 21 Let's just say AHRI will require its --**  **22 MR. AMRANE: Each participant in**

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## 1 each program -- **2 MS. SHEPHERD: Yes, right. 3 MR. AMRANE: -- of its members,**  **4 because we have participants who are not 5 members of AHRI.**  **6 I think, as AHRI, I will not be 7 comfortable with adding the FTC requirements**  **8 in there, in the recommendations. 9 MR. EISNER: Why is that?**  **10 MR. AMRANE: Well, because, again, 11 we are opening the door for another rulemaking**  **12 where things could change, where the wording 13 could change, which I don't think would be**  **14 helpful and useful in this particular case. 15 MR. EISNER: But there are some**  **16 companies who are uncomfortable with it not be 17 mandatory for 100 percent of the industry.**  **18 So, do you have a suggestion for something 19 else we could say in the preamble that might**  **20 address their concern? 21 MS. MEYERS: I would suggest that**  **22 we take "voluntarily" out of the first sub-**

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## 1 bullet. And then, I think we need to have a **2 lot of AHRI internal discussions about how we 3 want to move forward with this on the FTC.**  **4 MR. EISNER: All right. Well, 5 it's --**  **6 MS. MEYERS: And I would take it 7 off of the header of the slide as well.**  **8 MR. EISNER: Well, it's 10 after 9 12:00. Why don't we take an hour break? Is**  **10 that enough time for people to talk about 11 language that could satisfy all --**  **12 MR. RAWALD: I hate to be the one 13 to delay lunch because I really don't like**  **14 doing that, but it is useful if we can tee-up 15 on these last two slides those things that I**  **16 could bring back to the Department while we 17 are eating for them to think about**  **18 intelligently. That would help me immensely. 19 So, can we do that?**  **20 MR. EISNER: I sense here there is 21 a need to talk.**  **22 MR. RAWALD: Right, but can we**

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## 1 just go those last two slides and just get -- **2 MR. EISNER: Okay. 3 MR. RAWALD: Because we only have**  **4 two slides left. 5 MR. EISNER: Okay.**  **6 MR. RAWALD: Yes. 7 MR. EISNER: Does anybody else**  **8 want to raise any other points or concerns 9 that Doug needs to bring back to his bosses?**  **10 MR. RAWALD: Right. So, on slide 11 31, there's definitely an issue, as I have**  **12 heard from Bryan and echoed by Amy, regarding 13 the second bullet, specifically the second**  **14 sub-bullet, the sub-bullet to the second 15 bullet.**  **16 So, I will bring back the notion 17 of either not having this at all or the Chuck**  **18 White compromise, which would be, if you sell 19 13 SEER product to a guy who has been found to**  **20 have been a routine violator during the time 21 of his appeal, then you could at least have**  **22 penalties for that, but not to the broader**

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## 1 range of products. So, that is the two. That **2 is what I will bring back to those people I 3 work for.**  **4 MR. EISNER: Anything else on that 5 slide?**  **6 MR. DORIA: This is Jordan. 7 On the final bullet --**  **8 MR. EISNER: The final bullet on 9 slide 31?**  **10 MR. DORIA: I'm sorry, on slide 11 31, correct. We say they are mitigated by a**  **12 report to DOE within 15 days. 13 MR. EISNER: Uh-hum.**  **14 MR. DORIA: I guess I want to get 15 a fuller understanding of what "mitigated"**  **16 means. 17 And just a comment: 15 days of**  **18 receipt of knowledge. So, I definitely think 19 it needs to be done in a timely manner, right?**  **20 So, we are talking three months and you get to 21 keep doing it.**  **22 But, at the same time, when I am**

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## 1 thinking about how this information could come **2 into our possession, ultimately, what I 3 envision us doing is having a funneling**  **4 process where it is basically one person who 5 is responsible for this, probably an ethics or**  **6 compliance attorney, or something like that. 7 There could be some delay in**  **8 getting that information because won't know 9 who to talk to. They will talk to whomever**  **10 they know. It will find its way up, and we 11 will talk about it. The lawyers will decide,**  **12 "Yes, we actually think there is something we 13 should report here," you know.**  **14 So, 15 days, at least for me, I am 15 not sure that is quite enough time. I don't**  **16 know. My initial thought is 30 seems 17 reasonable. I don't know if others have a**  **18 view on that. 19 But those are my two thoughts on**  **20 this. 21 MR. RAWALD: Okay. So, the intent**  **22 of this is to encourage reporting and to say,**

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## 1 if you don't report, then you are in trouble. **2 And so, we want to encourage reporting by both 3 rewarding you by saying, "Oh, everything's**  **4 good," and so, the "mitigated" means, 5 essentially, that your sales to that person**  **6 won't count. There will be no penalty for 7 that. And it is a complete mitigation. There**  **8 will be no penalty paid for sales to the 9 person because you reported it.**  **10 So, 15 days was a lift for me, to 11 get 15 days in that. Some people might**  **12 possibly think, a manufacturer may think, "I 13 have 15 days. Let me sell them as much as**  **14 possible in the next 15 days," as they get 15 ready for next season.**  **16 I don't have an idea enough for 17 the business model to say that is even a**  **18 reality. But you understand what I have to 19 navigate. So, if you could tell me that 30**  **20 days makes sense and that we couldn't 21 liquidate stock to that person within 30 days,**  **22 such that they could, then, have enough,**

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## 1 because I have gotten them plenty of money and **2 I have taken care of it. So now, I feel good. 3 Even though they are a routine violator, I**  **4 have made my season sales to them. So, I am 5 okay. Then, I can bring that back to folks.**  **6 That is the concern I think that caused the 15 7 days.**  **8 MR. ROCKY: Doug, this is Bryan. 9 So, I think the question there is**  **10 the 15 days, we talk about the distribution 11 chain for a manufacturer. To work through all**  **12 of the avenues of distribution to an end 13 contractor, 15 days is probably not enough**  **14 time. 15 Again, we have to sort who we sold**  **16 it to, who they sold it to, and go through the 17 chain.**  **18 MR. DORIA: Well, Bryan, this is 19 Jordan.**  **20 I mean, I guess I view it a little 21 different. I mean, the way I read this is**  **22 that we are coming into possession of**

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## 1 knowledge that somebody may well be a routine **2 violator, not that we are investigating it; 3 that we have come into possession of a**  **4 reasonable degree of suspicion that causes us**
**5 concern. 6 I think, for me, it is this "of**  **7 receipt". I guess the question is, receipt by 8 whom, right? We are all big companies, right?**  **9 If it is receipt by, I will say, 10 the appropriate point of contact that we**  **11 designate and sort of indicate to the 12 Department that this is our point of contact**  **13 for these issues, whether it is you contacting 14 us for investigations, us reporting to you,**  **15 and any other sort of permutations, that seems 16 reasonable. I am just trying to figure out**  **17 how do we get from all the different people we 18 have in the field who are not going to know**  **19 that there is a hotline to call to share this 20 information.**  **21 MR. RAWALD: Right. If the guy 22 working on the Ingersoll Rand floor, you know,** 

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## 1 factory floor, hears about it, is that going **2 to be receipt of knowledge, a treatment of 15 3 days? Because it is not going to percolate up**  **4 to the appropriate person within 15 days. No, 5 I get that constraint.**  **6 And so, I am willing to tack in 7 some sort of requirement that it be to a**  **8 particular person. And you guys could 9 identify what entity that would be. So, that**  **10 is more palatable than increasing the timeline 11 to me. It would be, you know, once it reaches**  **12 this person, that is 15 days the clock is 13 going to tick from that.**  **14 So, I mean, frankly, I would have 15 a hard time tracing back to that individual**  **16 from my point of view, right? So, I am going 17 to know best when it came into your hands as**  **18 the corporate executive. 19 So, if there is some sort of term**  **20 or phrase that would be appropriate for you 21 guys that would be universal across the world**  **22 for the corporate executive -- that would be**

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## 1 the appropriate person -- let's use it. **2 MR. EISNER: Anything else on 3 slide 31?**  **4 MS. SHEPHERD: I had a question on 5 "mitigate". So, Doug, the language says**  **6 "mitigate," but you said "wouldn't be held 7 liable".**  **8 MR. RAWALD: Right. So, because 9 we approach things from a point of view of**  **10 mitigation, what we envision here would be 11 that there would be no liability for that.**  **12 MS. SHEPHERD: Okay. Can we just 13 say that, though?**  **14 MR. RAWALD: No liability. I will 15 go back and ask the question.**  **16 MS. SHEPHERD: And then, the other 17 two questions, they don't seem to quite be**  **18 popping up out of these slides, but I think 19 they might be something that you need to think**  **20 about, is one thing we haven't really 21 discussed too much was the -- we have talked**  **22 about the responsible party for a routine**

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## 1 violation will be kind of the corporate **2 entity. But what if it is a huge corporate 3 entity that has multiple branches? Is it**  **4 going to be, is it the Department's view that 5 all sales to that corporate entity, regardless**  **6 of wherever the violation or the routine 7 violation was happening, are going to be**  **8 prohibited? That is a question I think we 9 have.**  **10 And then, the last one is we had 11 talked about this a little bit in terms of the**  **12 appeal, in terms of narrowing the scope to the 13 13 units. Would the Department, if we decided**  **14 that was appropriate on the whole, is that 15 something that would be an option, in the**  **16 Department's view? 17 MR. RAWALD: Right. And so, I**  **18 think this goes back to the question of the 19 term "product".**  **20 MS. SHEPHERD: Yes. 21 MR. RAWALD: And I have asked**  **22 folks about it. As I told you I think**

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## 1 yesterday, it was a lot of people who have **2 very different perspectives all came to the 3 exact same answer on this from the**  **4 Department's point of view. It was 5 surprising.**  **6 MS. SHEPHERD: So, my issue is 7 that in all of the current prohibited acts it**  **8 says "product," too. And that is not what is 9 going on. If you have a labeling issue on a**  **10 split-system unit, they don't fine you for 11 your heat pump.**  **12 MR. RAWALD: Uh-hum. 13 MS. SHEPHERD: So, it is extremely**  **14 troubling to me, the precedent that this sets, 15 because it seems a strong deviation from what**  **16 is in there now and how the word "product" is 17 treated in the current prohibited acts.**  **18 So, my concern is, is this a new 19 interpretation from the Department? Because**  **20 the word "product" is the same that is in the 21 other listed items there. So, if it means**  **22 that here, I am very concerned that it is the**

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## 1 Department's view that it means it other **2 places, too. 3 MR. RAWALD: So, I will have to go**  **4 back and look at the particular prohibited 5 acts that you are talking about to be able to**  **6 respond to that cogently. My understanding is 7 the definition or the interpretation we are**  **8 offering is the one that is consistent with 9 and has something to do with consistent with**  **10 how we have dealt with this across the board, 11 though I understand in this context it doesn't**  **12 say consumer product or covered product, but 13 we view it to be synonymous here.**  **14 So, I will go back and talk to 15 folks again. The only other option I can**  **16 offer is, of course, the group can decide they 17 want to narrow this playing field down. And**  **18 I would, of course, if constrained, have to 19 vote against it. And then, we would go from**  **20 there with what the groundrules lay out the 21 DOE's response would be in such a situation.**  **22 But I will go back and ask the**

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## 1 question, if we can narrow it, during this **2 period here that we are breaking. 3 So, there was a point you made**  **4 before that, though. What was the first point 5 you made?**  **6 MS. SHEPHERD: So, it was 7 mitigate, turn that --**  **8 MR. RAWALD: Corporations. 9 MS. SHEPHERD: Oh, so a**  **10 distributor that is a huge distributor is 11 found to have a branch somewhere that has**  **12 routinely violated. Does that mean that all 13 sales to all locations of that distributor are**  **14 going to be prohibited? 15 MR. RAWALD: That is an**  **16 interesting question. So, I haven't thought 17 of the corporate structure for distributors,**  **18 which may be more complex, I would say. So, 19 the corporate structure for a dealer and a**  **20 contractor is probably going to be pretty 21 simple. The company we will go after will be**  **22 the company that is the contractor.**

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## 1 MR. WHITE: This is Chuck White. **2 The are some -- 3 MR. RAWALD: Some that are larger.**  **4 MR. WHITE: -- contractors with 5 multiple locations --**  **6 MR. RAWALD: Uh-hum. 7 MR. WHITE: -- a home office, not**  **8 a lot, but they do exist. 9 MR. RAWALD: Yes.**  **10 MS. SHEPHERD: And the reason that 11 is important is, obviously, manufacturers have**  **12 to know exactly who they can't sell to. 13 MR. RAWALD: Right.**  **14 MS. SHEPHERD: And then, when we 15 are all talking about the scope and the impact**  **16 of some of these, you know, of this effective 17 enforcement program, we really have to**  **18 understand what that impact is. 19 And if it is any affiliated**  **20 organization or if it is that corporate entity 21 for a huge entity, it means you can't sell**  **22 them any product. We have got to know that is**

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## 1 the Department's view that that is what that **2 means. 3 MR. RAWALD: Right. So, I will**  **4 bring that question back because we haven't 5 talked about it at all. So, okay.**  **6 MR. EISNER: Anything else on 31 7 for Doug?**  **8 (No response.) 9 Okay, 31, product --**  **10 MR. WHITE: Chuck White. 11 One thing. We say "manufacturer,"**  **12 but in our previous discussions that is any 13 manufacturer, correct. So, if you have a**  **14 routine violator that has been buying from 15 Jordan, he also can't buy from Karen; he can't**  **16 buy from -- so, is that clear in this 17 language, that once you have got this finding,**  **18 a manufacturer can be fined? Is that implied? 19 MR. RAWALD: Right. So, the**  **20 manufacturer prohibited act says it is 21 prohibited to sell to someone who is a routine**  **22 violator. So, that means that anyone who is**

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## 1 known to be a routine violator, whether you **2 interacted with them before or not, you can't 3 sell to them. Or, if you do, you will get**  **4 $200 fine, the first thing you sell to them. 5 So, that is clear.**  **6 MR. DORIA: This is Jordan. 7 Sort of to that point, I mean, how**  **8 would these bullets apply for distributors, 9 right? So, would the same be true, that if**  **10 there would appear where a contractor is 11 appealing, say, a finding of routine violator**  **12 status, does the same hold true for 13 distributors selling to them?**  **14 MR. RAWALD: Right. So, 15 distributors don't have the prohibited act**  **16 currently under the statute. 17 MR. DORIA: Yes.**  **18 MR. RAWALD: So, the question is, 19 so the distributor is found to be routinely**  **20 selling to routine violators. They can be, 21 then, in violation. And then, a company that**  **22 sells to the distributor would be, a**

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## 1 manufacturer will be held liable. But **2 distributors themselves don't have any 3 independent financial liability under this.**  **4 MR. EISNER: Okay. Anything else 5 on 31?**  **6 Or anything that you want Doug to 7 bring up with his bosses on slide 32?**  **8 MR. AMRANE: I guess I do have a 9 question for Doug. So, you issue your Notice**  **10 of a Routine Violator when the distributor/the 11 contractor has exhausted his appeal process or**  **12 before? 13 MR. RAWALD: Right. So, we reach**  **14 it before, and they could appeal, and that 15 could obviate it. But we issue it before, and**  **16 that is the point. The notice contains his 17 appellate rights within it.**  **18 MR. AMRANE: Okay. Even if at the 19 end of the appeal he is cleared, manufacturers**  **20 won't be able to sell anything to -- 21 MR. RAWALD: That is the question**  **22 that Amy and Bryan asked me to bring back.**

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## 1 MR. AMRANE: Okay. Okay. **2 MS. MEYERS: And this is Karen 3 with Rheem.**  **4 I just want to state for the 5 record that, you know, the 15 days in the last**  **6 bullet, even once it gets up to the 7 appropriate person, that is not a lot of time,**  **8 especially if that person is gone out, 9 traveling, whatever, because there is a whole**  **10 internal process that has to be. I want it 11 stated that I am still a little concerned**  **12 about that 15 days. 13 MR. EISNER: Okay, slide 32.**  **14 Nothing? Anything? Something? 15 MR. RAWALD: And this goes back to**  **16 the question of, okay, we test something. 17 That is rated SEER 14 and, actually, it is**  **18 13.6. What happens? 19 As we discussed, if the condensing**  **20 unit comes back, the condensing unit is going 21 to be non-compliant with the regional**  **22 standard. The manufacturer is going to have**

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## 1 to go out there. **2 But if what, instead, happens is 3 an independent coil manufacturer or a**  **4 mismatched pair from different manufacturers, 5 and it is that coil that is causing it to test**  **6 below 14, then the coil is what is going to be 7 found to be non-compliant. And so, the person**  **8 who manufactures the coil is going to be the 9 one who has to bear the responsibility of**  **10 showing, hey, listen, it is not out there in 11 these pairs.**  **12 What I don't want is manufacturers 13 to be responsible for something a different**  **14 coil manufacturer has mis-rated, is what I am 15 trying to avoid for you guys. Does that make**  **16 sense? Okay. 17 MR. AMRANE: This is Karim with**  **18 AHRI. 19 So, you do it today?**  **20 MR. RAWALD: The same way we do it 21 today.**  **22 MR. AMRANE: Okay. The same you**

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## 1 do it today, right? **2 MR. RAWALD: Yes, it is the exact 3 same process we do today. It is just applied**  **4 in the region. But I want to make clear that 5 is the exact same process we are doing today.**  **6 MR. EISNER: No problems for him 7 to bring back?**  **8 (No response.) 9 How much time do we need for lunch**  **10 for everybody to work out all their problems? 11 (Laughter.)**  **12 Do you want an hour and a half or 13 is an hour sufficient? All right. It is**  **14 12:25. Come back at 1:30. 15 (Whereupon, the meeting went off**  **16 the record for lunch at 12:26 p.m. and went 17 back on the record at 1:35 p.m.)**  **18 A-F-T-E-R-N-O-O-N 19 S-E-S-S-I-O-N**  **20 1:35 p.m. 21 MR. EISNER: Okay, why don't go**  **22 back to the beginning of the slides, just to**

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## 1 make sure there is agreement? **2 MR. RAWALD: So, you want to go 3 through the slides that we had voted on?**  **4 MR. EISNER: Just quickly, to make 5 sure there is agreement; we don't skip**  **6 anything. 7 The first one on which we had to**  **8 vote was slide No. 4. 9 MS. NOLL: Neil, can I ask a quick**  **10 question? 11 MR. EISNER: Sure.**  **12 MS. NOLL: My understanding was 13 these are the slides and the entirety of the**  **14 things that we have discussed and kind of the 15 consensus-ish, but there still seems to be**  **16 some stuff maybe missing. 17 MR. RAWALD: Right. So, when we**  **18 get through all the slides, if there is more 19 that people want to put on the table for a**  **20 plan, such as I know the advocates are still, 21 I think, interested in a prohibited act**  **22 probably discussion, then we can talk about it**

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## 1 then. But let's get through kind of where we **2 are, so we can establish if these work. And 3 then, see, when we have all these things, what**  **4 do we think is still necessary? 5 MS. NOLL: Thank you.**  **6 MR. EISNER: Okay, the first one 7 was slide 4. I have that down as unanimous**  **8 with one abstention. 9 Slide No. 5, unanimous.**  **10 Slide No. 7 was unanimous. 11 Slide No. 9 was unanimous.**  **12 Eleven and 12 were unanimous. 13 When we got to**  **14 contractors/dealers, there were a lot of 15 questions, a lot of issues, needs to check.**  **16 So, this is where we need to start to see what 17 we have worked out and can work out.**  **18 MR. RAWALD: Right. So, the main 19 issue here revolved around the term "indoor**  **20 unit," as I initially put up "an indoor coil," 21 as we changed it to, and then, some terms**  **22 regarding that.**

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## 1 So, if we could bring up the CCMS **2 web page? 3 I want you folks to understand**  **4 exactly what we are looking for from the 5 Department. So, when a manufacturer certifies**  **6 a system as compliant, they provide to us the 7 outdoor unit's model number, the model number**  **8 of what is said to be here the indoor unit, 9 and then, if applicable, the model number of**  **10 the ducted air mover. 11 So, for systems that are**  **12 installed, we want those three data points. 13 Now I don't know what the term is that makes**  **14 the most sense to folks, so everyone is clear 15 on what that means. But that is the thing**  **16 that we were asking for when I put that 17 information before you.**  **18 So, I am less concerned about the 19 ducted air mover, frankly, but the indoor unit**  **20 we do want to have -- well, in a system 21 installation we want to have all three. When**  **22 we install a new system, we want to have all**

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## 1 three pieces if all three pieces are being **2 used in the new system. 3 This is especially significant, I**  **4 would think, for a system that is rated blower 5 coil because the system was rated based upon**  **6 it being packaged with the blower. And so, 7 that has to be part of the system in order for**  **8 it to achieve the rate that has been 9 certified.**  **10 Does everyone follow what I am 11 saying here? Does that make sense?**  **12 So, I want to figure out the best 13 way to get that across to people as far as**  **14 that is what we are asking for records-wise. 15 We will ask, Karen, you had a**  **16 point? 17 MS. MEYERS: So, this increases**  **18 the record retention requirement 19 significantly. And so, I see where you are**  **20 coming, but on this I just guess that I don't 21 understand why we are including all of that**  **22 extra information that contractors have to**

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## 1 keep, contractors in the Southeast and **2 Southwest have to keep, when we have said in 3 the 14 SEER definition that the least**  **4 efficient condensing unit is going to be based 5 upon a coil-only rating.**  **6 So, when I look at those together, 7 I am trying to understand why we have this**  **8 record retention on the gas furnace, which is 9 primarily what the blower unit is, or a**  **10 condensing unit. So, that is where I am 11 having this.**  **12 So now, we have got this records 13 retention requirement on gas furnaces because**  **14 that is your blower unit with split-systems in 15 90-plus percent of the installations.**  **16 MR. RAWALD: Uh-hum. So, the 17 concern is that the system is rated to perform**  **18 together. That is the basis for the rating, 19 and it is certified to the Department that it**  **20 is compliant. 21 So, it would defeat the endeavor**  **22 of having manufacturers certify as compliant**

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## 1 a system if, when installing a system, the **2 contractor didn't have to install all those 3 pieces together.**  **4 Does that make sense? I mean, if 5 the manufacturer went to all the effort of**  **6 testing the system as a unit, and then said, 7 "This is what is compliant," and then, the**  **8 contractor went out and installed a different 9 indoor unit and blower with the condensing**  **10 unit the manufacturer put together, it 11 wouldn't achieve the efficiencies the**  **12 manufacturer has certified would be achieved 13 by the system.**  **14 And so, that is what we are trying 15 to make sure happens. We are trying to ensure**  **16 that what the manufacturer spent a lot of time 17 and money, frankly, making sure will happen**  **18 does happen out in the field. 19 MS. MEYERS: So, this is Karen**  **20 again. 21 But this is a records retention**  **22 requirement. So, the responsibility for the**

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## 1 rating falls upon the OEM, and we have **2 everything we have to do to that rating. But 3 I don't really know how to explain this, but**  **4 I just think, when you look at all those model 5 numbers that are up there and all those**  **6 possible combinations, and if you look at how 7 many of those combinations apply to the**  **8 products that we are talking about, and it is 9 going to be probably 80 percent, 70 percent,**  **10 and then, you look up how many of those are 11 going to occur in the Southeast or Southwest,**  **12 the records that you are talking about having 13 to maintain in case there is a violation is**  **14 multimillions. 15 And it seems excessive for this.**  **16 I will leave it up to the contractors and 17 stuff. I mean, I feel like I am advocating**  **18 for them. I just am questioning, is this a 19 reasonable request, because it just seems kind**  **20 of extreme to me with all the stuff. 21 MR. RAWALD: Right. Just so I can**  **22 respond, all we are asking for is on the**

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## 1 receipt that you give the customer you put the **2 manufacturer and model number of the indoor 3 and the outdoor unit, or the indoor and the**  **4 blower if you install all three together as a 5 system.**  **6 Otherwise, I don't see how it is 7 much more than what we talked about yesterday,**  **8 but I will be glad to hear Chuck's thoughts, 9 because he is looking at me.**  **10 MR. WHITE: This is Chuck White. 11 I look at it as a job-by-job**  **12 approach. So, when I took the job, I needed 13 to go look and make sure the pieces line up.**  **14 The current practice, I am going to go to one 15 of Jon or Steve Porter's, over there, pals and**  **16 say, "I have this job. I need the equipment. 17 Please make it line up." And that will**  **18 happen. 19 So, then, I am going to have a**  **20 record for that job, that residence at 21 whatever address, in my system and in most of**  **22 the contractors' out there systems, they are**

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## 1 going to have a record for that job. And it **2 is going to list the unit, the coil, the line 3 set, the sheet metal screws, lots of stuff.**  **4 There are probably some 5 contractors that do things on a unit-type**  **6 basis. We do a 3-ton unit for X and a 4-ton 7 for X. Will they have the sophistication?**  **8 That is probably a bad way to put it. They 9 may not take the trouble to keep a lot of**  **10 detail if they are doing a lot of volume, if 11 they have got a lot of units sitting in the**  **12 warehouse, but I think a lot of contractors 13 track at least serial number of the condensing**  **14 unit. Probably not necessarily the serial 15 number, and you're not asking for that, but**  **16 not necessarily the serial of the evaporator, 17 but probably you are going to have the model**  **18 number. 19 So, later, in your records if you**  **20 need something and you have to go back, you 21 have that at your fingertips. Probably not a**  **22 100 percent of the contractors out there are**

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## 1 doing it that way because they don't have to **2 now, but I think they are going to have 3 receipts of what they bought.**  **4 It may be a chore for some people 5 to match those receipts to particular jobs if**  **6 they didn't do it at the time, but, I mean, 7 there are ways to kind of figure that out.**  **8 And it will take some time, but you are giving 9 us some time to do that.**  **10 I don't think I have to keep track 11 of 1,000 different evaporator coils. I only**  **12 have to keep track of the condensing unit and 13 evaporator coil I used on this job.**  **14 MR. FENSTROM: This is Gary. 15 I agree with Karen; it is a**  **16 massive record retention obligation problem. 17 We could do away with all of that if we simply**  **18 had a postcard tracking system where we mailed 19 in to DOE where it went each time it changed**  **20 hands. That would be so much simpler and 21 cheaper and easier.**  **22 MR. LATTANZI: This is Matt**

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## 1 Lattanzi with NORDYNE. **2 While I don't really agree with 3 Gary's cost estimates there and simplicity or**  **4 easier, either, I would like to point out, 5 again, it is a record retention policy. And**  **6 all of our efforts relative to enforcement 7 have been focused on the outdoor equipment.**  **8 I mean, it is the FTC Energy Guide Label. It 9 is the additional label that manufacturers are**  **10 going to add; that, in combination with the 11 least-efficient being a coil-only rating for**  **12 14 SEER, it seems to me that I don't 13 understand how having this information on the**  **14 indoor unit adds any value to the enforcement. 15 But it would be welcome if**  **16 somebody wants to correct me, if I am wrong. 17 I think it is just adding, in my opinion, it**  **18 is adding an extra burden in terms of document 19 retention.**  **20 Thank you. 21 MR. WHITE: So, this is Chuck**  **22 White.**

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## 1 I would like to just kind of jump **2 in. I think about things, I have been forced 3 to think about things from this perspective**  **4 for a few weeks now. But I have some other 5 perspectives as a business owner.**  **6 And one of them is liability. 7 Someone says, "You put something in that was**  **8 not compliant." Under today's rules, I could 9 certainly buy a SEER 13 condensing unit, put** **10 it with the wrong evaporator coil in a brand 11 new installation, and install a system that is**  **12 not SEER 13. I could do that very easily. 13 So, a homeowner, particularly one**  **14 that might have a law degree, might look at 15 those pieces of information and say, "You've**  **16 defrauded me. You've cheated me. You've done 17 me wrong," and pursue a different legal course**  **18 against me. 19 So, I have some other motivation**  **20 to document things and keep track of numbers, 21 because I can't guarantee, if you make that**  **22 accusation against me, I can't guarantee I can**

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## 1 go back into that property and validate that. **2 And I can't guarantee somebody didn't come 3 along later and put a different part in and**  **4 change the situation. 5 So, I mean, I have some motivation**  **6 otherwise to keep some records. And again, me 7 personally, and I think for the vast majority**  **8 of my members and probably Charlie's members 9 as well, he is asking me to keep what I**  **10 already have. Now maybe he is asking me to 11 keep it for a longer time period than I**  **12 normally would. That I can't really speak to 13 for the thousands of contractors that are out**  **14 there. 15 But who my customer was and the**  **16 major parts I put in, and if I don't tell you 17 what the evaporator is, you can't know that I**  **18 put the right SEER in a new installation. If 19 we are talking a repair, I am changing an**  **20 outside unit, that is a different story. But, 21 if you want to know that I put in SEER**  **22 compliant system, if I give you a quote that**

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## 1 says I will put in a SEER 13 system, I can't **2 just put in a SEER 13 condensing unit because 3 I didn't do it.**  **4 And I am very careful, and have 5 been very careful, when I write quotes to**  **6 people. If I am changing a condensing unit, 7 I don't tell them I am going to give them a**  **8 SEER 13 system because I don't know that 9 unless I include I am going to change the coil**  **10 and now I have a matched system. 11 So, it is some more recordkeeping**  **12 for some people that aren't doing it now, but 13 most contractors have details on the specific**  **14 jobs. Now, if I get a 1,000-unit apartment 15 complex, I may be a little more challenged to**  **16 know exactly everything because I have got a 17 lot of units in one place. They come in a big**  **18 truck, and that may not be as detailed. 19 But, for the typical service**  **20 contractor, installation contractor, doing 21 kind of routine house subdivision work,**  **22 upgrades, that kind of stuff, I think this is**

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## 1 all really relatively routine information you **2 are asking me to hang onto. 3 MR. RAWALD: So, I guess one thing**  **4 I want to be clear on from the manufacturers 5 is, when we go to this CCMS website, the model**  **6 number listed under indoor unit, is that the 7 indoor coil? Is that the box that has the**  **8 coil, the TXV, and something else in it? What 9 is that model number?**  **10 And Dave is raising his hand. So, 11 I think he has an idea.**  **12 MR. WINNINGHAM: And other 13 manufacturers can chime-in here. It could be**  **14 two scenarios. It could be the indoor 15 evaporator coil or it could be a blower coil**  **16 that shows up in that column. 17 I'm not sure that everyone is**  **18 listing everything exactly the same under 19 those scenarios. But I believe that the**  **20 indoor model number in most all cases is 21 either the evaporator coil or the blower coil,**  **22 and what you see of the ducted air mover is a**

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## 1 furnace. **2 MR. RAWALD: So, just to be clear, 3 the model number is always the coil, whether**  **4 it is blower coil or -- it is always going to 5 be a coil. So, calling it "the indoor coil"**  **6 for purposes of the record retention, that 7 would be clear that is what we are asking for**  **8 because that would be the number that would be 9 here in this column, as opposed to, if there**  **10 was a different model number for a finished 11 product that has a case with a coil, with the**  **12 TXV, is that a different number? 13 I just want to make sure that we**  **14 are getting at -- I want it to be the thing 15 that you guys are reporting. I want to make**  **16 sure we are only requiring what you guys are 17 reporting.**  **18 MR. ROCKY: Yes, Doug, this is 19 Bryan.**  **20 So, the other opportunity that 21 Dave said is, if you have a modular blower and**  **22 an evap coil, that would be listed together as**

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## 1 the indoor unit. I think pretty much **2 everybody is consistent with the model number 3 of a ducted air mover is a furnace, usually**  **4 with an ECM, because, again, in the example 5 that is up on the screen those are all 16-**  **6 SEER-type things. So, that is an ECM furnace 7 to get a higher efficiency rating.**  **8 But I believe that, under the AHRI 9 program in the definitions, again, I would**  **10 agree that indoor unit is an evap coil by 11 itself, an evap coil with a modular blower, or**  **12 it is an air handler, which is the evap coil 13 inside combined in one box with the blower.**  **14 MR. RAWALD: And I just want to be 15 clear. So, if the furnace is preexisting, and**  **16 they are simply installing the condensing unit 17 and the indoor unit, we are not asking you to**  **18 retain a number that you didn't install. 19 But, if you are installing a**  **20 system that has been certified as a system, we 21 want you to retain the numbers from the three**  **22 points of the system as it would have been**

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## 1 certified by the manufacturer. Because the **2 point is to make sure that the system as 3 installed is compliant.**  **4 Now I know that Matt has pointed 5 me a couple of times to the fact that we are**  **6 really concerned about condensing units, and 7 I think that is mostly true. But, if the**  **8 installer -- and I don't think this is always 9 wittingly -- but because of their actions**  **10 undermines the system rating, that defeats the 11 intent. I mean, the point is manufacturers**  **12 have certified, at great expense, compliant 13 systems. And if an installer decides to use**  **14 the Rheem outdoor unit with an independent 15 coil, and then, a different blower, and they**  **16 don't work together to actually achieve the 17 level that Rheem thought it would if they had**  **18 certified the system, that undermines 19 everything that Rheem is doing.**  **20 And I don't want that. I want the 21 outcome to be, hey, we're all in this**  **22 together, and we are trying to make sure the**

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## 1 system itself performs at 14, if it is **2 required to. And so, the installer has to 3 install a certified combination that meets the**  **4 minimum. And the only way that I can know 5 that is by having the installer keep records**  **6 of all three pieces of information if they are 7 installing all three together as a system.**  **8 That seems to make sense to me. 9 MR. AMRANE: This is Karim with**  **10 AHRI. 11 And I agree in principle with you,**  **12 Doug, but what are you doing today? Because 13 the scenario you are talking about can be**  **14 applied today, right? I mean, somebody 15 installing a condensing unit with the wrong**  **16 coil. But you are not doing it today, right? 17 MR. RAWALD: Right, because we**  **18 don't do anything about installations. So, 19 for all we know, there could be many**  **20 mismatched systems out there that we are just 21 living with, and it is too bad because of all**  **22 the money that is being spent to create these**

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## 1 systems that would work in the first place. **2 But now we have an installation 3 burden, and we have something here that is**  **4 different. And so, we are trying to make sure 5 we attack this the appropriate way, given what**  **6 we have. 7 MR. SACHS: This is Harvey.**  **8 From my perspective as an advocate 9 who tries to think about the entire system,**  **10 Doug, I am very sympathetic with what you 11 want, but the logical extension of that would**  **12 be to say, "I really need to look for a 13 successful installation at the refrigerant**  **14 charge, how close is it to what it ought to 15 be, and the airflow across that coil at the**  **16 rated conditions. And I would really like to 17 know about the duct leakage, and if it is in**  **18 the attic, I want to know about the duct 19 installation."**  **20 And just extrapolating from the 21 work of people like John Proctor, I think most**  **22 of us are beaten down to accept the fact that**

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## 1 the typical installation today has a SEER **2 shortfall as installed, not under the test 3 conditions under which it is rated. It is**  **4 probably in the range of 20 percent and often 5 much more.**  **6 This is, in part, some testing 7 conditions that don't match very well the**  **8 installation, particularly something called 9 external static pressure.**  **10 But, as much as I would like to 11 assure that we are getting good installations,**  **12 and certainly the contractors have worked 13 enormously on that and I have tried to help,**  **14 it is a pretty heavy lift. 15 And I would like to know, and this**  **16 is my "ask," how you visualize using this 17 information in an actionable way if you get**  **18 exactly what you want in terms of the model 19 numbers and serial number.**  **20 MR. RAWALD: Right. And I want to 21 be clear. The only people that are not saying**  **22 it is heavy are the ones that the burden is**

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## 1 seemingly on. **2 MR. SACHS: Yes. 3 MR. RAWALD: So, I really don't**  **4 understand why you guys are fighting so hard, 5 when they're not. But, hey, Harvey, I'll**  **6 answer your question because I think it is a 7 germane one.**  **8 MR. SACHS: Okay. 9 MR. RAWALD: Which is I have a**  **10 requirement to make sure the system that is 11 reported to me as being non-compliant actually**  **12 is non-compliant before I do anything. So, if 13 I go into a home and I say, "Oh, well, the**  **14 condensing unit is, indeed, certified over 14. 15 So, that passes the test. But they mixed it**  **16 with parts that actually don't make it 14," 17 that is a non-compliant installation.**  **18 The manufacturer has certified 19 what the combinations are going to be to**  **20 achieve 14. And the purpose of that is to say 21 these are the things you should install with**  **22 my product.**

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## 1 MR. SACHS: Okay. Now, following **2 that up, have you found what you would regard 3 as a violation in that scenario? And would**  **4 anyone other than the contractor have any 5 action for which he is liable as a result of**  **6 that mismatch? 7 MR. RAWALD: Right. So, we would**  **8 deem this to be a violation. That takes me 9 back to that "later on" slide, which is the**  **10 one that is talking about what would be things 11 that are installed in violation.**  **12 So, it would be a violation to 13 install combinations that aren't certified.**  **14 So, they have got to install a combination 15 that is certified as the combination to DOE.**  **16 MS. MEYERS: Here is a very real 17 likelihood of what could happen: they could**  **18 put in a Rheem condensing unit and coil, a 19 certified combination, and they could put in**  **20 a York gas furnace. That is not a certified 21 combination. The coil and the condensing unit**  **22 are going to get the rating. But, because you**

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## 1 are requiring every installation to have an **2 absolute certified rating, that is what you 3 are requiring, but, you know, it could all be**  **4 done at the same time. They would all have 5 records. But now you are trying to use this**  **6 records retention to regulate installed 7 efficiency.**  **8 You know, that is why I don't see 9 the purpose of the least rating it can get is**  **10 just with the coil. 11 MR. RAWALD: Chuck, just real**  **12 quick, if I could jump in? So, if the coil 13 and the outdoor and indoor unit are certified**  **14 as a pair, and then, it is added to another 15 York blower, I don't care as long as that pair**  **16 exists. 17 The scenario I am concerned about**  **18 is you have a certified combination that 19 requires all three pieces, and you decide to**  **20 switch out one of those three pieces. That no 21 longer is a certified combination.**  **22 So, if the Rheem outdoor unit's**

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## 1 performance is certified only based upon its **2 performance with a particular indoor unit and 3 a particular blower, and then, the contractor**  **4 decides to use a different blower, that is not 5 a certified combination.**  **6 But, if the indoor and outdoor 7 unit exist as a certified combination,**  **8 regardless of the fact that the blower is 9 there or not, that is fine. That would pass**  **10 muster. 11 MR. LATTANZI: This is Matt.**  **12 Yes, I guess I get it now, Doug. 13 I see where you are going here. My thought**  **14 was, you know, even if you had a 13 SEER 15 condensing unit, you installed it with a**  **16 blower/coil combination that made 14 SEER in 17 the South, that is still, even though it made**  **18 14, that is not a legal install. 19 So, my thought process was, if you**  **20 control the outdoor units, you would have 21 everything. But I get what you are saying.**  **22 You could install a 14 SEER outdoor unit with,**

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## 1 for example, an oversized or an undersized **2 coil that wasn't a matched pair. So, I guess 3 that does make sense to me, and I am not**  **4 hearing any objections from Chuck or from 5 Charlie. So, you know, I am going to quit**  **6 pushing back on this record retention policy. 7 MS. MEYERS: It just sounds like**  **8 we are in conflict because they could put in 9 a 13 SEER. You know, if you did not read this**  **10 whole thing, and you say, "I have put in a 11 certified combination," but the whole**  **12 conversation we have been having these last 13 nine days is that it has to be based upon the**  **14 least-efficient rating of the outdoor unit, 15 which is based upon a coil-only rating.**  **16 But now, we are saying I want to 17 make sure that the whole system gets that**  **18 rating. So, it makes me question why we are 19 doing all this other stuff.**  **20 But it is almost like a 21 miscommunication. But, again, I am just -- if**  **22 the contractors are willing to do it -- I just**

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## 1 think it is going to bring a lot of questions. **2 And then, how is that going to work for your 3 enforcement? Because, if you tried to bring**  **4 a violation against me as a contractor, it is 5 like, listen, this is a certified combination.**  **6 It gets 14. I put in all three pieces. It 7 gets 14. You said I had to keep records that**  **8 showed every installation was compliant. I 9 have that.**  **10 So, that is where I think it is 11 going to be very hard for the Department to**  **12 argue against that, but I just think we are 13 getting mixed messages here.**  **14 MR. SACHS: This is Harvey. 15 And I have sort of blithely been**  **16 assuming that this least-efficient combination 17 implicitly was rated with a PSC motor, and**  **18 that is not the case. 19 MR. LATTANZI: That is not the**  **20 case. There is no -- it is just a coil and an 21 outdoor unit.**  **22 MR. SACHS: With standard airflow?**

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## 1 MR. LATTANZI: Right, right. **2 Standard airflow. The motor doesn't come into 3 effect.**  **4 MR. SACHS: I'm sorry, I am paying 5 the price for not having participated in the**  **6 210/240 revision. 7 (Laughter.)**  **8 You all wouldn't give me what I 9 wanted.**  **10 (Laughter.) 11 MR. WHITE: This is Chuck White.**  **12 Let me just clarify in my own mind 13 or share my train of thought. January 1,**  **14 there is going to be listings for equipment 15 that only go SEER 14 and higher. They do not**  **16 go below 14. 17 And as long as I pick something**  **18 that is that with a matched combination, I can 19 put it in in Florida. And I think as long as**  **20 DOE has lists that they will approve of, the 21 AHRI list, the DOE, the Charlie McCrudden**  **22 list, if you like it, however those lists are**

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## 1 -- and we know what they are, and we can **2 reference them, and we have agreed that unit 3 cannot be listed with any combinations below**  **4 14 -- if I go find my unit on that list and 5 match it up, I'm in the clear.**  **6 And we originally talked about 7 that the blower was not going to be in that**  **8 factor. I remember early on some discussions 9 about ECMs can help you gain some ground in**  **10 your SEERs, but that is not recognized. 11 So, it sounds a little like, if we**  **12 are willing to include that duct mover -- but, 13 to me, the duct mover was, if I am buying**  **14 typically the electric furnace today that 15 hangs in a lot of apartment units, where it is**  **16 assembled with the blower and the coil, comes 17 as a package, it is all made together, that**  **18 that was kind of what we were talking about. 19 I didn't think we were talking**  **20 about we are going to put in a gas furnace 21 with an ECM drive, and we are going to gain a**  **22 couple of points. Because the base**

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## 1 combination isn't above 14, that isn't going **2 to help me. 3 So, again, as long as I know there**  **4 are recognized lists that I can work from, and 5 I buy the right products and I keep track of**  **6 them in my normal fashion, maybe I am too dumb 7 to know this is a big issue. But, just from**  **8 the way businesses operate on the installation 9 end of things, I don't see that it is going to**  **10 be a large burden outside of what we already 11 do.**  **12 Now you come knocking on my door 13 and say, "Give me your last three years'**  **14 records," that is a different story. That is 15 more work, but that is not what we are talking**  **16 about in terms of burden. 17 So, I don't think Charlie and I**  **18 have any particular disagreement here. 19 MR. McCRUDDEN: I mean, this is**  **20 Charlie. 21 The recordkeeping requirement is a**  **22 pain, but it helps you get to where you need**

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## 1 to be, and I think it is something that **2 doesn't take us to the point where it is a big 3 problem.**  **4 MR. EISNER: Any more comments? 5 MS. MEYERS: So, I guess I would**  **6 be okay if you said "complete indoor unit, 7 excluding gas and oil furnaces," and whatever**  **8 else. I don't have a problem with the blower 9 unit and the evaporator unit because that is**  **10 what we have been talking about, a blower unit 11 coil or an evap coil, because that is what we**  **12 are saying is what 14 SEER is based upon, 13 correct? That is what the rating is based**  **14 upon. 15 But the system including the gas**  **16 furnaces and having this record retention, I 17 mean, it sounds like if somebody puts in a gas**  **18 furnace with a certified combination, but that 19 gas furnace is not anywhere on the CCMS**  **20 database -- 21 MR. RAWALD: So, I don't want to**  **22 go that far, Karen, because that is not what**

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## 1 I mean to imply. There are some systems where **2 the indoor and outdoor combination only exist 3 with that third number listed, right, only**  **4 with all three together? And if it is only 5 all three together, then you have got to put**  **6 in all three. But if you have the two 7 together, I don't care what you do for the**  **8 blower, right? I care about what you do with 9 the two together. As long as you have the**  **10 indoor and the outdoor unit required to 11 achieve the efficiencies that you will**  **12 achieve, that -- 13 MR. LATTANZI: Something just**  **14 occurred to me, if I may? 15 MR. RAWALD: Yes.**  **16 MR. LATTANZI: If you have all 17 three --**  **18 MR. RAWALD: Uh-hum. 19 MR. LATTANZI: -- it is always**  **20 going to be above the federal minimum 21 because --**  **22 MR. RAWALD: That seems like it**

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## 1 for me. **2 MR. LATTANZI: -- the 3 manufacturers don't, I think we -- jump in**  **4 here if I've got it wrong, guys. Would you 5 rate, would you put a rating in the directory**  **6 today with an air conditioner, a coil, and a 7 furnace at 13 SEER? You wouldn't do that. It**  **8 would always be a coil-only rating. And for 9 heat pumps, it is 14 SEER based on manufacture**  **10 date. So, that doesn't matter. 11 So, I kind of agree with where**  **12 Karen is going here. Really, you just need 13 the outdoor unit and the coil or air handler**  **14 or -- 15 MR. RAWALD: And that's fine to**  **16 me. 17 MR. LATTANZI: You could say, if**  **18 you limited it to that -- we're arguing to 19 reduce burden for these guys in distribution,**  **20 and I'm going to step back from that. 21 MR. RAWALD: I just want to make**  **22 sure we use the right words. That is**

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## 1 acceptable to me, what you guys are **2 describing. I just want to make sure we use 3 the appropriate words, so that it captures the**  **4 same information. So, I can compare what I 5 get when I ask Chuck for records to what the**  **6 manufacturer has certified as being the 7 combination that works for them.**  **8 So, if the word is simply "indoor 9 unit," that's great. If the word is "indoor**  **10 coil," that's great. I just want to know what 11 the words are that get me there, so we can**  **12 make sure that we are on the same page. 13 MR. LATTANZI: I am going to**  **14 suggest -- suggest -- "indoor coil or air 15 handler," or maybe "blower coil". Is that the**  **16 right word? I think if you said "indoor coil 17 or air handler" --**  **18 MR. RAWALD: Okay. 19 MR. EISNER: Is that okay with**  **20 everybody? 21 MR. RAWALD: Okay. So, with all**  **22 that being said, is there anything else on**

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## 1 this slide or can we agree that this works? **2 MS. SHEPHERD: One minor thing. 3 It would be for all such units, just to**  **4 clarify that you are talking about the first 5 two bullets, right? Or I'm sorry, the first**  **6 three? The first two? The second two? 7 All I'm saying, is this for all**  **8 units right now? And just for clarity, it 9 would be we are talking about the second**  **10 bullet and the third bullet, right? 11 MR. RAWALD: Right.**  **12 MS. SHEPHERD: Yes, that's all -- 13 MR. RAWALD: Right, because the**  **14 first one is the scope. That's right. 15 MR. EISNER: So, the words are all**  **16 up there we want? Anybody object to this 17 language? Tim's happy?**  **18 MR. BALLO: With the understanding 19 of, I mean, I think we all understand what we**  **20 mean by "indoor coil/air handler". 21 THE COURT REPORTER: I'm sorry, is**  **22 your microphone on?**

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## 1 MR. BALLO: I think we all **2 understand what we mean by "indoor coil/air 3 handler". So, yes.**  **4 MR. EISNER: Okay. So, with these 5 changes, slide No. 14, does anyone object to**  **6 this being unanimous agreement? 7 (No response.)**  **8 Hearing none, we put it down as 9 unanimous.**  **10 We can go on to the next ones. 11 And the next slide I have is slide 15, and we**  **12 have similar problems, as I recall, in 15 and 13 16. There are a number of issues here. So,**  **14 let's start with 15. 15 MR. MELCHI: This is Jon with**  **16 HARDI. 17 I understand why we need to track**  **18 the indoor coil and air handler installation, 19 for the reasons stated by --**  **20 MR. RAWALD: Why would you have to 21 do it for the distributor?**  **22 MR. MELCHI: Yes.**

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## 1 MR. RAWALD: Right. And so, I **2 have been emailing back and forth. You may 3 have noticed I am pretty close to us saying we**  **4 don't. 5 MR. MELCHI: Okay.**  **6 MR. RAWALD: So, just be patient. 7 MR. MELCHI: Yes, thank you. That**  **8 was the question -- 9 MR. RAWALD: I think we are going**  **10 to get there, Jon. 11 MR. MELCHI: Okay.**  **12 MR. RAWALD: I think we are going 13 to get there, but I need to -- well, I am**  **14 trying to navigate things. 15 MR. MELCHI: I appreciate that.**  **16 MR. RAWALD: I am asking the whole 17 generation-wide endeavor, but I am doing my**  **18 best. 19 But I have other things that you**  **20 and I have discussed that we should focus on 21 here.**  **22 MR. MELCHI: Yes.**

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## 1 MR. RAWALD: So, Jon emailed me **2 last night with a request about language to 3 narrow the scope. I circulated it among the**  **4 Department. And the response I got was no. 5 And the concern is we have been**  **6 built up for quite a while now with believing 7 that distributors don't know where things are**  **8 going. And so, I think that people are 9 reluctant to -- if the distributors don't know**  **10 where it is going, they don't want to limit 11 the distributor's scope of responsibility**  **12 based upon where they do business. That is 13 the rub I'm having.**  **14 So, at the moment, I have been 15 told that we cannot limit the scope. Now, if**  **16 the group wants to come through a consensus 17 for limiting the scope, the Department can**  **18 vote against it. And then, we can go from 19 there, and I could go back and readdress the**  **20 issue before we ever get to Notice and 21 Comment.**  **22 MR. MELCHI: And just to let you**

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## 1 know at least where HARDI's head was at is the **2 request was that a distributor -- the records 3 retention would apply to a distributor who**  **4 sells product, meaning the broad class of 5 product covered in this -- not just central**  **6 air and not just single package -- heat pumps, 7 anything, to an entity with knowledge that**  **8 that entity installs product in the South or 9 Southwest Region.**  **10 And that means an installation of 11 a broad range of product, knowing that we were**  **12 -- what I was trying to do is make it a little 13 more broad to the Department. You know, we**  **14 discussed multiple times, you know, the guy in 15 Maine wondering why they have got to change**  **16 business practices for this. 17 I certainly understand that for my**  **18 distributors along the border and actually 19 north of the border who have contractors who**  **20 occasionally go down. I was just trying to 21 limit the scope, because if you limit the**  **22 scope, it makes the implementation of the**

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## 1 entire request a little easier to do than **2 broadly across all 50 states. 3 MR. RAWALD: No, and I get that.**  **4 And I want to assure you that I was an 5 advocate for that because I think that there**  **6 is some benefit to be had. 7 I'm not getting a lot of reception** **8 from the Department for that. I will re 9 engage if you want at one more break on the**  **10 issue. So, we could table it and bring it 11 back. But that is kind of where we were.**  **12 I did just receive agreement to 13 eliminate the indoor coil portion from the**  **14 distributors. So, that is good news, I think, 15 for you guys.**  **16 So, we also discussed yesterday 17 the possibility of phasing in over time, at**  **18 least, if nothing else, the over-the-counter 19 sales record retention. And you were going to**  **20 think about an appropriate timeline for that. 21 Have you conferred with anybody and come to a**  **22 number?**

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## 1 MR. MELCHI: This is Jon with **2 HARDI. 3 Yes, we conferred last night with**  **4 our Board, and, you know, I think probably I 5 kept coming to two different, I got two**  **6 different responses. Some thought that it 7 would be most appropriate to kind of coincide**  **8 it with the 18-month grace period, that that 9 would probably be a pretty good point to use.**  **10 Others thought the calendar year would be 11 better.**  **12 But I understand that you don't 13 necessarily want to leave a gap. But I think**  **14 the quickest that we could probably get this 15 implemented across the board, the grace**  **16 period, because we would probably take every 17 week of that 18 months getting folks set up.**  **18 MR. RAWALD: Right. So, the 19 options would be July 1st, 2016 or January**  **20 1st, 2017, right. Okay. So, I think that we 21 could do July 1st, 2016. I will ask the**  **22 question and come back after our next break**

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## 1 with an answer for that. **2 MR. MELCHI: Great. Thank you. 3 And there was a difference. The**  **4 folks who thought it would be longer were 5 those who, for the purposes of tracking serial**  **6 numbers with those, would need to make 7 technology investments and changes. And those**  **8 were the folks who thought, you know, we are 9 going to really need some extra time to make**  **10 this investment because it is not necessarily 11 clear that our ERP partner will be able to**  **12 start tomorrow making that change. It would 13 need to be phased in over time. And given the**  **14 number of distributors who may be making the 15 same request to what are essentially**  **16 customized systems, it could take some time. 17 MR. RAWALD: So, I will take back**  **18 July 1st, 2016. I could tell you the 2017 is 19 not going to have a lot, but I think July 1st**  **20 could be something that is acceptable. I will 21 bring that back.**  **22 You were obviously a big advocate**

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## 1 for the serial number, and I told you I have **2 already gotten a lot of pushback on that. I 3 brought it up once again, and there is some**  **4 value to it that we discussed, especially from 5 the point of view of from the top-down and for**  **6 trying to track some sales. 7 So, folks do want to maintain the**  **8 serial number for the condensing unit. So, 9 that is kind of where we were with that.**  **10 So, I can re-engage on the 11 geography one more time, and I can bring July**  **12 1st, 2016. And then, I think we will be ready 13 to vote on this at that point, if that works**  **14 for you guys. 15 MS. SHEPHERD: This is Amy.**  **16 I just had a question. So, where 17 did we come -- I thought we came down -- on**  **18 the geography question for me a little bit, 19 did we decide that this was a requirement for**  **20 the South and Southwest, but it was all 21 product. Or I am just not sure where the**  **22 status was of that.**

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## 1 MR. RAWALD: For the contractors **2 and dealers? 3 MS. SHEPHERD: So, it is**  **4 different? 5 MR. RAWALD: Right. So, the**  **6 contractors and dealers we limit to the 7 Southwest and Southeast, guys who are doing**  **8 jobs in that area. 9 MS. SHEPHERD: Do we have that in**  **10 here? 11 MR. RAWALD: So, I don't know.**  **12 It's on the scope, right? The scope is the 13 first thing that you have up there applies?**  **14 Yes. 15 But, for the distributors, we are**  **16 having a more complicated time accepting it, 17 for reasons we discussed.**  **18 MR. MELCHI: Yes. And, Doug, I 19 think the one question still, does this apply**  **20 to again all SEER levels of condensing units 21 or is it simply 13/14?**  **22 MR. RAWALD: So, my good friends**

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## 1 here decided they wanted to retract that **2 request yesterday. So, after they had asked 3 it, they then pulled it back. So, I did not**  **4 ask the question. So, right now, we are 5 maintaining all SEER, is what we were going**  **6 on. 7 MR. WHITE: Doug, I agree to that.**  **8 We did do that. But I am not sure that at the 9 distributor level it is not a different**  **10 question. 11 MR. RAWALD: No, I think it's a**  **12 fair point. So, I can ask for the 13 distributors, but I didn't have that question**  **14 yesterday. So, I didn't ask the question. 15 MR. WHITE: Yes, yes.**  **16 MR. RAWALD: So, if that is the 17 question now --**  **18 MR. WHITE: I'm not sure it is as 19 important for them to know their 18s and 20s**  **20 and 16-and-a-halfs. 21 MR. MELCHI: I mean, I think you**  **22 are likely to have, you know, if they are**

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## 1 doing it for one, that some companies will **2 choose to do it for all SEER levels. But 3 knowing that you may not have to would**  **4 probably lessen the burden to an extent. 5 MR. RAWALD: Okay. So, where**  **6 would you want to draw the line, Jon? What 7 number?**  **8 MR. MELCHI: I'm just thinking 9 through this as well. I guess if I can ask my**  **10 manufacturing partners with distribution? 11 Aniruddh and John, is there a number or is it**  **12 easier for you in your thoughts to do it for 13 everything? I can see benefits in both ways,**  **14 and I think you will see companies do it both 15 ways.**  **16 MR. ROY: We'll probably do it for 17 all, just because it is consistent problems.**  **18 MR. RAWALD: Yes. 19 MR. HURST: Yes, it is hard to**  **20 segregate process and systems. So, from a 21 practical standpoint, we would do it across**  **22 the board.**

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## 1 MR. MELCHI: That's fine. I will **2 withdraw that request. 3 MR. RAWALD: Okay.**  **4 MR. EISNER: Anything else on 15, 5 other than what Doug has got to talk over with**  **6 DOE? 7 MS. SHEPHERD: This is Amy.**  **8 I know it is going to be annoying, 9 but so for these units and on the**  **10 manufacturers, I would add such as well, like 11 we did on the -- sorry.**  **12 MR. MELCHI: Doug, one last 13 question that came up was party to whom the**  **14 unit was sold, including company or 15 individual's name, full address, and phone**  **16 number. 17 You know, a question somebody had**  **18 brought up was, again, consumer or contractor 19 refuses to give you an address. You can get**  **20 a phone number from them. Is that something 21 where you -- I mean, is it a no-sale at that**  **22 point without this information?**

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## 1 MR. RAWALD: No. Listen, you can **2 get what you can get, right? 3 MR. MELCHI: Yes. As close as you**  **4 can. 5 MR. RAWALD: We want you to get** **6 everything, but I want you to make a good 7 faith effort, yes.**  **8 MR. MELCHI: Okay. Yes, 9 absolutely.**  **10 Thank you. 11 MR. EISNER: All right, slide 16,**  **12 what do we have to talk about there? 13 MR. RAWALD: I think we just need**  **14 to change the term to the term that we used on 15 slide 14. There you go. And I think,**  **16 otherwise, folks were -- 17 MR. EISNER: No other problems on**  **18 this? 19 Is this one we can vote on now or**  **20 do we want to wait until we resolve everything 21 on 15?**  **22 MR. RAWALD: I'm prepared to vote**

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## 1 on it. I think we should vote on it. I don't **2 think there is anything -- I don't think 15 3 weighs on this at all.**  **4 MR. EISNER: Anybody object to the 5 language that is up there now for slide 16?**  **6 (No response.) 7 Hearing no objections, we will put**  **8 it down as unanimous. 9 This brings us up to slide 17. We**  **10 had a number of issues on things like years. 11 MR. RAWALD: Right. So, the only**  **12 issue I really had right there was the 13 question of how long. And so, I went back to**  **14 the Department last night, and everybody liked 15 the way that Harvey used his numbers with**  **16 months. And they are willing to do 48 for 17 contractors, 54 for distributors, and 60 for** **18 manufacturers, which is four years, four-and 19 a-half years, and five years. So, that was**  **20 the response to my effort to get three, four, 21 five, which Chuck really liked.**  **22 MR. EISNER: Anything else on this**

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## 1 slide? **2 MR. HURST: I would request that 3 we double-check the math.**  **4 (Laughter.) 5 MR. RAWALD: I used my calculator**  **6 this morning. Don't worry. 7 MR. EISNER: Okay. Looking at the**  **8 language that is up there with the timeframe 9 that I guess is in there now, yes, slide 17,**  **10 anybody have any objections? 11 (No response.)**  **12 Okay. Hearing none, record it as 13 unanimous.**  **14 That brings us up to slide 18, 15 which I think have down as already being a**  **16 unanimous vote to support it. 17 MR. McCRUDDEN: I'm sorry, this is**  **18 Charlie at ACCA. 19 If we could go back to 17 real**  **20 fast, just one quick question because we 21 talked about, I think, yesterday about the**  **22 compliance date for recordkeeping**

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## 1 requirements. And I think you said that it is **2 unlikely that this will be final by January 3 1st.**  **4 Is there something we can put in 5 the preamble about sort of compliance date**  **6 with the standard versus compliance date with 7 this recordkeeping requirement?**  **8 MR. RAWALD: So, there is already 9 a compliance date with the standard required,**  **10 right? So, that is January 1st, 2015. 11 The general course of business**  **12 with these enforcement-type rules is they 13 become effective 30 days after being final.**  **14 So, that would be now are you asking us to, 15 instead of establishing that, have a date**  **16 certain established? 17 MR. McCRUDDEN: No, no, no. What**  **18 I am asking is, it is unlikely that the 19 compliance date, the 30 days following it is**  **20 posted is going to be January 1st, 2015. And 21 so, there is going to be this lag. And there**  **22 may be some confusion about the recordkeeping**

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## 1 requirement starting on January 1st, 2015, **2 when it is in actuality not going to start 3 until 30 days after you --**  **4 MR. RAWALD: Right. We will make 5 it clear in the preamble that we are not**  **6 requiring recordkeeping until 30 days after 7 the final rule is promulgated.**  **8 MR. McCRUDDEN: Perfect. Thank 9 you.**  **10 MR. RAWALD: While we would 11 appreciate it, you know, we can't require it.**  **12 Right. 13 MR. EISNER: Okay. I think the**  **14 next slide was 20, which we voted on 15 unanimously.**  **16 Twenty-one, we had a number of 17 questions or at least questions.**  **18 Manufacturers, among other things, 19 wanted to caucus on this also.**  **20 MR. RAWALD: Right. So, the 21 manufacturers wanted to talk about the second**  **22 bullet, sub-bullet, from the first bullet,**

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## 1 which is what they are going to do if they**2 discontinue something because it is non 3 compliant.**  **4 I don't really see it to be an 5 issue for us to put in the regulation at all.**  **6 I just think it would be an issue for someone 7 to kind of figure it out internally how they**  **8 want to do it. So, if they want to talk about 9 this, great, but I don't think it is a problem**  **10 for us to navigate or regulate, from my 11 perspective.**  **12 I just wanted to put you on notice 13 to our thought, which is installers can**  **14 install discontinued product as long as it is 15 not discontinued because it is non-compliant.**  **16 So, if an installer gets his handout and that 17 is no longer on the database, but it was 12**  **18 months ago when the manufacturer sold that, 19 and it was on the database as being compliant,**  **20 and it was only discontinued because you 21 decided to do something different, as opposed**  **22 to you learned that it was non-compliant, the**

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## 1 installer can install it. **2 And then, the manufacturers want 3 to talk about, what can we do to get back**  **4 things that were deemed non-compliant by DOE 5 or AHRI testing.**  **6 MR. EISNER: Other things people 7 want to discuss?**  **8 (No response.) 9 I thought there were questions on**  **10 indoor and -- 11 MS. MEYERS: Yes, I thought on the**  **12 second bullet we deleted "indoor". I mean, 13 that's what my notes show. I don't know if we**  **14 agreed to that or not. 15 MR. EISNER: So, "indoor" should**  **16 come off? 17 And there was some question about**  **18 unit versus component, I think. 19 MR. RAWALD: Well, that was**  **20 Chuck's "ask" to me, and then, we talked about 21 the fact that I am a little leery of those**  **22 terms. But we will navigate that in how we**

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## 1 write it. So, I understand what he is asking, **2 and I will make sure I am sensitive to that 3 concern when we write the regulation.**  **4 MR. EISNER: Is there anything 5 else here that was left open?**  **6 MR. McCRUDDEN: Well, this is 7 Charlie with ACCA.**  **8 To me, there is a huge liability 9 here on that second sub-bullet, which is it is**  **10 a violation if the contractor installs 11 something that is non-compliant because it was** **12 found to be, after testing and rating, non 13 compliant.**  **14 And so, the question I think to 15 the manufacturers is, what are you going to do**  **16 to inform the contractors that the product 17 that you have out there that is now not legal**  **18 to install -- because the liability here, the 19 violation is still coming by the contractor**  **20 for the product that he believed was 21 compliant, but now is no longer compliant.**  **22 MS. SHEPHERD: But, Doug, it is**

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## 1 not knowing at that point, is it? **2 MR. RAWALD: Right. So, the 3 Department on that, unless the contractor**  **4 knows, they can't do anything about it. But 5 what we want the manufacturers to do is to**  **6 figure out a way to get that somewhere else, 7 because I think it is product that is usable**  **8 still, right? So, I mean, it is still going 9 to be compliant in the North. So, the**  **10 question is, can the manufacturer somehow 11 reroute that from the distributor, so they get**  **12 it to the right place? 13 That is what we would like to see**  **14 happen, I think, from a Department point of 15 view. We don't want to see product**  **16 manufactured go to waste. We just don't want 17 to see it being installed in the wrong place.**  **18 So, the manufacturer is already 19 going to have pay the consequences of the fact**  **20 that they have this product. So, they are 21 going to have incentive to want to make sure**  **22 it is distributed in the right place, right?**

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## 1 Because their liability is for the product **2 that is non-compliant being installed in the 3 South.**  **4 So, it is not an issue for the 5 contractor. It is an issue for the**  **6 manufacturer. They are going to be liable for 7 improperly-rated products being installed in**  **8 the wrong region. So, they are going to want 9 to make sure it gets put in the right place.**  **10 So, they were just going to talk about how to 11 make it there. But it is not a contractor**  **12 concern, in my opinion. 13 MR. EISNER: So, you are saying,**  **14 essentially, if they don't get it into the 15 right region, the manufacturer can be**  **16 penalized? 17 MR. RAWALD: Right. That is what**  **18 we talked about before, is that the 19 manufacturer has to figure out what goes where**  **20 to minimize their liability for the 21 improperly-rated product, the product that is**  **22 a 13.2 as opposed to being a 14.**

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## 1 And so, the concern is, okay, that **2 they can identify that their distributor has 3 500 units, and they get it sent to the North.**  **4 Then, they don't have to pay the fine for 5 those because they have got them to the right**  **6 place. That is the point. So, we want to 7 incentivize the manufacturers to figure out**  **8 where things should go. 9 I see John Hurst shaking his head,**  **10 so at least he understands where I am coming 11 from. I am not sure the rest of the**  **12 manufacturers agree or not. Bryan is with me, 13 too. Okay.**  **14 MR. ROCKY: So, this is Bryan. 15 I think, Charlie, the end result**  **16 is the contractor is going to get a system at 17 this point today that they are buying and**  **18 going to install. It is a legal combination, 19 but something happens that, on Monday next**  **20 week, that is no longer a legal combination. 21 The contractor is still not going to be held**  **22 liable for anything he did today in good**

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## 1 faith. **2 MR. McCRUDDEN: No, and I 3 understand that. What I am saying is product**  **4 that is out there, not yet installed, but at 5 the distributor -- I mean, I think this is**  **6 sort of the recall situation. What do you do 7 and what measures do you do to make sure that**  **8 it doesn't fall in? 9 Because I understand the knowing**  **10 requirement on the contractor on installing 11 the product that he may not know is now**  **12 illegal, but it is -- 13 MS. MEYERS: But we deleted the**  **14 records requirement from distributors for the 15 coil and air handler. So, how can I, as a**  **16 manufacturer, if I happen to discontinue a 17 combination because it is no longer a valid,**  **18 certified, compliant unit -- so, I will go 19 tell my distributor this, but he is not**  **20 required to keep records on that indoor 21 coil/air handler because we just removed it.**  **22 So, we have this disconnect.**

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## 1 MR. RAWALD: Well, he is not **2 required by regulation. I can't tell you what 3 you are going to do by contract. I mean, how**  **4 you dictate what you want to do with your 5 customer to protect yourself is up to you**  **6 guys, right? 7 MS. MEYERS: But I think the**  **8 Department has left me very vulnerable because 9 they are saying you are responsible, but**  **10 you're -- 11 MR. RAWALD: This gets back to**  **12 Harvey's question last week. If you want the 13 Department's help, ask for it, but I have**  **14 asked multiple times, do you guys want the 15 Department's help with kind of this thing to**  **16 help track things back for you? And I haven't 17 heard that, no, we want the Department's help.**  **18 So, I don't want to get in the way 19 of your relationship with your customer. If**  **20 you want to create regulations and you want to 21 convince Jon of the efficacy of doing that**  **22 because it is going to help you down the road,**

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## 1 I will support that. I mean, the Department **2 is not -- we are just trying to come to a 3 solution that works for a group in the**  **4 negotiation here. So, I'm open. 5 MR. WHITE: So, this is Chuck**  **6 White. 7 So, I'm reading the three bullets**  **8 that are up there. I don't really read any of 9 those as a manufacturer's issue. It is not**  **10 certified as that. So, did I not pick the 11 correct one? If I didn't pick the right**  **12 combination, now if you are saying it is 13 something that was certified and was later**  **14 deemed that certification was invalid, I think 15 that is a different phrasing.**  **16 And the reason I say that is I'm 17 only going to be able to pick equipment that**  **18 is SEER 14 and greater. So, anything, 19 theoretically, that I install, I would have**  **20 had to make sure that it was one of these 14 21 and higher only, and you guys didn't have any**  **22 combinations, the manufacturers didn't list**

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## 1 any combinations that were less than that. **2 MR. RAWALD: Right. And so, the 3 scenario we are talking about here, Chuck, is**  **4 the manufacturer discontinues the product. 5 So, that certification disappears from my**  **6 database. But you've already bought it and 7 you are ready to install it. And so, you can**  **8 still install it. Because they discontinue 9 it, that is not going to stop you from doing**  **10 your job. 11 But, if the manufacturer took it**  **12 off the list because we told them to because 13 it was non-compliant, based upon our testing,**  **14 they are going to have to do something or they 15 should do something to make sure that those**  **16 things aren't installed, or else they are 17 going to be held responsible for it.**  **18 That is back to that basic premise 19 that we talked about a while back, which is**  **20 the manufacturers for product that is 21 improperly rated are going to be responsible**  **22 for making sure that they don't actually get**

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## 1 installed, or they are going to have to pay **2 the consequences, a $200 fine, a maximum, for 3 the ones that are installed there. So, this**  **4 isn't a contractor issue. I don't think this 5 is a problem for the contractor. It really is**  **6 for the manufacturers to figure out how do we 7 stop product being non-compliant for being**  **8 installed. 9 So, I want to make sure when I**  **10 describe the discontinued status, because 11 oftentimes things are discontinued for other**  **12 reasons that people understand. There is that 13 one caveat that links up with this other issue**  **14 we talked about before. 15 MS. MEYERS: Yes, so this is Karen**  **16 with Rheem again. 17 I guess I am still a little**  **18 uncomfortable because you have also made the 19 comment that or the Department has made the**  **20 comment that they want OEMs to take 21 responsibility to move inventory that a**  **22 contractor may have, if a combination is**

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## 1 discontinued because that certification is no **2 longer valid. 3 So, I couldn't do that at this**  **4 point because the Department has said, for the 5 enforcement of regional standards, that my**  **6 distributor partner doesn't have to keep 7 records of the two pieces of equipment that**  **8 are used to certify that equipment or that 9 rating.**  **10 I am still a little concerned 11 about this. This doesn't happen often, but,**  **12 you know, you have said that OEMs have to take 13 responsibility for or have some type of**  **14 responsibility for contractor inventory. I 15 guess that is where I am getting a disconnect.**  **16 If you could maybe walk me through it one more 17 time, I would appreciate it.**  **18 MR. RAWALD: Right. 19 THE COURT REPORTER: I'm sorry,**  **20 could you repeat that last comment again? 21 MS. MEYERS: I said, maybe if you**  **22 could just walk me through it one more time,**

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## 1 I could get a little more comfortable with it. **2 MR. RAWALD: Right. So, the idea 3 that I put forward, I think it must have been**  **4 three or four meetings ago now, but, boy, 5 everything is being run together for me, was**  **6 I wanted to make sure everyone understood that 7 this scenario in which a manufacturer**  **8 manufactures and rates a product at 14, a 9 system, sells it, and then, we test it and it**  **10 tests at 13.2, if it is installed in the 11 South, that would be installed in violation.**  **12 But it wouldn't be the installer's fault 13 because he thought that it was compliant. It**  **14 is the manufacturer's fault. 15 And so, what I explained back then**  **16 was the manufacturer has to minimize their 17 liability, has to show what ended up in the**  **18 North and if it didn't end up installed at 19 all. So, if you can say, okay, well, I think**  **20 that is the best way to help minimize your 21 liability, would be to identify those that are**  **22 still in distribution and not installed and**

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## 1 say, "Hey, guys, can you put those over in **2 Minnesota as opposed to setting them down in 3 Texas?"**  **4 I don't know how that works for a 5 manufacturer or a supply chain idea at all.**  **6 I am just saying to you that you should think 7 about that because it is a way of minimizing**  **8 your liability before the Department for the 9 installation of non-compliant units because of**  **10 the improper rating. 11 So, if you need records to be**  **12 retained to support that action on your part, 13 tell us and we can talk about it again. But**  **14 I teed that up a while back. And, Harvey, I 15 think very carefully said, "Do you need the**  **16 Department's help?" And the reaction we seem 17 to have gotten was, well, we can take care of**  **18 it through our customer relationships that we 19 have built.**  **20 So, I am open on this concept, but 21 I want to kind of get to an answer that works**  **22 for everybody. But we can't change the basic**

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## 1 premise of liability. That is going to be **2 true. So, if you need these tools from us, 3 then we have to reopen that inquiry.**  **4 MR. WINNINGHAM: This is Dave. 5 Could we go back to slide 14 and**  **6 15 momentarily? 7 MR. EISNER: Do you want to see 14**  **8 first? 9 MR. WINNINGHAM: Yes, 14.**  **10 MS. MEYERS: I am going to know 11 what I sent my distributors, but I am not**  **12 going to know what you sent to contractors. 13 And you're not going to know what you sent to**  **14 contractors on the indoor coil side because 15 you don't have to keep a record of it.**  **16 But I am responsible for making 17 sure that inventory gets out of the**  **18 contractors and I move it somewhere, but you 19 don't have a requirement to keep the coil**  **20 model number and who you sold that coil to. 21 So, I have no way to get there.**  **22 MR. RAWALD: Would it be helpful**

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## 1 to caucus for a little bit here? I mean, is **2 this something that -- you guys are having a 3 little bit of an interdispute. Maybe it would**  **4 be helpful to caucus for a few minutes on this 5 to kind of --**  **6 MR. McCRUDDEN: So, this is 7 Charlie with ACCA.**  **8 Before we do that, though, just 9 talking to Doug now, I'm okay. My concern**  **10 was, is that a contractor could get captured 11 up I this, but he assures me that can't**  **12 happen. 13 MS. MEYERS: It's not your**  **14 problem; it's my problem. 15 MR. McCRUDDEN: I understand that.**  **16 But do you know what? 17 MR. RAWALD: She's saying, no,**  **18 it's not a problem. 19 (Laughter.)**  **20 MR. McCRUDDEN: Okay. 21 MR. WHITE: So, this is Chuck**  **22 White.**

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## 1 One last thing to maybe help. We **2 took the indoor coil out because we agreed 3 that you could have an indoor coil that could**  **4 be a SEER 13 in some applications and could be 5 a SEER 14 in others.**  **6 And the condensing unit to be sold 7 in the South can't have a combination of less**  **8 than 14. And if one of your listed, rated 9 combinations fails that, now that condensing**  **10 unit no longer makes that 14 floor. And so, 11 that has to be addressed. Either you have to**  **12 change the rating scenario, so you delete 13 something, or you have a unit that is**  **14 mislabeled and you've got to pull them back. 15 MS. MEYERS: So, right, Chuck, I**  **16 know how we rate products. The problem is, if 17 I have a coil that has a bad TXV and it is**  **18 changed, so it is no longer getting the rating 19 that I certified, I am going to discontinue**  **20 that combination. I am going to come out with 21 a new coil model number that is redesigned, or**  **22 whatever.**

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## 1 But I have responsibility because **2 now that 14 SEER rating is getting 13.8. So, 3 I know who I shipped those coils to. But now,**  **4 I also need to know where my customers shipped 5 those coils to, so that I can take some**  **6 remedial action and move that inventory. 7 I don't know of any OEM that --**  **8 you know, if OEMs had agreements in place 9 today with their customers to make sure that**  **10 distributors kept track by model and serial 11 number of every unit they sold to a**  **12 contractor, we wouldn't be having any of this 13 discussion.**  **14 I can't go find out if you have 15 one of my coils that may have a bad TXV valve**  **16 on it because I don't sell to you. I sell to 17 my distributor. But I am responsible. I hold**  **18 the liability for that combination. 19 So, my issue is that, if I have to**  **20 take that action, I think that the requirement 21 for the distributor to keep track of the**  **22 indoor coil and model number is somewhat**

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## 1 important because I can't get there from here. **2 I am trying to do the right thing 3 and trying to go get your inventory, so you**  **4 are not putting in a bad combination, but 5 there is no way for me to find that path.**  **6 MR. WHITE: Right. And this is 7 Chuck White.**  **8 And I get that. But, also, I 9 think the distributor has to tell you who they**  **10 sold it to because, even if I buy units from 11 John, condensers and evaporators, there is no**  **12 guarantee that I installed those combinations. 13 You still have to come talk to me to see what**  **14 I put in as an installation. 15 MS. MEYERS: I don't even know who**  **16 you are. I don't know your name. I don't 17 know that you bought one.**  **18 MR. WHITE: I get that. I get 19 that. But you have to say to the distributor,**  **20 "Here's the serial numbers that I have. Who 21 did you sell them to?"**  **22 MR. EISNER: I think we still need**

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## 1 to caucus now. Karen, do you still agree we **2 need a caucus time? 3 MS. MEYERS: I don't know whether**  **4 we need to caucus, but I can't agree to this 5 until I call back to my, you know -- so, Rheem**  **6 cannot agree to this as it stands until I talk 7 to my company.**  **8 MR. RAWALD: To which slide is 9 that, the distributors, the distributor**  **10 discovery slide? Okay. So, we are reopening 11 that. So, it is no longer a -- okay. Okay.**  **12 MS. MEYERS: So, because of the 13 way we have the stuff worded on 21, so it is**  **14 kind of a combination of 15 and 21 that I am 15 having --**  **16 MR. LATTANZI: Yes, to be clear, 17 we are reopening 15, right?**  **18 MR. RAWALD: Right, and, actually, 19 we never closed it actually.**  **20 MR. LATTANZI: Well, 15 wasn't 21 closed.**  **22 MR. RAWALD: Yes, because I had**

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## 1 the open issue for a couple of things. **2 MR. LATTANZI: Right. 3 MR. RAWALD: So, that's fine.**  **4 Okay. 5 So, just to be clear, we are not**  **6 going to adjust the manufacturer liability 7 piece, unfortunately, because the manufacturer**  **8 is responsible for the fact that it is not 9 compliant, in our minds. So, the question is**  **10 really, what does the manufacturer need to 11 help them minimize their liability, I think as**  **12 I see it. 13 MS. MEYERS: Yes. So, yes. We**  **14 can caucus if the rest of the OEMs want to. 15 MR. LATTANZI: Well, I do have one**  **16 question. I mean, where I am a little lost, 17 Karen, is I am trying to find -- and it must**  **18 be in a different group of slides -- where we 19 are responsible for inventory at the**  **20 contractor level. Was that indicated 21 somewhere else?**  **22 MR. RAWALD: No. So, you are not**

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## 1 responsible for that per se. What you are **2 responsible for is, if you have rated a 3 product and it doesn't perform at that level,**  **4 nobody else down the chain knows that because 5 you are the one who is rating it. And so, the**  **6 issue we have discussed a few times -- and it 7 may have been at one of the meetings that you**  **8 were not here, when Dan was here -- that the 9 manufacturer is going to be responsible for**  **10 that unless they can show, no, this actually 11 went to the North; it didn't go to the North**  **12 (sic). 13 So, if you manufactured 1,000**  **14 units of a system that are rated at 14, but 15 actually perform at 13.2, and you can show,**  **16 no, no, 750 went to Minnesota and only 250 17 went to Texas, then you would only be**  **18 responsible for those 250. 19 And so, the manufacturers want to**  **20 minimize the liability you would have for 21 installation of a product that you improperly**  **22 rated that actually is non-compliant with the**

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## 1 regional standard. And so, how do you do **2 that? And so, that is what Karen is saying: 3 how do I do that if I don't have a complete**  **4 chain of events here from the manufacturer on 5 down?**  **6 MR. LATTANZI: Right. 7 MR. RAWALD: And we have created**  **8 this gap now by taking out the air handler 9 problem for the distributors to make the**  **10 distributor's life a little easier. 11 MR. LATTANZI: Okay. So, I mean,**  **12 I get it now. I mean, in the event it happens 13 as you indicated, to mitigate our exposure, we**  **14 have to go after the inventory that is not 15 only at the distributor, but what is at the**  **16 contractor. And the question is, how do we 17 get there? I understand.**  **18 MR. HURST: Well, just because it 19 was shipped to the South doesn't mean that it**  **20 remains in the South -- or North. 21 MR. LATTANZI: Right.**  **22 MR. EISNER: Okay. So, caucus?**

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## 1 MR. LATTANZI: Can we request 15 **2 minutes? 3 MR. EISNER: We can take the**  **4 regular break now. 5 MR. LATTANZI: Yes.**  **6 MR. EISNER: A 15-minute break. 7 (Whereupon, the foregoing matter**  **8 went off the record at 2:46 p.m. and went back 9 on the record at 3:06 p.m.)**  **10 MR. EISNER: Okay, we're back on 11 the record.**  **12 First of all, let's talk about 13 whether anybody thinks we are going to finish**  **14 today. 15 MR. FENSTROM: This is Gary.**  **16 I truly hope we are going to 17 finish today because, unfortunately, I will**  **18 have to be on the telephone next time if we 19 have to have a next time.**  **20 MR. EISNER: Does everybody 21 believe that is a reason to finish today?**  **22 (Laughter.)**

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## 1 MS. SHEPHERD: This is Amy **2 Shepherd. 3 I don't know about that, but I**  **4 think the issue that I raised earlier about 5 product is something I have to take back,**  **6 which is not to say that, if it turns out that 7 that is the answer, which is not to say that**  **8 it couldn't be telephonic, if it is only 9 limited to that one issue. But that is where**  **10 I am 11 MR. EISNER: And I think that is a**  **12 good distinction. If that is all we have left 13 and it is basically I can agree with what was**  **14 on the screen, we could do that 15 telephonically. But I think we have -- what**  **16 did we decide -- seven of the issues 17 remaining. Some of them are a little more**  **18 difficult issues. When I say "issues," I mean 19 slide. It is a separate issue.**  **20 And we have some things that are 21 not necessarily covered in the slides that**  **22 other people may want to bring up and open up**

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## 1 for discussion. **2 We have a little over, almost two 3 hours left. So, my sense is we are not going**  **4 to finish. We may only need to meet one more 5 day. We have two more days scheduled on the**  **6 15th and 16th. 7 And I would like to finish today,**  **8 but my advice is don't feel that you want to 9 rush, if spending another couple of hours will**  **10 get us the consensus that could be very, very 11 valuable.**  **12 So, why don't we keep going? But 13 sometime, especially if people are going to**  **14 start to leave -- anybody have to leave 15 between now and 5:00? I know we have lost a**  **16 couple of people. 17 MR. LATTANZI: I'm sorry, this is**  **18 Matt. 19 We have already lost John.**  **20 MR. EISNER: Right, but I am 21 asking if anybody else is going to leave**  **22 because tell us when, and before you leave we**

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## 1 can break from our substantive discussion and **2 figure out what we want to do next about 3 meeting.**  **4 MR. ROCKY: So, this is Bryan. 5 I will be leaving about 4:30.**  **6 MR. EISNER: Okay. Quarter after 7 4:00, let's take a few minutes to decide what**  **8 to do. 9 All right. During the break we**  **10 were talking about 15 and 21. Is there 11 anything more? Did we reach any agreements or**  **12 have any discussion that would be valuable to 13 go over now?**  **14 (No response.) 15 All right. If not, we were up to**  **16 21. Does everybody feel that we have to put 17 21 off until later to --**  **18 MR. RAWALD: Right. So, this is 19 Doug.**  **20 And at the break, Tim did come to 21 me and say, "We deleted the word `indoor'. I**  **22 think it is worthy of at least thinking about**

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## 1 it some more." **2 This is one of the areas that was 3 in the guidance that was highly commented on**  **4 by people. So, I guess from the Department's 5 point of view, I am going to have to circle**  **6 back with our technical folks to make sure 7 they are okay with dropping "indoor" there.**  **8 So, I guess we are not going to be prepared to 9 drop "indoor" today without me having that**  **10 conversation, and I haven't had that 11 conversation yet.**  **12 MR. EISNER: Okay. Anything else 13 on 21?**  **14 MR. AMRANE: This is Karim with 15 AHRI.**  **16 I guess for Doug, can you clarify 17 a little bit, you know, the issue about a unit**  **18 not complying with the original standard 19 because of the test? What would be the**  **20 responsibility of the manufacturers? I mean, 21 with respect to finding, to find the products,**  **22 I mean, do manufacturers have to go and find**

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## 1 the product at the contractor level? **2 MR. RAWALD: Right. So, this is 3 Doug.**  **4 So, the manufacturers don't have 5 any responsibility other than paying the fine,**  **6 right? So, you pay a per-unit fine for every 7 one that ends up in the South. Now, if you**  **8 want to proactively stop those from ending up 9 in the South because you want to minimize your**  **10 liability, that seems like a good idea and we 11 would totally support that. But we are not**  **12 able to require you to do anything other than 13 that, other than to pay the fines for the ones**  **14 that end up in the South. 15 MR. AMRANE: This is the**  **16 clarification we want today. 17 MR. EISNER: Anything else on**  **18 slide 21? 19 (No response.)**  **20 Okay. According to my notes, we 21 had a unanimous vote on slide 22.**  **22 We had a unanimous vote on 23 and**

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## 1 24. **2 We said on 25, "Wait to gather" 3 something. I can't read my note, but --**  **4 MR. RAWALD: Right. Twenty-five 5 was relevant to 31, was the problem. So, 25**  **6 was linked to 31. 7 I have gone back and talked to**  **8 folks in the Department about the timeline 9 here. We are comfortable keeping this, and we**  **10 will make a concession on slide 31 that we can 11 get to that, hopefully, will make things**  **12 easier. So, if we want to put this off until 13 we talk about 31, that is fine to me.**  **14 MR. EISNER: All right. 15 MR. RAWALD: That's fine. Thirty**  **16 one is where I had all the notes really that 17 I had to take back. So, that's fine.**  **18 So, Amy's question to me was 19 regarding the corporate entity that would be**  **20 responsible. So, the Department takes action 21 against the company that is culpable for the**  **22 actions that they take.**

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## 1 So, McCrudden Heating and Cooling **2 is the one who installs the bad unit. They're 3 the one we take an action against. Their**  **4 parent company is not going to be held 5 responsible for their actions. And Rheem**  **6 would not be held responsible or liable for 7 dealing with Chuck's or Charlie's parent**  **8 company, as long as you didn't deal with 9 Charlie's company. So, that is how we would**  **10 deem it. 11 So, it is the company that we**  **12 would take the action against who is the 13 entity, and it would be that entity through**  **14 which the company could not deal with. Does 15 that make sense, Amy?**  **16 MS. SHEPHERD: So, a company that 17 has multiple locations, if the Department goes**  **18 through and finds that the routine violation 19 was isolated to a specific location --**  **20 MR. RAWALD: Right. So -- 21 MS. SHEPHERD: -- does that mean**  **22 that you are still prohibited from dealing**

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## 1 with that entire entity at other locations? **2 MR. RAWALD: Right. So, we would 3 take action against companies. So, if it is**  **4 the same company, it would be against the 5 company. So, yes, if they had different**  **6 corporate names for each one of those 7 branches, it would be different. But, if they**  **8 are all the same company, the company would be 9 the one that would be responsible.**  **10 MS. SHEPHERD: And the Department 11 wouldn't have any flexibility to craft**  **12 something within this rule that did that? 13 Because I think, you know, you could very,**  **14 very easily find that -- like I'm thinking of 15 distributors, in particular. At a big**  **16 distributor, that you have one branch of that 17 distributor or one location where things maybe**  **18 weren't up-to-speed and that is where it all 19 happened. But they have corporate policies in**  **20 place. You know, you go through the whole 21 rigamarole and you find that it is sort of**  **22 isolated to that.**

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## 1 But the Department would view that **2 it doesn't have -- can we have the ability to 3 say in that particular case, the Department**  **4 makes a particular finding or something, that 5 it would be to that location?**  **6 MR. RAWALD: Right. And so, I 7 think that is a fair question. It is not one**  **8 that I have asked. And I think it is an open 9 area for us to discuss at least further. So,**  **10 we could tee it up further for the talk. I 11 don't know how we craft language that would be**  **12 appropriate, but I think we could talk about 13 it.**  **14 MR. MELCHI: Doug, I'm sorry, this 15 is Jon with HARDI.**  **16 So, to kind of piggyback onto 17 Amy's question, and that would be the scenario**  **18 I think you and I emailed back where, if the 19 headquarters discovered that this had**  **20 happened, and then was taking steps within 21 that branch, you know, whether you terminate**  **22 all the folks who were responsible, put all**

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## 1 the employees through training at that branch, **2 or maybe even suspend equipment sales for a 3 period of time, those would be things that you**  **4 would consider? 5 MR. RAWALD: Right. Those would**  **6 be considerations we would have to the idea to 7 having a routine violator in the first place.**  **8 MR. MELCHI: Okay. 9 MR. RAWALD: And so, what I think**  **10 is more likely is that we wouldn't find the 11 company would be a routine violator because**  **12 they -- 13 MR. MELCHI: Took those steps?**  **14 MR. RAWALD: -- dealt with that 15 branch, rather than trying to carve out some**  **16 sort of exception to the company vis-a-vis the 17 branch. I think that is what we would be more**  **18 comfortable doing. So, like dealing with 19 things at a company level.**  **20 MS. SHEPHERD: I mean, if you get 21 to the same place --**  **22 MR. RAWALD: Right, yes.**

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## 1 MS. SHEPHERD: -- that is fine. **2 But I think we would want, then, some -- I 3 guess we just want to think about that because**  **4 I just want to make sure that you do end up 5 getting to the same place.**  **6 MR. RAWALD: I understand. 7 MS. SHEPHERD: Okay.**  **8 MR. RAWALD: No, I do. 9 MR. WHITE: So, Doug, this is**  **10 Chuck White. 11 Enlighten me as to what you**  **12 consider a franchise/franchisee? Is that a 13 separate business or is that a division of a**  **14 master business? 15 MR. RAWALD: Right. So, we look**  **16 at companies based upon who is actually 17 licensed in their state, the registry of a**  **18 company. So, if the company has a filing with 19 the state saying, "We're a company," then that**  **20 is what we view to be an entity that we would 21 take an action against. That is how we**  **22 operate.**

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## 1 So, does that answer that question **2 for you? Does that help clarify it at all or 3 not?**  **4 So, there is a lot of complexity 5 to corporate law, and it varies by state. And**  **6 so, I can't give advice on that 7 wholeheartedly. I can tell you what our**  **8 practice is. 9 MR. WHITE: Yes, I think that is**  **10 okay. 11 MR. RAWALD: Okay.**  **12 MR. WHITE: It doesn't really 13 answer it, but I am not a franchisee. So --**  **14 (Laughter.) 15 MR. RAWALD: Okay.**  **16 MR. ROCKY: Doug, this is Bryan. 17 So, I am trying to understand how**  **18 this applies for factory-owned distribution 19 under this discussion. As a manufacturer, I** **20 know what I have got to do, but with factory 21 owned distribution, and some of it, I am not**  **22 as dependent as Jon is and others, but I have**

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## 1 14 factory branches. If I have my branch in **2 a city become a violator, then I am now 3 required not to sell those products in the**  **4 rest of my branches because they are part of 5 a company entity that is all of us, as Johnson**  **6 Controls? Is there a different discussion 7 point there?**  **8 MR. RAWALD: Right. Is your 9 factory a Johnson Controls factory or is it a**  **10 York factory? I mean, what is the factory? 11 MR. ROCKY: So, the factory and**  **12 the company that builds the units is Johnson 13 Controls.**  **14 MR. RAWALD: Uh-hum. 15 MR. ROCKY: York is a brand name**  **16 these days, like a lot of other companies have 17 brand names.**  **18 MR. RAWALD: Okay. And then, who 19 is the distribution company? Is that also**  **20 Johnson Controls? 21 MR. ROCKY: It is Johnson**  **22 Controls, yes. It is a division of, we are a**

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## 1 division of, but it is Johnson Controls. **2 MR. RAWALD: Yes. I have to think 3 about it because that is corporate law beyond**  **4 the level of which I am comfortable giving an 5 answer without talking to some folks, since it**  **6 is a complicated question. 7 MR. ROCKY: Yes, and it is well**  **8 beyond my even beginning knowledge. So, that 9 is why I asked the question, because it is**  **10 going to come up. 11 MR. RAWALD: Yes.**  **12 MR. ROCKY: It already has. But I 13 understand how to deal with the distributor.**  **14 I think I understand how to deal with -- and 15 Steve is not here -- a Johnstone Supply that**  **16 has many locations, but many different owners 17 and things. And I think I know how to deal**  **18 with a privately-owned distributor, but I am 19 not quite as sure on this area of factory**  **20 owned branches versus factory-owned 21 distribution, because I think there is some**  **22 difference in terms between the manufacturers**

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## 1 and how they organize and control and run **2 their factory-owned distribution. 3 MR. RAWALD: Right. Okay, Amy**  **4 also asked the question once again about 5 product under 10 CFR 430.32(c). I went back**  **6 and talked to folks in the Department again, 7 and we are still pretty steadfast that that is**  **8 how we look at the term as defined. It is 9 consistent across the board that the term in**  **10 the products, in the prohibited act that 11 applies to manufacturers, where it says "sale**  **12 of a product," means the product as defined 13 under 430.32(c), the entire seven classes**  **14 listed there, and for central air 15 conditioners.**  **16 So, if the group wants to talk 17 further at length about whether they want to**  **18 recommend a different item, I don't want to 19 forestall that conversation. I would vote**  **20 against it. But that could, then, be 21 something that we could go back and think**  **22 about and deal with it consistent with the way**

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## 1 we would say we would do that in the **2 rulemaking activity, as we described in the 3 beginning in our Working Group working rules**  **4 here. 5 MS. SHEPHERD: So, this is Amy.**  **6 If I could have just some 7 clarification, that would help me, because I**  **8 have to go back and explain this. So, when 9 you say it is applied this way across the**  **10 board, in what other situation is there a 11 product that has product classes, and there is**  **12 an enforcement action that relates to one of 13 the standards of the product class and it has**  **14 an impact on a different product class? They 15 are all the same product.**  **16 MR. RAWALD: Uh-hum. 17 MS. SHEPHERD: Okay.**  **18 MR. RAWALD: Right. And so, we 19 regulate it; we bring enforcement actions on**  **20 distribution on a basic model level. It is 21 not even a product class, right? So, if I**  **22 find a basic model is non-compliant, then it**

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## 1 is limited to that basic model. It doesn't **2 apply to any other products in that. 3 So, this is a totally different**  **4 prohibited act in that way. So, I am not 5 saying that the impact is the same across how**  **6 we do prohibited acts. What is the same is 7 how we view the term "product". And so, the**  **8 term "product" as we define it, even though it 9 is at other places in the statute "consumer**  **10 product" and "covered product," in this 11 particular instance, the way it is phrased, we**  **12 view it to be the same term, to mean the 13 product as defined, including all product**  **14 classes. If the statute had product classes, 15 it would have said "product class". That is**  **16 a defined term, we feel. So, that is the 17 variability that I see there and that our**  **18 lawyers have discussed over dealing with this 19 issue.**  **20 MS. SHEPHERD: Okay. So, I guess 21 my concern is, as I said, it is the**  **22 implication of this going forward. So, if we**

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## 1 had something right now where you have, like **2 for labeling, you have a product. That is a 3 prohibited act that is based off the product.**  **4 And you had a product that had product 5 classes, and one of the labels within that**  **6 product class, would the Department feel it 7 had authority to take any kind of action vis**  **8 a-vis any other product class? 9 Do you see what I am saying? I**  **10 mean, like -- 11 MR. RAWALD: I am having a hard**  **12 time following the hypothetical. I'm really 13 sorry. Because the Department, up until now,**  **14 takes actions in two areas, and that is 15 distribution of basic models that are not in**  **16 compliance. It is called distribution of a 17 new product. So, that is that term, that "new**  **18 covered product," which is unique to that 19 particular statutory phrase, and we view it at**  **20 the basic model level. 21 And then, we have distribution or**  **22 failure to apply information, which we use a**

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## 1 lot, especially in the certification context. **2 If you don't certify, we are probably going to 3 bring action for failure to certify. And**  **4 product, once again, we view that on the 5 large- or small-scale.**  **6 So, I can't say there is any 7 analogy in the prohibited acts section of what**  **8 we are doing. So, we are looking at how we 9 have treated the term "product" in the statute**  **10 across our regulatory scheme. 11 MS. SHEPHERD: Okay. So, the**  **12 Department views, it wouldn't even view that 13 it had flexibility, given these are regional**  **14 standards, and it is different, to make sure, 15 to allow us to create an enforcement rule that**  **16 would be limited to that product class? 17 Because the thing that I have, I**  **18 mean, the ultimate thing I have here is that 19 there is a violation regarding a standard that**  **20 is applicable to a product class. That 21 standard is not applicable to a different**  **22 product class, but the consequence is going to**

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## 1 be that you can't sell to that entity. No **2 manufacturer can sell a different product that 3 has a totally different standard applied to**  **4 it. 5 And this going to come up when we**  **6 are dealing with regional standards for 7 furnaces as well. So, I just really want to**  **8 make sure that we understand this as we go 9 forward.**  **10 So, my question is, so we don't 11 even have the ability to say, okay, but for**  **12 purposes of this enforcement rule, what we are 13 going to craft is, for our effective**  **14 enforcement plan, is that it is going to be 15 the action that manufacturers are going to be**  **16 prohibited from is going to be that they can't 17 sell that product class?**  **18 MR. RAWALD: So, I guess, as a 19 baseline, I think an agency has the ability to**  **20 not use the entire breadth of their authority 21 if they have discretion, right? So, in**  **22 enforcing a rule, there is always**

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## 1 prosecutorial discretion. So, we could, of **2 course, decide we want to use prosecutorial 3 discretion to narrow the class of products for**  **4 which we would collect civil penalties for a 5 manufacturer for selling to a person that is**  **6 deemed to be a routine violator. 7 So, we could do that. And so, the**  **8 Department might be amenable to doing that. 9 I don't know. What I have been told is we are**  **10 looking at the term "product" to be consistent 11 across our interpretation of it. This is the**  **12 way we view it. 13 But, if the group wants to come to**  **14 a different conclusion, I will bring that back 15 to the Department. Rather than saying I'll**  **16 vote no, I will bring it back to the 17 Department and try my best to have them**  **18 understand your point and say we should use 19 our discretion here to narrow the scope of**  **20 what we are doing to what makes sense to the 21 group. I will do that. So, if you want to**  **22 open the discussion that way, I can bring it**

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## 1 back that way. **2 MS. SHEPHERD: Right. Well, I 3 think I need to take it -- I think we need to**  **4 see how the rest of it pans out. That is very 5 good to know in determining how the rest of**  **6 this pans out. 7 And I think where we are coming**  **8 from is that we just had a very different 9 expectation of this as we started this.**  **10 Because when we talked about the scope of this 11 rulemaking, it was really specific and it**  **12 related to split-systems. We have that in our 13 document.**  **14 But now, what we are talking about 15 is an enforcement plan that the effect of that**  **16 enforcement plan is going to affect different 17 product classes, which is not something that**  **18 we anticipated. 19 MR. RAWALD: Right. No, I hear**  **20 that. 21 MR. SACHS: So, this is Harvey.**  **22 And if I were Karen, thinking**

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## 1 about your definition of "product," it might **2 seem to me it is not even nuclear, but 3 hydrogen and that it could affect her sales of**  **4 water heaters, if there is a violation on the 5 regional standard for air conditioners.**  **6 MR. RAWALD: Right. So, that is 7 not the way we view it. So, we are limiting**  **8 it. We think "product" means the 430.32(c) 9 central air conditioner product. So, it would**  **10 not affect anything else that is not under 11 those seven product classes of central air**  **12 conditioner listed there. 13 MR. SACHS: Thanks. I should have**  **14 remembered that. 15 MR. RAWALD: That's okay.**  **16 MR. SACHS: And Karen didn't need 17 my help.**  **18 MR. RAWALD: I don't mind 19 repeating these things because I think it is**  **20 really important and I want to get them right. 21 Now, that being said, the question**  **22 was asked about, "Well, hey, if someone is**

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## 1 appealing, what could we do here?" And so, in **2 exercise of discretion, the Department is 3 willing to do the Chuck White compromise,**  **4 which would be, hey, if you sell during the 5 pendency of appeal to a person who has been**  **6 deemed a routine violator product that would 7 not comply with the minimum standards of the**  **8 region, then that will be something you will 9 pay the civil penalty for.**  **10 So narrowing the scope quite a 11 bit, right? So now, we are only talking about**  **12 below 14 SEER or below EER, central air 13 conditioners, splits and packaged systems.**  **14 So, that would be the thing by which you could 15 be fined for selling if someone appealed and,**  **16 then, lost during the time that the appeal is 17 ongoing.**  **18 And so, the point of that is to 19 basically so you, as the manufacturer, could**  **20 say to someone who is found to be a routine 21 violator, "Hey, are you appealing? Great.**  **22 While we're waiting for your appeal to come**

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## 1 on, I am only going to sell you things that **2 are above the standard in the region, until we 3 figure out for sure whether or not you're**  **4 doing something bad here. So, I am not going 5 to sell you anything that is below the**  **6 standard until such time as we have worked 7 this out."**  **8 So, that is a much more narrowing 9 of the risk for the manufacturer. Hopefully,**  **10 that is an acceptable outcome. It is not a 11 complete, hey, you can sell them anything. It**  **12 is you can't sell them product, as I think 13 that would be doing the bad thing.**  **14 I think this is the position that 15 Chuck offered and that Ray Ellis advocated,**  **16 because it stops bad stuff from getting into 17 the wrong location.**  **18 MR. DORIA: Yes, Doug, this is 19 Jordan.**  **20 I would say I appreciate that, and 21 I think that is a very good approach and sort**  **22 of a good compromise. It is preventing them**

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## 1 from being able to violate. **2 Just sort of a technical question. 3 If they are being deemed a routine violator,**  **4 we never really talked about, you know, what 5 exactly are they violating, meaning which of**  **6 the two regions or which of the two standards. 7 Now in the instance that someone**  **8 is violating only the South standard, I am 9 assuming we need to sell them only 14 SEER**  **10 product. If they violated the Southwest 11 standard, we would need to sell them 14 SEER**  **12 product that also, then, met the EER 13 requirements, right? So, it would be sort of**  **14 what we could and couldn't sell them would be 15 pegged to, I'll say, the exact standard that**  **16 they violated. Is that right? Is my 17 understanding of it right?**  **18 MR. RAWALD: Right. So, I didn't 19 put it that way. I think that is a**  **20 possibility. The way we viewed it would be 21 you can only sell them the product that would**  **22 comply with the region in which they are**

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## 1 working. And so, if they are an installer and **2 they are working in the Southeast, they would 3 have to be minimally compliant with the**  **4 Southeast. I think it is basically the same 5 result, but it is just we were looking after**  **6 where they were operating as opposed to what 7 standard they violated.**  **8 Because what I wouldn't want to 9 have is someone only violated the EER**  **10 standard. And so, they moved to the Southeast 11 and they start buying a bunch of 13 SEER**  **12 stuff. We are saying, well, they haven't 13 violated that part yet. So, we know they are**  **14 a routine violator. So, we still have to sell 15 them things that are minimally compliant with**  **16 the standard at that point, until we know that 17 they are not -- until we have eviscerated that**  **18 finding and said, "Oh, okay, that was wrong. 19 DOE was wrong."**  **20 Anyone else have a thought on that 21 outcome? Does that seem like a sensible**  **22 compromise? I mean, I really appreciate Chuck**

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## 1 putting it forward. I thought that was a good **2 idea, personally. 3 Okay, the request for the change**  **4 "mitigates," no liability for sales, that's 5 fine. No liability.**  **6 Karen had asked for more than 15 7 days. I am not able to get it at the moment.**  **8 So, 15 days is where I am at. 9 MS. MEYERS: Is that, I guess,**  **10 business days? 11 MR. RAWALD: Right. So, the days,**  **12 we hadn't discussed whether it was business or 13 calendar days. I am willing to say business**  **14 days. The folks I work with, I am afraid they 15 are going to say it is calendar days, in their**  **16 mind. So, we will go back and wrangle on 17 that.**  **18 Aniruddh, did you have a point? 19 MR. ROY: Doug, I was going to**  **20 recommend the same thing. 21 MR. RAWALD: Business days?**  **22 MR. ROY: Fifteen business days.**

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## 1 MR. RAWALD: Right. And I can see **2 the wisdom behind that, especially given 3 holidays and other things. I just can't say**  **4 that that is what people meant when they 5 agreed with me, with what I pushed them to**  **6 agree to. So, I have got to talk to them some 7 more.**  **8 MR. EISNER: If the 15th days 9 falls on a Saturday or Sunday, what is your**  **10 current practice, to give them more time? 11 MR. RAWALD: It is always the next**  **12 business day. We always go to the next 13 business day when it is a weekend or a holiday**  **14 the day falls upon. But we typically count 15 the days because a lot of things in EPCA are**  **16 30 days, and we use calendar days. We just 17 give them the extra day or two that is**  **18 required to get to the actual business day. 19 So, that is my concern, is that**  **20 would be divergent from our current practice 21 to do business days rather than calendar days.**  **22 MR. ROY: Doug, I wanted to make**

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## 1 another comment on bullet 1. **2 MR. RAWALD: Okay. 3 MR. ROY: Actually, the sub-bullet**  **4 to that, where it says, "10 CFR 430.32(c)," 5 says, "Central Air Conditioner". I am looking**  **6 at the definition right now or at least that 7 section. It says, "Central Air conditioners**  **8 and Heat Pumps". 9 So, coming back to Amy's point on**  **10 the product classes mentioned over there -- 11 MR. RAWALD: Right. Maybe it is**  **12 not so simple? 13 MR. ROY: Right.**  **14 MR. RAWALD: And, Aniruddh, I want 15 to stress I am willing to bring all these**  **16 arguments back to folks. And I am letting you 17 know where we stand at the moment.**  **18 MR. ROY: Right. I understand. I 19 understand your point.**  **20 MR. RAWALD: I am just giving you 21 all the arguments here.**  **22 MR. ROY: But it is just, you**

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## 1 know, when we had the scope discussion in our **2 first two days of the meetings, I think we had 3 limited it to central air conditioners.**  **4 MR. RAWALD: Right. No, I hear 5 what you are saying, and I see the term here.**  **6 So, I will bring that back to people and bring 7 it to their attention.**  **8 Okay. 9 MS. HARIHARAN: This is Johanna.**  **10 And I just wanted to let you know, 11 when we did make this decision, we were aware**  **12 that heat pumps is also included. 13 MR. RAWALD: Yes.**  **14 MS. HARIHARAN: Did everyone get 15 that? Okay.**  **16 THE COURT REPORTER: Could you 17 repeat that? I'm sorry.**  **18 MS. HARIHARAN: No, that's okay. 19 When we had the discussion about**  **20 the definition, we were aware that heat pumps 21 was also within the definition.**  **22 MR. EISNER: You're saying DOE or**

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## 1 you're saying the table here? **2 MS. HARIHARAN: DOE. 3 MR. EISNER: Yes, that is my**  **4 recollection, too, that we discussed heat 5 pumps.**  **6 MR. RAWALD: Right. No, what she 7 is saying, when the lawyers looked at the**  **8 issue, they were aware of the point that 9 Aniruddh raised. So, that is not new**  **10 information. So, we will talk about it, but 11 that is not going to change the outcome, is**  **12 what she is saying, because we already thought 13 of that point.**  **14 MR. ROY: Okay. 15 MR. RAWALD: And I have not been**  **16 properly saying, "Central Air Conditioner and 17 Heat Pumps" is the problem. But I do get your**  **18 point, Aniruddh, and I think it is a fair 19 point. It is just it is one that we looked**  **20 at. 21 And I think the biggest issue here**  **22 is that I think there is definitely room for**

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## 1 us to narrow our discretion. That is the **2 approach the Department could possibly be 3 persuaded at, in my opinion.**  **4 So, if you want to consider 5 arguments for that, that's fine. I find that**  **6 will be probably very little traction for 7 narrowing it to the extent of, well, it is**  **8 really not allowed to selling them any product 9 below the standard. I think it has got to be**  **10 something more than that, and I think there 11 are other possibilities that are more than**  **12 that but less than what we view the 13 interpretation to be.**  **14 So, I will let Amy lead the charge 15 to kind of look at how to do that and**  **16 readdress that point. 17 I like to delegate. Can you tell**  **18 that? I used to be in the military. 19 MR. EISNER: Anything else on this**  **20 slide? 21 MR. ROCKY: Yes, this is Bryan.**  **22 So, maybe it is not a question**

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## 1 anymore, but we talked about a process time **2 from the time of notice of finding of routine 3 violation to when manufacturers are liable for**  **4 the fine. I think the response was 5 immediately. But I think the request was, is**  **6 there a timeframe that says manufacturers will 7 start taking corrective actions, or whatever,**  **8 within three days or five days or a week? 9 MR. RAWALD: And is that still the**  **10 case with the narrowing of the scope, so small 11 of being only those products that would be**  **12 non-compliant with the region? You still want 13 that time?**  **14 MR. ROCKY: Again, I am trying to 15 think about the activities with --**  **16 MR. RAWALD: Right. You need it 17 practical with what you can do in the**  **18 business. I get that. And so, I want to make 19 sure it makes sense from a business point of**  **20 view. 21 So, what I have gotten for you is**  **22 a way smaller scope of activity.**

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## 1 MR. ROCKY: And I appreciate that **2 very much. 3 MR. RAWALD: Right, right.**  **4 MR. ROCKY: So, I think all I was 5 just looking for the clarification was that**  **6 you were not planning on having any further 7 discussion on an allowance-of-time process.**  **8 MR. RAWALD: I can. I can. Just, 9 once again, I only have so much goodwill that**  **10 I have built on. So, tell me what you need 11 and I will try to go back. What is**  **12 reasonable? What is a reasonable amount of 13 time for a manufacturer to say, "Hey, I can't**  **14 sell you anything less than 14 right now 15 because I just received this notice from DOE**  **16 saying that you're a bad actor."? What is the 17 reasonable amount of time that you would need**  **18 to turn off your sales of less than 14 product 19 to that person?**  **20 If you say 30 days, Karen, I am 21 just going to laugh.**  **22 MS. MEYERS: No, I hate to be**

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## 1 controversial, but, you know, I make the sale, **2 but, then, the shipment may not occur for four 3 weeks. So, are you talking about trucks I**  **4 have in transit that I have to stop and turn 5 around that is, you know, the fifth stop on a**  **6 truck? 7 I mean, really, I know this is**  **8 going beyond, now I'm going beyond ridiculous. 9 But it is an important business -- I think**  **10 Bryan brings up a good point. I mean, I would 11 like, you know, once we are notified by DOE**  **12 that we have 72 hours to implement corrective 13 actions, to ensure that we don't think that's**  **14 any big deal, because we are going to get the 15 notice. I don't know who is going to get the**  **16 notice. But, then, there are several 17 transactions that have to be gone through and**  **18 stopped and people notified and trucking 19 companies notified. You know, I have a lot to**  **20 do. 21 If you told me at four o'clock, I**  **22 could not be in compliance by 8:00 a.m. the**

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## 1 next morning. **2 MR. RAWALD: Well, so here's the 3 situation with the prohibited act. Unlike**  **4 other ones with a distribution in commerce, 5 this one uses the word "sell". This one uses**  **6 the word "sell". So, that is a meaningful 7 distinction.**  **8 MS. MEYERS: Okay. 9 MR. RAWALD: So, if the sale is**  **10 already completed, I can't do anything about 11 it. So, the product already being on the**  **12 road, that is not something I am going to 13 charge you for. It is the sale. So, you can**  **14 no longer be selling. So, this is a different 15 prohibited act than the other ones, and "sell"**  **16 is a very defined term. It is very clear. 17 So, understand that you can no**  **18 longer sell to that person, once we make the 19 notice, how long would you need to tell people**  **20 who are in your Sales Department, "Stop making 21 those sales."?**  **22 MS. MEYERS: So, most of our**

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## 1 orders/sales, there is not a person there. **2 MR. RAWALD: Okay. 3 MS. MEYERS: So, it is all done,**  **4 you know, electronically or through our ERPs. 5 MR. RAWALD: You just don't want**  **6 to pay workers anymore, huh? 7 (Laughter.)**  **8 It is a sad society we live in. 9 MS. MEYERS: It is because of**  **10 these DOE efficiency standards. 11 MR. RAWALD: That's right.**  **12 MS. MEYERS: They made the cost of 13 being in the air conditioning --**  **14 MR. RAWALD: That's right. You 15 need all those people working in customer**  **16 service, huh? 17 (Laughter.)**  **18 MS. MEYERS: So, it would still 19 require some time --**  **20 MR. RAWALD: So, how much time? 21 MS. MEYERS: -- manual**  **22 intervention. So, I would --**

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## 1 MR. RAWALD: Seventy-two hours, is **2 that -- 3 MS. MEYERS: I think that's**  **4 reasonable. 5 MR. RAWALD: I can get you 72**  **6 hours, I think. If that is a reasonable 7 amount of time, I can get that.**  **8 MS. MEYERS: I'm already going to 9 get in so much trouble for what --**  **10 (Laughter.) 11 MS. SHEPHERD: Make it business,**  **12 not calendar. 13 MS. MEYERS: The 72 hours is just**  **14 another nail in my coffin. 15 MR. RAWALD: Okay. So, three**  **16 business days? Three business days? 17 MR. EISNER: Can we get three**  **18 business days? 19 MR. RAWALD: Okay, I will ask for**  **20 three business days. Okay. Okay. 21 MR. WINNINGHAM: Doug, this is**  **22 David, Allied.**

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## 1 Just for clarity purposes, like **2 Karen mentioned before, you know, we make a 3 sale and loads are put together, and it may**  **4 ship several weeks out. Kind of what is the 5 perspective on -- where is that cutoff period?**  **6 I mean -- 7 MR. RAWALD: It is the sale date.**  **8 The sale date is the date. The prohibited act 9 is sales.**  **10 MR. WINNINGHAM: Okay. 11 MR. RAWALD: Sales, sales, sales.**  **12 So, it is when you sell it, yes. It is the 13 sale date. It is the sale date, yes. This is**  **14 one we are very clear on it. That is what the 15 statute gave me authority for.**  **16 MR. SACHS: This is Harvey. 17 That seems to be a very clean**  **18 thing, and everything being downstream of that 19 can be triggered. Am I missing something or**  **20 is everybody onboard? 21 Thank you.**  **22 MR. RAWALD: Okay. So, the really**

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## 1 open item here seems to be the definition of **2 product, right? So, how about if we took out 3 that bullet and we made a separate slide for**  **4 product as defined and left that open? Would 5 we otherwise be able to agree to this slide?**  **6 We will have to go back if we get three 7 business days. So, I guess I have to do that.**  **8 So, okay, I can't do that. That's right. 9 MR. EISNER: Anything else on this**  **10 slide? 11 (No response.)**  **12 Are we ready to go back to -- what 13 number was it?**  **14 MR. RAWALD: Twenty-five. 15 MR. EISNER: Twenty-five, right to**  **16 appeal. 17 MR. RAWALD: Right. So, knowing**  **18 the caveats now about the downstream 19 requirements that will be going on during the**  **20 pendency of appeal, is everyone okay with a 21 30-day notice and the 45 days to make the**  **22 decision? Does that all seem reasonable now,**

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## 1 given what we have narrowed the scope to be of **2 what you can't do with someone who is in 3 appealing status?**  **4 And I can tell you all, we are 5 making our best effort to make the independent**  **6 Hearings and Appeal Office be the body to do 7 this. I feel like they are onboard.**  **8 Since it looks like we are going 9 to have a future meeting, we could wait until**  **10 the next meeting to finalize this slide, if 11 you would like. But I feel like we are going**  **12 to get there. 13 MS. SHEPHERD: And just to**  **14 clarify, the three business days, would that 15 apply to this, and then, there would be -- so,**  **16 do you know what I'm saying? Like you have 17 three days to stop to make sure you're not**  **18 selling them any 13 SEER? 19 MR. RAWALD: Uh-hum, right. And**  **20 that is what I am going to go back and ask 21 for.**  **22 MS. SHEPHERD: And then, the other**

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## 1 one, would it be for the -- okay. **2 MR. RAWALD: Okay. So, really, 3 the only thing we have to figure out in this**  **4 is what we are doing, who is deciding the 5 appeal. So, if people want to wait to vote**  **6 until after that has been decided, I can 7 understand that. Hopefully, I will have an**  **8 answer for you at a future meeting, if we have 9 a future meeting. So, we can do that, if that**  **10 is what people are comfortable with. 11 MR. EISNER: Do you want to vote**  **12 on this or do you want to wait? Anybody want 13 to wait? Nobody wants to wait. So, we want**  **14 to vote on this now? 15 MS. MEYERS: I think, just from my**  **16 viewpoint, it is the issue that Jordan raised 17 earlier. I just think it needs to be**  **18 consistent. 19 MR. RAWALD: That's a guarantee.**  **20 That's an absolute guarantee. We are not 21 going to develop multiple processes. That is**  **22 too difficult for us, Karen. I mean, we are**

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## 1 going to find one way and we are going to do **2 it that way all the time. 3 MR. EISNER: So, we are ready to**  **4 vote on this. Does anybody object to slide 5 No. 25 as it currently exists on the screen?**  **6 (No response.) 7 No objections. We'll treat this**  **8 as unanimous. 9 Slide 26 we already agreed to. We**  **10 changed it to 30 days. 11 Slide 28 we were going to vote**  **12 after lunch. 13 MR. RAWALD: Right. And so, the**  **14 reason why we didn't vote on that was because 15 I had said I am going to have to abstain. I**  **16 checked in with people, and I am still being 17 advised that I should abstain, just because**  **18 the Department shouldn't be in a position of 19 advising FTC on making a change to the Energy**  **20 Guide Label at this point. 21 So, we are not opposed. I want to**  **22 make it clear we are not opposed. I just**

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## 1 don't feel it is appropriate from a government **2 jurisdictional issue to do that. So, I think 3 the ASRAC will forward the recommendation of**  **4 the group with the FTC tag as put together by**
**5 AHRI. 6 And we don't want it necessarily**  **7 to be noted that we abstained or who 8 abstained, but it won't be noted at all. Just**  **9 for purposes of our voting here, I am being 10 told that I should abstain. So, that is what**  **11 I am going to do. 12 MR. DORIA: So, this is Jordan.**  **13 An item we just got for this was 14 the voluntary label, which took an interesting**  **15 turn. 16 MR. RAWALD: Yes, next slide,**  **17 though. 18 MR. DORIA: No, no, I understand,**  **19 but I guess, from my perspective, if what we 20 are saying is FTC is the body that has**  **21 jurisdiction over all the labeling, and some, 22 like myself, are in agreement that we think** 

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## 1 this label should be mandatory, I guess my **2 point on is what we vote on here or what we 3 bring to FTC might be broader than just this.**  **4 It might actually be the piece that we have 5 been calling the voluntary label, the regional**  **6 label. 7 MR. RAWALD: Uh-hum.**  **8 MR. DORIA: So, that is why I 9 bring it up now.**  **10 MR. RAWALD: Right. But I view 11 that as two separate things. But everyone**  **12 could agree to at least bring this to FTC, and 13 then, we could hash it out later on with**  **14 everyone more. 15 MR. AMRANE: Doug, this is Karim.**  **16 How are you going to bring this to 17 FTC? As part of a report from this group or --**  **18 MR. RAWALD: Right. They are 19 going to get the report from ASRAC, and it is**  **20 going to say, hey, this what we think you 21 should do.**  **22 MR. AMRANE: Okay.**

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## 1 MR. RAWALD: And I have heard from **2 Hampton that, if it makes sense from what they 3 are trying to do, then he will view it very**  **4 favorably. I mean, they don't want the label 5 to be confusing. They want to make it simple.**  **6 They want to make sure it works with what we 7 are doing here. So, I have every reason to**  **8 believe they are going to view it favorably. 9 MR. EISNER: Would they do this**  **10 part of the process when they agree to the -- 11 I'm sorry. When ASRAC agrees with the report**  **12 that this Committee sent forward, and they, 13 then, submit it to the Secretary. Would they**  **14 also submit it to the FTC at the same time? 15 MR. RAWALD: I can't say how the**  **16 process is going to play out. I could tell you 17 how the information is going to get to the**  **18 worker bees at FTC. How the actual report will 19 be delivered by ASRAC, I just don't have any**  **20 information on. So, I will have to find that 21 out.**  **22 MR. EISNER: Karen, did you have**

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## 1 something? **2 MS. MEYERS: That was just my 3 question. Is the ASRAC report enough to**  **4 actually officially initiate a rulemaking at 5 FTC? I don't know if you know the answer to**  **6 that. 7 MR. RAWALD: I will have to ask**  **8 Hampton to know what he is going to need. I 9 presume that is going to be initiated by them,**  **10 based upon information provided by us. But I 11 don't know what the formal trigger will be.**  **12 All administrative agencies are 13 required to entertain requests for rulemaking.**  **14 So, I think they will view that in that way 15 under the Administrative Procedures Act, which**  **16 is this is a formal request for rulemaking, 17 and they will go from there. So, I think that**  **18 is how it will work, but I can't say for sure 19 exactly where it will be. But they will get**  **20 there. 21 MR. EISNER: Harvey?**  **22 MR. DORIA: So, this is Jordan.**

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## 1 I was just going to say one more **2 time, I mean, we, as an industry, have already 3 gone through before with FTC where we said one**  **4 thing. Not too long thereafter, we went to 5 them with something else, and it was not well**  **6 received. 7 So, I would just say that if we**  **8 are -- I am not against this, but we need to 9 just be very clear with them at the outset, I**  **10 think, about what we want, and then, we can't 11 have additions, modifications, changes. We**  **12 need to be very clear, ask them for it once, 13 and move on. So, I am not going to hold this**  **14 up, but I think, just as a group, we need to 15 make sure that we do that.**  **16 MR. RAWALD: Right. I mean, part 17 of the problem I think that we are currently**  **18 in is that FTC received comment recommending 19 they do one thing, and they received feedback**  **20 that they wanted something else. So, that is 21 hard because you go through a lot of effort.**  **22 The FTC is a lot harder, though,**

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## 1 because they have a Commission. They don't **2 have a Secretary. So, they have a lot more 3 people to deal with and to please. And so,**  **4 rulemaking is even more difficult for them 5 than it would be for us.**  **6 And so, trying to get all that 7 through is complicated. And so, I think that**  **8 it is hard for them to reverse gears when that 9 happens. So, just keep that in mind.**  **10 But, if everyone is happy with 11 what Karim has shown, which everyone seems to**  **12 be, then that seems to be the way to go. 13 MR. SACHS: This is Harvey.**  **14 It just occurs to me that there is 15 a much broader constituency involved here than**  **16 those around the table. I think in terms of 17 the specific consumer advocates like Charlie**  **18 Harak, in particular; just as an example, 19 Consumer Federation of Americans, and so on.**  **20 I think we would entertain the 21 thought of beating the bushes if there was the**  **22 idea that an independent petition, a petition**

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## 1 independent of the ASRAC needed to be done to **2 help reinforce the case. 3 MR. RAWALD: Right. Because,**  **4 Harvey, I think you had come before with the 5 idea of a direct final rule possibly. And FTC**  **6 I am sure would not entertain that without a 7 more broad-based coalition than simply those**  **8 people here. So, I think that would be 9 necessary if you wanted them to consider doing**  **10 that, to be more expedient in adopting 11 something.**  **12 MR. SACHS: I would certainly want 13 to consult back.**  **14 MR. RAWALD: Right. 15 MR. SACHS: So, I don't want to**  **16 make that as a promise. 17 MR. RAWALD: Right.**  **18 MR. SACHS: But it is something 19 that I think -- and I am looking at my peers**  **20 around the table -- that we would certainly be 21 willing to bring up in our caucus, in our**  **22 broader caucus.**

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## 1 MR. EISNER: Okay. Anything else **2 on the Energy Guide Label? 3 (No response.)**  **4 All right, with one abstention, 5 are there any objections in the rest of the**  **6 group to calling this unanimous, plus one 7 abstention from DOE?**  **8 (No response.) 9 Okay, hearing no objection, put it**  **10 down as unanimous. 11 That brings us to slide No. 29,**  **12 manufacturers' voluntary label. And we have 13 already talked about this also, going to FTC**  **14 to see if they could require it, the 15 recommendation from this group.**  **16 MR. RAWALD: Right. And so, Karim 17 put forward the fact that he was against that,**  **18 and I think some folks were onboard with him, 19 being against that. Jordan has said that he**  **20 might not agree with Karim's approach. So, I 21 guess we want to ferret out that argument a**  **22 little bit more.**

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## 1 MR. EISNER: Any discussion? **2 MR. ROY: Aniruddh Roy with 3 Goodman.**  **4 In the second bullet, can we just 5 add "Southeast" and "Southwest," just for**  **6 clarity? Or like two sub-bullets maybe? 7 MR. RAWALD: That's fine. Yes,**  **8 that's fine. 9 MR. ROY: And also, I don't think**  **10 as a group we have discussed the timeline in 11 terms of when this will be implemented,**  **12 because for us it is going to be difficult to 13 implement by January 1st, 2015. We would need**  **14 at least six months. 15 MR. RAWALD: So, I guess it is up**  **16 to the rest of the manufacturers; I mean, how 17 do you feel about that? And six months from**  **18 when? From today or from what? 19 MR. ROY: From the time I believe**  **20 the official guidance on 14 CFR -- if we 21 consider what is in the slides as official**  **22 guidance as of today, then we would need until**

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## 1 April, essentially. **2 MR. RAWALD: Okay. 3 MR. ROY: As soon as we vote on**  **4 this. 5 MR. RAWALD: I personally prefer**  **6 you view this slide as official guidance 7 because I can't guarantee you when else that**  **8 thing would be. And I think that it would be 9 good to get started on this label because we**  **10 are not going to change our tact on that. 11 Waiting on this rule to take place**  **12 will not be a good idea because it could take 13 a little longer than we want, especially for**  **14 six months. So, I would ask that you at 15 least, for purposes of deeming when you start**  **16 doing this, you deem what we said yesterday as 17 the official guidance, given the fact that we**  **18 voted on it and everyone agreed to it. This 19 group has come to an accord on it. We are**  **20 going to do that. But that is my preference, 21 knowing that I am still pushing to get that 14**  **22 SEER guidance out to you guys at some time in**

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## 1 the near future. **2 MR. EISNER: Do we want to put a 3 timeline in here, since it is a voluntary**  **4 requirement? 5 MR. AMRANE: So, this is Karim.**  **6 Can we put a date, like -- I don't 7 know -- April?**  **8 MS. MEYERS: Maybe we should 9 caucus.**  **10 MR. AMRANE: Maybe we should 11 caucus on this.**  **12 MR. RAWALD: Okay. 13 (Whereupon, the foregoing matter**  **14 went off the record at 3:49 p.m. and went back 15 on the record at 3:58 p.m.)**  **16 MR. EISNER: Let's go. 17 We caucused. What did we decide?**  **18 MS. SHEPHERD: March 1st, 2015. 19 MR. EISNER: Okay.**  **20 MR. ROCKY: So, again, just to 21 clarify, the manufacturers agreed that this**  **22 should give us sufficient time to go back to**

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## 1 our manufacturing and engineering groups to **2 discuss how this is going to be implemented. 3 Some will have the ability to do this easily,**  **4 and some will have to do some work. But the 5 group came together and said, as a group, we**  **6 would look at this. 7 And then, Karim, we are discussing**  **8 this as part of the certification program, 9 that that would be the required date or the**  **10 target date for the change of the 11 certification program as well, for those**  **12 members and participants that are not part of 13 this ASRAC Committee.**  **14 So, it gives us a consistent 15 target date.**  **16 Do we want that in the rule? The 17 answer from Karim is that it is acceptable to**  **18 put that in the -- 19 MR. RAWALD: Right. So, in the**  **20 preamble we will discuss that AHRI has 21 indicated that that would be the target date**  **22 for them. By the time the final rule comes**

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## 1 out, they may be well past. So, we will, **2 hopefully, not have that happen, but we will 3 see.**  **4 So, okay, great. 5 MR. EISNER: Okay.**  **6 MR. SACHS: This is Harvey. 7 And I really do just want to say**  **8 thank you for that. I think it is really 9 helpful.**  **10 MR. EISNER: Okay. So, vote on 11 this. Does anybody object?**  **12 MR. BALLO: This is Tim. 13 It is not that I object. I just**  **14 want to be clear that, from the efficiency 15 advocates' perspective -- and I can't speak**  **16 for everybody -- but I think I would still 17 want to reserve the right at least to put the**  **18 issue to FTC to make this a requirement. I 19 realize that the whole group won't go there,**  **20 but I just want to be clear that, by voting 21 for this slide, I am not foreclosing the**  **22 possibility that I would --**

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## 1 MR. RAWALD: Yes, I think we can **2 all agree to that. Nothing here is stopping 3 you from doing what you are legally entitled**  **4 to do as a citizen of the United States to 5 apply to the agency.**  **6 (Laughter.) 7 So, I don't think anyone would**  **8 forestall you on that. Okay. 9 MR. FENSTROM: So, this is Gary**  **10 for the California IOUs. 11 I agree with Tim. And the AHRI**  **12 certification requirement is great for this 13 particular measure, but I still think it needs**  **14 to have regulatory authority behind it to make 15 sure that somebody in the market doesn't see**  **16 that as an opportunity to misrepresent their 17 product and not comply with the agreement.**  **18 MR. EISNER: Okay. With that 19 said, anybody else want to add anything?**  **20 (No response.) 21 Are there any objections to**  **22 unanimously adopting this?**

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## 1 (No response.) **2 Okay. We will treat it as 3 unanimous.**  **4 Okay, that brings us up to the 5 last two slides. Thirty-one, manufacturer**  **6 liability. 7 MR. RAWALD: Right. So, on 31, we** **8 have two pending issues. We have the Amy 9 Shepherd-led coalition to narrow the term of**  **10 product, and then, we have the Doug promise to 11 go back to DOE and obtain three business days**  **12 before such time as manufacturers would be 13 liable for sales of products that are rated**  **14 below 14 SEER to someone who is found to be a 15 routine violator and is currently appealing**  **16 their finding. Okay? 17 MR. DORIA: Yes, this is Jordan.**  **18 One thing I just want to bring up, 19 just because I mentioned it before, is this**  **20 issue of receipt by whom of the information. 21 I don't see any reason why we can't vote on**  **22 it. I might just go back and ask our**

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## 1 attorneys if they have any issues or not. **2 And the reason I say I think we 3 can vote on it, I think we could vote on what**  **4 is there, and then, maybe reconsider further 5 clarification of receipt by whom is necessary.**  **6 That would be my thought. 7 MS. SHEPHERD: Receipt by -- can**  **8 you just clarify that issue? Receipt of what 9 by whom?**  **10 MR. RAWALD: Who in the company 11 would receive knowledge.**  **12 MR. DORIA: Receipt of knowledge, 13 that very last line.**  **14 MS. SHEPHERD: Uh-hum. 15 MR. DORIA: So, receipt,**  **16 acknowledge, like, you know, it is the 17 question of by whom.**  **18 MS. SHEPHERD: Oh, whether you 19 need more definition about that or something?**  **20 MR. DORIA: Well, the question is 21 receipt by whom within our company, right?**  **22 MS. SHEPHERD: Oh, yes, yes, yes.**

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## 1 MR. DORIA: Yes. **2 MR. EISNER: Well, is there any 3 disagreement on who that should be? I mean,**  **4 someone had talked earlier about the person 5 would be the official receiver of the**  **6 subpoena, or something like that. 7 MR. ROCKY: So, Neil, this is**  **8 Bryan. 9 So, the discussion gets to be, as**  **10 a matter of routine business in dealing with 11 our distribution partners, our contractors,**  **12 our suppliers of components, everyday 13 occurrence is someone says, "I reported that**  **14 to the factory." And that can be a 15 salesperson, a customer service person, a**  **16 technical support person, a product manager, 17 a manager, the president of the company, and**  **18 anybody in between who will answer a phone 19 call or pick up an email.**  **20 So, there are cases where, if a 21 message comes in to the CEO of the company,**  **22 that will generally generate rather quick**

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## 1 action to somebody. If it comes in to a **2 salesperson or a service person, then it can 3 take some time to get to the right person,**  **4 especially in a company the size of some of 5 these represented here.**  **6 MR. EISNER: Do we want to add 7 anything to the rule saying to whom it should**  **8 be submitted? 9 MR. AMRANE: This is Karim.**  **10 That is the question. I mean, 11 today all manufacturers submit a certification**  **12 report to DOE, and there is a contact name on 13 those reports. Would it be appropriate -- no?**  **14 It is the same. I think 15 manufacturers on their own, they have to sign**  **16 this. I believe so. And that is how DOE gets 17 the contact information in case of non**  **18 compliance. 19 MR. ROCKY: Not to argue that**  **20 point, but I'll tell you what. I have had 21 several instances in the last four weeks where**  **22 the EPA or the Department of Energy or ENERGY**

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## 1 STAR or somebody who has a contact list still **2 sent the information to the wrong person, 3 where I got commercial information requests,**  **4 and the residential requests went to somebody 5 else who didn't even know they should have**  **6 come to me. 7 So, as part of the rule, I am not**  **8 sure that -- I don't know how to say there 9 should be a specific contact. The contact**  **10 points on record for manufacturers is pretty 11 straightforward, if that is what we want to**  **12 proceed. 13 But there has got to be some**  **14 allowance on that. Whether or not the law 15 specifically, the rule says this is going to**  **16 be sent to an individual by title, not by 17 person/name, that is something that can be**  **18 considered by the Department. But there has 19 got to be some time to properly route the**  **20 request information. 21 MR. EISNER: What would you put in**  **22 the rule? I mean, that is what I am having a**

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## 1 little problem with. If you want it to be **2 sent by the Department, for example, to a 3 particular party by title --**  **4 MR. RAWALD: That's not the 5 question. That's not the question. The**  **6 question is who at the company, knowing the 7 item, will, then, have the 15 days' trigger?**  **8 So, at what point in the bureaucracy that 9 these companies have is DOE going to view it**  **10 as, okay, that is the person; they have 11 knowledge. Now the company is on notice.**  **12 Is it going to be the lowest 13 worker bee? Is it going to be someone up in**  **14 the middle range? Is it going to be the 15 highest levels? And that is going to trigger**  **16 the 15 days by which they have to, then, give 17 us notice. Then, we could then, say, "Okay,**  **18 you guys have reported within a time period. 19 All of your sales, then, aren't a problem."**  **20 So, Jordan wants to go back and 21 talk to his lawyers and kind of get an idea of**  **22 who they should identify, who will be the**

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## 1 right level. **2 I am going to need to confer with 3 the Department really to kind of figure out**  **4 what the best way for us to view that would 5 be.**  **6 So, I think it is a complicated 7 notion, given the variability of corporate law**  **8 and these kinds of things that I am very not 9 astute in, to make sure that we have**  **10 identified the appropriate person as being the 11 person that, then, the corporation has**  **12 knowledge. 13 MR. EISNER: All right. Does**  **14 anybody else have any comments or thoughts? 15 (No response.)**  **16 But you had been suggesting that 17 we could vote on parts of this. Do you still**  **18 think that or do you want to wait until we 19 work out these issues?**  **20 MS. MEYERS: Jordan, would you 21 have a problem if we waited on voting on this**  **22 slide? There's a lot of pending things.**

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## 1 MR. RAWALD: No, I think we should **2 wait on this slide. 3 MR. DORIA: That's fine.**  **4 MR. RAWALD: I think we should 5 wait.**  **6 MR. EISNER: Okay. The last 7 slide, product determined non-compliant.**  **8 MR. RAWALD: And this is the issue 9 that I have explained, hopefully, several**  **10 times to people's satisfaction, but I do want 11 to take more, as I explained.**  **12 So, it is looking at the outdoor 13 unit responsibilities, which we have talked**  **14 about a lot, but also the fact there are some 15 indoor unit folks who have responsibilities.**  **16 If it is their combination that they certified 17 that causes the failure, it is not going to be**  **18 on the outdoor unit manufacturer. It is going 19 to be on the indoor unit manufacturer to make**  **20 sure that they are responsible for all the 21 ones that end up in the South that shouldn't**  **22 have been there. And so, that is what we are**

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## 1 talking about here. **2 And then, the method of minimizing 3 reliability by figuring out, hey, what's out**  **4 there, and what you don't figure out what's 5 out there, then you go and pay for. That is**  **6 kind of the balance we are striking here. 7 MR. EISNER: Any comments?**  **8 (No response.) 9 Are we ready to vote on this?**  **10 Any objections to this being 11 unanimous?**  **12 (No response.) 13 Hearing none, put this one down as**  **14 unanimous. 15 Now it is not quite quarter after.**  **16 We said at quarter after we would talk about 17 the next meeting. Right now, it is scheduled**  **18 for the 15th and the 16th. 19 MR. RAWALD: Laura, can you let us**  **20 know which slides are left still open? 21 MR. EISNER: We have a couple we**  **22 have approved, probably about four or five.**

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## 1 MR. RAWALD: Okay, so that's three **2 more slides that we have to agree to. And 3 some of them require homework, so we can't**  **4 agree to them today. So, we certainly have to 5 come back or have some sort of further**  **6 meeting. So, the question is, do we need two 7 days? Do we want to have two days just in**  **8 case? Do we want to require it in person? Do 9 we want to have it on the phone? Do we want**  **10 to have it on email? I guess we have all 11 these options on the table.**  **12 How do people feel about coming 13 back? Obviously, I will do whatever the group**  **14 wants. 15 MR. EISNER: Let me ask also, does**  **16 anyone who is in the room now have any other 17 issues or essentially the equivalent of any**  **18 more slides they would want to add for 19 discussion and vote? Or is this it, where we**  **20 have covered all the issues everybody feels we 21 should discuss?**  **22 MR. BALLO: So, this is Tim.**

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## 1 You know, we have talked about the **2 issue of prohibited acts for parties other 3 than manufacturers. I don't think we need to**  **4 take that to a vote. I think we could just 5 agree to disagree, but I just think that**  **6 probably should be noted somewhere. 7 MR. DORIA: Tim, this is Jordan.**  **8 That makes sense. And I guess I 9 would just ask -- and if you are not prepared**  **10 to answer or simply don't want to answer, you 11 can -- but I would certainly want to know what**  **12 are maybe those specific other things that you 13 and maybe others would ultimately be saying?**  **14 What are the specific prohibited acts you want 15 that you think we may not get agreement on?**  **16 MR. RAWALD: So, this is Doug. 17 And I think what we have heard is**  **18 the prohibited acts would be the three 19 violations as we have described them plus the**  **20 failure to provide records when requested. 21 Those are the four prohibited acts that I have**  **22 heard from the advocates, I think, to date,**

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## 1 that they would want to at least have **2 conversation about and possibly would want the 3 Department to have the ability to charge civil**  **4 penalties for. 5 MR. BALLO: Yes, I think that's**  **6 right. 7 MR. FENSTROM: This is Gary.**  **8 So, the California IOUs agree with 9 Tim on this point. We would like to see some**  **10 degree of symmetry around prohibited acts. 11 And we acknowledge that there was**  **12 a settlement agreement, but we are not sure it 13 was written in such a way as to completely**  **14 cover every aspect of what might be considered 15 prohibited at the distributor level.**  **16 MR. EISNER: And the last time we 17 discussed this, as I recall, Gary, you said**  **18 you were open to alternatives that will 19 provide you with the objectives you have, even**  **20 if it is not through a prohibited act. 21 MR. FENSTROM: Yes, and that**  **22 continues to be the case. But I haven't heard**

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## 1 satisfactory alternatives yet. **2 MR. RAWALD: So, I guess, just 3 because we do want to get scheduling done**  **4 before Bryan leaves, what we have are our 5 three slides with open issues that are going**  **6 to have to be discussed before the next 7 meeting.**  **8 We have the discussion of 9 prohibited acts, which probably won't take**  **10 much time if the advocates decide that they 11 are going to maintain the position they are**  **12 in, but we want to at least give them the 13 opportunity to bring it up again, if they want**  **14 to. Because I don't want to foreclose that 15 discussion, and I think it is fair to you guys**  **16 to do that. 17 Is there anything else you would**  **18 want to have on the table or is that going to 19 be the sum total of what we have left? And if**  **20 that is, is that a one-day meeting? Do we 21 want to have two days just in case? How do**  **22 people feel at the moment about what we are**

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## 1 going to do next? **2 MR. ROCKY: Doug, this is Bryan. 3 I would like the chance to go back**  **4 and review all of my notes and discussion 5 items to make sure that something of substance**  **6 hasn't been overlooked or has all been 7 covered, as we have discussed.**  **8 I have already made my plane 9 tickets and travel plans. I'm coming here for**  **10 two days, but that can be changed. It is a 11 lot easier to cancel a trip than it is to make**  **12 another one in my organization. 13 In general, I think we probably**  **14 have a one-day meeting or less than a day, but 15 I think it is critical that we do it in person**  **16 face-to-face. 17 And the intent would be to review**  **18 my material, my questions, and submit that 19 back to the group within the next couple days,**  **20 working days. So that people could 21 disseminate the information, and if anybody**  **22 else had things to discuss as well. So, we**

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## 1 have time to prepare. **2 MR. DORIA: This is Jordan. 3 Just a question. I am inclined to**  **4 think one day will be done as well. But one 5 thing I am not sure about, the process of**  **6 creating and, then, reviewing the term sheet 7 and sort of having that final vote, and how**  **8 that would work, and if that needs to be done 9 in person.**  **10 MR. EISNER: What I would suggest 11 is the changes are being made. I am sure**  **12 these can be circulated in the next day or 13 two, because she has been typing as we go**  **14 along. So, that is available to all of you. 15 You can use it for talking with people.**  **16 I would like to throw out the idea 17 that Tim and others who join him can develop**  **18 a one-page slide or multiple pages, if they 19 want to come up with alternatives to things**  **20 they would like to see in prohibited acts. 21 I would strongly suggest that, if**  **22 possible, that could be circulated to the**

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## 1 whole group, so people can look at it before **2 we come back together, and see if we can get 3 unanimity on this issue by changing a few**  **4 words or adding a few words to that slide, 5 rather than going in with the assumption we**  **6 can't get any agreement on it, and we are just 7 simply going to take a vote. That might**  **8 result in the one issue so far that would have 9 a negative vote. So, if it can be resolved,**  **10 let's try to do it efficiently, if we can. 11 MR. BALLO: Yes, my thinking on**  **12 why we wouldn't want to do that is -- and 13 maybe I'm being ridiculous -- but it could be,**  **14 I just didn't want to make an awkward 15 situation where manufacturers are forced to**  **16 take a position, you know, that could impact 17 someone they sell to. So, to me, it seems**  **18 like we are not going to reach unanimity on 19 that point. I don't know whether it is**  **20 something that really needs to come to a vote. 21 It can just be noted separately. But if**  **22 people want to have a vote on it, that's fine.**

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## 1 MR. RAWALD: Perhaps, Tim, you **2 could put forward language that you want to 3 have in the report, and then, we could say,**  **4 okay, we can all agree that that is 5 appropriate, given the fact that there doesn't**  **6 seem to be a large enough voting block to add 7 the prohibited acts at this point, as far as**  **8 I could tell. So, I guess that is what we are 9 sensing here.**  **10 So, perhaps that would be a good 11 way to go. You could put forward, well, this**  **12 is what I want to have in the report. And we 13 could all say, "Yes, we agree with that. That**  **14 makes sense. That captures the position of 15 the group," which is that the advocates would**  **16 like to have this, but we understand that 17 there is a substantial number of the members**  **18 who are not interested in this. And so, while 19 we would think it would be better for the**  **20 Department to have it, we understand that it 21 won't be a result of this particular rule,**  **22 enforcement, and we certainly reserve the**

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## 1 right to a Noticeandf Comment rulemaking to **2 note that we wish the Department would think 3 about this. So, something like that, I guess.**  **4 Okay. Is there anything else 5 anyone else would see bringing up besides the**  **6 Bryan Rocky stuff? 7 (No response.)**  **8 So, it seems like we need, we are 9 going to have two days. Is everyone okay with**  **10 just saying let's be back on the 15th at nine 11 o'clock, and we will go forward from there?**  **12 MS. MEYERS: One day or two? One 13 day or two days? Did we decide that?**  **14 MR. EISNER: We have two days 15 scheduled, but the anticipation of the group**  **16 is that we can do it, the few people who have 17 spoken on it, in one day. So, we can leave**  **18 early, unless you have other business you want 19 to bring up with DOE privately while you are**  **20 here. 21 We might get it done the first**  **22 day, but we might not, especially depending on**

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## 1 what you learn in between the meetings about **2 the willingness of the people you are talking 3 to to go along with what they have heard or if**  **4 we need more information or discussion. 5 I think we want to be prepared**  **6 because we have got an end-of-October date -- 7 MS. MEYERS: Okay.**  **8 MR. EISNER: -- to have two days, 9 if we can get it.**  **10 The meeting, actually, for the 11 15th and the 16th shows that we are meeting in**  **12 room 4A-104. Is that in the basement? 13 MR. RAWALD: That's on the fourth**  **14 floor. And I will ask again if we can meet up 15 here. That was my preference, and I will re**  **16 engage because these reservations get changed 17 over time. But that is where we are coming**  **18 here. 19 MR. McCRUDDEN: So this is Charlie**  **20 with ACCA. 21 Can we still take a crack at that**  **22 trifold? Is that still out there?**

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## 1 MR. RAWALD: I mean, I could ask **2 to bring it back at the next meeting. 3 MR. McCRUDDEN: Okay.**  **4 MR. RAWALD: I can. It is just, 5 you know, there are a lot of approvals that**  **6 take place for these kinds of things. So, I 7 am kind of trying to get that geared up.**  **8 MR. McCRUDDEN: Okay. 9 MR. RAWALD: So, the more I bring**  **10 it back -- but I will ask the question and try 11 to bring it back at the next meeting.**  **12 MR. EISNER: Doug, just to be 13 clear, because the numbering system seems to**  **14 be different for the eighth floor, is this on 15 this part of the building or is this in**  **16 another part of the building, a different 17 elevator bank or something?**  **18 MR. RAWALD: I would have to look 19 at the room number.**  **20 MR. EISNER: It's 4A. 21 MR. RAWALD: It is in the front**  **22 building.**

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## 1 MR. EISNER: It is this building? **2 MR. RAWALD: No, it is in the 3 first building. It is in the front building.**  **4 MR. EISNER: I'm not sure what 5 that means.**  **6 MR. RAWALD: So, when you walk in, 7 you go straight up the elevator in that**  **8 building, as opposed to coming across the 9 bridge to this building.**  **10 MR. EISNER: Across the bridge? 11 MR. RAWALD: Uh-hum, so you stay**  **12 in that building. 13 Oh, we're going to switch it?**  **14 Okay. So, the meeting is switched. You guys 15 will be told when you get here and get your**  **16 badge where to go. So, don't worry about it. 17 I mean, you're going to find the right place.**  **18 And if you don't, then we will vote without 19 you.**  **20 (Laughter.) 21 MR. AMRANE: This is Karim.**  **22 Can we get a copy of the slides as**

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## 1 soon as possible? **2 MR. RAWALD: No, absolutely. So, 3 we will email the slides out tonight, the**  **4 slides as currently dictated with the vote and 5 everything else. And everybody has to bring**  **6 it back to their various constituents, so they 7 can go over it while we are gone.**  **8 MR. EISNER: Now we should talk 9 very briefly about the way this report gets**  **10 submitted to ASRAC. The slides that have been 11 up here, and after everybody agrees to them,**  **12 is what I would anticipate would be sent to 13 ASRAC. We would say, "This is what we agreed**  **14 to." 15 If there is anything else, we can**  **16 discuss it now, if you would like, or we could 17 talk about it next week. If there is anything**  **18 else you would like to have in a cover memo to 19 ASRAC when we submit these slides, be prepared**  **20 to talk about that or submit some language 21 that you would like to see in that report.**  **22 Okay. And that would include, Tim**

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## 1 and others, some language you might want in **2 there about your feelings on this issue about 3 prohibited acts and why you did what you did**  **4 or voted the way you did, that you would like 5 explained to ASRAC. Or, alternatively, also,**  **6 that you would like to be in the preamble to 7 the rule explaining why there were negative**  **8 votes on this. 9 Okay. Do we want to talk some**  **10 more? I know you've got to leave, but the 11 rest of you have got 40 minutes left, if you**  **12 want to talk about any other issues, any other 13 things that you want to go back and talk**  **14 about. Or do you want to go home and sleep? 15 MR. RAWALD: Right.**  **16 MR. EISNER: No, not you; I'm 17 talking about everybody else.**  **18 (Laughter.) 19 Let's consider the meeting**  **20 adjourned. 21 (Whereupon, at 4:21 p.m., the**  **22 meeting was adjourned.)**

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A $200 146:3 171:4 238:2 $5,000 8:8 A-F-T-E-R-N-O-O-N

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266:15 274:5 275:13 281:7 282:3 conditioning 2:6

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context 7:21 53:14

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90:10 contractors 2:7,14 7:5

24:16 30:10 31:18 32:6 33:7 41:18 53:11 53:14 65:1,10 71:17 95:9 134:17 169:4 179:22 180:1 182:16 183:22 184:5,12,22 188:13 189:13 196:12 201:22 214:19 219:1 219:6 224:17 230:16 242:12,14,18 312:11 contractors/dealers

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280:14 county95:21 96:19 couple 53:1,8 90:12

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112:2 144:22 167:16 167:18 187:17 226:11 272:2 COURT 210:21 239:19

282:16 cover 149:1 321:14

331:18 coverage 61:19 covered 20:16 167:12

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136:1 147:21 290:22 day80:5,7 87:16 103:19

253:5 280:12,13,14 280:17,18 323:14 324:4,12 327:12,13 327:17,22 day-to-day88:22 days 53:2,8 79:20 84:1

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74:9 85:3 86:4 91:14 94:19 95:6,9 258:8,14 265:13,14,17 266:22 287:14 301:3 dealer 168:19 dealers 30:9 31:18 32:5

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141:18 144:20 193:13 200:4 deciding 105:1 294:4 decision 6:15 73:3

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157:11 158:18 283:22 definition 65:6 128:7

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### NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 

### C E R T I F I C A T E

This is to certify that the foregoing transcript

In the matter of:

Before:

Date:

Place:

was duly recorded and accurately transcribed under my direction; further, that said transcript is a true and accurate record of the proceedings.

----------------------- Court Reporter 364

Central Air Conditioner Regional Standards Enforcement Working Group

US DOE

10-02-14

Washington, DC