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 U.S. DEPARTMENT OF ENERGY

 + + + + +

 OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

 + + + + +

PUBLIC MEETING: ENERGY CONSERVATION STANDARDS FOR

 COMMERCIAL WARM AIR FURNACES

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 CALL # 50402 EE-5B

 + + + + +

 MONDAY, MARCH 2, 2015

 The above-referenced working group met in

Room 8E-809, 1000 Independence Avenue SW,

Washington, D.C., 20585 at 9:00 a.m., Doug

Brookman, facilitating.
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1 P R E S E N T

2 DOUG BROOKMAN,

 Meeting Facilitator, Public Solutions

3

DAVE CASE,

4 U.S. Department of Energy

5 JOHN CYMBALSKY,

 Office of Energy Efficiency and Renewable

6 Energy, Building Technologies Office, U.S.

 Department of Energy

7

ERIC STAS,

8 Office of the General Counsel, U.S.

 Department of Energy

9

 A L S O P R E S E N T

10

DAN ARNOLD,

11 Nortek Global HVAC

12 ADAM DARLINGTON,

 Navigant Consulting

13

VICTOR FRANCO,

14 Lawrence Berkeley National Laboratory

15 JILL HOOTMAN,

 Trane

16

KEVIN JARZOMSKI,

17 U.S. Energy Information Administration

18 DOUG KOSAR,

 Gas Technology Institute

19

CHRISTOPHER LAU,

20 Navigant Consulting

21 ALEX LEKOV,

 Lawrence Berkeley National Laboratory

22
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1 JOHN LOHRER,

 U.S. Department of Justice, Antitrust

2 Division

3 JOANNA MAUER,

 ACEEE

4

MICHAEL MCCABE

5

SAM MCCLIVE,

6 Navigant Consulting

7 MIKE RAY,

 Lennox International

8

MICHAEL RIVEST,

9 Navigant Consulting

10 ANIRUDDH ROY,

 AHRI

11

HARVEY SACHS,

12 ACEEE

13 FRANK STANONIK,

 AHRI

14

CONSTANTIN VON WENTZEL,

15 Navigant Consulting

16 ROBERT WHITWELL,

 Carrier

17

18

19

20

21

22
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1 C O N T E N T S

2 Welcome, Introductions, Agenda Overview

 Doug Brookman 5

3

Purpose of Public Meeting; Opening Statements;

4 Regulatory Authority and Rulemaking Overview

 John Cymbalsky 10

5

Market and Technology Assessment; and

6 Screening Analysis; Engineering Analysis

 Adam Darlington 15

7

Break

8

Markups; Energy Use Characterization; and

9 Lifecycle Cost and Payback Period Analysis

 Victor Franco 77

10

National Impact Analysis, Shipments, and

11 Regulatory Impact Analysis

 Victor Franco 138

12

Manufacturer Impact Analysis

13 Christopher Lau 153

14 Environmental Impacts and

Indirect Employment Impacts

15 Victor Franco 178

16 Closing Remarks from Interested Parties

 John Cymbalsky 187

17

Adjourn 187

18

19

20

21

22
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1 P R O C E E D I N G S

2 MR. BROOKMAN: Okay, let's begin. Good

3 morning, everyone. Welcome. This is the Notice

4 of Proposed Rulemaking Public Meeting on Energy

5 Conservation Standards for Commercial Warm Air

6 Furnaces, here at the U.S. Department of Energy at

7 the Forrestal Building in Washington, D.C. Today

8 is March 2nd. Glad to see you here this morning.

9 We're going to start with welcoming remarks from

10 John Cymbalsky.

11 MR. CYMBALSKY: Thanks, Doug. Thanks to

12 all of you who braved the two-hour delay here and

13 we're going to start pretty much on time. So I

14 appreciate everyone's effort in making it. I know

15 a few of us who wish to be here are on the webinar

16 instead due to travel issues. So please

17 participate through the webinar as if you were in

18 the room because we really want this to be a good

19 dialogue today. Thank you.

20 MR. BROOKMAN: Thank you. And we'll

21 talk more about the webinar in a moment. I'm

22 going to start with introductions, as I typically
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1 do. I'll start to my immediate left, and Harvey,

2 if you'd say your name and organizational

3 affiliation, we can get used to turning these

4 microphones on and off.

5 MR. SACHS: Hi. I'm Harvey Sachs,

6 American Council for an Energy Efficient Economy,

7 otherwise known as ACEEE.

8 MR. BROOKMAN: Thank you.

9 MS. HOOTMAN: Jill Hootman, Trane.

10 MR. RAY: Mike Ray, Lennox.

11 MR. VON WENTZEL: Constantin von

12 Wentzel, Navigant Consulting.

13 MR. DARLINGTON: Adam Darlington,

14 Navigant Consulting.

15 MR. STAS: Eric Stas, DOE General

16 Counsel Office.

17 MR. LAU: Chris Lau, Navigant.

18 MR. FRANCO: Victor Franco, Lawrence

19 Berkeley National Laboratory.

20 MR. LEKOV: Alex Lekov, Lawrence

21 Berkeley National Laboratory.

22 MR. MCCLIVE: Sam McClive, Navigant
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1 Consulting.

2 MR. RIVEST: Mike Rivest, Navigant

3 Consulting.

4 MR. MCCABE: Michael McCabe,

5 representing myself.

6 MR. CASE: Dave Case, U.S. Department of

7 Energy.

8 MR. BROOKMAN: Thanks again to all of

9 you for braving the cold and ice this morning to

10 get here. All of you received a packet of

11 information I hope. I'm going to do a very brief

12 agenda review. Immediately following this agenda

13 review, there's an opportunity for anybody that

14 wishes to, to make opening remarks, brief summary

15 remarks here at the outset about issues that

16 matter to you.

17 Following that, we're going to hear the

18 purpose of the public meeting and regulatory

19 authority and rulemaking overview. We'll move

20 from there directly into market and technology

21 assessment and screening analysis. We'll take a

22 break midmorning around about 10:15 or so. Then,
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1 engineering analysis followed by markups, energy

2 use characterization, lifecycle cost and payback

3 period analysis.

4 We'll take lunch around about noon or

5 so, describe any details surrounding that as

6 necessary when we get there. Returning from

7 lunch, lifecycle cost and payback period analysis

8 and then national impact analysis, shipments and

9 regulatory impact analysis. We intend to take a

10 break around about 2:15 or so and then - or

11 whenever we get there - manufacturer impact

12 analysis, environmental impacts and indirect

13 employment impacts.

14 And then, at the end of the day, yet

15 another opportunity for closing remarks, any

16 issues that anybody wishes to raise that they

17 don't think have been covered sufficiently during

18 the course of the day. As the agenda reflects, we

19 expect we'll be adjourning today no later than 4

20 o'clock.

21 I'd ask for your consideration. Please

22 speak one at a time. If you would, say your name
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1 for the record each time you speak; you've already

2 gotten used to turning the microphones on and off.

3 There'll be a complete transcript of this meeting

4 made available. If you could, be concise and

5 share the airtime. If you haven't done so

6 already, please turn your cellphone on silent mode

7 and if you can limit the sidebar conversations,

8 that'd be helpful.

9 Webinar participants, we welcome you.

10 The Department of Energy is trying very hard to

11 make these meetings totally accessible.

12 Especially it's useful on a day like this when the

13 federal government opens late and travel is

14 perilous. Please turn your phones on mute if you

15 would and raise your hands in the software

16 provided to be recognized to speak. It's been

17 working pretty well here recently. So if you wish

18 to speak, we'll unmute you and you can speak and

19 we ought to be able to hear you in the room. So

20 you can participate in this conversation, you can

21 follow the slides on your computer.

22 And I would also just encourage everyone
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1 including everyone joining us via the Web to

2 please submit written comments following today's

3 meeting. The department benefits by having

4 detailed written comments on all these matters,

5 and timely if at all possible; so we appreciate

6 you doing that. And then we'll go to the purpose

7 of the public meeting; John Cymbalsky?

8 MR. CYMBALSKY: Thanks, Doug. This is

9 John Cymbalsky, from DOE. Okay, our purpose of

10 the public meeting. As I look around the room, we

11 have attendees here who are used to this by now,

12 so I'm not sure I'm going to read through all

13 this. But in a nutshell, we're going to present

14 our results from our proposal for commercial warm

15 air furnaces and, again, we can't say this enough.

16 Let's get a good dialogue going with lots of

17 comments as we go through our analysis here.

18 Okay, so we're going to just open it up

19 now for opening remarks. Those who wish to say a

20 few words about the proposal for commercial warm

21 air furnaces, now's your chance.

22 MR. BROOKMAN: Comments here at the
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1 outset? No? None at the time. Okay, then --

2 MR. CYMBALSKY: Any on the webinar?

3 MR. BROOKMAN: Then I think we'll

4 proceed with the content, moving to regulatory

5 authority.

6 MR. CYMBALSKY: Okay. Thanks, Doug.

7 Still John Cymbalsky at DOE. Okay, so as we

8 probably all know by now, DOE's regulatory

9 authority for most appliances traces back to the

10 Energy Policy and Conservation Act of 1975. There

11 were also updates throughout the years including

12 EPCA 1992, which is what added commercial warm air

13 furnaces as a type of covered equipment.

14 The statute at this time also set

15 initial standards for commercial warm air

16 furnaces. EPCA also directs DOE to consider

17 amending existing federal energy conservation

18 standards for commercial warm air furnaces

19 whenever ASHRAE amends the levels in 90.1. So,

20 further into the timeline on updates to EPCA, EISA

21 2007 and the American Energy Manufacturing

22 Technical Corrections Act amended EPCA to require
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1 that every six years the secretary publish either

2 a Notice of Determination that standards do not

3 need to be amended for, in this case, commercial

4 warm air furnaces, or a Notice of Proposed

5 Rulemaking that includes new standards. And so,

6 that's what we have here today.

7 AEMTCA also required that DOE consider

8 amended energy conservation standards for

9 equipment for which more than six years had lapsed

10 since the most recent energy conservation standard

11 for this product. And so, that's the authority

12 under which we're acting here today.

13 Definitions: So, EPCA defines a warm air

14 furnace as a "self-contained oil or gas-fired

15 furnace designed to supply heated air through

16 ducts to spaces that require it and includes

17 combination warm air furnace/electric air

18 conditioning units but does not include unit

19 heaters and duct furnaces", and you can see the

20 citation to the Code.

21 DOE further defines a commercial warm

22 air furnace as "a warm air furnace that is
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1 industrial equipment and that has a capacity as

2 rated by maximum input of 225,000 Btu per hour or

3 more", and you can see the citation in the Code of

4 Federal Regulations.

5 And then, for the scope, this rulemaking

6 covers self-contained gas-fired and oil-fired warm

7 air furnaces that supply heated air through ducts

8 with input ratings above 225,000 Btu per hour. It

9 includes commercial warm air furnaces that are

10 designed for makeup air heating and it also

11 includes combination warm air furnace/electric air

12 conditioning units, but does not include unit

13 heaters or duct furnaces.

14 Regulatory history: Equipment classes

15 were established by EPACT in 1992. It divided the

16 products into two classes; gas and oil-fired

17 units. The current minimum standards were

18 established by EPACT with an effective date of

19 January 1, 1994 and the thermal efficiencies are

20 listed below: 80 percent for gas-fired commercial

21 warm air furnaces, and 81 for oil.

22 Test procedure and efficiency metric,
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1 the test procedure is in the CFR, and it's a

2 uniform test method for the measurement of energy

3 efficiency of commercial warm air furnaces. It

4 incorporates ANSI standard Z21.47-2006, also the

5 UL standard 727-2006, and ASHRAE standard 103-

6 1993. The efficiency metric for commercial warm

7 air furnaces is thermal efficiency, which equals

8 100 percent minus the percent flue loss determined

9 using the testing procedure prescribed under 10

10 CFR 413.76.

11 Okay, as we probably all know by now, in

12 evaluating whether or not new standards are

13 justified, DOE has its seven EPCA factors that it

14 considers. They are listed here and we will go

15 through all these analyses over the course of the

16 day. And here we are at the proposal stage, or

17 the NOPR stage, and you can see the chevrons

18 indicating the analysis that went into the

19 proposal here today and we will go through each

20 and every one of these as we go through the day.

21 Okay, with that, if there are no questions, we're

22 going to move on to Adam Darlington to present the
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1 market and technology assessment and screening

2 analysis.

3 MR. HARVEY: Have you been trained up on

4 that?

5 MR. DARLINGTON: I have not. I'm trying

6 to figure out how to work this.

7 MR. CYMBALSKY: Oh, just to the right.

8 MR. DARLINGTON: To the right?

9 MR. CYMBALSKY: Yeah.

10 MR. DARLINGTON: And then, is this is a

11 -- do we have like a little pointer.

12 MR. CYMBALSKY: Yeah.

13 MR. DARLINGTON: It's not pointing. All

14 right, well -- yeah, it's not going on the screen

15 though. I guess I'll do without. All right, well

16 anyways, good morning, everyone. Adam Darlington

17 with Navigant. So I'll be taking us through the

18 market and technology assessment and the screening

19 analysis and the engineering analysis.

20 So the market and technology assessment,

21 here we have the purpose and methodology for this

22 particular portion of the analysis. So the market
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1 and technology assessment -- the market assessment

2 develops a quantitative and qualitative

3 characterization of the commercial furnace

4 industry, basically looking at manufacturers,

5 market shares, regulatory and non-regulatory

6 programs, historical market information; that type

7 of information.

8 The technology assessment develops a

9 list of potential technologies for improving the

10 energy efficiency of commercial furnaces and the

11 sources for these are all outlined in the TSD

12 chapter three. It's based on a variety of

13 publicly available information sources.

14 Okay, and so this slide is basically a

15 quick overview of the type of products we're

16 talking about here. So the majority of the market

17 for commercial furnaces are gas-fired commercial

18 furnaces. And typically these units are packaged

19 with the commercial air conditioning system

20 generally installed on rooftops. And so, as you

21 can see on the slide, it says "primarily installed

22 outdoors, supplies heated air to commercial
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1 buildings via ducts." Most are manufactured in a

2 single package as I just said, and they are

3 weatherized, meaning they are designed to be

4 installed outdoors.

5 Oil-fired commercial furnaces are a much

6 smaller portion of the market. They are generally

7 not packaged -- actually I think always the models

8 that we identified were never packaged with a

9 central AC -- an air conditioning component. And

10 they're generally intended for indoor

11 installation. So they're non- weatherized.

12 And so, as the slide says, DOE

13 identified four major manufacturers and nine

14 manufacturers with relatively smaller market

15 shares.

16

17 This slide is sort of a snapshot of the

18 models distribution. So DOE developed a database

19 based on the AHRI directory; and also for non-AHRI

20 members, DOE looked at product listings on

21 manufacturer websites. And DOE basically

22 maintained the existing equipment class breakdown
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1 into gas-fired and oil-fired. And so, on this

2 slide we're showing -- you can see the first two

3 columns, we're looking at 95 percent of the models

4 being gas-fired compared to 5 percent being oil5 fired. And then we also, just for informational

6 purposes, are looking at non-weatherized versus

7 weatherized. As you can see there, about tenfold

8 weatherized models to non-weatherized for the gas9 fired and then for the oil-fired they were all

10 non-weatherized. And keep in mind this is just

11 distribution of models. So actual unit sales or

12 shipments might be even more skewed in one of

13 these directions.

14 So the big -- one of the big things that

15 comes out of the market assessment is this, you

16 know, we look at the efficiencies of models on the

17 market. It kind of gives us a starting point, what

18 levels we're going to look at in the engineering

19 analysis. So, as you can see on this slide we're

20 looking at, the current federal minimum standard

21 is 80 percent. There are a lot of models at the

22 baseline. Still a good number at 81 as well, and
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1 then a few are at 82, and then just a handful

2 there at the condensing levels about 90 percent

3 and then nothing between 82 and 90 which, as you

4 all probably know, is the near- condensing range.

5 MR. RAY: Question.

6 MR. BROOKMAN: Please, Mike?

7 MR. RAY: Mike Ray, with Lennox. The 90

8 and 92 percent, do they fall into the above

9 225,000 Btu range?

10 MR. DARLINGTON: They are above the

11 225,000, yes. And so, I don't know if you caught

12 it in the scope section, but this rulemaking

13 includes makeup air units. And so, these are

14 actually smaller manufacturers of makeup air

15 units, yeah. So they're not what you would think

16 of as a conventional --

17 MR. RAY: What'd you call them again?

18 MR. DARLINGTON: Makeup air, yeah.

19 MR. RAY: Okay.

20 MS. HOOTMAN: [Off mic] -- outside air

21 units.

22 MR. DARLINGTON: Yeah, and then so this
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1 slide shows the oil-fired efficiency distribution.

2 And again, so the baseline is 81 percent and

3 that's the current federal standard. Most of the

4 models, you know, are at 82 percent with a couple

5 down there at 92 as well. And again, you know,

6 obviously a much smaller market and fewer models

7 than we saw for the gas.

8 And so, the other big part of the market

9 and technology assessment is the technology

10 assessment, and again as I stated earlier, the

11 goal is to develop a preliminary list of

12 technologies to improve the efficiency of

13 commercial furnaces. So DOE looked at a variety

14 of sources, reviewed manufacturer literature,

15 manufacturer brochures, spec sheets, took the

16 comments and inputs from stakeholders, discussions

17 during manufacturer interviews, and also

18 information gained during tear-down analysis and

19 we looked at all of these things to identify the

20 technologies that could be incorporated or are

21 currently incorporated to improve the efficiency

22 of commercial furnaces.
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1 And this brings us to the list shown on

2 this slide, where a number of technologies were

3 identified, and all of these are defined and

4 described in chapter three of the TSD. But

5 basically I would just say that this is sort of

6 the initial entire list. So just because

7 something's on this list doesn't mean that it's

8 necessarily driving any of the analysis. We'll

9 talk about it in the screening analysis and the

10 engineering analysis which of these technologies

11 were actually implemented and which were screened

12 out and which were not considered for other

13 reasons.

14 And so, here we're coming to our first

15 request for comment. Basically we are seeking

16 comment on the proposed equipment classes. We

17 note here in particular there's a question of

18 whether there's a need for separate classes for

19 non-weatherized and weatherized commercial

20 furnaces. And I guess just a little bit of

21 background on that point. So the question kind of

22 relates to whether there are any reasons to have
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1 separate product classes for them and I know that,

2 you know, we look at certain technology options

3 that may be more proven in non-weatherized, the

4 obvious example being condensing. But it's such a

5 small portion of the market, it's really unclear

6 if there would be too much benefit, so we're

7 seeking comment on that.

8 Also seeking comment on the technologies

9 identified, primarily whether DOE missed any

10 technologies, whether technologies are out there

11 that weren't included that possibly should have

12 been included and then also just generally on any

13 part of the market and technology assessment we're

14 seeking comment. So with that, do you want to

15 take it away, Doug?

16 MR. BROOKMAN: Thank you. Comments

17 here? You see the comment boxes, the request for

18 comment. Harvey Sachs?

19 MR. SACHS: This is Harvey Sachs with a

20 naquestion. Are the hundred percent makeup air

21 units differentiated enough to warrant

22 consideration of a separate product class for them
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1 or would that just lead to people doing some

2 submarining by adapting conventional units to

3 provide that function?

4 MR. DARLINGTON: Yeah, I mean, I guess

5 that's a question for maybe the manufacturers,

6 whether you're aware of any significant

7 differences. I mean, we did tear-down analysis.

8 We looked at outdoor air units. We looked at

9 conventional packaged units. You know, overall

10 the functionality I think is very similar,

11 obviously the big difference being that the

12 outdoor air, the makeup air units bring more than

13 just return air. They bring in outdoor air. So

14 as far as, you know, big design changes, you know,

15 I guess I'm not aware of anything that would maybe

16 drive it. But maybe the manufacturers could maybe

17 speak to some of the concerns if there are any.

18 MR. SACHS: Presumably the makeup --

19 hundred percent makeup air units or outdoor air

20 units would be missing a damper and a duct stub

21 for the return air.

22 MR. DARLINGTON: Well, sure. But I mean
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1 --

2 MR. SACHS: So the question -- I think

3 it's appropriate for the manufacturers --

4 MR. BROOKMAN: Louder, Harvey.

5 MR. SACHS: I think it's an appropriate

6 question for the manufacturers whether these might

7 warrant a separate class.

8 MR. DARLINGTON: Yeah, certainly if

9 there's going to be any difference in how the

10 efficiency can be improved as compared to other

11 types of commercial furnaces.

12 MR. BROOKMAN: Thank you, Adam. Jill?

13 MS. HOOTMAN: Jill Hootman, Trane. So a

14 gas furnace in a makeup air unit versus a

15 conventional package air conditioning system that

16 has a heating -- gas heating system, for all

17 intents and purposes really that gas furnace in

18 that makeup air unit can be tested the same as far

19 as the furnace. It certainly can be tested in the

20 same standard, Harvey. So I think that as far as

21 the test for its efficiency it's the same.

22 Now, whether you design those units in
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1 their application the same is another whole

2 question. They're certainly not designed the same.

3 The fan systems are different. Cabinet strength

4 and durability is different. Cabinet sizing is

5 different. So you don't design them because one is

6 for comfort conditioning and one is literally for

7 just ventilation and taking that outside air and

8 making it more comfortable for an air conditioning

9 system sometimes to condition on top of that. So

10 they're definitely two different utilities for how

11 they're used.

12 MR. BROOKMAN: Thank you. Mike, do you

13 have a comment? No?

14 MR. RAY: Mike Ray, with Lennox. The

15 hundred percent outside air unit; it traditionally

16 is a significantly larger cabinet and that's one

17 of the differences. The mainstream gas electrics,

18 if you will, are significantly smaller and don't

19 take into account all the various things that are

20 necessary as you design a hundred percent outside

21 air unit. So there are significant differences

22 between just a regular HVAC gas electric unit and
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1 a hundred percent outside air unit.

2 From a cooling standpoint, your coils

3 are significantly bigger, et cetera. But overall,

4 the gas heating component is just -- you know, I

5 mean, getting to 90 percent, I understand now the

6 -- who had 90 percent and where it was applied.

7 In general you don't see that in a commercial

8 arena.

9 MR. BROOKMAN: I don't think we've

10 received any comment yet about whether separate

11 equipment classes are needed. Jill?

12 MS. HOOTMAN: Jill Hootman, Trane. I

13 think what might be good here is what does the

14 department feel defines a product class? I mean,

15 in our eyes, these are different applications.

16 They're designed differently when we design them.

17 So we approach them totally differently. But that

18 doesn't mean that that's the definition by which

19 the department defines a product class. So maybe

20 an explanation of product class might be

21 appropriate.

22 MR. BROOKMAN: Uh-huh, or Adam, maybe
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1 you can start with the actual illustration here.

2 MR. DARLINGTON: Well, so the -- sorry,

3 the illustration?

4 MR. BROOKMAN: Go ahead. Keep going.

5 MR. DARLINGTON: Well, I was going to

6 say that there are statutory criteria for

7 establishing product classes, which is what I

8 think Eric is looking into right now. So you

9 know, I know it's capacity.

10 Do you have the -- so according to the

11 statute, we have the secretary can establish

12 separate equipment classes if the secretary

13 determines that the covered products within such

14 group, A) consume a different kind of energy from

15 that consumed by other covered products within

16 such type, B) have capacity or other performance17 related feature which other products within such

18 type (or class) do not have and such feature

19 justifies higher or lower standard from that which

20 applies (or will apply) to other products within

21 such type (or class). And I believe that's it.

22 Yeah, that's all.
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1 MR. SACHS: The term -- this is Harvey.

2 The term utility does not find itself in the

3 definition, different utility.

4 MR. DARLINGTON: A performance

5 characteristic I think was the term.

6 MR. CYMBALSKY: This is John, from DOE.

7 So I mean, to me the consumer is demanding warm

8 air and both are delivering the warm air. So I

9 don't know if a consumer would get any additional

10 utility from the warm air from a makeup unit

11 versus the more conventional one, my personal

12 opinion.

13 MR. BROOKMAN: Mike Rivest?

14 MR. RIVEST: So just from a practical

15 application from product classes and other

16 rulemakings, the thing that's guided DOE in the

17 past has been, you know, can this product achieve

18 the same AFUE values without risking that standard

19 set for one class would render that product non20 available. So for example -- so if the standard -

21 - if the standard were set for a regular

22 commercial furnace and at an AFUE that would
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1 result in non-availability of gas packs, like a

2 bare unit, for example, that would definitely, you

3 know, create automatically a trigger for a

4 separate product class.

5 MR. SACHS: So Mike --

6 MR. RIVEST: Now, in this case, you

7 know, it's -- you know, is there something

8 inherently different about the gas product itself

9 and the AFUE.

10 MR. SACHS: Yes.

11 MR. BROOKMAN: Harvey Sachs, go

12 ahead.

13 MR. SACHS: This is Harvey and what

14 caught my attention is several things. First of

15 all, an existence proof that we do have condensing

16 makeup air units available in the market. So

17 they're clearly to some degree --

18 MR. RIVEST: That only proves that --

19 you'd say, you know, those units consume a lot of

20 energy, right? So there's an economic argument.

21 But you know, the product class is not an economic

22 argument.
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1 MR. SACHS: Let me continue my mental

2 meandering please.

3 MR. RIVEST: Okay.

4 MR. SACHS: This is Harvey. We do have

5 an existence proof. It is a type of equipment

6 that gets special designs, as Mike and Jill have

7 told us, larger coils, for example. It is a

8 definite purpose class of equipment and I would be

9 the first to admit that the general body of

10 commercial gas furnaces incorporated in RTUs is

11 not yet ready for a condensing furnace. But given

12 the large amount of energy each of these large

13 units consumes or transforms and the existence of

14 products that comply with condensing on the

15 market, my question was simply should it be

16 considered for a separate class. Thank you.

17 Excuse me, one more thing. My memory is

18 short and I forgot about John's comment. I don't

19 see the RTU with return air and the dedicated

20 outdoor air makeup unit as being -- as providing

21 the same immunity to some extent there's an

22 application difference that the hundred percent
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1 unit is more likely to be applied in a different

2 system, a dedicated outdoor air system than a

3 mixed air chiller-based or unitary -- large

4 unitary equipment.

5 So the one is providing an essentially

6 ventilation-targeted service and bringing the

7 temperature and sometimes the humidity of the

8 makeup air into a range that can be handled by the

9 terminal units in a DOAS system whereas the other

10 is doing a hundred percent of the work all in one

11 box. That is the conventional RTU with gas pack.

12 So there is conceptually to me a significant

13 difference in the applications. They're not both

14 just providing warm air. In particular, the

15 hundred percent makeup might be providing so16 called neutral air.

17 MS. HOOTMAN: Exactly.

18 MR. BROOKMAN: So are you advocating

19 a separate product equipment class?

20 MR. SACHS: I am -- this is Harvey. I

21 am strongly advocated -- advocating that we look

22 at that question because of the differences in
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1 utility.

2 MR. BROOKMAN: Okay.

3 MR. SACHS: I don't have an answer. I

4 don't have enough data. Thank you.

5 MR. BROOKMAN: I didn't think I'd

6 heard it yet.

7 [Laughter.]

8 MR. BROOKMAN: Jill, do you have an

9 additional comment here?

10 MS. HOOTMAN: Well, yeah. I would just

11 -- Jill Hootman, Trane. I would support what

12 Harvey has said. It definitely has a different --

13 it definitely has a different use in the building.

14 It doesn't always. In my mind, I would say a

15 makeup air unit is not necessarily a comfort

16 conditioning. It is not providing the comfort

17 conditioning. It's providing room-neutral and

18 then another system is taking care of the actual

19 comfort conditioning.

20 So yes, there are applications. I would

21 agree, Mike. There are applications that have an

22 exorbitant temperature difference it has to
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1 overcome and with a hundred percent outside air.

2 So yes, it is burning quite a bit of gas in some

3 applications. I'm sure that northern Minnesota

4 and parts of this country are, you know --

5 MR. RIVEST: Yeah. I'm not making a

6 case for or against. I was just saying if you

7 could not reach it, the same AFUE, then definitely

8 it would warrant a separate product.

9 MS. HOOTMAN: Yeah. So when I look at

10 those -- when I look at energy --

11 MR. BROOKMAN: So that was Mike

12 Rivest. Now back to Jill. Go ahead.

13 MS. HOOTMAN: Yeah, sorry. When I agree

14 when I look at energy and capacity, I mean, the

15 designing of that heat exchanger is pretty much

16 similar I would say and it can be tested to the

17 same test conditions for sure. So I'm not so

18 sure. I'm sitting here on the fence really saying

19 that there is a different product class or not.

20 MR. RIVEST: So what's the product

21 definition?

22 MR. BROOKMAN: Mike, say it again
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1 please.

2 MR. RIVEST: What is the product

3 definition?

4 MR. BROOKMAN: Adam?

5 MS. HOOTMAN: It's just a furnace that -

6 -

7 MR. RIVEST: It doesn't get into space

8 conditioning versus --

9 MS. HOOTMAN: No.

10 MR. CYMBALSKY: What is the range of

11 efficiency of these things?

12 MS. HOOTMAN: Eighty to 90.

13 MR. CYMBALSKY: It is the whole range,

14 okay.

15 MS. HOOTMAN: Yeah. Oh, makeup air?

16 MR. CYMBALSKY: yeah, the makeup air.

17 No, no the makeup air, so it will span that whole

18 range.

19 MS. HOOTMAN: yeah. The packaged units

20 do not, okay?

21 MR. CYMBALSKY: Correct.

22 MS. HOOTMAN: The packaged air units do
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1 not.

2 MR. CYMBALSKY: I got that one. It's

3 just the makeup airs.

4 MR. BROOKMAN: Okay, thank you, Jill.

5 Daniel Arnold? We're going to unmute your phone,

6 Daniel. Let's hope we can hear you in the room.

7 MR. ARNOLD: Okay. Can you hear me?

8 MR. BROOKMAN: Yes, you sound good.

9 Keep going.

10 MR. ARNOLD: Okay. I'm with -- well,

11 I'm getting terrible echo on my end, sorry.

12 MR. BROOKMAN: Yeah, thank you.

13 We're getting reverb here in the room.

14 MR. ARNOLD: Yeah, let me try and -- can

15 you hear me now?

16 MR. BROOKMAN: Yeah. Okay, try it.

17 MR. ARNOLD: Hello?

18 MR. BROOKMAN: Yes, you sound good.

19 MR. ARNOLD: Okay. Sorry about that.

20 We had two phones going. Yeah, this is Dan

21 Arnold. I'm with Nortek Global HVAC, formerly

22 Nordyne and we do make makeup air units and I
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1 would just advocate to keep them in the same

2 class. I just don't really see the justification

3 for a separate class. I've been listening to the

4 discussion and, you know, as was mentioned,

5 they're essentially following the same test

6 procedure more or less to determine the steady7 state efficiency.

8 The heat exchanger, air burners, et

9 cetera, the technologies are similar to, you know,

10 a standard warm air furnace. So to put -- you

11 know, I just don't see the need for a separate

12 class and to go through that extra analysis.

13 MR. BROOKMAN: Okay. Thanks, Dan.

14 And for those of you joining us via the Web, we've

15 confirmed that this Web feature works for those of

16 you who wish to join us and speak. So please feel

17 free to do so. You see the comment box listed

18 here. Any additional comments before we move on?

19 Okay, we're moving on.

20 MR. DARLINGTON: All right. This is

21 Adam Darlington again. So I'll take us through

22 the screening analysis. The purpose of the
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1 screening analysis, as I alluded to previously, is

2 to basically remove from consideration designs

3 that are -- I guess they're not yet quite ready to

4 be considered. So here on the slide we show the

5 four criteria for screening and they are

6 technological feasibility; practicability to

7 manufacture, install and service; adverse impacts

8 on equipment, utility or availability to

9 customers; and adverse impacts on health or

10 safety.

11 And then, we also note that DOE would

12 only look at efficiency levels that can be

13 achieved using proprietary designs if there were

14 also non-proprietary technologies capable of

15 achieving the same efficiency although I don't

16 think that really came into play too much here.

17 And then, the last bullet, DOE also removes from

18 consideration any technologies that don't affect

19 the energy consumption or I guess actually the

20 energy efficiency as measured by the Department of

21 Energy test procedure.

22 So chapter four is the TSD chapter that
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1 corresponds to the screening analysis and it lays

2 out a lot of the justification for all of these.

3 But here you can see that we screened out several

4 technologies. A number of technologies were

5 removed because they would not affect the

6 efficiency as rated by the DOE test procedure,

7 which rates the thermal efficiency. So it's an

8 active mode test and it's actually very much like

9 a combustion efficiency test where it's actually

10 just 100 percent minus flue losses. So as you can

11 see, there were a number of technologies that

12 wouldn't really have an impact on the thermal

13 efficiency, or would have a very tiny impact. So

14 they weren't really considered further.

15 And then this next slide -- so we also

16 removed condensing -- or, sorry, concentric

17 venting which is generally only applicable in non18 weatherized installations because most of these

19 were, you know, as I said earlier, are weatherized

20 and also there's not a great deal of information

21 on the efficiency benefits as far as commercial

22 furnaces. So sort of the key takeaway from this
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1 slide is the technologies that were primarily

2 considered in the engineering analysis and they

3 all related to the heat exchanger.

4 So we had the addition of secondary or

5 condensing heat exchanger which would allow you to

6 get, you know, up into the 90-plus range.

7 Increased heat exchanger surface area; that was

8 primarily used, you know, looking at the non9 condensing, how to improve the efficiency of

10 those. And then we also took a closer look at the

11 incorporation of the heat exchange surface

12 features such as dimples, also internal features

13 such as baffles and turbulators.

14 And so, that was just kind of a quick

15 run- through of the screening. Here we're

16 inviting comments generally on the screening

17 analysis, you know, whether there are comments

18 about any of the technologies that were in or out.

19 And then, item 2-3, specifically we're asking

20 about the potential for the lessening of product

21 utility or unavailability of product types for any

22 -- you know, any of the commercial furnaces
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1 meeting the proposed standards which would be at

2 82 percent, so would there be any issues with the

3 levels and the technologies considered. So with

4 that, I'll let Doug go from there.

5 MR. BROOKMAN: Okay. Harvey Sachs?

6 MR. SACHS: I'm embarrassed not to have

7 done more of my homework. But if you would return

8 to slide 15 for a second, because I think it's

9 germane. That's test procedure and efficiency

10 metric. Oh, this is Harvey Sachs. Does ANSI

11 standard Z21.47-2006 look like the AFUE test or

12 does it look like a steady state?

13 MR. DARLINGTON: It's a steady-state, a

14 steady-state thermal efficiency test.

15 MR. SACHS: A steady-state thermal

16 efficiency.

17 MR. DARLINGTON: Yeah, except again,

18 sorry, it's called a thermal efficiency test.

19 MS. HOOTMAN: Everyone keeps using AFUE

20 and that's not right.

21 MR. DARLINGTON: Yeah. Well, even then,

22 so the thermal efficiency test, I think that we're
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1 all familiar with, would include the jacket losses

2 and that's not included.

3 MR. SACHS: Well, then returning from

4 that to slide 28, we see that the department has

5 given great consideration to the move from EER,

6 which is for air conditioners an analog to thermal

7 efficiency, to an IEER following the lead of

8 ASHRAE and I guess I'm disappointed considering

9 the duty cycle of most commercial equipment that

10 we haven't seen a parallel push toward the

11 adoption of an IEER-like rating that would give --

12 de facto give credit to two-stage modulating

13 capacities since we have seen their benefits even

14 in DOE rulemakings on the residential side. I

15 think this is something for which we all bear some

16 responsibility for negligence. We didn't beat you

17 up and you all didn't propose it. But it is a

18 route by which you can get to significant

19 decreases in energy utilization. End of rant.

20 MR. BROOKMAN: Jill?

21 MS. HOOTMAN: So Harvey, I understand

22 what you're saying. I guess I do want to say that
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1 the nature of heating in most of this country for

2 comfort conditioning in commercial buildings is

3 one of morning warm-up and then you may never have

4 the heater on again.

5 MR. SACHS: Good point.

6 MS. HOOTMAN: So you know, that -- I am

7 generalizing here. Obviously there are

8 applications for two stages and we make them and

9 modulating burners and we make them. But they are

10 usually a combination of a higher outside air

11 combination. So they're trying to do a dual

12 purpose with the outside -- you know, significant

13 outside air, whether that's a hundred percent or a

14 50 percent rate or whatever it might be, you know,

15 it's a little bit higher. It's compensating for

16 the outside air effect. But you know, in general,

17 even in the northern parts of the country, you are

18 still just morning warm-up and then the internal

19 loads tend to take over in a commercial building.

20 MR. SACHS: Harvey Sachs, again. Point

21 well taken, Jill --

22 FEMALE: Mic, please.
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1 MS. HOOTMAN: He thought he hit it.

2 MR. SACHS: I'll be more aggressive with

3 the mic later. Point well taken, Jill. This is

4 Harvey, and I guess that I'm still thinking that

5 on all but the peak days, I may be able to benefit

6 from that more lightly loaded heat exchanger and

7 particularly in these situations -- well,

8 particularly in these situations where I'm doing

9 warm-up of an unoccupied building and not having

10 to deal with massive quantities of outside air.

11 So I think it is something that should be

12 considered by the department and that I didn't

13 push it. Nobody else pushed it. But I think it's

14 -- as we move forward, it certainly ought to be on

15 the bucket list for revising the standard.

16 MR. BROOKMAN: Okay. Michael McCabe?

17 MR. MCCABE: This is Michael McCabe.

18 Question for you, Adam, kind of to go back to the

19 questions on the makeup air and also the screening

20 analysis. Looking at the chart that you had that

21 had the units achieved, the 90 and 92 percent

22 thermal efficiency were makeup air units?
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1 MR. DARLINGTON: That's right, yes.

2 MR. MCCABE: Looking at the design

3 options that come out of the screening analysis,

4 is it possible for the non-makeup air units, that

5 is, the rest of the units, to achieve the 90, 92

6 percent level with those technologies that are

7 being considered by the department?

8 MR. DARLINGTON: Did you want to answer

9 that?

10 MR. VON WENTZEL: I can take it.

11 Constantin von Wentzel. We believe so based on

12 our tear-down analysis and analysis of smaller,

13 residential units that are already on the market

14 that have that technology in them and it would

15 just be a matter of scaling it up to commercial

16 scale. But the technology is fundamentally the

17 same.

18 MR. BROOKMAN: Thank you. Jill?

19 MS. HOOTMAN: Jill Hootman, Trane. So I

20 would agree if that's all you were to look at. We

21 could probably make them in a commercial arena.

22 It will have way more impact on the installation
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1 of that unit. And that's where I think we lose

2 utility and that's where I think we lose and have

3 issues with. While it is in some cases possible to

4 take that caustic condensate and bring it back

5 through the building, you will still have a gap in

6 the curb that is outside that would still need to

7 have heat tape or some kind of protection for

8 freeze protection on it that's not conditioned in

9 the curb.

10 So that's a possibility. And yet, even

11 bringing it down into the building, there are

12 definitely building codes that would not allow

13 that and where that caustic, you know, condensate

14 gets dumped into potable water systems, there's

15 codes against that as well. So I think there's a

16 significant barrier in the installation of these

17 systems. But I would not disagree in that we

18 could probably make a condensing furnace that fits

19 in most of these units.

20 Now, when you are getting up to -- this

21 has no upper end of Btus. When you're getting up

22 into the million and the 2 million Btu heat
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1 exchangers that are made in packaged units, that's

2 another question. We don't -- I mean, they're

3 going to get so big and the secondary heat

4 exchangers are going to get so big that by the

5 time you design the fan to go across that, that

6 starts to get huge and significantly starts to

7 have an issue with replacement of existing systems

8 because that cabinet will be big. And we're

9 already the largest load that can go down a

10 highway in those units. So I think we start to

11 lose the ability to put that in, in some of those

12 units.

13 MR. BROOKMAN: Mike?

14 MR. RAY: I'd like to reinforce what

15 Jill just said about the size of the equipment.

16 Excuse me. As you add a secondary heat exchanger

17 to the cabinet, that then means you have to do

18 something to grow your cabinet to allow for that

19 secondary heat exchanger. That's one piece of it.

20 Physically, it has to get larger. The second

21 piece that goes along with that is the fan has to

22 increase because it's fighting the air of the
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1 secondary heat exchanger, which then impacts the

2 efficiency of the unit itself.

3 Now I've got to put in a larger

4 horsepower motor and now I'm hurting my cooling

5 efficiency which is not being taken into account

6 in the calculation that we've got going. So, and

7 to Jill's point, as I grow into my larger cabinets

8 and we're getting now to the point where it is

9 reaching the point where we're going to have a lot

10 of flatbeds going down the road, you know, being

11 able to ship these units down the road is becoming

12 more and more challenging because we're increasing

13 efficiencies and as the cabinets grow, it makes it

14 more difficult to get them to transport down the

15 road. So there's a lot of challenges associated

16 with a simple thing of going to 92 percent

17 efficiency for gas heating. There's a lot of

18 impacts that aren't being taken into account.

19 MR. BROOKMAN: Okay, thank you.

20 Harvey?

21 MR. SACHS: Just a -- this is Harvey.

22 Just a clarification, Mike. My sense has been
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1 that the real growth in the RTU industry has been

2 in what amount to almost -- well, to the very

3 largest capacities, the 60 tons, the 40 tons. We

4 probably don't have much difference in the

5 shipping challenges for 10-ton units. They're

6 bigger. You can't put as many of them on the

7 truck.

8 MR. RAY: Correct.

9 MR. SACHS: But they don't require

10 follow cars.

11 MS. HOOTMAN: Right.

12 MR. SACHS: So good. So it's really the

13 supplementing of built-up systems by packaged RTUs

14 in the largest capacities is where we're seeing

15 the problem.

16 MR. BROOKMAN: Jill?

17 MS. HOOTMAN: Yes. Sorry, yes. Jill

18 Hootman, Trane. But also remember, I mean, almost

19 60 percent of the business is replacement and so

20 if these units have gotten bigger, they no longer

21 replace themselves easily. So when we get to the

22 point, and I know we will talk about the
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1 additional cost that that incurs, so you're right.

2 We start to lose, you know, the ability to put as

3 many on a truck. So our freight and then down the

4 road we'll also lose the ability to replace

5 ourselves. So it has the lessening of some of the

6 product utility.

7 MR. BROOKMAN: Robert Whitwell, we

8 would like to hear from you. You should be

9 unmuted now.

10 MR. WHITWELL: Okay, yes. Thank you.

11 This is Bob Whitwell from Carrier. Can you hear

12 me okay?

13 MR. BROOKMAN: You sound good.

14 MR. WHITWELL: Okay. So I just wanted

15 to expand on a point that Mike made earlier when

16 if we were to add the heat exchanger -- secondary

17 heat exchanger for condensing efficiencies in the

18 rooftop, he talked about the impact it would have

19 on the fan power.

20 And we have to keep in mind that we

21 would have that impact all year round. So it

22 would be not only impact the cooling efficiency
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1 but we also would have that additional fan watts

2 during ventilation periods and also during the

3 heating periods.

4 MR. BROOKMAN: Okay. Thank you. Do

5 we have additional comments, perhaps final

6 comments on screening analysis, generally or

7 specifically? Nothing additional. Okay, then do

8 you want to take a break now or do you want -- how

9 long is the -- yeah, we'll keep going then.

10 Engineering analysis.

11 MR. DARLINGTON: Okay. This is Adam

12 Darlington with Navigant again. So here we see

13 the purpose of the engineering analysis is to

14 establish the relationship between equipment cost

15 and increased efficiency and the methodology for

16 this is to look at the efficiency level approach.

17 As I mentioned on the previous slide, we use the

18 efficiency information obtained from the market

19 assessment to select which efficiency levels to

20 look at, basically did reverse engineering, tear21 downs and cost modeling to develop estimates of

22 manufacturer production costs at each efficiency
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1 point. We incorporated a number of sources,

2 equipment tear-downs and cost modeling

3 manufacturer interviews, equipment testing,

4 manufacturer product literature and certification

5 data.

6 So here was the first step in looking at

7 the efficiency levels that were going to be

8 analyzed. Basically we had the baseline, the max

9 tech which is the highest efficiency available and

10 the intermediate efficiency levels. So looking at

11 the gas-fired and the oil-fired, both of them were

12 doing pretty much all of the levels that are

13 available since we had so few. I think we didn't

14 do the 90 for the gas. But that was the only one

15 that didn't actually get included in this. So

16 this table shows a quick summary of which

17 efficiency levels we were looking at. This is

18 sort of a high level description of what happens

19 during the engineering analysis.

20 So after we got our efficiency levels,

21 we select models for tear-down, and try to be

22 representative of typical models on the market.
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1 We conduct the physical tear-downs. In each

2 physical tear-down we catalog each individual

3 component of the furnace, measure it, weight it,

4 put it in a BOM spreadsheet and those BOMs act as

5 inputs for our cost model and the cost model, you

6 know, includes a lot of information about material

7 prices, fabrication processes, you know, labor

8 rates, things like that that would go into the

9 final part cost.

10 So once we get the cost estimate for

11 each component, they're summed with the cost

12 estimate for the furnace. We conduct manufacturer

13 interviews to further refine the inputs to the

14 cost model. And so, this slide basically shows

15 the breakdown of what we're looking at when we're

16 talking about these costs. So the full

17 manufacturer selling price is broken down into the

18 production cost and the nonproduction cost. Your

19 nonproduction cost is mainly SG&A, R&D and

20 interest. And we'll cover a lot of that later

21 when we talk about how we get to the manufacturer

22 selling price from the manufacturer production
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1 cost.

2 It's important to note that the

3 production cost includes direct labor, direct

4 material and overhead. And so, this slide is just

5 a general description of how we try to go about

6 doing the engineering analysis. So the first step

7 is usually to develop a baseline MPC. Then we

8 would look at the design options and the

9 technology used to achieve each efficiency level

10 higher than the baseline and that would help us to

11 develop an efficiency pathway by which

12 manufacturers would be able to achieve higher

13 efficiency levels. Then we use the cost modeling

14 and the tear-down results to calculate the MPCs

15 for each efficiency level above the baseline and

16 generate the cost efficiency curve which is the

17 relationship between the MPC and the efficiency

18 level.

19 So this slide summarizes the design

20 options that we primarily looked at. As I alluded

21 to at the end of the screening analysis, we've got

22 basically going from 80 to 81 and from 81 to 82 in
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1 the gas and then from 81 to 82 in the oil, looked

2 primarily at increasing the surface area for the

3 primary heat exchanger and then of course to get

4 to the max tech level in both cases we would need

5 to have the addition of the condensing secondary

6 heat exchanger as the primary design that drives

7 efficiency. And of course with that, you know,

8 you would have cabinet size increases and

9 condensate disposal components and things like

10 that. But we'll talk about that in a bit.

11 So this slide is just to hopefully make

12 the results of the engineering analysis a little

13 bit more clear. As I mentioned earlier, the gas14 fired units are typically packaged in a single

15 package with a commercial air conditioner. And

16 the gas-fired commercial furnace results, they

17 only include the cost of the furnace components.

18 They don't include the cost of the air

19 conditioning components. We did that to try to

20 normalize out any cost differences that might have

21 been caused by the air conditioning.

22 So the cost at the higher efficiency
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1 level, as I said, only reflects the changes to the

2 furnace components. But they also do reflect the

3 changes that would be necessitated for instance by

4 the addition of a condensing heat exchanger. So

5 when we looked at the amount of cabinet space

6 available, we saw that the overall cabinet size

7 would need to increase to accommodate the

8 secondary heat exchanger. And so, that

9 incremental difference in cost was included in our

10 estimates.

11

12 And then lastly for the oil-fired, those

13 are -- as I mentioned, typically standalone units.

14 They're not packaged with an air conditioner. So

15 the MPC for those actually reflects the entire

16 unit cost rather than just a portion of the unit

17 cost. So now, this side --

18 MR. SACHS: Adam?

19 MR. DARLINGTON: Yes?

20 MR. SACHS: If we could go back to that

21 slide, this is Harvey.

22 MR. DARLINGTON: Yep.
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1 MR. SACHS: Do we find that there's

2 essentially zero freestanding non-weatherized

3 commercial furnaces, gas-fired?

4 MR. DARLINGTON: No. There are some.

5 MR. SACHS: There are some. Are they 2

6 percent of the models or 10 percent of the models?

7 MR. DARLINGTON: It was about 7 percent

8 I think I showed on that earlier slide. So the

9 non- weatherized were standalone units, going back

10 to the slide I showed in the market assessment.

11 MR. SACHS: Okay. Thank you. I didn't

12 pick that up.

13 MR. DARLINGTON: Yeah. What slide is

14 that? Slide 21. Okay. So for the tear-down

15 analysis for the gas-fired units, DOE tested and

16 tore down two gas- fired units. One unit tested -

17 - or sorry, rated at 80 percent and tested at 82.

18 One rated at 82 and tested at 82. So basically

19 what happened with the engineering analysis is we

20 made an assumption based on the product

21 literature, based on the manufacturer feedback

22 during interviews about how the size of the heat
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1 exchanger would change.

2 So we did the tear-down of the 82

3 percent and we estimated that about a 10 percent

4 increase in heat exchanger surface area gives you

5 a 1 percent increase in thermal efficiency. So we

6 used that estimate to sort of based on the tear7 down of the 82 percent back up the 80 and 81

8 percent thermal efficiency. And so, we modeled

9 the size difference of the heat exchanger based on

10 these assumptions to determine our MPC estimates.

11 And so, that's a little bit different I guess from

12 what we described with going from the baseline up

13 which is why I wanted to highlight that. But

14 essentially it leads to this. So this is our cost

15 efficiency curve for the gas-fired commercial

16 furnaces.

17 And as you can see down there in the

18 non- condensing range, you know, we're looking at

19 a 10 percent increase in heat exchanger material,

20 which is only translating to about $5, $6 at those

21 lower efficiency levels and then you see a really

22 big jump going up to condensing with the addition
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1 of the secondary heat exchanger with the

2 additional cost of expanding the outer packaging

3 and then also with the additional cost of the

4 condensate disposal components as well. And so,

5 again, just a reminder, those are -- that's for

6 the furnace components only. So that would not be

7 an entire packaged rooftop system per se.

8 And then, to the oil-fired, this one

9 would be standalone, as I mentioned. So that's --

10 this is for the entire unit. And again, looking

11 from 81 to 82, we're looking at about $20 for heat

12 exchanger size increase and then 82 to 92, again

13 we're looking at condensing secondary heat

14 exchanger, expanding the outer jacket and

15 packaging. And then, so if we want to keep going,

16 after we get to MPCs, the next step is to go from

17 the MPCs to the MSPs which is the selling price

18 and we do that by applying manufacturer markup.

19 The markup is initially based on SEC 10K reports

20 from publicly-available, publicly-traded companies

21 that provide annual reports and information on

22 this.
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1 And we calculate an industry average

2 markup based on market share weighting and then we

3 talk to manufacturers during our interviews about

4 the markup that we calculate. And if necessary,

5 we'll calibrate that based on manufacturer

6 feedback and so for this particular rulemaking

7 we're estimating a 1.31 markup for gas-fired

8 commercial furnaces and 1.28 for oil. And the end

9 result of the engineering analysis is the MSP.

10 And so, MSP as you can see on the slide, it equals

11 the MPC times the manufacturer markup plus the

12 shipping cost. So the manufacturer markup is

13 applied, the shipping cost is added and is not

14 marked up and that gives us the results shown on

15 this slide, as you can see how the MSP compares to

16 the MPC and it looks like we have a question.

17 MR. BROOKMAN: Joanna Mauer has a

18 question. Joanna, please speak.

19 MS. MAUER: Hi. This is Joanna Mauer

20 from ACEEE. I'm sorry. I wanted to just go back

21 for a minute to Harvey's comment about two stage

22 and modulating furnaces and ask a question which
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1 is in applications where you are using heating

2 throughout the day, are there significant gas

3 savings in the field from two-stage or modulating

4 furnaces compared to single-stage units?

5 MR. BROOKMAN: Jill?

6 MS. HOOTMAN: I would not -- this is

7 Jill Hootman from Trane. I haven't done direct

8 analysis of that. But I would say from my

9 experience not as much significant savings as

10 you've seen in cooling for sure. You know, the

11 industry does make two-stage and modulating. Like

12 I said, it has been my experience that those are

13 from more customer demands about the fact that

14 they have higher outside air percentages. It's not

15 necessarily about saving.

16 It's just about making it more

17 comfortable instead of blasts of full heat

18 exchanger on and off. It's more of a soft way of

19 handling the midrange temperatures inbetween at

20 that higher outside air. So it's more of a

21 comfort need than it is a demand for saving

22 significant energy.
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1 MR. BROOKMAN: Joanna?

2 MS. MAUER: Thanks, Jill.

3 MR. BROOKMAN: Okay. Thank you.

4 Aniruddh Roy has a question or comment. Please,

5 Aniruddh?

6 MR. ROY: Thank you, Doug. So I just

7 have a question regarding the manufacturer

8 production cost, the incremental increase from 80

9 to the next levels. As far as I guess, you know,

10 you identify the increase in heat exchanger

11 surface area as being the design option that leads

12 to those changes or incremental increase.

13 So have you considered the cost of maybe

14 retooling in order to increase the heat exchanger

15 surface area as well as the cost that would be

16 incurred, let's say, to overcome any additional

17 pressure drops through the heat exchanger and

18 also, you know, to account for providing more

19 airflow across the heat exchanger.

20 And so, other components that may need

21 to be factored into that, is all that rolled over

22 into, let's say, an incremental $10 cost from 80
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1 percent to 82 percent?

2 MR. DARLINGTON: Yeah. So I mean, we

3 did a --

4 MR. BROOKMAN: Adam Darlington.

5 MR. DARLINGTON: Oh, sorry. Adam

6 Darlington. So I think we did look at what you

7 mentioned about, you know, the additional fan

8 power that would be needed to overcome, you know,

9 the additional pressure drop from maybe a larger

10 heat exchanger.

11 So when we looked into this issue, you

12 know, when we did the tear-downs, so from an

13 inducer fan side, we saw restrictor plates to

14 restrict the airflow. So we assumed that they

15 could just be made less restrictive and be a

16 relatively minor adaptation and so the inducer fan

17 wouldn't actually need to change.

18 And then, as far as the actual blower,

19 the assumption there was that it's more size based

20 on the system ductwork than on anything related to

21 the furnace and that's what we kind of -- the

22 conclusion that we came to when we looked at the
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1 product literature is that a lot of times that's

2 driven more by the cooling side and more by the

3 system that it's actually going into than the

4 furnace components.

5 But we certainly welcome, you know, your

6 feedback as to whether that's your experience or

7 whether, you know, changes need to be assumed for

8 that.

9 MR. ROY: Okay.

10 MR. BROOKMAN: Jill?

11 MS. HOOTMAN: Do you have more,

12 Aniruddh? I don't want to interrupt you.

13 MR. ROY: No, Jill. Please, go ahead.

14 MS. HOOTMAN: So Jill Hootman, Trane.

15 So I've got a question. What you define as a

16 combustion blower or the fan for the space,

17 combustion blower is something that is blowing fan

18 -- you know, into the heat exchanger.

19 MR. DARLINGTON: Yeah. No, I didn't

20 mean to say combustion blower, if I did.

21 MS. HOOTMAN: Okay.

22 MR. DARLINGTON: So there's an inducer
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1 fan, right?

2 MS. HOOTMAN: Right, okay.

3 MR. DARLINGTON: And so, there's usually

4 a blower which is the return air to the building.

5 MS. HOOTMAN: Yeah, exactly. Okay, I

6 just wanted to understand what you were -- okay.

7 MR. DARLINGTON: Apologies if I

8 misstated, yeah.

9 MR. BROOKMAN: Additional thoughts,

10 questions, comments here? Bob Whitwell, please,

11 you are now unmuted we hope.

12 MR. WHITWELL: Yes. Thank you. This is

13 Bob Whitwell from Carrier. First, a question and

14 then a comment. So as I look at the technical

15 support document in the engineering section, I see

16 the $5 that it cost to go from 80 to 81 and then

17 another $5 roughly to go from 81 to 82. And it

18 appears that that analysis is all done on a

19 250,000 Btu per hour input, a heat exchanger,

20 which is basically at the lower end of the range

21 that DOE covers. The range has no upper end and

22 so we have gas heat sections that go up to 2
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1 million Btu and beyond in the industry.

2 So my question to DOE and Navigant is

3 did you scale the cost based on input capacity or

4 did you use that same $5 and $10 independent of

5 the size of the heat exchangers?

6 MR. DARLINGTON: Yeah, this is Adam at

7 Navigant. So we do the analysis at a

8 representative capacity, as you pointed out, and

9 we -- the representative capacity was at 250,000.

10 And so, the assumption there is that serves as a

11 good point to judge the cost effectiveness. As

12 far as the engineering analysis goes, that's where

13 we stopped it. We didn't do any scaling at higher

14 or lower capacities. And I'll defer to the LBNL

15 team about whether that was included in the LCC,

16 if anything was done. Was that? No? Yeah, no.

17 So it's all based around the representative

18 capacity of 250,000.

19 MR. WHITWELL: Well, wouldn't you agree

20 that as you go up in heating capacity, the size of

21 the heat exchangers would grow and if you have to

22 increase the heat exchanger size by 10 percent or
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1 20 percent, that the additional -- that the cost

2 would be much higher as you go up to larger sizes?

3 MR. BROOKMAN: Mike Rivest?

4 MR. RIVEST: Yes, absolutely. So you

5 know, in the selection of our representative unit

6 is meant to be -- you know, the economics are done

7 on that unit and then applied to the whole class.

8 The assumption is that the cost-benefit analysis

9 at 250,000 is representative of, say, the 1

10 million product class. So in this situation, the

11 cost of the product would go up but so would the

12 savings because the amount of energy used is a lot

13 greater. If you think there are reasons to

14 believe that those costs don't scale, you know, in

15 the same manner, then that's something that could

16 be looked at.

17 MR. BROOKMAN: Bob, you've still got

18 the floor.

19 MR. WHITWELL: Yeah, so I think that

20 that should be evaluated, whether there would be -

21 - whether that scaling would hold as you go up in

22 size and may have to add not just change the
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1 length but maybe add some additional heat sections

2 which would include additional inducer fans and

3 additional burners and gas valves.

4 MR. RIVEST: It would be helpful in your

5 comments if you like provided a capacity to us to

6 look at. So you know, maybe that could become a

7 second representative unit for us to look at.

8 MR. WHITWELL: Okay.

9 MR. BROOKMAN: Okay.

10 MR. WHITWELL: Okay.

11 MR. CYMBALSKY: This is John from DOE.

12 Do we have the market data on what's being sold

13 capacity- wise that would help? So I think the

14 250,000 is the common -- a common size. Do we

15 have another?

16 FEMALE: [Off mic]

17 MR. CYMBALSKY: Well, I'm not asking for

18 all the data. How about, you know, if we're going

19 to do two representative units, maybe if a million

20 is the right one, can we get some data on the cost

21 of the million and we can work with that?

22 MR. BROOKMAN: I don't know whether
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1 the manufacturers present can come gather that or

2 whether we need to rely on Aniruddh or somebody to

3 do a survey. He moved? Oh, sorry.

4 FEMALE: It would be Frank.

5 MR. BROOKMAN: Frank, okay. I can't

6 keep up with the movement. So thank you for the

7 request, John. Harvey Sachs?

8 MR. SACHS: Harvey Sachs. Referring to

9 slide 42, we have 1.31 as the markup inferred for

10 gas- fired commercial furnaces. How does that

11 compare with the markup inferred for commercial

12 rooftop air conditioners? I'm just looking for a

13 calibration.

14 MR. DARLINGTON: One moment. Chris is

15 looking up what was used for the commercial air

16 conditioners. It should be the same.

17 MR. LAU: Yeah, it's roughly the same.

18 MR. DARLINGTON: It's roughly the same.

19 MR. BROOKMAN: Chris Lau?

20 MR. LAU: Yeah. So for the -- this is

21 Chris Lau with Navigant. For the commercial air

22 conditioner rulemaking, there were a range of
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1 capacity sizes and the markups there ranged from

2 roughly 1.3 at the low end to 1.4 for the very

3 largest units.

4 MR. SACHS: Thank you. That's

5 reassuring about precision without stating

6 anything on accuracy. Thanks.

7 MR. BROOKMAN: Jill?

8 MS. HOOTMAN: Jill Hootman, Trane. But

9 agreed, Harvey, if we had that kind of range, I

10 mean, it's this kind of same range for these kind

11 of products. So maybe a flat 1.3, and I agree, we

12 need to possibly look at another size range and

13 let you know the distribution between those size

14 ranges, between the 250,000 and another size range

15 because the cost -- I believe the costs go up

16 exponentially versus the savings. But I'll have

17 to get those comments for you.

18 MR. BROOKMAN: You don't think they

19 scale just directly.

20 MS. HOOTMAN: No. It does not scale

21 directly.

22 MR. BROOKMAN: Harvey?
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1 MR. SACHS: Thanks. As I said, my

2 mental -- this is Harvey. My mental model is that

3 the manufacturer's processes are very similar

4 because the units are integrated and so I was just

5 looking to see that the inferred markups were

6 similar.

7 MR. BROOKMAN: Okay.

8 MR. SACHS: I should have done my

9 homework.

10 MR. BROOKMAN: Did you cover the

11 engineering analysis slide?

12 MR. DARLINGTON: Yeah, and we moved to

13 the comment slide.

14 MR. BROOKMAN: Okay. Let's proceed

15 with the presentation content.

16 MR. DARLINGTON: Okay. Yeah, so I mean,

17 I'd just --

18 FEMALE: Push the mic, please.

19 MR. DARLINGTON: Yeah. So this is Adam

20 again. So before we, you know, had those handful

21 of comments and that discussion, I was just

22 getting to actually the comment request slide. So
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1 here we've got, you know, general request for

2 comments on the engineering analysis and in

3 particular we were looking for comment about the

4 efficiency levels analyzed, including the max tech

5 efficiency levels and specifically the 82 percent

6 thermal efficiency level.

7 And then we were also looking at --

8 looking for comment on the incremental

9 manufacturing costs above the baseline. And so, I

10 think we already had some discussion on that but

11 I'll turn it over to you, Doug.

12 MR. BROOKMAN: Yes. We've begun to

13 cover that. We welcome any additional thoughts or

14 comments related to these comment boxes. Jill,

15 please?

16 MS. HOOTMAN: Jill Hootman, Trane. I

17 think that we're ignoring an elephant in the room.

18 Eighty- two percent is condensing. It is

19 definitely condensing at parts of the operating

20 map. So I think we have to realize that we will

21 be developing not only aluminized but heavy-grade

22 aluminized and/or stainless steel heat exchangers
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1 to meet an 82 percent, especially if we look at

2 lifetime reliability that we want to have on these

3 heat exchangers. So I think we've missed and our

4 comments will indicate that I think you've

5 miscalculated the amount of beefiness to the heat

6 exchanger that we'll have to make at 82 percent

7 because the operating map definitely has points

8 that condense.

9 MR. BROOKMAN: Okay. Thank you.

10 Mike?

11 MR. RAY: Mike Ray. I would say that I

12 would agree with Jill but with one exception and

13 that is she said to perhaps beef up the aluminized

14 steel heat exchanger. I would think that

15 everybody would be going to stainless steel at

16 that point. You're at a --

17 MS. HOOTMAN: I'm just being nice.

18 MR. RAY: Yeah. As it is, when you look

19 at it, when you're in the 80, 81, 82 range, you're

20 at a point in some areas where you have condensing

21 furnaces and that hurts the longevity of the heat

22 exchanger itself.
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1 I think Roger Hunt from our company

2 submitted comments in the last round and he

3 pointed out and attached a picture of a heat

4 exchanger that had only been into -- installed for

5 three to five years and it was all rusted out.

6 And in certain areas of the nation, that's going

7 to be an issue.

8 MR. BROOKMAN: Okay. Thank you.

9 Yeah? Oh, thank you. Bob Whitwell, please.

10 You're unmuted.

11 MR. WHITWELL: Okay. Okay, thank you.

12 This is Bob Whitwell, Carrier. I just wanted to

13 go back to the comment previously about larger

14 heat exchanger not having an impact on the air

15 side resistance. As we know, when you go from a

16 straight air conditioner to a year-round air

17 conditioner with gas heat, the minimum efficiency

18 level drops by two-tenths of a point and that's to

19 account for the increase in internal losses in the

20 cabinet due to the heat exchanger and the fan

21 power that's required to overcome those losses.

22 So in a packaged rooftop unit, the gas
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1 furnace can account for as much as 40 to 45

2 percent of the total internal losses in the

3 cabinet. So with that in mind, there is going to

4 be some increase in fan power associated to

5 increasing the heat exchangers by 10 to 20

6 percent. So just a comment. I know that the

7 assumption was that there would be none. The

8 reality is that there will be something and so

9 manufacturers will have to design to overcome

10 that.

11 MR. BROOKMAN: Okay. Doug Kosar,

12 you're next. Please speak.

13 MR. KOSAR: Can you hear me?

14 MR. BROOKMAN: Yes.

15 MR. KOSAR: Yeah. I was referring back

16 to a conversation five minutes ago, 10 minutes ago

17 regarding potential second size range to evaluate.

18 Based on some of my recent but limited

19 experience, there may be a point around 400,000

20 Btu per hour input where it may be common practice

21 to transition from a single furnace to two

22 furnaces in packaged equipment and that would be a
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1 transition point where you'd see the additional

2 components associated with the second furnace, the

3 additional gas valve, inducer fan. That may be a

4 transition point where you may see a different

5 price regime.

6 MR. BROOKMAN: Okay. Thank you. Do

7 we have additional, perhaps final comments in

8 response to the comment boxes here, engineering

9 analysis? Adam?

10 MR. DARLINGTON: Yeah, and I guess we

11 just wanted to follow up about the comments

12 regarding the 82 percent level and the certain, I

13 guess, portions of the country where you would

14 experience condensing in the heat exchanger. I

15 guess what portion of the country would you

16 estimate that that is a problem for or is there

17 kind of a general region?

18 MR. BROOKMAN: Mike, you started with

19 this.

20 MR. RAY: Yeah, I'd have to do some

21 research to tie down exactly where it is. But I

22 am aware of certain areas of the country where
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1 we've witnessed that from our salesforce and not

2 necessarily on our equipment by the way.

3 MR. DARLINGTON: Okay.

4 MR. RAY: I'd just point that out.

5 MR. VON WENTZEL: Constantin von

6 Wentzel, Navigant, here. In particular, we would

7 appreciate comments in terms of your unit

8 shipments. It's not necessarily geographic area

9 but, you know, what percentage of your products

10 are affected by these kinds of areas where 82

11 percent in your estimation requires the use of

12 stainless steel heat exchangers.

13 MR. BROOKMAN: Okay. Any additional

14 thoughts or comments here before we take a break?

15 Let's take a break. It's 10:45. We'll break for

16 15 minutes, which means we'll resume right at

17 11:00. And we'll probably go a little bit past

18 noon before we break for lunch since we had this

19 window of opportunity here. So please make sure

20 to wear your badge visible in the building. I

21 think you know the restrooms are on both ends of

22 the hall. There's a coffee shop down on the
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1 ground floor and I'll see you and start back up at

2 11:00.

3 (WHEREUPON, the foregoing recessed.)

4 MR. BROOKMAN: So let's resume, pick

5 up where we left off and I believe that was slide

6 45, energy use, markups analysis. We've had

7 really good comments so far. Appreciate that.

8 Let's keep that going. And we're going to hear

9 from Victor Franco.

10 MR. FRANCO: Good morning. My name is

11 Victor Franco. I'm from Lawrence Berkeley

12 National Laboratory and I'll be presenting now the

13 markups and energy use analysis. So the markups

14 analyses are used to determine the commercial

15 consumer prices from the manufacturer's selling

16 price, discussed in the engineering analysis, for

17 both baseline and higher efficiency equipment.

18 The appropriate markups for determining

19 commercial consumer equipment prices depend on the

20 type of distribution channels through which the

21 equipment moves from the manufacturers to

22 purchasers. At each point in the distribution
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1 channel, companies mark up the price of the

2 equipment to cover their business costs and profit

3 margin. There are two primary types of

4 distribution channels, described the way most

5 equipment passes from manufacturer to consumer as

6 shown in the two flowcharts here, one involving

7 distributors and contractors and one of the

8 manufacturers to the consumer via a national

9 account.

10 While these two primary channels are

11 also distinguished by new and replacement market

12 segments, as shown here, also the DOE also

13 distinguishes between small and large mechanical

14 contractors. The fractions for each are shown in

15 this slide as well. As we can see, the primary

16 distribution channel is going from the

17 manufacturer, wholesaler to either the small or

18 large mechanical contractor and then to consumer.

19 The national account goes from the manufacturer

20 and as a proxy we include the wholesaler markup as

21 well and then to the commercial consumer.

22 To actually get the markups for each of
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1 these market participants, we take into account

2 the direct cost, expenses and profits from various

3 sources. As described before in the engineering

4 analysis, the manufacturer markup includes the

5 U.S. Securities and Exchange Commission 10K

6 reports. For the wholesaler markup, we use the

7 2012 profit report from HARDI. For the mechanical

8 contractor markups, we use ACCA 2005 financial

9 analysis report, together with the U.S. Census

10 Bureau 2007 economic census for the plumbing and

11 HVAC contractor sector. For the general

12 contractor markup, we use also the U.S. Census

13 Bureau 2007 economic census for the commercial

14 building construction sector. In addition, we

15 include sales taxes. These come from 2013 Sales

16 Tax clearinghouse data.

17 For this analysis, we include both

18 baseline markups and incremental markups.

19 Baseline markups relate the MSP of baseline

20 equipment to commercial consumer customer purchase

21 price. Incremental markups relate the increase in

22 MSP of more efficient equipment to the increase in
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1 commercial consumer purchase price. These costs

2 cover only the expenses that vary with the MSP

3 such as operating expenses and profits. Fixed4 costs such as overhead and labor do not scale with

5 increased efficiency. DOE applied the baseline

6 markets to the baseline level and incremental

7 markups to the incremental difference in MSP.

8 MR. RAY: Doug, do you want comments or

9 questions?

10 MR. BROOKMAN: Please, yes. Whenever

11 you -- yes, go ahead, Mike.

12 MR. RAY: Mike Ray. Excuse me. On

13 slide 46, when we look at the either the

14 replacement or the new construction, the bottom

15 version where it says manufacturer national

16 account and then commercial consumer, in those

17 steps, where's the contractor in that because

18 somebody has to do the installation and somebody

19 has -- and they have to have their markup involved

20 in that as well. So in that step somewhere there

21 has to be a contractor and their markups and

22 everything involved in that sales step, so.
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1 MR. FRANCO: Correct. We're just

2 referring to the national account. This is Victor

3 Franco, national account. We assumed that it goes

4 directly from mostly the manufacturer to

5 commercial consumer. Many times these might

6 involve just in-house contractors. But please

7 submit your comments to correct that.

8 MR. BROOKMAN: Mike, follow-on?

9 MR. RAY: Okay. Mike Ray. Yeah, in

10 general, our internal group is there to support

11 the -- to support the large and small contractors

12 who do the actual installations themselves. And

13 as such, we're not doing performance contracting

14 per se and so we don't have a group that goes out

15 and does the installations. In this model, as you

16 see here, the piece that is missing is that

17 contractor there that needs to -- that needs to

18 have the markup and all. I think --

19 MR. BROOKMAN: Mike, does the

20 commercial consumer, does that person generally

21 hire the contractor or is that person associated

22 with the wholesaler?
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1 MR. RAY: Well, yeah. Jill, you want to

2 --

3 MR. BROOKMAN: Jill, go ahead please.

4 MS. HOOTMAN: Jill Hootman, Trane.

5 There's every flavor with the national accounts.

6 So you know, if you're a Walmart, you might have

7 two key contractors across the United States that

8 do all your installations. Yes, we might be

9 selling directly to Walmart but Walmart will still

10 have to pay that contractor for the installation

11 and/or, you know, all the other sheet metal and

12 all the other stuff that has to happen. They're

13 paying them for that.

14 So there is that incremental step and

15 then there are other cases where they really --

16 the national accounts really act just like the

17 step above. They go through the chain just like

18 that. The only uniqueness I think that really

19 falls in national accounts is that we might not

20 sell to a wholesaler. We sell directly. It goes -

21 - the invoices directly invoice to them. But

22 there still is a contractor. They don't have their
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1 own contracting arms for all intents and purposes.

2 They might have somebody who goes around and

3 repairs units and does some of those kinds of

4 things.

5 But actual change out of units, they're

6 almost always going to a licensed contractor to do

7 that. Yes, some of our companies do have

8 performance contracting arms of our businesses.

9 But they're acting as a contractor too and they're

10 getting -- they have a profit stream just, you

11 know, a margin markup just as they would as a

12 contractor as well.

13 MR. BROOKMAN: Harvey Sachs.

14 MR. SACHS: This is Harvey Sachs, and

15 recognizing the enormous variety, particular OEM16 owned distribution versus independent

17 distribution, national accounts and everything

18 else, I guess I'm old school and always thought

19 markup referred to the value added by someone who

20 takes ownership of the equipment.

21 So the contractor on a national account

22 where you're doing a direct sale to the ultimate
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1 owner will hire a contractor to do the installing

2 and the sheet metal and all of that. But is there

3 -- and he has a profit margin. But is he really

4 seeing a markup on the equipment itself?

5 MS. HOOTMAN: He is putting a markup on

6 --

7 MR. BROOKMAN: Jill, please.

8 MS. HOOTMAN: Jill Hootman, Trane. He

9 is putting -- they are putting a markup on it. It

10 may not be at the same markup if they were to,

11 like you said, take on that responsibility of

12 buying the unit and warrantying the unit and all

13 of that, the long -- you know, so it might not be

14 the same. But there still is a markup. You know,

15 it's been a while since I've been in that business

16 and being on the sale side of things. So I can't

17 quote the numbers. But there is. There is

18 something there.

19 MR. SACHS: So I think we're all saying

20 the same thing, that it's pretty heterogeneous and

21 hard to analyze appropriately.

22 MR. BROOKMAN: Mike?
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1 MR. RAY: Mike Ray. I would say that

2 the top model really is -- explains the whole

3 process. Now, there may be a little bit of a less

4 step involved with national accounts. But in

5 general, the top example is the best example of

6 how the whole process works.

7 MR. BROOKMAN: Can you comment on the

8 distributions that are listed there, the

9 quantities?

10 MR. RAY: As far as?

11 MR. BROOKMAN: Well, do you think

12 they're in the ballpark or not?

13 MR. CYMBALSKY: Well, I guess the real

14 question -- this is John, from DOE. The real

15 question is I think we're all recognizing that the

16 national accounts might have a different markup,

17 if in fact the cut of the markup might be a little

18 different. So what I guess DOE is going to say is

19 we think -- let's just look at the replacement

20 side here. We think that 14 percent falls into

21 that bucket.

22 I guess what we're asking from you is
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1 let's assume that that's the correct 14 percent.

2 How does that differ then the model that Mike just

3 described that's more normal? And we agree. We

4 say, you know, the preponderance of the

5 replacement market's going through there. But if

6 we both agree that there's this national accounts

7 bucket that's a little bit different, how would

8 the markup be different from the top set of

9 flowcharts there?

10 MS. HOOTMAN: I can't say without doing

11 a little research.

12 MR. CYMBALSKY: Okay. I guess that's

13 what we're looking for. So I think -- and maybe

14 it's just 1 or 2 percent or whatever. But I think

15 we all recognize there might be a little different

16 set of streams there and for that process. So to

17 the extent we can differentiate, great. If we

18 can't, we'd like to hear that comment as well.

19 MR. BROOKMAN: Yes, Alex?

20 MR. LEKOV: Alex Lekov, Lawrence

21 Berkeley National Laboratory. So just to clarify,

22 if in this - - if in this chain, based on your
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1 input, is it fair if we replace the wholesale

2 label with the contractor label if this will be a

3 better presentation of this channel?

4 MR. BROOKMAN: Jill?

5 MS. HOOTMAN: So Jill Hootman, Trane.

6 So you have a manufacturer to essentially a retail

7 owner, right, direct to an owner. That's where

8 the sale of the equipment might happen. And you

9 also have manufacturer to a contractor in the

10 national accounts.

11 So the sale of the equipment itself

12 could be two different ways: directly to that

13 eventual owner, Target, Walmart, whatever or to a

14 contractor.

15 In the case that it went to Walmart,

16 Walmart then contracts with a contract to make

17 that installation of that unit and pay a price to

18 them. So there's the step of the contractor after

19 the sale of the equipment.

20 MR. BROOKMAN: Mike?

21 MR. RAY: Mike Ray, and if the

22 contractor wants to stay in business, he needs to
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1 mark up that equipment. And if the contractor's

2 not a smart businessman and doesn't mark up for

3 the cost of that equipment, then eventually it

4 will drive him out of business.

5 So he's got to take into account because

6 most of the time the national accounts require

7 that you maintain it or you're responsible for it

8 for a period of one year. Under those

9 circumstances, you know, the contractor, he has to

10 put his warranty in it as well as his markups in

11 order to make sure that it's a profitable business

12 for him.

13 MR. BROOKMAN: Okay, thank you.

14 MR. FRANCO: Thank you for those

15 comments. Victor Franco. Now, here are the

16 different markups for the different markup

17 participants that were calculated using the data

18 sources I reported before. So we have the

19 wholesaler, mechanical contractor, general

20 contractor and sales taxes. For the replacement

21 market, we include sales taxes and for new

22 construction we don't include sales taxes.
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1 The overall markups calculated then are

2 shown here in the overall markup and for the

3 national account they're lower as shown here as

4 well. The table below includes the overall markup

5 for the sample and we have a gas-fired commercial

6 warm air furnaces and oil-fired commercial warm

7 air furnaces. So you can see the baseline markup

8 and the incremental markup here.

9 Just to note that this includes

10 weighting of, for example, new construction. We

11 assume that for gas-fired commercial warm air

12 furnaces 80 percent of the market is at the

13 replacement and 20 percent are new construction

14 while for oil-fired CWAFs, they're 95 percent and

15 5 percent new construction. So we invite any

16 additional comments for the markup analysis at his

17 point.

18 MR. BROOKMAN: Jill?

19 MS. HOOTMAN: Jill Hootman, Trane. So I

20 think we were saying a little bit earlier,

21 especially when we asked you and Harvey asked you

22 how does this compare with CUAC. These are the
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1 exact same units. I realize that we don't have

2 the break necessarily in this rule.

3 But no question, the costs and the

4 markups are more when you start to talk about the

5 larger sizes here and the larger package units.

6 So the scaling that that has might be more

7 appropriately used or maybe you're weighting it

8 somehow, agreed you don't necessarily have the

9 sales distribution. But you now, we have to

10 consider that I think because it's the exact -- it

11 works exactly the same as CUAC.

12 MR. FRANCO: Thank you for that comment.

13 MR. BROOKMAN: Additional thoughts

14 related to markups analysis before we move on?

15 Okay.

16 MR. FRANCO: Thank you. Victor Franco

17 again. Now we're going to talk about the energy

18 use characterization. We determined the annual

19 energy consumption for commercial warm air

20 furnaces at the different considered efficiency

21 levels, defined the annual energy cost and

22 savings. This is an important part of the
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1 lifecycle cost analysis and payback period

2 analysis. So I'll be discussing this later today.

3 The basic method is we take into account

4 the total energy use. We take into account the

5 fuel use and the electricity use. For this fuel

6 use, we basically calculate the burner operating

7 hours and multiply that by the input capacity.

8 The input capacity is fixed 250 kBtu per hour as

9 discussed earlier.

10 The burner operating hours are

11 determined using the thermal efficiency at the

12 specific efficiency level and they take into

13 account the heating building load based on CBECS

14 and RECS data. And they also the existing

15 efficiency of the existing commercial furnace and

16 some adjustment factors that I'll be discussing in

17 two slides.

18 The electricity use is also taken into

19 account and I'll be discussing that in further

20 detail. But to note that it includes the impact of

21 non-heating season energy use, specifically for

22 condensing furnaces because of the circulating fan
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1 used in air conditioning. Before going in further

2 detail in terms of the energy use calculations, I

3 wanted to take a look at the building sample, how

4 we determined what buildings were using what type

5 of furnace.

6 So first, we take CBECS and RECS sample

7 and we determine if they are -- if they have

8 furnaces that are used in the building. Then, we

9 take a count, the criteria for the square footage

10 to determine if they're actually using a

11 commercial equipment or they're using residential

12 equipment. In the case of commercial equipment,

13 we assume that commercial space of 3,750 square

14 feet is the minimum to be commercial size.

15 And finally, we take into account what

16 fuel type the furnace. If it's gas, then it goes

17 to the gas-fired commercial furnaces sample. If

18 it's oil, it goes to the oil-fired commercial

19 furnaces sample. On the slide, there's a table

20 that lists what the actual count of the different

21 -- in our sample for CBECS and RECS. As you can

22 see, there's close to 1,500 buildings that are
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1 being sampled for gas-fired and a little bit more

2 than the hundred buildings for oil- fired

3 equipment. Now, let's look a little bit more

4 detail in terms of how we calculate the heating

5 fuel use.

6 So as I mentioned before, we're taking

7 into account the burner operating hours times the

8 input capacity of the commercial furnace. The

9 burning operating hours are the building heating

10 load divided by the useful output. What we mean

11 by useful output is any -- obviously the output

12 capacity of the furnace but we also take into

13 account any electrical components that might

14 provide heat. The building load in 2018 accounts

15 for many adjustments to the building load and it's

16 based on the heating use, energy use that's

17 provided from CBECS and RECS data. Then we

18 multiply this by the thermal efficiency of the

19 existing unit and we do a number of adjustments.

20 We adjust for average climate

21 conditions. We also adjust for climate change,

22 projections by 2018 and also for the building
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1 shell efficiency. Finally, we take into account

2 how many commercial furnaces are used to meet the

3 heating load because we're using a single capacity

4 of 250, a lot of buildings will actually use more

5 than one unit. So our threshold is 7,500 square

6 feet per commercial furnace. So if a building has

7 15,000 square feet, we assume that it has two

8 units that are being used and we are just

9 calculating -- for the impacts, we are just

10 calculating that one unit. But we divide the

11 energy use by two essentially for that specific

12 example.

13 So these are the results of the fuel use

14 for our building sample. So again, for gas-fired

15 we have close to 1,500 buildings that are used in

16 our analysis. The original energy use that's

17 being reported from CBECS and RECS is around 210

18 million Btus and our calculations by 2018, because

19 of the adjustment factors that I talked about

20 before, we're calculating 163 by 2018. Similar is

21 for oil-fired, from 161 reported by CBECS and RECS

22 to a little bit more than 117 million Btus per
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1 year and this is per unit. Next, we calculate the

2 electricity use.

3 So the electricity use is basically we

4 multiply the burner operating hours times the

5 power of the electrical component that are typical

6 in a furnace such as circulating fan, inducer,

7 ignition device and we adjust that by a ratio of

8 the electrical components on time to the burner on

9 time. In addition, we take into account auxiliary

10 equipment outside of the furnace such as the

11 condensate pumps and heat tape that might be used.

12 Finally, we take -- yes?

13 MR. BROOKMAN: Harvey Sachs?

14 MR. SACHS: Yes, Harvey Sachs. Victor,

15 I'm confused on slide 53. When you in your table

16 say average energy use it's fairly clear you're

17 using from the distributions on the graph that

18 you're using the mean rather than the median.

19 MR. FRANCO: That is correct, yes.

20 These are average, yes. The median would be

21 slightly less. The result would be less. But this

22 is the average. You're correct, the mean.
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1 MR. SACHS: My eyeball may be just

2 distorting, but it looks like it'd be a lot less.

3 MR. FRANCO: Yeah, I believe that's --

4 MR. SACHS: I'm not sure I understand

5 why you chose the mean. But it may be I'm not

6 thinking straight.

7 MR. FRANCO: No. Yeah, no. You are

8 correct. They're about 10 to 15 percent less.

9 Yeah, the mean -- the actual median is reported in

10 the TSD and their values are below there.

11 MR. SACHS: Thank you.

12 MR. FRANCO: So going back, this is

13 Victor Franco. The electricity use, we take into

14 account the difference in electricity use for the

15 circulating fan in the cooling mode and we take

16 into account the standby energy use as well. The

17 values for the different components for in terms

18 of power are listed here. The circulating fan is

19 assumed to be about 1,500 watts which is about a

20 two horsepower unit.

21 The inducer fan is about a hundred

22 watts, the ignition device, 25, and 10 for the
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1 standby. Here are the summary results. So again,

2 here are the average values, as we saw before.

3 The average value for the baseline for the fuel

4 use, 163 and the electricity use, a little bit

5 more than a thousand kWh. And the savings for

6 both the gas-fired and the oil-fired equipment.

7 MR. BROOKMAN: Harvey Sachs?

8 MR. SACHS: Harvey Sachs. I'm missing

9 something. Your 80 percent TE on page -- slide 55

10 is 163.4 annual fuel use which is a whole bunch

11 lower than the 210 on slide 53 and I'm not seeing

12 the different derivations immediately.

13 MR. FRANCO: Yes, thank you for that

14 clarification. So the 210 represents the actual

15 reported CBECS and RECS energy use and to the side

16 we have the estimated heating in 2018 which is

17 163.4 which you see in the table. The primary

18 difference is these adjustment factors for average

19 climate conditions, the building shell efficiency

20 and some accounting of the climate change by 2018.

21 I hope this clarifies.

22 MR. CYMBALSKY: So 15 years of things
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1 that happen, right?

2 MR. FRANCO: This is again -- the most

3 data -- most of the data comes from CBECS 2003

4 which is -- it was in 2003. We're trying to

5 project to 2018, 15 years. a lot of things have

6 changed in terms of building shell and --

7 MR. SACHS: It's a 20 percent

8 difference.

9 MR. FRANCO: Correct and also the

10 efficiency of the units.

11 MR. CYMBALSKY: The regional -- well,

12 the regional difference, right? So a lot of the

13 building construction has moved south in this

14 country. So the heating degree day average when

15 you look from 2003 to 2018 is a big deal.

16 MR. SACHS: Okay. This is Harvey.

17 Thank you, John and Victor.

18 MR. BROOKMAN: Jill?

19 MS. HOOTMAN: No.

20 MR. BROOKMAN: Okay.

21 MS. HOOTMAN: I'll wait. I think his

22 next slide is going to help me.
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1 MR. FRANCO: So yes, let's move to the

2 request for comment. So we're requesting comment

3 on the use of CBECS and RECS for determining the

4 energy consumption of this equipment in both

5 residential and commercial buildings. We seek

6 comments on the actual methodology for determining

7 the energy use for commercial equipment and any

8 other -- any other comments related to the energy

9 use characterization.

10 MR. BROOKMAN: Jill?

11 MS. HOOTMAN: Jill Hootman, Trane. So

12 you know, as we said before, we think that we

13 would recommend not just only analysis at 250,000

14 but at some other higher point and, yes, we'll

15 bring those comments on what recommendation of

16 what that is. If so, then isn't it true, like on

17 slide 54, you'd go through that calculation for

18 that as well as when we recommend another upper --

19 okay, I just wanted to make sure about that.

20 Okay.

21 MR. FRANCO: Yeah, correct. We would

22 actually assign some buildings with a higher input
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1 capacity as appropriate and others with the lower

2 capacity.

3 MS. HOOTMAN: Right.

4 MR. BROOKMAN: Michael McCabe?

5 MR. MCCABE: It's Michael McCabe.

6 Following up on Harvey's question and looking at

7 slide 53, if you compare those figures for the

8 2003 CBECS and what you're projecting in 2018, how

9 do those compare to what the AEO is forecasting?

10 MR. FRANCO: Good question. The AEO

11 does actually use -- right now it uses CBECS 2003.

12 We're using the same assumptions in terms of the

13 building shell, the climate and the correction for

14 average climate conditions. So they're actually

15 very, very close.

16 MR. MCCABE: Michael McCabe. So the

17 2018 figures are close to what the AEO is

18 projecting?

19 MR. FRANCO: That is correct, yes.

20 We're using exactly the same parameters. So the

21 building shell index actually comes from AEO for

22 the commercial side and the projections for
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1 climate change come from AEO as well and the

2 normalization to normal conditions is the same

3 methodology that AEO 2013 uses.

4 MR. MCCABE: Thank you.

5 MR. BROOKMAN: Yes, Mike?

6 MR. RAY: Mike Ray. As we look at our

7 electricity use, I'm guessing that we probably

8 haven't taken into account the impact of a

9 variable frequency drives that are being mandated

10 as part of ASHRAE.

11 FEMALE: [Off mic] motors.

12 MR. RAY: Yeah, and so from a constant

13 fan as well as other operations, the variable

14 frequency drive will adjust the speed of those

15 fans and will reduce the energy use in certain

16 applications and then, so I'm sure that wasn't

17 considered.

18 MS. HOOTMAN: But --

19 MR. FRANCO: Thank you for those

20 comments. Please if you can provide those in

21 writing, that would be helpful as well.

22 MR. BROOKMAN: Additional thoughts on
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1 these comment boxes? Frank Stanonik, welcome.

2 MR. STANONIK: Frank Stanonik, AHRI. And

3 this has come up in a couple other commercial

4 rulemakings. I believe it's the 2012 CBECS data

5 is being worked over somewhere I guess. What's

6 the -- do you have any better sense of whether

7 that data will be released in time to be

8 considered in this rulemaking?

9 MR. BROOKMAN: John Cymbalsky?

10 MR. CYMBALSKY: I'm noting that we have

11 an EIA employee in the room. I'm curious if Kevin

12 wants to --

13 MR. BROOKMAN: Do you wish to step

14 forward to this microphone here, please?

15 MR. JARZOMSKI: Hi, Kevin Jarzomski.

16 Kevin Jarzomski, EIA. I don't actually work on

17 CBECS but as I understand it, they've already

18 begun releasing characteristic data and the energy

19 consumption data should be released later in the

20 summertime. So it's forthcoming.

21 MR. BROOKMAN: Okay, thank you. Doug

22 Kosar, please. You're unmuted I hope.
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1 MR. KOSAR: Yes, thank you. This is

2 Doug Kosar, GTI.

3 MR. BROOKMAN: Doug, you're just

4 slightly garbled. Please get close to your

5 telephone or whatever you're using.

6 MR. KOSAR: Okay. I'm using a mic on my

7 computer. Is that any better?

8 MR. BROOKMAN: That's better. Yeah,

9 get close.

10 MR. KOSAR: I had a question on slide 55

11 and then a comment as well. On slide 55, are you

12 showing positive kWh savings over the course of

13 the year?

14 MR. FRANCO: Yes, that is correct. It

15 is a little bit of an artifact of how we conduct

16 the analysis in terms of having a fixed input

17 capacity. Because we have a fixed input capacity

18 for both the 80 percent thermal efficiency and 92

19 percent thermal efficiency, the actual -- and a

20 lot of the components are similar, for example,

21 the burner and other, that there's an actual

22 savings because of reduced operating hours.
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1 You have about 12, 13 percent higher

2 efficiency. That offsets the cooling. I didn't

3 go into detail how we calculate the cooling. We

4 assume 5 percent increased energy use in the

5 cooling side because of having the secondary heat

6 exchanger. So if you could provide any data, that

7 would be very helpful for us.

8 MR. KOSAR: Yeah, we've experienced

9 quite the contrary with the -- especially when we

10 go to condensing level efficiency. The

11 incremental pressure drop in these systems do

12 experience that year-round with the inline

13 components if we're talking about an RTU. So we

14 saw additional kWh consumption over the course of

15 the year since they were fitted with these higher

16 heat exchangers. So I would take a second look at

17 those savings calculations because it should

18 actually be negative as you increase to a higher

19 efficiency level.

20 And one other general comment, I know

21 we're talking about average savings for commercial

22 warm air furnaces. What we've seen in actual
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1 monitoring in the field is huge diversity in the

2 runtime of RTUs which basically equates to your

3 burner on-time. So we may see equivalent hours

4 that range here in Chicago from say, 1,200 kWh to

5 literally zero on some RTUs that are serving the

6 core of a building in a large footprint- type of

7 structure.

8 So I understand we're looking at the big

9 picture here in terms of average numbers. But the

10 reality on any given building is that you've got

11 significant diversity in runtimes of these

12 commercial warm air furnaces and RTUs and savings

13 you see on average you're going to see a much

14 wider range in actual practice.

15 MR. FRANCO: Thank you for your comment.

16 We tried to take that into account using the

17 building sample, as you can see on the previous

18 slide. We have a variety of field use. You would

19 expect to see the same electricity -- differences

20 in electricity use from our analysis.

21 MR. KOSAR: Yeah, the point I was trying

22 to make, I think on any given building you're
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1 going to have a distributed group of RTUs on the

2 rooftop that those that serve the core of the

3 building must be much higher runtime than those

4 that serve the corner of the building, much

5 shorter.

6 MR. FRANCO: Thank you. Appreciate your

7 comment.

8 MR. BROOKMAN: Yeah, thanks, Doug.

9 Final comments on these request boxes on slide 56?

10 Anything related to energy use characterization

11 you wish to add? Yes, Mike?

12 MR. RAY: Mike Ray. Victor, in the

13 calculation, did you take advantage of the ASHRAE

14 building models and utilize those as the baseline?

15 MR. FRANCO: No. We did not. But we

16 were able to compare it to those models and our

17 energy use estimates take into account all the

18 adjustments are similar. This provides a little

19 bit more of a wider distribution as you would see

20 in the field.

21 MR. RAY: Okay. As follow-up to that

22 then, you said a little different than what
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1 ASHRAE, a little different being 2 percent, 10

2 percent, 20 percent? What's --

3 MR. FRANCO: So previous ASHRAE

4 estimates, but this was back maybe five or more

5 years ago, were similar to the CBECS, around 200

6 million Btu. Our estimates are now because of all

7 these adjustments is down to 160. If we use the

8 same building model and adjusted it, we should get

9 about the same, 160.

10 MR. BROOKMAN: Final comments, because

11 we're going to move on here. Okay.

12 MR. FRANCO: Thank you. Victor Franco

13 again. Now, we're moving to lifecycle cost and

14 payback period analysis. The first slide here is

15 just an overview of the lifecycle cost and payback

16 analysis, is showing the different inputs that we

17 use. On the top of this flowchart we're showing

18 the total - - how to calculate the total installed

19 cost. As in the engineering analysis, one of the

20 major inputs is the manufacturer cost. Then we've

21 already described the markups. Those two

22 components give us the equipment price. In
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1 addition to that, we consider installation costs.

2 In the lower part of this flowchart, we

3 consider the operating costs. So we've already

4 described the energy use characterization. That

5 will give us the energy consumption. We then also

6 calculate the marginal energy prices, either

7 natural gas or electricity, to produce annual

8 energy costs. The operating costs also include

9 repair and maintenance costs to produce the annual

10 operating expenses.

11 In addition to that, we take into

12 account the lifetime discount rate energy price

13 trends to come up with the lifetime operating

14 costs. So both the components, the total

15 installed cost and the lifetime operating cost

16 give us the lifecycle cost and the payback period

17 as well.

18 So looking a little bit more at how we

19 conduct the lifecycle cost and payback period

20 analysis, it's an economic evaluation that the

21 commercial consumer perspective. The equations

22 are as shown here and in addition the analysis
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1 models, the uncertainty and variability of the

2 inputs using the Monte Carlo approach and

3 probability distributions using Excel and Crystal

4 Ball. We've included as part of the documents

5 that are publicly available a spreadsheet, an LCC

6 spreadsheet that has all these calculations.

7 This is just a summary of all the inputs

8 that I described before. I won't read all through

9 this but just it's good to if you want to go and

10 compare it to the flowchart, the definitions and

11 the different methodologies that we've used. I'll

12 go in more detail in a lot of these in the next

13 few slides.

14 First, we have the commercial consumer

15 equipment prices. So we discussed we used markups

16 to convert the manufacturer production cost into

17 the actual commercial consumer equipment prices.

18 In addition to this, we have used PPI data to

19 project price trends over the analysis period, as

20 you can see in the graph shown below.

21 MR. BROOKMAN: Michael McCabe?

22 MR. MCCABE: It's Michael McCabe.
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1 Victor, this consumer price trend, is that applied

2 to both the base case and the standards case?

3 MR. FRANCO: Victor Franco. That is

4 correct, yes, base case and standards case. So to

5 produce the total installed costs, we have also a

6 major component is the installation cost. We have

7 three major components to the installation cost

8 for this equipment. First off, we have the basic

9 installation costs and again, as discussed

10 earlier, we're only accounting for the

11 installation costs of part of the equipment. This

12 is a lot of times it's part of a packaged

13 equipment. We're trying to only include

14 installation costs related to the furnace

15 component.

16 These basic installation costs include

17 putting in place, heating up the furnace, the

18 piping related to the gas or oil equipment,

19 ductwork hookup, electrical hookup, any permit

20 removal and disposal fees. This would be the same

21 for all efficiency levels. The adders for higher

22 efficiency equipment would be the next two items.
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1 For a lot of this, weatherized condensing

2 equipment, this higher efficiency equipment

3 includes the condensate withdrawal costs. These

4 include pipe for the actual condensate, the pump,

5 condensate neutralizer, heat tape and electrical

6 outlet. The next slide will show you in more

7 detail these costs.

8 In addition to that, for estimation of

9 installation costs for indoor equipment, we have a

10 thorough methodology to calculate these costs

11 household to household. In terms of how the

12 venting and condensate withdrawal costs are

13 applied, we take into account the installation

14 location of this equipment. We assume that 95

15 percent of gas-fired equipment is installed

16 outdoors and 5 percent of equipment is installed

17 indoors. For oil-fired equipment, we assume that

18 all equipment is installed indoors. So for this

19 indoor equipment, we include these venting

20 installation costs.

21 Our data sources include our 2013 RS

22 Means mechanical cost data, manufacturer
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1 literature and consulting information.

2 MR. BROOKMAN: Mike?

3 MR. MCCABE: Hate to step back, but

4 Victor, on slide 62, did you have different

5 installation costs for new construction versus

6 replacement in there?

7 MR. FRANCO: Yes. Yes, we do. We have

8 a cost model for replacements and a different cost

9 model for new construction, which includes, for

10 example, the builder markups and includes having

11 to higher cost for having to replace the

12 equipment. If you have to vent the equipment,

13 then all equipment is assumed to be required new

14 venting for new --

15 MR. MCCABE: Also the condensate, the

16 handling of the condensate that's unique for an

17 existing building versus what it would be for a

18 new construction.

19 MR. FRANCO: Exactly, yes.

20 MR. MCCABE: Okay. Thank you.

21 MR. FRANCO: Thank you for that comment.

22 Since condensate withdrawal is one of the main
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1 components for the installation cost for

2 condensing equipment, here are some of the

3 assumptions that we use. For the condensate pipe,

4 essentially for all installations we consider it

5 both indoor and outdoor. The condensate pump is

6 for 50 percent of installations that don't have

7 CUAC. So that would be mainly for indoor

8 equipment. For freeze protection is applied to

9 all of the installations, a hundred percent of the

10 outdoor installations. So that's pretty much all

11 installations of gas-fired. The electrical outlet

12 is supplied if we include a pump or a heat tape

13 for 50 percent of the installations. And the

14 condensate neutralizer is applied to 12.5 percent.

15 MR. BROOKMAN: Mike?

16 MR. MCCABE: Okay, so the electrical

17 outlet that you list for 50 percent of the jobs,

18 if we look back on the previous cost or increase

19 that we had that was either $5 or $10, this

20 doesn't -- that's not included in that

21 calculation, is it?

22 MR. BROOKMAN: Constantin?
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1 MR. VON WENTZEL: Constantin von

2 Wentzel, Navigant Consulting. I believe the

3 electrical outlet is only required for condensing

4 applications. So the $5 to $6 increase was from

5 80 to 82 percent, noncondensing as opposed to the

6 scenario being described here which was a

7 condensing application.

8 MR. MCCABE: Okay, thank you.

9 MR. BROOKMAN: Harvey Sachs?

10 ME SACHS: Harvey Sachs. Deep in the

11 abscesses of my cranium, there's memory of a

12 large- scale study of RTUs in California in which

13 refrigerant charge was an issue.

14 So I've sort of worked on the assumption

15 that if there is an RTU, there's a way to get AC

16 for running -- pulling a vacuum or other

17 maintenance operations. And that would seem to be

18 available for the condensate pump or heat tape as

19 well. So I'm not -- am I wrong or where is this

20 AC outlet need coming from? You know.

21 MS. HOOTMAN: So --

22 MR. BROOKMAN: Jill, please.
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1 MS. HOOTMAN: Jill Hootman, Trane.

2 Harvey, describe that condensate, you know, you're

3 going to have -- you're going to have it coming

4 out of the unit and a lot of times it's run on top

5 of the roof. There are some installations it

6 could go down through the roof. But on top of the

7 roof, you're going to have to have that wrapped in

8 heat tape so it's constantly energized. It's

9 constantly energized and I don't think the

10 convenience outlet in a unit itself, then you're

11 going to unplug that and then when you want to run

12 your vacuum pump, use it.

13 You see what I'm saying? What if you're

14 on the roof? You don't want that de-energized

15 during all these heating hours. So it's going to

16 be another -- I think it's another. I agree with

17 him. It's another electrical outlet that is

18 constantly energized and heating anytime. It

19 could never be off. If it's off, it now has a

20 failure.

21 MR. BROOKMAN: Mike?

22 MR. RAY: Mike Ray. I think NEC code
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1 says that you have to have one outlet within 25

2 feet of other units so that there's service

3 capability. And so, you could have one outlet

4 serving four or five different units and in the

5 case of the heat tape, you want that to be running

6 constantly. And if you have four or five

7 different units, you'll need outlets for each one

8 of those.

9 MR. BROOKMAN: Thank you.

10 MS. HOOTMAN: Good point.

11 MR. BROOKMAN: Bob Whitwell, you're

12 next.

13 MR. WHITWELL: Yeah, I've had my

14 question already came up. So I'm all set. Thank

15 you.

16 MR. BROOKMAN: Thank you.

17 MR. FRANCO: Victor Franco again. So

18 now, we're going to be talking about the operating

19 costs. We already talked about the energy use

20 characterization. We would multiply that times

21 the energy prices to come up with the energy use

22 operating cost. The energy prices are developed
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1 for marginal monthly prices by different areas to

2 match up with the building location, the sample

3 building. We use the most current data we have

4 available for annual energy prices. We multiply

5 that times monthly price factors to come up with

6 monthly data and then we multiply that times

7 marginal price factors.

8 The data comes from EIA for all the

9 different prices including the electricity prices,

10 natural gas, LPG and fuel oil comes from the same

11 data sources. The monthly energy price factors

12 are developed using the same monthly data and the

13 marginal energy price factors are determined by

14 using that monthly data for a 10-year period for

15 the locations we analyzed.

16 Next, we look at the energy price trends

17 to go from 2012 average monthly marginal energy

18 prices to the years in our analysis from 2018 to

19 2040. We use directly the EIA 2013 by Census

20 Division. After 2040, we use the trends from 2030

21 to 2040 to project the future.

22 Another component of the operating costs
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1 are repair and maintenance. Repair cost is the

2 cost of replacing or repairing the components of

3 the commercial warm air furnaces that have failed.

4 We use data from 2013 RS Means facility repair and

5 maintenance a well as manufacturer literature,

6 equipment cost data and Consumer Reports data on

7 residential furnaces. We did not have data about

8 commercial furnaces in terms of frequency of

9 repair. So that would be good if that data is

10 available.

11 In terms of maintenance costs, we

12 calculate the labor and materials required to

13 maintain the equipment. The sources are 2013 RS

14 Means facilities repair and maintenance data, also

15 CBECS and RECS reports, how frequently the

16 building might be repairing the unit and we also

17 take into account for oil products the

18 availability of low-sulfur oil for -- fuel oil for

19 different parts of the country. Especially for

20 condensing designs, we take into account having to

21 maintain the condensate neutralizer and having to

22 check the condensate withdrawal system. These
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1 costs are reflected in the costs shown below. As

2 you can see, there's incremental cost both on the

3 repair side and the maintenance side. These are

4 annualized values, average values.

5 Next, we come to the other component of

6 the lifecycle cost --

7 MR. BROOKMAN: Frank Stanonik?

8 MR. STANONIK: Frank Stanonik, AHRI.

9 And I don't know if this has come up in the part

10 of the meeting I missed, but on your maintenance

11 costs, has there -- well, has the point been

12 raised yet that on the 82 percent thermal

13 efficiency because these are mostly outdoor units

14 that we have some concerns that in fact although

15 it won't be designed for condensing there will

16 certainly be conditions that make that a much

17 greater concern than if this was an indoor furnace

18 and we think that at the 82 level there in fact

19 might be some additional maintenance costs simply

20 because the greater likelihood that it will be on

21 occasion condensing and it's not really designed

22 for that, which would if nothing else require
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1 closer monitoring of the furnace.

2 MR. BROOKMAN: We did get some

3 comment on that earlier today.

4 MR. STANONIK: Okay.

5 MR. BROOKMAN: And the department

6 requested specifics in writing. For example,

7 where you might find that condition of it being

8 condensing regionally, by use, that kind of

9 comment, yes.

10 MR. STANONIK: All right. Well, then I

11 think the point would just be, you know, we're at

12 this point certainly not convinced that the

13 maintenance cost is basically unchanged as you get

14 to that 82 level. Okay, thanks.

15 MR. BROOKMAN: Yeah, and we did also,

16 just so that you'll know, receive the comment that

17 some of the other manufacturers had observed other

18 units where the heat exchanger had been degraded.

19 Okay, and in a short period of time. Okay. Bob

20 Whitwell, he wants to go back to slide 55 when

21 time is right. Let's do that now. Slide 55.

22 MR. WHITWELL: Okay, thank you. Sorry
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1 for taking the group back.

2 MR. BROOKMAN: No, no. It's okay.

3 We want to be complete here.

4 MR. WHITWELL: So could you explain

5 again where the energy savings comes from in the

6 case of the -- of cases one, two and three, up, up

7 and up on the gas-fired furnaces? I'm referring

8 to the savings shown over on the far right-hand

9 side.

10 MR. FRANCO: So this would be to the

11 electricity consumption savings. Is that correct?

12 MR. WHITWELL: Yes.

13 MR. FRANCO: Okay. This is Victor

14 Franco. The electricity consumption savings,

15 basically there's an offset between the savings --

16 potential savings from reduced operating hours of

17 the unit because we're assuming a fixed input

18 capacity. So essentially our input capacity is

19 250 kBtu for the 80 percent unit which is about

20 200,000 kBtu. For the same 250 input capacity

21 unit for that 92 percent, you're getting a much

22 higher output capacity. That leads to less
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1 operating hours.

2 So when we multiply a lot of our

3 different components by that reduced 10 to 15

4 percent operating hours, we get some savings.

5 That's offset by the cooling. We had assumed that

6 there was a 5 percent increased power in terms of

7 cooling and heating because of the secondary heat

8 exchanger and the circulating fan. That more or

9 less balances out with the effect that I just

10 talked about and that gives us a slight savings.

11 So please provide comments about our

12 methodology and about the actual impact on the

13 cooling or just the cooling impact in terms of the

14 power to check if our assumptions are correct.

15 MR. WHITWELL: Okay, thank you. Okay,

16 thank you.

17 MR. FRANCO: Thank you. So going back,

18 we're going back to the lifetime. So the other

19 components of the lifecycle cost analysis,

20 lifetime is the age of the furnace, once it's

21 retired from service. We gathered information

22 from national surveys and shipment data to
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1 determine distribution of lifetimes.

2 For CUAC equipment, we're actually using

3 an ASHRAE database that provides commercial CUAC

4 data. This is the same data that's used for the

5 CUAC analysis and we're using exactly the same

6 distribution from that previous analysis.

7 For oil-fired furnaces, we did not have

8 that same data, either shipments or a survey for

9 the data and we're using as a proxy the oil-fired

10 furnace residential data from the 2011 DFR. As

11 you can see, the mean and median lifetimes are

12 very similar. The median lifetime is about 18

13 years for gas-fired and for oil-fired it's about

14 26 years.

15 MALE: [Off mic.]

16 MR. FRANCO: Next we come up with

17 discount rates for lifecycle cost analysis. These

18 are used to determine the present value of the

19 lifetime operating cost expenses. We are using

20 calculated as a weighted average of the capital

21 costs using the capital cost asset price model for

22 different economic sectors. The primary source
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1 for the data comes from Damodaran Online database

2 of company debt and equity financing. We do

3 calculate discount rate for different sectors in

4 the commercial side including retail, property

5 owners, medical services, industrial, lodging,

6 food service, office, state/local government,

7 federal government and other. The table shows the

8 mean discount rate and the standard deviation. So

9 we do for each of these we do have a distribution

10 and that's taken into account in our analysis.

11 Next is the base case efficiency

12 distributions. Base case efficiency distributions

13 reflects the projected market share of equipment

14 at the different efficiency levels in the absence

15 of standards. So in essence not all consumers

16 purchase the equipment at the current efficiency

17 level. And the commercial consumers already

18 purchase equipment at a higher efficiency level.

19 We did not have at the time of the analysis any

20 data on the actual market shares. So we used the

21 AHRI database and the model availability to

22 determine these market shares in 2018.
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1 We assumed that the condensing 92

2 percent for commercial warm air furnaces, the

3 market share would be around 1 percent by 2018 and

4 that it's zero percent for indoor equipment for

5 either gas-fired or oil-fired equipment and the

6 other fractions just come directly from the

7 available models.

8 MR. BROOKMAN: Frank Stanonik?

9 MR. STANONIK: Frank Stanonik, AHRI. So

10 at the 81 percent level, all right, I'm trying to

11 understand that. So it says percent. What's the

12 93 percent for the 81 percent? What does that

13 mean? What am I reading there or what am I

14 supposed to understand from that I guess?

15 MR. FRANCO: Yes, this is Victor Franco,

16 just to clarify. So one column is the outdoor

17 equipment and the other column is indoor

18 equipment. We assume that there's a 95 percent of

19 the equipment for the gas-fired commercial is

20 outdoor, 5 percent is indoor.

21 MR. STANONIK: SO we're reading down.

22 So in terms of that, so 93 percent of whatever
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1 were the indoor units would be at 81. Okay, okay.

2 MR. FRANCO: That is correct.

3 MR. CYMBALSKY: So 93 percent of 5

4 percent. Got it.

5 MR. FRANCO: So now, we conclude the

6 methodology portion of the lifecycle cost before

7 going to the results and we request any general

8 comments on the methodology. Specifically, DOE

9 seeks comment on the approach and data sources

10 used for the installation costs especially for

11 more efficient equipment.

12 We also seek comment on the methodology

13 and data sources for the maintenance and repair

14 costs, especially for more efficient equipment.

15 We seek comment on the approach DOE uses for

16 calculating the lifetime of this equipment and

17 finally DOE seeks comment on the base case

18 efficiency distributions that we calculated for

19 2018 in the absence of amended energy conservation

20 standards.

21 MR. BROOKMAN: Comments? Comments

22 here? Okay, we're going to move on.
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1 MR. FRANCO: So next we come up with the

2 LCC and payback analysis results. As you can see

3 here, you can see the average installed costs, the

4 average lifetime operating cost, average LCC and

5 the average LCC savings as well as the fraction of

6 net costs, no impact, net benefit and the median

7 payback periods for different efficiency levels

8 both for the gas-fired and oil-fired equipment.

9 MR. BROOKMAN: Yes, Mike?

10 MR. RAY: Can you explain the average

11 installed cost, just that column?

12 MR. FRANCO: Yes. The average installed

13 cost is actually the average total installed cost.

14 That includes both the equipment and the

15 installation cost. This might be a little bit

16 confusing because it's just for the portion of the

17 gas equipment. So the actual --

18 FEMALE: [Off mic.]

19 MR. FRANCO: Exactly, yes. But if you

20 add the CUAC plus this, you would get the overall

21 -- potentially the overall cost of the equipment,

22 the actual equipment.
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1 MR. BROOKMAN: Harvey Sachs?

2 MR. SACHS: Harvey Sachs. Jill, I guess

3 in my simple mind, I've been assuming that this

4 really is incremental cost between a RTU with no

5 heating capacity and a gas pack.

6 MR. BROOKMAN: Jill, please use the

7 microphone.

8 MS. HOOTMAN: Jill Hootman. Yeah, I

9 agree, Harvey. But here's the thing is it never

10 happens that way, right? You're going to get the

11 whole unit with the -- if your gas fails and you

12 now need to replace your unit, you're going to get

13 the whole unit, the cooling, everything.

14 You're going to have to pay that

15 whatever increased amount for the entire unit even

16 though your cooling was probably operating, right?

17 You're never going to just replace just the

18 heating side. You have to replace the whole unit

19 and the incremental costs that go with replacing

20 that. It isn't just -- even though they did this,

21 they arbitrarily pulled out just the heating side.

22 It's never pristine like that.
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1 MR. SACHS: Harvey Sachs. And vice2 versa.

3 MS. HOOTMAN: For cooling?

4 MR. SACHS: Yeah.

5 MS. HOOTMAN: Yes, yes.

6 MR. CYMBALSKY: But I think -- this is

7 John from DOE. But if we're just focusing on the

8 efficiency changes in the gas part of the unit,

9 the rest is a wash if you assume all that's the

10 same, so. I mean, you could just add $5,000 or

11 whatever it is to every one of these. But the

12 delta is still the delta.

13 MS. HOOTMAN: Right. I understand what

14 you're saying in the analysis. I think that it

15 comes -- and this is Jill Hootman from Trane. I

16 think it comes to bear more in the fact that

17 whether they will actually repair or replace those

18 decisions.

19 MR. CYMBALSKY: Right.

20 MR. BROOKMAN: Mike?

21 MR. RAY: I think it ties back to --

22 this conversation that we're having also ties back
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1 to the fact that we'd like to have all this rolled

2 into one rulemaking. I think you've highlighted

3 the issue because you've got a piece right now

4 that you're cutting out for the gas furnace.

5 You've got a piece that we're talking about for

6 the cooling side and thus the reason why and I

7 know you've heard this before.

8 MR. CYMBALSKY: So I was waiting, right?

9 I was waiting for the comment. I was surprised it

10 took us until noon to get it.

11 MR. BROOKMAN: 12:20, in fact.

12 MS. HOOTMAN: I have to admit, I take --

13 MR. CYMBALSKY: Yeah, so DOE, you know,

14 obviously lining up the compliance dates for those

15 two rules since it's, you know, one box obviously

16 is something DOE understands is economically

17 important to the manufacturers. So the extent

18 legally we can do all that stuff, but you know,

19 clearly it's something that would make sense to

20 the department.

21 MR. BROOKMAN: Mike?

22 MR. RAY: Shifting directions back to
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1 the installed cost piece, in the case, the example

2 that I mentioned earlier in the day where there

3 was a heat exchanger, it was a competitor's heat

4 exchanger but where the heat exchanger rusted out

5 and in the end it was only three to five years

6 old, yes, because the unit was only three to five

7 years old, the unit was still in reasonably good

8 operating condition. They had to physically

9 dismantle the unit and put it -- and up a new heat

10 exchanger back in and then reassemble the entire

11 unit and hopefully address the issue of what

12 caused it to rust in the first place. But and

13 that was not an unusual situation that that

14 happened.

15 But and as it was, that furnace was an

16 82 percent furnace. And since a major piece had

17 failed but it was still a relatively new unit,

18 they had to -- they said let's go ahead and just

19 keep replacing those heat exchangers. But and

20 that's not included in how in the calculation to

21 replace a heat exchanger in three to five years or

22 in seven years or whatever. I know that's not
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1 part of the calculation and that's one of the

2 challenges I think from an industry standpoint.

3 We don't want our customers to have to

4 go through that pain of having to replace a heat

5 exchanger. You know, hey, my unit's only seven

6 years old or 10 years old. You know, having

7 something like that occur is not a fun thing to

8 do. If you're a contractor having to do it and

9 face your customer with it but also just in

10 general, as a manufacturer, because the customers

11 will be getting in touch.

12 MR. BROOKMAN: Michael McCabe?

13 MR. MCCABE: Michael McCabe. Victor,

14 this is a question that's somewhat out of your

15 analysis but given the work that LBNL has done,

16 you may have come across something. On slide 71,

17 given how little the installed cost changes from

18 the baseline to level two, the 82 percent, you've

19 got and the payback periods are so short, under a

20 year, have you come across any reason why more

21 consumers are not buying the more efficient units?

22 So this is really consumer behavior question.
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1 MR. FRANCO: Yes. We didn't actually

2 conduct that type of analysis. But it might be

3 model loyalty. There was one manufacturer that

4 produced that model. Definitely comments in that

5 regard would be greatly appreciated for us to more

6 appropriately evaluate that.

7 MR. CYMBALSKY: It's interesting. If

8 you go back to the engineering slide that, you

9 know, the mode that was rated at 80 actually

10 performed over 82 in our testing and the one that

11 was rated at 82 performed at 82. So I don't know

12 what that means, but I'll just make that

13 statement.

14 MR. BROOKMAN: Are we ready to move

15 on here? Frank?

16 MR. STANONIK: Frank Stanonik, AHRI.

17 And well, I'll apologize in advance again if I'm

18 bringing up issues that I missed this morning.

19 Listening to that last conversation and then the

20 couple others, but first of all, I think, John,

21 you just pointed something out that again I don't

22 know if it came up but if in fact products -- if
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1 the minimum is 82, then a manufacturer, it's

2 totally correct to assume that his production

3 units -- his production units will have

4 efficiencies on either side of that.

5 You know, assuming he's following the

6 law and complying and doing the test procedures,

7 you know, his rate will have to have the average

8 on 82 and when he produces them they're going to

9 be on either side. The ones that are on the other

10 side of 82, and again, we don't have that data

11 necessarily but let's just for sake of the

12 discussion say that the deviation was plus or

13 minus 2 percent. And again, I'm not saying that's

14 it because I don't know that.

15 But let's say it was. That means the

16 manufacturer knows that in some cases he

17 potentially is going to be sending out products

18 that are going to be operating at 84 percent,

19 okay? That from the manufacturer's perspective is

20 absolutely unacceptable for an outdoor unit. That

21 will have condensate problems. That may be the

22 one that dies within five months or whatever the
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1 number was.

2 But the point of all this is that as

3 we're looking at that level, we think the

4 installed cost is going to be very different

5 because a manufacturer is going to have to protect

6 -- I'll say protect themselves. They want to

7 provide the same levels of reliability of the

8 product. So they will have to do things and

9 encourage installation practices that basically

10 are intended to thwart any unintended condensation

11 and associated problems.

12 So we have a -- we think that the

13 installed cost here which is you're basically

14 looking at the cost of added heat exchanger or

15 whatever, in the practical sense has been

16 underestimated and we'll try and give you some

17 different estimates, some better information that

18 we would say we think the installed cost is

19 probably going to be more like this level because

20 we manufacturer again will have to in their

21 installation instructions put information that

22 essentially is intended to do things that avoid
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1 I'll say foreseeable condensate problems even

2 though it's, you know, again will every unit

3 necessarily have it.

4 Well, I don't think you can say if it's

5 being installed in San Diego or whatever. I don't

6 know that I'd be too worried. But you know, from

7 the industry's perspective, we don't know let's

8 say that those units that were coming down the

9 line and just, you know somehow they were firing

10 and operating in the 83 percent efficiency or

11 whatever. You know, we don't know that they end

12 up either in San Diego or Minneapolis or New York

13 City or Boston or whatever.

14 MR. BROOKMAN: Okay.

15 MR. STANONIK: So I think there's a

16 bigger issue there than it's unfortunately not

17 quite as simple as this chart would show.

18 MR. FRANCO: Thank you. I appreciate

19 your comment. I'll move on to the next part of

20 our analysis. DOE takes into account subgroup

21 analysis. So for these commercial products, we

22 look at small businesses to evaluate the impact on
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1 this portion of the markets. The results are

2 shown here. A comparison of the LCC and median

3 paybacks are very similar, as can be seen from the

4 table. That concludes the LCC and payback

5 analysis and at this point we would request

6 comment on any other questions about the lifecycle

7 cost. Specifically we would request comment on

8 consumer subgroup analysis.

9 MR. BROOKMAN: Should we break for lunch

10 or should we keep going?

11 MR. SACHS: What does John, our leader,

12 think our estimated time --

13 MR. CYMBALSKY: I think we can get

14 through this in an hour if we --

15 MR. BROOKMAN: I don't think -- I

16 think an hour -- I think we should break for lunch

17 if it's going to take an hour.

18 MR. CYMBALSKY: What does everyone else

19 think? I'm leaning the other way even though my

20 stomach is growling.

21 MR. SACHS: I reluctantly agree with the

22 honorable Mr. Cymbalsky.
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1 MR. BROOKMAN: All right. I'm

2 comfortable to keep going if you want to keep

3 going.

4 MR. CYMBALSKY: I can order some donuts.

5 MR. BROOKMAN: It seems like he's got

6 some right there. Okay, it seems like we're going

7 to keep going. Okay, let's proceed. Shipments,

8 NIA, RIA, MIA.

9 MR. FRANCO: So we now go into the

10 shipments, NIA, RIA and MIA analysis section.

11 I'll be -- I'll present the shipments, NIA, RIA

12 and MIA analysis next. The shipments analysis is

13 used to project -- to calculate the projected

14 shipments from the analysis period from 2018 to

15 2047 with and without the energy conservation

16 standards. The shipments analysis takes into

17 account two major market segments, new

18 construction and replacements. New constructions

19 are determined using the projected commercial

20 floor space and the projected market share in that

21 new construction market.

22 Replacements are determined based on
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1 historical shipments and the survival function.

2 We also take into account fraction of units that

3 are demolished, that is the actual building that

4 are demolished. Efficiency projections are also

5 taken into account in terms of the base case and

6 standard case. We also take into account the

7 impacts of standards on shipments in terms of the

8 price elasticities. The commercial consumer

9 decisions are influenced by the purchase price and

10 operating cost. Some consumers may choose to

11 repair rather than replace their commercial

12 equipment.

13 Here is a flowchart showing the

14 shipments analysis. So on the top part, this is

15 how we calculate the new construction shipments,

16 as I mentioned before. We're matching the

17 projected new construction commercial flow space

18 with the commercial equipment saturations for the

19 new construction market and for the replacement

20 shipments we're taking into account historical

21 annual shipments and retirement function. On the

22 replacement side we also take into account some
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1 demolitions and adding these two give us the total

2 shipments, the annual shipments during the

3 analysis period.

4 In terms of data sources, we're using

5 AEO 2013 for the projected new construction

6 commercial floor space and the saturations come

7 from historical data in CBECS and RECS. The

8 historical annual shipments is a mixture of

9 different sources. We have only one data point

10 for just gas-fired commercial warm air furnaces in

11 1994. We have historical data from CUAC which is

12 also used in the CUAC rulemaking that goes from

13 1980 to 2012 using both AHRI data and census data.

14 To come up with commercial warm air furnaces

15 shipments, we calculate a ratio of the CUAC

16 shipments to the commercial warm air shipments

17 based on the 1994 data.

18 Based on that data, we come up with

19 about 80 percent of CUAC shipments are CUACs with

20 gas-fired commercial warm air furnaces. We didn't

21 have any data for oil-fired equipment. So we came

22 up with a ratio between oil-fired and gas-fired
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1 equipment based on residential furnace shipments.

2 The retirement function comes from the lifetime

3 distribution, which was a few slides ago and is

4 further described in TSD chapter eight.

5 Here are the historical and projected

6 shipments. We're projecting around 250,000 to a

7 little bit more than 300,000 shipments during the

8 analysis period from 2018 to 2047. Oil-fired

9 equipment accounts for about 1 percent of those

10 shipments. DOE seeks comment on the methodology

11 and data sources used in these projections.

12 Specifically, DOE is interested in any historical

13 data that can be gathered that would be more

14 accurate for the commercial warm air furnaces.

15 DOE also seeks comment on the impacts of the

16 amended standards on the product shipments,

17 including any equipment switching that might --

18 DOE might need to take into account.

19 MR. BROOKMAN: Comments on the

20 shipments analysis? Okay.

21 MR. FRANCO: Next, we come to the

22 national impact analysis. The national impact
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1 analysis serves to estimate the national impacts

2 of the energy conservation standards over the

3 lifetime of the commercial warm air furnaces

4 shipped between 2018 and 2047. There are two

5 components that we take into account to calculate,

6 the national energy savings, which is the

7 difference in the annual energy use between the

8 base case and the standard cases, summed over the

9 lifetime of the equipment shipped between 2018 and

10 2047, and the net present value, which is the

11 difference between the present value of the

12 installed cost and the present value of the

13 operating cost over the analysis period from 2018

14 to 2047. These values are discounted. The method

15 we use I'll be describing in further detail in the

16 next few slides.

17 This slide shows a flowchart of the

18 actual analysis. Again, we start with the

19 shipments analysis to give us the annual

20 shipments. We calculate the base case energy use

21 based on the annual energy consumption times the

22 annual shipments analysis which will give us the
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1 base case cumulative energy use. In the standards

2 case, we do exactly the same and we come up with a

3 standards case cumulative energy use. We multiply

4 this by the site to source energy conversion

5 factors to come up with the national energy

6 savings.

7 The net present value, again we start

8 with the shipments analysis, annual shipments

9 data. From the LCC analysis, we have average

10 energy cost, maintenance and repair cost and total

11 installed cost both for the base case and standard

12 cases. We then compare the cumulative operating

13 cost savings between the case base and standard

14 case and the cumulative total consumer cost

15 increases. We discount both of these and come up

16 with a net present value.

17 This slide further describes the inputs

18 and some of the sources. The annual unit energy

19 consumption comes from the LCC energy analysis,

20 energy use estimates. The shipments are described

21 previously in the shipments analysis. The

22 equipment stock is determined by the annual yearly
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1 stock of the annual shipments in the lifetime over

2 the equipment class. For this equipment, there is

3 no rebound effect. I will be talking a little bit

4 more about the base case efficiency distributions.

5 But basically we use a roll-up scenario.

6 And we request comment on historical

7 shipments data to determine these further. Site8 to- power plant conversion factors are determined

9 from AEO 2013. Full-fuel-cycle is also determined

10 from AEO 2013. Total installed cost and operating

11 cost per unit come from LCC analysis. Results,

12 the discount rate used for the national net

13 present value is 7 percent and 3 percent real and

14 this comes from OMB's regulatory analysis

15 guidelines.

16 Here are the base case efficiency

17 distributions. As mentioned before, we use a

18 roll-up when we're complying to standards. The

19 equipment at or above the efficiency will not be

20 affected in the roll-up scenario. So for example,

21 our base case assumptions are for the gas-fired

22 warm air furnaces 67 percentage at the baseline
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1 and 24 percent are at 81 percent. If the standard

2 is set at efficiency level one, basically it's 67

3 plus 24 which will give us 90 percent at that

4 efficiency. The efficiencies above that will not

5 be affected.

6 We do apply a trend in terms of the

7 condensing efficiency. We start off in 2018 at 1

8 percent of the market and we assume that that will

9 increase to 5 percent of the market by 2047.

10 MR. BROOKMAN: Mike?

11 MR. RAY: Minor points, but just on

12 slide 83, obviously it's rounding numbers. But

13 they're off just by a hair. It's not a big deal

14 but just noted that.

15 MR. FRANCO: Yeah, below there's a

16 little bit of a note that says the rounding, yes.

17 Thank you for that. Next, DOE determined the

18 trial standard levels. DOE has five trial

19 standard levels that is a mixture of the

20 efficiencies for gas-fired and oil- fired

21 equipment. TSL 1 is the most commonly efficiency

22 level above the baseline for a gas-fired equipment
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1 and at the baseline for oil-fired equipment.

2 Therefore, 81 percent for both. Two through four

3 are a mixture. So TSL 2 is 81 percent for gas, 82

4 percent for oil. TSL 3 is 82 for gas, 81 percent

5 for oil. And TSL 4 is 82 percent for both gas and

6 oil. TSL 5 is at the max tech. For this NOPR

7 analysis, DOE is proposing TSL 4 as a proposed

8 level.

9 Next, we present the results from the

10 national impact analysis. First, we'll look at

11 the national energy savings in CWAFs. These are

12 by TSL. So the first few rows are the primary

13 energy savings and the last three rows are the

14 full-fuel-cycle energy savings. For the proposed

15 level at TSL 4, the full- fuel-cycle energy

16 savings are a little bit more than half a CWAF.

17 Next are the net present value. They're

18 reported at both 3 percent and 7 percent. For TSL

19 4, at 3 percent it's about 2.7 billion and at 7

20 percent discount rate, a little bit more than 1

21 billion. This concludes the national impact

22 analysis and at this time we request any comments
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1 on the analysis from interested parties,

2 specifically related to rebound effect and base

3 case efficiency distribution trends.

4 MR. BROOKMAN: Comments on national

5 impact analysis? Michael McCabe?

6 MR. MCCABE: Victor, right at the top

7 you asked for comments on the rebound effect. As

8 I understand it, EIA in the annual energy outlook

9 does include rebound effect for commercial heating

10 and cooling. But it's not being included here.

11 Are there any data out there that EIA should

12 consider as to drop it from their analysis?

13 MR. FRANCO: Thank you so much, Mike.

14 I'm not aware of what that level is of the rebound

15 effect. We did get stakeholder comments that there

16 was no rebound effect for this rulemaking. So any

17 information would be useful to further quantify if

18 that is true or not.

19 MR. MCCABE: Okay. I think -- this is

20 Michael McCabe again. I think John looks like

21 he's getting about ready to chime in since he's

22 got some background with --
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1 MR. CYMBALSKY: I do, yeah.

2 MR. MCCABE: A little bit of background

3 with EIA and the annual energy outlook.

4 MR. CYMBALSKY: Yeah. So this is John

5 at DOE, a former EIA modeler. Yeah, you know, I

6 did the residential model so I'm not as up to

7 speed on the commercial side. But I do believe

8 they have a rebound and it's based on the --

9 there's a rich literature here that the range for

10 rebound effect on some of these -- and if you look

11 by end use, some of them are actually positive and

12 not negative.

13 So the studies out there show a large

14 range. I think EIA picked a number more like -0.3

15 or -0.25. I'm not sure. But we'd have to go back

16 and look at that. But lots of arguments on both

17 sides here. So I don't -- we assumed none and

18 took comment and again we're happy to take comment

19 again on that.

20 MR. BROOKMAN: Okay. Frank Stanonik?

21 MR. STANONIK: Frank Stanonik, AHRI. On

22 slide 85, so if you look at the primary energy
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1 savings between -- well, you know, one and two is

2 81 percent, three and four is 82 percent. So the

3 primary energy savings at three or four is in fact

4 more than double what is one or two, right? So

5 then but if I go back to slide 55, the annual fuel

6 use, the savings at level one is 1.9 million Btu

7 and at level two it's double, straight double.

8 The annual electrical savings is for the

9 81 is 12 kWh per year. At 82, it's just less than

10 double. So if you will, the per unit consumption

11 numbers indicate roughly 1 percent get you double

12 and yet the national energy savings, that's

13 certainly more than double. What am I -- what

14 changes at the national energy savings level to

15 kind of alter that proportion?

16 MR. FRANCO: Thank you so much, Frank,

17 for that question. This is Victor Franco again.

18 It is a little bit confusion once you're comparing

19 the lifecycle costs and the energy use and

20 comparing it to the national impact. The main

21 thing to consider there is that for the energy use

22 it's kind of the average at that efficiency level.
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1 Once we look at either the LCC savings

2 or the national impact analysis, we're looking at

3 it in terms of the base case. There's a number of

4 consumers that are already at 81 percent. So

5 there's a fraction that wouldn't have any savings

6 at 81 and when you're going from 81 to 82, those

7 actually do have savings and it's about close to

8 24 percent of the market.

9 MR. BROOKMAN: Harvey Sachs? No?

10 Okay.

11 MR. SACHS: He answered it when he

12 clarified.

13 MR. BROOKMAN: Yeah, thank you.

14 Michael McCabe?

15 MR. MCCABE: It's Michael McCabe.

16 Victor, following up on that, I would expect then

17 that the savings would be going down, you know, in

18 the NIA rather as compared to the engineering

19 because if you've got more -- if you've got 20

20 percent of whatever the number the consumers are

21 already buying at that level, then the average per

22 unit savings is going to be lower than what it
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1 would be in the engineering analysis.

2 MR. CYMBALSKY: Right, so that's -- this

3 is John from DOE. So I don't know if this came

4 out clear. But a lot of the market's at 81. So

5 but 80 to 81, there's a bunch of percentage guys

6 already buying at 81. So that was a small delta.

7 But there are not a lot at 82. So that's a bigger

8 delta. So if the number suggested more were

9 already buying at 82, what you just said would be

10 true. But it's actually 81 where they're buying

11 already.

12 MR. BROOKMAN: Okay. Thank you,

13 John. Final comments on national impact analysis?

14 Okay, we're moving on to regulatory impact

15 analysis.

16 MR. FRANCO: Victor Franco again, going

17 back to regulatory impact analysis. Just one

18 second. Okay, there we go. So the purpose of the

19 regulatory impact analysis is to assess the

20 national impacts of non-regulatory alternatives to

21 mandatory amended energy conservation standards.

22 Basically we modified the NIA spreadsheet to
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1 evaluate the non-regulatory alternatives such as

2 the no regulatory action, consumer rebates,

3 consumer tax credits, manufacturer tax credits,

4 voluntary energy efficiency targets and bulk

5 energy purchases.

6 The output of this analysis is NES and

7 NPV for non-regulatory alternatives. No

8 alternative was found to be as beneficial as the

9 proposed energy conservation standards. Further

10 information about this analysis and the results is

11 presented in chapter 17 of the TSD.

12 MR. BROOKMAN: Manufacturer impact

13 analysis. Chris Lau?

14 MR. RAY: Before we jump to that?

15 MR. BROOKMAN: Yes, Mike Ray?

16 MR. RAY: Mike Ray. Where is the TSD in

17 chapter 17? I went out and looked at -- I went

18 out and pulled down as many files as I could in

19 preparation for this and I found a few of these.

20 But I didn't find -- I don't know that I found a

21 regulatory impact analysis and you're referencing

22 chapter 17. So I assume that there is a list of
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1 chapters that are available yet I think there's

2 only six files out on the website.

3 MR. FRANCO: Victor Franco. There is

4 one single TSD file that's actually available and

5 it includes all the chapters and appendices. If

6 you go through that file, close to the bottom

7 there's chapter 17. It's available there. So

8 there are six files, correct. Some of them are

9 the analytical tools, the spreadsheets. There's

10 two PDF files. One is the NOPR notice and the

11 other one is actually the TSD. That's the larger

12 file.

13 MR. RAY: Okay. Thank you.

14 MR. LAU: Afternoon, folks. My name is

15 Christopher Lau. I'm with Navigant. I'll be

16 presenting the manufacturer impact analysis. The

17 primary purpose of the manufacturer impact

18 analysis, or the MIA, is to assess the impacts of

19 amended standards on commercial warm air furnace

20 manufacturers as an industry. The second purpose

21 is identifying and qualifying the impacts on

22 manufacturer subgroups such as small business
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1 manufacturers. And the final portion of the MIA

2 involves discussion of direct employment,

3 potential capacity constraints and other federal

4 regulations that go in effect around the

5 compliance date of the standard.

6 The primary tool we use is the

7 government regulatory impact model. It is a cash

8 flow model used to represent the industry as a

9 whole. The major output of the model is an

10 industry net present value, a metric used to

11 succinctly quantify the impact of standards on

12 manufacturers. We also conduct interviews to

13 validate and refine the inputs to the model, the

14 government regulatory impact mode, or the GRIM,

15 and to better understand qualitative issues.

16 The analysis is conducted in three

17 general phases. Phase one, we built an industry

18 profile from publicly-available information.

19 Phase two, we use content from the MTA, the

20 engineering analysis and shipments analysis to

21 outline the industry in the GRIM. And in phase

22 three, key inputs are validated with manufacturers
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1 and qualitative issues are discussed in

2 interviews. We use this content to refine the

3 GRIM to better reflect the industry.

4 As I mentioned before, the model itself

5 relies on several analyses we've already discussed

6 today. We use financial and product information

7 from the market and technology assessment. We

8 take manufacturer production costs from the

9 engineering analysis and we use shipment forecasts

10 from the shipment analysis. These inputs are

11 essentially locked in before we run our model. To

12 complete our model, we supplement two key pieces

13 of information; markup scenarios and conversion

14 cost scenarios.

15 For this rule, we developed high and low

16 cases for the manufacturer markup scenarios and we

17 also developed high and low cases for the

18 conversion cost scenarios. This results in four

19 different sets of results, all four presented in

20 the TSD -- [coughs] -- excuse me. I'm a little

21 sick today.

22 The NOPR itself focuses on two of those
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1 scenarios, the ones with the least and greatest

2 change in INPV, the percent range of potential

3 impacts on the industry. What we found was

4 actually that for markups, the results are not

5 particularly sensitive to the markup assumptions.

6 Our markup scenarios, to be simplistic, are

7 measures of the industry's ability to pass on the

8 cost of the standard to its customers. However,

9 since we didn't see much change in the variable

10 cost for manufacturers, I think we discussed this

11 a bit earlier, you know, like 3 to 4 percent

12 change in MPC for gas-fired units and 1 to 2

13 percent change in MPC for oil-fired units. The

14 conversion costs were really the driving factor in

15 the INPV results.

16 And so, if you look here in the base

17 case, we estimate that the industry, just for the

18 furnace unit -- right, there again is an arbitrary

19 distinction -- but the base case value is roughly

20 75 million at TSL 4. The model shows a loss of 15

21 percent to 58 percent for the industry and those

22 are really tied to the conversion cost scenarios.
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1 In one case, we estimate the industry having put

2 together upfront investment of $20 million and the

3 high case it's up from an investment of $60

4 million. It's a fairly significant range there

5 and something I'd like to focus on today.

6 In interviews, when we spoke to

7 manufacturers, there was consensus that product

8 conversion costs were the real driver here. But

9 at the same time, we received a really wide range

10 of feedback, everything from numbers in the

11 thousands and numbers in the millions on a per

12 manufacturer basis. More difficult for us, the

13 feedback received was fairly high level. You

14 know, it was fairly vague as to what the

15 components of those costs were.

16 So it made it hard for us to -- it made

17 it challenging for us to do our validation work of

18 those numbers. So in the discussion today, it

19 would be helpful to the department and to the

20 analytic team to understand the industry's

21 estimates of those conversion costs -- capital

22 conversion costs and product conversion costs but
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1 also understanding how the industry arrives at

2 those estimates, what are the key components.

3 On the tooling side, you know, what's

4 the equipment tooling necessary, how many pieces.

5 On the R&D side, more detailed estimates of the

6 redesign costs, you know, the engineering time,

7 the lab time, the kinds of safety testing, heat

8 limit testing, reliability testing, just

9 understanding how those costs add up to the fairly

10 significant numbers the industry has proposed and

11 that we heard in interviews.

12 [Off mic conversations]

13 MS. HOOTMAN: Jill Hootman, Trane. So I

14 think we've said this before too. It becomes very

15 hard to just quantify gas heat because associated

16 fans will have to change, therefore cabinets will

17 have to change, therefore major redesign as far as

18 we're concerned. You know, costs, if we have to

19 redesign a heat exchanger, it is a long

20 development.

21 Average time in test labs can be

22 significant, six to eight weeks just to prove out
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1 your design and then you start your reliability

2 testing and your reliability testing, it cycles on

3 and off, on and off, on and off, looking at heat

4 surfaces and where you have, you know, hot spots

5 and wear and all of that. Those can take years to

6 actually do those reliability tests. I would

7 hasten to guess probably two to three years just

8 to do that cycle testing.

9 We don't really -- we don't --

10 historically if you look at designs and

11 historically if you look at those packaged units,

12 we are upgrading, doing various different things

13 on the cooling side more often than we're doing on

14 heating because we don't want to touch heating

15 because it is so long, so -- and there's not as

16 many variations as well, you know, that are used

17 in -- in other words, there might be six or eight

18 models and they're used in various different

19 configurations. Every time you change the

20 configuration, you have new testing.

21 So let's say I do have a 250,000 Btu and

22 you think, oh, there's an economy of scale there.
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1 Well, every single time I put that in a horizontal

2 unit, I have new testing. I put it in a down flow

3 unit, I have new testing. I put it in a different

4 cabinet, I have new testing. Every single time

5 those heater overloads have to be looked at,

6 airflow profile has to be looked at in order to

7 determine hot spots on the heat exchanger and

8 where it might have failures.

9 So really this testing is sometimes in a

10 way longer than cooling testing that actually

11 happens. Plus on the whole I would say that, you

12 know, I might have one lab to 10 chambers that

13 could do cooling in a test lab but I only have one

14 that might be able to do heating. So my

15 availability of where I might be able to do heat

16 testing might also be a problem. Since this has

17 no upward bounds like we said that were up to 2.5

18 million, 2 million Btu heat exchangers, there're

19 actually probably no labs that do those. We test

20 them outside and you have to wait for temperatures

21 to be adequate to test those.

22 So you know, you're waiting for Mother
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1 Nature to be able to test those. You know, coming

2 up with exact numbers right now, I can't say them.

3 I'll certainly, you know, look at that when we

4 provide comments on all of this. But I think to

5 say that it's just the heat exchanger development

6 is wrong. It definitely has way bigger effects in

7 the whole unit. So I would agree with your $60

8 million. It's probably upwards more than that.

9 MR. BROOKMAN: Okay.

10 MR. LAU: Thank you.

11 MR. BROOKMAN: Michael McCabe?

12 MR. MCCABE: Michael McCabe. Chris,

13 quick question. One of the purposes of the MIA is

14 to capture cumulative regulatory burden between

15 the residential furnace proposed rule and the

16 commercial furnace proposed rule, DOE identified

17 it's either 19 or 20 rules that would affect the

18 HVAC industry. And what your slides don't touch

19 on is how you captured the cumulative regulatory

20 burden. Could you touch on that?

21 MR. LAU: Sure.

22 MR. RIVEST: I'll take that one.
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1 MS. HOOTMAN: Yes.

2 MR. BROOKMAN: Mike Rivest?

3 MR. LAU: Yeah, they're just

4 prescription.

5 MS. HOOTMAN: Wow.

6 MR. RIVEST: Well, I'll try to -- this

7 is Mike Rivest, Navigant. That's a sweeping

8 question, Mike. Let's look at this particular

9 slide about the industry -- it focuses on the

10 value of a particular industry, the industry

11 that's being regulated in this rule. It's an

12 industry that we quantify at $75 million and so we

13 put the bounds of the industry at the product

14 shipments that are being regulated today.

15 So when we talk about regulative burden,

16 it can mean a number of different things. As I --

17 as we define the industry more broadly, we are

18 increasing the revenues as well. So you're

19 increasing the denominator, you know. So in a

20 way, you're diluting the impact, if you will,

21 right? So from a percentage point of view, if you

22 look at the impact here of -58, 55 percent, if I
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1 start bringing in the central AC rule and all

2 those other rules, your denominator is getting

3 really, really large and your percentage impact is

4 actually going down, down. You know, it's going

5 to be a lesser number.

6 So I don't think that's what you have in

7 mind. I think cumulative burden in some

8 situations can be the cumulative burden of

9 multiple rulemakings on one particular product

10 within a certain timeframe for example. That's

11 not happening in this rule. So it's not being

12 captured in that way. There might be qualitative

13 considerations where there are pooled resources

14 for R&D or test labs, for example, where, you

15 know, if those are known to us, then those would

16 be reported to the department and taken into

17 consideration in the decision-making.

18 So that type of information you gave

19 earlier is extremely helpful, Jill. So you know,

20 if test chambers are shared resources with those

21 other products, the residential furnaces for the

22 heating products, for example, that would be
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1 helpful to know or maybe even the R&D resources

2 such as engineers or pooled resources. So that

3 would be helpful. But on the INPV calculation

4 itself, you know, increasing the number of rules

5 under consideration is not something we've done.

6 I don't think it's something that was intended to

7 be done.

8 MR. BROOKMAN: Harvey Sachs?

9 MR. SACHS: This is Harvey Sachs and I

10 certainly don't claim to speak for everyone in the

11 advocacy community. But if I try to think about

12 this a little bit holistically, given that 93 to

13 95 percent of the gas-fired warm air furnaces are

14 integral parts of RTUs, I think that I can be very

15 sympathetic to the desire to have the RTU be the

16 regulated product including both its cooling and

17 its heating and preferably figuring out how to

18 include its ventilating function as well, that I

19 think Jill and Mike have made a pretty strong case

20 that there is a strong interaction as we think

21 about heat exchanger size, which is the basic

22 component in the warm air furnace with other
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1 aspects of the RTU design.

2 And I don't know how to handle this,

3 given the multiple actors including ASHRAE 90.1

4 for commercial equipment. I think it is incumbent

5 upon all of us as a community to start thinking in

6 these directions.

7 MR. RIVEST: You know, in the context of

8 two rules going on simultaneously or maybe not

9 simultaneously but, you know, overlapping -- I

10 mean, there can be quantitative consideration of

11 economies of grouping them. So for example, that

12 $60 million could be reduced if it was done -- the

13 R&D program corresponded or, you know, coincided

14 with a rooftop standard.

15 Well, the R&D requirements, you know, if

16 you're doing the testing and you're having to, you

17 know, to do a lot of testing for the fans or, you

18 know, I assume when you're going to be determining

19 for example the fan size or the motor size and the

20 statics and things like that, you'll want to have

21 the proper furnace installed. So you'd want to do

22 that once I assume. So there might be some
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1 savings in having the two rules together that

2 could be taken into account. That's something, you

3 know, you're in a position to tell us.

4 MR. SACHS: I think you're addressing --

5 MR. BROOKMAN: Harvey, microphone.

6 MR. RIVEST: That's not what you were

7 getting at?

8 MR. SACHS: I think you're directly

9 addressing the representatives from industry. But

10 I'm saying that my goal is energy savings and the

11 less expensive it is to get the energy savings,

12 the more likely it is we are to get them. And in

13 that sense, the advantages of synchronizing, that

14 may be the simplest way to describe it, the

15 processes for what we call the unitary commercial

16 air conditioner and the warm air -- commercial

17 warm air furnace ought to be seized and we have

18 not as a community, including the ASHRAE

19 community, figure out how to do that and I think

20 that ensures inefficiencies.

21 MR. LAU: This is Chris Lau with

22 Navigant. Harvey, I think we're speaking the same
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1 language. And to that point, you know, we have a

2 set of conversion costs for the cooling side of

3 the rooftop units from the CUAC rulemaking and we

4 have a set of conversion costs here for the

5 heating side. And when we went out and spoke to

6 manufacturers a while back, we got these estimates

7 of conversion costs from them.

8 And in part of those conversations, I

9 know that part of the costs you see here, that $60

10 million is them taking into account the redesign

11 of the cooling side also, right, because the

12 cooling side -- the way the schedule was when we

13 did these interviews, it was that the CUAC rule

14 would go into effect, then I think it's two years

15 later the warm air furnace rule would go into

16 effect. And there are interactions there. And so

17 --

18 MR. SACHS: Harvey, interrupting

19 impolitely, the next cycle of 90.1 which I think

20 is 2016 and that has standing in this room as

21 well.

22 MR. LAU: Right, and so, to Mr. McCabe's
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1 point and echoing something Mike Rivest said

2 earlier, you know, it would be helpful -- you

3 know, given the department's heard that the CUAC

4 and the commercial warm air furnace rulemaking

5 should be aligned, if they were aligned, how would

6 that affect some of these conversion costs we're

7 seeing today because that would be -- that would

8 create a very quantitative indication of why they

9 should be aligned.

10 MR. BROOKMAN: Harvey?

11 MR. SACHS: Thank you. This is Harvey

12 again. Thank you and I appreciate that, Chris. I

13 think there's a process question but there's also

14 a question of what is the product. And from my

15 perspective on commercial warm air furnaces is

16 that 5 to 7 percent are non-weatherized products.

17 Everything else is more integrated into a single

18 cabinet than, for example, the central AC and

19 furnace on the residential side. It's a much more

20 integrated design from my perspective.

21 MR. RIVEST: So you should be looking

22 over there when you say that.
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1 MR. CYMBALSKY: I've already spoken my

2 piece on that. I think that my understanding

3 though is that what, you know, I'll say it a

4 little more bluntly than Chris just did, that if

5 these were aligned, that there would be some

6 synergy in the cost needed to redesign the RTU as

7 a -- you know, a thing that does both the heating

8 and the cooling and that it would be preferred by

9 the manufacturers to have those in line because

10 I'm assuming the cost wouldn't be additive. There

11 would be some decrement in the total. Did we get

12 the math right now?

13 MR. SACHS: This is Harvey.

14 MR. CYMBALSKY: I'm saying --

15 MR. SACHS: Yes, yes.

16 MR. CYMBALSKY: Okay. Then why don't we

17 just say that?

18 MR. SACHS: So why don't we take that

19 savings in energy savings?

20 MR. CYMBALSKY: Okay. We just said it,

21 so okay. I think we could -- you know, we look

22 forward - - obviously we're not going to get
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1 anything here today. We didn't expect to. But

2 you know, we're putting the plea out for whatever

3 you can do to help the department make, you know,

4 a decision on that. So the numbers obviously

5 would help policymakers and that to get to that

6 spot. So why don't we just move on to the small

7 businesses at this point?

8 MR. LAU: All right. Moving on to --

9 Chris Lau, from Navigant. Moving on to the next

10 slide, we did do a small business subgroup

11 analysis. We identified two small manufacturers.

12 One produced gas- fired product. They account for

13 17 of the 254 listing in the -- it says the AHRI

14 directory here but it's actually in the combined

15 directory that we put together. What we found was

16 their product mix was not substantially different

17 from some of their larger competitors, meaning

18 that they were not the only manufacturer that only

19 produced baseline equipment.

20 We also found one oil-fired commercial

21 warm air furnace manufacturer. They account for

22 11 out of the 16 listings in the directory,
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1 indicating that they are fairly substantial in

2 this niche. They also offer the most efficient

3 products in the market and so we believe that they

4 are a leader in this niche and in general DOE was

5 unable to identify any publicly- available data

6 that would lead to the conclusion that the small

7 manufacturers would be differentially impacted

8 from the average in the industry than their larger

9 competitors though DOE does recognize that small

10 manufacturers may need to allocate a greater

11 portion of their available technical resources

12 than competitors, and may need to access outside

13 capital.

14 And so, with that, you know, we have

15 multiple requests for comment. I think we've

16 stated many of these. But essentially we seek

17 comment as always on the number of small

18 manufacturers and the potential impact to those

19 small manufacturers and the severity of those

20 impacts.

21 Again, sometimes it can be very

22 difficult to find public information on these
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1 manufacturers and we do want to make sure we

2 properly consider the impacts on them. DOE seeks

3 comment on the potential impacts of the amended

4 standards on the industry, on the conversion costs

5 for the industry, on the key drivers, again that

6 level of detail on the key drivers of those

7 conversion costs and then on changes in

8 manufacturer prices and markups. And finally, we

9 invite all comment on the MIA.

10 MR. BROOKMAN: Mike?

11 MR. RAY: I assume that you went to them

12 direct and asked them specifically.

13 MR. LAU: We did.

14 MR. RAY: Okay, yeah. I would assume

15 that you would. But yeah.

16 MR. BROOKMAN: Jill?

17 MS. HOOTMAN: So it's a detail I know in

18 this that I just have a question on where -- how

19 you derive the number of production workers

20 affected --

21 MR. LAU: Sure.

22 MS. HOOTMAN: -- because I'm quite
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1 shocked by the number.

2 MR. LAU: Sure. So the number of

3 production workers actually primarily falls out of

4 three pieces of information. One is we use the

5 annual survey of manufacturers, so U.S. census

6 data on typical production workers' wages in this

7 industry. Then we look at the MPC for the

8 engineering analysis and the percentage of that

9 MPC that we estimate to be labor content. And

10 then, we look at shipments, national shipments.

11 And so, basically we're saying for

12 example there's a hundred shipments and $10 of

13 that is labor content, then out of that $1,000,

14 how many workers does it take to produce those

15 units. So a thousand dollars can be backed into

16 annual worker wage. I mean, obviously the example

17 the numbers are way too small but --

18 MS. HOOTMAN: Yeah, the numbers are way

19 too small.

20 MR. BROOKMAN: Mike Rivest?

21 MR. RIVEST: Mike Rivest. I think that

22 goes back to the definition of the industry.
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1 We're only considering the revenues associated

2 with the heating section and you may have in mind

3 the full packaged unit. No? I mean, if each of

4 these units cost, like you said, said if it's $400

5 and, you know, I've been looking at these surveys

6 of manufacturers for I don't know how many years

7 now, but typically it's 10 percent is labor.

8 Take 10 percent of the cost, not of the

9 sales price. It's 10 percent and that average

10 labor cost is under -- it's under $20. It's just

11 a multiplication. So I don't know how -- and then

12 we add in for indirect labor. So you know, not

13 the people actually on the line but the people --

14 MS. HOOTMAN: The suppliers.

15 MR. RIVEST: No, we don't add in for the

16 suppliers, but -- I mean, the supervisors in the

17 plant, things like that. And that's how we build

18 up our labor estimates. So I'd be surprised that

19 we're that far off if we're talking about the same

20 thing.

21 MS. HOOTMAN: All right. Well, this is

22 where I have the issue. I can look at three
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1 manufacturing facilities that make these gas

2 furnaces and I have on order in those

3 manufacturing facilities dedicated just to heat

4 exchangers and making them the number that you

5 have in here, 200 people.

6 MR. RIVEST: Okay.

7 MS. HOOTMAN: So that's where I go, huh,

8 I got --

9 MR. RIVEST: That's good information. I

10 mean --

11 MS. HOOTMAN: -- people making that and

12 I'm just one of the many people that you just --

13 you know, so that's where I go how did you back

14 into it because it's not in actuality what's

15 happening.

16 MR. RIVEST: Okay. That's good

17 information. I mean, I think --

18 MR. VON WENTZEL: Constantin von Wentzel

19 here at Navigant. Any information that you can

20 submit to us, we would appreciate. There might be

21 an issue where your manufacturing assets are

22 shared across a wider range of product. So that
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1 might be where the 200 people come from as opposed

2 to 200 people being dedicated only to 250,000 Btu

3 furnaces.

4 MS. HOOTMAN: Okay. So that's a good

5 thing. Is it just the 250,000 or to all of the

6 furnaces under commercial warm air?

7 MR. VON WENTZEL: No, no.

8 MS. HOOTMAN: Okay.

9 MR. VON WENTZEL: No, no. I mean, it's

10 just that's where the $40 would come in, right?

11 MS. HOOTMAN: Okay.

12 MR. VON WENTZEL: I mean, obviously if

13 you're building a million Btu furnace, you're

14 going to require more tubing, more labor, more

15 everything.

16 MS. HOOTMAN: Yeah, right. Okay.

17 MR. RIVEST: But more simply, we have

18 the revenue, our revenue estimates per year and

19 then, like I said, labor is about 10 percent. Are

20 we far off there?

21 MS. HOOTMAN: Yeah, and I heard you say

22 that before and I admit I didn't find it in here.
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1 But you said this is a $75 million industry.

2 MR. RIVEST: That's the value per year.

3 MS. HOOTMAN: That's the value

4 pertaining to commercial warm air furnaces. Is

5 that right?

6 MR. RIVEST: Right.

7 MS. HOOTMAN: And I realize that's a

8 subsection of -- I mean --

9 MR. RIVEST: Right. You may want to

10 look at it.

11 MS. HOOTMAN: So I'll comment. If

12 that's the amount --

13 MR. RIVEST: The annual sales -- it's

14 about --

15 MR. LAU: $70 million.

16 MR. RIVEST: $70 million revenue.

17 MS. HOOTMAN: Okay.

18 MR. RIVEST: So that would be --

19 MS. HOOTMAN: Off the top of my head,

20 because we don't pull it apart, I'd have to do

21 some figures on that.

22 MR. RIVEST: Back out the markup and
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1 then take 10 percent of that and then take 15 --

2 MR. BROOKMAN: So while they're

3 looking, just for the record, we've had this

4 exchange going back and forth for several minutes

5 between Mike Rivest and Jill, so we know who's

6 speaking here.

7 MS. HOOTMAN: Thank you.

8 MR. BROOKMAN: And Chris, when you

9 find that number, did you find the number?

10 MR. LAU: The annual revenue is roughly

11 $70 million.

12 MS. HOOTMAN: Seventy, okay.

13 MR. BROOKMAN: Okay, so in this last

14 conversation, boy, we've really illustrated the

15 benefits of getting really good comment from the

16 manufacturers, really very, very beneficial.

17 Okay, Chris, keep going.

18 MR. LAU: That's actually my last slide,

19 and I'll hand it back to Victor.

20 MR. FRANCO: Thank you. This is Victor

21 Franco again. Now, we're going to be looking at

22 the environmental impacts and indirect employment
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1 analysis. As part of the environmental impacts,

2 we take into account the emission impacts in the

3 analysis to estimate the emission reductions

4 resulting from the amended standards.

5 These include the full-fuel-cycle

6 emissions that include the power plant and

7 upstream emissions and include the fugitive

8 methane emissions.

9 The method for determining this is using

10 outputs from AEO 2013 both in the reference and

11 standard cases to estimate marginal emission

12 factors. The results of these for TSL 4 are shown

13 below. Energy savings from the proposed standards

14 are expected to be the following reductions.

15 Further information about the methodology and

16 about the results are provided in chapter 13 of

17 the TSD.

18 In addition, DOE took account of the

19 monetization of these emission reductions to

20 estimate the potential monetary benefit of reduced

21 power plant emissions resulting from the

22 considered energy conservation standards. DOE
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1 used the most current social cost of carbon values

2 developed through the interagency reviews. The

3 interagency estimates are shown in this next

4 slide, range from $12 to $119 per metric ton. For

5 emission reductions that occur in later years, SCC

6 values grow in real terms over time. DOE also

7 monetized NOx emissions reductions resulting from

8 amended standards. These range from $476 to

9 $4,893 per short ton. DOE calculated monetary

10 benefits using the median value of $2,684 per

11 short ton.

12 The results are shown in this next

13 slide. For TSL 4, the CO2 monetized emission

14 reductions ranged from $175 million to $2.6

15 billion. More details about the methodology and

16 about these results are included in chapter 14 of

17 the TSD. DOE requests comments on this part of

18 the analysis, specifically seeks comments on its

19 approach for conducting the emissions analysis for

20 commercial warm air furnaces. Also DOE seeks

21 comment on the approach for estimating monetary

22 benefits associated with emissions reductions,
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1 including in the social cost of carbon values

2 used.

3 MR. BROOKMAN: Frank?

4 MR. STANONIK: Frank Stanonik, AHRI.

5 I've got to ask why are we measuring -- why is the

6 cost of CO2 in a metric ton but the NOx is in

7 short tons? Could we use the same ton? But the

8 more serious question is so what's -- you

9 explained that you're -- maybe I'm more familiar

10 with the estimates for the social cost of carbon

11 and the CO2 numbers. At least I have some idea

12 where they came from. Where did you get the

13 estimate for the value of the NOx emission

14 reductions? Did that come from the same social

15 cost of carbon? No? I didn't think so.

16 MR. CYMBALSKY: Yeah, so I'm more

17 familiar with the social cost of carbon numbers as

18 well, which come from an interagency agreement

19 and, you know, we're basically told what to use

20 here. That's not a DOE thing. As for the NOx,

21 I'm pretty sure we're getting the value from what

22 EPA has done in this area. So the numbers I
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1 believe are 28 -- if you look at the totals, yeah,

2 the carbon values are much, much higher, so.

3 MR. STANONIK: Frank Stanonik. I guess,

4 John, I was looking quite the opposite. I'm

5 looking at --

6 MR. CYMBALSKY: I meant when you add

7 them up. I mean, not --

8 MR. STANONIK: Oh, oh. Yeah, okay.

9 MR. CYMBALSKY: When you look in the

10 summary table shows that the carbon -- the sum of

11 the carbon benefits in the rule are much bigger,

12 threefold or so.

13 MR. STANONIK: Right. But the value of

14 a reduced ton of NOx is factors time higher than

15 the CO2. Yeah, okay.

16 MR. BROOKMAN: Michael McCabe?

17 MR. MCCABE: Michael McCabe. Victor, I

18 apologize for this question but I should have

19 asked back on the NIA but this discussion just

20 reminded me. At TSL 5, the condensing, are you

21 capturing any fuel switching from gas-fired

22 furnaces to heat pumps and how is that captured in
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1 the environmental impact analysis?

2 MR. FRANCO: Thank you for that

3 question, Mike. For this analysis, we did not

4 take into account any equipment switching or fuel

5 switching. DOE is not proposing currently

6 condensing as a standard and that was not

7 analyzed. If you want to provide comments to

8 that, if DOE should analyze that, please do.

9 MR. BROOKMAN: Frank Stanonik?

10 MR. STANONIK: Frank Stanonik. Sorry,

11 one more question. I just want to make sure. So

12 on slide 96, all those estimated reductions, are

13 those just reductions associated with the -- what

14 do I call it, with the generation of the energy

15 whatever or as an example in the case of nitrogen

16 oxides, is it actually looking at the actual NOx

17 emissions of the furnace itself?

18 MR. FRANCO: I believe it's a mixture

19 for both. But it's mainly from the electricity.

20 MR. BROOKMAN: It's a mixture --

21 MR. CYMBALSKY: It's the combustion of

22 fuel.
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1 MR. FRANCO: Combustion of fuel, yeah.

2 MR. CYMBALSKY: So it doesn't matter

3 where it happens.

4 MR. FRANCO: Next, we look at the

5 utility impact analysis, assesses the impacts of

6 the electric installed capacity and generation

7 resulting from the adoption of these amended

8 standards. We modeled this based on the energy

9 savings impacts on the different TSLs using NEMS10 BT to generate forecasts that deviate from the AEO

11 reference case, AEO 2013.

12 The output is the total in electricity

13 generation, changes in primary fuel, changes to

14 the mix of electricity generation by fuel type and

15 changes to total installed capacity. Detailed

16 results are provided in chapter 15 of the TSD as

17 well as more details about the methodology.

18 Finally, DOE took into account the indirect

19 employment impact analysis to assess the overall

20 impact on indirect national employment from the

21 amended standards that results from shifting

22 consumer expenditures among goods and services and
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185

1 changing product and energy costs.

2 The methodology used the impact of

3 sector energy technologies (ImSET) model to

4 evaluate indirect employment impacts. Changes in

5 national equipment and energy expenditures from

6 the NIA are entered as inputs into the ImSET. The

7 net labor impacts will be small over time due to

8 small magnitude of the short-term effects. More

9 details about this analysis are provided in

10 chapter 16 of the TSD as well as the methodology

11 that was used.

12 MR. BROOKMAN: So as you can see in

13 the agenda, now is another opportunity for closing

14 remarks, summary comments here as we move towards

15 the end of the meeting. Frank?

16 MR. STANONIK: And again, if this has

17 come up before, you can just tell me to be quiet.

18 I think --

19 MR. SACHS: So moved.

20 [Laughter.]

21 MR. STANONIK: I think one of the issues

22 we have a concern about is that the trial levels
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186

1 may in fact result in increasing the size of the

2 unit and if that is an outcome of a trial level,

3 that now does incur potentially some installation

4 costs, certainly in a replacement situation

5 because most of these units are in fact placed on

6 top of a platform I guess I'll call it or whatever

7 and if the unit ends up -- and again, realizing

8 we're talking about inputs from 226,000 to 2

9 million or whatever or more.

10 But in any case, if that bigger unit

11 requires some rework of, if you will, the

12 installation platform or whatever, that's a cost I

13 think that at this point hasn't been factored in

14 and we have a concern that it is going to be

15 there. And again, I only bring it up now because

16 I probably missed my chance since I came in late.

17 MR. BROOKMAN: Additional comments

18 here as we move towards the end of the meeting?

19 Harvey Sachs?

20 MR. SACHS: Harvey Sachs, thank you.

21 MR. BROOKMAN: Thank you. I'll turn

22 it back to John Cymbalsky for closing remarks.
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1 MR. CYMBALSKY: Okay, thanks, Doug. So

2 this last slide here just again shows how to

3 submit comments. Please use the email box as

4 opposed to regular mail if you can. The comment

5 period will close just before midnight, April 6th,

6 2015. So again, thanks for everyone for braving

7 the weather this morning to join us in person.

8 And for those of you on the webinar, thanks for

9 participating as well. I think the meeting went

10 well today. We appreciate all the comment we

11 received and again look forward to more in your

12 written comments over the next month. Thanks

13 again. Bye.

14 (WHEREUPON, the foregoing adjourned at

15 1:29 p.m.)

16

17

18

19

20

21

22
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1 CERTIFICATE OF COURT REPORTER

2 I, NATASHA THOMAS, the Court Reporter before whom

3 the foregoing proceeding was taken, do hereby

4 certify that the proceeding was recorded by me;

5 that the proceeding was thereafter reduced to

6 typewriting under my direction; that said

7 transcript is a true and accurate record of the

8 proceeding; that I am neither related to nor

9 employed by any of the parties to this proceeding;

10 and, further, that I have no financial interest in

11 this proceeding.

12

13

14

15

16

17 _______________________

 NATASHA THOMAS

18 AUDIO REPORTER

19

20

21

22
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1 CERTIFICATE OF TRANSCRIBER

2

3 I, BENJAMIN GRAHAM, do hereby certify that

4 this transcript was prepared from audio to the

5 best of my ability.

6 I am neither counsel for, related to, nor

7 employed by any of the parties to this action, nor

8 financially or otherwise interested in the outcome

9 of this action.

10

11

12

13

 ________________________

14 BENJAMIN GRAHAM

15

16

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19

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21

22
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$

$1,000 173:13

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2011 123:10

2012 79:7 102:4

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2013 79:15 101:3

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118:4,13 140:5

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184:11

2015 1:14 187:6

2016 167:20

2018 93:14,22

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artifact 103:15

ASHRAE 11:19

14:5 41:8 101:10

106:13 107:1,3

123:3 165:3

166:18

aspects 165:1

assess 151:19

153:18 184:19

assesses 184:5

assessment 4:5

7:21 15:1,18,20

16:1,8 18:15

20:9,10 22:13

50:19 56:10

155:7

asset 123:21

assets 175:21

assign 99:22

associated 47:15

74:4 75:2 81:21

135:11 158:15

174:1 180:22

183:13

assume 86:1 89:11

92:13 94:7 104:4

111:14,17

125:18 129:9

134:2 145:8

152:22

165:18,22

172:11,14

assumed 62:14

63:7 81:3 96:19

112:13 122:5

125:1 148:17

assuming 121:17

128:3 134:5

169:10

assumption 56:20

62:19 65:10 66:8

74:7 114:14

assumptions

57:10 100:12

113:3 122:14

144:21 156:5

attached 73:3

attendees 10:11

attention 29:14

audio 188:18

189:4

authority 4:4 7:19

11:5,9 12:11

automatically

29:3

auxiliary 95:9

availability 37:8

118:18 124:21

160:15

available 9:4

16:13 28:20

29:16 51:9,13

55:6 109:5

114:18 117:4

118:10 125:7

153:1,4,7

171:5,11

Avenue 1:20

average 59:1

93:20

95:16,20,22

97:2,3,18 98:14

100:14 104:21

105:9,13 117:17

119:4 123:20

127:3,4,5,10,12,

13 134:7 143:9

149:22 150:21

158:21 171:8

174:9

avoid 135:22

aware 23:6,15

75:22 147:14

away 22:15

B

backed 173:15
Capital Reporting Company

Call # 50402 EE-5B 03-02-2015

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(866) 448 - DEPO

www.CapitalReportingCompany.com © 2015

background 21:21

147:22 148:2

badge 76:20

baffles 39:13

balances 122:9

Ball 109:4

ballpark 85:12

bare 29:2

barrier 45:16

base 110:2,4

124:11,12

126:17 139:5

142:8,20

143:1,11,13

144:4,16,21

147:2 150:3

156:16,19

based 16:12 17:19

44:11 56:20,21

57:6,9 58:19

59:2,5 62:19

65:3,17 74:18

86:22 91:13

93:16 138:22

140:17,18 141:1

142:21 148:8

184:8

baseline 18:22

20:2 51:8

53:7,10,15 57:12

71:9 77:17

79:18,19 80:5,6

89:7 97:3 106:14

132:18 144:22

145:22 146:1

170:19

basic 91:3

110:8,16 164:21

basically 16:4,14

17:21 21:5,15

37:2 50:20 51:8

52:14 53:22

56:18 64:20 91:6

95:3 105:2

120:13 121:15

135:9,13 144:5

145:2 151:22

173:11 181:19

basis 157:12

bear 41:15 129:16

beat 41:16

become 67:6

becomes 158:14

becoming 47:11

beef 72:13

beefiness 72:5

begin 5:2

begun 71:12

102:18

behavior 132:22

believe 27:21

44:11 66:14

69:15 77:5 96:3

102:4 114:2

148:7 171:3

182:1 183:18

beneficial 152:8

178:16

benefit 22:6 43:5

127:6 179:20

benefits 10:3

38:21 41:13

178:15

180:10,22

182:11

BENJAMIN

189:3,14

Berkeley 2:14,21

6:19,21 77:11

86:21

best 85:5 189:5

better 87:3 102:6

103:7,8 135:17

154:15 155:3

beyond 65:1

bigger 26:3

48:6,20 136:16

151:7 161:6

182:11 186:10

billion 146:19,21

180:15

bit 21:20 33:2

42:15 54:10,13

57:11 76:17 85:3

86:7 89:20

93:1,3 94:22

97:4 103:15

106:19 108:18

127:15 141:7

144:3 145:16

146:16,20 148:2

149:18 156:11

164:12

blasts 60:17

blower 62:18

63:16,17,20 64:4

blowing 63:17

bluntly 169:4

Bob 49:11

64:10,13 66:17

73:9,12 116:11

120:19

body 30:9

BOM 52:4

BOMs 52:4

Boston 136:13

bottom 80:14

153:6

bounds 160:17

162:13

box 31:11 36:17

130:15 187:3

boxes 22:17 71:14

75:8 102:1 106:9

boy 178:14

braved 5:12

braving 7:9 187:6

break 4:7 7:22

8:10 50:8

76:14,15,18 90:2

137:9,16

breakdown 17:22

52:15

brief 7:11,14

bring 23:12,13

45:4 99:15

186:15

bringing 31:6

45:11 133:18

163:1

brings 21:1

broadly 162:17

brochures 20:15

broken 52:17

Brookman 1:22

2:2 4:2 5:2,20

6:8 7:8 10:22

11:3 19:6 22:16

24:4,12 25:12

26:9,22 27:4

28:13 29:11

31:18 32:2,5,8

33:11,22 34:4

35:4,8,12,16,18

36:13 40:5 41:20

43:16 44:18

46:13 47:19
Capital Reporting Company

Call # 50402 EE-5B 03-02-2015

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48:16 49:7,13

50:4 59:17 60:5

61:1,3 62:4

63:10 64:9

66:3,17 67:9,22

68:5,19

69:7,18,22

70:7,10,14 71:12

72:9 73:8

74:11,14 75:6,18

76:13 77:4 80:10

81:8,19 82:3

83:13 84:7,22

85:7,11 86:19

87:4,20 88:13

89:18 90:13

95:13 97:7

98:18,20 99:10

100:4 101:5,22

102:9,13,21

103:3,8 106:8

107:10 109:21

112:2 113:15,22

114:9,22 115:21

116:9,11,16

119:7 120:2,5,15

121:2 125:8

126:21 127:9

128:1,6 129:20

130:11,21

132:12 133:14

136:14 137:9,15

138:1,5 141:19

145:10 147:4

148:20 150:9,13

151:12

152:12,15

161:9,11 162:2

164:8 166:5

168:10

172:10,16

173:20

178:2,8,13 181:3

182:16 183:9,20

185:12

186:17,21

BT 184:10

Btu 13:2,8 19:9

45:22 64:19 65:1

74:20 107:6

149:6 159:21

160:18 176:2,13

Btus 45:21

94:18,22

bucket 43:15

85:21 86:7

build 174:17

builder 112:10

building 2:6 5:7

32:13 42:19 43:9

45:5,11,12 64:4

76:20 79:14

91:13 92:3,8

93:9,14,15,22

94:6,14 97:19

98:6,13

100:13,21

105:6,10,17,22

106:3,4,14 107:8

112:17 117:2,3

118:16 139:3

176:13

buildings 17:1

42:2 92:4,22

93:2 94:4,15

99:5,22

built 154:17

built-up 48:13

bulk 152:4

bullet 37:17

bunch 97:10 151:5

burden 161:14,20

162:15 163:7,8

Bureau 79:10,13

burner 91:6,10

93:7 95:4,8

103:21 105:3

burners 36:8 42:9

67:3

burning 33:2 93:9

business 48:19

78:2 84:15 87:22

88:4,11 153:22

170:10

businesses 83:8

136:22 170:7

businessman 88:2

buying 84:12

132:21 150:21

151:6,9,10

Bye 187:13

C

cabinet 25:3,4,16

46:8,17,18 54:8

55:5,6 73:20

74:3 160:4

168:18

cabinets 47:7,13

158:16

calculate 53:14

59:1,4 91:6 93:4

95:1 104:3

107:18 108:6

111:10 118:12

124:3 138:13

139:15 140:15

142:5,20

calculated 88:17

89:1 123:20

126:18 180:9

calculating

94:9,10,20

126:16

calculation 47:6

99:17 106:13

113:21 131:20

132:1 164:3

calculations 92:2

94:18 104:17

109:6

calibrate 59:5

calibration 68:13

California 114:12

capability 116:3

capable 37:14

capacities 41:13

48:3,14 65:14

capacity 13:1

27:9,16 33:14

65:3,8,9,18,20

67:5,13 69:1

91:7,8 93:8,12

94:3 100:1,2

103:17

121:18,20,22

128:5 154:3

184:6,15

capital 123:20,21

157:21 171:13

capture 161:14

captured 161:19

163:12 182:22

capturing 182:21

carbon 180:1

181:1,10,15,17

182:2,10,11

care 32:18

Carlo 109:2

Carrier 3:16

49:11 64:13

73:12
Capital Reporting Company

Call # 50402 EE-5B 03-02-2015

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(866) 448 - DEPO

www.CapitalReportingCompany.com © 2015

cars 48:10

case 2:3 7:6 12:3

29:6 33:6 87:15

92:12 110:2,4

116:5 121:6

124:11,12

126:17 131:1

139:5,6 142:8,20

143:1,2,3,11,13,

14 144:4,16,21

147:3 150:3

156:17,19

157:1,3 164:19

183:15 184:11

186:10

cases 45:3 54:4

82:15 121:6

134:16 142:8

143:12

155:16,17

179:11

cash 154:7

catalog 52:2

caught 19:11

29:14

caused 54:21

131:12

caustic 45:4,13

CBECS 91:13

92:6,21 93:17

94:17,21 97:15

98:3 99:3

100:8,11

102:4,17 107:5

118:15 140:7

cellphone 9:6

census

79:9,10,12,13

117:19 140:13

173:5

central 17:9 163:1

168:18

certain 22:2 73:6

75:12,22 101:15

163:10

certainly 24:8,19

25:2 43:14 63:5

119:16 120:12

149:13 161:3

164:10 186:4

CERTIFICATE

188:1 189:1

certification 51:4

certify 188:4

189:3

cetera 26:3 36:9

CFR 14:1,10

chain 82:17 86:22

challenges 47:15

48:5 132:2

challenging 47:12

157:17

chambers 160:12

163:20

chance 10:21

186:16

change 57:1 62:17

66:22 83:5 93:21

97:20 101:1

156:2,9,12,13

158:16,17

159:19

changed 98:6

changes 23:14

55:1,3 61:12

63:7 129:8

132:17 149:14

172:7 184:13,15

185:4

changing 185:1

channel 78:1,16

87:3

channels 77:20

78:4,10

chapter 16:12

21:4 37:22 141:4

152:11,17,22

153:7 179:16

180:16 184:16

185:10

chapters 153:1,5

characteristic

28:5 102:18

characterization

4:8 8:2 16:3

90:18 99:9

106:10 108:4

116:20

charge 114:13

chart 43:20

136:17

check 118:22

122:14

chevrons 14:17

Chicago 105:4

chiller-based 31:3

chime 147:21

choose 139:10

chose 96:5

Chris 6:17

68:14,19,21

152:13 161:12

166:21 168:12

169:4 170:9

178:8,17

Christopher 2:19

4:13 153:15

circulating 91:22

95:6 96:15,18

122:8

circumstances

88:9

citation 12:20 13:3

City 136:13

claim 164:10

clarification 47:22

97:14

clarified 150:12

clarifies 97:21

clarify 86:21

125:16

class 17:22 22:22

24:7 26:14,19,20

27:18,21 28:19

29:4,21 30:8,16

31:19 33:19

36:2,3,12

66:7,10 144:2

classes 13:14,16

21:16,18 22:1

26:11 27:7,12

28:15

clear 54:13 95:16

151:4

clearinghouse

79:16

clearly 29:17

130:19

climate 93:20,21

97:19,20

100:13,14 101:1

close 92:22 94:15

100:15,17

103:4,9 150:7

153:6 187:5

closer 39:10 120:1

closing 4:16 8:15
Capital Reporting Company

Call # 50402 EE-5B 03-02-2015

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185:13 186:22

CO2 180:13

181:6,11 182:15

code 12:20 13:3

115:22

codes 45:12,15

coffee 76:22

coils 26:2 30:7

coincided 165:13

cold 7:9

column 125:16,17

127:11

columns 18:3

combination

12:17 13:11

42:10,11

combined 170:14

combustion 38:9

63:16,17,20

183:21 184:1

comes 18:15 98:3

100:21 117:8,10

121:5 124:1

129:15,16 141:2

143:19 144:14

comfort 25:6

32:15,16,19 42:2

60:21

comfortable 25:8

60:17 138:2

coming 21:14

114:20 115:3

136:8 161:1

comment 21:15,16

22:7,8,14,17,18

25:13 26:10

30:18 32:9 36:17

59:21 61:4 64:14

70:13,22

71:3,8,14 73:13

74:6 75:8 85:7

86:18 90:12 99:2

102:1 103:11

104:20 105:15

106:7 112:21

120:3,9,16

126:9,12,15,17

130:9 136:19

137:6,7

141:10,15 144:6

148:18

171:15,17

172:3,9 177:11

178:15 180:21

187:4,10

comments

10:2,4,17,22

20:16 22:16

36:18 39:16,17

50:5,6 64:10

67:5 69:17 70:21

71:2,14 72:4

73:2 75:7,11

76:7,14 77:7

80:8 81:7 88:15

89:16 99:6,8,15

101:20 106:9

107:10 122:11

126:8,21 133:4

141:19 146:22

147:4,7,15

151:13 161:4

180:17,18 183:7

185:14 186:17

187:3,12

commercial 1:10

5:5 10:14,20

11:12,15,18

12:3,21 13:9,20

14:3,6

16:3,10,17,19,22

17:5 20:13,22

21:19 24:11 26:7

28:22 30:10

38:21 39:22 41:9

42:2,19 44:15,21

54:15,16 56:3

57:15 59:8

68:10,11,15,21

77:14,19 78:21

79:13,20 80:1,16

81:5,20

89:5,6,11 90:19

91:15

92:11,12,13,14,1

7,18 93:8 94:2,6

99:5,7 100:22

102:3 104:21

105:12 108:21

109:14,17

118:3,8 123:3

124:4,17

125:2,19 136:21

138:19

139:8,11,17,18

140:6,10,14,16,2

0 141:14 142:3

147:9 148:7

153:19 161:16

165:4 166:15,16

168:4,15 170:20

176:6 177:4

180:20

Commission 79:5

common 67:14

74:20

commonly 145:21

community

164:11 165:5

166:18,19

companies 58:20

78:1 83:7

company 73:1

124:2

compare 68:11

89:22 100:7,9

106:16 109:10

143:12

compared 18:4

24:10 60:4

150:18

compares 59:15

comparing

149:18,20

comparison 137:2

compensating

42:15

competitors

170:17 171:9,12

competitor's

131:3

complete 9:3

121:3 155:12

compliance

130:14 154:5

comply 30:14

complying 134:6

144:18

component 17:9

26:4 52:3,11

95:5 110:6,15

117:22 119:5

164:22

components

54:9,17,19 55:2

58:4,6 61:20

63:4 75:2 93:13

95:8 96:17

103:20 104:13

107:22 108:14

110:7 113:1

118:2 122:3,19

142:5 157:15

158:2

computer 9:21
Capital Reporting Company

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103:7

concentric 38:16

conceptually

31:12

concern 119:17

185:22 186:14

concerned 158:18

concerns 23:17

119:14

concise 9:4

conclude 126:5

concludes 137:4

146:21

conclusion 62:22

171:6

condensate

45:4,13 54:9

58:4 95:11

111:3,4,5,12

112:15,16,22

113:3,5,14

114:18 115:2

118:21,22

134:21 136:1

condensation

135:10

condense 72:8

condensing 19:2,4

22:4 29:15

30:11,14 38:16

39:5,9 45:18

49:17 54:5 55:4

57:18,22 58:13

71:18,19 72:20

75:14 91:22

104:10 111:1

113:2 114:3,7

118:20

119:15,21 120:8

125:1 145:7

182:20 183:6

condition 25:9

120:7 131:8

conditioned 45:8

conditioner 54:15

55:14 68:22

73:16,17 166:16

conditioners 41:6

68:12,16

conditioning

12:18 13:12

16:19 17:9 24:15

25:6,8

32:16,17,19 34:8

42:2 54:19,21

92:1

conditions 33:17

93:21 97:19

100:14 101:2

119:16

conduct 52:1,12

103:15 108:19

133:2 154:12

conducted 154:16

conducting 180:19

configuration

159:20

configurations

159:19

confirmed 36:15

confused 95:15

confusing 127:16

confusion 149:18

consensus 157:7

conservation 1:9

5:5 11:10,17

12:8,10 126:19

138:15 142:2

151:21 152:9

179:22

consider 11:16

12:7 90:10

108:1,3 113:4

147:12 149:21

172:2

consideration

8:21 22:22

37:2,18 41:5

163:17 164:5

165:10

considerations

163:13

considered 21:12

30:16 37:4 38:14

39:2 40:3 43:12

44:7 61:13 90:20

101:17 102:8

179:22

considering 41:8

174:1

considers 14:14

constant 101:12

Constantin 3:14

6:11 44:11 76:5

113:22 114:1

175:18

constantly

115:8,9,18 116:6

constraints 154:3

construction

79:14 80:14

88:22

89:10,13,15

98:13 112:5,9,18

138:18,21

139:15,17,19

140:5

constructions

138:18

consulting 2:12,20

3:6,9,15 6:12,14

7:1,3 112:1

114:2

consume 27:14

29:19

consumed 27:15

consumer 28:7,9

77:15,19

78:5,8,18,21

79:20 80:1,16

81:5,20 108:21

109:14,17 110:1

118:6 132:22

137:8 139:8

143:14 152:2,3

184:22

consumers

124:15,17

132:21 139:10

150:4,20

consumes 30:13

consumption

37:19 90:19 99:4

102:19 104:14

108:5 121:11,14

142:21 143:19

149:10

content 11:4 70:15

154:19 155:2

173:9,13

context 165:7

continue 30:1

contract 87:16

contracting 81:13

83:1,8

contractor 78:18

79:8,11,12

80:17,21

81:17,21
Capital Reporting Company

Call # 50402 EE-5B 03-02-2015

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82:10,22

83:6,9,12,21

84:1

87:2,9,14,18,22

88:9,19,20 132:8

contractors

78:7,14 81:6,11

82:7

contractor's 88:1

contracts 87:16

contrary 104:9

convenience

115:10

conventional

19:16 23:2,9

24:15 28:11

31:11

conversation 9:20

74:16 129:22

133:19 178:14

conversations 9:7

158:12 167:8

conversion 143:4

144:8 155:13,18

156:14,22

157:8,21,22

167:2,4,7 168:6

172:4,7

convert 109:16

convinced 120:12

cooling 26:2 47:4

49:22 60:10 63:2

96:15 104:2,3,5

122:5,7,13

128:13,16 129:3

130:6 147:10

159:13

160:10,13

164:16

167:2,11,12

169:8

core 105:6 106:2

corner 106:4

correct 34:21 48:8

81:1,7 86:1

95:19,22 96:8

98:9 99:21

100:19 103:14

110:4 121:11

122:14 126:2

134:2 153:8

correction 100:13

Corrections 11:22

corresponded

165:13

corresponds 38:1

cost 4:9 8:2,7 49:1

50:14,21 51:2

52:5,9,10,11,14,

18,19

53:1,3,13,16

54:17,18,20,22

55:9,16,17 57:14

58:2,3 59:12,13

61:8,13,15,22

64:16 65:3,11

66:1,11 67:20

69:15 79:2 88:3

90:21 91:1

107:13,15,19,20

108:15,16,19

109:16 110:6,7

111:22 112:8,11

113:1,18 116:22

118:1,2,6

119:2,6 120:13

122:19

123:17,19,21

126:6

127:4,11,13,15,2

1 128:4 131:1

132:17

135:4,13,14,18

137:7 139:10

142:12,13

143:10,11,13,14

144:10,11

155:14,18

156:8,10,22

169:6,10

174:4,8,10 180:1

181:1,6,10,15,17

186:12

cost-benefit 66:8

costs 50:22 52:16

66:14 69:15 71:9

78:2 80:1,4 90:3

108:1,3,8,9,14

110:5,9,11,14,16

111:3,7,9,10,12,

20 112:5 116:19

117:22 118:11

119:1,11,19

123:21

126:10,14

127:3,6 128:19

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Capital Reporting Company

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Capital Reporting Company

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Capital Reporting Company

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Capital Reporting Company

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Capital Reporting Company

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Capital Reporting Company

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Capital Reporting Company

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Capital Reporting Company

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Jill's 47:7

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185:22

licensed 83:6

lifecycle 4:9 8:2,7

91:1 107:13,15

108:16,19 119:6

122:19 123:17

126:6 137:6

149:19

lifetime 72:2

108:12,13,15

122:18,20

123:12,19

126:16 127:4

141:2 142:3,9

144:1

lifetimes 123:1,11

lightly 43:6

likelihood 119:20

likely 31:1 166:12

limit 9:7 158:8

limited 74:18

line 136:9 169:9

174:13

lining 130:14

list 16:9 20:11

21:1,6,7 43:15

113:17 152:22

listed 13:20 14:14

36:17 85:8 96:18

listening 36:3

133:19

listing 170:13

listings 17:20

170:22

lists 92:20

literally 25:6

105:5

literature 20:14

51:4 56:21 63:1

112:1 118:5

148:9

little 15:11 21:20

42:15 54:12

57:11 76:17

85:3,17

86:7,11,15 89:20

93:1,3 94:22

97:4 103:15

106:18,22 107:1

108:18 127:15

132:17 141:7

144:3 145:16

146:16,20 148:2

149:18 155:20

164:12 169:4

load 46:9 91:13

93:10,14,15 94:3

loaded 43:6

loads 42:19

location 111:14

117:2

locations 117:15

locked 155:11

lodging 124:5

LOHRER 3:1

long 50:9 84:13

158:19 159:15

longer 48:20

160:10

longevity 72:21

lose 45:1,2 46:11

49:2,4

loss 14:8 156:20

losses 38:10 41:1

73:19,21 74:2

lot 18:21 29:19

38:2 47:9,15,17

52:6,20 63:1

66:12 94:4 96:2

98:5,12 103:20

109:12 110:12

111:1 115:4

122:2 151:4,7

165:17

lots 10:16 148:16

Louder 24:4

low 69:2

155:15,17

lower 27:19 57:21

64:20 65:14 89:3

97:11 100:1

108:2 150:22

low-sulfur 118:18

loyalty 133:3

LPG 117:10

lunch 8:4,7 76:18

137:9,16

M

magnitude 185:8

mail 187:4

main 112:22

149:20

mainly 52:19

113:7 183:19

mainstream 25:17

maintain 88:7

118:13,21

maintained 17:22

maintenance

108:9 114:17

118:1,5,11,14

119:3,10,19

120:13 126:13

143:10

major 17:13

107:20 110:6,7

131:16 138:17

154:9 158:17

majority 16:16

makeup 13:10

19:13,14,18

22:20

23:12,18,19

24:14,18 28:10

29:16 30:20

31:8,15 32:15

34:15,16,17

35:3,22 43:19,22

MALE 123:15

mandated 101:9

mandatory 151:21

manner 66:15

manufacture 37:7

manufactured

17:1

manufacturer

4:12 8:11 17:21

20:14,15,17

50:22 51:3,4

52:12,17,21,22

56:21 58:18

59:5,11,12 61:7

78:5,17,19 79:4

80:15 81:4

87:6,9 107:20

109:16 111:22

118:5 132:10

133:3 134:1,16

135:5,20

152:3,12

153:16,17,22

155:8,16 157:12

170:18,21 172:8

manufacturers

16:4 17:13,14
Capital Reporting Company

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24:3,6 53:12

59:3 68:1 74:9

77:21 78:8

120:17 130:17

153:20

154:1,12,22

156:10 157:7

167:6 169:9

170:11

171:7,10,18,19

172:1 173:5

174:6 178:16

manufacturer's

70:3 77:15

134:19

manufacturing

11:21 71:9

175:1,3,21

map 71:20 72:7

March 1:14 5:8

margin 78:3 83:11

84:3

marginal 108:6

117:1,7,13,17

179:11

mark 78:1 88:1,2

marked 59:14

market 4:5 7:20

15:1,18,20,22

16:1,5,6,16

17:6,14 18:15,17

20:6,8 22:5,13

29:16 30:15

44:13 50:18

51:22 56:10 59:2

67:12 78:11 79:1

88:21 89:12

124:13,20,22

125:3

138:17,20,21

139:19 145:8,9

150:8 155:7

171:3

markets 80:6

137:1

market's 86:5

151:4

markup 58:18,19

59:2,4,7,11,12

68:9,11 78:20

79:4,6,12 80:19

81:18 83:11,19

84:4,5,9,10,14

85:16,17 86:8

88:16

89:2,4,7,8,16

155:13,16

156:5,6 177:22

markups 4:8 8:1

69:1 70:5

77:6,13,18 78:22

79:8,18,19,21

80:7,21 88:10,16

89:1 90:4,14

107:21 109:15

112:10 156:4

172:8

massive 43:10

match 117:2

matching 139:16

material 52:6 53:4

57:19

materials 118:12

math 169:12

matter 7:16 44:15

184:2

matters 10:4

Mauer 3:3

59:17,19 61:2

max 51:8 54:4

71:4 146:6

maximum 13:2

may 22:3 42:3

43:5 61:20 66:22

74:19,20 75:3,4

84:10 85:3

96:1,5 105:3

132:16 134:21

139:10 166:14

171:10,12 174:2

177:9 186:1

maybe 23:5,15,16

26:19,22 61:13

62:9 67:1,6,19

69:11 86:13 90:7

107:4 164:1

165:8 181:9

McCabe 3:4 7:4

43:16,17 44:2

100:4,5,16 101:4

109:21,22

112:3,15,20

113:16 114:8

132:12,13

147:5,6,19,20

148:2 150:14,15

161:11,12

182:16,17

McCabe's 167:22

McClive 3:5 6:22

mean 21:7

23:4,7,22

26:5,14,18 28:7

33:14 46:2 48:18

62:2 63:20 69:10

70:16 93:10

95:18,22 96:5,9

123:11 124:8

125:13 129:10

162:16 165:10

173:16 174:3,16

175:10,17

176:9,12 177:8

182:7

meandering 30:2

meaning 17:3

170:17

means 46:17 76:16

111:22 118:4,14

133:12 134:15

meant 66:6 182:6

measure 52:3

measured 37:20

measurement 14:2

measures 156:7

measuring 181:5

mechanical

78:13,18 79:7

88:19 111:22

median 95:18,20

96:9 123:11,12

127:6 137:2

180:10

medical 124:5

meet 72:1 94:2

meeting 1:9 2:2

4:3 5:4 7:18 9:3

10:3,7,10 40:1

119:10 185:15

186:18 187:9

meetings 9:11

members 17:20

memory 30:17

114:11

mental 30:1 70:2

mentioned 36:4

50:17 54:13

55:13 58:9 62:7

93:6 131:2

139:16 144:17
Capital Reporting Company

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met 1:19

metal 82:11 84:2

methane 179:8

method 14:2 91:3

142:14 179:9

methodologies

109:11

methodology

15:21 50:15 99:6

101:3 111:10

122:12

126:6,8,12

141:10 179:15

180:15 184:17

185:2,10

metric 13:22 14:6

40:10 154:10

180:4 181:6

MIA 138:8,10,12

153:18 154:1

161:13 172:9

mic 19:20 42:22

43:3 67:16 70:18

101:11 103:6

123:15 127:18

158:12

Michael 3:4,8 7:4

43:16,17

100:4,5,16

109:21,22

132:12,13

147:5,20

150:14,15

161:11,12

182:16,17

microphone

102:14 128:7

166:5

microphones 6:4

9:2

midmorning 7:22

midnight 187:5

midrange 60:19

Mike 3:7 6:10 7:2

19:6,7 25:12,14

28:13 29:5 30:6

32:21 33:11,22

46:13 47:22

49:15 66:3

72:10,11 75:18

80:11,12

81:8,9,19 84:22

85:1 86:2

87:20,21 101:5,6

106:11,12 112:2

113:15

115:21,22 127:9

129:20 130:21

145:10 147:13

152:15,16

162:2,7,8 164:19

168:1 172:10

173:20,21 178:5

183:3

million 45:22 65:1

66:10 67:19,21

94:18,22 107:6

149:6 156:20

157:2,4 160:18

161:8 162:12

165:12 167:10

176:13

177:1,15,16

178:11 180:14

186:9

millions 157:11

mind 18:10 32:14

49:20 74:3 128:3

163:7 174:2

minimum 13:17

18:20 73:17

92:14 134:1

Minneapolis

136:12

Minnesota 33:3

minor 62:16

145:11

minus 14:8 38:10

134:13

minute 59:21

minutes 74:16

76:16 178:4

miscalculated

72:5

missed 22:9 72:3

119:10 133:18

186:16

missing 23:20

81:16 97:8

misstated 64:8

mix 170:16 184:14

mixed 31:3

mixture 140:8

145:19 146:3

183:18,20

mode 9:6 38:8

96:15 133:9

154:14

model 52:5,14

70:2 81:15 85:2

86:2 107:8

112:8,9 123:21

124:21 133:3,4

148:6

154:7,8,9,13

155:4,11,12

156:20 185:3

modeled 57:8

184:8

modeler 148:5

modeling 50:21

51:2 53:13

models 17:7,18

18:3,8,11,16,21

20:4,6 51:21,22

56:6 106:14,16

109:1 125:7

159:18

modified 151:22

modulating 41:12

42:9 59:22

60:3,11

moment 5:21

68:14

MONDAY 1:14

monetary 179:20

180:9,21

monetization

179:19

monetized

180:7,13

monitoring 105:1

120:1

Monte 109:2

month 187:12

monthly

117:1,5,6,11,12,

14,17

months 134:22

morning 5:3,8 7:9

15:16 42:3,18

77:10 133:18

187:7

mostly 81:4

119:13

Mother 160:22

motor 47:4 165:19
Capital Reporting Company

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motors 101:11

move 7:19 14:22

36:18 41:5 43:14

90:14 99:1

107:11 126:22

133:14 136:19

170:6 185:14

186:18

moved 68:3 70:12

98:13 185:19

movement 68:6

moves 77:21

moving 11:4 36:19

107:13 151:14

170:8,9

MPC 53:7,17

55:15 57:10

59:11,16

156:12,13

173:7,9

MPCs 53:14

58:16,17

MSP 59:9,10,15

79:19,22 80:2,7

MSPs 58:17

MTA 154:19

multiple 163:9

165:3 171:15

multiplication

174:11

multiply 91:7

93:18 95:4

116:20 117:4,6

122:2 143:3

mute 9:14

myself 7:5

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naquestion 22:20

NATASHA

188:2,17

nation 73:6

national 2:14,21

4:10 6:19,21 8:8

77:12 78:8,19

80:15 81:2,3

82:5,16,19

83:17,21 85:4,16

86:6,21 87:10

88:6 89:3 122:22

141:22 142:1,6

143:5 144:12

146:10,11,21

147:4

149:12,14,20

150:2 151:13,20

173:10 184:20

185:5

natural 108:7

117:10

nature 42:1 161:1

Navigant 2:12,20

3:6,9,15

6:12,14,17,22

7:2 15:17 50:12

65:2,7 68:21

76:6 114:2

153:15 162:7

166:22 170:9

175:19

NEC 115:22

necessarily 21:8

32:15 60:15

76:2,8 90:2,8

134:11 136:3

necessary 8:6

25:20 59:4 158:4

necessitated 55:3

negative 104:18

148:12

negligence 41:16

neither 188:8

189:6

NEMS 184:9

NES 152:6

net 127:6 142:10

143:7,16 144:12

146:17 154:10

185:7

neutral 31:16

neutralizer 111:5

113:14 118:21

NIA 138:8,10,11

150:18 151:22

182:19 185:6

nice 72:17

niche 171:2,4

nine 17:13

nitrogen 183:15

Nobody 43:13

non 17:11 28:19

38:17 39:8 56:9

57:18

non-AHRI 17:19

non-availability

29:1

noncondensing

114:5

none 11:1 74:7

148:17

non-heating 91:21

non-makeup 44:4

nonproduction

52:18,19

non-proprietary

37:14

non-regulatory

16:5 151:20

152:1,7

non-weatherized

18:6,8,10 21:19

22:3 56:2 168:16

noon 8:4 76:18

130:10

NOPR 14:17

146:6 153:10

155:22

nor 188:8 189:6,7

Nordyne 35:22

normal 86:3 101:2

normalization

101:2

normalize 54:20

Nortek 2:11 35:21

northern 33:3

42:17

note 21:17 37:11

53:2 89:9 91:20

145:16

noted 145:14

nothing 19:3 50:7

119:22

notice 5:3 12:2,4

153:10

noting 102:10

now's 10:21

NOx 180:7

181:6,13,20

182:14 183:16

NPV 152:7

nutshell 10:13

O

obtained 50:18
Capital Reporting Company

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obvious 22:4

obviously 20:6

23:11 42:7 93:11

130:14,15

145:12 169:22

170:4 173:16

176:12

occasion 119:21

occur 132:7 180:5

o'clock 8:20

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offer 171:2

office 1:7 2:5,6,8

6:16 124:6

offset 121:15

122:5

offsets 104:2

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40:10 62:5 68:3

73:9 159:22

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18:4 54:1 59:8

92:18 93:2

110:18 117:10

118:17,18

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17:5 18:1,9 20:1

51:11 55:12 58:8

89:6,14 92:18

94:21 97:6

111:17

123:7,9,13 125:5

127:8 140:21,22

141:8 146:1

156:13 170:20

okay 5:2 10:9,18

11:1,6,7

14:11,21 16:14

19:19 30:3 32:2

34:14,20

35:4,7,10,16,19

36:13,19 40:5

43:16 47:19

49:10,12,14

50:4,7,11

56:11,14 61:3

63:9,21 64:2,5,6

67:8,9,10 68:5

70:7,14,16 72:9

73:8,11 74:11

75:6 76:3,13

81:9 86:12 88:13

90:15 98:16,20

99:19,20 102:21

103:6 106:21

107:11 112:20

113:16 114:8

120:4,14,19,22

121:2,13 122:15

126:1,22 134:19

136:14 138:6,7

141:20 147:19

148:20 150:10

151:12,14,18

153:13 161:9

169:16,20,21

172:14 175:6,16

176:4,8,11,16

177:17

178:12,13,17

182:8,15 187:1

old 83:18 131:6,7

132:6

OMB's 144:14

ones 134:9 156:1

Online 124:1

on-time 105:3

open 10:18

opening 4:3 7:14

10:19

opens 9:13

operating 71:19

72:7 80:3

91:6,10 93:7,9

95:4 103:22

108:3,8,10,13,15

116:18,22

117:22 121:16

122:1,4 123:19

127:4 128:16

131:8 134:18

136:10 139:10

142:13 143:12

144:10

operations 101:13

114:17

opinion 28:12

opportunity 7:13

8:15 76:19

185:13

opposed 114:5

176:1 187:4

opposite 182:4

option 61:11

options 22:2 44:3

53:8,20

order 61:14 88:11

138:4 160:6

175:2

organizational 6:2

original 94:16

others 100:1

133:20

otherwise 6:7

189:8

ought 9:19 43:14

166:17

ourselves 49:5

outcome 186:2

189:8

outdoor

23:8,12,13,19

30:20 31:2

113:5,10 119:13

125:16,20

134:20

outdoors 16:22

17:4 111:16

outer 58:2,14

outlet 111:6

113:11,17

114:3,20

115:10,17

116:1,3

outlets 116:7

outline 154:21

outlined 16:11

outlook 147:8

148:3

output 93:10,11

121:22 152:6

154:9 184:12

outputs 179:10

outset 7:15 11:1

outside 19:20

25:7,15,20 26:1

33:1

42:10,12,13,16

43:10 45:6

60:14,20 95:10

160:20 171:12

overall 23:9 26:3

55:6 89:1,2,4

127:20,21

184:19

overcome 33:1

61:16 62:8 73:21

74:9
Capital Reporting Company

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overhead 53:4

80:4

overlapping 165:9

overloads 160:5

overview 4:2,4

7:19 16:15

107:15

owned 83:16

owner 84:1

87:7,13

owners 124:5

ownership 83:20

oxides 183:16

P

p.m 187:15

pack 31:11 128:5

package 17:2

24:15 54:15 90:5

packaged 16:18

17:7,8 23:9

34:19,22 46:1

48:13 54:14

55:14 58:7 73:22

74:22 110:12

159:11 174:3

packaging 58:2,15

packet 7:10

packs 29:1

page 97:9

pain 132:4

parallel 41:10

parameters

100:20

participants 9:9

79:1 88:17

participate 5:17

9:20

participating

187:9

particular 15:22

21:17 31:14 59:6

71:3 76:6 83:15

162:8,10 163:9

particularly

43:7,8 156:5

parties 4:16 147:1

188:9 189:7

pass 156:7

passes 78:5

past 28:17 76:17

pathway 53:11

pay 82:10 87:17

128:14

payback 4:9 8:2,7

91:1 107:14,15

108:16,19

127:2,7 132:19

137:4

paybacks 137:3

paying 82:13

PDF 153:10

peak 43:5

people 23:1

174:13

175:5,11,12

176:1,2

per 13:2,8 58:7

64:19 74:20

81:14 91:8

94:6,22 95:1

144:11 149:9,10

150:21 157:11

176:18 177:2

180:4,9,10

percent 13:20 14:8

18:3,4,21 19:2,8

20:2,4 22:20

23:19 25:15,20

26:1,5,6 30:22

31:10,15 33:1

38:10 40:2

42:13,14 43:21

44:6 47:16 48:19

56:6,7,17

57:3,5,7,8,19

62:1 65:22 66:1

71:5,18 72:1,6

74:2,6 75:12

76:11 85:20

86:1,14

89:12,13,14,15

96:8 97:9 98:7

103:18,19

104:1,4 107:1,2

111:15,16

113:6,9,13,14,17

114:5 119:12

121:19,21

122:4,6

125:2,3,4,10,11,

12,18,20,22

126:3,4 131:16

132:18

134:13,18

136:10 140:19

141:9 144:13

145:1,3,8,9

146:2,3,4,5,18,1

9,20 149:2,11

150:4,8,20

156:2,11,13,21

162:22 164:13

168:16 174:7,8,9

176:19 178:1

percentage 76:9

144:22 151:5

162:21 163:3

173:8

percentages 60:14

performance

27:16 28:4 81:13

83:8

performed

133:10,11

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72:13 75:7

perilous 9:14

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88:8 91:1 107:14

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109:19 117:14

120:19 138:14

140:3 141:8

142:13 187:5

periods 50:2,3

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permit 110:19

person 81:20,21

187:7

personal 28:11

perspective

108:21 134:19

136:7 168:15,20

pertaining 177:4

phase

154:17,19,21

phases 154:17

phone 35:5

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physical 52:1,2

physically 46:20

131:8

pick 56:12 77:4

picked 148:14

picture 73:3 105:9

piece 46:19,21

81:16 130:3,5
Capital Reporting Company

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131:1,16 169:2

pieces 155:12

158:4 173:4

pipe 111:4 113:3

piping 110:18

placed 186:5

plant 144:8 174:17

179:6,21

plates 62:13

platform 186:6,12

play 37:16

plea 170:2

please 5:16 8:21

9:6,14 10:2 19:6

30:2 34:1 36:16

42:22 59:18 61:4

63:13 64:10

70:18 71:15 73:9

74:12 76:19

80:10 81:6 82:3

84:7 101:20

102:14,22 103:4

114:22 122:11

128:6 183:8

187:3

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134:12 145:3

160:11

point 18:17 21:21

42:5,20 43:3

47:7,8,9 48:22

49:15 51:1 65:11

72:16,20 73:18

74:19 75:1,4

76:4 77:22 89:17

99:14 105:21

116:10 119:11

120:11,12 135:2

137:5 140:9

162:21 167:1

168:1 170:7

186:13

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Policy 11:10

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170:5

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164:2

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22:5 55:16 75:15

126:6 127:16

137:1 154:1

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148:11

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possible 10:5 44:4

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69:12

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potential 16:9

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156:2 171:18

172:3 179:20

potentially 127:21

134:17 186:3

power 49:19 62:8

73:21 74:4 95:5

96:18 122:6,14

144:8 179:6,21

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practicability 37:6

practical 28:14

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105:14

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precision 69:5

preferably 164:17

preferred 169:8

preliminary 20:11

preparation

152:19

prepared 189:4

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86:4

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present 10:13

14:22 68:1

123:18 138:11

142:10,11,12

143:7,16 144:13

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70:15 87:3

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price 52:17,22

58:17 75:5 77:16

78:1 79:21 80:1

87:17 107:22

108:12 109:19

110:1

117:5,7,11,13,16

123:21 139:8,9

174:9

prices 52:7

77:15,19 108:6

109:15,17

116:21,22

117:1,4,9,18

172:8

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22:9 39:1,8

53:20 54:2 173:3

primary 54:3,6

78:3,10,15 97:17

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148:22 149:3

153:17 154:6

184:13

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probability 109:3

probably 11:8

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45:18 48:4 76:17

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160:19 161:8

186:16

problem 48:15

75:16 160:16
Capital Reporting Company

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problems 134:21

135:11 136:1

procedure 13:22

14:1,9 36:6

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procedures 134:6

proceed 11:4

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188:3,4,5,8,9,11

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qualifying 153:21

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85:9
Capital Reporting Company

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question 19:5

21:17,21 23:5

24:2,6 25:2

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59:16,18,22

61:4,7 63:15

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100:6,10 103:10

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172:18 181:8

182:18 183:3,11

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R

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158:6,17,19

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Capital Reporting Company

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reflect 55:2 155:3

reflected 119:1

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refrigerant 114:13

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remarks 4:16 5:9

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Renewable 1:7 2:5

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Capital Reporting Company

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179:12,16

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Sachs 3:11 6:5

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salesforce 76:1

Sam 3:5 6:22

sample 89:5

92:3,6,17,19,21

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117:2

sampled 93:1

San 136:5,12

saturations

139:18 140:6

saving 60:15,21

savings 60:3,9

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Capital Reporting Company

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90:22 97:5

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sheet 82:11 84:2

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Capital Reporting Company

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short 30:18 120:19

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simultaneously

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slide 16:14,21

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Solutions 2:2

somebody 68:2

80:18 83:2

somehow 90:8

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something's 21:7

somewhat 132:14

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102:5

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35:11,19 38:16

40:18 48:17

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Capital Reporting Company

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