From: Robert Berman [mailto:bermaneconomics@gmail.com] Sent: Wednesday, November 16, 2011 10:30 AM To: Caskey, John Cc: Robert Berman; Hirsch, Bruce R; Steve Nadel; Phil Hopkinson; Eric.Petersen@aksteel.com; jerry.schoen@aksteel.com; Maxine (EMAB) Savitz; mhyland@appanet.org; Raymond.Polinski@ATImetals.com; maheshsampat @bellsouth.net; tpetrosino@carolina.rr.com; dbrender@cda.copper.org; Ja mes.Lass@cleco.com; chris.brown@cogentpowerinc.com; frank.guilbault@cogentpowerinc.com; ted.johnst one@cogentpowerinc.com; Aaron Meyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran; tballo@earthjustice.org; carlosgsiqueiros@eaton.com; eduardorobles@eaton.com; Emily (CONTR) Marche tti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org; DYoung@energ y-solution.com; rick.anderson@faypwc.com; bsmith@federalpacific.com; rgreeson@fed eralpacific.com; carlos.gaytan@ge.com; artrosenfeld@gmail.com; greg.coulter405@gmail. com; ned.efbrush@gmail. com; Richard Parker; Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen; cabolduc@lbl.gov; gjrosenquist@lbl.gov; kcoughlin@lbl.gov; ScottB@LVMetals.com; dave .millure@metglas.com; kwinder@mleainc.com; jrossetti@mlgw.org; Brian Coffey; Caitlin Johnson; Ma tthew Nardotti; Michael Rivest; Zhimei Luo; Creevy, Jim; mwaltner@nrdc.org; rroy@nrdc.org; ro bert.saint@nreca.coop; Teckman@nwcouncil.org; vijay.tendulkar@onyxpower.com; gbf1@ pge.com; chuck.simmons@pgnmail.com; ahofmann@publicpower.org; pkumar@publicpower.org; adelaski@standardsASAP.org; jmauer@standardsasap.org; wes.patterson@us.abb.com; chad.kennedy@us.schneider-electric.com; thomas.patzner@us.schneider-electric.com; charlied@uus.org Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference I agree. It's a small data point. GMP provides some reassurance that impacts of increased efficiency standards don't pose a problem for small IOUs, even at very high efficiency levels. I had an opportunity to talk with GMP's directorof field operations, as I was particularly interested in whether there we re weight problems and asked about his experience with pole change-outs due to the increased weight. He said that no special procedures were used (same crew and buckets) and no pole changes-outs. Not statistically valid. Not main stream market (GMP buys on TOC). Clearly anecdotal only. But their perspective, experience and what they can tolerate is something I find interesting and edifying.



### Regards,

Robert A. Berman, Principal Berman Economics www.BermanEconomics.com 1915 Grand Court Vienna, VA 22182 703

‐ 281

‐ 0490 703

‐ 655

‐ 8398 (cell) BermanEconomics@gmail.comOn Nov 15, 2011, at 5:53 PM, Caskey, John wrote:

For the record, Green Mountain Power only has 90,000 customers and had an average rate of 12.4 cents per kilowatt hour in 2010. I would pers onally not support creati ng a national standard around the experience of this tiny utility.

Sent from John Caskey AVP - NEMA - Industry Operations Office 703.841.3233 Mobile 703.350.6886

On Nov 14, 2011, at 3:58 PM, "Robert Berman" <bermaneconomics@gmail.com< mailto:bermaneconomics@gmail.com >> wrote: You have an argument into my statement that is not there. I do not asse rt that efficiency was THE reason for the purchase; only that the pric e of making a transforme r with M3 at that efficiency was not a deterrent as the transformer was produced a nd sold. The if high efficiency were not a relevant factor, they could have been produced and sold at lower efficiencies with the other specs. They were not. I also note that Green Mountain Power, for example, has bought M3 efficiencies as high as 99.59%; and e fficiency is their primary concern.

Finally, it's not clear to me that Jaguar and Cad illac purchases are analogous to transformers. I don't know of anyone who buys transformers for status or comfort -- probably not for mpg either.

Regards,

Robert A. Berman, Principal Berman Economics 1915 Grand Court Vienna, VA 22182 703.281.0490 703.655.8398 (cell)

< mailto:Berman.Economics@gmail.com >Berman.Economics@gmail.com< mailto:Berman.Econ omics@gmail.com > < http://www.BermanEconomics.com >www.BermanEconomics.com< http://www.BermanEcono mics.com > Sent from my iPhone

On Nov 14, 2011, at 3:14 PM, "Caskey, John"

<< mailto:Joh_Caskey@nema.org >Joh_Caskey@nema.org< mailto:Joh_Caskey@nema.org >> wrote:

RobertYou continue to reference the ABB data presen ted by Wes Patterson as in dicating that since a transformer was sold at the EL3 or EL4 efficien cy level that this level is cost effective. Specifically, you state “Market sale s data, however, is quite real. In this case it unambiguously says that the transformers at EL4 are an econom ically reasonable choice -- the market has, in fact, selected that choice on multiple occasions”. This is simply NOT TRUE. Just because a person buys as Jaguar for $100k that gets 25 mpg in place of a $40k Cadillac that gets 20 mpg; does NOT mean that the $60k delta will ever be “economically reasonable” for the extra 5 mpg. You seem to be assuming that all of the transformers purchased from ABB that meet the efficiency levels were purchased for effici ency reasons. This is simply not fact. The fact is that one large transformer manufacturer was able to produce distribution transformers at EL3 and EL4 using M3 steel. To my knowledge, Wes di d not state the price for these transformers. In addition, just because one company can produce th is product doesn’t mean that all transformer manufacturers can make this productat this level using M3 steel.

My hope is that we can all understand the facts and the analysis results better over the next few weeks so that we can negotiate a solution thatbenefits the consumers, the ratepayers, the manufacturers, the environment, etc. I plan to stay at the table till the end of the negotiation process. Regards,

John

John F. Caskey, CEM Assistant Vice President, Industry Operations National Electrical Manufacturers Assoc. (NEMA) 1300 North 17th Street - Suite 1752 Rosslyn, VA 22209 john.caskey@nema.org< mailto:john.caskey@nema.org > 703-841-3233 Voice 703-841-3333 FAX 703-350-6886 Cell From: Robert Berman [ mailto:bermaneconomics@gmail.com ] Sent: Monday, November 14, 2011 1:19 PM To: Hirsch, Bruce R Cc: 'Steve Nadel'; Robert Berman; Phil Hopkinson; < mailto:Eric.Petersen@aksteel.com > Eric.Petersen@aksteel.com< mailto:Eric.Petersen@aksteel.com >; < mailto:jerry.schoen@aksteel.com > jerry.schoen@aksteel.com< mailto:jerry.schoen@aksteel.com >; Maxine (EMAB) Savitz;

< mailto:mhyland@appanet.org > mhyland@appanet.org< mailto:mhyland@appanet.org >; < mailto:Raymond.Polinski@ATImetals.com > Raymond.Polinski@ATImetals.com< mailto:Raymond.Polinski@ATImetals.com >; < mailto:maheshsampat@bellsouth.net > maheshsampat@bellsouth.net< mailto:maheshsampat@bellsouth.net >;< mailto:tpetrosino@carolina.rr.com > tpetrosino@carolina.rr.com< mailto:tpetrosino@carolina.rr.com >; < mailto:dbrender@cda.copper.org > dbrender@cda.copper.org< mailto:dbrender@cda.copper.org >; < mailto:James.Lass@cleco.com > James.Lass@cleco.com< mailto:James.Lass@cleco.com >; < mailto:chris.brown@cogentpowerinc.com > chris.brown@cogentpowerinc.com< mailto:chris.brown@cogentpowerinc.com >; < mailto:frank.guilbault@cogentpowerinc.com > frank.guilbault@cogentpowerinc.com< mailto:frank.guilbault@cogentpowerinc.com >; < mailto:ted.johnstone@cogentpowerinc.com > ted.johnstone@cogentpowerinc.com< mailto:ted.johnstone@cogentpowerinc.com >; Aaron Meyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran; < mailto:tballo@earthjustice.org > tballo@earthjustice.org< mailto:tballo@earthjustice.org >; < mailto:carlosgsiqueiros@eaton.com > carlosgsiqueiros@eaton.com< mailto:carlosgsiqueiros@eaton.com >; < mailto:eduardorobles@eaton.com > eduardorobles@eaton.com< mailto:eduardorobles@eaton.com >; Emily (CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky; < mailto:srosenstock@eei.org > srosenstock@eei.org< mailto:srosenstock@eei.org >; < mailto:DYoung@energy-solution.com > DYoung@energy-solution.com< mailto:DYoung@energy-solution.com >; < mailto:rick.anderson@faypwc.com > rick.anderson@faypwc.com< mailto:rick.anderson@faypwc.com >; < mailto:bsmith@federalpacific.com > bsmith@federalpacific.com< mailto:bsmith@federalpacific.com >; < mailto:rgreeson@federalpacific.com > rgreeson@federalpacific.com< mailto:rgreeson@federalpacific.com >; < mailto:carlos.gaytan@ge.com > carlos.gaytan@ge.com< mailto:carlos.gaytan@ge.com >; < mailto:artrosenfeld@gmail.com > artrosenfeld@gmail.com< mailto:artrosenfeld@gmail.com >; < mailto:greg.coulter405@gmail.com > greg.coulter405@gmail.com< mailto:greg.coulter405@gmail.com >; < mailto:ned.efbrush@gmail.com > ned.efbrush@gmail.com< mailto:ned.efbrush@gmail.com >; Richard Parker; < mailto:Paul.Ryan@hitmet.com > Paul.Ryan@hitmet.com< mailto:Paul.Ryan@hitmet.com >; < mailto:jhodge@howard.com > jhodge@howard.com< mailto:jhodge@howard.com >; Daniel Cohen;

< mailto:cabolduc@lbl.gov > cabolduc@lbl.gov< mailto:cabolduc@lbl.gov >; < mailto:gjrosenquist@lbl.gov > gjrosenquist@lbl.gov< mailto:gjrosenquist@lbl.gov >; < mailto:kcoughlin@lbl.gov > kcoughlin@lbl.gov< mailto:kcoughlin@lbl.gov >; < mailto:ScottB@LVMetals.com > ScottB@LVMetals.com< mailto:ScottB@LVMetals.com >; < mailto:dave.millure@metglas.com > dave.millure@metglas.com< mailto:dave.millure@metglas.com >; < mailto:kwinder@mleainc.com > kwinder@mleainc.com< mailto:kwinder@mleainc.com >; < mailto:jrossetti@mlgw.org > jrossetti@mlgw.org< mailto:jrossetti@mlgw.org >; < mailto:brian.coffey@navigant.com > brian.coffey@navigant.com< mailto:brian.coffey@navigant.com >; < mailto:caitlin.johnson@navigant.com > caitlin.johnson@navigant.com< mailto:caitlin.johnson@navigant.com >; < mailto:matthew.nardotti@navigant.com >matthew.nardotti@navigant.com< mailto:matthew.nardotti@navigant.com >; < mailto:mrivest@navigant.com > mrivest@navigant.com< mailto:mrivest@navigant.com >; < mailto:zhimei.luo@navigant.com > zhimei.luo@navigant.com< mailto:zhimei.luo@navigant.com >; Creevy, Jim; Caskey, John;

< mailto:mwaltner@nrdc.org > mwaltner@nrdc.org< mailto:mwaltner@nrdc.org >; < mailto:rroy@nrdc.org > rroy@nrdc.org< mailto:rroy@nrdc.org >; < mailto:robert.saint@nreca.coop > robert.saint@nreca.coop< mailto:robert.saint@nreca.coop >; < mailto:Teckman@nwcouncil.org > Teckman@nwcouncil.org< mailto:Teckman@nwcouncil.org >; < mailto:vijay.tendulkar@onyxpower.com > vijay.tendulkar@onyxpower.com< mailto:vijay.tendulkar@onyxpower.com >; < mailto:gbf1@pge.com > gbf1@pge.com< mailto:gbf1@pge.com >; < mailto:chuck.simmons@pgnmail.com > chuck.simmons@pgnmail.com< mailto:chuck.simmons@pgnmail.com >; < mailto:ahofmann@publicpower.org > ahofmann@publicpower.org< mailto:ahofmann@publicpower.org >; < mailto:pkumar@publicpower.org > pkumar@publicpower.org< mailto:pkumar@publicpower.org >; < mailto:adelaski@standardsASAP.org > adelaski@standardsASAP.org< mailto:adelaski@standardsASAP.org >; < mailto:jmauer@standardsasap.org > jmauer@standardsasap.org< mailto:jmauer@standardsasap.org >; < mailto:wes.patterson@us.abb.com > wes.patterson@us.abb.com< mailto:wes.patterson@us.abb.com >; < mailto:chad.kennedy@us.schneider-electric.com > chad.kennedy@us.schneiderelectric.com< mailto:chad.kennedy@us.schneider-electric.com >; < mailto:thomas.patzner@us.schneider-electric.com > thomas.patzner@us.schneiderelectric.com< mailto:thomas.patzner@us.schneider-electric.com >; < mailto:charlied@uus.org > charlied@uus.org< mailto:charlied@uus.org > Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference

Bruce,

Those upfront transformer costs ar e compared to the fuel cost savings in the LCC approach. The discounting process values fuel cost saving in the future at less than the costs in curred today. The positive LCC means that that the efficiency a dvocates are not ignoring costs, but comparing them with benefits and finding that the consumer is better off and will be paying less. One does not, however, need to rely on the LBL analysis to see this. The ABB sales data shows M3 transformers being delivered at EL4 efficiency. As a modeler, I am always skeptical of model results -- people do not live in computers and certainly not on in some of the back-of-theenvelope calculations that we have seen from others. Market sales data, however, is quite real. In this case it unambiguously says that the tran sformers at EL4 are an economically reasonable choice -- the market has, in fact, selected that choice on multiple occasions.

To the extent that there are dug-in positions, again the evidence does not support that it is the efficiency advocates that ar e dug-in. Although EL4 is achievabl e and beneficial based both onmarket data and LBL analyses, the proponents of greater efficiency indicated a willingness to compromise. It is certain repr esentatives of the industry who ha ve consistently said either no change, or a fractional change. It is those industry re presentatives who appear to be advancing the "my position or nothing" attitude. Although I happen to agree that substantial movement towards more efficient distribution systems, I also note that these are incredibly expensive meetings. We have a large number of very se nior people devoting s ubstantial time to the meetings, their preparation and non-trivial trav el costs. These peopl e have other things competing for their time. If you and others hone stly believe that you cannot agree to a higher standard, and place no value on regulatory certain ty, then let's not waste additional time and money. Let's just say that we gave it a good shot, cut our losses here, and make our respective cases to DOE outside the negotiation process and let DOE make it's own decision. I believe that they certainly have sufficient in formation to support their positi on in a February NOPR. I can't imagine what else they would need.

Regards,

Robert A. Berman, Principal Berman Economics

< http://www.BermanEconomics.com >www.BermanEconomics.com< http://www.BermanEcono mics.com > 1915 Grand Court Vienna, VA 22182 703-281-0490 703-655-8398 (cell)

< mailto:BermanEconomics@gmail.com >BermanEconomics@gmail.com< mailto:BermanEcono mics@gmail.com >

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

Steve,

I am disappointed with your a pproach to this assignment.

It appears that negotiation to you is defined as agreeing with your positi on --- or calling it off. It is unfortunate that you believe the American pub lic, especially in these trying economic times, should be expected to foot the (ver y large) bill for more efficient tr ansformers when it is still not certain that there is value in doing so. You have clung to one suspect calculation that indicates there may be a payback --- in the distant future --- and only if all the assumptions being made pan out. You choose to ignore the co sts, not yet factored in, on US jobs, US businesses and the reliability of supply of an item so desp erately needed for our economy to expand.

This is not a “cut and dried” economic decision but is one that needs to be taken seriously for themajor impact it could have on the electric suppl y of the US and the financial position of the American public. If DOE makes the final deci sion on this, I would expect them to do “due diligence” in considering all the effects there d ecision would have on US businesses and the US economy. Let it be known that the Utility Industry has no t pulled out of the negotiation process and will continue to work with DOE to reach the right decision.

Bruce.

From: Steve Nadel [ mailto:snadel@aceee.org ]< mailto:[mailto:snadel@aceee.org] > Sent: Friday, November 11, 2011 2:16 PM To: Robert Berman; Phil Hopkinson Cc: < mailto:Eric.Petersen@aksteel.com > Eric.Petersen@aksteel.com< mailto:Eric.Petersen@aksteel.com >; < mailto:jerry.schoen@aksteel.com > jerry.schoen@aksteel.com< mailto:jerry.schoen@aksteel.com >; Maxine (EMAB) Savitz;

< mailto:mhyland@appanet.org > mhyland@appanet.org< mailto:mhyland@appanet.org >; < mailto:Raymond.Polinski@ATImetals.com > Raymond.Polinski@ATImetals.com< mailto:Raymond.Polinski@ATImetals.com >; < mailto:maheshsampat@bellsouth.net > maheshsampat@bellsouth.net< mailto:maheshsampat@bellsouth.net >; Hirsch, Bruce R;

< mailto:tpetrosino@carolina.rr.com > tpetrosino@carolina.rr.com< mailto:tpetrosino@carolina.rr.com >;< mailto:dbrender@cda.copper. org >dbrender@cda.copper.org< mailto:dbrender@cda.copper.org >; < mailto:James.Lass@cleco.com > James.Lass@cleco.com< mailto:James.Lass@cleco.com >; < mailto:chris.brown@cogentpowerinc.com > chris.brown@cogentpowerinc.com< mailto:chris.brown@cogentpowerinc.com >; < mailto:frank.guilbault@cogentpowerinc.com > frank.guilbault@cogentpowerinc.com< mailto:frank.guilbault@cogentpowerinc.com >; < mailto:ted.johnstone@cogentpowerinc.com > ted.johnstone@cogentpowerinc.com< mailto:ted.johnstone@cogentpowerinc.com >; Aaron Meyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran; < mailto:tballo@earthjustice.org > tballo@earthjustice.org< mailto:tballo@earthjustice.org >; < mailto:carlosgsiqueiros@eaton.com > carlosgsiqueiros@eaton.com< mailto:carlosgsiqueiros@eaton.com >; < mailto:eduardorobles@eaton.com > eduardorobles@eaton.com< mailto:eduardorobles@eaton.com >; Emily (CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky; < mailto:srosenstock@eei.org > srosenstock@eei.org< mailto:srosenstock@eei.org >; < mailto:DYoung@energy-solution.com > DYoung@energy-solution.com< mailto:DYoung@energy-solution.com >; < mailto:rick.anderson@faypwc.com > rick.anderson@faypwc.com< mailto:rick.anderson@faypwc.com >; < mailto:bsmith@federalpacific.com > bsmith@federalpacific.com< mailto:bsmith@federalpacific.com >; < mailto:rgreeson@federalpacific.com > rgreeson@federalpacific.com< mailto:rgreeson@federalpacific.com >;< mailto:carlos.gaytan@ge.com > carlos.gaytan@ge.com< mailto:carlos.gaytan@ge.com >; < mailto:artrosenfeld@gmail.com > artrosenfeld@gmail.com< mailto:artrosenfeld@gmail.com >; < mailto:greg.coulter405@gmail.com > greg.coulter405@gmail.com< mailto:greg.coulter405@gmail.com >; < mailto:ned.efbrush@gmail.com > ned.efbrush@gmail.com< mailto:ned.efbrush@gmail.com >; Richard Parker; < mailto:Paul.Ryan@hitmet.com > Paul.Ryan@hitmet.com< mailto:Paul.Ryan@hitmet.com >; < mailto:jhodge@howard.com > jhodge@howard.com< mailto:jhodge@howard.com >; Daniel Cohen;

< mailto:cabolduc@lbl.gov > cabolduc@lbl.gov< mailto:cabolduc@lbl.gov >; < mailto:gjrosenquist@lbl.gov > gjrosenquist@lbl.gov< mailto:gjrosenquist@lbl.gov >; < mailto:kcoughlin@lbl.gov > kcoughlin@lbl.gov< mailto:kcoughlin@lbl.gov >; < mailto:ScottB@LVMetals.com > ScottB@LVMetals.com< mailto:ScottB@LVMetals.com >; < mailto:dave.millure@metglas.com > dave.millure@metglas.com< mailto:dave.millure@metglas.com >; < mailto:kwinder@mleainc.com > kwinder@mleainc.com< mailto:kwinder@mleainc.com >;< mailto:jrossetti@mlgw.org >jrossetti@ mlgw.org< mailto:jrossetti@mlgw.org >; < mailto:brian.coffey@navigant.com > brian.coffey@navigant.com< mailto:brian.coffey@navigant.com >; < mailto:caitlin.johnson@navigant.com > caitlin.johnson@navigant.com< mailto:caitlin.johnson@navigant.com >; < mailto:matthew.nardotti@navigant.com > matthew.nardotti@navigant.com< mailto:matthew.nardotti@navigant.com >; < mailto:mrivest@navigant.com > mrivest@navigant.com< mailto:mrivest@navigant.com >; < mailto:zhimei.luo@navigant.com > zhimei.luo@navigant.com< mailto:zhimei.luo@navigant.com >; < mailto:Jim.creevy@nema.org > Jim.creevy@nema.org< mailto:Jim.creevy@nema.org >; < mailto:john.caskey@nema.org > john.caskey@nema.org< mailto:john.caskey@nema.org >;< mailto:mwaltner@nrdc.org >mwaltner @nrdc.org< mailto:mwaltner@nrdc.org >; < mailto:rroy@nrdc.org > rroy@nrdc.org< mailto:rroy@nrdc.org >; < mailto:robert.saint@nreca.coop > robert.saint@nreca.coop< mailto:robert.saint@nreca.coop >; < mailto:Teckman@nwcouncil.org > Teckman@nwcouncil.org< mailto:Teckman@nwcouncil.org >; < mailto:vijay.tendulkar@onyxpower.com > vijay.tendulkar@onyxpower.com< mailto:vijay.tendulkar@onyxpower.com >; < mailto:gbf1@pge.com > gbf1@pge.com< mailto:gbf1@pge.com >; < mailto:chuck.simmons@pgnmail.com > chuck.simmons@pgnmail.com< mailto:chuck.simmons@pgnmail.com >; < mailto:ahofmann@publicpower.org > ahofmann@publicpower.org< mailto:ahofmann@publicpower.org >;< mailto:pkumar@publicpow er.org >pkumar@publicpower.org< mailto:pkumar@publicpower.org >; < mailto:adelaski@standardsASAP.org > adelaski@standardsASAP.org< mailto:adelaski@standardsASAP.org >; < mailto:jmauer@standardsasap.org > jmauer@standardsasap.org< mailto:jmauer@standardsasap.org >; < mailto:wes.patterson@us.abb.com > wes.patterson@us.abb.com< mailto:wes.patterson@us.abb.com >; < mailto:chad.kennedy@us.schneider-electric.com > chad.kennedy@us.schneider-electric.com< mailto:chad.kennedy@us.schneider-electric.com >; < mailto:thomas.patzner@us.schneider-electric.com > thomas.patzner@us.schneiderelectric.com< mailto:thomas.patzner@us.schneider-electric.com >; < mailto:charlied@uus.org > charlied@uus.org< mailto:charlied@uus.org > Subject: RE: Negotiated Rulemaking - Dist ribution Transformers Teleconference

Phil,

We're in the middle of negotiations and some of us have made clear that no or little change to the standard is not acceptable as the DOE analysis justifies higher standards (higher levels are technically feasible and cost-eff ective on a life-cycle cost basis). The efficiency groups would rather leave the decision to DOE than agree to su bpar standards. If you and other participants want to veto any significant cha nge in the standard, then we might as well save some time, break off negotiations and just make our respective argume nts to DOE. Is that what you want to do? If the answer is no, then let's start talking abouthow to make higher standards acceptable rather than continue to make arguments about why low standards are needed. We're all busy and if we're going to make progress we need to break new ground and not rehash old ground.

Steve

Phil Hopkinson

<< mailto:phopkinson@hvolt.com >phopkinson@hvolt.com< mailto:phopkinson@hvolt.com >> 11/11/2011 1:16 PM >>> Hello Robert and all:

You must not have looked at Je rry Corkran’s message because he found the cost to be $17/watt, which is pretty close to my number, where both Jerry and I have used M3 co re steel to derive the cost curve. The fact is that th e cost curve is very steep with M3 and quickly hits the brick wall.

1. I have checked Carlos Gaytan’s cost curves as well and he is finding about the same relationship with M3. 2. I have checked Wes Patterson’s data as well and he is finding an M3 cost curve about the same as mine. 3. I have checked the OPS data with M3 as well and it too is very close to $20/watt. a. For example, for design line 1 they show an efficiency at50% load of 99.08% which translates to 232 watts of loss and sells for $1,960.73. b. They show another M3 design with an efficiency of 99.26% which translates to 186 watts of loss and sells for $2962.11. c. The change in selling price is $2,962.11-$1,906.11 or +$1,001.38 d. The change in watts is 232-186 or -46 watts. e. The OPS $/watt is therefore, $1,001.38/46 watts or $21.77 f. Hence we see that all data sources are pointing to cost per wa tt of ~$20 /watt saved to go from the current mandatory standard to EL1. I get $30/watt to go to EL2 and $53/watt to go to EL3 4. The fact is that M3 is about out of gas and the DOE did a good job in the last rule making.5. The fact also is that a push to a nything beyond present does not show economic value and I do not support it. 6. The fact also is that a push to higher efficiencies will kill the new transformer market and open up the rebuild market, destroying jobs at th e new transformer manuf acturers and resulting in transformers of lower efficiency wh ich will cost ener gy and not save it.

Best regards,

Phil

Philip J Hopkinson, PE President & CEO HVOLT Inc. 3704 High Ridge Rd. Charlotte, NC 28270

< mailto:phopkinson@hvolt.com >phopkinson@hvolt.com< mailto:phopkinson@hvolt.com > Ph 704-846-3290 Fx 704-845-2520 Cell 704-236-3320

< http://www.hvolt.com/ >www.hvolt.com< http://www.hvolt.com >

From: Robert Berman [ mailto:bermaneconomics@gmail.com ]< mailto:[mailto:bermaneconomics@gmail.com] > Sent: Friday, November 11, 2011 11:16 AM To: Phil Hopkinson Cc: Corkran, Jerry L; Richard Parker; Freeman, Jeremiah (CONTR);

< mailto:rick.anderson@faypwc.com > rick.anderson@faypwc.com< mailto:rick.anderson@faypwc.com >; < mailto:tballo@earthjustice.org > tballo@earthjustice.org< mailto:tballo@earthjustice.org >; < mailto:ScottB@LVMetals.com > ScottB@LVMetals.com< mailto:ScottB@LVMetals.com >; < mailto:john.caskey@nema.org > john.caskey@nema.org< mailto:john.caskey@nema.org >; Cymbalsky, John; < mailto:adelaski@standardsASAP.org > adelaski@standardsASAP.org< mailto:adelaski@standardsASAP.org >;< mailto:Teckman@nwco uncil.org >Teckman@nwcouncil.org< mailto:Teckman@nwcouncil.org >; < mailto:gbf1@pge.com > gbf1@pge.com< mailto:gbf1@pge.com >; < mailto:carlos.gaytan@ge.com > carlos.gaytan@ge.com< mailto:carlos.gaytan@ge.com >; < mailto:rgreeson@federalpacific.com > rgreeson@federalpacific.com< mailto:rgreeson@federalpacific.com >; < mailto:bruce.r.hirsch@bge.com > bruce.r.hirsch@bge.com< mailto:bruce.r.hirsch@bge.com >; < mailto:jhodge@howard.com > jhodge@howard.com< mailto:jhodge@howard.com >; < mailto:mhyland@appanet.org > mhyland@appanet.org< mailto:mhyland@appanet.org >; < mailto:dave.millure@metglas.com > dave.millure@metglas.com< mailto:dave.millure@metglas.com >; < mailto:snadel@aceee.org > snadel@aceee.org< mailto:snadel@aceee.org >;< mailto:wes.patterson@us.abb.com >wes.patterso n@us.abb.com< mailto:wes.patterson@us.abb.com >; < mailto:Eric.Petersen@aksteel.com > Eric.Petersen@aksteel.com< mailto:Eric.Petersen@aksteel.com >; < mailto:Raymond.Polinski@ATImetals.com >Raymond.Polinski@ATImetals.com< mailto:Raymond.Polinski@ATImetals.com >; < mailto:artrosenfeld@gmail.com > artrosenfeld@gmail.com< mailto:artrosenfeld@gmail.com >; < mailto:srosenstock@eei.org > srosenstock@eei.org< mailto:srosenstock@eei.org >; < mailto:rroy@nrdc.org > rroy@nrdc.org< mailto:rroy@nrdc.org >; < mailto:robert.saint@nreca.coop > robert.saint@nreca.coop< mailto:robert.saint@nreca.coop >; < mailto:chuck.simmons@pgnmail.com > chuck.simmons@pgnmail.com< mailto:chuck.simmons@pgnmail.com >;< mailto:kwinder@mleai

nc.com >kwinder@mleainc.com< mailto:kwinder@mleainc.com >; < mailto:mwaltner@nrdc.org > mwaltner@nrdc.org< mailto:mwaltner@nrdc.org >; < mailto:jerry.schoen@aksteel.com > jerry.schoen@aksteel.com< mailto:jerry.schoen@aksteel.com >; < mailto:Paul.Ryan@hitmet.com > Paul.Ryan@hitmet.com< mailto:Paul.Ryan@hitmet.com >; < mailto:ahofmann@publicpower.org > ahofmann@publicpower.org< mailto:ahofmann@publicpower.org >; < mailto:pkumar@publicpower.org > pkumar@publicpower.org< mailto:pkumar@publicpower.org >; < mailto:bsmith@federalpacific.com > bsmith@federalpacific.com< mailto:bsmith@federalpacific.com >; < mailto:greg.coulter405@gmail.com > greg.coulter405@gmail.com< mailto:greg.coulter405@gmail.com >;< mailto:jmauer@standardsas ap.org >jmauer@standardsasap.org< mailto:jmauer@standardsasap.org >; Cohen, Daniel; Meyers, Aaron; < mailto:Jim.creevy@nema.org > Jim.creevy@nema.org< mailto:Jim.creevy@nema.org >; < mailto:jrossetti@mlgw.org > jrossetti@mlgw.org< mailto:jrossetti@mlgw.org >; < mailto:cabolduc@lbl.gov > cabolduc@lbl.gov< mailto:cabolduc@lbl.gov >; < mailto:kcoughlin@lbl.gov > kcoughlin@lbl.gov< mailto:kcoughlin@lbl.gov >; < mailto:brian.coffey@navigant.com > brian.coffey@navigant.com< mailto:brian.coffey@navigant.com >; < mailto:mrivest@navigant.com > mrivest@navigant.com< mailto:mrivest@navigant.com >; < mailto:gjrosenquist@lbl.gov > gjrosenquist@lbl.gov< mailto:gjrosenquist@lbl.gov >;< mailto:caitlin.johnson@navigant.com >cai tlin.johnson@navigant.com< mailto:caitlin.johnson@navigant.com >; < mailto:zhimei.luo@navigant.com > zhimei.luo@navigant.com< mailto:zhimei.luo@navigant.com >; Marchetti, Emily (CONTR);

< mailto:charlied@uus.org > charlied@uus.org< mailto:charlied@uus.org >; < mailto:DYoung@energy-solution.com > DYoung@energysolution.com< mailto:DYoung@energy-solution.com >; < mailto:James.Lass@cleco.com > James.Lass@cleco.com< mailto:James.Lass@cleco.com >; < mailto:maheshsampat@bellsouth.net > maheshsampat@bellsouth.net< mailto:maheshsampat@bellsouth.net >;< mailto:matthew.nardotti @navigant.com >matthew.nardotti@navigant.com< mailto:matthew.nardotti@navigant.com >; Raba, Jim; Savitz, Maxine (EMAB); < mailto:tpetrosino@carolina.rr.com > tpetrosino@carolina.rr.com< mailto:tpetrosino@carolina.rr.com >; < mailto:chris.brown@cogentpowerinc.com > chris.brown@cogentpowerinc.com< mailto:chris.brown@cogentpowerinc.com >; < mailto:ted.johnstone@cogentpowerinc.com > ted.johnstone@cogentpowerinc.com< mailto:ted.johnstone@cogentpowerinc.com >; < mailto:frank.guilbault@cogentpowerinc.com >frank.guilbault@cogentpowerinc.com< mailto:frank.guilbault@cogentpowerinc.com >;< mailto:ne d.efbrush@gmail.com >ned.efbrush@gmail.com< mailto:ned.efbrush@gmail.com >; < mailto:dbrender@cda.copper.org > dbrender@cda.copper.org< mailto:dbrender@cda.copper.org >; < mailto:chad.kennedy@us.schneider-electric.com > chad.kennedy@us.schneiderelectric.com< mailto:chad.kennedy@us.schneider-electric.com >; < mailto:eduardorobles@eaton.com > eduardorobles@eaton.com< mailto:eduardorobles@eaton.com >; < mailto:vijay.tendulkar@onyxpower.com > vijay.tendulkar@onyxpower.com< mailto:vijay.tendulkar@onyxpower.com >; < mailto:thomas.patzner@us.schneider-electric.com > thomas.patzner@us.schneiderelectric.com< mailto:thomas.patzner@us.schneiderelectric.com >;< mailto:carlosgsiqueiros@eaton.com >carlosgsiqueiros@eaton.com< mailto:carlos gsiqueiros@eaton.com >; Robert Berman; Trujillo, Antonio; Moore, Jack C Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference

Even if it were that high (and Mr. Hopkinson is the only one I've seen who has put the number anywhere near that), the efficiency objectiv e is saving Watt-hours (energy) not Watts (the capacity to save energy) . One Watt saved fo r 8,760 hours per year for 30 years is 262.8 kWh (not counting leap years). Even at Mr. Hutchi nson's $20, that's just over 7¢ / kWh. If Mr. Hutchinson will examine his electric bill, as he ha s reported, he will see that even as high as 7¢ it's a good buy, and that assumes we put a ZERO valu e on any environmental benefits (which is why DOE agreed to reconsider its 2007 MEPS in the first place.

Indeed, the cost of losses per Watt (roughly the A factors that O PS has been using) are no where near the $20 claimed here. Moreover, as ABB and others have pointed out, the proper approach would have been to minimize cost subject to e fficiency, not A & B, which would have resulted in a lower, flatter curve to the asymptote. AB B's actual market data -- physical transformers produced and delivered -- shows a competitive market for M3 transformers even at EL4 efficiency. You can make all th e hypothetical claims you want t o, gentlemen, the market is the real world.

Regards,

Robert A. Berman, Principal Berman Economics

< http://www.BermanEconomics.com >www.BermanEconomics.com< http://www.BermanEcono mics.com > 1915 Grand Court Vienna, VA 22182 703-281-0490 703-655-8398 (cell)

< mailto:BermanEconomics@gmail.com >BermanEconomics@gmail.com< mailto:BermanEcono mics@gmail.com >On Nov 10, 2011, at 6:53 PM, Phil Hopkinson wrote:

Well stated Jerry

That is also what my analysis a nd report said. If you restrict to M3 then the cost of EL1 rises to about $20/watt.

Phil

Phil Hopkinson,P.E. HVolt Inc. 704-846-3290 F: 704-845-2520 C: 704-236-3320

< mailto:phopkinson@hvolt.com >phopkinson@hvolt.com< mailto:phopkinson@hvolt.com > On Nov 10, 2011, at 18:04, "Corkran, Jerry L"

<< mailto:Jerry.Corkran@CooperIndustries.com >Jerry.Corkran@CooperIndustries.com< mailto:J erry.Corkran@CooperIndustries.com >> wrote: To Mr. Parker and the DOE working group,

The reason for the request for the incremental co st of the losses is that the current DOE efficiency levels can be obtaine d if the design is optimized at about $4 per core watt and $1 per winding watt at full load. At the DOE 50% kVA ra ting, this is the same as evaluating the losses or optimizing the design at about $4 per total watts loss.

The present DOE efficiency loss level results in transformer designs about like many utilities were purchasing their transformers before 2007. The utilities were pur chasing the efficiency levels that were justified based on the cost of losses. A few utilities were purchasing higher efficiency that the 2007 efficiency rules becaus e of the calculated cost of energy being higher than the $4/$1 loss evaluation.

What came up in the discussion last week was ev en for loss level 1, the incremental cost of losses was about $17 per watt for the design ch ecked, between the present DOE losses an efficiency level of DEL1. The added cost of $17 per watt is so much higher than the typical cost of the energy for the utilities, that it is ve ry questionable that the DOE payback estimates are accurate. A 3% interest rate may be a factor in the payback calculations.

Jerry Corkran

From: Richard Parker [ mailto:richardparkerdc@gmail.com ]< mailto:[mailto:richardparkerdc@gmail.com] >Sent: Thursday, November 10, 2011 3:23 PM To: Robert Berman Cc: Freeman, Jeremiah (CONTR); < mailto:rick.anderson@faypwc.com > rick.anderson@faypwc.com< mailto:rick.anderson@faypwc.com >; < mailto:tballo@earthjustice.org > tballo@earthjustice.org< mailto:tballo@earthjustice.org >; < mailto:ScottB@LVMetals.com > ScottB@LVMetals.com< mailto:ScottB@LVMetals.com >; < mailto:john.caskey@nema.org > john.caskey@nema.org< mailto:john.caskey@nema.org >; Corkran, Jerry L; Cymbalsky, John; < mailto:adelaski@standardsASAP.org > adelaski@standardsASAP.org< mailto:adelaski@standardsASAP.org >;< mailto:Teckman@nwco uncil.org >Teckman@nwcouncil.org< mailto:Teckman@nwcouncil.org >; < mailto:gbf1@pge.com > gbf1@pge.com< mailto:gbf1@pge.com >; < mailto:carlos.gaytan@ge.com > carlos.gaytan@ge.com< mailto:carlos.gaytan@ge.com >; < mailto:rgreeson@federalpacific.com > rgreeson@federalpacific.com< mailto:rgreeson@federalpacific.com >; < mailto:bruce.r.hirsch@bge.com > bruce.r.hirsch@bge.com< mailto:bruce.r.hirsch@bge.com >; < mailto:jhodge@howard.com > jhodge@howard.com< mailto:jhodge@howard.com >; < mailto:mhyland@appanet.org > mhyland@appanet.org< mailto:mhyland@appanet.org >; < mailto:dave.millure@metglas.com > dave.millure@metglas.com< mailto:dave.millure@metglas.com >;< mailto:snadel@aceee.org >sna del@aceee.org< mailto:snadel@aceee.org >; < mailto:wes.patterson@us.abb.com > wes.patterson@us.abb.com< mailto:wes.patterson@us.abb.com >; < mailto:Eric.Petersen@aksteel.com > Eric.Petersen@aksteel.com< mailto:Eric.Petersen@aksteel.com >; < mailto:Raymond.Polinski@ATImetals.com > Raymond.Polinski@ATImetals.com< mailto:Raymond.Polinski@ATImetals.com >; < mailto:artrosenfeld@gmail.com > artrosenfeld@gmail.com< mailto:artrosenfeld@gmail.com >; < mailto:srosenstock@eei.org > srosenstock@eei.org< mailto:srosenstock@eei.org >; < mailto:rroy@nrdc.org > rroy@nrdc.org< mailto:rroy@nrdc.org >; < mailto:robert.saint@nreca.coop > robert.saint@nreca.coop< mailto:robert.saint@nreca.coop >;< mailto:chuck.simmons@pgnmail.co

m >chuck.simmons@pgnmail.com< mailto:chuck.simmons@pgnmail.com >; < mailto:kwinder@mleainc.com > kwinder@mleainc.com< mailto:kwinder@mleainc.com >; < mailto:mwaltner@nrdc.org > mwaltner@nrdc.org< mailto:mwaltner@nrdc.org >; < mailto:jerry.schoen@aksteel.com > jerry.schoen@aksteel.com< mailto:jerry.schoen@aksteel.com >; < mailto:Paul.Ryan@hitmet.com > Paul.Ryan@hitmet.com< mailto:Paul.Ryan@hitmet.com >; < mailto:ahofmann@publicpower.org > ahofmann@publicpower.org< mailto:ahofmann@publicpower.org >; < mailto:pkumar@publicpower.org > pkumar@publicpower.org< mailto:pkumar@publicpower.org >;< mailto:bsmith@federalpacific.c

om >bsmith@federalpacific.com< mailto:bsmith@federalpacific.com >; < mailto:greg.coulter405@gmail.com > greg.coulter405@gmail.com< mailto:greg.coulter405@gmail.com >; < mailto:jmauer@standardsasap.org > jmauer@standardsasap.org< mailto:jmauer@standardsasap.org >; Cohen, Daniel; Meyers, Aaron;

< mailto:Jim.creevy@nema.org > Jim.creevy@nema.org< mailto:Jim.creevy@nema.org >;< mailto:jrossetti@mlgw.org > jrossetti@mlgw.org< mailto:jrossetti@mlgw.org >; < mailto:cabolduc@lbl.gov > cabolduc@lbl.gov< mailto:cabolduc@lbl.gov >; < mailto:kcoughlin@lbl.gov > kcoughlin@lbl.gov< mailto:kcoughlin@lbl.gov >;< mailto:brian.coffey@navigant.com >brian.coff ey@navigant.com< mailto:brian.coffey@navigant.com >; < mailto:mrivest@navigant.com > mrivest@navigant.com< mailto:mrivest@navigant.com >; < mailto:gjrosenquist@lbl.gov > gjrosenquist@lbl.gov< mailto:gjrosenquist@lbl.gov >; < mailto:caitlin.johnson@navigant.com > caitlin.johnson@navigant.com< mailto:caitlin.johnson@navigant.com >; < mailto:zhimei.luo@navigant.com > zhimei.luo@navigant.com< mailto:zhimei.luo@navigant.com >; Marchetti, Emily (CONTR);

< mailto:charlied@uus.org > charlied@uus.org< mailto:charlied@uus.org >; < mailto:DYoung@energy-solution.com > DYoung@energysolution.com< mailto:DYoung@energy-solution.com >; < mailto:James.Lass@cleco.com > James.Lass@cleco.com< mailto:James.Lass@cleco.com >; < mailto:maheshsampat@bellsouth.net > maheshsampat@bellsouth.net< mailto:maheshsampat@bellsouth.net >; < mailto:phopkinson@hvolt.com > phopkinson@hvolt.com< mailto:phopkinson@hvolt.com >; < mailto:matthew.nardotti@navigant.com > matthew.nardotti@navigant.com< mailto:matthew.nardotti@navigant.com >; Raba, Jim; Savitz, Maxine (EMAB); < mailto:tpetrosino@carolina.rr.com > tpetrosino@carolina.rr.com< mailto:tpetrosino@carolina.rr.com >;< mailto:chris.brown@cogentp owerinc.com >chris.brown@cogentpowerinc.com< mailto:chris.brown@cogentpowerinc.com >; < mailto:ted.johnstone@cogentpowerinc.com > ted.johnstone@cogentpowerinc.com< mailto:ted.johnstone@cogentpowerinc.com >; < mailto:frank.guilbault@cogentpowerinc.com > frank.guilbault@cogentpowerinc.com< mailto:frank.guilbault@cogentpowerinc.com >; < mailto:ned.efbrush@gmail.com > ned.efbrush@gmail.com< mailto:ned.efbrush@gmail.com >; < mailto:dbrender@cda.copper.org > dbrender@cda.copper.org< mailto:dbrender@cda.copper.org >; < mailto:chad.kennedy@us.schneider-electric.com > chad.kennedy@us.schneiderelectric.com< mailto:chad.kennedy@us.schneider-electric.com >; < mailto:eduardorobles@eaton.com > eduardorobles@eaton.com< mailto:eduardorobles@eaton.com >; < mailto:vijay.tendulkar@onyxpower.com > vijay.tendulkar@onyxpower.com< mailto:vijay.tendulkar@onyxpower.com >; < mailto:thomas.patzner@us.schneider-electric.com > thomas.patzner@us.schneiderelectric.com< mailto:thomas.patzner@us.schneider-electric.com >; < mailto:carlosgsiqueiros@eaton.com > carlosgsiqueiros@eaton.com< mailto:carlosgsiqueiros@eaton.com > Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference

Robert,

I understand the DOE staff are working on the in cremental Watts calculations and will get that out to group as soon as it's ready.best wishes, Richard On Thu, Nov 10, 2011 at 11:52 AM, Robert Berman

<< mailto:bermaneconomics@gmail.com >bermaneconomics@gmail.com< mailto:bermaneconom ics@gmail.com >> wrote: Thank you Richard. That clarification is helpful.

In the liquid-filled meeting we were told that we would receive an analysis of incremental Watts saved by DL for all ELs, as well as the incremental cost. When will that analysis be available? For many of us, that analysis is the basis for a dditional, perhaps extensiv e analyses, so it should come with enough lead time before any additional meetings or teleconferences to that we can give it the required consideration. It would be most helpful if th e incremental cost were provided separately for transformer and installation, with any pole component of the installation identified.

For the MV Dry and LV Dry meetings, it would be most helpful if you would also circulate an agenda with objectives, hopefully this week, so that we are able to prepare for those meetings.

Regards,

Robert A. Berman, Principal Berman Economics

< http://www.BermanEconomics.com/ >www.BermanEconomics.com< http://www.BermanEcono mics.com > 1915 Grand Court Vienna, VA 22182 703-281-0490< tel:703-281-0490 > 703-655-8398< tel:703-655-8398 > (cell)

< mailto:BermanEconomics@gmail.com >BermanEconomics@gmail.com< mailto:BermanEcono mics@gmail.com >

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

Dear Colleagues:

The telcon on the 17th is currently planned for medium-voltage dry-type and the telcon on the 21st is reserved for low-voltage. There will be revised analysis circulat ed in advance of both calls per our discussion yesterday. Each call has substantia l chunks of time allocated, though I hope we won't need all that time.

It may be prudent to schedule a liquid-filled call at some point as well, but I propose that we hold off on that for day or so, until we can clarify when revised analysis for liquid-filled will be ready.

Thanks for your very constructive participati on in the meetings over the last two days.Richard Parker On Thu, Nov 10, 2011 at 10:05 AM, Freeman, Jeremiah (CONTR)

<< mailto:Jeremiah.Freeman@ee.doe.gov >Jeremiah.Freeman@ee.doe.gov< mailto:Jeremiah.Free man@ee.doe.gov >> wrote: When: Thursday, November 17, 2011 1:00 PM-5: 00 PM (GMT-05:00) Eastern Time (US & Canada). Where: Webinar and Phone

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

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

Dear Colleagues,

This event is to save the time slot on your calendar based on our discussion at yesterday's meeting. Later today further information will be sent regarding the registration information for our November 17 and November 21 webinars. Af ter registering you will get the link for the webinar and a toll free number.

Please call with questions or concerns.

Very Respectfully, Jeremiah Freeman 202-431-4243< tel:202-431-4243 > (cell) 202-586-1867< tel:202-586-1867 > (office)

This e-mail and any attachments are confidential, may contain legal, professional or other privileged inform ation, and are intended solely for the addressee. If you are not the intended recipient, do not use the information in this e-mail in any way, delete this e-mail and notify the sender. CEG-IP2