From: Phil Hopkinson [mailto:phopkinson@hvolt.com]

Sent: Wednesday, November 16, 2011 8:23 AM

To: Hirsch, Bruce R; 'Robert Berman'

Cc: Steve Nadel; John Caskey; Eric.Petersen@aksteel.com; jerry.schoen@aksteel.com; Maxine (EMAB)

Savitz; mhyland@appanet.org; Raymond.Polinski@ATImetals.com; maheshsampat@bellsouth.net;

tpetrosino@carolina.rr.com; dbrender@cda.copper.org; James.Lass@cleco.com;

chris.brown@cogentpowerinc.com; frank.guilbault@cogentpowerinc.com;

ted.johnstone@cogentpowerinc.com; AaronMeyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran;

tballo@earthjustice.org; carlosgsiqueiros@eaton.com; eduardorobles@eaton.com; Emily (CONTR)

Marchetti; Jeremiah (CON TR) Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org;

DYoung@energy

‐ solution.com; rick.anderson@faypwc.com; bsmith@federalpacific.com;

rgreeson@federalpacific.com; carlos.gaytan@ge.com; artrosenfeld@gmail.com;

greg.coulter405@gmail.com; ned.efbrush@gmail.com; Richard Parker; Paul.Ryan@hitmet.com;

jhodge@howard.com; Daniel Cohen; cabolduc@lbl.gov; gjrosenquist@lbl.gov; kcoughlin@lbl.gov;

ScottB@LVMetals.com; dave.millure@metglas.com; kwinder@mleainc.com; jrossetti@mlgw.org; Brian

Coffey; Caitlin Johnson; Matthew Nardotti; Michael Rivest; Zhimei Luo; Jim Creevy; mwaltner@nrdc.org;

rroy@nrdc.org; robert.saint@nreca.coop; Teckman@nwcouncil.org; vijay.tendulkar@onyxpower.com;

gbf1@pge.com; chuck.simmons@pgnmail.com; ahofmann@publicpower.org;

pkumar@publicpower.org; adelaski@s tandardsASAP.org; jmauer@standardsasap.org;

wes.patterson@us.abb.com; chad.kennedy@us.schneider

‐ electric.com; thomas.patzner@us.schneider

‐

electric.com; charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Excellent comments Bruce:

I would add though that during the peak loads of the day that not only does cost favor M3 but so does

total loss because the amorphous transformers have higher load loss than the M3 transforme rs.

Best regards,

Phil

Philip J Hopkinson, PE

President & CEO HVOLT Inc.

3704 High Ridge Rd.

Charlotte, NC 28270

phopkinson@hvolt.com

Ph 704

‐ 846

‐ 3290

Fx 704

‐ 845

‐ 2520

Cell 704

‐ 236

‐ 3320

www.hvolt.com

From: Hirsch, Bruce R [ mailto:Bruce.R.Hirsch@bge.com ]

Sent: Wednesday, November 16, 2011 7:59 AM

To: 'Robert Berman'; Phil Hopkinson

Cc: Steve Nadel; John Caskey; Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB)

Savitz; mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ;

tpetrosino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ;chris.brown@cogentpowerinc.com ; frank.guilbault@cogentpowerinc.com ;

ted.johnstone@cogentpowerinc.com ; AaronMeyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran;

tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily (CONTR)

Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org ;

DYoung@energy

‐ solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ;

rgreeson@federalpacific.com ; carlos.gaytan@ge.com ; artrosenfeld@gmail.com ;

greg.coulter405@gmail.com ; ned.efbrush@gmail.com ; Richard Parker; Paul.Ryan@hitmet.com ;

jhodge@howard.com ; Daniel Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ;

ScottB@LVMetals.com ; dave.millure@metglas.com ; kwinder@mleainc.com ; jrossetti@mlgw.org ;

brian.coffey@navigant.com ; caitlin.johnson@navigant.com ; matthew.nardotti@navigant.com ;

mrivest@navigant.com ; zhimei.luo@navigant.com ; Jim Creevy; mwaltner@nrdc.org ; rroy@nrdc.org ;

robert.saint@nreca.coop ; Teckman@nwcouncil.org ; vijay.tendulkar@onyxpower.com ; gbf1@pge.com ;

chuck.simmons@pgnmail.com ; ahofmann@publicpower.org ; pkumar@publicpower.org ;

adelaski@standardsASAP.org ; jmauer@standardsasap.org ; wes.patterson@us.abb.com ;

chad.kennedy@us.schneider

‐ electric.com ; thomas.patzner@us.schneider

‐ electric.com ;

charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Robert,

This happens all the time in “time of day” rates. The fact is that it is cheaper to produce electricity at a

core generating station than at the peaking plants. It also is cost effective to keep core stations running.

With that said, I think the issue is tha t you and Phil are looking at this from a different point of view. Phil

is looking at the cost to generate and he is correct. You are looking at the value of avoiding generation

altogether and you are also correct.

It is important to und erstand that our (or DOE’s) decision cannot be made on any one factor. All of the

issues put on the table are important issues that must be factored into the final decision. My main

concern at this time is that the Advocate’s case is based on the DOE calculated pay ba ck periods that

utilize a projected cost that is much less than that seen by the only manufacturer who has experience

building higher efficiency units with M3 steel. Robert, you have pushed us to consider historical

experience over models. Thus, I believe we need to step back and look at what the ABB data is really

telling us and correct the DO E calculations as appropriate.

Bruce

From: Robert Berman [ mailto:bermaneconomics@gmail.com ]

Sent: Tuesday, November 15, 2011 7:57 PM

To: Phil Hopkinson

Cc: Robert Berman; Steve Nadel; Hirsch, Bruce R; John Caskey; Eric.Petersen@aksteel.com ;

jerry.schoen@aksteel.com ; Maxine (EMAB) Savitz; mhyland@appanet.org ;

Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ; tpetrosino@carolina.rr.com ;

dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogentpowerinc.com ;

frank.guilbault@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.com ; AaronMeyers; Antonio

Trujillo; Jack C Moore; Jerry L Corkran; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ;

eduardorobles@eaton.com ; Emily (CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energy

‐ solution.com ; rick.anderson@faypwc.com ;

bsmith@federalpacific.com ; rgreeson@federalpacific.com ; carlos.gaytan@ge.com ;artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ; Richard Parker;

Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ;

kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millure@metglas.com ; kwinder@mleainc.com ;

jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnson@navigant.com ;

matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ; Jim Creevy;

mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ; Teckman@nwcouncil.org ;

vijay.tendulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@pgnmail.com ;

ahofmann@publicpower.org ; pkumar@publicpower.org ; adelaski@standardsASAP.org ;

jmauer@standardsasap.org ; wes.patterson@us.abb.com ; chad.kennedy@us.schneider

‐ electric.com ;

thomas.patzner@us.schneider

‐ electric.com ; charlied@uus.org

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Sorry that you disagree. A loss is a loss no matter where it comes from. It's the VALUE that changes. The

core loss still exists at peak. Why in the world would you put a lower value on the core loss at peak just

because it AL SO exists at off

‐ peak times as well?

Regards,

Robert A. Berman, Principal

Berman Economics

1915 Grand Court

Vienna, VA 22182

703.281.0490

703.655.8398 (cell)

Berman.Economics@gmail.com

www.BermanEconomics.com

Sent from my iPhone

On Nov 15, 2011, at 5:30 PM, Phil Hopkinson < phopkinson@hvolt.com > wrote:

Good afternoon Robert and all:

I must disagree fundamentally with the way you have characterized the loss values. At night when the

load is light everywhere then the energy cost is also low and those who have time of day metering can

attest to it. If the load is as low as 10% then wh at is left is largely core loss and the generation is only

base generation at very low cost per kWH.

During the day when the load is high the peak generators are all fired up and that is expensive energy.

There the winding losses are the big co ntribution to total transformer losses. Unfortunately when one

has an amorphous transformer that meets the same efficiency as an M3 transformer it has higher

winding losses than the M3. In the modeling that Jerry Corkran and I did we found that the amorphous

transformer had higher day time losses than the M3 which looks like it takes aw ay from the enthusiasm

for amorphous cores as a National standard.

The bottom line is that core loss is not as valuable as winding loss on a watt for watt tradeoff.

Best regards,Phil

Philip J Hopkinson, PE

President & CEO HVOLT Inc.

3704 High Ridge Rd.

Charlotte, NC 28270

phopkinson@hvolt.com

Ph 704

‐ 846

‐ 3290

Fx 704

‐ 845

‐ 2520

Cell 704

‐ 236

‐ 3320

www.hvolt.com

From: Robert Berman [ mailto:bermaneconomics@gmail.com ]

Sent: Tuesday, November 15, 2011 1:23 PM

To: Steve Nadel

Cc: Bruce R Hirsch; Robert Berman; John Caskey; Eric.Petersen@aksteel.com ;

jerry.schoen@aksteel.com ; Maxine (EMAB) Savitz; mhyland@appanet.org ;

Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ; tpetrosino@carolina.rr.com ;

dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogentpowerinc.com ;

frank.guilbault@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.com ; Aaron Meyers; Antonio

Trujillo; Jack C Moore; Jerry L Corkran; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ;

eduardorobles@eaton.com ; Emily (CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energy

‐ solution.com ; rick.anderson@faypwc.com ;

bsmith@federalpacific.com ; rgreeson@federalpacific.com ; carlos.gaytan@ge.com ;

artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ; Richard Parker;

Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel Cohen; Phil Hopkinson; cabolduc@lbl.gov ;

gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millure@metglas.com ;

kwinder@mleainc.com ; jrossetti@mlgw.org ; brian.coffey@navigant.com ;

caitlin.johnson@navigant.com ; matthew.nardotti@navigant.com ; mrivest@navigant.com ;

zhimei.luo@navigant.com ; Jim Creevy; mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ;

Teckman@nwcouncil.org ; vijay.tendulkar@onyxpower.com ; gbf1@pge.com ;

chuck.simmons@pgnmail.com ; ahofmann@publicpower.org ; pkumar@publicpower.org ;

adelaski@standardsASAP.org ; jmauer@standardsasap.org ; wes.patterson@us.abb.com ;

chad.kennedy@us.schneider

‐ electric.com ; thomas.patzner@us.schneider

‐ electric.com ;

charlied@uus.org

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Steve,

The statement that "reducing transformer losses primarily affects baseload, not peak" is a bit of an over

simplification. Reducing transformer losses affects both base and peak. The value of the loss at any point

in time is then marginal cost or system l ambda. That is, the value of reducing transformer losses is the

greater of the cost of the next unit that would have been dispatched, but for the reduced load

attributable to the transformer, or the cost of generation from the last unit actually dispatched, but

used less due to the more efficient tran sformer. Because generation is brought on line least

‐ cost first,

losses are evaluated in reverse order

‐‐ highest cost first. As Katie Coughlin explained at the last meeting,

this is the way LBNL evaluates benefits. Thus in the early years, the more efficient transformer may

actually save substantially more money than in later years, when the older, hig her cost units have beenretired. I don't believe this benefit is picked up by the LBNL modeling, as it requires more detailed

information

‐‐ at least hourly marginal costs for each power pool.

Regards,

Bob

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 15, 2011, at 8:57 AM, Steve Nadel wrote:

Two comments. First, some comments have focused on just the market for M3 and amorphous steel.

The two markets are linked

‐‐ we need competition between the two to keep the price of both in check.

We don't want a standard that strongly favors one over the other. The re vised DOE analysis on the mix

between M3 and amorphous at different standard levels should help us to address this. Second,

reducing transformer losses primarily affects baseload, not peak. So talking about cost per kW is

misleading. An efficient transformer is energized for more than 8 000 hours per year. The average DSM

measure saves for about 3000 hours per year (although there is wide variation). If you want to

compare, you'd need to compare levelized cost per kWh saved over the measure lifetime.

Steve

>>> "Hirsch, Bruce R" < Bruce.R.Hirsch@bge.com > 11/15/2011 7:37 AM >>>

John’s points are well taken. Keep in mind that the DOE numbers indicate a payback at EL4 only if

amorphous steel is used. Thus, to assume that because it can be built using M3 steel, all is well, is totally

untrue. In John’s auto analogy, at least the custom er has a choice of spending the extra money. In our

case, the customer will have no choice.

We all also need to understand that there is not an infinite supply of money to spend on efficiency

improvements. By forcing utilities to spend money on improving transformer efficiencies, we may very

well be taki ng money out of other efficiency programs which have a much higher payback than what is

being proposed here. In BGE’s case our package of efficiency programs cost us approximately $139 per

kilowatt saved. What is being proposed here is up to 100 times more costly. If BG E pulls back funds from

other efficiency programs to pay the high costs for transformer efficiencies, we would see a significant

decline in efficiency improvements overall.

BruceFrom: Caskey, John [ mailto:Joh_Caskey@nema.org ]

Sent: Monday, November 14, 2011 3:14 PM

To: Robert Berman; Hirsch, Bruce R

Cc: 'Steve Nadel'; Phil Hopkinson; Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine

(EMAB)

Savitz; mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ; tpetr

osino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogentpoweri

nc.com ; frank.guilbault@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.com ; Aaron Meyers;

Antonio Trujillo; Jack C Moore; Jerry L

Corkran; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily

(CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energy

‐

solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ; rgreeson@federalpacific.com ; c

arlos.gaytan@ge.com ; artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ;

Richard Parker; Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel

Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millur

e@metglas.com ; kwinder@mleainc.com ; jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnso

n@navigant.com ; matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ;

Creevy,

Jim; mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ; Teckman@nwcouncil.org ; vijay.tend

ulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@pgnmail.com ; ahofmann@publicpower.org ; p

kumar@publicpower.org ; adelaski@standardsASAP.org ; jmauer@standardsasap.org ; wes.patterson@us

.abb.com ; chad.kennedy@us.schneider

‐ electric.com ; thomas.patzner@us.schneider

‐

electric.com ; charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Robert

You continue to reference the ABB data presented by Wes Patterson as indicating that since a

transformer was sold at the EL3 or EL4 efficiency level that this level is cost effective. Specifically, you

state “Market sales data, however, is quite real. In this case it u nambiguously says that the transformers

at EL4 are an economically reasonable choice

‐‐ the market has, in fact, selected that choice on multiple

occasions”. This is simply NOT TRUE.

Just because a person buys as Jaguar for $100k that gets 25 mpg in place of a $40k Cadillac that ge ts 20

mpg; does NOT mean that the $60k delta will ever be “economically reasonable” for the extra 5 mpg.

You seem to be assuming that all of the transformers purchased from ABB that meet the efficiency

levels were purchased for efficiency reasons. This is simply not fact. The fa ct is that one large

transformer manufacturer was able to produce distribution transformers at EL3 and EL4 using M3 steel.

To my knowledge, Wes did not state the price for these transformers. In addition, just because one

company can produce this product doesn’t mean that all transformer manufacturers can make this

product at thi s level using M3 steel.

My hope is that we can all understand the facts and the analysis results better over the next few weeks

so that we can negotiate a solution that benefits the consumers, the ratepayers, the manufacturers, the

environment, etc. I plan to stay at the ta ble till the end of the negotiation process.

Regards,John

John F. Caskey, CEM

Assistant Vice President, Industry Operations

National Electrical Manufacturers Assoc. (NEMA)

1300 North 17th Street

‐ Suite 1752

Rosslyn, VA 22209

john.caskey@nema.org

703

‐ 841

‐ 3233 Voice

703

‐ 841

‐ 3333 FAX

703

‐ 350

‐ 6886 Cell

From: Robert Berman [ mailto:bermaneconomics@gmail.com ]

Sent: Monday, November 14, 2011 1:19 PM

To: Hirsch, Bruce R

Cc: 'Steve Nadel'; Robert Berman; Phil

Hopkinson; Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB)

Savitz; mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ; tpetr

osino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogentpoweri

nc.com ; frank.guilbault@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.com ; Aaron Meyers;

Antonio Trujillo; Jack C Moore; Jerry L

Corkran; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily

(CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energy

‐

solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ; rgreeson@federalpacific.com ; c

arlos.gaytan@ge.com ; artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ;

Richard Parker; Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel

Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millure

@metglas.com ; kwinder@mleainc.com ; jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnso

n@navigant.com ; matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ;

Creevy, Jim; Caskey,

John; mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nreca.coop ; Teckman@nwcouncil.org ; vijay.te

ndulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@pgnmail.com ; ahofmann@publicpower.org ;

pkumar@publicpower.org ; adelaski@standardsASAP.org ; jmauer@standardsasap.org ; wes.patterson@

us.abb.com ; chad.kennedy@us.schneider

‐ electric.com ; thomas.patzner@us.schneider

‐

electric.com ; charlied@uus.org

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Bruce,

Those upfront transformer costs are compared to the fuel cost savings in the LCC approach. The

discounting process values fuel cost saving in the future at less than the costs incurred today. The

positive LCC means that that the efficiency advocates are not ignoring costs, bu t comparing them with

benefits and finding that the consumer is better off and will be paying less. One does not, however,

need to rely on the LBL analysis to see this. The ABB sales data shows M3 transformers being delivered

at EL4 efficiency. As a modeler, I am always skeptical of model results

‐‐ people do not live in computers

and certainly not on in some of the back

‐ of

‐ the

‐ envelope calculations that we have seen from others.

Market sales data, however, is quite real. In this case it unambiguously says that the transformers at EL4are an economically reasonable choice

‐‐ the market has, in fact, selected that choice on multiple

occasions.

To the extent that there are dug

‐ in positions, again the evidence does not support that it is the

efficiency advocates that are dug

‐ in. Although EL4 is achievable and beneficial based both on market

data and LBL analyses, the proponents of greater efficiency indi cated a willingness to compromise. It is

certain representatives of the industry who have consistently said either no change, or a fractional

change. It is those industry representatives who appear to be advancing the "my position or nothing"

attitude. Although I happ en to agree that substantial movement towards more efficient distribution

systems, I also note that these are incredibly expensive meetings. We have a large number of very

senior people devoting substantial time to the meetings, their preparation and non

‐ trivial travel costs.

These people have other things competing for their time. If you and others hon estly believe that you

cannot agree to a higher standard, and place no value on regulatory certainty, then let's not waste

additional time and money. Let's just say that we gave it a good shot, cut our losses here, and make our

respective cases to DOE outside the ne gotiation process and let DOE make it's own decision. I believe

that they certainly have sufficient information to support their position in a February NOPR. I can't

imagine what else they would need.

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

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

Steve,

I am disappointed with your approach to this assignment.

It appears that negotiation to you is defined as agreeing with your position

‐‐‐ or calling it off. It is

unfortunate that you believe the American public, especially in these tryin g economic times, should be

expected to foot the (very large) bill for more efficient transformers when it is still not certain that there

is value in doing so. You have clung to one suspect calculation that indicates there may be a payback

‐‐‐

in the distant future

‐‐‐ and only if all th e assumptions being made pan out. You choose to ignore the

costs, not yet factored in, on US jobs, US businesses and the reliability of supply of an item so

desperately needed for our economy to expand.

This is not a “cut and dried” economic decision but is one that need s to be taken seriously for the major

impact it could have on the electric supply of the US and the financial position of the American public. IfDOE makes the final decision on this, I would expect them to do “due diligence” in considering all the

effects there decision would have on US businesses and the US economy.

Let it be known that the Utility Industry has not pulled out of the negotiation process and will continue

to work with DOE to reach the ri ght decision.

Bruce.

From: Steve Nadel [mailto:snadel@aceee.org]

Sent: Friday, November 11, 2011 2:16 PM

To: Robert Berman; Phil Hopkinson

Cc: Eric.Petersen@aksteel.com ; jerry.schoen@aksteel.com ; Maxine (EMAB)

Savitz; mhyland@appanet.org ; Raymond.Polinski@ATImetals.com ; maheshsampat@bellsouth.net ;

Hirsch, Bruce

R; tpetrosino@carolina.rr.com ; dbrender@cda.copper.org ; James.Lass@cleco.com ; chris.brown@cogent

powerinc.com ; frank.guilbault@cogentpowerinc.com ; ted.johnstone@cogentpowerinc.com ; Aaron

Meyers; Antonio Trujillo; Jack C Moore; Jerry L

Corkran; tballo@earthjustice.org ; carlosgsiqueiros@eaton.com ; eduardorobles@eaton.com ; Emily

(CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky; srosenstock@eei.org ; DYoung@energy

‐

solution.com ; rick.anderson@faypwc.com ; bsmith@federalpacific.com ; rgreeson@federalpacific.com ; c

arlos.gaytan@ge.com ; artrosenfeld@gmail.com ; greg.coulter405@gmail.com ; ned.efbrush@gmail.com ;

Richard Parker; Paul.Ryan@hitmet.com ; jhodge@howard.com ; Daniel

Cohen; cabolduc@lbl.gov ; gjrosenquist@lbl.gov ; kcoughlin@lbl.gov ; ScottB@LVMetals.com ; dave.millur

e@metglas.com ; kwinder@mleainc.com ; jrossetti@mlgw.org ; brian.coffey@navigant.com ; caitlin.johnso

n@navigant.com ; matthew.nardotti@navigant.com ; mrivest@navigant.com ; zhimei.luo@navigant.com ;

Jim.creevy@nema.org ; john.caskey@nema.org ; mwaltner@nrdc.org ; rroy@nrdc.org ; robert.saint@nrec

a.coop ; Teckman@nwcouncil.org ; vijay.tendulkar@onyxpower.com ; gbf1@pge.com ; chuck.simmons@p

gnmail.com ; ahofmann@publicpower.org ; pkumar@publicpower.org ; adelaski@standardsASAP.org ; jma

uer@standardsasap.org ; wes.patterson@us.abb.com ; chad.kennedy@us.schneider

‐

electric.com ; thomas.patzner@us.schneider

‐ electric.com ; charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Phil,

We're in the middle of negotiations and some of us have made clear that no or little change to the

standard is not acceptable as the DOE analysis justifies higher standards (higher levels are technically

feasible and cost

‐ effective on a life

‐ cycle cost basis). The efficiency groups would rather leav e the

decision to DOE than agree to subpar standards. If you and other participants want to veto any

significant change in the standard, then we might as well save some time, break off negotiations and

just make our respective arguments to DOE. Is that wh at you want to do? If the answer is no, then let's

start talking about how to make higher standards acceptable rather than continue to make arguments

about why low standards are needed. We're all busy and if we're going to make progress we need to

break new gr ound and not rehash old ground.

Steve

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

You must not have looked at Jerry Corkran’s message because he found the cost to be $17/watt, which

is pretty close to my number, where both Jerry and I have used M3 core steel to derive the cost curve.

The fact is that the cost curve is very steep with M3 an d quickly hits the brick wall.

1. I have checked Carlos Gaytan’s cost curves as well and he is finding about the same relationship

with M3.

2. I have checked Wes Patterson’s data as well and he is finding an M3 cost curve about the same as

mine.

3. I have checked the OPS data with M3 as well and it too is very close to $20/watt.

a. For example, for design line 1 they show an efficiency at 50% load of 99.08% which translates to

232 watts of loss and sells for $1,960.73.

b. They show another M3 desig n with an efficiency of 99.26% which translates to 186 watts of loss

and sells for $2962.11.

c. The change in selling price is $2,962.11

‐ $1,906.11 or +$1,001.38

d. The change in watts is 232

‐ 186 or ‐ 46 watts.

e. The OPS $/watt is therefore, $1,001.38/46 watts or $21.77

f. Hence we see that all data sources are pointing to cost per watt of ~$20 /watt saved to go from

the current mandatory standard to EL1. I get $30/watt to go to EL2 and $53/watt to go to EL3

4. The fact is that M3 is about out of gas and the DOE did a good job in the la st rule making.

5. The fact also is that a push to anything beyond present does not show economic value and I do not

support it.

6. The fact also is that a push to higher efficiencies will kill the new transformer mar ket and open up

the rebuild market, destroying jobs at the new transformer manufacturers and resulting in transformers

of lower efficiency which will cost energy and not save it.

Best regards,

Phil

Philip J Hopkinson, PE

President & CEO HVOLT Inc.

3704 High Ridge Rd.

Charlotte, NC 28270

phopkinson@hvolt.com

Ph 704

‐ 846

‐ 3290

Fx 704

‐ 845

‐ 2520

Cell 704

‐ 236

‐ 3320

www.hvolt.com

From: Robert Berman [mailto:bermaneconomics@gmail.com]

Sent: Friday, November 11, 2011 11:16 AM

To: Phil Hopkinson

Cc: Corkran, Jerry L; Richard Parker; Freeman, Jeremiah

(CONTR); rick.anderson@faypwc.com ; tballo@earthjustice.org ; ScottB@LVMetals.com ; john.caskey@ne

ma.org ; Cymbalsky,

John; adelaski@standardsASAP.org ; Teckman@nwcouncil.org ; gbf1@pge.com ; carlos.gaytan@ge.com ; rgreeson@federalpacific.com ; bruce.r.hirsch@bge.com ; jhodge@howard.com ; mhyland@appanet.org ; d

ave.millure@metglas.com ; snadel@aceee.org ; wes.patterson@us.abb.com ; Eric.Petersen@aksteel.com ;

Raymond.Polinski@ATImetals.com ; artrosenfeld@gmail.com ; srosenstock@eei.org ; rroy@nrdc.org ; rob

ert.saint@nreca.coop ; chuck.simmons@pgnmail.com ; kwinder@mleainc.com ; mwaltner@nrdc.org ; jerry

.schoen@aksteel.com ; Paul.Ryan@hitmet.com ; ahofmann@publicpower.org ; pkumar@publicpower.org

; bsmith@federalpacific.com ; greg.coulter405@gmail.com ; jmauer@standardsasap.org ; Cohen, Daniel;

Meyers,

Aaron; Jim.creevy@nema.org ; jrossetti@mlgw.org ; cabolduc@lbl.gov ; kcoughlin@lbl.gov ; brian.coffey@

navigant.com ; mrivest@navigant.com ; gjrosenquist@lbl.gov ; caitlin.johnson@navigant.com ; zhimei.luo

@navigant.com ; Marchetti, Emily (CONTR); charlied@uus.org ; DYoung@energy

‐

solution.com ; James.Lass@cleco.com ; maheshsampat@bellsouth.net ; matthew.nardotti@navigant.com ;

Raba, Jim; Savitz, Maxine

(EMAB); tpetrosino@carolina.rr.com ; chris.brown@cogentpowerinc.com ; ted.johnstone@cogentpoweri

nc.com ; frank.guilbault@cogentpowerinc.com ; ned.efbrush@gmail.com ; dbrender@cda.copper.org ; cha

d.kennedy@us.schneider

‐

electric.com ; eduardorobles@eaton.com ; vijay.tendulkar@onyxpower.com ; thomas.patzner@us.schnei

der

‐ electric.com ; carlosgsiqueiros@eaton.com ; Robert Berman; Trujillo, Antonio; Moore, Jack C

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Even if it were that high (and Mr. Hopkinson is the only one I've seen who has put the number anywhere

near that), the efficiency objective is saving Watt

‐ hours (energy) not Watts (the capacity to save energy )

. One Watt saved for 8,760 hours per year for 30 years is 262.8 kWh (not counting leap years). Even at

Mr. Hutchinson's $20, that's just over 7¢ / kWh. If Mr. Hutchinson will examine his electric bill, as he has

reported, he will see that even as hi gh as 7¢ it's a good buy, and that assumes we put a ZERO value on

any environmental benefits (which is why DOE agreed to reconsider its 2007 MEPS in the first place.

Indeed, the cost of losses per Watt (roughly the A factors that OPS has been using) are no wh ere near

the $20 claimed here. Moreover, as ABB and others have pointed out, the proper approach would have

been to minimize cost subject to efficiency, not A & B, which would have resulted in a lower, flatter

curve to the asymptote. ABB's actual market data

‐‐ physical transformers produced and delivered

‐‐

shows a competitive market for M3 transformers even at EL4 efficiency. You can make all the

hypothetical claims you want to, gentlemen, the market is the real world

.

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 10, 2011, at 6:53 PM, Phil Hopkinson wrote:Well stated Jerry

That is also what my analysis and report said. If you restrict to M3 then the cost of EL1 rises to about

$20/watt.

Phil

Phil Hopkinson,P.E.

HVolt Inc.

704

‐ 846

‐ 3290

F: 704

‐ 845

‐ 2520

C: 704

‐ 236

‐ 3320

phopkinson@hvolt.com

On Nov 10, 2011, at 18:04, "Corkran, Jerry L" < Jerry.Corkran@CooperIndustries.com > wrote:

To Mr. Parker and the DOE working group,

The reason for the request for the incremental cost of the losses is that the current DOE efficiency levels

can be obtained if the design is optimized at about $4 per core watt and $1 per winding watt at full

load. At the DOE 50% kVA rating, this is the same as evaluating th e losses or optimizing the design at

about $4 per total watts loss.

The present DOE efficiency loss level results in transformer designs about like many utilities were

purchasing their transformers before 2007. The utilities were purchasing the efficiency leve ls that were

justified based on the cost of losses. A few utilities were purchasing higher efficiency that the 2007

efficiency rules because of the calculated cost of energy being higher than the $4/$1 loss evaluation.

What came up in the discussion last week was even for loss level 1, the incr emental cost of losses was

about $17 per watt for the design checked, between the present DOE losses an efficiency level of DEL1.

The added cost of $17 per watt is so much higher than the typical cost of the energy for the utilities,

that it is very questionable that the DOE payback esti mates are accurate. A 3% interest rate may be a

factor in the payback calculations.

Jerry Corkran

From: Richard Parker [mailto:richardparkerdc@gmail.com]

Sent: Thursday, November 10, 2011 3:23 PM

To: Robert Berman

Cc: Freeman, Jeremiah

(CONTR); rick.anderson@faypwc.com ; tballo@earthjustice.org ; ScottB@LVMetals.com ; john.caskey@ne

ma.org ; Corkran, Jerry L; Cymbalsky,

John; adelaski@standardsASAP.org ; Teckman@nwcouncil.org ; gbf1@pge.com ; carlos.gaytan@ge.com ; r

greeson@federalpacific.com ; bruce.r.hirsch@bge.com ; jhodge@howard.com ; mhyland@appanet.org ; d

ave.millure@metglas.com ; snadel@aceee.org ; wes.patterson@us.abb.com ; Eric.Petersen@aksteel.com ;

Raymond.Polinski@ATImetals.com ; artrosenfeld@gmail.com ; srosenstock@eei.org ; rroy@nrdc.org ; rob

ert.saint@nreca.coop ; chuck.simmons@pgnmail.com ; kwinder@mleainc.com ; mwaltner@nrdc.org ; jerry.schoen@aksteel.com ; Paul.Ryan@hitmet.com ; ahofmann@publicpower.org ; pkumar@publicpower.org

; bsmith@federalpacific.com ; greg.coulter405@gmail.com ; jmauer@standardsasap.org ; Cohen, Daniel;

Meyers,

Aaron; Jim.creevy@nema.org ; jrossetti@mlgw.org ; cabolduc@lbl.gov ; kcoughlin@lbl.gov ; brian.coffey@

navigant.com ; mrivest@navigant.com ; gjrosenquist@lbl.gov ; caitlin.johnson@navigant.com ; zhimei.luo

@navigant.com ; Marchetti, Emily (CONTR); charlied@uus.org ; DYoung@energy

‐

solution.com ; James.Lass@cleco.com ; maheshsampat@bellsouth.net ; phopkinson@hvolt.com ; matthe

w.nardotti@navigant.com ; Raba, Jim; Savitz, Maxine

(EMAB); tpetrosino@carolina.rr.com ; chris.brown@cogentpowerinc.com ; ted.johnstone@cogentpoweri

nc.com ; frank.guilbault@cogentpowerinc.com ; ned.efbrush@gmail.com ; dbrender@cda.copper.org ; ch

ad.kennedy@us.schneider

‐

electric.com ; eduardorobles@eaton.com ; vijay.tendulkar@onyxpower.com ; thomas.patzner@us.schnei

der

‐ electric.com ; carlosgsiqueiros@eaton.com

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Robert,

I understand the DOE staff are working on the incremental Watts calculations and will get that out to

group as soon as it's ready.

best wishes,

Richard

On Thu, Nov 10, 2011 at 11:52 AM, Robert Berman < bermaneconomics@gmail.com > wrote:

Thank you Richard. That clarification is helpful.

In the liquid

‐ filled meeting we were told that we would receive an analysis of incremental Watts saved

by DL for all ELs, as well as the incremental cost. When will that analysis be available? For many of us,

that analysis is the basis for additional, perhaps e xtensive analyses, so it should come with enough lead

time before any additional meetings or teleconferences to that we can give it the required

consideration. It would be most helpful if the incremental cost were provided separately for transformer

and installation, with any pole component of the ins tallation identified.

For the MV Dry and LV Dry meetings, it would be most helpful if you would also circulate an agenda with

objectives, hopefully this week, so that we are able to prepare for those meetings.

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

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

The telcon on the 17th is currently planned for medium

‐ voltage dry

‐ type and the telcon on the 21st is

reserved for low

‐ voltage. There will be revised analysis circulated in advance of both calls per our

discussion yesterday. Each call has substantial chunks of time allocated, though I hope we won't need

all that ti me.

It may be prudent to schedule a liquid

‐ filled call at some point as well, but I propose that we hold off on

that for day or so, until we can clarify when revised analysis for liquid

‐ filled will be ready.

Thanks for yo ur very constructive participation in the meetings over the last two days.

Richard Parker

On Thu, Nov 10, 2011 at 10:05 AM, Freeman, Jeremiah (CONTR) < Jeremiah.Freeman@ee.doe.gov >

wrote:

When: Thursday, November 17, 2011 1:00 PM

‐ 5:00 PM (GMT

‐ 05:00) Eastern Time (US & Canada).

Where: Webinar and Phone

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

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

Dear Colleagues,

This event is to save the time slot on your calendar based on our discussion at ye sterday's meeting.

Later today further information will be sent regarding the registration information for our November 17

and November 21 webinars. After registering you will get the link for the webinar and a toll free

number.

Please call with questions or concerns.

Very Respectfully,

Jeremiah Freeman

202

‐ 431

‐ 424 3 (cell)

202

‐ 586

‐ 1867 (office)

>>> This e

‐ mail and any attachments are confidential, may contain legal,

professional or other privileged information, and are intended solely for the

addressee. If you are not the intended recipient, do not use the information

in this e

‐ mail in any way, delete this e

‐ mail and noti fy the sender. CEG

‐ IP2