NON-CONFIDENTIAL COPY I A tik 

# I&k THE OFFICE OF HEARINGS & APPEALS DEPARTMENT OF ENERGY

IN THE MATTER OF: THE PETITION FILED BY AMANA APPLIANCES FOR EXCEPTION RELIEF TO THE FINAL RULE ON ENERGY CONSERVATION STANDARDS FOR REFRIGERATORS, REFRIGERATOR

-FREEZERS AND FREEZERS

SUPPLEMENTAL COMMENTS CASE NO. VEE-0054 August 12, 1999
GE Appliances, a potentially aggrieved party within the meaning of the Office of Hearings and Appeals ("OHA") regulations, hereby files these supplemental comments to its March 15, 1999, response. 1. Introduction and Summary On July 12, 1999, Amana Appliances ("Amana") filed a Supplement ("Supplement") to its initial Application ("Application") for exception to the Department of Energy's ("DOE") Final Rule on Energy Conservation Program for Consumer Products: Energy Conservation Standards for Refrigerators, Refrigerator-Freezers and Freezers, 10 C.F.R. Part 430 (Final Rule). This Supplement, which expands and clarifies its Application, seeks relief from the requirements of the Final Rule promulgated on April 23, 1997. That rule mandates that refrigerator products manufactured on or after July 1, 2001, use approximately 30% less energy than such products manufactured under today's energy conservation standard. 

### The, specific relief requested by Amana is that covered products manufactured by it on or after July 1, 2001, not be required to comply with the Final Rule but be given "10% relief" until January 1, 2010. Thus, rather than manufacture refrigerators that use 30% less energy than today's models, Amana's would be permitted to manufacture refrigerators that use 10% more energy than comparable competitive models that comply with the more stringent standard. Moreover, Amana seeks to maintain this cost-avoidance advantage for a period of eight and one-half years. 

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THE OFFICE

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DEPARTMENT OF ENERGY I 

# tf--- iJd!; IN THE MATTER OF: THE PETITION FILED BY AMANA APPLIANCES FOR EXCEPTION RELIEF

TO THE FINAL RULE ON ENERGY CONSERVATION STANDARDS FOR REFRIGERATORS, REFRIGERATOR-FREEZERS AND FREEZERS SUPPLEMENTAL COMMENTS CASE NO. VEE-OOS4 August 12, 1999

GE Appliances, a potentially aggrieved party within the meaning of the Office of Hearings and Appeals ("aHA") regulations, herebyfiles these supplemental comments to its March 15, 1999, response. I. Introduction and Summary On July 12, 1999, Amana Appliances ("Amana") filed a Supplement ("Supplement") to its initial Application ("Application") for exception to the Department of Energy's ("DOE") Final Rule on Energy ConseNation Program for Consumer Products: Energy ConseNation Standards for Refrigerators, Refrigerator-Freezers and Freezers, 10 C.F.R. Part 430 (Final Rule). This Supplement, which expands and clarifies its Application, seeks relief from the requirements of the Final Rule promulgated on April 23, 1997. That rule mandates that refrigerator products manufactured on orafter July 1, 2001, use approximately 30% less energy than such products manufactured undertoday's energy conservation standard. The, specific relief requested by Amana is that covered products manufactl:Jred by it on or afterJuly 1, 2001, not be required to comply with the Final Rule but be given "10% relief" until January 1, 2010. Thus, ratherthan manufacture refrigerators that use 30% less energy than today's models, Amana's would be permitted to manufacture refrigerators that use 10% more energythan comparable competitive models that comply with the more stringent standard. Moreover, Amana seeks to maintainthis cost-avoidance advantage for a period of eight and one-half years.

• 1 •

### In its Supplement, Amana expands its claim for relief based on the

unavailability of HFC-245fa by disclosing its decision to use cyclopentane-blown foam instead, thereby locking in what it claims to be a 10% energy penalty. According to the Supplement, "no design option exists that will enable Amana to reliably and cost-effectively meet the stringent Refrigerator Efficiency Standards that go into effect on July 1, 2001, with Amana using cyclopentane as its foam blowing agent.'" (See Supplement, p.3.) Their argument continues: "These circumstances-the unavailability of a comparable replacement for 141b, and the substantially increased costs of compliance with the revised standards-are precisely the events that were envisioned by DOE as 

### grounds for an exception." But even a cursory reading of the Final Rule will show that there are five conditions, not just two, that Amana must establish in order to be granted exception relief. It must establish that:
• HFC-245fa is not available -- which means that it cannot be manufactured because of toxicity or other concerns, or cannot be supplied by AlliedSignal in sufficient quantities to meet manufacturers' needs; • "comparable products" are not available; • unavailability of HFC-245fa or comparable products will continue until imposition of the HCFC-141 b ban in 2003; • alternative approaches that must be used because of the "unavailability" of HFC-245fa or comparable products impose "substantial increases" in expected manufacturer compliance costs;2 and

1 Amana concedes, however, that the unavailability of HFC-245fa will not prevent it from manufacturing products that will meet the 2001 energy requirements. It argues that it is nevertheless entitled to relief because available foams are less efficient, thereby requiring thicker application, which results in less internal volume

. One might view the Application as presenting this issue to OHA: Does the loss of refrigerator internal storage volume constitute a "special hardship , inequity or unfair distribution of burdens" that justifies an adjustment of the Final Rule pursuant to Section 504 of the Department of Energy Organization Act? [2 U.S.C. § 7194(a)]. We think it does not. 2 The precise language is "the unavailability of HFC-245fa or comparable products prior to the imposition of the ban on the further production of HCFC- 141b would substantially increase the expected manufacturer costs associated with complying with this revised standard ." 62 Fed .Reg. 23109 (1997).

2 In its Supplement, Amana expands its claim for relief based on the unavailability of HFC-245fa by disclosing its decision to use cyclopentane-blown foam instead, thereby locking in what it claims to be a 10% energy penalty. According to the Supplement, "no design option exists that will enable Amana to reliably and cost-effectively meet the stringent Refrigerator Efficiency Standards that go into effect on July 1, 2001, with Amana using cyclopentane as its foam blowing agent. 1" (See Supplement, p.3.) Their argument continues: "These circumstances-the unavailability of a comparable replacement for 141b, and the substantially increased costs of compliance with the revised standards-are precisely the events that were envisioned by DOE as grounds for an exception." But even a cursory reading ofthe Final Rule will show that there are five conditions, notjust two, that Amana must establish in orderto be granted exception relief. It must establish that:

• HFC-245fa is not available

-- which means that it cannot be manufactured because of toxicity or other concerns, or cannot be supplied byAlliedSignal in sufficient quantities to meet manufacturers' needs;

• "comparable products" are not available;

• unavailability of HFC-245fa orcomparable products will continue until imposition of the HCFC-141b ban in 2003;

• alternative approaches that must be used because of the "unavailability" of HFC-245fa orcomparable products impose "substantial increases" in expected manufacturer compliance costs;2 and

Amana concedes. however, thatthe unavailability ofHFC-245fa will not prevent it from manufacturing products that will meet the 2001 energy requirements. It argues that itis nevertheless entitled to reliefbecause available foams are less efficient. therebyrequiring thicker application. which results in less internal volume. One might view the Application as presentingthis issue to OHA: Does the loss ofrefrigerator internal storage volume constitute a "special hardship. inequity orunfairdistribution of burdens" thatjustifies an adjustmentofthe Final Rule pursuant to Section 504ofthe DepartmentofEnergy Organization Act? [2 U.S.C. § 7194(a)]. Wethink it does not. 2 Theprecise language is "the unavailability ofHFC-245faorcomparable productspriorto the imposition ofthe ban onthe furtherproduction ofHCFC-141b would substantially increase the expected manufacturercosts associated with complying with this revised standard." 62 Fed.Reg. 23109(1997).

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### ® it will suffer "special hardship, inequity, or unfair distribution of burdens" if

relief is not granted. 3 - As will be shown below, Amana has not met its burden and is not entitled to relief.

11. Amana Has Not Shown that HFC-245fa is not Available Within

the Meaning of the "Trap Door" Provision. A. The trap door was developed in response to two manufacturer concerns that existed at the time the Final Rule was issued.
Amana is correct in its statement that consensus was achieved on the provisions of the Final Rule when manufacturers accepted the so-called "trap door" provision for exception relief through the OHA petition process. Two concerns dominated the discussion on how this provision could be activated: Whether HFC-245fa would pass toxicity testing and receive all necessary regulatory approvals; and whether AlliedSignal would manufacture sufficient quantities for all manufacturers who wanted to use it.4 Toxicity concerns have been allayed with the successful completion of product testing

. HFC-245fa has been submitted for a generally regarded as safe (GRAS) determination and there are no other regulatory obstacles to the manufacture of the product.5 The issue of adequate availability for all manufacturers has also been resolved. Amana's April 15, 1997, letter to then-DOE Senior Policy Advisor Kyle Simpson is an example of the prevalent concern in the industry at the time that the Final Rule was being developed. Amana was concerned that in the event of a "shortage" of HFC-245fa, DOE "must assure fair and equitable allocation of supply so the smaller firms, such as Amana, do not get squeezed out."s There is no shortage of HFC-245fa and there is no basis for fear that Amana , or any other manufacturer, will be squeezed out because of inadequate supply. AlliedSignal has offered to supply the needs of any and all interested

3 The standard for OHA's decision in this matter is set forth in Section 504 of the DOE Organization Act, 42 U.S.C. §7194(a).

In the preamble to the Final Rule, DOE acknowledged these concerns and concluded that based on then-current information, its expectation was that "HFC-245fa will receive the necessary regulatory approvals, and that AlliedSignal will make it available in sufficient quantities for all manufacturers to use prior to 2003. 62 FedReg. 23108 (1997).

Allied has also applied to EPA for approval of HFC-245fa as a Significant New Alternative Product (SNAP) to CFCs. When approved manufacturers will be able to use the chemical as a blowing agent for refrigerator insulation foam. 6 Included as Exhibit 6 to Amana's July 12, 1999, filing. • it will suffer "special hardship,. inequity, or unfair distribution of burdens" if relief is not granted. 3 - As will be shown below, Amana has not met its burden and is not entitled to relief.

II. Amana Has Not Shown that HFC-245fa is not Available Within the Meaning of the "Trap Door" Provision. A. The trap door was developed in response to two manufacturer concerns that existed atthe time the Final Rule was issued. Amana is correct in its statement that consensus was achieved on the provisions of the Final Rule when manufacturers accepted the so-called ''trap door" provision for exception relief through the OHA petition process. Two concerns dominated the discussion on howthis provision could be activated: Whether HFC-245fa would pass toxicity testing and receive all necessary regulatory approvals; and whether AlliedSignal would manufacture sufficient quantities for all manufacturers who wanted to use it. 4 Toxicity concerns have been allayed with the successful completion of product testing. HFC-245fa has been submitted for a generally regarded as safe (GRAS) determination and there are no' other regulatory obstacles to the manufacture of the product.s
The issue of adequate availability for all manufacturers has also been resolved. Amana's April 15, 1997, letterto then-DOE**S~nior** PolicyAdvisor Kyle Simpson is an example of the prevalent concern in the industry at the time that the Final Rule was being developed. Amana was concerned that in the event of a "shortage" of HFC-245fa, DOE "must assure fair and equitable allocation of supply so the smallerfirms, such as Amana, do not get squeezed OUt.,,6 There is no shortage of HFC-245fa and there is no basis forfearthat Amana, or any other manufacturer, will be squeezed out because of inadequate supply. A/liedSigna/ has offered to supplythe needs of any and all interested

3 The standard for OHA'sdecision in this matteris setforth in Section S04 ofthe DOE Organization Act, 42 U.s.C. §7194(a). 4 In the preamble to the Final Rule, DOE acknowledged these concerns and concluded that based on then-current information, its expectation was that "HFC-24Sfa will receive the necessary regulatory approvals, and that A1IiedSignal will make it available in sufficientquantities for all manufacturers to use 

### rriono 2003.62 Fed.Reg. 23108(1997). Allied has also applied to EPAfor approval ofHFC-24Sfa as a SignificantNewAlternative Product (SNAP) to CFCs. When approved manufacturers will be able to use the chemical as a blowing agent for refrigerator insulation foam. 6 Included as Exhibit 6 to Amana'sJuly 12, 1999,filing.

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### manufacturers. Amana is the only manufacturer that has petitioned for exception

relief. OHA can draw only two possible conclusions from this fact: All or some other manufacturers have made plans to use substances other than the Allied chemical; or all or some other manufacturers have entered into individual purchase agreements with Allied. In either event, having sufficient HFC-245fa quantities is no longer an industry concern. Since HFC-245fa toxicity testing has been successfully completed and is being offered for sale to interested manufacturers, it must be deemed "available." For these reasons alone, OHA must deny the requested relief.
B. AlliedSignal has demonstrated a continuing commitment to HFC-245fa production. The appliance industry, acting through the Association of Home Appliance Manufacturers ("AHAM"), and AlliedSignal have failed to agree on terms of an industry joint purchase agreement. The inability of the parties to reach an industry-wide agreement, however, does not mean that HFC-245fa will not be available on a timely basis to any manufacturers who want to use it.7
In a letter dated April 29, 1999, to AHAM, Allied advised the industry that if the industry chose not to pursue its proposal for an all-industry agreement , Allied "will ...turn it's [sic] attention to individual negotiations ...[I]t is AlliedSignal's belief that there is sufficient demand, at an appropriate price point, with certain appliance manufacturers to proceed under a smaller plant scale scenario. As such, AlliedSignal remains confident that commercial HFC-245fa will become a reality." (Emphasis supplied.) (See Exhibit 1, attached.) In addition to Amana, several manufacturers, including GE Appliances, have held discussions with Allied on purchase terms. Given Allied's commitment to future production of HFC-245fa there is no basis on which OHA could conclude that it is not and will not continue to be available. C. Relief cannot be granted simply because Amana is not willing to purchase HFC-245fa on the terms and conditions offered by the manufacturer. One need not have been privy to the negotiations between Amana and Allied to know that any failure by Amana to obtain its HFC-245fa requirements is entirely by its choice.

7 Among the issues OHA must resolve before exception relief could be granted is whether the failure of the parties to reach an industry purchase agreement resulted from deliberate conduct of one or more industry parties to achieve impasse

. In this regard, OHA must give particular scrutiny to Amana's conduct to be certain that it had clean hands when it filed its petition or whether it had the trap door as its objective when it started the negotiations.

4 manufacturers. Amana is the onLy manufacturer that has petitioned for exception relief. OHA can draw only two possible conclusions from this fact: All or some other manufacturers have made plans to use substances otherthan the Allied chemical; or all or some other manufacturers have entered into individual purchase agreements with Allied. In either event, having sufficient HFC-245fa quantities is no longer an industry concern. Since HFC-245fa toxicity testing has been successfully completed and is being offered for sale to interested manufacturers, it must be deemed "available." For these reasons alone, OHA must deny the requested relief.

B. AlliedSignal has demonstrated a continuing commitment to HFC-245fa production. The appliance industry, acting through the Association of Home Appliance Manufacturers ("AHAM"), and AlliedSignal have failed to agree on terms of an industryjoint purchase agreement. The inability of the parties to reach an industry-wide agreement, however, does not mean that HFC-245fa will not be available on a timely basis to any manufacturers who want to use it? In a letter dated April 29, 1999, to AHAM, Allied advised the industry that if the industry chose not to pursue its proposal foran all-industry agreement, Allied "wilL.tum it's [sic1 attention to individual negotiations

...[11t is AlliedSignal's belief that there is sufficient demand, at an appropriate price point, with certain appliance manufacturers to proceed under a smaller plant scale scenario. As such, AlliedSignalremains confident that commercialHFC-245fa willbecome a reality." (Emphasis supplied.) (See Exhibit 1, attached.)
In addition to Amana, several manufacturers, including GE Appliances, have held discussions with Allied on purchase terms. Given Allied's commitment to future production of HFC-245fa there is no basis on which OHA could conclude that it is not and will not continue to be available. C. Relief cannot be granted simply because Amana is notwilling to purchase HFC-245fa on the terms and conditions offered 

### by the manufacturer. One need not have been privyto the negotiations between Amana and Allied to knowthat anyfailure byAmana to obtain its HFC-245fa requirements is entirely by its choice.

7 Among the issues OHAmustresolve before exception reliefcould be granted is whetherthe failure ofthe parties to reach an industry purchase agreement resulted from deliberate conductofone or more industryparties to achieve impasse. In this regard, OHAmust give particular scrutiny to Amana's conduct to be certain that it had clean hands when it filed its petition orwhether it had the trap dooras its objective when it started the negotiations.

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### Amana's tale of self-inflicted woe is detailed on pages 4 and 5 of the

Supplement. Amana clearly acknowledges that • Amana began its own negotiations with Allied after all-industry discussions terminated. • Allied offered to supply 100% of Amana's blowing agent requirements for a period of at least six years • Amana "rejected" as "unreasonable" the terms offered by Allied, including a take-or-pay requirement and undisclosed pricing. • The Amana-Allied talks are at a "standstill" and "Amana does not believe that commercial availability of HFC-245fa could have been guaranteed by July 1, 2002, as Allied has represented." (Emphasis supplied.) Stated most plainly, Amana has rejected a bona fide offer for the supply of HFC-245fa because it doesn't want to pay a fair market price. Alternatively, it has convinced itself that, despite supplier assurances, the chemical cannot be delivered on time. These concerns are a normal part of doing business. They are not unique to the appliances industry or the development of HFC-245fa. They do not entitle Amana to the extraordinary relief established under the Final Rule to deal with limited unique uncertainties-toxicity and quantity of HFC-245fa or unavailability of comparable products. These concerns have been resolved. But Amana still wants the Federal government to use the trap door against Allied to deprive it of the market value of its investment. It wants the government to turn it into a sword to use for competitive advantage against other industry members and grant permission to trigger potential adverse environmental impact in the form of .5 lost quads of energy and many tons of added pollution.8 The parties never intended that one manufacturer's unwillingness to accept market realities could trigger this result. Amana has put itself into this predicament. It should not be allowed to throw a well-settled regulation back into bitter contention simply because it wants better purchase terms from a supplier.

s One

-half quad is the additional energy that would be consumed nationally if the 2001 Refrigerator Standards were relaxed by 10% through 2009 for all new refrigerator products, a result that Amana invites. (See Exhibit 2, James Cosgrove affidavit.)

5 Amana's tale of self-inflicted woe is detailed on pages 4 and 5 of the Supplement. Amana clearly acknowledges that

• Amana began its own negotiations with Allied after all-industry discussions terminated. • Allied offered to supply 100% of Amana's blowing agent requirements for a period of at least six years • Amana "rejected" as "unreasonable" the terms offered by Allied, including a take-or-pay requirement and undisclosed pricing. • The Amana-Allied talks are at a "standstill" and "Amana does not believethat commercial availability of HFC-245fa could have been guaranteed by July 1, 2002, as Alliedhas represented." (Emphasis supplied.) Stated most plainly, Amana has rejected a bona fide offerforthe supply of HFC-245fa because it doesn't want to pay a fair market price. Altematively, it has convinced itself that, despite supplier assurances, the chemical cannot be delivered on time. These concems are a normal part of doing business. They are not unique to the appliances industry orthe development of HFC-245fa. They do not entitle Amana to the extraordinary relief established underthe Final Rule to deal with limited unique uncertainties-toxicity and quantity of HFC-245fa or unavailability of comparable products. These concems have been resolved. ButAmana still wants the Federal govemment to use the trap door against Allied to deprive it ofthe market value of its investment. It wants the govemment to tum it into a sword to use for competitive advantage against other industry members and grant permisSion to trigger potential adverse environmental impact in the form of .5 lost quads of energy and manytons of added pollution.8
The parties never intended that one manufacturer's unwillingness to accept market realities could triggerthis result. Amana has put itself into this predicament. It should not be allowed to throw a well-settled regulation back into bitter contention simply because it wants better purchase terms from a supplier.

8 One-halfquad is the additional energy that would be consumed nationally ifthe 2001Refrigerator Standards were relaxed by 10% through 2009 for all newrefrigeratorproducts. a resultthat Amana invites. (See Exhibit 2. lames Cosgrove affidavit.)

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### 111. Amana Has-Not Shown that "Comparable Products" Are Not Available A. "Comparable products" as used in the trap door provision must take into consideration the energy efficiency potential of three relevant "systems "-components, cabinet structure and foam composition and thickness. Amana's decision to use cyclopentane is cited as the reason that it requires relief. According to Amana, cyclopentane carries a 10% energy penalty, which Amana has not been able to recapture by any design that is "reliable and cost-effective." (See p. 7 of the Supplement.) Thus, Amana, which has already balked at the price of HFC-245fa, the chemical it had planned to use, now seeks relief for choosing an even more expensive second choice, cyclopentane. This is the engineering equivalent, borrowing the Abraham Lincoln story, of shooting one's parents and pleading for mercy as an orphan. After cataloging all the foams that are less efficient than HFC-245fa, including CP, Amana asserts that there is "no other economically or technically feasible method of recapturing the 10% loss resulting from use of cyclopentane." Amana contends that more efficient components have "already been incorporated into Amana's plans to meet the standards, or have not been proven to be reliable or cost-effective. But refrigerators are not meant to be built of foam alone. Amana has failed adequately to quantify its claims related to reliability andcost. Which new components are not reliable? What is the meaning of costeffective, a phrase that is not employed in the 2001 Refrigerator Standards? In sum, how can OHA and other potentially affected parties assess the relative cost and efficiency of the approaches that Amana has considered and rejected in concluding that its only recourse is the anti-competitive special treatment of the exception process? The facts are not as bleak as Amana would have OHA believe. Since the last rulemaking, componentry efficiency has increased by more than 20%. Integrated gasket design alone can contribute dramatically to achieving the 30% energy improvement required by the new standards. A myriad combination of components can achieve all the efficiency improvements required to be in compliance with the revised standard. GE Appliances is at a

6 III. Amana Has-Not Shown that "Comparable Products" Are Not Available A. "Comparable products" as used in the trap door provision musttake into consideration the energy efficiency potential of three relevant "systems"-components, cabinet structure and foam composition and thickness. Amana's decision to use cyclopentane is cited as the reason that it requires relief. According to Amana, cyc/opentane carries a 10% energy penalty, which Amana has not been able to recapture by any design that is "reliable and cost-effective." (See p. 7 of the Supplement.) Thus, Amana, which has already balked at the price of HFC-245fa, the chemical it had planned to use, now seeks relief for choosing an even more expensive second choice, cyclopentane. This is the engineering equivalent, borrowing the Abraham Lincoln story, of shooting one's parents and pleading for mercy as an orphan. After cataloging all the foams that are less efficient than HFC-245fa, including CP, Amana asserts that there is "no other economically ortechnically feasible method of recapturing the 10% loss resulting from use of cyclopentane." Amana contends that more efficient components have "already been incorporated into Amana's plans to meet the standards, or have not been proven to be reliable or cost-effective. But refrigerators are not meant to be built of foam alone. Amana has failed adequately to quantify its claims related to reliability and cost. Which new components are not reliable? What is the meaning of costeffective, a phrase that is not employed in the 2001 Refrigerator Standards? In sum, how can OHA and other potentially affected parties assess the relative cost and efficiency of the approaches that Amana has considered and rejected in concluding that its only recourse is the anti-competitive special treatment of the exception process? The facts are not as bleak as Amana would have OHA believe. Since the last rulemaking, componentry efficiency has increased by more than 20%. Integrated gasket design alone can contribute dramaticallyto achieving the ;30% energy improvement required bythe new standards. A myriad combination of components can achieve a/l the efficiency improvements required to be in compliance with the revised standard. GE Appliances is at a

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### loss to understand Amana's no-can-do attitude. (See Exhibit 3, Rick DeVos

affidavit, attached.) Cabinet redesign also offers significant potential to recover the losses attributable to use of less efficient foam. This is particularly true for Amana's products, which have not seen a cabinet redesign in more than 20 years. Competitive analyses conducted by GE engineers show that by redesigning its cabinet, Amana can recover interior volume lost to increased insulation thickness. Redesign of its door from 2 in. to the more common 3.5 in. found in the rest of the industry would also provide the opportunity to increase insulation with no impact on internal volume. B. Advances in increasing foam efficiency continue. Amana wants OHA to accept as fact a fiction that progress in foam improvement has stopped and will not advance between now and the January 1, 2003, phase-out of HCFC-141 b. In fact, we know from historical experience that chemical manufacturing and appliance manufacturing process technologies will improve efficiencies over time. Process improvements have increased the efficiency yields of HCFC-141 b and HFC-1 34a. Despite the more moderated tone of DuPont's latest comments (see Exhibit 3, Attachment A to the Amana Supplement), it remains true, as stated, that "foaming technology... has progressed over the past few years." Already, as stated in the Abstract of the paper attached to the Kessler Affidavit (Exhibit 3) as Attachment B, tests performed by the AHAM Industry/Government CFC Appliance Replacement Consortium show as little as a 6% energy loss in using cyclopentane. (See Exhibit 4, Gary Mellinger affidavit, attached.) IV. Amana Has Failed to Demonstrate the Continuing Unavailability Until 2003 of HFC

-245fa or A Comparable Product A. OHA must reiect Amana 's attempt to rewrite the Refrigerator Standards.Amana is trying to rehash old arguments by marrying the HCFC141 b phase

-out and the effective date of the new standards. As we earlier pointed out in our March, 1999, comments, DOE rejected this position,

9 It would be an abuse of the exception process if in granting the petition , OHA allows Amana to preserve, for stated reasons ofinability to achieve greater efficiency, a feature Amana touts for marketing advantage-thinner doors. The trap door provision must be used only for its intended limited purposes: Relief from toxicity and quantity, not to preserve marketing features that do not have statutorily recognized consumer utility.

7 loss to understand Amana's**nO-G~n-do** attitude. (See Exhibit 3, Rick DeVos affidavit, attached.) Cabinet redesign also offers significant potential to recover the losses attributable to use of less efficient foam. This is particularly true for Amana's products, which have not seen a cabinet redesign in more than 20 years. Competitive analyses conducted by GE engineers show that by redesigning its cabinet, Amana can recover interiorvolume lost to increased insulation thickness. Redesign of its doorfrom 2 in. to the more common 3.5 in. found in the rest of the industry would also rrovide the opportunity to increase insulation with no impact on internal volume. B. Advances in increasing foam efficiency continue. Amana wants OHA to accept as fact a fiction that progress in foam improvement has stopped and will not advance between now and the January 1, 2003, phase-out of HCFC-141b. In fact, we know from historical experience that chemical manufacturing and appliance manufacturing process technologies will improve efficiencies overtime.

. Process improvements have increased the efficiency yields of HCFC-141 b and HFC-134a. Despite the more moderated tone of DuPont's latest comments (see Exhibit 3, Attachment A to the Amana Supplement), it remains true, as stated, that "foaming technology

...has progre'ssed overthe pastfew years." Already, as stated in the Abstract of the paper attached to the Kessler Affidavit (Exhibit 3) as Attachment 8, tests performed by the AHAM Industry/Government CFC Appliance Replacement Consortium show as little as a 6% energy loss in using cyclopentane. (See Exhibit 4, Gary Mellinger affidavit, attached.) IV. Amana Has Failed to Demonstrate the Continuing Unavailability Until 2003 of HFC-245fa or A Comparable Product A. OHA must reject Amana's attemptto rewrite the Refrigerator. Standards. Amana is trying to rehash old arguments by marrying the HCFC141b phase-out and the effective date ofthe new standards. As we earlier pointed out in our March, 1999, comments, DOE rejected this position,

It would be an abuse ofthe ex.ception process ifin granting the petition, OHAallowsAmanato preserve, for stated reasons ofinability to achieve greaterefficiency, a feature Amanatouts for marketing advantage-thinnerdoors. The trap doorprovision mustbe used only for its intended limited purposes: Relieffrom tox.icity and quantity, notto preserve marketingfeatures that do nothave statutorilyrecognized consumerutility.

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### knowing full well the risks involved to the industry. DOE intended that industry assume those risks. But it provided fourteen additional months beyond the statutory minimum of three years to develop compliance plans. As in the story of the Little Red Hen, it would be unconscionable if manufacturers who took prudent business actions and planned ahead to comply with a promulgated standard were now penalized by the government handing out free grain to a manufacturer that ate its seed corn. B. The industry parties, including Amana, agreed to separate 2001 energy compliance from the 2003 HCFC-141 b phase-out schedule. The Final Rule is clear on this point if nothing else: The industry parties understood and accepted the possible unavailability of HFC-245fa in time for compliance with the 2001 standard when they reached consensus on the terms of the Final Rule. The fact that HFC-245fa will not likely be available for 2001, therefore, is not exceptional and Amana may not cite it as grounds for its exception petition. Amana's petition, filed some three and one-half years before the HCFC-141 b phase-out date, is at least premature. But, as we have seen, Amana can make arrangements today for its HFC-245fa needs in the future. Its request is, therefore, doubly defeated. Amana can implement a single design effort to comply with energy and Clean Air Act requirementsby using HFC-245fa or cyclopentane. Or it can continue to use HCFC141 b and make a further investment to do something else closer to 2003. Either way, Amana and the rest of industry get what was bargained for and there are no grounds for exception relief. V. Amana Has Not Proved that Alternative Compliance Approaches Caused by the Claimed Unavailability of HFC

-245fa or a

Comparable Product Would "Substantially Increase

Expected Manufacturer Costs." A. Compliance with the new standards was not expected to be cost-free. Amana argues that every compliance solution is too costly. It's not clear why it expected the new standards to be cost

-free

. The Final Rule provides no basis for such a belief

. In fact, the opposite is true.

"The Department recognizes that there will be considerable costs associated with the product redesign necessary to meet

8 

### knowing full well the risksjrwolved to the industry. DOE intended that industry assume those risks. But it provided fourteen additional months beyond the statutory minimum of three years to develop compliance plans. As in the story of the Little Red Hen, it would be unconscionable if manufacturers who took prudent business actions and planned ahead to comply with a promulgated standard were now penalized by the government handing out free grain to a manufacturerthat ate its seed com. B. The industry parties, including Amana, agreed to separate 2001 energy compliance from the 2003 HCFC-141b phase-out schedule. The Final Rule is clear on this point if nothing else: The industry parties understood and accepted the possible unavailability of HFC-245fa in time for compliance with the 2001 standard when they reached consensus on the terms of the Final Rule. The fact that HFC-245fa will not likely be available for 2001, therefore, is not exceptional and Amana may not cite it as grounds for its exception petition. Amana's petition, filed some three and one-half years before the HCFC-141b phase-out date, is at least premature. But, as we have seen, Amana can make arrangements today for its HFC-245fa needs in the future. Its request is, therefore, doubly defeated. Amana can implement a single design effort to comply with energy and Clean AirAct requirements by using HFC-245fa orcyclopentane. Or it can continue to use HCFC141b and make a further investment to do something else closer to 2003. Either way, Amana and the rest of industry get what was bargained for and there are no grounds for exception relief. V. Amana Has Not Proved that Alternative Compliance Approaches Caused bythe Claimed Unavailability of HFC-24Sfa or a Comparable ProductWould "Substantially Increase Expected Manufacturer Costs." A. Compliancewith the new standards was notexpected to be cost-free. Amana argues that every compliance solution is too costly. It's not clearwhy it expected the new standards to be cost-free. The Final Rule provides no basis for such a belief. In fact, the opposite is true. "The Department recognizes that there 

### will be considerable costs 

### associated with the product redesign necessary to meet

8

" 

# -

### the new efficiency standards, as well as some additional costs associated with the conversion to a new insulation blowing agent, even assuming that agent is HFC-245fa or another chemical with comparable characteristics."10 (Emphasis supplied.)

I0 

### These were some of the reasons that the Department decided to give manufacturers an additional fourteen months before the standards became effective but Amana does not appear to have factored this into evaluation of relative costs. The above language and the extra time provided should have sent a clear message to the industry: Even though it will be costly, compliance is required. Every other manufacturer seems to have heard the message except Amana. Last-minute refusals to heed the clear warnings should not be rewarded. B. Amana has not proven that it will experience substantial increase in "expected manufacturer costs" of compliance. Which costs did every other manufacturer anticipate that caught Amana unprepared? Certainly not the knowledge that HFC-245fa was covered by a patent and therefore might command a premium price. Or that cyclopentane is highly combustible and required factory retrofitting before use. Or that HFC-134a and cyclopentane were less efficient substitutes for HCFC-141 b and their use would require cabinet redesign, including possible the loss of some internal volume. Or that upgraded components would be more costly than less-efficient ones. Amana argues that "as one of the smaller U.S. manufacturers, [it] will be significantly impacted by the unavailability of HFC-245fa and the costs associated with conversion to an alternative blowing agent." But Amana is also a closely held company whose financial strength is not subject to public scrutiny and whose cost structure, including compensation of its key decision-makers, and profitability is shielded from public examination. Publicly traded companies and the environment should not have to pay for unfettered private gain. Until its financial records can be made public, Amana's claims of inability to pay cannot be considered.

62 Fed Reg. 23108 (1997).

9 10 the new efficien¢"y standards, as well as some additionalcosts associated withthe conversion to a new insulation blowing agent, even assuming that agent is HFC-24Sfa or another chemical with comparable characteristics.fllO (Emphasis supplied.) These were some of the reasons that the Department decided to give manufacturers an additional fourteen months before the standards became effective but Amana does not appearto have factored this into evaluation of relative costs. The above language and the extra time provided should have sent a clear message to the industry: Even though it will be costly, compliance is required. Every other manufacturer seems to have heard the message except Amana. Last-minute refusals to heed the clear wamings should not be rewarded. B. Amana has not proven that it

### will experience substantial increase in "expected manufacturer costs" of compliance. Which costs did every other manufacturer anticipate that caught Amana unprepared? Certainly not the knowledge that HFC-24Sfa was covered by a patent and therefore might command a premium price. Or that cyclopentane is highly combustible and required factory retrofitting before use. Orthat HFC-134a and cyclopentane were less efficient substitutes for HCFC-141b and their use would require cabinet redesign, including possible the loss of some intemal volume. Orthat upgraded components would be more costly than less-efficient ones. Amana argues that "as one of the smaller U.S. manufacturers, [it] will be significantly impacted by the unavailability of HFC-24Sfa and the costs associated with conversion to an altemative blowing agent." But Amana is also a closely held company whose financial strength is not subject to public scrutiny and whose cost structure, including compensation of its key decision-makers, and profitability is shielded from public examination. Publicly traded companies and the environment should not have to payfor unfettered private gain. Until its financial records can be made public, Amana's claims of inability to pay cannot be considered.

62 Fed. Reg. 23108 (1997).

9

### C. Comparable products and alternative approaches are available that need not "substantially increase " expected manufacturer compliance costs. In order for a manufacturer to avail itself of the trap door provision of the Final Rule, it must be faced with compliance costs that are substantially increased and unexpected." As discussed above, all of the costs about which Amana complains were clearly foreseeable. Also, as discussed above, DOE advised the parties that they would be expected to expend "considerable" costs for product redesign and "additional" costs for foam conversion. At mostAmana has proven that what it feared might happen as regards HFC245fa pricing has in fact occurred12. But it has clearly fallen short of proving surprise of the magnitude required by the Final Rule. Nor has Amana proven that other available solutions (or "comparable products") fall outside acceptable, i.e., expected costs parameters. HFC-134a, recently approved by EPA, is a viable alternative to HCFC-141 b. Admittedly, it is less efficient, probably by approximately 10%, but its relative low cost in comparison to HFC-245fa, means that more costly but more efficient components could be used. The same is true of cyclopentane, although this choice carries with it the higher-but not unexpected-costs of factory retrofitting discussed above.Additional compliance time could be gained by stockpiling HCFC141 b for use beyond 2003. Industry's experience stockpiling CFCs after their 1993 ban provides a useful model. It is not necessary, as Amana contends, to store stockpiled material in tankers and other containers. By agreeing with chemical manufacturers" that they keep the purchased stock at their premises storage cost can be contained and the parade of environmental horrors cited by Amana avoided completely. 13 Each of these solutions has benefits and drawbacks. But they all achieve compliance with the 2001 standards. And they do so without

" "...and the unavailability of HFC-245fa or comparable products prior to the imposition of the ban on further production of HCFC-14lb would substantially increase the expectedmanufacturer costs associated with complying with this revised standard ." 62 Fed Reg. 23109 (1997 ). (Emphasis supplied.) 12 It should be pointed out that use of HFC-245fa, found in the Final Rule to be a "drop

-in" substitute for HCFC-141b, would not entail significant investment, i.e., manufacturer cost

. It might, however, entail considerable product cost that NAECA envisions would be passed on to consumers

. Thus, Amana's arguments about the high cost of HFC-245fa must be rejected as a basis for relief because they are not relevant under the Act or the Final Rule's trap door provision , which are keyed to manufacturer costs. 13 GE Appliances has successfully used this arrangement and would be glad to share best practices with Amana.

10 C. Comparable products and alternative approaches are available that need not "substantially increase" expected manufacturer compliance costs. In orderfor a manufacturerto avail itself of the trap door provision of the Final Rule, it must be faced with compliance costs that are substantially increased and unexpected.11
As discussed above, all of the costs about which Amana complains were clearly foreseeable. Also, as discussed above, DOE advised the parties that they would be expectec;i to expend "considerable" costs for product redesign and "additional" costs forfoam conversion. At most Amana has proven that what it feared might happen as regards HFC24Sfa pricing has in fact occurred 12• But it has clearly fallen short of proving surprise of the magnitude required bythe Final Rule. Nor has Amana proven that other available solutions (or "comparable products") fall outside acceptable, i.e., expected costs parameters. HFC-134a, recently approved by EPA, is a viable altemative to HCFC-141b. Admittedly, it is less efficient, probably by approximately 10%, but its relative low cost in comparison to HFC-24Sfa, means that more costly but more efficient components could be used. The same is true of cyclopentane, although this choice carries with it the higher-but not unexpected-costs of factory retrofitting discussed above. Additional compliance time could be gained by stockpiling HCFC141b for use beyond 2003. Industry's experience stockpiling CFCs after their 1993 ban provides a useful model. It is not necessary, as Amana contends, to store stockpiled material in tankers and other containers. By agreeing with chemical manufacturers that they keep the purchased stock at their premises storage cost can be contained and the parade of environmental horrors cited byAmana avoided completely.13 Each of these solutions has benefits and drawbacks. But they all achieve compliance with the 2001 standards. And they do so without

II "

...and the unavailability ofHFC-245faorcomparable products priorto the imposition ofthe ban on further production ofHCFC-141b would substantially increase the expectedmanufacturercosts associated with complying with this revised standard." 62 Fed. Reg. 23109 (1997). (Emphasis supplied.) 12 It should be pointed outthat use ofHFC-245fa. found in the Final Rule to be a "drop-in" substitute for HCFC-141b, would not entail significantinvestment, i.e., manufacturercost. Itmight, however, entail considerable productcost thatNAECA envisions would be passed on to consumers. Thus, Amana's arguments aboutthe high costofHFC-245fa mustberejected as a basis for reliefbecause they are not relevant underthe Actorthe Final Rule'strap doorprovision, which are keyed to manufacturer costs. 13 GEAppliances has successfully used this arrangement and would be glad to share bestpractices with Amana.

10

'

# ...

### unexpected and substantial increases in manufacturer costs. In fact, there is surprising comparability in the cost of all these solutions. (See Exhibit 2, James Cosgrove affidavit, attached.) VI. Amana Has Not Met Its Burden of Demonstrating "Special Hardship, Inequity or Unfair Distribution of Burdens." A. Costs increases that affect all manufacturers do not impose undue hardship entitling a single manufacturer to exception relief. Section 504 of the Department of Energy Organization Act authorizes DOE to make adjustments of any rule if necessary to prevent special hardship, inequity or unfair distribution of burdens. As discussed above, since DOE expected manufacturers to bear "considerable costs" in complying with the 2001 standards, the fact that Amana and others are experiencing significant compliance-related costs-investments and other-is not remediable by OHA. Moreover, as specifically related to Amana's complaints about HFC-245fa pricing, It would be bad public policy to allow manufacturers, by refusing to pay a market-based price for the preferred substitute, to escape the compliance costs that were clearly contemplated during the regulatory process. All of the manufactures are impacted by the costs cited by Amana as too high. Where, then, does Amana suffer a "special" disadvantage? Although it argues that some costs affect it differentially and more adversely because of its size, that is a fact of Amana's being in the appliances industry. The revised refrigerator standard did not cause Amana's relatively small market share. Its size, therefore, should not be the basis for special relief under the rule. To do so would literally open every NAECA rulemaking-not just those that specifically reference section 504-to revision by Amana and similarly situated companies. B. Manufacturers are not entitled to exception relief because they implement compliance strategies that result in differential manufacturer costs. Amana made a business decision to use cyclopentane foam. One of the consequences of this decision is that it must make sizable investments to retrofit existing factories. A prudent manufacturer would take the opportunity to make offsetting productivity improvements but Amana apparently decided not to.

11 unexpected and substantial increases in manufacturer costs. In fact, there is surprising comparability in the cost of all these solutions. (See Exhibit 2, James Cosgrove affidavit, attached.) VI. Amana Has Not Met Its Burden of Demonstrating "Special Hardship, Inequity or Unfair Distribution of Burdens." A. Costs increases that affect all manufacturers do not impose undue hardshipentitling a single manufacturerto exception relief. Section S04 of the Department of Energy Organization Act authorizes DOE to make adjustments of any rule if necessary to prevent special hardship, inequity or unfair distribution of burdens. As discussed above, since DOE expected manufacturers to bear "considerable costs" in complying with the 2001 standards, the fact that Amana and others are experiencing significant compliance-related costs-investments and other-is not remediable by OHA. Moreover, as specifically related to Amana's complaints about HFC-24Sfa pricing, It would be bad public policy to allow manufacturers, by refusing to pay a market-based price for the preferred substitute, to escape the compliance costs that were clearly contemplated during the regulatory process. All of the manufactures are impacted by the costs cited by Amana as too high. Where, then, does Amana suffer a "special" disadvantage? Although it argues that some costs affect it differentially and more adversely because of its size, that is a fact of Amana's being in the appliances industry. The revised refrigerator standard did not cause Amana's relatively small market share. Its size, therefore, should not be the basis for special relief underthe rule. To do so would literally open every NAECA rulemaking-notjust those that specifically reference section S04-to revision by Amana and similarly situated companies. B. Manufacturers are notentitledto exception relief because they implement compliance strategies that result in differential manufacturercosts. Amana made a business. decision to use cyclopentane foam. One of the consequences ofthis decision is that it must make sizable investments to retrofit existing factories. A prudent manufacturerwould take the opportunity to make offsetting productivity improvements but Amana apparently decided notto.

11

'

# ... '

# ...

### It could have decided to convert to HFC-245fa, or HFC-134a or to stockpile HCFC-141 b. These choices would have involved much less manufacturer costs (or investment) but would have resulted in higher product costs that would be paid by consumers. Neither the Act nor the Final Rule provides that OHA shall reward or punish a manufacturer for the choice it makes. Decisions have long since been made to take one road or the other. Arbitrarily picking winners and losers based on who is last to the starting gate is neither good law nor public policy. Amana, for its own business reasons, made a choice--cyciopentane-that may not be the least costly option. But it should now live with its choice just as all other manufacturers must do. C. Amana 's claim that it suffers an undue distribution of burdens because of its competitors' production facilities in Mexico and Canada must be rejected. Like most of Amana's argument, its reference to the ability of some of its competitors to import HCFC-141 b foam product from Mexico and Canada beyond January 2001, is a red herring. As OHA noted in its request to Amana for more information, any such claim is pure speculation. In any event, as OHA further observed, EPA will likely act to prohibit such conduct. But GE Appliances will, for the record, end once and for all any speculation regarding its intentions on Mexico and Canada imports:• Any U.S. production transferred to Mexico or Canada for reexport to the U.S. will comply with the U.S. EPA HCFC-141 b phase-out schedule. • Moreover, GE is working with its Mexican partners to convert their production facilities imported from HCFC-1 41 b foam for any GE product imported into the U.S. By providing this clarification, GE Appliances does not intend to credit Amana's argument that foreign-located facilities are relevant to this proceeding. GE's foam strategy was determined well over a year ago. Amana's attempt to expand the scope of OHA's inquiry from HFC-245fa toxicity and quantity issues, is without basis in the Final Rule. We did, however, want to remove this diversionary argument and refocus attention on Amana's lack of preparedness, not others' foresight.

12 It could have decided to convert to HFC-245fa, or HFC-134a or to stockpile HCFC-141 b. These choices would have involved much less manufacturer costs (or investment) but would have resulted in higher product costs that would be paid by consumers. Neitherthe Act northe Final Rule provides that aHA shall reward or punish a manufacturerfor the choice it makes. Decisions have long since been made to take one road orthe other. Arbitrarily picking winners and losers based on who is last to the starting gate is neither good law nor public policy. Amana, for its own business reasons, made a choice-cydopentane-that may not be the least costly option. But it should now live with its choice just as all other manufacturers must do. 

# c. Amana's claim that it suffers an undue distribution of burdens because of its competitors' production facilities in Mexico and Canada must be rejected. Like most of Amana's argument, its reference to the ability of some of its competitors to import HCFC-141b foam product from Mexico and Canada beyond January2001, is a red herring. As aHA noted in its request to Amana for more information, any such claim is pure speculation. In any event, as aHAfurther observed, EPA will likely act to prohibit such conduct. But GE Appliances will, forthe record, end once and for 

### all any speculation regarding its intentions on Mexico and Canada imports:

• Any U.S. production transferred to Mexico orCanada for reexport to the U.S. will comply with the U.S. EPA HCFC-141b phase-out schedule. • Moreover, GE is working with its Mexican partners to convert their production facilities imported from HCFC-141b foam for any GE product imported into the U.S. By providing this clarification, GE Appliances does not intend to credit Amana's argument that foreign-located facilities are relevant to this proceeding. GE's foam strategy was determined 

### well overa year ago. Amana's attempt to expand the scope of OHA's inquiry from HFC-245fa toxicity and quantity issues, is without basis in the Final Rule. We did, however, want to remove this diversionary argument and refocus attention on Amana's lack of preparedness, not others' foreSight.

12

### VII. Granting Amana's Exception Petition Will Cause Irreparable Competitive Injury to Manufacturers That Have Begun to

Implement Compliance Plans.

14 Is 

### A. OHA must consider the competitive impact of exception relief.

Unlike Amana, GE Appliances and the other manufacturers have actually made plans to comply with the revised refrigerator standards. Designs have been finalized, equipment purchased, factory construction and renovation begun and merchandising programs are under development. With the same information that was available to Amana, other companies began their compliance efforts. Amana's mid-stream effort to change the compliance rules will have a significant and anti-competitive impact. Most significantly to GE Appliances, foam choices have been made and internal refrigerator volumes have been determined. OHA should be under no illusions about what is at the root of Amana's poormouthing: This is an attempt to gain an internal volume advantage over competitors. As it noted in its initial Application,14 Amana has calculated that each cubic foot of lost internal volume means $50 less at retail. If Amana is correct that use of less-efficient alternative blowing agents will require thicker insulation and, therefore, less internal storage volume, all manufacturers will be affected-not just Amana. OHA should not unlevel that playing field and give a competitive advantage to Amana. (See Exhibit 5, Ken Holland affidavit, attached.) Every compliance dollar that Amana saves, if not pocketed by its owners, can be spent on sales-enhancing features. No segment of the appliances industry is as competitive as refrigerators. These products are most often the drivers for other appliance purchases. Giving Amana the ability to feature up its models and sell them at similar or even lower prices will cause significant dislocation in the industry. DOE is under an obligation, as it acknowledged in the preamble to the Final Rule, to give "due consideration" to the effects of the relief sought by Amana on "competition in the affected markets.i15 While Amana has magnanimously advised OHA that it does not oppose giving exception relief to all manufacturers, that could not cure the competitive damage that would be caused by granting relief to Amana. It would come too late. GE Appliances cannot send back the equipment it has ordered
See p

. 5 of Amana's February 18, 1999 Application for Exception. 62 FedReg.23109 (1997).

13 14 IS 

### VII. Granting Amana's Exception Petition 

### Will Cause Irreparable Competitive Injuryto ManufacturersThat Have Begun to Implement Compliance Plans. A. OHA must considerthe competitive impact of exception relief. Unlike Amana, GE Appliances and the other manufacturers have actually made plans to comply with the revised refrigerator standards. Designs have been finalized, equipment purchased, factory construction and renovation begun and merchandising programs are under development. With the same information that was available to Amana, other companies began their compliance efforts. Amana's mid-stream effort to change the compliance rules will have a significant and anti-competitive impact. Most significantly to GE Appliances, foam choices have been made and intemal refrigerator volumes have been determined. OHA should be under no illusions about what is at the root of Amana's poormouthing: This is an attempt to gain an internal volume advantage over competitors. As it noted in its initial Application,14 Amana has calculated that each 

### cubic foot of lost internal volume means 

### $50 less at 

### retail. If Amana is correct that use of less-efficient alternative 

### blowing agents will require thicker 

### insulation and, therefore, less intemal storage volume, all manufacturers will be affected-notjust Amana. OHA should not unlevel that playing field and 

### give a competitive advantage to Amana. (See Exhibit 5, Ken Holland affidavit, attached.) Every compliance dollarthat Amana saves, if not pocketed by its owners, can be**sp~nt** on sales-enhancing features. No segment of the appliances industry is as competitive as refrigerators. These products are most often the drivers for other appliance purchases. Giving Amana the ability to feature up its models and sell them at similar oreven lower prices will cause significant dislocation in the industry. DOE is underan obligation, as it acknowledged in the preamble to the Final Rule, to give "due consideration" to the effects of the relief sought byAmana on "competition in the affected markets."15 While Amana has magnanimously advised OHAthat it does not oppose giving exception relief to all manufacturers, that could not cure the competitive damage that would be caused by granting relief to Amana. It would come too late. GE Appliances cannot send backthe equipment 

### it has ordered

Seep. 5 ofAmana'sFebruary 18, 1999 Application for Exception. 62 Fed.Reg.23109(1997).

13



# -

# -

-

...

### or undo the investments it.has made. Nor can the environmental consequences of relaxing the standards be overcome. (See Exhibit 2, Cosgrove affidavit.) None of this was contemplated in the parties' consensus agreement that resulted in the Final Rule. The only concerns that the trap door provision was intended to address was the potential unavailability of HFC-245fa because of toxicity or insufficient production quantities or the unavailability of comparable products. Since these concerns have been resolved, the trap door has permanently closed.

Vlll. Conclusion
As we have seen above, none of the conditions contemplated in the Final Rule has affected Amana. AlliedSignal is collecting data to support a favorable HFC-245fa GRAS determination. Amana has been offered its HFC-245fa production requirements for a period of at least six years, so quantity is not a problem. In any event, replacement products in combinations of improved efficiency components, cabinet redesign and other foam choices, even if less efficient than HFC-245fa, can achieve compliance with the revised standards. GE Appliances will achieve compliance on schedule with products that will meet the needs of the overwhelming number of consumers. Other manufacturers are prepared to do the same. It's time for Amana to join the industry as a full partner and society as a responsible corporate citizen ready to live up to obligations it knowingly undertook. The industry, the Department and all the stakeholders have spent enough time on the 2001 refrigerator rule. Almost half of the industry opposes the petition16. It's time to move on. Amana should withdraw its petition. But if it does not, OHA must deny it. GE Appliances hopes that OHA will do so. In all events, given the importance of this matter GE must preserve its right to pursue all options for appeal, should that be necessary.. For all the above reasons , GE Appliances respectfully requests that OHA deny the relief sought by Amana's Application.

16 Maytag has also filed comments opposing Amana's petition

. See March 1999, comments filed by Maytag Corporation. GE's and Maytag's refrigerator manufactured share is 48%. Appliance Manufacturer, April 1999.

14 or undo the investments ithas made. Norcan the environmental consequences of relaxingthe standards be overcome. (See Exhibit 2, Cosgrove affidavit.) None of this was contemplated in the parties' consensus agreement that resulted in the Final Rule. The only concerns that the trap door provision was intended to address was the potential unavailability of HFC-245fa because of toxicity or insufficient production quantities orthe unavailability of comparable products. Since these concerns have been resolved, the trap door has permanently closed.



### VIII. Conclusion As we have seen above, none of the conditions contemplated in the Final Rule has affected Amana. AJliedSignal is collecting data to support a favorable HFC-245fa GRAS determination. Amana has been offered its HFC-245fa production requirements for a period of at least six years, so quantity is not a problem. In any event, replacement products in combinations of improved efficiency components, cabinet redesign and otherfoam choices, even if less efficient than HFC-245fa, can achieve compliance with the revised standards. GE Appliances will achieve compliance on schedule with products that will meet the needs of the overwhelming numberof consumers. Other manufacturers are prepared to do the same. It's time for Amana to join the industry as a full partner and society as a responsible corporate citizen ready to live up to obligations it knowingly undertook. The industry, the Department and all the stakeholders have spent enough time on the 2001 refrigerator rule. Almost half of the industry opposes the

. petition16. It's time to move on. Amana should withdraw its petition. But if

it does not, aHA must deny it. GE Appliances hopes that aHA will do so. In all events, given the importance of this matter GE must preserve its right to pursue all options for appeal, should that be necessary
.. For all the above reasons, GE Appliances respectfully requests that OHA denythe relief sought byAmana's Application.

16 Maytag has also filed comments opposingAmana'spetition. SeeMarch 1999, comments filed by Maytag Corporation. GE's and Maytag's refrigeratormanufactured share is 48%. Appliance Manufacturer, April 1999.

14

### Please contact the undersigned if you require additional information. By

my signature below I certify that I have complied with the requirements of the OHA regulation, 10 C.F.R. § 1003.23(d).

cc: Alan F

. Kessler, Amana Appliances

15 Please contact the**under~igned** ifyou require additional information. By my signature below I certify that**~** have complied with the requirements of the OHA regulation, 10 C.F.R. 

### § 1003.23(d).**~~'"'-l** submitted

cc: Alan F. Kessler, Amana Appliances

15

'. 

# -P.U. Bas 1053 MMTili,Qwn, NJ U7962- 1 05 3

Marlin E. Dekk.ers Vice Prrsidcnt & Gener2l Muurr Fluorine Produc 

### April 29. 1999

Mr. Charles A. Samuels Government Relations Counsel Association of Home Appliance Manufacturers 701 Pennsylvania Avenue, N.W. 

### Suite 900 Washington, D.C. 20004 Via Fax: (202) 434-7400 Re: HFC-245fa Dear Mr. Samuels: It has been approximately one month since our last AlliedSigna lAppliance Industry meeting was held here at our site in Morristown, New Jersey. Since that time AlliedSignal has focused it's efforts on various issues related to HFC-245fa. I would like to take this opportunity to update the appliance industry on those efforts. Please disseminate this correspondence to each appliance manufacturer for their individual review.

PREMANUFACTURE NOTICE gTPD Prior to the commercial manufacture and sale of a new chemical substance, the United States Environmental Protection Agency's (US EPA) Office of Pollution Prevention and Toxic Substances requires that a PMN be submitted and approved for the chemical substance in question. With respect to HFC-2 tSfa, AffiedSignal submitted a PMN to the' US EPA on March 26, 1999.



### Recieved Time ADr-30 • 4:58PM EXHIBIT 1 lluijnE. Delclr..ers Vice Prc::si<lcnC a: Gt:nen.l**M~r** fluoriDe**Pt~**



### Mr. Charles A. Samuels Government Relations Counsel p.U. &11: 1053 Morn",rown., NJ 07%2·1053



### April 29. 1999



# ..**A&~ciatiotl** ofHome Appliant.::e Manufacturers 

### 701 Pennsylvania Avenue, N.W. Suite 900 Washington. 

### D.C. 20004


### Vis. Fax: (202) 434-7400 

### Re: HFC';14Sfa
Dear

### Mr. Samuels:
Ithas been approximately one month since our last All

### iedSignalJAppliance Industry meeting was held here at our site 

### in

### Morristown, New 1ersey. Since 

### that time AlliedSignal has 

### focu..c;ed it's efforts on various issues related 

### to HFC-245fa. I would like to take this opportunity to 

### update the appliance industry on those efforts. Please disseminate 

### this correspondence to 

### each appliance manufacturer 

### for their individual 

### review.



### PREMANUFACTliRE NOTICE (PMN)
Priorto 

### the commercial manufacture and 

### sale ofa new chemical substance. the United StAtes EnvironmenfAl Protection Agency·s (US EPA) Officc ofPollutionPrevention

### and**Toxi~** 

### Substances requires 

### that a PMNbe submitted and approved for the clu:mical

. . substance 

### in question. With respect to HFC-24.Sfa. 

### Alli.edSignai £ubmitted III PMN to the' 

### US EPA onMarch 26, 1999.

.



### . 

# - 

# - . .'

.

## - ......., ...... , 

### ...;. 

## -
., .



# - 

# ..

### -2-

SIG;rTF1CAN7 INEW ALTERI ATIVES POLICY (SNAP) PROGRAM 

### Under section 612 of the Clean Air Act, the US EPA established the SNAP program. The SNAP program, which makes decisions on a particular substitute in a particular end use within a larger sector, is administered by the US EPA's Office of Air and Radiation. On March 26, 1999 AlliedSignal petitioned the US EPA to approve HFC-245fa as, among other thing3, an acceptable substitute for HCFC-14]b in appliancc rigid polyurethane foam. GENERALLY REGARDED AS SAFE (GRAS) PETITION During our meeting of last month is was asked of AlliedSigral when the HFC-245fa toxicological data would be published in, a peer review journal. This step, of course, is needed for completion of the GRAS petition process. I have learned from Dr. George Rusch, AlliedSignal's toxicologist working on HFC-245fa, that a manuscript was completed by him and submitted to the journal "Toxicological Sciences" on December 21, 1998. Dr. Rusch has informed me that the journal has accepted the manuscript for publication, however, they have asked for some minor edits. This editing process should be complete within the next month, at which point the final draft will be resubmitted to the journal for publication. I am told, however, that once the final draft is complete it can be cited as reference in the GRAS process even before publication because the journal has already accepted the manuscript.

SEME-COMNfLF-RCZAL EFC-245fa As you know, AlliedSignal currently has HFC-245fa pilot plant manufacturing capacity at our Buffalo Research Laboratory (BRL). The BRL pilot plant was not designed, however, to be an economical source of supply for customers; it's main function is as a tool to develop viable manufacturing processes

. As such, AlliedSignal is working diligently to establish a semi-commercial program that would yield the ability to manufacture up to one million pounds ofHFC-245fa annually and sell that product in the 512.00/pound to $15.00/pound range prior to our commercial plant coming on line. While not yet finalized, we have made significant progress in this area and hope to introduce this option to our global customers in the next three to six months. While not initiated specifically for the North American appliance industry, this semi-commercial program would certainly offer appliance manufacturers a lower priced and larger source for sample/trial material.

Recievel Time Apr-30- 4:58PM ·2·**SIGi'lUlCA~,** 

### NEW AL TER"lATfVES POLICY (SNAP) PROGRA..'\.l 

### Under section 612 ofthe Clean 

### Air Act, 

## rut: US EPA**establ~d** 

### the SNAPprogram. 

### The SNAP

### program, which makes decisions on a particular substirute 

### in a particular 

### end 

### use within a larger sc:::tor, is administererl by 

### the US EPA's Offic.t: ofAir and 

### Radiation. On March 26, 1999 

### AllierlSignal petitioned tlle 

### US EPA to 

### approve HFC-245fa as, 

### among other thing3, aD accept!!.ble sub:stitute for HCFC-14Jb 

### in applia.m:.c rigid pclyurt:thanc: 

### foam.**GE~""ERULY** 

### REGARDED AS SAFE (GRAS) PETITION DurJlg 

### ourmeeting 

### oflast month 

### is was asked of

### A11iedSignal when the HFC-245fa toxicological data would 

### be 

### published 

### in a peer review**jo~.** This 

### step, ofcourse, is 

### needed for 

### completion of

### the GRAS petitionprocess. I 

### have learned from Dr. George 

### Rusch, AJJiedSignal's 

### toxicologist 

### working on 

### HFC-245fa. tha[ a 

### manuscripc was completed by 

### him and 

### submitted to 

### thejournal "Toxicological Sciences" on December 21. 

### 1998. Dr. Rusch has informed me that thejournal

### has**accep~** 

### the manuscript for publication, however. 

### they have asked for 

### some minor 

### edits. 

### This editing process should be 

### complete with..iD 

### the next month, at which point the 

### .fio.al draft 

### will be 

### resubmitted to 

### the 

### journal for publication. 

### I am told, 

### however. that once 

### the final draft is complete 

### it can

### be cited 

### as reference 

### in the 

### GRAS process even before 

### publication because the

### journal has already 

### accepted the 

### manuscript.



### SEJdI·COMMERCIALHFC-14Sfa
As you know I 

### All.iedSignal 

### currently has HFC-24Sfa pilot plant manufacturing capacity at our

### Buffalo Research Laboratory (BRL). The BRLpilotplant was not designed. 

### however, to 

### be an economical source ofsupply for customers; it's mainfunction is as a tool 

### to develop viable manufacturing processes. As such. AlliedSignal is 

### working

.. diligently 

### to 

### establish a semi-commercial

### programthat 

### would yield 

### the ability 

### to 

### manufacture up to 

### one million pounds of

### HFC·245fa 

### annually and sell that

### product in the $12.00/pound to 

### $15.00/pound range prior to our 

### commercialplant coming on liDe. While 

### not yet 

### finalized. we have made significantprogress 

### in this 

### area and 

### hope to 

### introduce this option to 

### ourglobal customers 

### in the next 

### three to 

### six. months. While not Uritiatx:d**sp~itically** 

### for 

### me North American appliance 

### industry. this semi-cotrunercial

. 

### program would certainly 

### offer appliance manufactnrers a lower priced and 

### larger source for 

### sample/trial 

### material.



# -

# ..

, 

# --3-



### AlliedSLgnaIBAYER MEETING AND FLNAL fiFC-245fa PROPOSAL You will recall that, at the end of last month's meeting, it was suggested that AlliedSignal attempt to restructure the AlliedSignallBayer patent license agreement. This-suggestion was made by the appliance industry in hopes of closing the gap between AlliedSignal's final proposal a.nd the industry's final proposal. We have been unsuccessful in this attempt. As such, AiliedSignal is not in a position to pass along a lower priced proposal to the appliance industry. Our final proposal is summarized below , You will see that we have reconsidered our position on a price commitment for additional volume above the " take or pay" volume. Additionally, we have comidcred all of the additional points raised in the industry's letter of March 15, 1999

. Our final offer should now be considered as follows: 

### Term • A six year contract term. 

### Volume • An industry aggregate 15.0 million pound annual "take or pay" commitment. 

### Price • $3.25/pound selling price for the "take or pay" volume. • The selling price of $3.251pound is a base price. This base price to be adjusted, up or down, on a semi

-annual basis tied to labor, utilities, and raw materials. The base year for this semi

-annual adjustment will be 1999. • AlliedSignal will provide each participating appliance manufacturer, at the appliance manufacturers option, up to an additional 15 % more HFC-2 45 fa above their "take or pay" volume on an an.nual basis at $3.25/pound (adjusted as per above).

• The "pay

- portion of the "take or pay" will be the fixed cost portion of both the HCC-244fa plant and the HFC-245fa plant plus an appropriate return.

• Prices in this proposal do not include delivery freight.



### Recievei.Tiae ADr.30• 4:58PM -J

### Allie<ISignaJ/BAYER :MEETING:**A..~** 

### FL'iAL lIFC·24Sfa PROPOSAL You will recall thAt, 

### at the end oflast month's meeting, it 

### was suggested 

### tlut AliicdSign.al 

### attempt to 

### restrucrurc the AlliedSign.alJBayer patent 

### license agreement. This_suggestion
was made 

### by the appliance industr"j 

### in hopes 

### ofclosing the 

### gap ber,veen AllicrlSignal'3 

### final propo:sal and the:**i.ndu:st:ry'~** 

### tin.al proposal. We have been unsuccessful 

### in this attempt. As 

### such. AlliedSignal 

### is Dot 

### in a position to pass aJong a lower priced proposal to 

### the applia.nce industry. 

### OUr final proposal 

### is summarized below. 

### You will see that 

### we have reconsidered our position on a price commianent 

### for additional volwne above the "take 

### or pay" 

### volume. Additionally. we ha.ve coruidcred all ofthe additional points ni&ed in 

### the industry's**l.et~** 

### of

### 1ot!arch 

### 15. 1999. Our 

### fUJ.al offer should DOW 

### be 

### considered as follows: 

### Term
• A 

### six. year contract term. 

### Volume



## Price • An industry**a~crregate** 15.0 millionpound annual**"~ke** or

### pay" c.ommitment.

.. $3.25/pound 

### selling price for the 

### Mrake or

### pay" volume. 

### • The selling price ofS3.25/paund is a base price. This 

### base price to 

### be adjusted. up or down, 

### on a semi-annualbasis tied to 

### labor. 

### UtilitiC3. and raw 

### materials. Thebase 

### year for this semi-annual adjustment

### will be 1999. • AlliedSignal 

### will provide 

### eachparticipating appliance manufacturer, at 

### Ule

. appliancc manufactuTcr"s option, up 

### to an additional lS% 

### more HFC·24Sra· 

### above their

..

### tab: or

### pay" volume on

### an annual basis at 

### S3.25/pound

### (adjuSted as pet' above). 

### • The "pay" portionofme ..

### take orpay" will

### be the fUed 

### costportion ofboth 

### the HCC-240faplant and 

### the 

### HFC-24Sfaplantplus an appropriate return. 

### • Prices in this 

### proposal do not include delivery freight.**R~cleved.** 

### Tiae 

### ADr.30. 4:58PM



# -

# -
'. 

# --4-



### Other Items • A most favored nations provision will be provided. This provision will be designed to extend a significant advantage to those appliance tnanufacnirers who sign up for volume under this proposal versus those appliance manufacturers who do not sign up for this proposal and may choose to purchase HFC-245fa from AlliedSignal at a latter date. 

### • If a workable mechanism can be developed and incorporated into contract form, AlliedSignal will allow each participating appliance manufacturer to transfer all, or a portion, of its "take or pay" commitment to another participating appliance manufacturer. • AllicdSignal will allow each participating appliances manufacturer to terminate an appropriate portion of its "take or pay" commitment should United States, Foreign. or International regulation directly prohibit the use of HFC-245fa as a blowing agent. Any agreement between the appliance industry and AlliedSignal is subject to AlliedSignal's senior management review. As such, the above proposal should not be considered a formal offer at this time. If the appliance industry derides to pursue this proposal, please advise either Brian Strauss, Guy Broadbent, or myself prior to the end of business on Friday, May 7th so that contracts may be drawn up in a timely manner. If the appliance industry chooses not to pursue this proposal AlliedSignal will cease this industry wide negotiation effort and turn it's attention to individual negotiations. I should tell you that if this industry wide process ends in no agreement on HFC-245fa it is AlliedSignal's belief that there is sufficient demand, at an appropriate price point, with certain appliance manufacturers to proceed under a smaller plant scale scenario . As such, AlliedSignal remains confident that commercial HFC-245fa will become a reality. Again, please distribute this communication to each appliance manufacturer for their individual review. If any questions should arise regarding this matter. please feel free to contact Brian Strauss (973-455-3187), Guy Broadbent (973-455-2665), or me (973 455-2124) at any time. Thank you. Very truly yours,

Recieved Time ADr.30. 4:58PM TOTAL. P-05 

### -4-
Other Items


### • A most favored nations provision will 

### be provideC. This provision

### will be 

### desig:nai to 

### extend a sl1!nificant advantage to 

### those applia.nce manufactl.lIcrs who sign up for volume under this proposal 

### versus those appliance mAnufacturers whu do not sign 

### up for this proposal aod

### may choose to purchltsc: HFC-24Sfa from AUiedSiena1 aC a latter date. 

### • If

### a workable 

### mechanism can be developed 

### and ir..corporat.ed iDeo contract form, AlliedSignaI will allow**~ch** 

### participating**appl~** 

### manufacturer to transfer 

### all, 

### or 

### aportion. 

### of

### its "'take or

### pay" CDmmitm.ent 

### to another

### participating applimce 

### manufacturer. • AlliedSignal 

### will allow each participating appI.ian.ce maoufacturer to 

### terminate 

### an appropriate portion

### ofits ytake 

### or pay" commitmeot**~hould** Unjted 

### Sutes, ForetiD. or International regulation directly prohibit the use ofHFC-245fa as a 

### blowing agent. Any 

### aa,reeme.nt 

### between the appliance industry 

### and AlliedSiinal 

### is subject to 

### AlliedSignal's senior management 

### review. As such, the 

### above proposal 

### should not

### be consIdered a formal offer at rhis time. 

### Ifthe 

### appliance industry de::i.des to 

### pursue this proposal, 

### please advise either Brian Sn-auss. Guy Broadbent. or myselfprior to 

### the end ofbusjness on

### Friday. May 7th so 

### that contracts may 

### be draWD 

### up 

### in a timely manner. If

### the appliance industry chooses Dot to 

### pursue this 

### proposal AlliedSignal 

### will cease this 

### industry wlde negotiation effort and 

### turn It"s arumcton to 

### individual negotiations. I should tell you that if

### this industry 

### wide process ends 

### in DO 

### aareement o.n**HFC~24Sfa** 

### it 

### is AUiedSignal's belief

### that there is sufficient demand, at an appropriate pricepoint, 

### with ceruinapp1.Wlce manufacturers to 

### proceed under a**~t1c::r** 

### plant scale scenario. As such. AIliedSignal 

### rema.i.ns confident that commercial 

### HFC-245fa

### will become a reality. Again. please 

### distribute this communication to each 

### appliance manufacturer 

### for their individual review. 

### Ifany 

### questions 

### should arise regarcUng this 

### matter. please feel free to 

### contactBrian Scrauss (973-455-3187), Guy 

### Broadbent (973·455·2665), or me (973 455-2124) atany time. Thankyou.

v 

### cry truly 

### yours.

# df!~

Reci!¥!d Time Apr.30. 4:58PM TOTR. P.e5



# -

# -

### Affidavit of James Cosgrove:

James Cosgrove, first being duly sworn, deposes and says: 1. I am employed as General Manager, Refrigeration Technology for GE Appliances, General Electric Company. My office is located at Appliance Park, Louisville, Kentucky, which is the headquarters operation of GE Appliances and the technology center for the appliances business. I am responsible for directing the technology and engineering effort of the appliances business and have held this position since May 1998. As relevant to this matter, I am responsible for overall planning and implementing of the Company's new refrigerator design program, including the effort to design products that comply with the 2001 Department of Energy (DOE) efficiency standards. 2. I file this affidavit in opposition to the Exception Petition filed by Amana Appliances that seeks relief of 10% from the 2001 refrigerator energy-efficiency standards through 2009. GE Appliances is committed to achieving compliance with the new standard and has begun a full design effort to manufacture compliant models well in time for the effective date of the standard. Based on my knowledge of the options available to achieve the required improvements, including the advances made in energy-efficient components, cabinet redesign options and available foam blowing agents, it is inconceivable that Amana cannot cost-effectively design and manufacture refrigerators that meet regulatory requirements. 3. I have read the affidavit of Alan Kessler, Amana's Vice-President for Engineering & Quality. I agree with Mr. Kessler that blowing agent choice is the most important building block of a compliance program. As noted by Mr. Kessler there is a wide range of blowing agent choices

. Once the blowing agent has been selected, its energy performance will determine the performance requirements of compressors, motors and other components, what changes to cabinet design might promote compliance, and what foam thickness is necessary. 4. I disagree, however, with Mr. Kessler's conclusion that Amana's choice of cyclopentane puts them so far behind in the effort to attain a 30% efficiency improvement that they require 10% relief. Without understating the difficulty of the challenge and the need for a strong engineering staff, an appliance company of Amana's size should have the resources to implement a technically and economically feasible compliance program. 5. The fact that some solutions identified by Amana may require thicker insulation and a consequent loss of internal storage volume , should not be a basis for exception relief: Any volume loss would affect equally all manufacturers that have not chosen HFC-245fa; and can be avoided altogether if high-efficiency components are added. While such components are costly, this approach

EXHIBIT 2 

## - Affidavit of James Cosgrove: James Cosgrove, first being duly sworn, deposes and says: 1. I am employed as General Manager, Refrigeration Technology for GE Appliances, General Electric Company. My office is located at Appliance Park, Louisville, Kentucky, which is the headquarters operation of GE Appliances and the technology centerforthe appliances business. I am responsible for directing the technology and engineering effort of the appliances business and have held this position since May 1998. As relevant to this matter, I am responsible for overall planning and implementing of the Company's new refrigerator design program, including the effort to design products that comply with the 2001 Department of Energy (DOE) efficiency standards.
2. I file this affidavit in opposition to the Exception Petition filed by Amana Appliances that seeks relief of 10%from the 2001 refrigerator energy-efficiency standards through 2009. GE Appliances is committed to achieving compliance with the new standard and has begun a full design effort to manufacture compliant models well in time for the effective date of the standard. Based on my knowledge of the options available to achieve the required improvements, including the advances made in energy-efficient components, cabinet redesign options and available foam blowing agents, it is inconceivable that Amana cannot cost-effectively design and manufacture refrigerators that meet regulatory requirements. 3. I have read the affidavit of Alan Kessler, Amana's Vice-President for Engineering & Quality. I agree with Mr. Kesslerthat blowing agent choice is the most important building block of a compliance program. As noted by Mr. Kessler there is a wide range of blowing agent choices. Once the blowing agent has**b~en** selected, its energy performance will determine the performance requirements of compressors, motors and other components, what changes to cabinet design might promote compliance, and what foam thickness is necessary. 4. I disagree, however, with Mr. Kessler'S conclusion that Amana's choice of cyclopentane puts them so far behind in the effort to attain a 30% efficiency improvementthatthey require 10% relief. Without understating the difficulty of the challenge and the need for a strong engineering staff, an appliance company of Amana's size should have the resources to implement a technically and economically feasible compliance program. 5. The fact that some solutions identified byAmana may require thicker insulation and a consequent loss of intemal storage volume, should not be a basis for exception relief: Anyvolume loss would affect equally all manufacturers

. that have not chosen HFC-245fa; and can be avoided altogether 

### if high-efficiency components are added. While such components are costly, this approach



### EXHIBIT 2requires less manufacturer cost, or investment, than needed to use

cyclopentane. , 

### 6. In an effort to evaluate the cost impact of the various alternatives available to Amana, DOE should seek from Amana data from which total unit cost can be calculated. This information would enable DOE to assess the relative impact on Amana of the various compliance options available to determine if the cost of cyclopentane is as prohibitive as claimed. Given the competitive impact of granting exception relief to Amana, DOE should consider retaining AD Little or another consultant to do an independent analysis of their claims. 7. GE Appliances is well into its redesign effort. The choice of blowing agent was finalized more than a one year ago. Although the final locations of some production have not been decided (see paragraph 11, infra) designs, including cabinet dimensions and components, have also been finalized. Factories have been designed. Equipment has been specified and purchase orders have been issued. To date, GE Appliances has committed f the more than

required to implement the new refrigerator program. We have gone •^ far down the road to benefit from exception relief that Amana suggests should be extended to the entire industry. In fact, extending relief to our other competitors would only exacerbate the competitive injury that would result from granting relief to Amana. 8. Other manufacturers have also begun their energy compliance programs. According to published reports, Frigidaire is investing up to $100 million at its Anderson SC plant and $80 million in a new facility in Greenville Ml. Both projects will receive significant incentives from state governments. (See Attachment A, 1 & 2.) Whirlpool has indicated that it already manufactures refrigerators that exceed today's standards by 30%. Clearly it has no need for relief. (See Attachment A 3.) 9. The potential adverse environmental consequences of granting exception relief are additional reasons why such relief should be denied. If such relief is granted to Amana and extended to all the industry, approximately .8 quads of electricity-savings will be lost. According to recent reports, reductions in appliance energy use have accounted, in part, for the continued reductions in U.S. C02 emissions even though economic activity has increased. (See Attachment B.) Any move to relax standards , especially those that have already been "banked," will cause unnecessary pressure on growth and could escalate political conflict over global warming issues. 

### 10. Mr

. Kessler refers to GE Appliances' minority ownership in a joint venture in Mexico, and the fact that HCFC•141 b

-containing products can continue to be lawfully imported into the U

.S., as an additional reason Amana should be granted exception relief, In fact, GE Appliances' Mexican interests are not relevant to this proceeding

. First, although the Company announced to its Louisville , KY. unions requires less manufacturer cost. or investment. than needed to use cyclopentane.
6. In an effort to evaluate the cost impact of the various alternatives available to Amana, DOE should seek from Amana data from which total unit cost can be calculated. This information would enable DOE to assess the relative impact on Amana of the various compliance options available to determine 

### if the cost of cyclopentane is as prohibitive as claimed. Given the competitive impact of granting exception relief to Amana, DOE should consider retaining AD Little or another**cons~ltant** to do an independent analysis of their claims.
7. GE Appliances is well into its redesign effort. The choice of blowing agent was finalized more than a one year ago. Although the final locations of some production have not been decided (see paragraph 11, infra) designs, including cabinet dimensions and components, have also been finalized. Factories have been designed. Equipment has been specified and orders have been issued. To date, GE Appliances has committed f the more than**~equired** to implement the new refri r program. We have gone too far down the road to benefit from exception relief that Amana suggests should be extended to the entire industry. In fact. extending relief to our other competitors would only exacerbate the competitive injury that would result from granting relief to Amana. 8. Other manufacturers have also begun their energy compliance 

### programs. According to published reports, Frigidaire is investing up to $100 million at its Anderson SC plant and $80 million in a newfacility in Greenville MI. Both projects will receive significant incentives from state govemments. (See Attachment At 1 & 2.) Whirlpool has indicated that 

### it already manufactures 

### refrigerators that exceed today's standards by 30%. Clearly it has no need for relief. (See Attachment A 3.)
9. The potential adverse environmental consequences of granting exception relief 

### are additional reasons why such relief should be denied. If such relief is granted to Amana and extended to all the industry. approximately .5 quads of electricity-savings will be lost. According to recent reports. reductions in appliance energy use have accounted, in part, for the continued reductions in U.S. 

### C02 emissions even though economic activity has increased. (See Attachment B.) 

### Any move to relax standards, especiallythose that have already been "banked,· will cause unnecessary pressure on growth and could escalate political conflict over global warming issues. 10. Mr. Kessler refers to 

### GE Appliances' minority ownership in a joint venture in 

### Mexico, and the fact that HCFC-141b-containing products can continue to be lawfully imported into the U.S., as an additional reason Amana should be granted exception relief. In fact, GE Appliances' Mexican interests are not relevant to this proceeding. First, althC?ugh the Company announced to its Louisville, KY. unions



### ----------- ----

### a possible move of Louisville-manufactured units to Mexico, no decision has

been made, nor can one be made, until negotiations are conducted. It is too early to know whether those negotiations will result in a retention of all or some manufacturing in Louisville. Second, Louisville is one of three GE refrigerator production operations. The Company has announced an investment plan for the Decatur AL plant, which will manufacture small top-mounted freezer 2001 models. No announcements have been made regarding the Bloomington IN plant, but any decision would also be subject to company-union negotiations.Finally, all new refrigerators are being designed for compliance with the HCFC141 b phase-out schedule. Thus, if any U.S. production is transferred to Mexico for re-export, that product will meet EPA standards as if manufactured in the U.S. 11. GE is working with its Mexican partners to convert joint venture Mexican refrigerator production intended for U.S. export from HCFC-141 b. Thus, any increased Mexican imports, if provided to GE, will be in full compliance with U.S. environmental standards as if manufactured in the U.S.

COMMONWEALTH OF KENTUCKY ) COUNTY OF JEFFERSON ) 

### AMES COSGROVE

Subscribed, sworn to and acknowledged before me by JAMES COSGROVE on this the ---- day of 1999.

Notary 

### Public

- State-at-Large My commission expires: 

# 3 -1 

# -1) 1-)

# 03 O-/ a possible move of Louisville-manufactured units to Mexico, no decision has been made, nor can one be made, until negotiations are conducted. It is too early to know whether those negotiations will result in a retention of all or some manufacturing in Louisville. Second, Louisville is one of three GE refrigerator production operations. The Company has announced an investment plan forthe Decatur AL plant, which will manufacture small top-mounted freezer 2001 models. No announcements have been made regarding the Bloomington IN plant, but any decision would also be subject to company-union negotiations. Finally, all new refrigerators are being designed for compliance with the HCFC141b phase-out schedule. Thus, if any U.S. production is transferred to Mexico for re-export, that product will meet EPA standards as if manufactured in the U.S.
11. GE is working with its Mexican partners to convert joint venture Mexican refrigerator production intended for U.S. export from HCFC-141 b. Thus, any increased Mexican imports, if provided to GE, will be in full compliance with U.S. environmental standards as if

### manufacture~.**~~** the

### u.~

## __

COMMONWEALTH OF KENTUCKY ) ) COUNTY OFJEFFERSON )
Subscribed, sworn to and acknowledged before me by JAMES COSGROVE on this the

# /0#-dayof

# ¥ . 1999.

# ~~~~ .. , No ary Public

- State-at-Large My commission expires: 

# 3 - /**~ ~** 

# 0.3

" 

# -'rlr:r,da•/, au;uc, _ M1 

# Fligid2ira adding flea o7

# refriQar tors, jobs 21 

# plant
Ey ?lacml Sr`/C Indecent err- :Jail

'

to im:-, a ne'.'v lint'
C in;e r en: to .._ -.: der^en giant.

brand re'. ant.' a::..^..a__. Torn Thom csor,

r' - told a ota: _ iJ reccie a: a s: heduleo announce rent i nside the p l ant F da
He told th aroun of Kcal and scat.'. dianItar,es. including Gov. David Seasley, that the company will make an initial investment of 545 million and create 3S jobs. Frigidaire could add as many as 100 jobs in the next five years, although no expansion of the outside wails is planned. `Mil C`andier 1nce:ercenr4fad South Carolina Gov. Cavid Eeasiev, left, T crn Thompson, plant manager at Frigidaire's Anderson plant, middle, and Anderson County Ccunc;i Chairman William Floyd share a laugh.

Under a shroud of secrecy, Electric City trolleys carded local dignitaries from the Anderson County yirort to the corn any Friday so they wouldn't know ahead of'time where they were going. In Septembier, Fr,_idaire. under the anonymous name "Company X." got a tax incentive package from the Anderson County Council. The county offered it the standard 6 percent fee-in-lieu of taxes, lowering its property tax rate from 10.5 percent. The company also will get a 32,500 state tax credit per job. Anderson County Development Partnership director Holly Matheson said Frgidaire officials wanted to wait to make the announcement until details were finalized and a special ceremony at the plant could be organized. Part of the announcement included Mr. Thompson using a pair of scissors to cut off one-third of a symbolic electric bill. He said the new refrigerators will save customers about 200 kilowatt-hours per year. Part of the company's investment comes from a federal mandate that manufacturers cut the energy use of appliances by about 30 percent in July 2001. Company officials said the new refrigerators, which Frigidaire is calling the "next generation" of advanced refrigerators, will go beyond the minimum energy standards.
Officials wouldn't reveal other details on the new refrigerators for competitive reasons, but said the)
http://www.andersonsc.com/archive/newspacre.asp?id=30747 8/9/99 ATTACHMENT Al 1-

_ •• -' \' .

.,.., .

# - .-- I·

. 

# - .. , •.• ," • J 

# FrigjoaJre 

# 8od]n!J jjne 

# of rBj]Lgerators]jobs at 

# plant

21 N.Jcmi Sr.,!cer Ir.ceper:

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'IJiil**C~ancler** ir.ce:::encenr·Mail 

### He tele tl':c**~:-vq** or" icC:ll :lrlC**Si:Jt~** cigni[:rries. inducing Gov. D:lvic be:lsky. th:l[ [he company '.vi11 make :lr: ir.iti:J.I ir:ves,ment of5..;.5 million ::md**C'~.1[=** 35jeb. Fr:g:c:l::-e could :lCG :lS m:my :lS 100 jobs in the next fi'le ye:lrs, although no expansion ofthe Jutsice w:J.lls is p!:lnned. SCL.:th Carolir.a GO'/. Ca'/ic Beas;ey, left, Ten Thcr.ipscn, piar.t mar.age at F;;gicaira's ,l.;-:cerscn plant, micc!e, and ,l..-:cerscn CCL.;nt'j CCL.:r.c:i Chairman VlJiiliar.i F:cyc! share a laugh.

Cncer:l shrouc of secrecy, Electric City trolleys c:ll7it!d loc:11 dignit.1ries from the Anderson County Air-oort to the cor::::;;.lnV Frid.1v so thev \vouldn't k.'10W :lhe:ld of'time vv'here thev vv'ere going. '" 

### ...."**~** .. 

# -- In Septe:Tlbe:-, Frig:d::l::-e. under the :lnony::neus n.1l7le "Company 

### X." got :l t.1.'<. ince:1tive p:lcbge from t!1e**:~** ..nce:-son County CounciL Tht! cOL!my offered it tht! standard 6 percent fee-in-lie:.l of t.::l.x.es, lowe:-ing its property t4L'<. rate from 10.5 percent. The company also will get a 52,500 state t4L'<. credit perjob.
Anderson County DevelopmentPartnership director Holly Matheson saidFrigidaire officials wanted to wait to make the announcement until details were finalized and a special ceremony at the plant could be organized.
Part ofthe announcement included iYIr. Thompson using a pairofscissors to cut offone-third ofa symbolic electric bill. He said the new refriger:ltors will save customers about200 kilowatt-hours peryear. Part ofthe company's investment comes from a federal mandate that manufacturers cut the energy use ofappliances by about 30 percent in July 2001. Company officials said the new refrigerators, which Frigidaire is calling the "next generation" of advancedrefrigerators, will go beyond the minimum energy standards.
Offici:lls wouldn't reveal otherdetails on the new refrigerators for competitive reasons, but said the)
http://www.andersonsc.com!archive/newspage.asp?id=30747 8/9/99 

### ATTACHMENT AlIvir. Thompson said later that Anderson County suppliers also should benefit from the investment,

but it was to early to say how. "These are good corporate citizens - they always pay their tax bill early every year," said Bill Dillard, superintendent of Iva-based Anderson School District 3. Frigidaire's investment could add hundreds of thousands of dollars in tax revenues to the school district. The company already pays about $398,000 per yearin taxes to the local schools. Frigidaire Home Products, based in Augusta, Ga., has one other refrigerator manufacturing plant in Greenville, Mich. Company spokesman Tony Evans said Frigidaire wasn't ready to disclose any changes in the Michigan plant. Frigidaire, which competes worldwide with General Electric and Whirlpool, is owned by AB Electrolux in Stockholm, Sweden. The company makes everything from lawn mowers to Eureka vacuum cleaners. 

### Frigidaire Home Products • based in Augusta, Ga. • owned by AB Electrolux in Stockholm, Sweden • has about 15,000 employees in 10 states and Canada • makes refrigerators, Poulan chain saws, Weed Eater trimmers, Tappan and White-Westinghouse home appliances, including dishwashers, stoves and air conditioners In Anderson: 

### • at 101 Masters Blvd., near BASF Corp., south of Anderson • employs about 1,200 people • makes about 4,400 refrigerators per day • opened about 10 years ago 

### Home 11 Archive 11 Back
Anderson lndependent

--Mall A Scripps Howard Newspaper

_httr Jfwww.andersonsc

.comlarchivelnewspage

.asp?id=30747 8/9/99 

## - Nu. Thompson said later that Anderson County suppliers also should benefit from the investment, but it was to early to say how.

- "These are good corporate citizens

- they always pay their tax bill early every year," said 

### Bill Dillard, superintendent ofIva-based Anderson School District 3. Frigidaire's investment could add hundreds ofthousands ofdollars in tax revenues to the school district. The company already pays about 

### $398,000 peryearin taxes to the local schools. Frigidaire Home Products, based in Augusta, Ga., has one otherrefrigerator manufacturing plant in Greenville, N1ich. Company spokesman Tony Evans saidFrigidaire wasn'tready to disclose any changes in the N1ichigan plant. Frigidaire, which competes worldwide with General Electric and Whirlpool, is owned by AB Electrolux in Stockholm, Sweden. The company makes everything from lawn mowers to Eureka vacuum cleaners. 

### FrigidaireHome Products •based in Augusta, Ga. • owned by AB Electrolux in Stockholm, Sweden • has about 15,000 employees in 10 states and Canada • makes refrigerators, Poulan chain saws, WeedEatertrimmers, Tappan andWhite-Westinghouse home appliances, including dishwashers, stoves and airconditioners InAnderson: • at 

### 101 Masters Blvd., nearBASFCorp., south ofAnderson • employs about 1,200 people • makes about

### 4:,400 refrigerators perday • openedabout 10 years ago Home 

### II Archive" Back

And.mion IndfIPflnd8llt-MsII A Scripps Haward Newspaper

http-J!www.andersonsc.com/archive/newspage..asp?id=30747



# -

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### 8/9/99



# -

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# ndair^

# :to invest $8

Greenville:


# ., 1 1 

## N ew 

## fl

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## of products to be manufacturedheir By ROSEMARY HORVATH Daily News staffwriter. GRBE ILLlg -- Prigidaire Home Products announced Thuraday

. il will begin another century here Investing more than $80 million over three years in the plant. . PHPwill develop and manufacture an altogether new fleet of products to meet federal energy ! capadty lop-freezer refrigerators standards by 2001. Energy will bet are produced here. The balance of reduced by 30 percent or more products'*. is . produced . In than 200kWH per

.year
. Rip's: Anderson,' S.C.i. where . a .similar parent company is AD Electrolux I Investment was made... . of Sweden . -Offtctils- representing,manage. The product and factory, I went, employee unions, state and redesign includes

-new produc

- local governments got a preview



## t The Daily News 

# million`in

of the Next Generation project at company headquarters Thursday. Mike Kern, a Greenville native, is New Generation project leader. Topper described the investment as essentially creating a brand

-new factory operation within the existing facility. He projected annual output would be remain at the current one million, . And: by streamlining and adding advanced equipment, the operation will continue to operate with its current work force of2,000. But unlike previous fluctuations, employment levels will Terpaln stable, he said. - Thursday's announcement culminated months of negotiations and assessments

. Slate and local governments offered a package offinancial incentives and job training funds

. Included is a proposed 50 percent reduction in personal property tax abatements from the City of Greenville and training grants from the Michigan Jobs Commission. Greenville City Manager George Bosanic said the process for granting tax abatement will begin at the next City Council meeting

. Final approval is made by the State Tax Commission. State Rep. Larry DeVuryst, 93rd District

-Alma, told the group some people had the feeling of walking on thin ice knowing the company was considering pulling nut of the state. Topper said several locations were considered, such as merging with the Anderson plant, moving to another state yr country. .



### January 22, 1999 Hon -lines, fabrication areas and more streamlined and efficient manufacturing processes, said fill Topper, vice president .and general manager

, Greenville factory.. "Me transition is the largest project undertaken in (he 100- year-plus history of the factory," Topper said. Ninety percent of the research and'-design for Frigidaire's two refrisetator Iactpries is based in Greenville. Side-by-side and large 

# :Fr.gidai**r~::~o i'nv~st_** **$80':~m_i**

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## Of 

## products to be

## mnnufachlredlte,-e By ROSEMARV HORVATH D!llyNews stiffwriter. Uon 'Ui1es, fabrication areas and more streamllned and efficient manufacturing processes, said Bill Topper, vice president ,and generN manager, GreenviUe fac:- tory

.. " , , 'GRImNVILttt

_ Frigidaire "The transition is the largest' Home Products announced project undertaken In the 100- n.ur,day.iI wIU begin another**year-pt~** history of t1te (actory," cenlUry here lnveltingmore than TopperitaJd.

. $80 mlllJonovertluftyearsinthe Nln'ely percent 

## of the rese:Uch plant.**ando·~esign** for Frigidaire's hvo

o FHPwlUdevelop and manufac-**refrig~rator** Jad()ries is based in lure an altogether new fleet of Gree!,ville.Side·by-:sldeand Jarge products 10 meet federal energy', capadty lop-freezer refrigerators .tandudsby2001. 'EnergywlU be Ireproduced hf!t'e.Jh,ebalanceof reduced by 30 percent or more produces-,.is. producei:l ,.In ahln 200kWH per .year.**1tHP'.~ Anderso~·S,C,t:,\'lhere.1** **.s~lar** parent company Is**~O** Blectro[ux' investment was**n\a~~.** , , ' . ofSweden.

0 • 

# I**'Offldbls'~presentlng,manage**

The product lind factop'I mept, elhployee UNOM, 'laloe and redesign includes

.flew produc- local goye,mmenh gol 4 previe\y



### .- a :



# TheDally

# News ... , ofthe Next Generation project at ing funds. lncluded b It proposed companyheadquartersThursday, 50 percent reductJon in personal MikeKern, a Greenvillenative" is property

# tax abatements from the New**Generalfo~** projectleader. City of Greenville and training

Topper described the Invest- grants from the MichJgan Jobs ment as essentlaJly creating a Commissl,on. brand-new fllclory operation Greenville. elly Manager, within the existing fllcHily, He George BOlanic saJd the process projected annualoutputwouldbe

.lor granting lax abatement will remainat thecurrent one mUlion. begin Ilt the next City Cnuncil

, And: by**~lreamllning** and meeting. Final approval**~s** made adding advanced equipment, the by theState Tax CommisslOn. operationwillcontinue 10operate State Rep. Lany DeVuyst, 93rd with Us rurrent work force \l{ District-AIm., tord the group 2,000. Out unlike**.pre~ous** fluctu- some people had the feeling of**.tlo~.** ePlployment levels will walking on thin ire knOWing the. TelJlaln**JIAb)e~** hesaid. " _ companywas consideringpulling

,Thursday's annpunrement cul- outofthe state. " mln.ted months of negotiatioN Topper &ald'leveral**(~tioni** and assessments. Slate and local wereconsidered, suchas merging governmentsoffered a packageof with the Anderson planf, moving llnandal**incentiv~8** andjob train- to anotherstateprcountry. '



### .January**22~** 

### 1099Whirlpool WHIRLPOOL CORPORATION HONORED FOR Ncws ENERGY EFFICIENCY
Whirl l's l t

hi i i l d poo ers p n env ronmen a ea Relations stewardship and as a producer of energy efficiency Carver products has recently been acknowledged with a opportunities prestigious award from the Alliance to Save Energy (ASE). Site Llap The Alliance to Save Energy is a non-profit coalition of prominent business, government, environmental and consumer leaders who promote the efficient and clean use of energy worldwide to benefit the environment, the economy and national security. This ASE award is one of three prestigious 'Star of Energy Efficiency' awards andrecognizes Whirlpool for outstanding contribution achieving and promoting costeffective energy efficiency. More specifically, this award recognizes Whirlpool's support in both environmental public policy and providing environmentally responsible products for consumers. "Environmentally, Whirlpool has been at the forefront of the appliance industry,' said David Nemtzow, president of the Alliance to Save Energy. 'hey have helped raise the bar for environmental regulations and public policy and have been innovative in their development of products that conserve resources, namely the SERP refrigerator and the Resource Saver washing machine.' The Alliance has also recently commented in their' Associates Bulletin' that `Whirlpool's focus on quality and saving energy has made it an industry leader and outstanding corporate citizen.' Senator Jeff Bingaman recently wrote that 'Whirlpool's energy-efficient products and your work educating the public and policy makers about energy efficiency highlights your commitment to energy efficiency and helps ensure that we preserve our environment, create jobs, and save money for consumers.' In addition to the above Alliance award, Whirlpool has won a series of energy efficiency and environmental awards in the recent past and has demonstrated its commitment to preserving our precious finite natural resources. The following are examples of those awards and that commitment. The U.S. Department of Energy (DOE) recently named Whirlpool its 'Appliance Partner of the Year.' This honor is bestowed for Whirlpool's support of Energy Star, a DOE program that has developed standards for energy consumption, through educational efforts and new product introductions. 'Whirlpool prides itself on leading energy-efficiency standards in our industry,' said Mike Thieneman, executive vice president of Whirlpool North American Region. 'It's very gratifying for our efforts in product development and environmental



### 8/9/99 .ittpJlwww.,x,hirlpmlcorp.com/whr/lestenergy.htmI ATTACHMENT A3 

## - 

# IM--PORTANT 

# COMPANY STUFF**Whirl~Qol ~h:ws**  WHIRLPOOL CORPORATION HONORED FOR ENERGY EFFICIENCY**lnve~tQr** R.lilUons Cilner OpportunmttS Whirlpool's leadership in environmental stewardship and as a producer of energy efficiency products has recently been acknowledged with a prestigious award from the Alliance to Save Energy (ASE). Site lila!) The Alliance to Save Energy is a non-profit coalition of prominent business, government, environmental and consumer leaders who promote the efficient and clean use of energy worldwide to benefit the environment, the economy and national security. This ASE award is one of three prestigious "Star of Energy Efficiency· awards and recognizes Whirlpool for outstanding contribution achieving and promoting costeffective energy efficiency. More specifically, this award recognizes Whirlpool's support in both environmental public policy and providing environmentally responsible products for consumers. "Environmentally, Whirlpool has been at the forefront of the appliance industry,' said David Nemtzow, president of the Alliance to Save Energy. "They have helped raise the barfor environmental regulations and public policy and have been

- innovative in their development of products that conserve resources, namelythe SERP refrigerator and the Resource Saverwashing machine.· The Alliance has also recently commented in their "Associates Bulletin" that "Whirlpool's focus on quality and saving energy has made it an industry leader and outstanding corporate citizen." SenatorJeff Bingaman recently wrote that Whirlpool's energy-efficient products and your work educating the public and policy makers about energy efficiency highlights your commitment to energy efficiency and helps ensure that we preserve our environment, createjobs, and save moneyfor consumers.· In addition to the above Alliance award, Whirlpool has won a series ofenergy efficiency and environmental awards in the recent past and has demonstrated its commitment to preserving our precious finite natural resources. The fol/owing are examples ofthose awards and that commitment.
The U.S. Department of Energy (DOE) recently named Whirlpool its • Appliance Partner of the Year:This honoris bestowed forWhirlpool's support of EnergyStar, a DOE program that has developed standards forenergy consumption, through educational efforts and new product introductions. 'Whirlpool prides itself on leading energy-efficiency standards in our industry,· said Mike Thieneman, executivevice president ofWhirlpool

- North American Region. -Irs very -- gratifying forourefforts in product**de~~lopment** and environmental

.http://w.ww.whirlpoolcorp.com!whrlicslenergy.html**ATTAC~ENT** A3



# -

# - ....

- ...

-- 

# -

- 8/9/99award's."

c-.

SERP Refrigerator - In 1993, Whirlpool won the top prize in the $30 million 'Super Efficient Refrigerator Project' (SERP) contest sponsored by a coalition of U.S. public and private utility companies to develop a super-efficient refrigerator. Whirlpool's SERP refrigerator had the best energy efficiency levels of any refrigerator of its kind in the market. In 1995, Whirlpool introduced a second generation of SERP units with energy efficiency exceeding DOE standards by up to 30 percent. - Resource SaverTM Wash System -- In 1998, Whirlpool announced the introduction of the Resource Saver Wash System, a high-efficiency, top-loading washing machine with a spray rinse system and water temperature sensor that reduces energy consumption by up to 56 percent and water usage by up to 47 percent, compared to Whirlpool's deep fill and rinse washers. This is the industry's first and only top-loading washer to receive the Energy Star designation and Good Housekeeping's Best Buys for 1998.

erica, Europe, China and India. production in North America, South iripool has ceased CFC-refrigerator scientists have determined that CFC emissions can damage the ozone layer, rom escaping into the atmosphere. Since engineers developed a groundbreaking CFC reclamation process used in the repair of older refrigerators, thus preventing CFCs CFC Reclamation Process - Whirlpool

t are more than 95 percent recyclable. the development of a washer and dryer Europe

. a new product

-design tool called Eco-Design has been implemented to assist Recyclable Washer and Dryer - In



### htwJ/ www.whirlpoolcorp

.com/whrricslenergy.html 8/9/99 

### --"

..**~.** •• Resource SaverTM Wash System

-- In 1998, Whirlpool announced the introduction of the Resource S?verWash System, a high-efficiency, top-loading washing machine with a spray rinse system and water temperature sensor that reduces energy consumption by up to 56 percent and water usage by up to 47 percent, compared to Whirlpool's deep fill and rinse washers. This is the industry's first and onlytop-loading washer to receive the Energy Star designation and Good Housekeeping's Best Buys for " 1998

. •• SERP Refrigerator

- In 1993, Whirlpool won the top prize in the $30 million 'Super Efficient Refrigerator Project' (SERP) contest sponsored by a coalition of U.S. public and private utility companies to develop a super-efficient refrigerator. Whirlpool's SERP refrigerator had the best energy efficiency levels of any refrigerator of its kind in the market. In 1995, Whirlpool introduced a second generation of SERP units with energy efficiency exceeding DOE standards by up to 30 percent

Reclamation Process

- Whirlpool n,n_,M:: developed a groundbreaking reclamation process used in the repair older refrigerators, thus preventing CFCs escaping into the atmosphere. Since**~i'i:lnt;il\\:.tl\\:.** have determined that CFC**"""'lj~(!inr'oC:**

### can damage the ozone layer,**V\/t'lir1~rnn'** has ceased CFC-refrigerator**JrlJ\~U"UlJn** in North America, South**AmAnt'~** Europe, Chinaand India. Recyclable Washerand Dryer

- In a new product-design toolcalled ECC:HJ,asicln has been implementedto assist

the development ofa washerand dryer

are more tl'!an 95 percent recyclable.

http-J/www.whirlpooIcorp:comlwhrlicslenergy.html



# -

# - - "" 

# .. "" 

# .. 

# - 8/9/99Recyclable Product Packaging In Clyde, Ohio, the Whirlpcol manufacturing - - I .. plant has made great strides in a recyclabie product packaging program. Since 1992, more than a million pounds of packaging waste has been eliminated.
Environmental Protection Agency Awards-

-In October 1998, Whirlpool received both the 1998 Climate Protection Award and the 1998 Stratospheric Ozone Protection Award. These awards recognize technical achievements , perscnai dedication and exceptional leadership in protecting the climate and eliminating ozone-depleting substances . Whirlpool also received Environmental Achievement recognition from the U.S. Environmental Protection Agency for rapid voluntary reduction of chemical emissions in 1994. Whirlpool has also received commendations from the EPA on its involvement with the Green Lights prcgram.
" Australian Energy Efficiency Awards-- Whirlpool received the 1997 and the 1998 Galaxy Star Awards for excellence in the design, manufacture promotion and marketing of energy efficient appliances . The awards referenced Whirlpool's "four star" electronic sensor dryers, high efficiency washers, and

"five star" frost free refrigerators. With manufacturing facilities in 13 countries, Whirlpool's product design and manufacturing teams have worked in tandem with governments and the scientific community to develop resource-friendly products, recyclable packaging and conservation programs. Traditionally, the company has made great strides in exceeding environmental standards through innovations, advanced technology and an investment in continuous environmental improvements.

( HomeLife I Site M I Search 1 [ Acoiiance Comer I Cookin'l Clothesline I Family Life I Company Stuff ]
Copyright © 1997, whirlpool Corporation, All Rights Reserved

Comments to: info#whirfoool.com

http://www.whirlpoolcorp.com/whrricsr'energy.html 8/9/99 

## .. ;,.r:: ,,-:{

- '.- _•. Rec,!cl;lble FroGt..;c:**PaCkar;H~~** .- In 

### "'"7---:'

### .-:'~'**::-'.,:,~~~'"Jt--:-:'-~:-:-~.:--~:-, _~** 

### __**\~CjYGe,** Ohio, the

### Wrolr:~col**mant..;:<:c::..;r:r~** '. ' _. 7 -"-- .'. -_ -- ;Jlant has made great strides in a**r~c,!c!2.cie** product pac:<aging**~ror;r3.r.1.** Sincp. 1392, more than a million pounds of**~ac~<aglng** was:e has :een eliminated.
"" E;l'Iironr.;ental Protection Agency Awards--In October 1998. Whirlpool rscsi'/ec both the 1998 Climate Protection Award and the 1998 Stratoscheric Ozone Protection A'Narc. These awards recognize technical achievements, personai decication and exceptional leadership in protecting the climate and eliminating ozone-cepleting substances. Whirlpool also received Environmental Achie'Jemer,t recognition from the U.S. Environmental Frotection Agency for rapid voluntarJ recuc!ion or chemical emissions in 1994. Whirlpool has also received commendations from the EPA on its involvement with the Green Lights prcgram.
""Australian Energy Efficiency Awarcs--

. Whirlpocl received the 1997 and the 1998 Galaxy Star .A.wards for excellence in the design. manufacture promotion and marketing of energy efficient appliances. The awards referencedV'/hirlpool's "four star" electronic sensor driers. high efficiency washers. and "five star" frost free refrigerators.
With manufacturing facilities in 13 countries, Whirlpool's product design and manufacturing teams have worked in tandem with govemments and the scientific community to develop resource-friendly products, recyclable packaging and conservation programs. Traditionally, the company has made great strides in exceeding environmental standards through innovations, advanced technology and an investment in continuo.us environmental improvements.



### rHomeLite I**~** I**~** [ Aocliance Comer I**~** I Clothesline I Family Ute I Comoany SMt 1 Copyright'C 1997. Whirlpool Corporation, All Rights Reserved Comments to: info@whirlpool,com

ht.r.?:lIwww.whlrlpoolcorp.comlwhr/icsfenergy.html 8/9/99



# - 

# .. 

# -

# ..A2 WAI,I, S'I'I1 l?1^;1' .10tillNA1 , 111oNI)AY, AUG UST 2
. 1999 

# ECONOMY Iai C

# ot Emissions 

# Give 

# Ex

# perts 

# Ho p

# e Co111])11,111CC t'Vitli I.'Dilution Curbs Seen More Likely Itr.I1111N.1.I tu.1, A ".• . ••/ I ,I,• l1 \I t ' I111 1'.1 .II,I ^IIN.\r. Ul^1.II'r4 Ih'siiilr a honoring roli^sinlts 4'f ratan made cal bolt Il'ntailo'd ahm'sI Il,tl in the U.S. I . ;null l;lnl'al rmisSiolls appear Io y ,I1 0- 1 1 . has (=''I skill(' expel Is to believe IIIet chef k (if I nmplvinc willi itttet IlaIttnlino curbs aino'd at shooting it mint: nla)• nod hr sit jelling.more, S'lnlr gm Ill uttielll and pl ilu\Or i I',irr (i,itlc hate ;issllltteotEliiu Ill is Iinkrrl In ener gy ('tnlI,al Rental hV tilt, hurl sing of nil, abut Iiisil (ncls (Ital Irlrasr tar- 'Ir. I III is (he main "t;trrnbnnseci ii'n(icls ('('Gent, is oerrhral1+111 t In' (Iaiy'ing molt, of Ihr c ill IIii' a(Im1SIIIIo'I4'. I?I-1c, ;I rat 1%firil Ilie U.S. ecml-;tltmisl .I ; and Ill,' pt ice of gasoI'r'I In Irroltls, C02 elltissinns in I':It rl1' ntnct'd. I ising onh• 11.017, ,L Io a 1)epaI(inittl of Faleigy Ivhink hide's a ti,'rrnt chance (hat -inc a sicnificallf cll;nlge,'' said u'I Glavin, vice Illesidellt ofIt It Incliinle, a Waslingion rneiil think Tank.;ttin'c Choir Sri's the same phen:l'','nine g(nhally. If hrlircrs it it I11110nm's. I'inld make Ihr 11vt k ''tic I riptit l'II by lite Ii}•'Io, r of 1, glnhal oat sting less dil(i•^4+^_^a 

### Tioionni

## ng 'Carbon`

, Even while the U.s:.eculluiny loafed, 1998 614 -01^^Ide 6116s1 14,w
' ` easing compliance wills IhlernaliOnal Iieatles = 1 ?;x i ^' 1f ^ ^^ w^ . t x4' 4 miss 10N INiEN51fY +^{ ' 1 t ! l , : I = ter ?/n,

_ i

1 ' (md(Ilolls of tons) .. , ', .(Idn9lsmllll^ns bl llUP t:'^? .+ F1%O got % ..xf 1,606 199.1 ♦0.4% Chita 883 213. 4 -3.7 IE.U. 603 116.6 -0,9 fluesin 4,10 717. 2 -1.3 Japan 327 s E 111.1 -2.5 India f 304 1 ? 178.2 World 6,950 168.3 >.^ -0.5 'fle(ales how nnah carbon dtntide a counhy emhS to the Sue of Its ico"y is miasuied by'. '?t :` 1 d l li t

t i t ' = ' ' 'I'I " d t, e` } t gross oinec . pro , or ecoi o bu , p , , ^^

uc om u I tti, l ,
cull. The (leafy, which lire U.S. Congress has yet lu ratify, requires fhe U.S. to cutC02 emissions, measured against 1990 levels. by 1% slat ling in 20113. "l(yoto is still going to be a slietch (of sonm' counll ics," Mr. Flavin said, "but (lie amrlnml of emissions trading deeded and the dt,gtee of domestic effort may turn outto lie significantly less than everyone expcc(rtl." I(rcaust' many exprt(s assun ►ed economic gltnv(h a1141 (3)2 rnlissions tuove in lockslep. they had pi editaed the U.S. might have to impose an economy

-wrenching emissions cut of 307 to 4070 by 2008, when the treaty's schedule of emissions curbs begins. One safety valve planned by theClinton administration Is emissions trndIng, which would let U.S. companies buypermits-from other companies or countries that have exceeded the treaty's targets-to emit additional C02. This has proyoked a light with European nations that want emissions trading to be limited. But flat or slumping emissions could defuse some of this tension: "Most of this is due to market forces," said Itoward Geller, executive director at American Council for an Energy

-Efficient Economy, a nonprofit Washington research firm (hat represents business and academic groups : lie and Mr.Flavin see the rise of the information sector, which features Industries with light C02 emission levels, and (lie increasing use of more energy

-efficient machines andappliances as two major factors that appear to have caused emissions to remain nearly level in 1998. Roger S

. Bailentine, a While Houselawyer who handles the climate change Issue, says the full statistical picture of whathappened In the energy sector In 1998 is incomplete. "What we've got so far Is a snapshot, but It certainly Is consistent with what we've been saying, which Is you can grow the economy and reduce emissions at the same time." Mr. Ballentine Is about to depart for China, a key player in the Kyoto deliberations. China also has produced some recent statistical surprises. According to Mr. Flavin, China's economy grew 7% last year, while Its use of coal fell 5%. Mr. Balletttine attributes the drop In coal use to efforts by Chinese officials to remove subsidies that have favored lavish use of coal, which has fouled the air of many Chinese cities. The Clinton administration will needChina and other developing nations to become involved In the Kyoto Treaty to get Congress to ratify It. Lawmakers here are reluctant to put the U.S. at an economic disadvantage with the emission cuts If other nations don't follow suit

. But data of energy use from China and Eastern Europe also indicate emissions levels there are dropping because industries are leaping Into the Information economy, too. So far, the slump in emissions has been documented by two studies. A preview of a report by the DOE's Energy Information Administration on use of fossil fuels in 1998 shows that despite the rapid growth of the economy, emissions from the U.S. Industrial sector fell 1.296 last year

. Separately, a Worldwatch analysis of 1998 energy data gathered by BP Amoco PLC shows global emissions declined 0

.5% last year, while the world economy expanded 2.5%. 1\7. Till'; \\,,\1,1, :-iTIlEli:1' .lOOHN"

.. I\tOND"Y. AUGUST 2. l!l99 

# ECONOMY 

# '\at 

# C02Elllissiol1S G-ive Experts

# I-Iope**l~Olllpliallce** 

# \Vilh PollulionCurbs Sccn fvlorc Likely
11,1 ,I""N ,1,1"111," ,\

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,**r"'i<~:illlls** pI Iliall iliadI' r:lIhllll 1I'III:Ii!1f'1l**a\lllll~1** Iial ill IIII' 1I.l'. I. :llItI /:!{lI>a! l'IlIissiollS "!,(,(,:lr In 'l'I,,'d, ha<: I,'t( SlIllIrrXI'f'lls III "!'IiI'\"('llir
I <11

..,1.; """l11ph'illl! lI'illI illlNlla- "".Jillll nil (Is aillll'd al Sll'llIl11illg :11 mill,! ilia," 111'1111' Sll,iollillg, 11"11', S"IIII' 1:1111'1111111'111 a1111 1" j111<1, r 1'1nil'l !i"II<: h:II'r assllIlH',1 " flll\1 Iii is lillk"" 10 1'1Il'1 P' 1'1111- I,**I';lIli"lIl;ul~'** IIII' hllillillg (II oil. ,111"1 ''''sif [lids Ihal Id,'a,.' rar1·1,', I**'I~** is Ihr lIIaill "I!II'rlllulIlsr III' s' il'lIli<:ls Iwlit'I'1' is o\"('lllI'al1":1111'1**h~'** II;1l'l'illl! 1Il{lll' "I Ihl'

< in II,,' allllllsl'III'J(',
I**1!t:'~.** a yf'ar 11111'111111'**II,~,** rCIIII- " allll",I,I':"r allli IIII' 1" ifr,II gilSfI- ('1'01 I" If'fllllis, r(ll rlllissiollS in 

### "",rI,1' 1I101Td. Iisilll! IIl1ly 1I,III'7r. l: '" a Ilrl';II'"H'11 pI**1'~IIl'lgr** II'- hilll, 'hpll"s :t dl" 1'111 rll:IIIl'l' Illal 'illc " siCllilirall1 I'lIalll(l'." said "',. !'''Irill. rirr (II ('silll'lIl "I "h 11I<:1i11i11'. il \\'asllillghlll fm'i' II IhiIII.; lallk. I;!lill's 1!1I'1I1' srI's Iht' SoUtH' piH"

h;'I'I'I'lIilll! I:lohalll', II IlI'lil'\'I's

, if if f**""IiI1""~.** I "IIhl 111011<1' IIII' 11"1**i'i""~** I I',!IIit

..II ",I' Ihe I{yol" , f 1111, /:11111:11 Iralmillg ,,"lOS .lilll

### Thinning Carbon:**D~oxl** Even while Ihe U.S:,ecOIlulnyloared, 1998

## ca**bll~I·r.lIIJXldlll** ..·mu:.nll' easlnu**cOllllllian(;~**Willi 11l!8 ' , ' .**'I:}:"~ ,t~ISSION,** 

CUll, Thr !lcaly, which Ihe U.S. Congress' has yrllo lalily, rC11llirrs Ihe U.S, 10 cui CO2 rrllis1'ifllls. IIIr1l51111,'1I againsl J990 levels. 11\' 7';'" sIalIIII/! ill 2111111.

, "I{rulo is SliII'g(lilll( hI hI' a 1'llrlcll lor SIIIIIP ('11111111 irs," fIIr. Flavin said, "IJIIllhe :1111011111 (II ('mis.ions Inulill/!' ncedrll alHl IIII' Ih'I:I(,1' fll Ihllllrslie errmllll:lY lurn 0111 10 hI' sil:llilirallll)' IC$s Ih311 evclyolle exIwrled." IIt'nIIlS(' lIIallY rXllf'lls lIsslllllrd c('o11111IIit' I:,owllt :1nll CO)' "IIIissIons nlllvr ill lurksl..,., IIII'rhatlillr"idclilhe U,S. might have 10 1IIIIIOse an eCOliomy-wrenchlng cmissions cut or 3010 to .010 by 2008, when Ihe Irealy's schedule or emissions curbs hcgins. One sarely valve Ilianned by Ihe Cllnlon adrnlnlslrallon is emissions Iradlng, which would let U.S. companies buy pCl'llIils-rl'O/II olher cOlllpanles or COIIIItries thai have exceeded the Ilealy's largels-toemil atldilional C02.This hns I,rovokctl a light wllh guropean nations lhat want emissions trnding tobe Ihnlled. IIlIt lint or slnlllJling emissions could deluse someorIhls tension: "MostorthisIs duetomarketforces," saidIlownrdGeller,

.cxecutlve director atAmerican Council ror an Energy-Efficient Economy, a nonl'roJil Washington research linn that represents businessand academic groujls; lieand Mr. Flnvln see the rise or the InfOrmation sector, which features Induslries with light CO2 elllission levels, and the Increasing lise 01 more energy-eUident machines and appliallces as two major ractol's that nilpear to have caused emissions to remain nenrly level In J998. Roger S. Ballentine, a·Whlle House lawyerwhohandles the climate change Is· sue,saysthefull statistical**plctur~**ofwhat happened In theenergy sectorIn 1998Is In· complete. "Whatwe've gotsorarIsasnapshot, but It certainly Is consistent wllh what we've been saying, which Is you can grow theeconomy andreduceemissions at the sameUme." Mr. Ballentine Is about to depart ror China, a key player In the Kyoto dellbera· tlons. China alsohasproducedsomerecent slatlstlcal surprises. According to Mr. Flavin. China's economy grew 

### 7,. last year, while Its use orcoal fell 5,.. Mr. Bal·

, lentine altrlbutes thedrop Incoal use to er·

rorts by Chinese oUicials to remove subsl· dies that have ravored lavish use or coal, which has fouled the air or many Chinese cities. The Clinton administration will need China and other developing nallons to becOllie Involved In the Kyoto Treaty to get Congress to ratUy It. Lawmakers here are reluctant to put Ihe U.S. at an economic disadvantage with the emission culs Ir olher nations don't rollow suit. Butdataof energyuse fromChinaandEasternEurope also Indicate emissions levels there are dropping because Industries are leaping Inlo lhe Information economy,too. So (ar. the slump In emissions has been documenled by lwo stUdies. Apreviewofa rCllOrt by the DOE's Energy Information Administration onuseorlossll ruels In 1998 shows thai despite the rapid growth ofthe economy. emissions from lhe U.S. Industrial sectorfell 1.2%lastyear. Separately.a WOl'ldwalch analysis or 1998 energy data

, galhered by UP Amoco PLC shows global

, emissions declined D.S" last year, while

, the world economyexpanded 2.5%. 

# "

# ...

f :

.. :

### Affidavit of Rick DeVos:

Rick DeVos, first being duly sworn, deposes and says: 1. I am employed as an engineer for GE Appliances, General Electric Company. My office is located at Appliance Park, Louisville, Kentucky, which is the headquarters operation of GE Appliances and the technology center for the appliances business. I am responsible for design and specification of refrigerator product and have held this position since February 1999. As relevant to this matter, I work on refrigerator cabinet redesign for GE's new refrigerators that will meet Department of Energy's (DOE) 2001 energy efficiency standards. 2. I have worked on refrigerator design for 6 years, having worked as manager of refrigeration engineering at Frigidaire. I have further worked in the refrigeration industry for an additional 6 years as manager of advanced technology and reliability for International Comfort Products, a major manufacturer of residential air conditioning equipment. 3. I file this affidavit in opposition to the Exception Petition filed by Amana Appliances that seeks relief of 10% from the 2001 refrigerator energy-efficiency standards through 2009. Part of any manufacturer's design effort normally includes a review of the products of its competitors. I have performed these analyses on competitor refrigerator products, including Amana's. Based on those reviews, I have determined that Amana has several cabinet design options that could improve the energy performance of its refrigerators. 4. Amana's refrigerator doors are 2.0 in. thick. Adding insulation and increasing the door thickness to 3.5 in. found in the rest of industry would improve energy performance. The marketing benefits of thin refrigerator doors, an appearance feature, should not put this design option off limits in the search for energy improvement. Maytag, Frigidaire and GE already use 3.5 in. doors on product as small as 24.6 cubic feet. 5. Amana's cabinet design is very old. This gives it opportunities not available to other manufacturers to add insulation without loss of internal volume. Amana also places the cold suction line outside the cabinet while competitors have located it in the foam of the cabinet preventing heat gain. In addition, gasket area heat leak improvements can have a major impact on refrigerator efficiency improvement. 6. If Amana has already made plans to include these improvements in its new designs, then it should have even less difficulty achieving the energy improvements- required to comply with the new refrigerator standards. When cabinet redesign is combined with adding improved components that have become available since the regulations were finalized in 1997, Amana should be able to achieve the performance levels required by the regulations in 2001 and

EXHIBIT 3 Affidavit of Rick DeVos: Rick DeVos, first being duly swom, deposes and says: 1. I am employed as an engineerfor GE Appliances, General Electric Company, My office is located at Appliance Park, Louisville, Kentucky, which-is the headquarters operation of GE Appliances and the technology centerforthe appliances business. I am responsible for design and specification of refrigerator product and have held this position since February 1999, As relevant to this matter, I work on refrigerator cabinet redesign for GE's new refrigerators that will meet Department of Energy's (DOE) 2001 energy efficiency standards.
2. I have worked on refrigerator design for 6 years, having worked as manager of refrigeration engineering at Frigidaire. I have further worked in the refrigeration industry for an additional 6 years as manager of advanced technology and reliability for International Comfort Products, a major manufacturer of residential air conditioning equipment. 3. I file this affidavit in opposition to the Exception Petition filed by Amana Appliances that seeks relief of 10%from the 2001 refrigerator energy-efficiency standards through 2009. Part of any manufacturer's design effort normally includes a review of the products of its competitors. I have performed these analyses on competitor refrigerator products, including Amana's. Based on those reviews, I have determined that Amana has several cabinet design options that could improve the energy performance of its refrigerators.
4. Amana's refrigerator doors are 2.0 in. thick. Adding insulation and increasing the doorthickness to 3.5 in. found in the rest of industry would improve energy performance. The marketing benefits of thin refrigerator doors, an appearance feature, should not put this design option off limits in the search for energy improvement. Maytag, Frigidaire and GE already use 3.5 in. doors on product as small as 

### 24.6' cubic feet.
5. Amana's cabinet design is very old. This gives it opportunities not available to other manufacturers to add insulation without loss of intemal volume. Amana also places the cold suction line outside the cabinet while competitors have located it in the foam ofthe cabinet preventing heat gain. In addition, gasket area heat leak improvements can have a major impact on refrigerator efficiency improvement. 6. If Amana has already made plans to includethese improvements in its new designs, then it should have even less difficulty achieving the energy improvements-required to comply with the new refrigerator standards. When cabinet redesign is combined with adding improved components that have become available since the regulations were finalized in 1997, Amana should be able to achieve the performance levels required bythe regulations in 2001 and

EXHIBIT 3

### maintain these levels in 2003. M-El projects that it will improve the efficiency of

its compressors by 11 % between now and 2001. And other components already available on the market, including evaporators, condensers and electronic controls, can provide fully 9%of the 30% efficiency improvement required by the new energy standards. 7. As is apparent from the foregoing, Amana has many places to find the ways to constituent elements to develop a compliance plan. It does not require 10% relief.

RICK DEVOS
COMMONWEALTH OF KENTUCKY ) COUNTY OF JEFFERSON' )
Sub2^sic ibed, sworn and acknowledged before me by RICK DEVOS on this the I' day of , 1999.

N¢tary Public - State-at-Large My commission expires: maintain these levels in 2003. MEl projects that it will improve the efficiency of its compressors by 11% between now and 2001. And other components already available on the market, including evaporators, condensers and electronic controls, can provide fully 9%of the 30% efficiency improvement required by the new**e~ergy** standards.
7. As is apparent from the foregoing, Amana has many places to find the ways to constituent elements to develop a compliance plan. It does not require 10% relief.

RICK DEVOS

COMMONWEALTH OF KENTUCKY ) ) COUNTY OF JEFFERSON )
Subscribed, sworn and acknowledged before me by RICK DEVOS on this the

# ~ day of

# ---1~~~~__, 1999.

N tary Public

- State-at-Large My commission expires: 

# '3

- I

-

# d.()03

### Affidavit of Gary Mellinger:

Gary Mellinger, first being duly sworn, deposes and says: 1. I am employed as Team Leader, Insulation, for GE Appliances, General Electric Company. My office is located at Appliance Park, Louisville, Kentucky, which is the headquarters operation of GE Appliances and the technology center for the appliances business. As relevant to this matter, I am responsible for evaluating foam blowing agent candidates and improving foam applications processes for GE's new side-freezer refrigerators that will meet the Department of Energy's 2001 efficiency standards. 2. 1 have worked on refrigerator insulation issues for approximately 22 years. I have been the GE Appliances representative to the Insulation Technical Advisory Committee (ITAC) of the AHAM-industry-govemment Appliance Research Consortium (ARC) since its creation. I have been the keynote speaker and moderator of lectures on refrigerator foam insulation at the Society of Plastics Industries' International Polyurethane Conference. 3. I file this affidavit in opposition to the Exception Petition filed by Amana Appliances that seeks relief of 10% from the 2001 refrigerator energy-efficiency standards through 2009. 4. Amana's Petition appears to be predicated on the assumption that blowing agent and foam efficiencies are static and not subject to improvement over time. In my experience, as new blowing agents have been developed, chemical suppliers and appliance manufactures have improved their insulating properties. Changes in foam formulations and changes in foam application processes have led to consistent improvements in refrigerator foam energy performance. 5. As Amana readily acknowledges, there are multiple options available to achieve compliance with the new refrigerator standards. Even though Amana seeks a blanket 10% relief for using cyclopentane, its own submitted evidence shows that ARC's test results found that cyclopentane can actually achieve

EXHIBIT 4 Affidavit of Gary Mellinger: Gary Mellinger, first being duly sworn, deposes and says: 1. I am employed as Team Leader, Insulation, for GE Appliances, General Electric Company. My office is located at Appliance Park, Louisville, Kentucky, which is the headquarters operation of GE Appliances and the technology center forthe appliances business. As relevantto this matter, I am responsible for evaluating foam blowing agent candidates and improving foam applications processes for GE's new side-freezer refrigerators that will meet the Department of Energy's 2001 efficiency standards.
2. I have worked on refrigerator insulation issues for approximately 22 years. I have been the GE Appliances representative to the Insulation Technical Advisory Committee (ITAC) of the AHAM-industry-govemment Appliance Research Consortium (ARC) since its creation. I have been the keynote speaker and moderator of lectures on refrigeratorfoam insulation at the Society of Plastics Industries' International Polyurethane Conference. 3. I file this affidavit in opposition to the Exception Petition filed by Amana Appliances that seeks relief of 10%from the 2001 refrigerator energy-efficiency standards through 2009. 4. Amana's Petition appears to be predicated on the assumption that blowing agent and foam efficiencies are static and not subject to improvement overtime. In my experience, as new blowing agents have been developed, chemical suppliers and appliance manufactures have improvedtheir insulating properties. Changes in foam formulations and changes in foam application processes have led to consistent improvements in refrigeratorfoam energy performance.
5. As Amana readily acknowledges, there are multiple options available to achieve compliance with the new refrigerator standards. Even though Amana seeks a blanket 10% relief for using cyclopentane, its own submitted evidence shows that ARC's test results found that cyclopentane can actually achieve



### EXHIBIT 4



# - ...

### energy performance that is only 6% worse than HCFC-141 b. (See Attachment B

to Kessler Affidavit.) GE's



### G, tRY MEtt NGER e,-^ COMMONWEALTH OF KENTUCKY ) COUNTY OF JEFFERSON )
Subscribed, sworn to and acknowledged before me by GARY MELLINGER on this the day of 1999.

Not,4ry Public - State

-at-Large / - ^^ My commission expires : energy periormance that is on to Kessler Affidavit.) GE's

COMMONWEALTH OFKENTUCKY ) ) COUNTY OF JEFFERSON )
Subscribed, sworn to and acknowledged before me by GARY MELLINGER on this the

# fI~day of ,1999.

,'. : .. :"::-,'::**~.-** ry Public

- State-at-Large 

### M .. . 

# 3-/-d.J}tJ3

y commiSSion explres:

_____ _ 

### .. ,"

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### ...

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....... 7', ", • " :' "" 1 ,_ .... ", .'

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## .-,**~** •.•.

,', ... ".....

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# ... ...**~':** ' .

.' .'Affidavit of Kenneth Holland:

Kenneth Holland, first being duly sworn, deposes and says: 

### 1. I am employed as side-by-side Product Manager for GE Appliances, General Electric Company. My office is located at Appliance Park, Louisville, Kentucky, which is the headquarters operation of GE Appliances. I amresponsible for developing product plans and specifications for the new GE sidefreezer refrigerators that will be built in compliance with the Department of Energy's (DOE) 2001 energy efficiency standards. 2. I have reviewed those portions of Arnana's exception petition that discuss concerns about possible loss of internal refrigerator volume because of a need to increase insulation thickness to meet the new refrigerator standards. 3. In devising product specifications for GE's new refrigerators, I too, have reviewed various design options, some of which could lead to smaller internal 

### storage volume.

Based on my knowledge of Amana's current product offerings and how a -e y might be affected by the new energy standards, I do not believe that the impact of the standards on volume would be appreciably different for Amana. 4. As Alan Kessler points out in his affidavit filed in support of the Amana petition, the retail prices of refrigerators is directly affected by internal storage volume. Thus, larger volume models of similarly featured refrigerators command a higher price

. Internal volume is the single most important product feature on which manufacturers compete

. GE Appliances would be placed at a competitive disadvantage if Amana,were granted exception relief. Amana would be able to avoid the cost of engineering solutions to overcome the impact of increased foam thickness that other manufacturers must solve , either retaining the savings or passing them along to retailers in the form of lower prices

.. This would probably lead to market share gains by Amana, or, if other manufacturers responded with price reductions, slimmer margins for Amana's competitors and weaker industry players

. Finally, if Amana took advantage of the exception relief and did not

EXHIBIT 5 Affidavit of Kenneth Holland:
.' Kenneth Holland, first being duly sworn, deposes and says: 1. I am employed as 

### side-by-side Product Managerfor GE Appliances, General Electric Company. My office is located at Appliance Park, Louisville, Kentucky, which is the headquarters operation of GE Appliances. I am responsible for developing product plans and specifications for the new GE sidefreezer refrigerators that will be built in compliance with the Department of Energy's (DOE) 2001 energy efficiency standards.
2. I have reviewed those portions of A{T1ana's exception petition that discuss concerns about possible loss of internal refrigerator volume because of a need to increase insulation thickness to meet the new refrigerator standards. 3. In devising product specifications for GE's new refrigerators, I 

### too, have reviewed various design options, some of which could lead to smaller internal storage volume.

Based on my knowledge ofAmana's current product offerings and how be affected by the new energy standards, Jdo not believe that the impact ofthe standards on volume would be appreciablydifferentforAmana.
4. AsAlan Kesslerpoints out in his affidavit filed in support ofthe Amana petition, the retail prices of refrigerators is directly affected by internal storage volume. Thus, largervolume models of similarty featured refrigerators command a higher price. Internal volume is the single most important productfeature on which manufacturers compete. GE Appliances would be placed at a competitive disadvantage ifAmana were granted exception relief. Amana would be able to 

### avoidthe cost of engineering solutions to overcome the impact of increased foam thickness that other manufacturers must solve, either retaining the savings or passing them along to retailers inthe form of lowerprices

.. This would probably lead to market share gains byAmana, or, if other manufacturers responded with price reductions, slimmermargins forAmana's competitors and weaker industry players. Finally', 

### ifAmanatookadvantage of the exception relief and did not



### EXHIBIT 5

### have to reduce internal storage volumes, all other manufacturers would be

disadvantaged in their ability to compete on this most important product feature. Amana has not justified the request for exception relief and their petition should be denied.

KENNETH HOLLAND
COMMONWEALTH OF KENTUCKY ) COUNTY OF JEFFERSON )
Subscribed, sworn to and acknowledged before me by KENNETH HOLLAND on this the Ic - day of UU^^_ 1999.



### Nottry Public

- State

-at-Large My commission expires: 3-" ^ 

# a^^3 have to reduce internal storage volumes, all other manufacturers would be disadvantaged in their ability to compete on this most important product feature. Amana has not justified the request for exception relief and their petition should be denied.

,.

# ~/. -!['l 

### /11 /JI}!'J

# .J-

# ~ j!j I,I/YV L ,i**N:rk'~~_** 

### KENNETH HOLLAND \

COMMONWEALTH OF KENTUCKY } ) 

### COUNTY OF JEFFERSON }
Subscribed, swom to and acknowledged before me by KENNETH 

### '/1"(/' /)

## (~ HOLLAND 

### on this 

## thel c- day

### of

### W'-:'~ .1999.

Not 

### ry Public - State-at-Large

, " .', 

### . My commission expires: 

# "3
- I,- (JOr)

# 3

", 

# ..