### Memo: Changes to the LCC Analysis for Distribution Transformers

Prepared by: LBNL st a ff

For: DOE/ERAC Distribution Transformer Rulemaking Negotiating Sub

- committees
Date: Nov. 6, 2011

This memo summarizes LBNL respons es to issues that have been raised by the subcommittees regarding the life

- cycle cost (LCC) analysis. In some cases, issues have been dealt with by making changes to the LCC calculation. In other cases, after further consideration it was determined that no changes to the LCC wer e necessary.

All the LCC results provided for the Nov. 8-9 meetings incorporate the changes described here. For most design lines, the LCC results are based on the engineering data that were distributed in August 2011. Design lines 6, 7, 8 (LVDT), 11 and 12 (MVDT) use updated engineering data. This memo does not discuss modifications to the engineering analysis.

Liquid

- Immersed Distribution Transformers

1. Loading levels for rural utilities : In the previous analysis, rural utilities were treated as a subgroup in the LCC. Committee members have noted that in rural areas the number of customers per transformer is likely to be significantly lower than in urban or suburban areas, which in turn results in lower RMS loads. To account for this effect, LBNL performed an analysis to determine an average population density in the territory served by each of the utilities represented in the LCC simulation. For each utility, EIA Form 861 data were used to generate a list of counties served by the utility. Census data were used to determine the average housing unit density in each county. An average over counties was then used to assign the utility to a low density, average density or high density

category , with t he cutoff for low density set at 30 households per sq uare mile. In the current LCC, for those utilities serving primarily low density areas the median of the

RMS load distribution is reduced from 35% to 25%. The se modifications to the LCC also

allow the RMS load to be adjusted upward for high population dens ity area s, should that be necessary. With these changes, lower loading for rural utilities is represented directly in the LCC, so that the sub-group analysis is no longer necessary.

2. Potential impact of electric vehicles : It has been suggested that a rapid increase in the number of plug- in electric vehicles will result in significant growth in loads on utility distribution transformers. The Department refers to the Energy Information Agency’s Annual Energy Outlook (AEO) for forecasts of electricity load gr owth, capacity changes, price trends etc. While the AEO forecasts substantial growth in the use of electricity as a light -duty vehicle fuel, it remains an extremely small fraction (less than 1%) of residential electricity use.

3. Hourly load data : A number o f utilities, and EEI, have submitted hourly load data or other data on average transformer loads. Data on absolute load levels will be used to validate and correct the distribution of RMS loads used in the LCC. The hourly loadshape information will be used to validate and correct the load distribution functions and the system load -transformer load joint distribution functions used in the LCC. In order to make these adjustments, the data need to be processed into a consistent format, and then run through a number of statistical processing steps. This analysis is not yet complete.

4. Utility pole change -outs : In general

, as transformers are redesigned to reach higher efficiency

, the weight and size also increase. The degree of weight increase depends on how the design is modified to improve efficiency. For pole-mounted transformers, represented by design line (DL) 2, the increased weight may lead to situations where the pole need s to be replaced to support the additional weight of the transformer. This in turn leads to an increase in the installation cost. To account for this effect in the analysis, three steps are needed:

a. The first step is to d etermine wheth er the pole needs to be changed. This depends on the weight of the transformer in the base case compared to the weight of the transformer under a proposed efficiency level, and on assumptions about the lo ad

bearing capacity of the pole . In the LCC calculation, it is assumed th at a pole change -out will only be necessary if the weight increase is larger than 15% of the weight of the baseline unit. The number of pole change- outs is also capped at 25% of the total population. Utility poles are primarily made of wood. Both ANSI and NESC provide guidelines on how to estimate the strength of a pole based on the tree species, pole circumference and other factors. Pole species, circumference and height define a pole class. Natural variability in wood growth leads to a high degree of vari ability in strength values across a given class. Thus, NESC also provides guidelines on reliability, which result in a n acceptable probability that a given pole will exceed the minimal required design strength. As poles are sized to cope with large wind stresses and potential accumulation of snow and ice, this results in “over-sizing” of the pole relative to the load by a factor of 2-4. Hence, the 15% limit assumed in the LCC calculation is likely to be conservative.

b. The second step is to determine the cost of a pole change -out. Specific examples of pole change-out costs were submitted by the sub- committee. These examples were consistent with data taken from the RSMeans Building Construction Cost database. Based on this information, a triangular distribution was used to estimate pole change

- out costs, with a lower limit at $ 2025 and an upper limit at $5999. Utility poles have a finite life

- time, so that pole change-out due to increased transformer weight should be counted as an early replacement of the pole, i.e. it is

not correct t o attribute the full cost of pole replacement to the transformer purchase. Equivalently, if a pole is changed-out when a transformer is replaced, it will have a longer lifetime relative to the pole it replaces, which offsets some of the cost of the pole installation. To account for this affect, pole installation costs are multiplied by a factor n/pole- lifetime , which approximately represents the value of the additional years of life. The parameter n is chosen from a flat

distribution between 1 and the pole- lifetime. For this calculation the pole lifetime is assumed to be 30 years. As the LCC represents the costs associated with purchase of a single transformer, to account for multiple transformers mounted on a single pole, the pole co st should also be divided by a factor representing theaverage number of transformers per pole. No data is currently available on the fraction of poles that have more than one transformer, so this factor is not

included.

c. The increased installation cost that arises due to pole replacement needs to be scaled from the representative unit to the full set of capacities covered by DL2. Since the pole strength is determined by the weight of the base case unit, and the weight of the base case unit increases as the capacity increases, higher capacity transformers will be installed on stronger poles. All the installation costs in the LCC are scaled with weight according to the 0.75 scaling law. Based on a review

of RSMeans data, using this law to also scale the pol e installation costs should adequately reflect the increase in installation cost with pole strength.

5. Vault Installed Transformers : In general, as transformers are redesigned to reach higher efficiency, the weight and volume also increase. The degree of volume increase depends on how the design is modified to improve efficiency. For vault installed transformers, represented by DL 4 and 5, the increased volume may lead to situations where a more expensive transformer would be purchased to fit into the existing vault without having physically modifying the vault

.

a. To determine whether a more expensive unit must purchased. This depends on the volume of the transformer in the base case compared to the volume of the transformer under a proposed efficiency level. If th e LCC determines that a

transformer is to be installed in a vault, it will select the lowest cost transformer design meeting the required efficiency that is of equal or lesser volume then the

selected transformer in the basecase.

b. In the LCC calculation, it is assumed that utilities serving dense urban populations are the main purchasers of vault transformers . Using the population density measure described in item 1 of this memo, a likely purchaser of a vault transformer is a utility serving a population density greater than 500 household per square mile. In the LCC calculation it is assumed that 50% of transformers purchased by these utilities will be vault installations.

It should be noted that the impac ts of vault modification are not yet modeled in the LCC spreadsheet, and continued be analyzed in the Life-cycle Cost Subgroups Analysis (draft TSD chapter 11).

All Equipment Classes

6. Removal of ZDMH from the b ase c ase : The subcommittee has noted that in the current market no transformers using ZDMH as a core material are sold in the US market. Hence, designs using this material are screened out of the analysis for the base case only. For higher efficiency levels, the LCC still includes ZDMH designs. The q uestion of how the market will evolve under a higher efficiency standard is still open, and as yet we do not have a solid basis for screening any material entirely out of the LCC. Quantitative analysis of the demand for specific materials, potential availa bility of materials, and theimpact this may have on the market prices is performed downstream of the LCC in the National Impacts Analysis (NIA) and the Manufacturer Impact Analysis (MIA).

7. Market share of high

- efficiency units in the base case : Sub- commit tee members have provided data on market share as a function of efficiency. For some design lines, the lower boundary of the price- efficiency curve is quite flat, so that the choice algorithm in the LCC showed units being selected in the base case with eff iciencies substantially higher than the current DOE minimum standard. The LCC has been modified so that the fraction of units selected in the base case at different efficiency levels is consistent with

the market share data that have been provided.

8. Reduct ion of RMS load levels : The median value of the RMS load distribution for some design lines has been reduced as per committee recommendations.