**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 U.S. DEPARTMENT OF ENERGY **PUBLIC MEETING ON ENERGY CONSERVATION STANDARDS FOR RESIDENTIAL DISHWASHERS, DEHUMIDIFIERS, AND COOKING**  **PRODUCTS, AND COMMERCIAL CLOTHES WASHERS** Room 8E-089 U.S. Department of Energy 1000 Independence Avenue, S.W. Washington, D.C. 20585 9:00 a.m. Thursday, November 13, 2008 Appearances : DOUG BROOKMAN, Facilitator, Public Solutions 108 Newburg Avenue Baltimore, Maryland 21228 U.S. Department of Energy : RONALD LEWIS STEPHEN WITKOWSKI MICHAEL KIDO MARK FRIEDRICHS 1000 independence Avenue, SW Washington, D.C. 20585 Attendees : JENNIFER THOMAS AMANN, Director, Buildings Program American Council for an Energy Efficient Economy Suite 600 529 14 th Street, N.W. Washington, D.C. 20045 TIMOTHY BALLO, ESQ. EarthJustice Suite 702 1625 Massachusetts Avenue, N.W. Washington, D.C. 20036 DR. DEBRA K. BRUNK Vice President, Technical Services Association of Home Appliance Manufacturers (AHAM) Suite 402 1111 19 th Street, N.W. Washington, D.C. 20036**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 Attendees: LANCE DeLAURA Market Strategy/Codes & Standards Manager Customer Programs Sempra Energy Utilities Southern California Gas Company 555 W. Fifth Street Los Angeles, California 90013-1046 TOM ANDERSON Director of Energy Conservation - North America Electrolux Major Appliances 250 Bobby Jones Expressway Augusta, GA 30907 JAMES BATTAGLIA, Consultant Navigant Consulting, Inc. 77 S. Bedford Street, Suite 400 Burlington, MA 01803-5154 DAVID COHAN Codes and Standards Manager Northwest Energy Efficiency Alliance Suite 600 529 SW Third Avenue Portland, Oregon 97204 MARGO FAIER, Economist Economic Analysis Group U.S. Department of Justice Antitrust Division 601 E Street, N.W. Washington, D.C. 20530 GARY FERNSTROM, Senior Project Manager Pacific Gas and Electric 77 Beale Street San Francisco, CA 94177 GREGG A. HAND White & Case, LLP 701 Thirteenth Street, N.W. Washington, D.C. 20005 J.B. HOYT Director, Regulatory Affairs and State Government Relations Whirlpool Corporation 2000 North M-63, MD3005 Benton Harbor, Michigan 49022**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 3 Attendees: JEFFREY KINGMAN, Senior Consultant Navigant Consulting Suite 500 1801 K Street, N.W. Washington, D.C. 20006 KELLEY A. KLINE, ESQ. Counsel - Regulatory Compliance GE Consumer and Industrial Appliance Park, AP2-225 Louisville, Kentucky 40225 PHILIP J. MANTHEI Staff Engineer, Agency/Codes Approval Appliance Laundry Systems LLC Shepard Street, P.O. Box 990 Ripon, Wisconsin 54971-0990 LUKE M. HARMS Government Relations Specialist Whirlpool Corporation Suite 750 701 Pennsylvania Avenue, N.W. Washington, D.C. 20004 CHRISTOPHER JOHNSON Senior Manager, Regulatory Compliance Product Standards & Environmental Compliance LG Electronics 910 Sylvan Avenue Englewood Cliffs, New Jersey 07632 DERRICK LITTLE Systems Manager, Global Products Technology GE Consumer and Industrial Appliance Park AP2-126 Louisville, Kentucky 40225 EDWARD R. OSANN, Senior Associate American Council for an Energy-Efficient Economy National Press Building Suite 600 529 14 th Street, N.W. Washington, D.C. 20045 JUDITH REICH, Managing Consulting Navigant Consulting, Inc. 77 S Bedford Street, Suite 400 Burlington, MA 01803-5154**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 4 Attendees: MICHAEL RIVEST, Managing Director Navigant Consulting, Inc. 77 S Bedford Street, Suite 400 Burlington, MA 01803-5154 STEVEN J. ROSENSTOCK, P.E. Manager, Energy Solutions Edison Electric Institute 701 Pennsylvania Avenue, N.W. Washington, D.C. 20004-2696 DOUGLAS J. ROSSIN, Consultant Navigant Consulting, Inc 1801 K Street, NW, Suite 500 Washington, D.C. 20006 TONY (BYUNGWOOK) YE Account Manager Product Safety and Compliance LG Electronics 1000 Sylvan Avenue Englewood Cliffs, New Jersey 07632 GREGORY ROSENQUIST Energy Analysis Department Environmental Energy Technologies Division Ernest Orlando Lawrence Berkeley National Laboratory One Cyclotron Road, MS: 90-4000 Bldg. 90, Room 4131A University of California Berkeley, California 94720 JACOB SKAGGS D&R International Suite 500 1300 Spring Street Silver Spring, Maryland 20910 MICHELE CANO U.S. Department of Justice Antitrust Division Suite 4000 450 5 th Street, N.W. Washington, D.C. 20530 CONSTANTIN von WENTZEL, Associate Director Navigant Consulting, Inc. 77 S Bedford Street, Suite 400 Burlington, MA 01803-5154**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 5 Attendees: JIM RANFONE Managing Director, Building Codes and Standards American Gas Association 400 N Capitol Street, NW Washington, D.C. 20001**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 6

A G E N D A ITEM : PAGE : Welcome 7 Opening Remarks, Introductions and Agenda Review 7 Doug Brookman Rulemaking Overview 11 Stephen Witkowski Comments from Participants 16 Doug Brookman Engineering Analysis 38 Judith Reich Energy Use Analysis, Markups for Equipment Price Determination, and Life-Cycle Cost Analysis 96 Gregory Rosenquist Shipments Analysis and National Impact Analysis 136 Gregory Rosenquist Afternoon Session Trial Standard Levels, Consumer Subgroup Analysis, and Manufacturer Impact Analysis 144 Gregory Rosenquist and Constantin von Wentzel Utility Impact Analysis, Employment Impact Analysis, Environmental Assessment, Regulatory Impact Analysis 176 Gregory Rosenquist Discussion of Other Issues 199 Doug Brookman Next Steps and Closing Remarks 205 Stephen Witkowski Adjourn**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 7

P R O C E E D I N G S 1 2 9:00 a.m. Welcome 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 MR. WITKOWSKI: Good morning. I want to welcome you all to the Department of Energy’s Public Meeting on Notice of Proposed Rulemaking or NOPR for Energy Conservation Standards for Residential Dishwashers, Dehumidifiers, and Cooking Products, and Commercial Clothes Washers. You should all have a copy of the agenda and the presentation slides. There is one technical note. The Technical Support Document for these products will be available on our website, I hope by no later thanWednesday. If you need it immediately, send me an email and I can get you an electronic copy, but it will be up very soon. And again, thank you and welcome. Doug? Opening Remarks, Introductions and Agenda Review 18 19 20 21 22 23 24 25 MR. BROOKMAN: Thank you. It’s our custom to provide an opportunity for each person to introduce him or herself, so I’d like to just do that. This will not all be captured in the record but we do have a sign-in sheet. So if you’d say your name and your organizational affiliation, I’ll start with you, Steve. MR. ROSENSTOCK: Steven Rosenstock, Edison**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 8

Electric Institute. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. BROOKMAN: And I’m not sure how well these microphones work. We’ll find out as the day goes

on. Go ahead, Phil. MR. MANTHEI: Phil Manthei, Appliance Laundry Systems. MR. DeLAURA: Lance DeLaura, Southern California Gas Company and San Diego Gas and Electric Company. MR. ANDERSON: Tom Anderson, Electrolux Major Appliances. MR. FERNSTROM: Gary Fernstrom, formerly from and representing Pacific Gas and Electric Company. MR. HOYT: J.B. Hoyt, Whirlpool Corporation. DR. BRUNK: Debra Brunk, Association of Home Appliance Manufacturers. MR. OSANN: Ed Osann, working with Efficiency Advocates together with the Appliance Standards Awareness Project. MR. LITTLE: Derrick Little, General Electric Company. MS. CANO: Michele Cano, Department of Justice. MS. FAIER: Margo Faier, Department of**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 9

Justice. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. LEWIS: Ron Lewis, DOE. MR. WITKOWSKI: Steve Witkowski, DOE. MR. von WENTZEL: Constantin von Wentzel, Navigant Consulting. MS. REICH: Judith Reich, Navigant Consulting. MR. ROSENQUIST: Gregory Rosenquist, Lawrence Berkeley National Laboratory. (Introductions off microphone.) MR. BROOKMAN: Thank you. Thanks to all of you for being here. It’s given us an opportunity to start on time. I’m going to do a very brief agenda review and then we will proceed with the meeting. I think all of you, as Steve mentioned, have a copy of the agenda. You also have the slides that will be the presentation materials today in your packet as well as a copy of the Federal Register Notice. So following this agenda review, we’re going to go immediately through a Rulemaking Overview. Following that overview, there’s an opportunity for each of you that wishes to do so to make a brief statement here at the outset about your concerns, a summary of the issues that are most important for you today.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Following that, we’ll go into Engineering Analysis. We’ll take a break midmorning, around about 11 or so. Following the midmorning break, Energy Use Analysis, Markups for Equipment Price Determination, and Life-Cycle Cost Analysis. Pardon me. We will break for lunch and following lunch, we’ll have the Shipments Analysis and National Impact Analysis, and following that, Trial Standard Levels, Consumer Subgroup Analysis, and Manufacturer Impact Analysis, Utility Impact Analysis, Employment Impact Analysis, Environmental Assessment, Regulatory Impact Analysis. It’s a lot of analysis. We’ll take a midafternoon break around about 2:45 or so. There’s an opportunity at the end of the day to cover any additional issues that you might wish to raise or to double back on an issue that you may not have covered fully during the course of this discussion, and we will close out today around about 3:45-4-4:30 or so with Next Steps and Closing Remarks. So that’s the general plan for today. Questions and comments here at the outset? (No response.) MR. BROOKMAN: I’d ask for your consideration. A few of you are new to these meetings today. Yes, a few of you? Most of us have gotten to**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 use to doing this and we’re getting pretty comfortable with it by now. I’d ask simply that you please speak one at a time. Please say your name each time you speak for the record. Please keep the focus here. If you’d turn your cell phones on silent mode and if you need to have a sidebar conversation for more than about 30 seconds with the person next to you, please take it out of the room. We’ll understand. It’s okay. I’m going to be queuing people by name asbest I can to speak. I also wish to encourage followon comments. As I queue you by name, if you’d just say your name one more time for the record, that would be helpful, and I’m going to ask that you please be concise, share the air time, and we’ll be a lot more efficient as the day goes on. So questions and comments here at the outset before we begin? You didn’t get a chance to introduce yourself. MR. BALLO: I’m Tim Ballo with EarthJustice. MR. BROOKMAN: Thank you. Anybody else did we miss? (No response.) MR. BROOKMAN: Okay. Then let’s proceed. Rulemaking Overview 24 25 MR. WITKOWSKI: Okay. Well, what I will be**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 doing in the next few minutes is giving a brief overview of the process, the purpose of the public meeting and requests for some comments from the participants. The purpose is to invite comment on the Proposed Energy Conservation Standards, TSL-1 for Conventional Cooking Products, TSL-3B for Microwave Ovens, and TSL-3 for Commercial Clothes Washers, and to request recommendations for alternatives, to present methodologies and characterize results for this rulemaking analysis, to discuss specific issues related to each analysis, to seek input from interested parties on methodologies, assumptions, data sources, and results from the analyses, and to describe the next steps, and comments from participants. Participants are invited to provide summary comments or statements. Participants are invited to raise additional issues for discussion today and the NOPR Comment Period closes December 16 th , 2008, and the information for submitting comments is in your handouts. The statute authority is the Energy Policy and Conservation Act, EPCA, as amended, and the Energy Independence and Security Act of 2007, referred to as EISA, amended, to prescribe standards for dishwashers**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and dehumidifiers. Since EISA gives prescriptive standards for these products, DOE is not proposing standards for them. The proposed Notice addresses the requirements of the following under which DOE is required to publish a NOPR addressing energy conservation standards for the products that we’re covering today. I won’t go into the fine print here, but DOE’s report to Congress and the consolidated consent decree are all available on our website. DOE actions on residential cooking products and commercial clothes washers and the test procedures, Final Rule for Residential Cooking Products was published on October 3 rd , 1997, which made several revisions to more accurately measure the efficiency. The Notice of Proposed Rulemaking or NOPR proposing standard -- excuse me -- standby power test methods for microwave ovens was published in the Federal Register on October 17 th , 2008, and the Final Rule for Commercial Clothes Washers, which adopted the EPACT 2005 Amendments to EPCA requiring that commercial clothes washers be rated according to the residential clothes washer test procedure published in October 18 th , 2005, and so on. I don’t think I need to read all the rest of**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the conservation standards. They’re here and you can refer to them in the document and get the details on the website. For those of you who are new to these proceedings, EPCA directs EPA to consider seven factors when setting energy conservation standards and of these seven factors, the first one is the economic impact on consumers and manufacturers and the related analysis is the Life-Cycle Cost Analysis and Manufacturer Impact Analysis. Factor 2, lifetime operating cost savings. The analysis is the Life-Cycle Cost Analysis. 3, total project energy savings, the National Impact Analyses. 4, impact on utility performance, Screening Analysis and an Engineering Analysis. 5, the impact of any lessening of competition is the Manufacturer’s Impact Analysis. 6, need for energy conservation, and that analysis is the National Impact Analysis. And then other factors the Secretary considers relevant and these include the Environmental Assessment, Utility Impact Analysis, and Employment Impact Analysis. Now we move to the selection of the proposed**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 standards and for conventional cooking products, DOE considered four Trial Standard Levels, TSLs, in getting with the most efficient level, TSL-4, and working down to a level where the benefits of potential standards outweighed the burdens. DOE tentatively concludes that at TSL-4, the benefits of energy saving and emissions reductions would be outweighed by the potential multimillion dollar negative net economic cost to the nation, the economic burden on consumers and the large capital conversion cost that could result. DOE also tentatively concludes that at TSL-3 and TSL-2, the benefits of energy savings and emission reductions would still be outweighed by the economic burden on consumers and the adverse impacts on manufacturers. At TSL-1, only amended energy conservation standards consisting of prescriptive requirements to eliminate standing pilots for gas cooktops and gas standard ovens would be promulgated by DOE. DOE tentatively concludes that TSL-1 saves a significant amount of energy and is technologically feasible and economically justified. At this point, DOE requests comments on whether it should adopt TSL-1 or some other mix of**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 6

1 2 3 efficiency levels for conventional cooking product classes. Comments? Comments from Participants 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. BROOKMAN: So let’s take comments right now on that question that you see there at the bottom of Slide Number 6. Who’d like to start? Debra? DR. BRUNK: This is Debra Brunk with AHAM. MR. BROOKMAN: Okay. DR. BRUNK: From AHAM’s perspective, we certainly appreciate the DOE’s efforts to evaluate the different Trial Standard Levels. We recognize the issues and concerns with constantly-burning pilot lights. However, I think our position here is that DOE did not address the potential safety concerns and the technologies that were imposed. We recognize that there are a lot of alternative technologies out there and particularly what we’ll talk a little bit later, I think, probably about the battery-powered smart ignition-type technologies, but I think our concern is that current safety standards, in particular the American National Standard for Household Cooking Gas Appliances, ANSI B.21.1, does not address alternative technologies for igniting gas appliances, and so we**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 have some concerns about how this proposed standard might work in parallel with standards development processes that would need to occur and also we don’t have any sense from this particular standards group on verifiable or viable technology for this particular effort. MR. BROOKMAN: Will you go into greater detail later about the concerns about safety? DR. BRUNK: Yes. MR. BROOKMAN: Okay. Thank you. Other questions or comments here at the outset, especially on the question you see at the bottom of 6? Comment on whether it should adopt TSL-1 or some other mix of efficiency levels for the conventional cooking product classes? Yes, Jim, please. MR. RANFONE: Yeah. Jim Ranfone from the American Gas Association. We also would oppose DOE adopting TSL-1 because not just from the safety issues but we have some trouble understanding the analysis in terms of the completeness, the energy savings and we can go into detail later, but the other issue is when you look at the overall picture of how that exception got -- was adopted into the legislation, it was because of certain**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 8

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 situations where consumers were not -- didn’t have electric outlets in the vicinity of the range. This is a declining market. It’s a replacement market. We think you should still maintain that product as a product class. When we looked at the comments that were in the Federal Register, we saw that DOE did realize and recognize that there are, for example, religious groups that don’t allow electricity or don’t adopt it in their area for whatever reasons, religious, and DOE verified that when they did the analysis. A couple other issues, one of them being the manufacturers’ impact. It looked like there were a couple manufacturers that indicated that they would harmed by adopting this requirement, yet I didn’t see any real follow-up in the Technical Support Document or at least the Federal Register on how that impacted the manufacturers, the small manufacturers. We have some questions on the DOE assumptions on cost, cost of decent systems versus standing pilots, which didn’t seem to jive from what we saw in the field, and the way you presented it, you’re separating it from cooktops, cooktop ovens. When you look at it from ranges, there is the difference in price to the

consumer.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I think you had your manufacturers’ prices down to $37 for combined but when you look at it from a total product, it’s more than that and I think that’s the area you should look at it, the impact on the customers, not on the manufacturers’ costs. So some other issues that we’ll bring up during the discussions, but overall, this is a product that should remain in place. We do question the battery-operated applications, that suddenly DOE is getting involved in appliances which we don’t think is appropriate. If there was product out there, then you should analyze it, but I think saying, well, it can be developed based on some battery-operated ignition systems, we would question that as a valid reason for imposing this level. Also, there’s some comments about it being applied to instantaneous water heaters, some other products. We’re not aware of that. We know there’s some battery-operated systems on, for example, outdoor grills, but I’ve never seen one on a furnace or an instantaneous water heater. So I would suggest you take another look at that before you adopt it as a requirement. You’ve looked at it from the customer, you know, the availability of a product and we don’t think**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that’s correct. MR. BROOKMAN: Thanks, Jim. Other comments about this specific question and then we’ll double back to more opening round kind of comments. Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, Edison Electric Institute. When I looked at the standards for both, you know, gas ovens as well as microwave ovens, it seemed like DOE was taking, you know, different approaches for microwave ovens with maximum standby power. For gas equipment, it was basically a component of the appliance. I think, you know, in DOE -- you know, Federal Government -- I’m going to go back in terms of banning actual products. I do -- I remember back in EPACT 2005 where mercury vapor ballasts were banned from manufacturer import and then people at some point realized that, you know what, it’s one thing to ban it, but then all of a sudden those products were used for medical equipment. So when EISA -- the ban was going to take place January 1 st , 2008. EISA 2007, which was passed in December 2007, basically overturned that ban because of the fact that**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it realized that there were certain applications for this particular product, not using that much energy but just basically there was almost a life safety involved with it. It is used in a certain piece of medical diagnostic equipment. So, you know, on the one hand, you know, it might be, you know, -- it will save energy to ban pilot lights, there’s no question about it, but on the other hand, it -- a total ban -- does restrict flexibility. So DOE might want to consider doing a similar option with gas ovens that they did with microwave ovens in terms of a maximum energy usage in the standby mode, I’ll say, btu per hour, such that there might be some flexibility for the manufacturers rather than banning a component that’s in there right now. Thank you. MR. BROOKMAN: Okay. Thank you. Other comments on this specific question? Gary Fernstrom. MR. FERNSTROM: Gary from PG&E. I have a question and I’m happy to put this off if this is the wrong time to ask it, but I’m wondering if, in DOE’s analysis, the electric glow bar that operates in gas ovens was considered, if the electric energy use of the glow bar was considered. MR. WITKOWSKI: They were considered and I**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 think that a little further on when we get to the actual analysis will be the point that you’ll want to bring them up. These are just for -- we’re just asking for general input at this time. MR. FERNSTROM: Thank you. MR. BROOKMAN: Okay. Thank you, Steve. Ken, do you have a comment? I thought you were ready to comment, Ken. MR. OSANN: Ed Osann. MR. BROOKMAN: Pardon me. Ed, I apologize. MR. OSANN: The Appliance Standards Awareness Project. We are generally supportive of the elimination of the standing pilots. MR. BROOKMAN: Okay. Thank you. So then no additional comments on this specific question. Then you’re finished with your review and I’m going to proceed -- MR. WITKOWSKI: Right, right. MR. BROOKMAN: -- with the opening round. This is an opportunity for anybody that wishes to make general comments, raise issues of concern to you and get those issues on the record here right off at the start this morning. So who would like to start? Phil, please.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. MANTHEI: Yes. Phil Manthei, Alliance Laundry Systems. DOE’s proposed standards for top-loading class commercial clothes washers effectively takes Alliance’s laundry systems out of the marketplace and that hands it to a line from that one, Whirlpool, Maytag. There’s only three manufacturers of residential clothes washers and only two major manufacturers of commercial clothes washers. I want to, as we go through this, say we do agree with some areas of the ANOPR. Obviously we agree that of the two product classes, we agree with DOE’s findings of the adequacy of the test procedure. We agree with DOE’s recognition of relatively flat future shipments. However, obviously because of the Technical documents are not online, we have to trust that. I cannot see a graph yet. Alliance agrees with DOE’s proposed energy standards for front-loading clothes washers. However, there is one point we’d make. Front-loading clothes washers with electric heater has a slightly lower number, 1.96, and basically taking that out. There are places in the northern parts of the United States that to effectively get the hot water you need to clean your**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 clothes, you need a heater. DOE must absolutely reconsider the proposed standard for top-loading clothes washers because of seven things and then I’ll issue what I say is the recommended reasonable standard. It is based on faulty technical rating and when we get to the Engineering portion, we’ll get into that. Based on the GE product that you’ve cited from the California Energy Commission, there are some issues. It will eliminate ALS as a competitor. There is no commercial acceptance of the technology behind the proposed standard. One model does not provide, and it’s only a recent entry, does not provide commercial acceptance in the market. It will result in reducedproduct quality and utility. It will eliminate toploading clothes washers from the market. There is no justification for investment to meet the proposed standard for Alliance Laundry. There will be a detrimental impact on industry and labor force. Alliance Laundry Systems proposes Trial Standard Level 1 as appropriate for top-loading class. That’s an MEF-1.42 and a water factor of 9.5. Number 1, it’s technically and economically feasible. The water factor is consistent with the 2007 Energy**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Independence and Security Act for residential clothes washer minimum standards. Why should commercial clothes washer users be required to use less water than someone in their home? That’s discrimination. It’s not right. I’m sure the new administration under Obama, who’s supporting the middle-class and oppressed, is going to love that. Avoids significant detrimental impact on us, the low-volume manufacturer. Avoids potential unavailability of top-load class of clothes washers. Avoids potential loss of competition. Achieves efficiency improvement, although users get lower wash water temperatures. I think DOE has rushed to judgment. AllianceLaundry Systems is outraged by DOE’s proposed toploading class standard where DOE is the enabler to upsetting the market and competition and loss of apparent utility of the product and literally hands the business, as I said, to Whirlpool and Maytag which certainly has got to be seen as a monopoly, especially when they have 72 percent of the residential clothes washer market and they would end up with about 90 percent in the commercial clothes washer market. Thank you. MR. BROOKMAN: Thank you, Phil. Other**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 comments here at the outset? Gary? MR. FERNSTROM: Gary Fernstrom, Pacific Gas and Electric. I just would like to make the observation that nothing comes for free and in the end, somebody pays. So consumers can pay more for energy to do their laundry or operators can pay more for the equipment in the first place, so that the laundry can be done less expensively. So when we talk about discrimination in certain classes, we’re really talking about who bears the burden of the cost with respect to the initial investment and the operating cost and there seems to be a tendency with industry to look at only the initial investment and to downplay the effect on different classes of society with respect to what they pay for the operating cost. MR. BROOKMAN: Okay. Thank you. Yes, Tim. MR. BALLO: Tim Ballo with EarthJustice. A comment on the commercial clothes washer portion of this rulemaking. DOE, in the NOPR, argued that they don’t have the authority to do a single product class for commercial clothes washers because of 6295.04, which provides that the preponderance of the evidence shows**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that the standard would result in the unavailability in the United States of certain features in a product, DOE can’t adopt that standard. I believe that a preponderance of the evidence does not show that a single standard for all commercial clothes washers would result in the unavailability in the United States of commercial clothes washers that can be accessed from the top. There is a residential clothes washer that can be accessed from the top which I may have missed this, but I believe it’s a horizontal access washer, and the existence of that product goes a long way to show that basically there is a market for -- if there is a market for this feature, accessing the commercial clothes washer from the top, and DOE adopts the single standard for all commercial clothes washers, the market will provide this feature, if there’s any real customer utility for it, because it already exists in a very similar product. MR. BROOKMAN: Okay. Thank you. Debra? DR. BRUNK: Debra Brunk from AHAM. Just a few general comments beyond what we mentioned on the gas ranges or, I guess, cooktops and ovens. Regarding commercial clothes washers, just to reiterate, we are pleased that DOE has defined two**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 8

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 product classes for commercial clothes washers. We believe certainly that makes sense and we also appreciate DOE’s willingness to utilize the current residential clothes washer test procedure. Also, we do appreciate, and I’m sure we’ll get into this a little later, but the estimates of future shipments for commercial clothes washers are much more realistic as published in the Notice of Proposed Rulemaking than in the Advanced Notice which we discussed last year. AHAM does support the water and energy efficiency standards that DOE does propose for the front-loading product class. Second, in regard to microwave ovens, I’ll say very little on that right now, but we do believe as an industry that the standby requirement by 2012 is a bit aggressive and it’s not consistent with the timing in the rest of the world. We do recognize that it does not make sense to put an active energy use standard on microwave ovens, that it does not make sense to roll the standby power use into the active energy use. So we see the need for this path forward. I think one thing that we would like to make sure we put out is that we will be having the microwave**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 oven procedure discussion tomorrow. We do believe that a discussion of Trial Standard Levels in this case are very much in parallel and in concert with the test procedure definitions and those -- they’re linked. So it may be a little bit difficult to discuss today the Trial Standard Levels. MR. BROOKMAN: Thank you. J.B. MR. HOYT: J.B. Hoyt, Whirlpool Corporation. At the risk of repeating a little bit of what’s been said, we certainly appreciate the department’s designation of two classes for commercial clothes washers. There are significant differences in both consumer and purchaser utility between the classes and that’s now been recognized. At the risk of disagreeing with a fellow manufacturer, we do feel that the proposed levels are viable by 2012 in both top-load and front-load class and I realize that’s a position that is -- there’s not consistency within the industry. Also as Debra said, the forecast going forward is much more realistic and consistent with our own views of the industry. In traditional conventional cooking products, we are intellectually and from a sales and marketing standpoint comfortable with the proposal to eliminate**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 3 0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 standing pilot lights in gas products, but there are significant safety issues that we feel have been overlooked in the analysis. In point of summary, the spark igniters that work effectively in the gas grill have a very wide margin of safety because those products are used outdoors and if there’s a gas leak because the unit fails to ignite, that gas is likely to be disbursed. Indoors, in the event that the igniter fails or the battery dies, there’s a tremendous opportunity for either someone to be overcome by the gas or for explosion. So we think that’s an issue. As for the standard levels for other products, we agree with the standard to remain in place. In terms of microwave ovens, while it’s arithmetically possible to combine an operating and a standby power into one calculation, it’s illogical to do so, so we concur with that. We are concerned about the definitions used in microwave ovens. We can expand on that later. We’re concerned about the timing. Microwave ovens, unlike most of our products, really are ubiquitous. They are very similar products around the globe. There’s an opportunity to leverage technology and**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 3 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 timing and combined, any changes in U.S. policy with changes in policy around the world, that would be significantly advantageous to us as manufacturers. A couple other comments. This applies to both microwave ovens -- applies more to conventional cooking than microwaves. In the area of display types, the displays that are used in a lot of conventional cooking products, VFD displays, are necessary because of the high heat applications in there and those do consume more energy. So as we look at -- I know there’s not been a proposed test procedure yet for conventional cooking standby power. I know the department wants to gather data on that. We would urge that that data-gathering happen or be initiated soon. Unlike other products, the dishwasher and clothes washer, we have a lot of experience with energy and we have a lot of data available that we can provide the department. In cooking, we don’t. We’ve not dealt with it. So this is going to be plowing new ground for us as manufacturers as well as for the department and we would ask that you get that request to us promptly and allow adequate time for us to develop that data because this is going to be starting from scratch. Things like VFDs or alternatives to VFDs, I**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 3 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 should say, in high heat applications will be an issue for us. MR. BROOKMAN: Thank you. Yes, please. Please say your name for the record. MS. KLINE: Hi. This is Kelley Kline from GE. First of all, we’d like to support AHAM’s comment that it made regarding the standing -- the burning pilot light and would just like to amplify the point regarding the consumer utility that they provide for customers without line power for economic, religious or other reasons. We’d also like to support AHAM’s comments as they relate to microwave ovens. In terms of the commercial clothes washer standard, we do support DOE’s proposal to have two product classes. However, our -- we cannot support and do not agree with the proposed standard levels for the top-load product class. We share Alliance’s concern about the competitive effects in the marketplace for adopting those standards and have a fear that the adoption of the standards or the proposed levels would essentially regulate that product class out of the marketplace. So we would like to amplify Alliance’s point on that**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 3 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 position. MR. BROOKMAN: And would you say what standard level you’d like to see? MS. KLINE: We agree with what Alliance had proposed. MR. BROOKMAN: Okay. Thank you. Other comments here at the outset? I think it’s very helpful for the department not only to hear what you don’t like but to hear, as you’ve started to do, what you concur with, what you agree with. So thanks to all of you that have offered that kind of comment, in addition to your critique. I think that’s helpful for the department and for the rulemaking. Ed? MR. OSANN: Ed Osann, Appliance Standards Awareness Project. I will start out with a compliment for the department. We do commend the department for the proposal on one-watt standby for microwave ovens and we appreciate the willingness to pull forward on the development of the test procedure rather than deferring to the latest permissible development of that test procedure under the law, which would be 2011, so that the potential savings for standby power reduction can be captured in this round of the rulemaking for cooking**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 3 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 products. We had recommended that course in the framework in the NOPR stage and we appreciate that DOE has moved in that direction. We do take issue with several aspects of the proposal for commercial clothes washers. We believe that the division of the product category into two product classes was not required under the law. DOE, having made the distinction of the two classes, the TSLs for the two classes did not track and ignored the benchmarks, industry benchmarks, such as occur in the proposed Energy Star levels and federal tax incentive performance levels that had been pending for -- throughout most of this Congress and were widely anticipated within the industry. The technology screening appears to be somewhat flawed by ignoring combinations that are now in commercial production in residential market. It almost seems as though DOE wants to have the argument both ways with regard to the small manufacturer considerations, that when considering the economic position of one commercial product manufacturer and in the description of the general market relationships, the combination of the residential and commercial markets is cited by DOE as providing tremendous**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 3 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 advantages in part due to R&D and product innovation and product development, the availability of the residential market and residential platforms for that purpose, but then when evaluating specific technologies, the innovations that are already on the market in the residential sector are apparently not given serious consideration in the commercial product rulemaking, and there’s something about that lack of symmetry that’s troubling. There seems to be also a lack of substantiation, either data or analysis, regarding the potential recapture of market share, concern that DOE expressed in terms of -- in support of reducing the proposed standard for front-loading clothes washers from the level that would maximize life-cycle cost savings to something less than that due to concern about the recapture of market share by less efficient top-loading washers. It’s unclear whether there’s really any analysis to support that. It seems as though -- I mean step back from the details. It seems as though there’s sort of a -- some kind of perfect storm at work here. The previous analyses leading up to the NOPR clearly indicated that there are tremendous life-cycle cost savings presented by high-efficiency clothes**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 3 6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 washers and those are available to all sectors of the market and yet for what appears to be a lack of a relatively small amount of capital, recognizing that amount of capital is significant for one of the actors in this marketplace, but apparently for lack of a relatively small amount of capital, hundreds of millions of dollars of consumer savings are going to be foregone and there’s got to be a way of squaring the circle somewhat before we end this regulatory process. MR. BROOKMAN: Okay. Thank you. Other comments here at the outset before we go into a more detailed presentation on the content listed in the agenda? (No response.) MR. BROOKMAN: Okay. Then let’s proceed. MR. WITKOWSKI: Okay. We sort of skipped some slides, 7 through 10, but they’ve been covered in the comments, so we can go into the detailed analysis

now. MR. BROOKMAN: Let’s pause just for a moment. Let’s do please look at Slides 7 through 10. MR. WITKOWSKI: These are the actual TSLs for the commercial clothes washers. MR. BROOKMAN: Right. This is an opportunity for any additional comments on those slides. I wasn’t**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 3 7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 aware that you were going to skip those. Yes, Ed Osann. MR. OSANN: Yes, Ed Osann. I did have one more general comment. Steve had referred to the fact that the Technical Support Document would be posted some time later this week. I would just like to note that it hasn’t been widely available. I appreciate the effort of DOE staff to make it available to me, but I do want to observe at this point the possibility that we will be requesting and welcome others in joining the request to extend the deadline for written comments, if the TSD is not promptly available this week. MR. WITKOWSKI: It’s available directly from me immediately and I, as I said, fully expect it to be available online by Wednesday of next week, but as I’ve told -- as I mentioned to several of you, if you want it now, I will get you an electronic copy and as I have for Ed. MR. BROOKMAN: Yes, Gary Fernstrom. MR. FERNSTROM: Doug, I’m sure everyone is aware, but I’d just like to note that so far as PG&E in California are concerned, we believe that because of the preciousness of water in California and the embodied energy in it, that a higher standard for**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 3 8

1 2 3 4 5 6 7 8 9 10 11 12 commercial clothes washers is merited. California petitioned the Department of Energy to have an exemption from the federal standard for that product. That was subsequently denied and California has taken that to court. MR. BROOKMAN: Okay. Thank you for that reminder. So additional comments then as we go through Slide 7, 8, 9 and 10 before we move on to more detailed presentations? (No response.) MR. BROOKMAN: Okay. Let’s proceed then. Engineering Analysis 13 14 15 16 17 18 19 20 21 22 23 24 25 MS. REICH: Good morning, everybody. This is Judith Reich from Navigant Consulting. Let’s see. I’m going to skip ahead here. As we’re going to go through the presentation, we will identify a number of issues that were brought up in the NOPR on which DOE is seeking comment and these are listed out. I won’t go through them right now, but each one of these will be addressed and you’ll be provided an opportunity to comment on them. So I believe we have -- up to this point. I’m going to be leading off the discussion of the**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 3 9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 individual analyses that were conducted as part of the NOPR phase. This nice graphic shows a flow chart of what the analyses are and the order in which they are conducted. You’ll notice that some of them are the same as were conducted in the ANOPR phase but have been updated based on comments and input from stakeholders that DOE received as a result of the ANOPR and some of these are new and specific just to the NORP. What we’re going to present is primarily those issues that were just shown on which DOE is looking for input but also key results of analyses that are new to this phase. You’ll also be provided an opportunity to comment on other issues in any area as they arise. If you wish to find out any more information on these, I’ll refer you to the NOPR and hopefully the TSD when that’s made available. The first stage in the analyses that DOE performs is the Engineering Analysis and in the NOPR, this was an update of the Engineering Analysis from the ANOPR stage, based on again the inputs that were received and also there was some additional work that was performed as a result of the Energy Independence and Security Act, the EISA, which resulted in DOE**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 4 0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 adding the analysis for microwave ovens standby power. Now, the requirement of EISA was that the microwave oven and other covered products would not need to consider standby power, incorporating that into the energy conservation metric, if the final rule was published after July 2010, but for the purposes of this rulemaking, DOE decided to accelerate the analysis for microwave ovens and to include it in this because it determined that standby power is a significant fraction of energy use for microwave ovens and because of opportunities among the products that are currently on the market to reduce standby power. So it is including microwave oven standby power and also is conducting the concurrent test procedure rulemaking, so that will be available at the same time. The purpose of the Engineering Analysis fundamentally is to define what the relationship is between incremental improvements in energy efficiency over a baseline product and to associate the costs with those incremental improvements. All of the product classes from the ANOPR were analyzed which includes conventional and microwave oven energy factor and commercial clothes washers and it also added in microwave oven standby power.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 4 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Two different fundamental approaches can be taken in determining the cost efficiency relationship and they are -- the choice of which to use is a function of the fundamental characteristics of the product and also what’s available on the market. So for all cooking products, the design option approach was taken in which specific technologies or strategies that manufacturers may take to improve efficiency are evaluated and the costs associated with each of them and then are incrementally layered to see what would happen or what would be required to achieve higher efficiency levels. With general stakeholder agreement from the ANOPR, DOE determined that it was a viable approach to take the cost-efficiency curves that were generated in the 1996 analysis and update them, update the costs, recognizing that technologies are not that different from what they were at the time. So that the efficiency levels would remain the same but that the costs would be scaled by the Producer Price Index. For standby power for microwave ovens, again a design option approach was taken and in this case, DOE determined through some reverse engineering and analysis what that relationship would be between incremental reductions in standby power and the**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 4 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 manufacturing costs. A different approach was taken for commercial clothes washers, based on the fact that there are a wide range of efficiencies among units available on the market which could be associated with specific efficiency levels that were defined, and at the ANOPR stage, the industry supplied the cost information at two of the efficiency levels above baseline and DOE then performed some analysis to extend the cost, create the cost-efficiency curve. When we moved to the NOPR phase and the determination was made to have two product classes for commercial clothes washers, DOE again performed analysis and spoke further with manufacturers to be able to extend the existing data points for the two cost-efficiency curves. MR. OSANN: Question. MR. BROOKMAN: Please, Ed. MR. OSANN: Ed Osann. So is the upshot here that for the Engineering Analysis for commercial clothes washers, you did not take a design option approach? MS. REICH: That’s right. MR. OSANN: You did not assemble representative types of technologies. Then the**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 4 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 technology screening apparently had no purpose? MS. REICH: Well, the evaluation of technologies supplemented that efficiency level approach. DOE did perform some limited evaluation of specific technologies at different levels, but it was primarily the efficiency level approach. MR. OSANN: And did the efficiency level approach extend to clothes washers generally or was it limited to commercial clothes washers? MS. REICH: Well, commercial clothes washers in this rulemaking. Okay. That brings us to the first issue which DOE has identified and which we’ve already had a number of comments on, which is for the efficiency levels were defined for conventional gas cooking products, the first efficiency level is associated with the elimination of standing pilot ignition systems, and it should be noted that there currently is a prescriptive standard that preclude standing pilots on certain gas cooking products, namely those that are already equipped with electrical power cords which ineffect means gas self-cleaning ovens, but that the TSL1 that is the proposed standard would in fact eliminate standing pilots in all gas cooking product classes. When it was reviewing technologies, DOE**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 4 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 identified that there are battery-powered ignition systems that are used in other products and which could be incorporated into cooking products for households in which there’s no line power available in the kitchen and these systems are being used in instantaneous gas water heaters or outdoor grills and furnaces. When we reviewed ANSI Z21.1, it did appear that such systems would -- that these battery-powered systems would meet the requirements of -- the safety requirements of that standard, but at this point, wecertainly invite comment on the viability of batterypowered spark ignition modules as an alternative to standing pilot ignition systems. MR. BROOKMAN: Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. I think the concept is -- it sounds great, but I think, along with other products, I’m just wondering, are there any commercially-available products that have such a system right now? MS. REICH: Yes, yes. MR. ROSENSTOCK: There are? MS. REICH: Yes, there are. MR. ROSENSTOCK: Okay. Indoor gas cooktops. There are products that -- MS. REICH: Oh, gas cooking products?**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 4 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. ROSENSTOCK: The gas cooking products, like ranges or gas cooktops. MR. BROOKMAN: Indoor, you said? MR. ROSENSTOCK: Indoor. MS. REICH: Indoor. MR. ROSENSTOCK: Yeah. MS. REICH: Not known at this point. What DOE did was look at other products that are indoor residential products. MR. BROOKMAN: Jim, Jim Ranfone. MR. RANFONE: Jim Ranfone, American Gas Association. Can you identify which ignition systems for us are a battery-powered system that’s used on a furnace or will you? Possibly not now but afterwards, because I’m not aware of a battery-powered ignition system that’s available on a furnace or an instantaneous gas water heater. MS. REICH: Okay. MR. RANFONE: Secondly, it seems that if it’s not viable to go with a battery-operated system on a range for a number of reasons, cost, safety, people replacing batteries or, you know, not having a battery and suddenly starting to match light their equipment which is something we don’t want them to do or possibly**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 4 6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 if they have a -- don’t have a pilot light and then they start using extension cords and we don’t really want that to happen. So there’s some other safety issues besides the reset of the gas. It seems like DOE is saying, well, if this doesn’t work, if this isn’t a viable solution to eliminating standing pilots, then, well, that’s okay, we’re still going to eliminate standing pilots. It seems like that’s what you’re saying. Here’s your out, that if you’ve got these systems and all you have to do is apply it and you’ll still have a range or a cooktop or an oven that doesn’t require electric supply, but if it turns out that that’s not a viable solution, which I think, you know, I would say to you, if you don’t have a product on the market,there’s a reason for it. If you don’t have a batteryoperated cooking piece of equipment with an ignition on a piece of cooking equipment, there’s a reason for it, a lot of reasons. It may not be economics. It may be safety. I think some of the other comments have said that. So I would caution you, you know, before you say, well, we can do this with a system that’s not available in a current product, that you really take a**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 4 7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 look at it hard line because you may wind up with an unintended consequence. MR. BROOKMAN: Yes, Lance. MR. DeLAURA: This is Lance DeLaura with Sempra Utilities. I share the concern of AGA relative to the safety. I have this vision of our six million customers, especially the low-income customers, not understanding the issue of replacing a battery and doing what Jim just talked about, not only with a match but with a lit piece of paper or a lit paper towel and having unintended consequence. MR. BROOKMAN: So would you be specific? What would you recommend the department do with this? MR. DeLAURA: I’d like to see the department have a better understanding of what the available technology is. I mean, I think the same thing that Jim said. We’re hearing that there is a technology for water heaters and furnaces for battery operation. I’m not aware of that either. I’d like to understand that better. MR. BROOKMAN: They should do more -- they should dig further and do more, find out what’s outthere. Would you comment on the viability of batterypowered spark ignition modules?**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 4 8

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. DeLAURA: I don’t have enough information on that, especially as it relates to cooking. I can’t say more. MR. BROOKMAN: Okay. Please say your name. MR. JOHNSON: Chris Johnson, LG Electronics. I was just wondering if DOE looked at products available in other parts of the world or did you just focus on technologies of gas cooking products that are sold in the U.S. or energy -- if you did not look at other technologies and other products available in other parts of the world, why not? MS. REICH: Oh, we did consider technologies that were available elsewhere, yes. MR. BROOKMAN: Gary, please. MR. FERNSTROM: Gary Fernstrom with PG&E. I’d just like to follow Lance DeLaura’s comments and agree that we can’t compromise safety. If it’s a matter of economy, you know, I think frequently the initial cost is weighted too much relative to the operating cost. However, I’d like to be confident that technology is being considered. MR. BROOKMAN: I think the department would, given their tight time frame for all of this, would really like as much comment on the viability of it from what you know now as possible. So if there is the**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 4 9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 possibility for doing that. Constantin, and then I’m coming back to you, Debra. MR. von WENTZEL: I just wanted to mention -- MR. BROOKMAN: Say your name for the record. MR. von WENTZEL: Constantin von Wentzel, Navigant Consulting. I just wanted to state for the record that we noted an instantaneous gas water heater that was running on four D cell batteries, so that was a complete ignition system that was battery-powered, and we also noted commercial availability of a thin-wall gas furnace ignition system that’s also based on batteries. MR. BROOKMAN: Thank you. Debra. DR. BRUNK: Debra Brunk with AHAM. I think I’ll just reiterate a little bit of what I had said in my opening comments. I think the industry appreciates where DOE is at on this. We appreciate that there is energy to be saved by banning constant burning pilots -- however, we are concerned that at this point, the technologies out there are not viable on safety. DOE has identified the battery-powered spark ignition as a potential technology and we recognize**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 5 0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that as a potential technology. However, again there are safety concerns and we don’t see that there are other viable technologies out there at this time. In terms of the -- specifically for the battery-powered spark ignition, we talked about the big outdoor grills. There are concerns about moving that indoors in terms of gas leakage and also reliability. We talked about consumers lighting manually those kind of things. We would be very concerned about that. We mentioned the NDU 21.1 which again is very specific to gas ranges and cooktops. It does address battery-powered spark ignition which might be considered a cooktop. However, it does not address for unattended lights which could be in the range or in the oven, however you want to describe that unit. So that is not currently addressed by that standard. I think again this is something that we continue to discuss. I think it’s a relatively small market at this point. I think that this rulemaking, AHAM’s suggestion would be that there would be standards that would be effective for both electric and gas on conventional cooking products, but I think perhaps what, you know, we as an industry would need to do is take a look at this gas standard and see how, in particular, our battery-powered spark ignition module**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 5 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 could be incorporated for gas cooking products and I just -- I feel knowing how standards development works, the timeline would not be consistent with this rulemaking. MR. BROOKMAN: Thank you. Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. I made these comments during the ANOPR stage. I did see where DOE did reverse engineering and a lot of analysis of microwave ovens and standby power and looking at different models and what the actual standby was and different features and the standby mode was, and I had suggested that why not look at that for gas equipment as well because, you know, maybe there are ranges and there are different technologies that currently exist where, let’s say, one type of oven has, you know, 200 btus per hour on standby, another one is at 100 btus per hour, and maybe there would be a performance way of looking at it for gas products as well as what you’re doing with electric products. I guess at this point, there’s no time. We never really kind of saw any information about why DOE did not look at standby energy use of the gas products, but I think there are legitimate concerns about a total ban and I don’t know if it’s too late to do it, but again you might want to look at some sort of a**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 5 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 performance approach, I’ll say btus per hour approach, on standing pilot lights rather than just a complete ban for many reasons as suggested here. There might not be as many -- as much energy savings but the energy savings still could be rather significant. Thank you. MR. BROOKMAN: Thank you. Additional comments on this query from the department? (No response.) MR. BROOKMAN: Okay. MS. REICH: All right. The next half dozen or so slides relate to the analysis for the microwave ovens for standby power and again this was introduced because of both the potential for energy savings and the introduction or the signing of EISA in December 2007, and specifically EISA requires that standby and off-mode power be incorporated into the energy descriptor for a covered product, unless it is technically infeasible, and in that case, it requires a separate standby power metric, unless that, too, is technically infeasible. So DOE first examined the existing efficiency descriptor for microwave ovens to see whether it would be feasible to incorporate in standby power. AHAM had**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 5 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 supplied DOE data from 21 microwave ovens and DOE also supplemented that test data with its own data from a sample of 32 microwave ovens and that combined sample showed that there was no correlation between cooking efficiency which for microwave ovens is equivalent to energy factor and any feature that DOE could identify which includes output power or cavity size. DOE also noted that among tests that were conducted on an individual unit which -- whose results would be averaged to define the efficiency, that there was a significant variability from test to test and that variability could be as high as several percentage points which is significant when you compare it to the total range of efficiencies measured in the sample which ranged from 55 to 62 percent. DOE further examined what the -- whether it would be meaningful to combine this energy factor or cooking efficiency with a standby and off-mode energy consumption and what is apparent is that an energy factor which is measured by a test that only lasts a few tenths of seconds, trying to combine that with a standby measurement that’s made over many hours is not a representative measurement. It is not the efficiency of the cooking process and it’s not truly representative of the performance of the microwave oven**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 5 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 over the extended period of time that’s associated with standby. So while it is mathematically possible to add those two together, it’s not a meaningful measurement and the -- or a meaningful metric and that is inherent in the requirements of EISA, that such meaningfulness. So DOE determined that by trying to put these two very disparate measures together, it would produce a metric that would not be appropriate and it is technically infeasible to do and therefore DOE is proposing a separate prescriptive standby power requirement. So DOE invites comment on this preliminary determination of technical infeasibility of incorporating microwave oven cooking efficiency with standby mode and off-mode power into a single metric. MR. BROOKMAN: Ken? Pardon me. Ed? MR. OSANN: Ed Osann, Appliance Standards Awareness Project. We support this initial determination for the reasons stated. The analysis does, however, highlight problems with the microwave test procedure itself and I’m left to wonder what plans DOE might have to sort of get to the heart of the problem with the microwave test procedure, the wide variation results, that sort of**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 5 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 thing. MS. REICH: Mm-hmm. Well, DOE is aware that this is an issue that other organizations and manufacturers are looking at. DOE does not plan at this time to update the test procedure for measuring cooking efficiency but recognizes the limitations of it. For example, DOE received comments that the load that is specified, a water load, is not representative of actual food that would be cooked or heated in the microwave oven but that at this time, it’s not known how a more representative food load could be specified that would produce accurate and repeatable results. SO again, DOE is aware of that and is aware that this is an issue that is being looked at but is not planning to do -- to incorporate any changes to the efficiency portion of the test procedure at this point. MR. BROOKMAN: Debra. DR. BRUNK: Debra Brunk with the Association of Appliance Manufacturers. I would just like to say that I think DOE did a very good job in the ANOPR on working through this topic and just going through step by step in terms of everything that you considered. I think it’s a good**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 5 6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 analysis. As far as what Whirlpool said earlier, I think we do think it is technically feasible. I think we’re talking about semantics here, but it is not practical and we do agree with DOE on their analysis here. MR. BROOKMAN: Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. I would agree with the AHAM comments, although on a bigger picture, I have to say now and again, this is because of federal law now. Now, a lot of products are going to have two efficiency test procedures and two efficiency standards and with DOE’s workload on all the products that have to be done by 2012, and again this is again the direct result of EISA 2007, not exactly streamlining it, could actually double the work that might be needed for DOE when you think about it per product, unfortunately, and I agree that they are kind of separate issues and could need separate standards, but again, unfortunately, we’re going down a road where two test procedures, two efficiency standards for a single product. MR. BROOKMAN: Thank you. Debra. DR. BRUNK: Debra Brunk from AHAM. I just want to follow up on Steve’s point.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 5 7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 We support DOE’s work on this particular product. I think EISA 2007 was very clear that, when feasible, the standby power would be incorporated into the active energy use and I think most products that certainly we are familiar with in our association, most of those would roll the standby power into the active energy use. So I’m hoping that there will be multiple procedures that come up here. MR. BROOKMAN: Thank you. Additional comments on this question that you see at the bottom of Slide 19? (No response.) MR. BROOKMAN: Okay. MS. REICH: Okay. Well, in addition to standby power, EISA requires off-mode power to be considered and so, first, it’s instructive to determine what exactly off-mode means. Not shown here is active mode and active mode for a microwave oven is when a unit is plugged in and it has the magnetron or potentially thermal elements energized for the purposes of heating or cooking or defrosting the load. Standby mode is defined by the EISA Amendments to EPCA as the condition in which the product is connected to the main power source and it**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 5 8

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 specifies the functions that would be associated with standby mode. Specifically, there would be -- it would be in standby mode if there were energy-consuming components that were required to activate or deactivate other modes and this would be, for example, having a remote control or a sensor that would detect a user action and perhaps bring it up from a powered down state. Standby mode would also cover the situation where there are continuous functions consuming power, such as a clock display on the microwave oven or a sensor-based function which in this case would mean primarily a cooking sensor. In contrast, the off-mode would still be a situation where the unit was plugged in and consuming power but it’s not power that’s associated with any standby mode or active mode function and in the case of microwave ovens, DOE would assume that a microwave oven that has electromechanical controls and no display but perhaps drawing power for something like a power supply would be considered to be operating in off-mode. However, through research and observations ofthe units that it sampled, DOE did not observe any offmode capability among any units that it could define as**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 5 9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 currently available in the United States. It appears that there are no longer microwave ovens available with electromechanical controls, with no displays. So DOE would invite comments on and perhaps any input or data that anybody may have on microwave ovens which may consume power in the off-mode. MR. BROOKMAN: Debra? DR. BRUNK: I’m Debra Brunk with AHAM. I think this gets a little bit into our concern I mentioned earlier about definitions and those kind of things. But I think it’s very helpful to look at the work that the world has done, particularly Europe, in defining or trying to clarify off-mode. I think one of the things that we feel is important to look at is we’re moving into a new realm here for looking at standby power, manufacturers looking at how to meet the requirements for standby power, and I think looking at products that are available now may not be necessarily applicable to the future. For example, you mentioned the no electromechanical controls but perhaps we have to go back and look at that direction in order to meet standby requirements. So I think looking at the definitions that**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 6 0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 are in the drafts of IUC 6301 and also in the European Directive that was published in June of this year could be helpful. There are a number of examples there that are put forward. One of them might be an LED or some other indication even that the unit is simply off-mode. It hasn’t completely -- you know, it is still working. Again that’s something that is not in use now because there’s not a need for it, but as we move into standby power, things like that may become more, I won’t say necessary but it’s a different type of product and there will have to be ways the product can communicate to the consumer that it is still working, but I won’t use the word “on,” based on the definitions here, but it is still plugged in. Let’s put it that way. So again, I think a lot of our comments around microwave ovens, we will be looking at Europeand what Europe is doing and we feel that they’re offmode definitions and examples are realistic as we move forward. MR. BROOKMAN: Ron Lewis. MR. LEWIS: I just want to note that many of the items, like definitions, are given to us by Congress and we don’t have the authority to say we prefer somebody else’s definition. That’s not an**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 6 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 option to us. So I just want to point that out, that as we’re looking for solutions and trying to find solutions, we have certain flexibilities and other things we don’t. The same thing with -- there are several good suggestions being made this morning where we have time limits that are prescribed either by Congress or being overseen by a court that don’t allow us a whole lot of extra time to go out and analyze new things that haven’t been analyzed. So I just wanted to point those out, that as we’re trying to find resolution and come up with the best that we can do, there are certain constraints and it’s not necessarily because we don’t appreciate the input or the desire to bring things together but we have limited flexibilities. MR. BROOKMAN: Debra, follow-on. DR. BRUNK: Yes, we recognize that. I think we’re looking at EISA 2007. Those definitions were literally taken from the 16301 draft, and I think maybe we’re working -- those definition changes as opposed to I think there is opportunity to perhaps clarify or guidelines that might be helpful to this. MR. BROOKMAN: J.B., follow-on. MR. HOYT: J.B. Hoyt, Whirlpool. Agreed, and**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 6 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 having been involved in the construction of that language, Ron, your point is well taken, but again I think the work done by IEC since that time takes these definitions to a much higher level and an opportunity for clarification or extension of these definitions is something that the department needs to seriously consider. I had a second point which now has suddenly escaped me. I apologize. MR. BROOKMAN: That’s okay. We’ll return to it. Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. In terms of the odd-mode, kind of following up especially on what Debra said, -- MR. BROOKMAN: Hey, Steve. Ron wanted to follow up. Let me follow on and I’ll return to you. MR. ROSENSTOCK: Sure. MR. BROOKMAN: Ron Lewis. MR. LEWIS: Just in the continuation of the constraints and the flexibilities, et. cetera, one of the things that EISA 2007 also prescribed was a general blanket directive for us to update standards and test procedures on a given cycle, time cycle, six years, I think, was for standards, seven years for test**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 6 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 procedures, we’re required to update them and no longer period of time than that. So looking at right now, as you’re well aware, as most of the people have been coming to all these meetings are aware, in the last three years, we’ve gone like in order of magnitude up in the activity level. We’re probably doing 12 times the work right now that we were doing three years ago, getting stuff out of here. So this ramp-up in trying to catch up with all the requirements we have right now has been an incredible effort, trying to look down the road at where those opportunities are and it may be the next cycle to update that you were talking about the microwave oven test procedure on looking at the ways to improve that. We wholeheartedly want to improve things and we want to internationally, where it makes sense, try to include the best thought that we can, but it may not be right now with all these constraints that we have possible to absorb it into this update, but we want to move forward and get early input from everybody of what is going on and start that dialogue and start that sharing of information, look at what we can do as we move forward. So it’s not like a dead issue or this is a once and forever kind of conclusion.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 6 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. BROOKMAN: J.B. MR. HOYT: J.B. Hoyt, Whirlpool. Thank you, Ron. You actually reminded me of what my second comment was, and I recognize the department’s workload. It has had a similar impact on us as manufacturers, as you might imagine, and I share your opinion. But given that pressure, which we mutually face, if we’re not able to, we collectively, the department and industry, go as far as we’d like to in an analysis, that may preclude us going as far as we’d like to in terms of standards or standards levels because indeed we still have the responsibility of making sure the product is useful by the consumer and we really have to make sure that we don’t preclude that and if that means we have to delay something until the next round, that would be unfortunate but if that’s what the time pressures dictate, I think we have to recognize that. MR. BROOKMAN: Thank you. Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. Kind of circling back to the off-power mode, I just kind of thought that, you know, it’s kind of the law of unintended consequences where if a response, for example, is, okay, there’s no clock and it’s just crank time or, you know, not electronic time, it’s just, you**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 6 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 know, mechanical timer and no clocks, there’s a utility issue with the product and especially thinking about, you know, senior citizens, might be not as easy for them to use a product. You know, it’s going to save energy but there will be a utility issue and how you measure that and how you quantify that into dollar modes, I’m not sure, but again there are sometimes, you know, -- there’s thinking out of the box a little bit, thinking about the utility as well with some of these. You know, what does this lead to as we go down this road, just to think about. Thank you. MR. BROOKMAN: Ed Osann. MR. OSANN: Yeah. Ed Osann. Two points. One, lest we drift too far here, I’d just observe that the language of all of these definitions was reviewed by AHAM, agreed to by AHAM, and jointly recommended by AHAM and efficiency advocates to the Congress. So we have the definitions to work with that were recommended by stakeholders. Secondly, this may fall between this slide and the next one, but the department’s proposed a prescriptive standard for standing pilot lights. Is there anything in the law that would prevent a**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 6 6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 prescriptive standard for microwaves? I mean, you have the authority to propose and adopt a prescriptive standard of some sort, do you not? MR. LEWIS: We’d have to check. MR. BROOKMAN: Thank you, Ron Lewis. The department would have to check. Okay. J.B. MR. HOYT: J.B. Hoyt, Whirlpool again. Back to this off-mode debate, if indeed the standby power regulation requires a change in our product, and we’re suggesting that that might in terms of either the nature of the display or the visibility of the display, that would be a fundamental change in the way the consumer uses the product. That’s not to say that’s good or bad, it’s just different, and indeed one of our concerns is that that would cause consumer complaints, probably erroneous complaints. If my display dims or my display goes away, for example, as a consumer, I’m used to seeing that clock on all the time, I’m going to call Whirlpool and say, hey, my product has died, and it’s going to require consumer education on our part and may require unnecessary service calls to which there is an expense. Obviously to overcome that, you have to do more to educate the consumer. I just want to point out that the marketing**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 6 7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 costs we submitted to the department way back in the ANOPR phase did not include the cost of such a possibility because we did not foresee it at that point in time and I believe that’s true for the industry, although I would have to confirm that. So this is a fundamental change. There will clearly be some additional costs to the industry. MR. BROOKMAN: Okay. Thank you. Ed Osann. MR. OSANN: Ed Osann. Was an on/off switch considered as a design option? MS. REICH: An on/off switch would not be -- if it were in the off position, would not be -- fall under the definition of off-mode because effectively that disconnects the microwave from power. So it’s not covered under standby and off-mode definitions. MR. BROOKMAN: So that was Judith. MR. OSANN: It was not considered? It was considered and rejected or it was not considered? MS. REICH: Well, it’s not considered to be a standby power or off-mode design option. MR. OSANN: Okay. I guess I’m puzzled by the determination that it would not be considered a design option for standby. MS. REICH: Well, because if the switch were**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 6 8

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in the off position, there’s no standby power consumption and it is an entirely separate situation. It’s not in standby mode, it’s not in off-mode, according to the EISA definition. MR. BROOKMAN: Additional comments before we move on here? (No response.) MR. BROOKMAN: Okay. Judith. MS. REICH: Well, this perhaps follows up on some of the comments we just heard about utility of different features that contribute to standby power in the microwave oven. DOE identified three areas which largely contribute to the level of standby power consumption. The first is the presence of a cooking sensor and the type of cooking sensor. These are typically humidity or steam or gas sensors that generally have a heated sensing element and so in order to provide this resistive heating, they consume on the order of one to two watts. Additionally, this element requires usually several minutes to warm up which, of course, is in some cases, in many cases, longer than the active mode, the cooking operation that a user would want to perform. But DOE has identified several types of**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 6 9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 cooking sensors that consume no power in standby mode. Some of these are currently in use and some of them are being developed for use. These include an absolute humidity sensor, an electric steam sensor, and there’s at least one design which DOE believes that will have zero incremental manufacturing cost to implement and which is being developed by suppliers specifically for microwave oven applications. On the display side, there are several technologies which can be utilized and they may be selected on the basis of features, such as brightness, color, viewing angle, whether it can be seen at night, whether it has the ability to display complex characters, and so the primary traces are an LED display, liquid crystal display which may or may not have back lighting which would eliminate the need to have ambient lighting to see it, and vacuum fluorescent displays which generally have the highest energy consumption. And then, finally, in the area which also affects standby power, are the choice of power supplies and their associated control boards. There are several opportunities for reducing standby power among these. The first would be to upgrade the materials or design to just have a standard power supply, a conventional**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 7 0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 one, but with higher grade components so that the energy consumption is reduced. The second alternative might be to specify components that the power supply supplies power to to be smaller or lower power draw so that the power supply itself can be made smaller, and the third would be how to change from a commercial power supply to a standby power supply, where instead of regulating the output power by dissipating it through a transistor, that the transistor would actually be switched on and off at a duty cycle that’s appropriate to maintain steady output power. DOE invites comments on these and any input and data on what unique utility is provided by each of these features and particularly display technologies and cooking sensors that do not require standby power. MR. BROOKMAN: Debra. DR. BRUNK: Debra Brunk with AHAM. Regarding the cooking sensors, I mentioned this in our previous comments. We do feel that this is a very important piece of microwave ovens in terms of their performance. It really is not realistic to have a sensor on a product and then have the consumer wait several minutes for it to warm up in order for it to do its job. I think the fact that there are cooking**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 7 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 sensors out there that do not require standby power is excellent. However, I think that there’s a couple concerns that we have as an industry. One is reliability and accuracy. We think these are not proven yet, and I think we need to start looking at particularly at auditing these technologies over the range-type units. They have high temperature requirements that need to be met. Again, these are very new and untested. So in terms of a design option, it is a design option that is relatively unknown and untested at this point. I think, also, to your point, I think you addressed it slightly and we haven’t been able to get any additional information on this, but we do believe that there are some intellectual property concerns around these particular cooking sensors that do not require standby power and they might not be widely available to the industry. Regarding displays, I think out of the list there, certainly DOE’s proposal to move to a longer standby is no longer viable. It just won’t work. From a consumer utility standpoint, there is the argument for high temperature use again over the range in particular and from a consumer functionality standpoint, they do provide excellent visibility from**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 7 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 all angles of the room and that’s why they’re used. They’re very high end display. And again, I think just looking at other technologies, we certainly need to look at reliability of LEDs, particularly in over-the-range-type situations where temperatures are high and those may not be as useful in that type of product. MR. BROOKMAN: Thank you. Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. Just in terms of the cooking sensors, in previous comments, I have said that one of their key functions would be to reduce cooking time in the active mode, that I know with my microwave oven, that they have -- one of the features is that it automatically knows when to stop your cooking microwave meal, for example, frozen meal, and usually in time, you know, it says on the box, let’s say, five or 10 minutes, but using the sensor, the time is reduced by X amount. It could be five percent, 10 percent, and I don’t know if DOE did any analysis, but the sensors do provide some energy savings in the active mode, and I think that again this is probably a utility aspect. I don’t know if DOE did any tests of the active mode with cooking sensors and without the cooking sensor, for example, based on the manufacturer**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 7 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 recommendations, but if there are energy savings in the active mode, I would not want to see this type of product, you know, kind of be legislated out of existence because there are energy savings and I think that, you know, again taking the tunnel version versus -- the whole component versus the whole compliance. If it’s saving energy on an annual basis, isn’t that what we want to do? MR. BROOKMAN: Great. MS. REICH: Excuse me. MR. BROOKMAN: Judith, follow-on, yes. MS. REICH: Okay. Yes, I’d like to respond to that. Yeah. Cooking sensors, their benefit in active mode is not currently captured by the test procedure. DOE does recognize that in the real world, that they could produce energy savings and this was a utility issue that was considered in the selection of the proposed standby power level to be able to maintain the presence of the cooking sensor. MR. BROOKMAN: Gary. MR. FERNSTROM: I think it’s important we keep our eye on the goal here. I love the convenient features of my microwave and I’ve become very accustomed to the display on all of my kitchen appliances.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 7 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 However, I think most consumers would be astonished to know that in some cases, some of their home appliances use more energy in the standby mode getting ready to serve their intended function than they actually use doing it. MR. BROOKMAN: Okay. Thank you. Ed Osann. MR. OSANN: Yeah. I want to try again with the inquiry I had on the last slide. Would an on/off switch be considered a design option, standby power design option, an on/off switch for display for the product for the display? MS. REICH: Yes, that would be considered a design option, but again that’s brought up consideration of consumer utility, whether the presence of a continuous display, for example a clock feature,

-- MR. OSANN: Consumer-activated? MS. REICH: Correct, yes. MR. BROOKMAN: Yes, Derrick. MR. LITTLE: Derrick Little with GE. I’d like clarification on that question. So you’re saying if you turn off the display, you by definition are in off-mode or by definition would be in standby mode? MS. REICH: Well, if there are other**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 7 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 components consuming power that either fall under the definition of standby or off-mode, it would be in one of those. For example, some microwave ovens have a feature that automatically shuts off the display after a certain period of time of a user not doing anything and then it detects the next time that the user opens the door or uses the controls that would power it back up. So yes, shutting just the display off by any means but still consuming power for other purposes would still be in standby or off-mode. MR. OSANN: And just to follow-up, was that a design option considered in this analysis? MS. REICH: The automatic power-down function was, yes. MR. OSANN: But a consumer-activated switch was not? MS. REICH: It was not one of the standby levels that was considered, no. MR. BROOKMAN: Thank you. Yes, Derrick. MR. LITTLE: A couple of comments on this particular slide. The sensors. There are, as you mentioned, both absolute relative humidity sensors. The**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 7 6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 performance of those sensors is somewhat different. Essentially, the resolution or the amount of humidity change that you’re able to detect varies, depending on that particular sensor. So they’re not necessarily -- there’s pros and cons with each, I guess, is one thing I want to point out. The sensor that uses or consumes that power is more readily able to detect smaller changes in humidity and therefore you can cook more different types of foods and this goes somewhat to consumer utility as does the display technology issue that Debra mentioned earlier, particularly on over-the-range microwave ovens where they have to be subjected to the heat from the cooking product below it. The VFDs typically have a higher ability to withstand temperature that, say, an LCD with backlit. Also in some of the literature, an LCD with backlit was looked at as an option to replace VFD. We don’t think that’s necessarily a viable option again from the consumer utility standpoint because with the VFD, you have the ability to see the time at any point in time. With the LCD, you can only see it when the backlit is on and the backlit cannot be on for the life of the product. With respect to the power supplies, we do**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 7 7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 agree that the power supply components should be upgraded. The cost, I think, was -- which was mentioned in the NOPR assessment of what that may require to get to that TSL level is a question, of

course. MR. BROOKMAN: Okay. Thank you. Other comments on this series of issues, cooking sensors, display technologies, and power supplies and control board options? (No response.) MR. BROOKMAN: Okay. MS. REICH: Well, this brings up the next issue that we were just discussing which is this automatic power-down function, and it’s important to note that DOE does need to consider the EISA definitions as well as the IEC-62.301 definitions of what standby mode is, and it is determined by the lowest power-consuming state that the microwave oven is in standby mode. DOE is aware that there are units on the market that can achieve less than one watt, significantly less than one watt standby power levels by having this function of turning off power to most components during this period of inactivity. DOE’s also aware that many microwave ovens in**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 7 8

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 other countries where there are aggressive standby power targets are already implementing this feature. So DOE would like to invite comments on the control strategy, such as this, that manufacturers may use to implement it and also what sort of design trade-offs they may make once they’re able to incorporate features that may be higher power-consuming components, such as a VFD display, but that during standby mode these would be power-down. And also, what the viability and cost of the control board circuitry that would be necessary to accomplish this power-down function to switch off cooking sensors and displays. MR. BROOKMAN: Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. I think one of my main questions would be on the utility issue. In these microwave ovens that you’re referring to, how long does it take for those components to get back up, like, you know, for the cooking sensor, et. cetera? I mean, is there a consumer utility issue for some of the powering down and then coming back up? Are there any or if not, great, but if there are, there can be -- let’s say it takes two minutes for the sensor to warm up, you have to wait for the sensor to warm up before they put the food in the oven.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 7 9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MS. REICH: Right. Exactly. That’s why DOE investigated these fast response cooking sensors that could have little to no warm-up times. MR. ROSENSTOCK: But in those microwave ovens, it’s pretty quick to get back to regular operation? MS. REICH: Actually, I don’t know. I think the assumption is yes. MR. ROSENSTOCK: Okay. MR. BROOKMAN: Constantin, you know the answer to this question? MR. von WENTZEL: Constantin von Wentzel, Navigant Consulting. I just wanted to note that there are already for sale in the United States multiple microwave ovens with no standby cooking sensors in them. So it’s not a new technology. It’s something that already exists and it’s something that already has been implemented by, I believe, at least two manufacturers. MR. BROOKMAN: Thank you. Debra. DR. BRUNK: Debra Brunk from AHAM. I think just a general comment on a lot of these design options. I think we again appreciate, you know, DOE suggesting a lot of these design options, the research that is behind it.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 8 0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I think we do recognize that there are manufacturers, there are areas of the world that are already starting to incorporate some of these design options. I think from the industry standpoint here, we have little or no data right now on some of the design trade-offs, some of the reliability on these different design options, and I think, you know, as we move forward with, you know, whatever the standard is ends up being, those will come into play and that really becomes more of a manufacturer decision on how we will implement these as opposed to something that we would want to make sure that we don’t end up on a single prescriptive path on how a standby power standard needs to be reached. MR. BROOKMAN: Thank you. Other comments on this slide? Ed Osann. MR. OSANN: Is the option you’re requesting comment on intended to be power-down technology that would be reactivated by consumer activity or would it be open to sort of a fuzzy logic approach where a pattern of activity would be detected and power-down and power-up would become automated? MS. REICH: Well, that’s an interesting possibility and we would certainly consider all potential approaches. You know, it was only**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 8 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 anticipated that it would be consumer-activated, but certainly it would be an option that would be considered if a fuzzy logic-type controller were implemented. MR. BROOKMAN: J.B. MR. HOYT: J.B. Hoyt, Whirlpool. I think that’s a creative idea, and I think as manufacturers, we want to leave this approach open so that whatever the standard is, we have a variety of ways to achieve it as we may each want to achieve it in a different manner as we think we have a better way of appealing to the consumer as opposed to having a prescriptive defined only method to achieve it. MR. BROOKMAN: Thank you. Additional comments on this point? (No response.) MS. REICH: Okay. This issue involves one of the design options that was mentioned which is the improvement in power supply technology. It’s generally recognized that switching power supplies from a performance standpoint are certainly an improvement. They have the highest available conversion efficiencies which can be up to 75 percent and their standby power consumption can be quite low, perhaps .2 or less watts, but those advantages come at a cost.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 8 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 The devices are more complex. They have greater number of parts, and as a result, there may be reliability issues and there may -- and there’s certainly costs associated with it. DOE is not aware of switching power supplies that are currently implemented in microwave oven applications. So it’s as yet to be determined what the long-term reliability of these units are with their greater complexity. So DOE would invite comments on whether switching-type power supplies are applicable to the microwave oven environment and what the efficiency impacts would be associated with them. MR. BROOKMAN: Gary. MR. FERNSTROM: Just a technical comment. Switching power supplies can have efficiency exceeding 90 percent and then computers are routinely exceeding five percent. MR. BROOKMAN: Okay. Thank you. Other comments on power supply? Yes, J.B. MR. HOYT: J.B. Hoyt with Whirlpool. We are aware of switching the power supplies. We do have some application of that power supply in non-U.S. product. It is new. We are gaining experience, but we would suggest we don’t have a lot of experience. We don’t**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 8 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 have the comfort around reliability yet to know whether to take that plunge. There are higher costs. They have the risk of higher complexity, but the cost thing, there’s going to be some added costs, regardless of whether or not they pick up in volume, but I think the big question really is gaining experience and again our products are ones that consumers keep in their homes for 10-15 years and it’s just an unknown plunge for us. MR. BROOKMAN: Thank you. MS. REICH: Well, that brings us to the definition of the standby power levels that were laid before us in the Engineering Analysis. Specifically in defining the -- it’s no longer a cost-efficiency relationship, it’s a cost of standby power curve. The increasing standby levels are associated with decreases in the standby power consumption. So in determining what a baseline level is, DOE considered what would be a typical power requirement for a microwave oven that incorporated any display technology, a cooking sensor, and what I’ll call the conventional power supply and that was determined to be a level of four watts. To determine higher efficiency levels, DOE**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 8 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 first considered the Federal Energy Management Program’s procurement requirement or recommendation for microwave ovens which is the standby power target for government purchases. So where possible, a unit with no more than two watts of standby power would be selected. Let me jump to a standby level of three which is the International Energy Agency’s one watt program and this is a target that many countries are aiming for, and in between the FEMP and IEA levels, DOE defined a gap fill of 1.5 watts, and then, finally, Standby Level 4 is the Max Tech Level for this analysis, determined to be .02 watts, and this was on the basis of a unit that’s available in Korea, I believe, that does incorporate the automatic power-down feature. So DOE invites comments on the selection of standby power levels for the Engineering Analysis. MR. BROOKMAN: Debra. DR. BRUNK: Debra Brunk with AHAM. We do believe that the baseline standby power level is appropriate, based on the data collected by AHAM and by DOE, and the other standby levels are also appropriate, I think recognizing that a lot of the world is moving towards one watt.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 8 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I think as I had mentioned earlier, though, it’s important to keep the definitions and examples in mind. We are talking about these prescriptive limits and I think from an industry perspective, this Max Tech value, EEI’s comment earlier, I think we’d be curious to know a little bit more about the unit of functionality, you know, for the consumer how long it takes to, you know, respond, just those kind of things it would be interesting to know, and that may be in the TSD. MR. BROOKMAN: Thank you. Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. Again, I was going to -- the quick comment is, you know, it looks like the Max Tech is with a power-down, but again it’s a matter of does it have as many, I’ll say, of the display features and does it include all the features as the baseline model? That would be my question. MS. REICH: Yes, that does have a cooking

sensor. MR. ROSENSTOCK: It does have a cooking sensor and the clock and the -- MS. REICH: Yes. MR. ROSENSTOCK: -- other -- okay. Thank you.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 8 6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. BROOKMAN: Other comments on the standby power levels? (No response.) MS. REICH: Okay. Well, finally, for microwave ovens, we come to the definition of the cost relationship with standby power. These are the incremental manufacturing costs above the baseline technology, and you’ll see that, from this chart, that there are multiple pathways that could be taken to achieve a given standby power level and the costs are in average value based on weighting these different approaches that manufacturers can take. So again, at the baseline level, microwave oven is assumed to have both the cooking sensor and any display technology desired, but to get to Standby Level 1, which is the two watt level, it would require a zero standby power-consuming cooking sensor and for thedisplay technologies that are somewhat higher powerconsuming technologies, namely the backlit LCD and the vacuum fluorescent display, it would require upgrading their power supply, and the incremental cost at that level is determined to be 30 cents. You’ll see at each successive level, these approaches, these design options are layered on the previous one. So at Level 2, the 1.5 watts, it**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 8 7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 requires the approaches taken at Level 1, plus if you have LED technology, that, too, would require upgrading the power supply. For the highest power-consuming display technology VFD, it would require switching to sensitive core relays. So the average cost at Level 2 was determined to be 67 cents. Then moving on to Level 3, DOE determined that you would need these upgraded relays or a switching power supply for LED. For LCD, backlit LCD, would require the upgraded relays and the switching power supply, and if you did maintain VFD technology, the only way to achieve that one watt level is to go with an automatic power-down feature. At Level 3, the incremental cost was determined to be a $1.47. Finally, Standby Level 4, which is the most stringent, the .02 watts, the only way to achieve that for any type of display technology would be to implement the automatic power-down feature. The average cost for that is $5.13. Welcome comments or input on these costs as well as the determination of the different approaches that can be taken to achieve the levels and whether there is any intellectual property issues on any -- associated with any of these design options.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 8 8

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. BROOKMAN: Gary. MR. FERNSTROM: I’d just like to make a quick observation. Looking at Level 3, that would be moving from the baseline of roughly four watts to one watt. That would save three watts and for PG&E customers, that would have a retail value of about 5.25 per year. So I realize California isn’t the whole country, but at least for California customers, Level 4 would have a payback in terms of reduction in consumer cost of about a year. MR. BROOKMAN: Thank you. Debra. DR. BRUNK: Debra Brunk with AHAM. I think just a couple of maybe concerns about these costs here. I think we’re concerned from the industry standpoint. We’re not quite sure where these costs came from, if they’re more component costs or that kind of thing. I’m not aware of -- I guess when I talk to a lot of our members, they don’t recall actually having talked to specifically DOE about these costs. We certainly looked at active power for microwave ovens, but with regard to the standby analysis, there really didn’t seem to be a lot of interaction there, and I think back to Whirlpool’s point earlier, I think there’s a one-time cost that would need to be rolled up into this and then I think,**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 8 9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 also, this lays out again a very specific path for having achieved these and we would just want to reiterate there are multiple ways to go here. MR. BROOKMAN: Okay. Thank you. Additional comments on standby power, particularly the cost issues here? Yes, Steve. MR. ROSENSTOCK: Again on this slide, are these incremental manufacturing costs or retail? MS. REICH: Manufacturing costs. MR. ROSENSTOCK: Manufacturing. Okay. MR. BROOKMAN: Would you say how these costs were derived, Judy? MS. REICH: Well, correct me if I’m wrong, Constantin, but I believe these were derived from discussions and information obtained from suppliers as well as discussions with manufacturers. MR. BROOKMAN: Constantin. MR. von WENTZEL: And we also -- Constantin von Wentzel, Navigant Consulting. And we also weighted them by the market share to reflect that the VFDs have a certain amount of market share. Other display technologies have a different market share. So for the different technologies, different displays, we weighted them accordingly. So some at some point need an upgrade,**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 9 0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 some don’t. Therefore, the costs jump particularly at Level 4. MR. BROOKMAN: So these are on average? MR. von WENTZEL: Correct. MR. BROOKMAN: Correct. Okay. Yes, Derrick. MR. LITTLE: Derrick Little, General Electric. Just one important thing I wanted to point out. Obviously this takes into account both countertop microwave ovens as well as over-the-range microwave ovens, but if you look at over-the-range microwave ovens, they are -- predominantly use the VFD technology because of issues we’ve already raised, but effectively going to Level 3 on an over-the-range microwave oven essentially says from the consumer utility standpoint, if you still have a VFD, you cannot have it lock on during that period of time. MR. BROOKMAN: Okay. MR. LITTLE: Whereas for a countertop microwave oven, it’s, I think as you said, -- these changes are a small percentage of the market share that’s out there, but if you split those two categories and again we’ve lumped them all together, it’s going to be a disproportionate effect on the OTRs. MR. BROOKMAN: Okay. Other comments on standby power and costs involved?**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 9 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (No response.) MR. BROOKMAN: So now there’s an opportunity for any additional comments on the Engineering Analysis, the slides we’ve covered up until now this morning. Yes, Phil. MR. MANTHEI: Also including commercial clothes washers we’ve talked about to this point? MR. BROOKMAN: Yes. MR. MANTHEI: Okay. Phil Manthei, Alliance Laundry Systems. I alluded to earlier that we had some concerns about the products on the marketplace that are discussed in the NOPR as the basis for the proposed standard. The proposed standard is based on a faulty assumption that the existing top-load commercial GE Model WNRD-2050G meets the proposed standard. In our tests, it does not meet that rating. ALS showed that it meets a rating of MEF 1.57, not 1.76, as shown in the California Energy Commission database. GE commercial clothes washer -- the reason for that is primarily due to the spin speed. The unit we have in our possession, whether it’s an anomaly or what, it only reaches 640 rpm. It cannot possibly achieve the remaining moisture content in the low 40**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 9 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 percent. You can take the California Energy Commission database and look at all of the Whirlpool top-load clothes washers, all of our top-load clothes washers. They’re all in the 50 percent area. Whirlpool has some that are down lower because they’re the non-traditional that spin at much higher speeds. So we measured 49 percent RMC, not 42.4, as stated in the California Energy Commission database. This is the unit, a picture of the unit. There’s also another issue that we encountered. We opened the unit. It has this energy label on it. Our friends at GE, which I don’t want to make too big a point on, there may be some good reasons for this, but until possibly a few days ago, this is the energy label that appeared on their website for this model. It’s in the old format. The labeling rule requires that the websites be updated with the latest information. Of course, the label was changed to this format in March. This label shows 283 kilowatt hours per cycle of energy -- I’m sorry -- per year. MR. BROOKMAN: Is that the new one or the old one? MR. MANTHEI: That’s the old one.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 9 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. BROOKMAN: Okay. MR. MANTHEI: The CE database has a missing entry for power consumption. However, that’s a voluntary submission. You don’t have to provide that. However, you can calculate it. There’s another column called Energy Efficiency, EF. It’s basically the same as MEF. It’s got the highest in and out enumerator of power consumption between the water and the motor in the denominator and does not have the dryer-related energy in it. So because they have the value of 4.61 for energy efficiency and it’s published and it’s also in the California database, the capacity is 3.5, you can get to the power consumption. There, it’s stated as 0.759. Here’s the energy label. New format now. Changed from -- switched what the primary descriptor is. It now has the secondary descriptors showing energy efficiency for the kilowatt hours per year, 472, not 283. That’s 1.204 kilowatt hours per cycle. What is it? At the very minimum, DOE should test and confirm GE’s commercial clothes washer’s actual efficiency before using it as a basis for assessing technical feasibility for the proposed standards.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 9 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 So I’ll give one of these to GE and -- MR. BROOKMAN: Thanks very much. Jim’s next in the queue. Jim Ranfone. MR. RANFONE: Jim Ranfone, American Gas Association. Just want to comment on something that Constantin, I’m sorry, I don’t know his last name, mentioned, that there were two manufacturers of ignition systems, battery-operated ignition systems, one of them being Finwall. I don’t know who the other one was. You said it was instantaneous. I’ll talk to you on that one later. But I did Google Finwall. They do make a battery-operated ignition system for the recreational vehicle furnaces and water heaters. It’s a 12-volt battery-type system. It’s a specialty application for RVs and I would find it hard to believe that you could apply that type of system, which may cost more than the range, to a domestic range for either cooktop or -- so I think there may be some information here that that particular application would not be comparable. Nobody should leave here thinking, well, Finwall’s got an ignition system that you could put on a range. It’s 12-volt. It’s one amp. It’s a specialty valve system and you have to take a look at**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 9 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the complexity and the cost of that before you come out and say, well, there’s a system out there that could be applicable to a domestic gas range. I’ll talk to you about the instantaneous one, too. MR. BROOKMAN: Thank you. Gary Fernstrom. MR. FERNSTROM: I have a question for Alliance. Did you bring those anomalies that you found to the attention of the FTC and the California Energy Commission? MR. MANTHEI: No, we did not. MR. FERNSTROM: Why not? MR. MANTHEI: We’ve been very busy. We have a lot of things going on getting ready for this. MR. BROOKMAN: Okay. Thank you. Additional comments on the spectrum of Engineering Analysis issues that have been raised this morning? (No response.) MR. BROOKMAN: So I see none. We’re scheduled to take a break now. I think now’s a good time. It’s 5 minutes after 11. Let’s try and resume at 11:20. (Recess.) MR. BROOKMAN: Okay. We’ve made really good progress. We are now moving on to the next segment in**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 9 6

1 2 3 the agenda, which is Energy Use Analysis, Markups for Equipment Price Determination, and Life-Cycle Cost Analysis, Greg Rosenquist. Energy Use Analysis, Markups for Equipment Price 4 Determination, and Life-Cycle Cost Analysis 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. ROSENQUIST: Okay. Welcome back from the break, everyone. Again, my name’s Greg Rosenquist, and I work at Lawrence Berkeley National Laboratory, and I’ll be taking you through the Life-Cycle Cost and Payback Period Analysis that DOE conducted for this rulemaking. The analysis itself was actually composed of three parts. The first is the Energy Use Characterization and its purpose is to develop energy and water consumption savings corresponding to each of the standard levels, and when you couple that with energy and prices, you get the energy and water cost savings to the consumer. The next analysis is the Markups for Equipment Price Determination. Its purpose is to first figure out how the product is distributed from the manufacturer to the consumer and then develop markups for each party in that distribution chain and from those markups, you take the manufacturing costs from the Engineering Analysis and develop the consumer**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 9 7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 retail prices for the Life-Cycle Cost and Payback Period Analysis. And finally, there’s the Life-Cycle Cost and Payback Period Analyses themselves and the purpose of this analysis is to determine the LCC savings and the payback periods for the various Candidate Standard Levels that DOE considered. As I talk about the rest of the analyses, I’ll try to highlight those portions that are different, that were modified for the NOPR compared to what was done for the ANOPR. This slide goes over the approach used to do the Energy Use Characterization. I’ll start with conventional cooking products. Again, these products consist of the gas and electric cooktops, ovens and ranges. The annual energy use was determined to be in decline since the 1970s. This is the same conclusion that DOE had come up with in the ANOPR and it used the same data sources as in the ANOPR. It continued to use this 2004 California Residential Appliance Saturation Survey as well as a metered study from the Florida Solar Energy Center to establish the annual energy consumption of these products. For microwave ovens, again DOE determined the**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 9 8

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 same thing as what was determined in the ANOPR, that the energy use for these products has been relatively constant since the 1980s. Again, DOE used the same data source as for the ANOPR, and that’s the 2004 California Residential Appliance Saturation Survey. One thing that DOE did differently for the NOPR was include the energy consumption associated with the standby power consumption. For commercial clothes washers, DOE used the same approach as in the ANOPR. It took the per cycle energy and water consumption and multiplied it by the cycles per year to come up with the annual energy and water consumption. DOE did an extensive literature search for the ANOPR and did not do any more searches for the NOPR. It determined the cycles per year for two product applications, multifamily and laundromats. The numbers you see here are in cycles per day, not cycles per year, and the average value for multifamily was 3.4 and the average value for laundromats was six. This next slide goes over the analysis of the markups to determine equipment prices and again starting with conventional cooking products and microwave ovens, DOE relied on the same distribution**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 9 9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 channel that it had used for the ANOPR. This channel was based upon data from AHAM’s Fact Book which said that over 93 percent of the sales went to retail outlets. These markups then were determined for the manufacturer and the retailer in order to come up with the consumer equipment price from the manufacturing costs developed in the Engineering Analysis. Two types of markups were developed, the same thing that was done in the ANOPR, a baseline markup and an incremental markup. The baseline markup relates the consumer prices to how costs are for manufacturers and retailers for a standard and then in the incremental case, it relates those prices to the situation after the standard has been developed, and the overall baseline markup was determined to be 1.95 and the overall incremental markup was determined to be 1.55. For commercial clothes washers, DOE used the same distribution channels that it had used for the ANOPR, so no changes here as well. Again, DOE relied on information coming from the Consortium for Energy Efficiency, which showed that product was distributed from the manufacturer to a distributor and to the Laundromat as an endpoint, and then for multifamily housing, that intermediary was the route operators.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 For purposes of determining the equipment prices for this product, DOE continued to rely solely on the distribution channel for laundromats, assuming again that the equipment prices that would be developed for this distribution channel would be indicative of the prices that went to route operators and to multifamily housing. The overall baseline markup turned out to be 1.93 and the overall incremental markup turned out to be 1.59. MR. BROOKMAN: There’s a lot of content in these slides. Feel free to ask clarifying questions if you need to. We can stop for them. Tom, yes. MR. ANDERSON: Tom Anderson with Electrolux. A quick question back on the conventional cooking products and microwaves in terms of the annual energy

use. You said they declined from 1970 in conventional. Is that total energy or the average consumer home energy? MR. ROSENQUIST: That’s the energy of the cooking products. MR. ANDERSON: Total usage of the country? MR. ROSENQUIST: I’m talking about, you know,**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 01

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 there are a lot of studies done since the late 1970s and they looked at the energy consumption of those products in homes and -- MR. BROOKMAN: On a per unit basis? MR. ROSENQUIST: -- on a per unit basis, yes. MR. ANDERSON: I’ve got you. Okay. MR. ROSENQUIST: Thanks, Doug. MR. BROOKMAN: Okay. Thank you. Okay. MR. ROSENQUIST: This slide goes over the approach that was used to conduct the Life-Cycle Cost and Payback Period Analysis and again it’s the same approach that was used for the ANOPR. No big -- no differences were done on the approach for the NOPR than for the ANOPR. The life-cycle again equals the consumer price, plus the lifetime operating cost savings discounted to a present or base year. This economic evaluation is done from the perspective of the

consumer. For transparency purposes, the analysis implemented in a Microsoft Excel spreadsheet with an add-on called Crystal Ball. Crystal Ball gave the ability to conduct analyses using a Monte Carlo simulation approach where many of the inputs to the analysis are characterized with what are called**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 02

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 probability distributions and those probability distributions again capture the uncertainty and variability of these inputs. Specifically for residential products, DOE developed household samples based upon the 2001 Residential Energy Consumption Survey. Again, this is the same approach that was done for the ANOPR. It used that sample to come up with the variability in energy use and energy pricing. For commercial clothes washers, the theory relies solely on characterizing the distribution of cycles per year. The results are expressed as LCC savings; that is, the difference between the LCC at the baseline level and the LCC at the standard level, and for the payback period, the calculation is done at a standard level relative to the baseline level. This figure just basically summarizes what I just discussed in terms of how the LCC is determined. I’ll now be going over all the inputs that were used for the LCC and Payback Period Analysis, starting with the energy and water prices, and again the sources of data and the approaches used to develop these inputs for the NOPR are the same approaches and data sources that were used for the ANOPR. So starting with the electricity prices, DOE**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 03

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 relied on this data from the Energy Information Administration, it’s called Form 861 Data. It provides utility level revenues and sales, so we can calculate an average electricity price by utility. Because the data also provides the number of customers served, we can come up with a customer-weighted price based upon different regions. For the analysis that was conducted here, we developed prices for 13 regions, the nine Census divisions and the four large states. For natural gas prices, DOE based the data on EIA’s Natural Gas Monthly. This is state-level average gas price data and again using population regional gas prices were developed based upon these nine Census divisions and four large states. For water and wastewater prices, data was taken from Raftelis Consultants and the American Waterworks Association Water and Wastewater Survey. There were many water utilities and wastewater utilities sampled but not enough to come up with the data for each of these 13 regions, so prices were developed for only the four Census regions. Future energy prices were forecast out into the future by using forecasts out of the 2008 Annual Energy Outlook. Three forecasts were implemented into the spreadsheet model, one for the reference case and**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 04

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 two others for the low and high economic growth forecasts. Then, finally, for water and wastewater price forecasts, DOE used an extrapolation off the historical data, a linear extrapolation, to forecast what would happen to these water and wastewater prices out into the future. MR. ROSENSTOCK: Question? MR. BROOKMAN: Yes, please, Steve. MR. ROSENSTOCK: Steve Rosenstock, EEI. In terms of water and wastewater prices, how are you handling the other five Census regions in terms of their water prices? MR. ROSENQUIST: Okay. So let me clarify here. The four Census regions are the Northeast, Midwest, South and West, and the Census divisions comprise those four Census regions. So we’re capturing the water prices for the entire country, just now it’s very specific regional levels. MR. BROOKMAN: Those four listed Census regions encompass the entire country? MR. ROSENQUIST: Yes, and again because of the level of the data for water and wastewater prices, we weren’t able to get it down to the Census division**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 05

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 level and large state level. MR. BROOKMAN: I gotcha. Okay. MR. OSANN: Question? MR. BROOKMAN: Yes, please. MR. OSANN: I have two questions. Ed Osann. On Page 32, the slide that’s up, for electricity prices and natural gas prices, what year are the electricity and natural gas? These are Form 861 for what year? MR. ROSENQUIST: For 2006. That was the most recent available complete dataset when we did the analysis. MR. OSANN: And for natural gas monthly? MR. ROSENQUIST: 2006. MR. OSANN: And which edition of Raftelis did you use? MR. ROSENQUIST: The most recent survey, I believe it was for 2007. I can doublecheck on that during the break. MR. OSANN: Okay. And I had a question. You may have mentioned this. On Slide 29, under Commercial Clothes Washers, the cycles per year, are those numbers given cycles per day and then multiplying? MR. ROSENQUIST: Yeah. That’s correct. That’s right. MR. BROOKMAN: Gary Fernstrom.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 06

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. FERNSTROM: So let me see if I understand this. Are you using two-year-old data to decide what you’re going to do five years in the future? MR. ROSENQUIST: Yes, because that’s the latest data available, but you have to remember it’s being forecasted out into the future with trends from the most recent Annual Energy Outlook. MR. FERNSTROM: Oh, I understand it’s being forecasted. MR. ROSENQUIST: Okay. All right. MR. BROOKMAN: Please. Tim. MR. BALLO: Tim Ballo, EarthJustice. Just a point on that Annual Energy Outlook. The AEO does not consider regulatory changes that take place in the future. It’s inevitable, given the make-up of Congress and the incoming administration, that there will be a price on carbon that will impact electricity prices, possibly significantly, during the time period covered by this analysis. EIA has done an analysis by Lieberman Water, a likely starting point for any future climate legislation and forecasted what the impact on energy prices will be. To realistically depict energy prices in the future, DOE must consider the impact of carbon**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 07

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 legislation. At minimum, even if it doesn’t do that, there are regional cap and trade programs that are in effect right now in the case of Reggie in the Northeast and the WCI out West that again will impact the price of electricity and are not reflected in the energy price trends contained in the AEO. MR. BROOKMAN: Thank you. Steve Rosenstock. MR. ROSENSTOCK: Well, again, in terms of that, you know, it’s hard to predict. I mean, who would have predicted that oil would have shot up a $148 a barrel and now it’s down to 59? I mean, good luck forecasting some of these energy prices. I think they’re doing -- DOE does a good job with the data that they have, and in terms of New England with Reggie, I believe the clearing price was $3.07 per ton of CO2. So again, it can be calculated and it might already be incorporated into the rates of the commercial and residential customers in New England. The money that was -- the clearing price is already included in the current rate. So again, if you wanted to adjust it, you could adjust it based on the data that they have, you know, right now, but DOE does not double count, you know. It shouldn’t say, oh, it’s $3, but it’s already**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 08

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 been incorporated in that $3. MR. BROOKMAN: Tim. MR. BALLO: Tim Ballo, EarthJustice. Just a follow-on. It was $3.07, I believe, at the first auction. However, that cap again declines significantly between 2009 and 2018, I believe it declines. I don’t remember the exact number but we’ll include that in our comments. The allowance price will likely increase significantly. MR. BROOKMAN: Thank you. MR. ROSENQUIST: Okay. I’ll move on with the next set of inputs to the LCC and Payback Period Analysis that I’ll discuss. These are the installation and repair and maintenance costs. For conventional cooking products, the installation costs used a later version of the RS Means Mechanical Cost Databook than was used for the ANOPR. The costs turned out to be a $146. The big change for the NOPR was to develop an added installation cost differently for gas cooking products that don’t require electricity to operate than what was developed for the ANOPR. Again in this case, there are some households out there that, if they’re required to use a gas cooking product that doesn’t use electricity, they**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 09

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 would have to install an electrical outlet. So what DOE did was looked at the National Electrical Code to determine what percent of households would actually have to install an outlet and based on that assessment, DOE determined that households built before 1960 would very, very likely need to install an outlet to accommodate such a gas cooking product. When you looked at the household samples that were being used in the LCC Analysis from Rex, approximately 55 percent of those household samples for gas cooking products were built in households built before 1960. DOE relied on the RS Means Mechanical Cost Databook again for determining the installation of this outlet which was $235 and this was for a ground fault circuit interrupter outlet. When you take into account the rest of the households that don’t need an outlet, the 45 percent that don’t need an outlet, the weighted average installation costs turned out to be a $130 and because only gas standard ranges are still being equipped with standing pilots, for purposes of the analysis, DOE divided that cost in half and allocated equally to gas cooktops and to gas standard oven installations. Another deviation from the ANOPR that was done for the NOPR was to determine repair and**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 10

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 maintenance costs for gas cooking products. What DOE did was contact contractors in six different states to determine what these repair/maintenance costs would be for different types of gas ignition systems.For standing pilots, DOE determined a onetime repair/maintenance cost of a $126 that occurred in the 10 th year of the product’s life for maintaining and repairing the valves in that system. For glow bar hot surface ignition systems, which are used in ovens, DOE determined that there would be a $147 cost every fifth year of the product’s life to replace the brittle igniter that’s used in that system and for electronic spark ignition systems, a one-time cost of a $178 was determined to occur in the 10 th year of the product’s life to replace the control module. For microwave ovens, DOE did nothing different than what it did for the ANOPR. It continued to assume that there are no additional installation costs or no maintenance/repair costs for the baseline equipment in the more efficient equipment. For commercial clothes washers, DOE updated its use of a more recent RS Means Mechanical Means Databook for the installation costs which turned out to be a $186, and for the NOPR, this is different than what they did -- DOE did for the ANOPR, it determined**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the repair and maintenance costs for more efficient clothes washers, and it based this on a function which is equal to half the equipment price divided by the product lifetime. DOE has used such algorithms in past product rulemakings. Maybe this is a good place to stop to ask if there’s any questions about this analysis. MR. BROOKMAN: Ed. MR. OSANN: Two questions. With regard to installation costs, cooking product installation costs,you’ve got 55 percent of the households sampled pre1960 and you’re assuming 100 percent of that would require -- did you look at and consider the possible cohort of kitchen renovation over nearly 50 years or did you not consider that? MR. ROSENQUIST: Did not consider renovations. If the house was built before 1960, it was assumed that it would need an outlet. The information in Rex does not indicate whether an extensive renovation did occur in that household. So DOE went ahead and just assumed that an outlet would not be in the proper place to accommodate a gas cooking product that required electricity. MR. BROOKMAN: Steve Rosenstock.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 12

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. OSANN: Just to -- MR. BROOKMAN: Follow-on, Ed. Go ahead. MR. OSANN: Is there any empirical data, maybe it’s in the TSD, regarding the repair and maintenance costs of commercial clothes washers or is this simply an assumption that is carried forward from -- where was this carried forward from? MR. ROSENQUIST: It was first developed for central air conditioner product rulemaking and then applied also to a furnace rulemaking and so now it’s being brought forward for commercial clothes washers. MR. OSANN: Okay. Is there any empirical data relating to clothes washers in particular for residential or commercial? MR. ROSENQUIST: No empirical data, no, but again since it was vetted in those prior rulemakings, at least to my recollection, there wasn’t a big problem with that, using that algorithm. DOE felt comfortable using it for commercial clothes washers. MR. BROOKMAN: Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. In terms of that pre-1960 homes, there might be some data. Either the National Association of Homebuilders or I think there’s a Remodelers Trade Association as well, they might have some information because pre-1960,**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that’s at least, you know, two lifetimes of cooking equipment, I would say. Just also remembering the saturation of ovens, I think it’s like 98 percent that, you know, most of them are located in kitchens. So, you know, I think that percentage might be just, you know, high compared -- just because of renovations and sales, et. cetera. Thank you. MR. BROOKMAN: Thank you. Tom. MR. ANDERSON: Tom Anderson, Electrolux. Back to the repair and maintenance costs for the conventional cooking, I may have missed this, but the glow bar hot surface, it says requires replacement every fifth year. Is that from the surface records? As a manufacturer, we life test those type of products and they tend to hold their life. MR. ROSENQUIST: It was based upon contacting contractors who service this type of equipment. So any information you can provide that would determine more appropriate, you know, replacement would be useful. MR. BROOKMAN: That’s very helpful. MR. ANDERSON: Thank you. MR. BROOKMAN: Thank you. Okay. Other comments on this slide before we move on?**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 14

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (No response.) MR. ROSENQUIST: The next set of inputs are the discount rates and the product lifetimes, and the methodologies and data sources used for the ANOPRs are virtually the same that were used by DOE for the NOPR. The discount rates again were developed based upon the finance costs of purchasing these appliances and the finance cost is based upon the interest rates associated with any debt that’s incurred to purchase the product as well as the interest rates associated with the opportunity costs of any equity that’s pulled out to purchase the product. For residential cooking products, the discount rate’s a function of whether the product is bought in a new home or is a replacement. In a new home, the interest rate’s associated with the average real mortgage rate which turned out to be 3.2 percent, and for replacements, it’s a weighted average of the equity and the debt that’s being used by consumers to purchase appliances, and again that value turned out to be 5.5 percent. These numbers are virtually identical to what was used or what was determined for the ANOPR. Again, the primary source of data was the Federal Reserve Board’s Survey of Consumer Finances. Surveys spanning from 1989 to 2004 were used. The**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 15

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 primary purpose of these surveys was to determine the percentage of consumers that were using either debt or equity to finance the purchase. The surveys were also used to develop some of the interest rates associated with some of the equity and debt. For commercial clothes washers, a weighted average cost of capital of firms that purchase these clothes washers was used to determine the discount rate. Again that weighted average cost of capital addresses the equity or debt financing that’s used to purchase these products. For commercial clothes washers, the real discount rate was 5.7 percent which is virtually the same as that for the ANOPR. MR. HOYT: Quick question. J.B. Hoyt, Whirlpool. Are those after tax numbers? MR. ROSENQUIST: Yes, they are. MR. HOYT: Thank you. MR. ROSENQUIST: On product lifetimes, the same sources were used for the NOPR as were for the ANOPR. That’s Appliance Magazine and past DOE Technical Support Documents. For conventional cooking products, both gas and electric, the average lifetime was 19 years. For**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 microwave ovens, the average lifetime was nine years and for commercial clothes washers, the function of the type of product application. For multifamily, it was 11.3 years, and for laundromats 7.1. You have a shorter lifetime for laundromats because the product is used more heavily there. One big difference from the ANOPR is that we used or DOE used Weibull distributions to characterize how the product’s derived over its life. MR. BROOKMAN: Ed. MR. OSANN: Question. Ed Osann. What does that mean exactly. MR. ROSENQUIST: The Weibull distribution? It’s a type of distribution that’s used commonly to characterize how equipment basically survives over a time period. So it has a shape parameter that you can modify based upon the average lifetime you think that the distribution has. MR. OSANN: Is there some kind of a decision rule for applying these minimum, average, and maximum on a curve? MR. ROSENQUIST: Right, right.. MR. BROOKMAN: Phil. MR. MANTHEI: Phil Manthei, Alliance Laundry Systems.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 17

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Going back to discount rates, obviously the ability to obtain capital for commercial clothes washers for operators of laundromats is going to be very differently now than it was. How do we intend to factor that in? MR. ROSENQUIST: To try to acquire data to inform us on what those interest rates might -- may be

now. MR. BROOKMAN: So comments on how the department would address that would be helpful. Okay. Other questions about this page on discount rates and product lifetime? There’s a lot of content here. (No response.) MR. ROSENQUIST: Okay. I’ll move on to the last input to the Life-Cycle Cost and Payback Period Analyses. This is the equipment assignment in the base case, and again what -- this is a very important input to the analysis and what DOE tries to do here is determine what percentage of consumers are already purchasing more efficient equipment beyond the baseline level. The resulting distribution of product efficiencies that consumers currently purchase are**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 characterized as the base case efficiency distributions; that is, the case when no new standards are being imposed, and again using these base case efficiency distributions avoids DOE from overstating the benefits that may incur to consumers for particular standard level. So what I’m showing here are these various distributions for the three types of products. For conventional cooking products, there’s past historical data provided by AHAM that allow DOE to determine the percentage of cooking products that still use standing pilot ignition systems. For gas cooktops, seven percent of the market uses standing pilot ignition systems. This includes not only products that are being used as part of a range but also built-in products. The remaining 93 percent use spark ignition systems, and gas standard ovens, 18 percent use standing pilot ignition systems. Again, this includes not only the ovens as part of a range but also built-in ovens, and the remaining 82 percent are distributed between ignition systems that use hot surface glow bar ignition systems or spark ignition systems. The eight percent is for spark ignition systems. For the rest of the conventional cooking**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 products, DOE assumed that 100 percent of the market was at the baseline level. For microwave ovens, as I think everyone knows, this product is not currently being regulated for efficiency, so there are no certified product directories out there. So DOE did not try to attempt to develop a distribution of product efficiencies based upon energy factor, but as Judy had reported earlier this morning, there was some testing of units done by both AHAM and DOE to determine the standby power consumption of microwave ovens and DOE used the distribution of power consumption for these units to characterize the base case standby power consumption for microwave ovens. Forty-six percent of those units had power consumption above four watts, 35 percent had power consumption between four to two watts, and 19 percent had power consumption between one and a half to two watts. Then, finally, for commercial clothes washers, DOE relied on the available models at each one of these efficiency levels from the California Energy Commission’s Product Database. For top-loading washers, 97 percent of the models available in that database have a modified**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 energy factor no greater than 1.42 and a water factor no greater than 9.5. For front-loading clothes washers, you can see that 85 percent of the market has a modified energy factor of 2.0 and a water factor of 5.5. MR. ROSENSTOCK: Quick question. MR. BROOKMAN: Please. MR. ROSENSTOCK: Steve Rosenstock, EEI. So on the microwave oven table, you’re saying 34.6 is between two and four watts? MR. ROSENQUIST: That’s correct. MR. ROSENSTOCK: Okay. It’s a little confusing. So for the four watts, it’s four watts -- MR. ROSENQUIST: It’s greater than four watts. MR. ROSENSTOCK: Four watts or greater? MR. ROSENQUIST: Yes. MR. ROSENSTOCK: Okay. MR. BROOKMAN: Jim Ranfone. MR. RANFONE: Yeah. Jim Ranfone, AGA. On the gas cooking products, is there a breakout between straight cooktops, straight ovens and then ranges combined that’s available? MR. ROSENQUIST: Yeah. That’s in the Technical Support Document.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 21

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. RANFONE: Okay. So that’s available? MR. ROSENQUIST: Yes. Another thing I forgot to mention about the standing pilot ignition systems, although this is the way that DOE characterized the current situation, they did forecast over time what would happen to the percent of equipment using standing pilot ignition systems and they forecast that by the year 2030 or 2032, that only five percent of the market would still use standing pilot ignition systems. That’s both for the cooktop market and the oven market. MR. BROOKMAN: Debra. DR. BRUNK: Debra Brunk, AHAM. I just wanted to clarify something here. This point says that the market share of microwave ovens is based on 52 units that were tested by AHAM, is that correct? MR. ROSENQUIST: You know, Judy said 53 this morning. So it could be a typo. So it’s either 52 or 53. DR. BRUNK: Well, I guess my question then is we looked at 52 microwave ovens, and, I mean, I’m questioning this. We don’t have the data in anything that we’ve measured in the past, but, I mean, are 52 microwave ovens really representative in trying to determine the market share? That would be the concern**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 22

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I would have with that assumption. MR. BROOKMAN: You question the methodology about that being a fair distribution of the types of units available? DR. BRUNK: The types of units available. I think taking just a sample. I think it’s a good sample size for understanding the standby distribution. I think when we tried to refer that in any kind of available market share data, that is probably not realistic. MR. ROSENQUIST: The reason why that was used is that was the only data source that was available. So actually the next slide actually asks for public comment on that very issue. MR. BROOKMAN: Ed Osann. MR. OSANN: Yeah. Similar point with regard to clothes washers. Actually, all of these are -- in the case of clothes washers, these are models. These are not sales. MR. ROSENQUIST: Right. So those -- just because the number of available models are at those levels does not necessarily mean the shipments are at those levels. MR. OSANN: And so the same would be true for the microwave ovens.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. ROSENQUIST: That’s correct. MR. OSANN: Fifty-two data points. It’s not sales-weighted in any way. MR. ROSENQUIST: That’s correct. MR. OSANN: So market share is really a bit of a misnomer here. MR. ROSENQUIST: Right. This data for microwaves and clothes washers is a proxy for market share. MR. OSANN: It’s sort of a performance distribution for a certain group of products that were considered. MR. BROOKMAN: So let’s move to the questions because we’re heading in that direction already. Greg, you want to read these off? MR. ROSENQUIST: Yeah. This issue for which DOE seeks comment is -- enunciates the issue that Debra had brought up about the distribution, the base case efficiency distribution for microwave ovens. It sounds like other interested folks also have questions about the distributions on commercial clothes washers and cooking products. So DOE is looking for any input and data on the base case efficiency distributions that were used. MR. BROOKMAN: Derrick.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 24

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. LITTLE: Derrick Little, General Electric. Of those 52 units, do we still have record of whether those were OTRs and NCO modes, if so, what the breakout would be between those? MR. BROOKMAN: Judith, find a microphone. MS. REICH: This is Judith Reich from Navigant Consulting. For 32 of the units that DOE tested, we have that information. For 21 of the AHAM units, we don’t have any identifying characteristics from them.MR. BROOKMAN: Derrick, do you have a followon there? MR. LITTLE: Of those 32, do you knowapproximately how many of those OTRs were over-therange microwave ovens? MS. REICH: None of them were over-the-range units. They were all countertop. MR. BROOKMAN: Okay. Tom. MR. ANDERSON: Tom Anderson, Electrolux. So would that be assumed that there would be no installation costs on microwaves, that they were in fact all countertop microwaves? MR. ROSENQUIST: Yes, that’s correct. MR. ANDERSON: Okay. Because there’s a large of the industry that is over-the-range which has**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 significant installation, so that probably should be weighted somehow because the over-the-range microwave requires accounting for that. MR. BROOKMAN: So if you could include that in your written comments and try to describe that percentage, that would be helpful for the department. MR. ANDERSON: I’ll do that. MR. BROOKMAN: Ron Lewis. MR. LEWIS: I think that every public meeting that we ever have, we always, starting with the framework documents that are the official announcement for starting a rulemaking, we always ask for input of data that would help us be accurate. As we get later into the ballgame, it gets harder and harder to make major changes to accommodate things. So as we move forward, getting data to us that’s meaningful. We had an incident last year where a trade association actually supplied data. We did analysis based on that and then they asked us -- they criticized us for using their data, said that it was not good for that purpose, and we need to have this to have a good result and be accurate and be reflecting the precision that we want to get early data and get things -- if there’s an issue that you see, it’s not just raising the concern. It’s good to know if you**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 26

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 have a concern, but the supporting data to help us get a confidence level and to know the intensity of the impacts becomes extremely important. So we want your inputs, even if it’s saying, hey, you didn’t consider this, but that’s not overly helpful. It’s only if you’ve got something that helps us to get greater understanding. MR. BROOKMAN: Mike Rivest. MR. RIVEST: Sort of, you know, following up on that, trying to be more specific. Commenting on the installation costs, it would be important for us to know if there’s a different installation cost for a microwave oven that has more strict standby requirements than the existing because if the installation costs are the same, then that’s out. In terms of the distribution of product for over-the-counter, again it would be helpful for us if we had a sense of the market share and if you feel that the technologies employed or the weighing of the power consumption is different, that would be helpful information as well. MR. BROOKMAN: Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. I think in this case, though, you know, in terms of, you know, when -- it’s also a matter of timing. I don’t**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 27

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 know if the stakeholders would know that DOE only got countertop ovens versus getting both over-the-range as well as countertop ovens as part of the analysis. Again, I don’t know if it was in an earlier document or not, but if -- you know, as the process goes on, you know, let’s say that 20 percent of the market are over-the-range microwave ovens, well, again for this analysis for installation, when would the stakeholders know that DOE only obtained, you know, countertop ovens? MR. BROOKMAN: Ron Lewis. MR. LEWIS: We asked -- we made requests right from the get-go for any input and data. We got data in this case from AHAM on some units. We supplemented that. We said, okay, we want to get a greater understanding and we -- much as people said, that’s -- I think Debra had said 53 is not a huge sampling. We got 21 units, I think the data from you. We supplemented that with, you know, another times one and a half or something in units in that same category. That was trying to get a greater understanding of what the industry gave us, the input we got from people. Had we gotten that input from people saying,hey, this is a huge part of the market, the over-therange, we would have picked that up. Okay. So it’s a**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 28

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 two-way street in that dialogue. We were trying to do due diligence by expanding the scope of what we had got to verify and to get a greater sampling. So we thought we were doing good. Now, you know, we’re getting a new understanding but very late in the ballgame and we need that information early if people say this is significant. MR. BROOKMAN: Mike Rivest. MR. RIVEST: Mike Rivest, Navigant Consulting. Steve, specifically at the ANOPR Workshop, we presented the results of our tests of the 32 microwave ovens and we presented the segmentation by volume, a number of attributes, but I guess at that point, no one pointed out and we didn’t -- you know, we hadn’t picked up on the need for segmentation by OTR and on the counter. MR. BROOKMAN: Okay. Thank you. Additional comments on these two questions, estimated market share for microwave ovens at different standby power consumption levels and different set of market shares that could affect the percent of consumers benefiting from the standards that limit standby power? (No response.) MR. BROOKMAN: No additional comments on**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 29

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 those. MR. ROSENQUIST: These next three slides I’ll be presenting provide the life-cycle cost results. This first slide starts with the conventional gas cooking products. The curve on the left is for gas cooktops, the curve on the right is for gas standard ovens. What we’re plotting here is average LCC savings against installed costs and each data point represents an efficiency level that DOE analyzed. For gas cooktops, two levels were analyzed. Only one provided average LCC savings. That’s the replacement of the standing pilot ignition with spark ignition. For gas standard ovens, seven Candidate Standard Levels were analyzed, two of which were replacing the standard pilot ignition device with a non-standing pilot version. One of them, the spark ignition at Level 1-A, yielded average LCC savings while the second, the hot surface glow bar ignition, did not and that was primarily due to the fact that this glow bar ignition device uses electricity during the operation of the burner. So there’s a lot of electricity consumption. Certainly there’s electricity consumption where in the baseline there isn’t any electricity consumption. This slide shows the LCC results for**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 30

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 microwave ovens. Again, average LCC savings are being applied against installed costs. DOE analyzed four standby power efficiency levels and four energy factor efficiency levels. For the standby power levels, all of them achieve or realize life-cycle cost savings with each incremental efficiency level achieving more energy life-cycle cost savings than the previous level. All four energy factor levels provided no LCC savings, actually an increase in that cost to the

consumers. Finally, we come to commercial clothes washers. Here again, the average LCC savings are being plotted against the installed costs. Again, we havetwo curves, one for top-loading washers, one for frontloading washers.There were three levels analyzed for toploading and four for front-loading, and as you can see here, only one of the efficiency levels, Efficiency Level 1 for top-loading, did not provide life-cycle cost savings. So this is the point where the presentation of the Life-Cycle Cost and Payback Period Analysis is complete, and we wanted to see if there’s any more additional comments or issues that you want to bring up**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 31

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 regarding the analyses for the Life-Cycle Cost and Payback Period. (No response.) MR. BROOKMAN: No additional comments? Yes, Tim. MR. BALLO: One comment. I didn’t see -- maybe I just missed it -- in the NOPR Analysis under Rebuttable Presumption Payback Period, how long those were for the various products, and again maybe I just missed it, but I don’t recall seeing it and the only treatment I do recall seeing, I’ve commented on this in prior rulemakings, DOE says that although it examined the rebuttable presumption criteria, it believes that its Life-Cycle Cost Analysis are superior. Again that’s -- the statute requires a little more than that. If a product satisfies that through your rebuttable presumption payback period and that is the presumptive economically-justified standard, then DOE must explain why it believes criteria under the seven factors in 02DI or 02D1 trump that rebuttable presumption finding. MR. BROOKMAN: Thank you. MR. ROSENQUIST: Doug, the rebuttable presumption payback periods are presented in the NOPR. I don’t know exactly what page, but they are in there.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 32

1 2 3 4 5 6 7 8 9 10 MR. BALLO: Tim Ballo again. I saw the simple payback period. I just didn’t see a rebuttable presumption payback period. MR. BROOKMAN: Okay. Other comments on the Payback Period and Life-Cycle Cost Analysis? (No response.) MR. BROOKMAN: I’m going to suggest we do one more content block before we go to lunch which means around about -- we’ll go to lunch around about 12:30- 12:40 or so. Okay? So let’s keep going. Greg. Shipments Analysis and National Impact Analysis 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. ROSENQUIST: Okay. Next, I’ll be talking about the National Impact Analysis that was conducted for the NOPR. The purpose of the National Impact Analysis are twofold. The first is to determine the product shipments and also then to determine how standards impact those product shipments, and second is to determine the national energy savings corresponding to the various standard levels and also the national economic impacts from those standard levels and those national impacts are determined with a net present value or what we call NPV. With regard to the Shipments Analysis, the approach that was used was virtually identical to what**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 33

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 was used in the ANOPR. First, DOE determined what are called base case shipments forecasts. These are the shipments forecasts when there are no new standards, and these shipments forecasts were determined over the period of 2012, the assumed effective date of the standard, out 30 years to 2042. The shipments model accounts for shipments to two primary market segments, new construction and replacements. New construction shipments are determined by taking housing starts information and multiplying it by historical rates of product ownership in new housing and replacements are determined by taking the product stock and applying the product retirement function to it. The shipments model that was used was calibrated by DOE against historical shipments data. Any discrepancy between the actual historical shipments and the forecasted or backcasted shipments data were taken into account and for cooking products, that discrepancy was attributed to early replacements, and for commercial clothes washers, it was attributed to non-replacements. This is a particular area for commercial clothes washers where the NOPR differs from the ANOPR. For the NOPR, DOE did look at data from the American**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 34

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Housing Survey to determine that there has been uptick in the amount of in-unit washers being used in multifamily. DOE attributes this to the fact that alot of rental properties are converting over to owneroccupied condominiums and townhouses, and so as a result, a lot of these common area laundry facilities are going by the wayside and so a lot of these commercial clothes washers are not being replaced. So the forecasts of these shipments then for commercial clothes washers is actually quite flat where for the ANOPR, DOE projected an increase in product shipments. For the standard case shipments forecasts, the exact same data was used to estimate these shipments as used for the base case with one important exception. DOE accounted for the purchase price increases and operating cost savings resulting from standards. They also accounted for household income in trying to determine how the standard impacts product shipments. As it turns out, the purchase price effects dominate this and as a result, shipments forecasts under the standards case are lower than what you find in the base case. One point to make is that that initial price**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 35

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 drop that’s seen from this purchase price change is -- gets diminished over time as consumers become less sensitive to that purchase price difference. This slide goes over the Shipments Analysis results, starting with the cooking products. With regard to conventional cooking products, there’s no curve being presented here. That’s because DOE assumed that the product shipments for the base case were the same as for the standards case and that’s because the market for these products is completely saturated. That means that DOE also assumed that there would be no equipment switching from gas cooking products to electric cooking products or vice versa. One thing that DOE did examine more closely was whether or not consumers that had to buy a gas cooking product without standing pilot ignition would potentially switch over to an electric cooking product. DOE analyzed whether the outlet to accommodate electric cooking product would be more costly and what DOE found is that it’s five times more costly than the outlet that would need to be installed for a gas cooking product. Because of this huge price increase on the outlet, DOE determined that there would be no equipment switching from gas to electric, even under the case**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 where standing pilots were being banned. MR. BROOKMAN: Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. For the cooking products in this graph here, you kind of show a rebound starting in basically this year, 2008, and flat for next year. With the housing market situation the way it is, doesn’t that maybe get adjusted downward a little bit just because, you know, housing starts peaked at two million, now they’re less than a million? MR. ROSENQUIST: Yeah. I mean, what we used for the housing starts are the Annual Energy Outlook and those housing starts forecasts do change from year to year and so what DOE tries to do is use the most recent version, of course, and just like you’re saying, if there’s an adjustment to those housing forecasts, they will be reflected in the shipments forecast. Just to be clear, the graph on the right is for microwave ovens, okay, not for conventional cooking products. MR. ROSENSTOCK: Okay. MR. ROSENQUIST: Okay. And so talking about that graph for microwave ovens, this is the base case shipments forecast for microwave ovens, as indicated by the blue dots.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 37

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 The standards case shipments forecast is presented here for the one watt standby power standard level and because the price increment to go to that standby power level is relatively small, the shipments case forecasts are virtually identical to the base case shipments forecasts. For commercial clothes washers, two sets of standards were used, one for top-loading washers and the other for front-loading washers. You can see thescale is different on top-loading than for frontloading, talking about on the order of a 150,000 to 200,000 for top-loading and only about 40,000 to 50,000 for front-loading.Again, the examples being used for toploading washers is the 1.6 MEF 8.3 water factor standard level and because it has an appreciable increase in purchase price, you can see that the standards case forecast actually drops relative to the base case forecast. For front-loading washers, the example being shown here is for the standard level of 2.0 MEF and 5.5 water factor and again since the price change relative to the baseline is relatively small, the standards case shipments forecasts are virtually the same as the base case forecasts.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 38

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 This next slide goes over the -- MR. BROOKMAN: Ed, please. MR. OSANN: On the last graphic, so the -- on front loaders, the lines actually overlap, is that the point? MR. ROSENQUIST: Yeah. I mean, if you blew this up, you would see a very slight decrease in the standards case shipments for this particular standard level, but since -- because of the scale, I mean, you really can’t see it there. MR. OSANN: Right. MR. ROSENQUIST: But there’s a very, very slight decrease. MR. BROOKMAN: Let’s see if there are any additional questions on Shipments Analysis before we

move on. (No response.) MR. BROOKMAN: Okay. MR. ROSENQUIST: Okay. This next slide goes over the general approach that was used for the National Impact Analysis and again this approach was basically the same as what was used for the National Impact Analysis for the ANOPR. What DOE does is it calculates national energy savings on an annual basis over this time period**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 39

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of 2012 to 2042 and accumulates that into a total national energy savings for any particular standard level. For the net present value or NPV, which accounts for all the product shipments coming into the market between 2012 and 2042, DOE takes into account the increases in equipment costs to the nation and the decrease in operating costs to the nation to come up with that value for all these products that do enter the market. The base case forecast does try to incorporate what happens to the efficiency of these products over time and in the case of the standards case forecasts, what DOE utilized was the roll-up scenario to estimate how these standards impact product efficiencies. Under the roll-up, what happens is that any products below a particular standard level roll up to that given standard level and all products above that standard level are unaffected. To illustrate how the roll-up is being -- is used, this example is given here for gas standard ovens, if you look under the column called Base Case, you can see that distribution is the same distribution that was presented earlier for the Life-Cycle Cost**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 40

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Analysis. Again, 18 percent of the market’s at the baseline level which consists of standing pilot ignition systems, 74 percent is for hot surface glow bar ignition, and eight percent is at spark ignition, and as you move over to a more stringent Candidate Standard Level, you can see how that distribution changes. I want to focus here on Candidate Standard Level 1-A which corresponds to spark ignition systems, and what you can see here is under the roll-up that 18 percent of the market with standing pilots rolls up into Candidate Standard Level 1-A which is the electronic spark ignition to comprise a total of 26 percent under this particular standard level. On the 74 percent of the market at the hot surface glow bars is unaffected because that’s another form of pilotless ignition and the assumption there is that consumers won’t all of a sudden vacate that particular product to go to spark ignition. So what happens under this roll-up scenario is that it dictates that the product efficiency mix, so that, you know, when DOE does its stock accounting model to estimate how products are coming into the market, it determines that when a unit does fail and**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 41

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 needs to get replaced by a new unit, it gets replaced by equipment according to the efficiency mix under each of these Candidate Standard Levels. The national average equipment prices and total installed costs and repair costs and maintenance costs, those are developed first from data coming from the Life-Cycle Cost Analysis. That Life-Cycle Cost Analysis provides us with per-unit values. Those are, in simple terms, multiplied by the stock of those products which are determined by the shipments model to provide these national values, and then for the cost part of the -- the cost inputs are being calculated from the National Impact Analysis and future values are discounted to the present year using discount rates of three and seven percent. MR. BROOKMAN: Questions, comments on National Impact Analysis? Tim. MR. BALLO: First, just to back up, I apologize, after saying all that about the rebuttable presumption payback period, I realized it was included in the NOPR at 6209.1. However, I’d note that the electric standard ovens do satisfy the rebuttable presumption test at TSL-3 and therefore presumably that can be justified. On the National Impact Analysis, DOE refused**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 42

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to consider the energy embedded in water because it believed that on 6207.4, that energy use is defined under EPCA as the energy directly consumed by a consumer product. Energy use is what the standard regulates. It’s what the test procedure tests for. What DOE is considering in this analysis is the energy savings, the energy efficiency and there’s no question that because of the energy embedded in water, a standard that saves water will also save energy. Factor Number 7 under 62950.2(b)(1) and any factor that DOE wants to consider basically. So for DOE to argue that it doesn’t have the discretion under this statute to consider the energy embedded in water is just not an accurate representation of what EPCA says. MR. BROOKMAN: Thank you. Additional comments on this section, Shipments Analysis and National Impact Analysis? (No response.) MR. BROOKMAN: You were finished, correct? MR. ROSENQUIST: Yes, I’m finished with the National Impact Analysis. MR. BROOKMAN: That’s fine. Okay. I just wanted to make sure. Okay. Then I’m going to suggest we pause for**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 43

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 lunch now. Ed, before we go to lunch, yes. MR. OSANN: Is there a roll-up analysis or a roll-up matrix like you’ve done for gas standard ovens for all products? MR. ROSENQUIST: Yeah, yeah. That’s in the Technical Support Document. So this example was specifically to illustrate what happens under a roll-up scenario and then for the other products, that’s in the Technical Support Document, specifically Chapter 11. MR. BROOKMAN: Other questions or comments? (No response.) MR. BROOKMAN: So let’s go to lunch. It’s almost 12:30. I guess then let’s resume at 1:30. This room will be locked. (Whereupon, at 12:27 p.m., the meeting was recessed for lunch, to reconvene this same day at 1:30 p.m.)**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 44

AFTERNOON SESSION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (1:30 p.m.) MR. BROOKMAN: Thank you. We have Trial Standard Levels, Consumer Subgroup Analysis, and Manufacturer Impact, and Greg is going to lead off along with Constantin. Yes, before we do. MR. MANTHEI: I just would like to ask a question on the Shipments Analysis portion. MR. BROOKMAN: Yes, Phil, please. MR. MANTHEI: Can DOE confirm that the chart on shipments is based on anticipated manufacturers -- MR. BROOKMAN: Can you refer to the chart, which one it is? MR. MANTHEI: Page or Slide 45, Top-Loading and Front-Loading Clothes Washers. Does that assume all the existing manufacturers will be in the marketplace? MR. ROSENQUIST: Yes, it does. I mean, basically, the shipments standard we used to calibrate the model was based upon the submittal we got from AHAM and if that data includes all the input from manufacturers, then it’s implied then that we’re assuming that all the manufacturers are still -- MR. MANTHEI: If a manufacturer exits the**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 45

1 2 3 4 5 6 7 8 9 10 11 12 13 14 market, it’s not represented? MR. ROSENQUIST: That’s not represented there. MR. BROOKMAN: Mike Rivest, find a microphone right here. MR. RIVEST: Mike Rivest. Phil, I think that just simply is meant to represent the shipments to the U.S. and it surely is dependent of the number of manufacturers. It’s consumer demand, if you will. Now, there’s -- it’s not like the shipment of domestically-manufactured products. That would be a different forecast. MR. BROOKMAN: Okay. Thanks, Mike. Okay. So then Gregory and Constantin. Trial Standard Levels, Consumer Subgroup Analysis, 15 and Manufacturer Impact Analysis 16 17 18 19 20 21 22 23 24 25 MR. ROSENQUIST: Okay. So I guess I’m picking it up at the conclusion of the revision of the ANOPR Analyses and we’ll begin with talking about the selection of Trial Standard Levels. The reason, the purpose for these selection of Trial Standard Levels is to create a list of standard levels from which DOE can assess the national impacts, the manufacturer impacts, the employment impacts, and the utility/environmental impacts.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 46

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 These Trial Standard Levels are developed for each of the three major groups of products that were analyzed for the NOPR; that is, conventional cooking products, microwave ovens and commercial clothes washers, and from that list of Trial Standard Levels, a proposed standard level is selected. The way that the Trial Standard Levels are assembled is by looking at the different Candidate Standard Levels in the product classes for each one of the products. So, for example, in the case of conventional cooking products, there are seven product classes. So a Trial Standard Level will draw a Candidate Standard Level from each one of those product classes to develop again the Trial Standard Level that represents those Candidate Standard Levels. These Candidate Standard Levels range across a wide range of efficiencies. For example, included in these Candidate Standard Levels are the maximum technologically-available efficiency level, the level with the lowest life-cycle cost, the level with the payback below three years. They also could include particularly noteworthy technologies. So each Trial Standard Level that’s developed incorporates the Candidate Standard Levels that exhibit one of these criteria. So, for example, you could have**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 47

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the Trial Standard Level with the minimum life-cycle cost which would again consist of the Candidate Standard Levels that had the minimum life-cycle cost from each one of the product classes. This slide -- MR. OSANN: Does the TSL have to have -- the TSL doesn’t have to have existing products in the marketplace in it, right? You can have a gap fill that is a construct for this analysis that may not line up with any particular products that are in the marketplace, can you not? MR. ROSENQUIST: Yeah. There might not be a complete correspondence for a gap fill level with a product that’s available in the marketplace. That’s true. MR. BROOKMAN: So that question was from Ed Osann. Okay. Thank you. MR. ROSENQUIST: So again, I don’t -- I can go into some detail about these TSLs for the three major product categories, but again I just want to get you really a picture of what the TSLs are. For conventional cooking products, there’s four TSLs again that represent seven product classes. I did want to point out that for Trial Standard Level 1, it consists of eliminating only standing pilots in**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 48

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 gas cooking products, and under the TSL-1, DOE would not have to regulate the energy factor of the cooking product. TSL-4 is the Max Tech level. It represents the Candidate Standard Level from each product class that is the maximum -- has the maximum technological feasible level. For microwave ovens, again as we’ve been saying through the morning session, there are -- DOE analyzed energy factors separately from standby power. So DOE developed two sets of Trial Standard Levels consisting of four TSLs each. The TSLs have a direct correspondence, a 1:1 correspondence with the Candidate Standard Levels that were analyzed. So again, there’s four Trial Standard Levels for the energy factor and there’s four Trial Standard Levels for standby power consumption, and then, finally, for commercial clothes washers, there are five Trial Standard Levels covering the two product classes, top-loading and front-loading. For example, Trial Standard Level 1 consists of the first incremental design change for each product class and, for example, Trial Standard Level 5 consists of the Max Tech levels from each product class. So unless people have specific questions**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 49

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 about the TSLs, I’ll move on. MR. BROOKMAN: Ed. MR. OSANN: Ed Osann, Appliance Standards Awareness Project. For commercial clothes washers, this is a substantial reconfiguration from the ANOPR, although there is -- I think there’s quite a bit of parallel with the front-loading, the top-loading is different. Why was -- why were current EnergyStar and forthcoming EnergyStar not identified as potential -- as TSLs? MR. ROSENQUIST: This is for the top-loading product class you’re speaking of? MR. OSANN: Yeah. MR. ROSENQUIST: Well, -- MR. OSANN: The forthcoming EnergyStar is TSL-1 for front-loading. The current EnergyStar is not in either one. MR. BROOKMAN: Mike Rivest. MR. RIVEST: The selection of the Trial Standard -- Mike Rivest, Navigant Consulting. The Trial Standard Levels were constructed around existing available products. The EnergyStar level of 17280, I believe, is not a product that could be reached with conventional top-loading technology, at**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 50

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 least it’s not one that was available on the market. MR. OSANN: Commercial -- limited to commercial products? MR. RIVEST: Correct. And the reason there’s that, we recognize that there are utility aspects to the commercial market which go beyond the requirements for the residential market. Those are documented in the TSD. So, for example, overloading, constant overloading of the baskets to get the most out of those four quarters, for example. So we didn’t want to go into technologies that may exist within the residential top-loading market but haven’t been deployed in the commercial market due to utility concerns. MR. OSANN: But the TSD does also talk about and the NOPR also talks about the migration of technologies from the residential to the commercial market, does it not? MR. RIVEST: I believe so. We recognize that

-- MR. OSANN: That’s why we’re concerned about the small volume manufacturer. MR. RIVEST: The -- those are two separate arguments. One argument has to do with the commonality of manufacturing platforms and the other one has to do**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 51

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 with what features consumers will accept within the respective markets. So there might be 80 percent commonality of components which a very large manufacturer could take advantage of, you know, through its purchasing volume and, you know, there’s 20 percent which is customized. So the head of the washer, for example, is very different but the guts might be very similar, but some of the features that are deployed in the residential market are not in the commercial market currently. So those are two separate things. MR. BROOKMAN: Follow-on on these points? (No response.) MR. BROOKMAN: Okay. Greg. MR. ROSENQUIST: This next slide presents the NPV for the Trial Standard Levels for each one of the three major product categories. For conventional cooking products, TSLs-1 through 3 all provided a net benefit to the nation in terms of a positive NPV. You can see on the slide the range of the dollar savings to the country. TSL-4 actually yielded a burden to the country. A large negative NPV was determined for TSL-4 for conventional cooking products. For microwave ovens, the four TSLs and energy**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 52

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 factor all produced a net burden to the country. For TSLs covering standby power, all four provided a net benefit to the country, and for commercial clothes washers, only TSL-1 provided a burden to the country, a small negative NPV, around $100,000, and then, of course, TSLs 2 through 5 yielded a net benefit to the country. MR. OSANN: Question. MR. BROOKMAN: Yes, please, Ed. MR. OSANN: Ed Osann. For cooking products, were the product classes evaluated independently? There’s nothing in the law to prevent you from adopting a TSL-2 for one product class and TSL-4 for another, correct? MR. ROSENQUIST: Again, you have to remember that the TSLs are comprised of the Candidate Standard Levels for each product class. So DOE has to select from the TSLs a proposed standard level. So maybe you want to -- maybe you meant that, you know, DOE could select Candidate Standard Level 2 for one product class and Candidate Standard Level 4 from another product class to build up a Trial Standard Level. So, I mean, with the different conventional cooking products is what you’d see here, that each of the TSLs were comprised of either the energy factors or**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 53

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the elimination of standing pilots that are presented on this table. MR. OSANN: So once you call it a TSL, they are bound together for purposes of the analysis? MR. ROSENQUIST: Yes. Yes, they are, and then DOE performs the Manufacturer Impact Analysis, the Utility Impact and the Environmental Impact Analyses, the Employment Impact Analyses, on those TSLs and based upon that information as well as the information from the Engineering and Life-Cycle Cost and National Impacts, it determines which one of those TSLs becomes the proposed standard level. MR. OSANN: Just to follow-up, isn’t there an obligation under NAVA to identify and adopt standards that are technically feasible? Doesn’t that apply to each product class? MR. ROSENQUIST: Yes, but I’m not -- MR. OSANN: If you’re binding a disparate group of seven products, maybe some were buried in TSL -- under TSL-3, one of these standards, Trial Standard Levels for one of these product classes, this is a hypothetical. Is the level for that product -- MR. ROSENQUIST: Okay. MR. OSANN: -- maximized under the life-cycle cost saving?**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 54

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. ROSENQUIST: Okay. Yeah. So, for example, for TSL-2, for conventional cooking products, that’s comprised of the TSLs from each product class that yield a net economic benefit to consumers for -- a majority yields a net economic impact, positive net -- an economic impact to the majority of consumers that are impacted by the standard. So when you go moving from TSL-1 to TSL-2, electric coil cooktops and electric standard ovens are the only product classes affected by that criterion. For Trial Standard Level 2, again what you see are the Candidate Standard Levels for each product class which meet that specific criterion providing a net economic benefit to consumers. MR. RIVEST: Mike Rivest. I think the process rule actually lays out how DOE goes about selecting its TSLs. So the analysis is run on eachproduct class separately and then we look at the lifecycle cost results of the product classes and group together the efficiency levels that have similar results. So all the Max Tech are grouped together. I’m talking generally, not necessarily here, all the minimum LCC efficiency levels would be grouped together. We’ve grouped in the past all the efficiency levels that result in zero NPV. We call that max**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 55

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 energy savings. So the TSLs are consistent in how they look at the efficiency levels. So they’re not unrelated, if you will, in that sense. So there’s no -- there isn’t a risk of having that hidden efficiency level which would have been the best that’s buried under there. MR. OSANN: No. MR. RIVEST: No. MR. OSANN: This is Ed Osann. Is the particular rubric for each of these four TSLs identified somewhere? What’s the descriptor for each of the four TSLs?MR. ROSENQUIST: Well, the criterion for TSL1 is simply eliminating standing pilot ignition systems from gas cooking products. The criterion for TSL-2 is the CSL from each product class that yields net economic impacts to a majority of consumers. The criterion for TSL-3 is the Candidate Standard Level from each product class that yields on average LCC savings, the maximum LCC savings, and the criterion for TSL-4 is the Max Tech level from each product class. MR. OSANN: Okay. Is that in the NOPR? MR. ROSENQUIST: Yeah. It’s written up in the NOPR. It’s also in the TSD. MR. OSANN: Okay. Can you go through that**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 56

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 same description for commercial clothes washers? MR. ROSENQUIST: Well, for commercial clotheswashers, it’s a little different, right? For toploading, there’s three Candidate Standard Levels and for front-loading, there’s four. So you see we have five TSLs which basically cover almost all the different permutations you can get from combining the efficiency levels from each product class. So for TSL-1, basically the criterion is to just move to the first design change which is CSL-1 from each product class. TSL-2 is the next designchange for each product class which corresponds to CSL2 for each product class. TSL-3 brings you to the next efficiency level for top-loading but keeps front-loading at the same efficiency level and the purpose behind that was to minimize the retail price difference between the two product classes. TSL-4, because we’re already at the Max Tech level for top-loading, just stays at that level, and then for front-loading increment up to the next efficiency level, and then TSL-5 is the Max Tech level from each product class. MR. OSANN: Correct me if I’m wrong. This is Ed Osann again. I thought earlier this morning, in**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 57

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 response to a question, it was indicated that the technology screening for commercial clothes washers did not involve a layering of the design changes and that wasn’t the basis for identifying the TSL. MR. ROSENQUIST: Yeah. Okay. I’m being a little loose with my terminology. What I meant by going to the first Candidate Standard Level for each product class is that that’s the first efficiency level for each product class. MR. BROOKMAN: It doesn’t involve a design change? MR. ROSENQUIST: Well, of course there’s a design change, right, but I don’t want to mix it up with the terminology that was used for the Engineering Analysis. The Engineering Analysis used an efficiency level approach to come up with these various Candidate Standard Levels. Of course, there again, design changes and moving to those efficiency levels. MR. OSANN: So TSL-1 is the first efficiency level, not the first design change? MR. ROSENQUIST: Correct. MR. OSANN: And which TSL is the one that maximizes net present value -- excuse me -- life-cycle cost savings?**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 58

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. ROSENQUIST: Well, it’s TSL-5, the Max Tech level. MR. OSANN: Max Tech also --MR. ROSENQUIST: Corresponds to Minimum LifeCycle Cost and Maximum Net Present Value. MR. OSANN: You have Max Tech for TSL-3 for top-loaders but Max Tech is TSL-5 for front-loaders? MR. ROSENQUIST: That’s correct.MR. OSANN: So what is TSL-3 for frontloaders? MR. ROSENQUIST: For front-loaders, it’s a machine that has a 2.0 MEF and a water factor of -- MR. OSANN: But what’s the rubric or the decision rule for that? MR. ROSENQUIST: Oh, for that one? Again, it was designed -- see, again for top-loading, again you’re incrementing up by efficiency level to correspond to each TSL. For front-loading, it didn’t happen when you went from 2 to 3 and the reason is because DOE decided to minimize that retail price difference between front-loaders and top-loaders for TSL-3. MR. BROOKMAN: Mike Rivest. MR. RIVEST: There’s actually two arguments why for TSL-3. There’s minimizing the cost**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 59

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 incremental. There’s also minimizing the manufacturing impact to be simultaneously having manufacturers redesign their vertical axis to the Max Tech and then to have them also redesign their horizontal axis to the Max Tech creates this level of investment and keeping in mind the very relatively low volume of product shipments, those investments are not spread over very large volumes, particularly for the low-volume manufacturers. So by focusing on improving the vertical axis design, thereby squeezing the price differential between vertical axis and horizontal axis, you’re creating more of a bridge or an incentive for people to go towards the vertical or horizontal axis and you’re not -- you know, you’re creating a backstop, if you will, because that 2.0, I believe the majority of horizontal axis models already meet that level. So the idea is you create a backstop on the horizontal and you create an inducement for people to buy horizontal. MR. BROOKMAN: Ed Osann. MR. OSANN: Yeah. I understand that there may be reasons for various -- there are reasons that would commend one to use one selection over another one but we were told less than five minutes ago that all of**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 60

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the Max Techs would be in one TSL across disparate -- MR. RIVEST: They are. They’re 5. MR. OSANN: -- product classes and that all of the levels that maximize life-cycle cost savings would be in the same TSL -- MR. RIVEST: They’re in TSL-5. MR. OSANN: -- across product classes. MR. RIVEST: So both are in TSL-5. It’s one and the same thing. MR. BROOKMAN: Maybe you could seek further clarification at the break. They’ll be happy to walk you through it. MR. OSANN: I would rather have the clarification on the record. MR. BROOKMAN: Okay. MR. ROSENQUIST: Again, I was going to say that again because TSL-5 represents both Max Tech and maximum LCC savings and maximum net present value to the nation, all the other Trial Standard Levels in a sense, in a sense, are gap fill. The department didn’t want to go out with just two Trial Standard Levels or one Trial Standard Level for that matter that just consisted of the minimum life-cycle cost or maximum life-cycle cost savings, and these other concerns that Mike Rivest just**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 61

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 pointed out concerning not creating a market situation where you’re inducing people or consumers away from front-loading machines was also a consideration when these TSLs were developed. MR. BROOKMAN: Thank you, Greg. Ed, do you have other questions? MR. OSANN: I do have a question about that particular facet of the analysis. Is this the time to ask it? MR. BROOKMAN: Sure. Yeah. MR. OSANN: Is there -- there’s language in the NOPR indicating that DOE was concerned about this recapture of market share by less efficient top-loaders if the standard for front-loaders was more rigorous or more costly. Is there analysis in TSD or anywhere that addresses that elasticity? MR. ROSENQUIST: You know, DOE assumed thatthe market share split that you have today between toploaders and front-loaders would be maintained over the forecast period and that is described in the Technical Support Document and in the NOPR. MR. OSANN: But the incremental cost difference between TSL-1 and -- excuse me -- between TSL-2 and 3 -- I guess it’s 1 and 3 because 2 and 3 are**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 62

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the same, is something in the vicinity of $28, and the incremental cost difference between 1 and 4 is $60, and this is on a total cost of over $1,300, basically. Is there any analysis that says that difference of roughly 32 additional dollars for the first cost for TSL-4 machines is going to expose the market to recapture by less efficient top-loading machines which themselves are going to go up by over $200? MR. ROSENQUIST: No, there isn’t. Again, the assumption that DOE made was that the current market shares between top-loading and front-loading will be maintained over the forecast period for all TSLs. So if there’s any information that you have or anyone else has about how that relationship may change, based upon the increased efficiency of these products, DOE would certainly take that into consideration to try to do some analysis. MR. RIVEST: Just at a very -- MR. BROOKMAN: Mike Rivest. MR. RIVEST: Mike Rivest. High-level thinking in terms of where the market is currently, I believe 70 percent of the market is -- 80 percent of the market is vertical, 20 percent is horizontal. So from a cost-effectiveness point of view,**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 63

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 certainly achieving an improvement from 126 to 176 with a water factor reduction of 95 to 83, you know, that’s where the bulk of the savings are coming from, but in terms from a design perspective, it’s just as costly to design going from a 20 to a 23 MEF as it would be probably for the vertical axis. So that incremental savings comes at two risks: the manufacturing risk and a consumer rebound risk, if you will. MR. OSANN: This is Ed Osann again. You’re making an additional point relating to manufacturing risk? MR. RIVEST: Manufacturing cost -- MR. OSANN: Manufacturing cost. MR. RIVEST: -- impact, yes. Required investments in tooling and research and development. MR. OSANN: But aren’t those going to be reflected then in your assessment of -- MR. RIVEST: They are reflected in -- MR. OSANN: -- incremental first costs? MR. RIVEST: They’re reflected in the incremental first cost, but they’re not -- and they’re also reflected in the manufacturing impact results which shows, you know, the more serious impacts if you are to cause redesign changes.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 64

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. OSANN: So the incremental costs that I cited which was the $60 increase to -- between TSL-1 and TSL-4, there’s more to consider than that $60 increment? MR. RIVEST: You’re only considering the consumer side now. I’m saying there’s another side which is the manufacturing impact side, which is the first-time cost as opposed to the variable cost. So that investment, which can be $15 million to come up with a new platform, is a one-time requirement in capital that a small manufacturer, for example, has to go in the capital markets to borrow that money. MR. OSANN: Is the amortization of that reflected in your estimates of the -- MR. RIVEST: That’s not -- MR. OSANN: -- of the first costs? MR. RIVEST: Yes, but that’s not the point. The point is it’s a first-time cost that has to be taken out of the liquidity of the company or borrowed from. So you’re looking at it strictly from the consumer perspective. You have to look at it from the manufacturing perspective. It’s a cash flow issue. It’s not a pricing issue, it’s a cash flow issue. MR. OSANN: We’re going to get to the Manufacturing Impact Analysis, I guess, --**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 65

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. BROOKMAN: Right. MR. OSANN: -- some time later? MR. BROOKMAN: Yes, we will. Kelley? MS. KLINE: I guess we’ll get to that later. My question -- Kelley Kline from GE. My question was really I was hoping to get some clarification on the manufacturing impacts and incremental costs from going to TSL-1 to 3 with the top-loading units. So we may be getting there in a minute. MR. BROOKMAN: Okay. So we’re going to -- MR. ROSENQUIST: Yeah. I just need to cover the Consumer Subgroup and then we’ll get right into the MIA. MR. BROOKMAN: Okay. So let’s proceed with that and then save your questions for the Manufacturer Impact Analysis. MR. ROSENQUIST: Okay. Let me quickly go over the Consumer Subgroup Analysis. Its purpose is to evaluate whether there’s any consumer subgroups out there that would be disproportionately impacted by a standard more so than the general population. For cooking products, DOE looked at two subgroups, low-income consumers and senior-only**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 66

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 consumers, and for commercial clothes washers, DOE analyzed small businesses as well as multifamily consumers that don’t have any access to municipal water and sewer. DOE conducted this analysis by using the LCC spreadsheet models and then took the inputs and modified them to be specific to these particular subgroups. As it turned out, the LCC results for all these subgroups were basically the same as for the general population, and if you don’t have any questions, I’ll turn it over to Constantin to talk about the Manufacturer Impact Analysis. MR. BROOKMAN: Before we move on, questions on the Consumer Subgroup Analysis. (No response.) MR. BROOKMAN: Okay. MR. von WENTZEL: Okay. So the purpose of the MIA is to assess the impacts of standards on residential cooking and commercial clothes washer manufacturers and specifically, there are a couple of entities who would be affected more than others. In this rulemaking, the low-volume manufacturer who we’ve heard from before, which is an entity that is focused on producing commercial clothes washers and commercial**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 67

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 laundry equipment in general, and as such, because of this concentration in this market, would be affected more than any other competitor by virtue of not being a diversified entity. On the cooking side, we identified three domestic manufacturers of cooking appliances that use standing pilots and two of those entities are small businesses and so there’s an additional amount of review that goes into assessing the impacts on these manufacturers, all of whom derive a significant portion of their income from units that have standing pilots in them. The method we used to look into these impacts is to use the Government Impact Regulatory Model, the GRIM, and also conducted a number of interviews with manufacturers. Not listed are microwave oven manufacturers which we also attempted -- we did our best to contact as many of them as we could. AS you can see, the MIA consists of three phases and we create an industry profile. We developed the GRIM, develop an interview guide, then we conduct a whole number of interviews and also conduct site visits, and from that create subgroup analyses and then get into impacts, such as employment, impacts on competition and so on and so forth, before we finalize**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 68

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 them for the NOPR. Let me talk about these three different groups separately, starting with the gas cooktops. As I mentioned before, there’s three domestic manufacturers. Two of them are small businesses. All three of these manufacturers already make gas cooking appliances that have electronic ignition systems, so one could make the argument that the transition costs would be relatively low. However, the impact that’s not very well known is the loss of differentiation. All three manufacturers mentioned that this is an important differentiator for them to have standing pilot ignition systems. Once those ignition systems go away and they have to compete with the rest of the market, which represents over 80 percent of current shipments, there could be an impact on their market share and as a result, there could be an impact on their revenues. However, what that impact is or would be could not be quantified by any of them. So that’s Number 1. Moving on to microwave oven manufacturers, as I mentioned, we had difficulty contacting a number of them as a result of most of them producing abroad and not being U.S.-based anymore. So, in particular, we had difficulty getting**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 69

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 quantitative impacts. There is some uncertainty in terms of the design path that manufacturers may take to achieve these higher-efficiency levels for power supplies and display systems and so on and so forth. For most of them, these systems appear to be purchase parts and as a result, the impact in terms of a cap-X basis may not be that great. However, some of them also manufacture their own. In other words, the impacts can vary from manufacturer to manufacturer. Another thing we noted is that the market or the international market seems to be harmonizing around a one watt standard at various different times, but whether you look at Australia, Japan, Korea, Europe, one watt seems to be a goal that many different countries and blocks of countries appear to be heading to. Another point that manufacturers brought up with us is that the one watt standard could in fact shoehorn them into such a small box in terms of how much energy budget they have that there could be an impact on the differentiation of their products in the marketplace. In other words, that more and more products will look similar and behave similar and therefore there may not be the opportunity to create something different and charge accordingly.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 70

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. BROOKMAN: We have a question. Your name, please. MR. JOHNSON: Chris Johnson, LG Electronics. I just had a question. If you had trouble getting input from manufacturers of microwave ovens, why is the range so great of IMPV at TSL-1, 267 million to negative 1165 million at TSL-4? Why are the ranges so great then if you have a small pool, why are the ranges so great? MR. BROOKMAN: You’re referring to Slide 56? MR. JOHNSON: Yes. MR. von WENTZEL: That’s the next slide. MR. BROOKMAN: So would you repeat the question again, please? MR. JOHNSON: I’m just wondering. You mentioned that you had difficulty getting the information from the microwave oven manufacturers and so I’m just wondering why is the Manufacturer Impact Analysis, the ranges of the IMPV so great then? It seems like it would be less if you only talked to a few. MR. RIVEST: Well, actually, -- this is Mike Rivest -- there are two components to the Manufacturer Impact. There’s the -- when we looked at the impact on standby power and then there was the impact of**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 71

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 incremental improvements in cooking efficiency. As you saw, we did very thorough analysis on the standby power requirements and developed our own cost-efficiency curves and our own investment numbers. The cooking power depended on the previous analysis which had capital investments that had been forwarded by industry. This goes back in ’96. What you’re seeing really is a wider range that represents a greater uncertainty. So as we get better information in fact, our range of results gets tighter. So we have to -- we’re faced with modeling different scenarios that really, you know, reflect very wide costs in shipment and pricing assumptions. So really, I think things are in the right direction there. MR. JOHNSON: Okay. Thank you. MR. BROOKMAN: Thank you. MR. von WENTZEL: Any other questions regarding microwave ovens? (No response.) MR. BROOKMAN: Constantin, I wasn’t sure that you were finished with the explanation on 54 before we’re moving on to the others. Did you complete what you wanted to say on 54? MR. von WENTZEL: I think we were on 55,**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 72

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 actually. MR. BROOKMAN: Okay. Good. Okay. MR. von WENTZEL: Yeah. So coming back to the different product classes and specifically now the commercial clothes washer, there’s a significant -- all manufacturers that we queried mentioned that there was a significant uncertainty regarding the consumer acceptance of high-efficiency vertical axis clothes washers. There have been products in the past that achieved very high-efficiency levels that have been withdrawn due to consumer complaints and the result of a standard that is very high on the vertical axis side could actually lead to a transition to a horizontal axis market, which is to say that if consumers do not accept a high-efficiency vertical axis clothes washer and therefore, for lack of a better word, you know, refuse to use them, then the net result of a very high standard could in fact be the transition of the market to horizontal axis which was sort of akin to what would have happened under or could have -- was proposed under the -- could have been proposed under the previous -- in the ANOPR with one product class. So at the very low volumes that these manufacturers are operating at, particularly the LVM,**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 73

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the low volume manufacturer, making very high capital investments that are required to develop and test the new product platform, it’s simply not justifiable based on the financial modeling that we did, particularly if one product class -- if you were to transition to all horizontal axis. The other manufacturers produce clothes washers on the order of 45 times more than the LVM and as such have significant advantages in terms of their scale, but in general, coming back to the NPV that we just looked at over here on Page 56, the impacts on the clothes washer industry as a whole are therefore quite negative, particularly in light of the production volumes that they’re producing at, which brings me to the last point, which is that the low volume manufacturer has stated repeatedly that it is likely to exit the clothes washer business all together if a standard were enacted that would lead to either the abandoning of the vertical axis clothes washer in the commercial field or a transition to horizontal axis in general. So that’s one of the reasons that the Trial Standard 3 is being put forth in that it minimizes the investments that are required to all-encompass one product platform as opposed to two because all**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 74

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 manufacturers already make product, horizontal axis product that meets that efficiency level. MR. BROOKMAN: Kelley. MR. von WENTZEL: That’s it. Any questions? MS. KLINE: Kelley Kline from GE. I guess my question then, because I agree with a lot of what youjust said about the consumer acceptance of the highefficiency, and I guess I’m wondering, given everything that you’ve said, how the Max Tech for the top-load level is still justified. MR. BROOKMAN: Mike Rivest. MR. RIVEST: Our understanding of the Max Tech vertical axis washer currently, as considered here in the analysis, it’s a conventional top-loader with conventional agitator. It involves more sophisticated controls for things such as a adaptive fill, multiple spin speeds, multiple temperatures. So really, from a mechanical point of view, from the manufacturing platform point of view, it keeps in place the existing manufacturing infrastructure. It still requires an investment in things, such as controls, but it doesn’t require a radical platform change as might be required of, you know, a new design top-loader which has an impeller instead of an agitator, for example.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 75

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 So whether or not the level chosen is the proper level, given what we heard this morning, is a question, but the intent was to stay within existing top-loader technology and that’s why if it’s left at that level would mitigate -- would maximize energy savings while mitigating manufacturing impacts. MR. BROOKMAN: Kelley. MS. KLINE: Kelley Kline again from GE. I guess my suggestion would be with that circumstance, and I understand what you just said, it still doesn’t get at the question and the point about consumer acceptability and the very high-efficiency Max Tech levels that we have some real questions about, and I’m wondering if DOE should consider some sort of user acceptability survey or study to determine the acceptability model. MR. RIVEST: I think, you know, the attitude we took is that here’s a product which is marketed by a large company who probably has extensive market research and so it’s not as though we went outside the range of existing product, for example. MS. KLINE: I understand that, and I understand that. It is, though, a very small fraction of the market, though. MR. RIVEST: I understand. If we had gone**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 76

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 further, there are technologies in the residential market that achieve much higher energy, but they’re not currently deployed in the commercial market. Our understanding why they’re not deployed is that they don’t lend themselves currently to the commercial market and they might, but they would require research and development and the type of consumer acceptance studies that you talked about. So that’s why the Max Tech is where it is, basically. MR. BROOKMAN: So that exchange between Mike Rivest and Kelley. Okay. Thanks for those clarifying remarks. Other questions based on where we are with Slide 56? Did you finish presenting this yet? MR. von WENTZEL: Well, I mean, I guess the most important thing to take away from this slide, because it’s very, very busy, is that your Appendix has actually far more detailed tables that actually break out the impacts on industry net present value by efficiency level in a much clearer way, I think, than this very busy slide does. And now back to Greg, unless there are questions. Any questions? MR. BROOKMAN: Are there still questions? MR. MANTHEI: Phil Manthei, Alliance Laundry**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 77

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Systems. I just would like to underscore the impact on users for these proposed Trial Standards. The one product that was used in the 1.8768.3, for instance, when you select hot water, you know, you get a 107- degree hot water in the test using the DOE test procedure. It’s not hot water. Hot water, under the recommendation of Proctor and Gamble, who has a book out called “How To Clean,” is a 120 and above is considered hot water. When you select warm water, you get 72-degree water. That is cold water under what Proctor and Gamble calls clean. Anything less than 80 degrees is cold water. So talking about impact on the users, you can’t expect to get your clothes clean. Every time you start reducing hot water, it’s not going to clean. MR. BROOKMAN: Thank you. Greg. Utility Impact Analysis, Employment Impact Analysis, 19 Environmental Assessment, Regulatory Impact Analysis 20 21 22 23 24 25 MR. ROSENQUIST: Okay. I’m going to pick things back up with the Utility Impact Analysis. The purpose of this analysis is to determine the effect of standards to electricity and gas providers due to the reduction in energy use and demand caused by the**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 78

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 standards. The method relies on taking the energy savings from the National Impact Analysis and feeding it into a model called NEMS or National Energy Modeling System. This is the Energy Information Administration’s model for forecasting energy for the United States, and again the version we use is tailored to the analysis of appliance standards. The output from the analysis is the change that’s caused by these standards and electricity and gas sales as well as prices by region. Another output is how the mix of electricity generation is affected by the standards as well as how the installed generation capacity for the U.S. is affected by the standards. For the NOPR, DOE determined that the proposed standards for all the various products yields something on the order of 400 megawatts in installed generation capacity savings by the year 2042. MR. BROOKMAN: Yes, Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. Were you able to do a determination without a reduction in the gas? MR. ROSENQUIST: What we did there is just forecasted the reduction in gas sales. So nothing concerning, for example, the impact on distribution**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 79

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 pipelines. MR. ROSENSTOCK: Gas wells or anything? MR. ROSENQUIST: Yeah. MR. ROSENSTOCK: Secondly, I guess for this rulemaking, are you thinking about doing any sort of water impacts, water utility impacts? MR. ROSENQUIST: No, the department did not decide to do that. The primary reason being, which is described in the NOPR, is that an analysis tool similar to NEMS is not available on the water utility side. That’s in simple terms. I mean, DOE did do an assessment of the type of work that’s going on in both states and in the Federal Government on looking at water and developing these tools but those tools aren’t there yet at the level that NEMS is. MR. BROOKMAN: Other questions? Gary. MR. FERNSTROM: Well, I’d just like to make the comment that, again particularly in California, water is very important because we’re having a drought and there’s a lot of embedded energy in water in California, and to leave its effect out of the analysis for lack of an analytical tool doesn’t seem to me to be a very acceptable way of dealing with it. MR. ROSENQUIST: In terms of the embedded**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 80

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 energy to provide water and wastewater services, the reason given by DOE in the NOPR is not because of analytical tools not being available, it’s because of the interpretation of legislation saying that only direct energy consumption from the products should be considered in the analysis. So the energy associated with water delivery and wastewater treatment, for example, therefore is not included. MR. FERNSTROM: All right. So there’s electric or gas energy going into the appliance, but it’s deemed there’s no energy embodied in the water that’s going into it. MR. ROSENQUIST: Well, in terms of the energy prices, again it’s implied that those energy prices reflect the cost of providing that service. So in the sense that again water, you know, is necessary for that energy production, that’s included, and as far as the water prices and the wastewater prices that are used in the analysis, again it’s implied that the energy that’s required to deliver that water and treat that wastewater is also included in the prices. MR. FERNSTROM: So the cost is incorporated? MR. ROSENQUIST: Yes, but -- so what’s not being accounted for is the energy that’s needed to deliver that water and again for the reason I just**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 81

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 gave, because it’s not a direct energy consumption of the appliance. MR. FERNSTROM: And presumably that’s embodied in the price, too, right? MR. ROSENQUIST: That’s correct. MR. BROOKMAN: Mike Rivest. MR. RIVEST: Well, I mean, there are potentially two issues. Certainly what’s embodied is monetized. The question is would one want to quantify the water without necessarily putting a monetary value added since it’s already embedded in the water prices? So I’m not sure if that’s where you were going earlier, that you want the quantities reported, but certainly to put a monetary value on it would be double counting those dollar values. MR. BROOKMAN: Tim. MR. BALLO: Tim Ballo, EarthJustice. Yeah. I can see that it’s double counting. My concern was that DOE’s reason for not considering it at all was, in my view, was pretty good. MR. BROOKMAN: Ed Osann. MR. OSANN: I don’t think it’s an issue of double counting. I think the concern was that in the National Impact Analysis, you’re presenting in the aggregate energy savings from the proposed rule and**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 82

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you’re not including in those energy savings the energy savings that’s embedded in the saved water. MR. RIVEST: Mike Rivest. I could see how that would take us down a path where, for example, we might want to take into account the embedded energy and the material costs of the production of the equipment, for example. So the question is one of boundaries. Where do we draw the lines, you know, or do we put a cradle to grave on everything? MR. BROOKMAN: Gary. MR. FERNSTROM: Well, it seems to me that there is certainly a question about where you draw the line, but I see a very clear line here because when you talk about embedded energy in the product, that is not something that is delivered to the product and a function of its use. Electricity, gas and water are delivered to the product and a function of its use. It seems to me, you know, that’s a very clear line. MR. RIVEST: But think about the NPV calculation. It has a first cost component and then it has energy savings aspects and then we discount it to a single value. If we were to do the same with energy, you would have to take into account the embedded energy in the product as a first-time energy cost and then you**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 83

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 could capture those additional savings. So it’s just a matter of being even-handed, I think. MR. BROOKMAN: Jennifer. MS. AMANN: Jennifer Amann, ACEEE. I see it as being a very different issue because we’re talking about the embedded energy in -- that is impacted by the standard. The embedded energy in the materials in the product aren’t a function of the standard. The efficiency standard impacts the electricity use and the water use of the equipment and so the embedded energy there is a different beast than the embedded energy. So I don’t really see us getting on a slippery slope by moving in that direction. MR. RIVEST: I don’t see that line. I see, for example, an air conditioner which would require more tons of copper and steel and that would create a one-time energy cost, for example. MR. BROOKMAN: The actual energy cost of producing the iron and the steel. MR. RIVEST: And that would change, that would be incrementally larger to the standard. So it’s a good debate. MR. BROOKMAN: Okay. So additional comments on this? So I guess I want to encourage Tim to -- since you had a legal rationale for why DOE could**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 84

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 include that, if you wanted to submit that in your comments, I think that would be helpful. Yes, Ed. MR. OSANN: Just to clarify before we leave Slide 58, in the Utility Impact Analysis, are the utilities at issue electric and gas distribution utilities only or are water and wastewater utilities included in the Utility Impact Analysis? MR. ROSENQUIST: No, the water and wastewater utilities are not included in the analysis. MR. OSANN: Is there a statutory prohibition against that? MR. ROSENQUIST: Well, again, the reason given by the department in the NOPR was because the analytical tools at the scale of the National Energy Modeling System are not yet available. MR. BROOKMAN: Gary. MR. FERNSTROM: I’d like to go back to my prior comment and say, you know, lack of analytical tools doesn’t seem to me like a very good reason for not addressing the issue. MR. BROOKMAN: Okay. Other comments on Utility Impact Analysis or questions, for that matter? (No response.) MR. BROOKMAN: Okay.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 85

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. ROSENQUIST: Okay. The next analysis is the Employment Impact Analysis, and the purpose of this analysis is to determine the impact of standards on jobs, employment in the country. What’s done here again is that we’re taking the national impacts that are determined in the National Impacts Analysis and feeding those into a spreadsheet model called MSET. This MSET model, again from the changes in costs and savings to the overall economy, determines the effect on the overall employment in the country. This model was developed by Pacific Northwest National Laboratory for DOE. It analyzes a 188 different sectors in the economy that affect transportation, buildings, and industry as well. I wanted to point out that the direct employment impacts to manufacturers are not determined in this analysis. That instead is determined in the Manufacturer Impact Analysis. The result of this analysis is again the change in national employment due to these standards that we’re analyzing and as it turns out, the proposed standards for this rulemaking have a very, very, very small positive impact, that is, an increase on national employment, but it’s safe to say that that impact is**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 86

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 not -- cannot -- would not be seen in national labor statistics. MR. BROOKMAN: Steve Rosenstock. MR. ROSENSTOCK: Just out of curiosity, I think I heard earlier that, and forgive me if I’m wrong, that predominantly like for microwave ovens, they’re all manufactured overseas, is that -- MR. von WENTZEL: Almost all. MR. ROSENSTOCK: Almost all of them. Ninety percent plus, something like that. In terms of, I’ll say, a National Impact Analysis, wouldn’t that -- you know, does this model take that into account, that if the majority of the employment -- wouldn’t that mean the majority of the impact would be overseas as well? MR. ROSENQUIST: Well, there’d be a national impact because again electricity providers would not be providing the same level of electricity and that in turn leads to reduced consumer expenditures which then in turn stimulates other sectors of the economy which could in turn result in a net job increase. So that element, as driven by the reduced expenditures on energy, would be captured in the analysis. But when you’re talking about the impacts to foreign manufacturers, again that explicitly would not**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 87

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 be accounted by this model. MR. BROOKMAN: Tim. MR. BALLO: Tim Ballo with EarthJustice. First, a clarification question. The indirect employment impacts modeling that you do, does that actually consider reductions in employment within the energy sector, say power plants? MR. ROSENQUIST: Yes. Yes, it does. MR. BALLO: So this is an issue that’s come up again in several rulemakings where DOE argues that positive indirect employment impacts, the department doesn’t need to monetize that or put any sort of economic value on to it because generally it would be offset by declines in other sectors, such as the manufacturing industry being regulated or the energy sector, but, however, just, you know, to point this out, there are, according to the department’s figures, 239 total domestic production employees in the microwave oven industry. That’s 239 people employed in the U.S. to make these products. For example, microwave oven standby standards will increase employment by 6,500 jobs. That’s 6,300 roughly more than are employed. So that if every single domestic microwave oven employee who’s involved in the production has their job outsourced to some**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 88

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 other country loses their job, we’re still at a net gain of 6,300 jobs. This factor is completely ignored in the economic analysis and it should be considered in any rationale analysis of the economic justification for the standard. MR. BROOKMAN: Thank you. MR. ROSENQUIST: That’s true. I mean, the dollar value of those jobs are not considered in the analysis. MR. BROOKMAN: Other comments on Employment Impact Analysis? (No response.) MR. BROOKMAN: Okay. MR. ROSENQUIST: Okay. Now, I’ll turn to the Environmental Assessment. The purpose of this analysis is to determine the impact of standards on airborne emissions coming from both power plants and from appliances at building sites. With regard to carbon dioxide, DOE determined the impact of standards using the same model that it used for the Utility Impact Analysis and that’s again the National Energy Modeling System or NEMS. Standards are run through NEMS in order to determine what the**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 89

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 change in carbon emissions are for a standards case relative to the reference or base case. When it comes to NOX and mercury, there were two rules recently that were vacated by the federal courts, the Clean Air Interstate Rule and the Clean Air Mercury Rule. Both of those rules would have capped emissions coming from power plants for both NOX and mercury. Now again, since they’ve been vacated, those rules are no longer in effect, but the problem was, is that NEMS, the latest version of NEMS that we use, still incorporated those rules. Therefore, we couldn’t use the model to estimate the impacts to NOX and mercury reductions. What was done instead is that we used NEMS to derive emission rates, NOX emission rates and mercury emission rates for power plants and those emission rates were multiplied by the drop in installed generation capacity in order to estimate a possible range of savings on mercury and NOX coming from power plants. Did you want to ask a question, Steve? Okay. NEMS does not have the ability to estimate emissions coming from fossil fuel appliances that are in a home or at a commercial building. So DOE had to**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 90

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 do a literature search to determine the emission factors that are associated with those appliances to determine what the savings in carbon and NOX are from standards that affected appliances at the site. When it comes to SO2, there have been caps in place since 1990 due to the Clean Air Act Amendments. So DOE estimated that there would be no impact to SO2 power plant emissions from standards. DOE did evaluate, though, the effect on allowance prices for SO2 and DOE did do NEMS runs to determine that there’s virtually no impact to allowance prices due to these proposed standards. And, finally, DOE did monetize the value of the reductions in carbon and in NOX and in mercury for this rule. For CO2, DOE used the Intergovernmental Panel on Climate Change report by looking at some values that were produced in that report for dollars per ton of CO2 avoided. For NOX and mercury, DOE did a literature search to determine what the health and environmental impacts would be in terms of dollars due to avoided NOX and mercury emissions. MR. BROOKMAN: Steve Rosenstock. MR. ROSENSTOCK: A couple of quick comments. Those rules were vacated, I know, but there are efforts**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 91

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to get them reinstated and it looks likely that there will be caps probably reinstated by some point in 2009. So my thought would be, again my opinion would be that the caps will be reinstated, if not lowered, at some point in the near future as well as the SOX numbers scaling down as well. In terms of the dollars per ton for CO2, the International Panel -- I’m just kind of curious because we saw the New England experiment with $3 per ton basically in the first round of options. The International Panel, what were their numbers? More like in the $20 to $30 range per ton? MR. ROSENQUIST: The cost was $14 or $15 per ton. MR. ROSENSTOCK: Okay. MR. ROSENQUIST: DOE decided to use the values from that report as opposed to market-based values. MR. ROSENSTOCK: Okay. MR. BROOKMAN: Additional comments on Environmental Assessment? Yes, Tim. MR. BALLO: Tim Ballo with EarthJustice. We’ll be submitting along with NRDC some more detailed comments on the monetary value that DOE should be using.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 92

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Just a general comment that these numbers, these monetized values should be incorporated into a truly national analysis of the net present value of the rulemaking. DOE has what it refers to as a national net present value figure, but it really leaves out a lot of factors, like the emissions reductions and the employment benefits, that kind of skews the analysis against stronger efficiency standards. MR. BROOKMAN: Thank you. Additional comments on Environmental Assessment? (No response.) MR. BROOKMAN: Okay. MR. ROSENQUIST: Now we come to a slide which discusses a couple of issues that DOE’s specifically seeking public comment on. The first issue pertains to DOE’s policy decision to discount environmental benefits. Again, in past rulemakings, DOE has decided to discount the emissions as a policy case and basically assuming that future emissions aren’t worth as much as emissions closer to the present. DOE has used three and seven percent discount rates to discount these environmental benefits and now is looking for comment on whether or not there’s other types of discount rates that should be used to discount**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 93

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 those future environmental benefits. MR. BROOKMAN: Let’s pause and see what responses we get to that one. Yes, Tim. MR. BALLO: Tim Ballo, EarthJustice. First of all, I believe you also include an adjustment factor from the IPCC to increase -- I believe you used 2.4 percent per year, the value of CO2 emissions reductions. The discount rate on top of that, I would just note that OMB Guidance Circular A4 provides a lot of flexibility here. I don’t think it compels the department to apply any sort of discount rate. There are serious ethical concerns with discounting emissions reductions. Essentially, you’re discounting debts in the future. You’re discounting emissions. MR. BROOKMAN: Thank you. Additional comments on discounted environmental benefits? Yes, Steve Rosenstock. MR. ROSENSTOCK: Not on the dollar side because typically you discount dollars, not other -- I know it’s kind of -- DOE’s not discounting energy and environmental impacts, but just the -- just in terms of some of these impacts, just because -- especially on the electric generation side with -- there are now renewable portfolio standards in 29 states and pretty**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 94

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 much mandated statewide goals in four other states representing over 75 percent of the population and with the clean air rules that are probably going to be reinstated in 2009, the -- any emissions back to kwh -- well, it’s been going down since 1970 and it will keep going down and it’s a matter of the energy savings in the future will have less environmental impacts than the energy savings now just because of the function of how power plants are getting cleaner. So I don’t know about discounting, but I’m just saying in terms of just overall accounting, if there’s X grams of X emission per kilowatt hour now, that value goes down, will be going down over the years, that DOE should make sure to account for it in its calculations. That’s not going to be static or increasing. It’s been going down for 30 years and if there are CO2 rules, that will also start getting -- you know, CO2 associated with that kilowatt hour. MR. BROOKMAN: Okay. Thank you. Additional comments on discounted environmental benefits? There’s another one on that same page. MR. ROSENQUIST: Yeah. The second issue pertains to something that Timothy had just brought up which is how DOE treats the monetization of these environmental benefits.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 95

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 DOE has decided to keep these separate from the consumer net present value basically because they view EPCA and the National Environmental Policy Act as not requiring them to combine it with the consumer net present value. So DOE, though, is looking for any comment on its treatment of the monetized values and how it should be basically used in their policy decisions. MR. BROOKMAN: I couldn’t tell whether those other bullets are linked. MR. ROSENQUIST: Yeah. All the bullets are linked. Actually, I skipped over one bullet. Again, another reason cited is that because the market for environmental emissions, at least for CO2, is not mature and not widespread, again they don’t feel like it should -- they should be counting those monetized CO2 emission reductions into its NPV calculation. MR. BROOKMAN: Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, EEI. That last sentence, “Unlike energy saving, economic value and emission reduction is not priced in the marketplace,” I think I have to disagree with that because of the fact that utilities for the cost of complying with Clean Air Act and other legislation, whether federal or state, have adjusted the price of**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 96

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the electricity to account for those costs. So part of the cost of electricity is for complying with federal and state Clean Air legislation. So it might not be broken out specifically in any utility bill and it might be a lower -- it might not be a significant value, it might be less than one percent of the utility bill, of the cost per kilowatt hour, but the cost to comply with -- the value is the cost to comply with emission reduction has been put into the electric rates and so there is -- you know, the savings are just blended in with all the other savings associated with the cost of providing the electricity. MR. BROOKMAN: Okay. Tim. MR. BALLO: Tim Ballo, EarthJustice. To respond to that, it’s true, there is a portion of the true value or the true cost, rather, of emissions is incorporated into the electric bill. However, the full cost of those emissions is not yet incorporated, for example, because there is no nationwide cap on carbon emissions as we sit here today. Once that does happen, then I would argue it’s certain to happen by the time the effective date rolls around for these products. There will be -- the electricity bills will incorporate arguably the full social cost of carbon and that’s why I argued earlier**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 97

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that DOE should increase the electricity price assumption that it uses. MR. BROOKMAN: Thank you. Yes, Ed Osann. MR. OSANN: Question about the second bullet on this slide. DOE’s made several additions to its monetization of environmental emissions reductions in today’s proposed rule. What are those several additions? MR. ROSENQUIST: It’s to monetize the environmental reductions, these reductions of airborne emissions. That wasn’t done until recently. MR. BROOKMAN: The CO2 and NOX and -- MR. ROSENQUIST: CO2 and NOX and mercury. MR. BROOKMAN: -- mercury. MR. ROSENQUIST: This is one of the first standards rulemakings that has included the monetary value of those emission reductions. MR. ROSENSTOCK: Steve Rosenstock, EEI. And again, I hate to repeat what I said before, especially in terms of SOX. The cost of the SOX compliance is embedded into rates and if DOE adds something else on it, in a way it is double counting. So, you know, again, small amount but again we should try not to double count where possible. MR. ROSENQUIST: Specifically again for SO2,**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 98

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 because of what, Steve, you just said, that these caps have been in place since 1990, there is a market for SO2 and there’s an allowance price associated with it and so what the department did was run NEMS to try to see what the impact from the standards was on that allowance price and it’s a negligible impact on the allowance price from the proposed standards. MR. BROOKMAN: Thank you. So additional -- you see three bullets there that we haven’t addressed fully yet. Monetization of Environmental Benefits and, Greg, do you feel like you’ve adequately described the other two bullets? MR. ROSENQUIST: Yeah. Yes, I think we’ve had input on all those. MR. BROOKMAN: Additional questions or comments based on these three specific requests for comment from the department? (No response.) MR. BROOKMAN: Okay. MR. ROSENQUIST: Okay. Now we’re to the last analysis that’s conducted for the NOPR and that’s the Regulatory Impact Analysis. The purpose of this analysis is to analyze alternatives, non-regulatory alternatives to mandatory efficiency standards and determine what those national**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 1 99

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 impacts would be from these non-regulatory alternatives. DOE considered the following non-regulatory alternatives to standards. The first one was no regulatory action whatsoever which is no new standard. Consumer rebates. Consumer tax credits. Voluntary efficiency targets, specifically EnergyStar. Manufacturer tax credits. Early replacement programs. Bulk government purchases. The way that DOE analyzed these programs was to take the NIA spreadsheet model for each one of the products and modify specific assumptions in those spreadsheet models to determine what the impacts again from these alternatives would be. What DOE tried to do in this case was use actual historical, recent historical data to see how the market has been affected by these programs, and because of recent tax incentive programs that have bee instituted by both states and the federal program, there was a little bit of data available to try to get after what those impacts would be. As it turns out, none of the alternatives achieved the same level of national energy savings or national economic benefits as the proposed standards for any of the products.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 MR. BROOKMAN: So comments on the Regulatory Impact Analysis? (No response.) MR. BROOKMAN: No additional comments on those? (No response.) MR. BROOKMAN: Okay. That’s all the presentation? MR. ROSENQUIST: That’s all the presentation. MR. BROOKMAN: I’d invite you to take a peek at the back-up slides that are attached to your documents here. There’s quite a lot of documentation here for you to look at, and as is the case always, the department wants to provide another opportunity now for anybody that wishes to, to make closing remarks, raise additional issues that haven’t been raised so far, summarize things you may have said earlier briefly as possible. So let’s just do that. Tim. Discussion of Other Issues 20 21 22 23 24 25 MR. BALLO: Tim Ballo, EarthJustice. I was still getting settled in this morning, so I missed my opportunity to respond earlier but I’ll do it now. At the outset of this meeting, there was a comment made and made very strongly that the incoming**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 01

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 administration, which has made a focus of its campaign helping out the middle class and lower-income folks, is facing the opportunity to select a standard that could adversely impact the interests of us folks. However, if you look at the numbers for the Life-Cycle Cost and Net Present Value, adopting a single standard for all commercial clothes washer classes represents the largest savings for consumers. From the ANOPR, when DOE’s proposing to keep a uniform class for all commercial clothes washers, adopting a modified energy factor of 2 and water factor of 5.5 would yield economic benefits of roughly 1 to 2.5 billion more than the standard DOE’s proposing to adopt today. Going with an even stronger standard would have larger benefits. Similarly, for cooking products, going with TSL-3 as opposed to TSL-1, I believe, which you would propose to adopt, would provide another 150+ million for consumers at a seven percent discount rate and 700 million at a three percent discount rate. So to the extent the next administration is concerned about impacts on middle and low-income people, adopting stronger standards is the best thing it can do for those people. MR. BROOKMAN: Thank you. Additional closing**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 02

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 remarks? Gary. MR. FERNSTROM: PG&E would like to agree with EarthJustice, to the extent that we strongly believe that a single standard for clothes washers is most in the public interest. MR. BROOKMAN: Thank you. Steve Rosenstock. MR. ROSENSTOCK: Steve Rosenstock, Edison Electric Institute. I just want to again thank DOE for the meeting and for all their hard work over the last several years. I know the mandates from the last two big energy bills are pretty overwhelming and I think they’re doing a really good job in terms of meeting all the deadlines, either through the legislation or the consent decree. There are obviously energy savings, significant energy savings from all these products. I hope DOE in the final rule will, you know, take everything into consideration and I hope that the rule will avoid any laws of unintended consequences because that way, we know that -- I think you got some good feedback here and I just want to make -- I just hope that, you know, the competition is not reduced and safety is not compromised when setting these efficiency standards and I think there are going to be good ways**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 03

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to do that and save a significant amount of energy. Thank you. MR. BROOKMAN: Thank you. Additional comments, closing remarks? Yes, Phil. MR. MANTHEI: I’d like to say we appreciate DOE’s -- they’re kind of caught in the middle here in their understanding. However, we absolutely want you to reconsider the standard for calculating the class of product. We’re to the end of the road with what’s happening with the top-loader. You can’t keep taking away hot water and water. It isn’t going to work anymore. Maybe there are some of these non-traditional designs that others can afford to bring forth. We cannot. Alliance Laundry does not have the capital and is unwilling to risk the business to do that. MR. BROOKMAN: Thank you. Ed Osann. MR. OSANN: Ed Osann. Taken together, the ANOPR and the NOPR paint a picture of very substantial potential energy and water savings from high-efficiency clothes washers. The path that DOE has laid out, however, in the NOPR just doesn’t get us there and there’s got to be a better way through this thicket of the DOE process and the current market configuration. We’ve heard from serious issues raised with**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 04

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the model that -- with the approach that DOE has taken in identifying Max Tech and the recommended standard level for top-loading clothes washers. There’s at least a reasonable likelihood that the standard level that DOE has proposed will not hold up for one reason or another and the decision criteria is based upon efficiency levels that are present only in the commercial market today and we’ll see a further retrenchment of the potential savings that can result from this rule. DOE still has the opportunity to look at efficiency levels in current and forthcoming EnergyStar. The TSD is erroneous in concluding that all of the higher-efficiency residential products that are on the market are impeller-type or do not have traditional agitators. There are in fact agitator-type residential products on the market today in the C&C database that produce -- that perform at higher levels than the Max Tech model that DOE has described for the purposes of this rulemaking. So that really needs a fresh look here, particularly as the DOE’s assumptions about the Max Tech model that they have chosen are called into question. MR. BROOKMAN: Thank you. Additional**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 05

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 comments? Yes, J.B. MR. HOYT: J.B. Hoyt, Whirlpool. I certainly appreciate everybody’s response to the closing comments. However, there’s been a lot of focus in these comments on technological feasibility. That is but one element in this. Again, we need to recognize that, as I like to say, the dogs have to like the dog food. Consumers have to be able to use the product in a way that meets their expectations, in terms of cleaning clothes and cooking food, and furthermore, consumers expect the product to last and have a durability of a significant period of time. So as manufacturers, those of us in the room who are manufacturers, have a responsibility of not only meeting the technological challenges but the consumer-based challenges as well and keeping that balance in line is extremely important as we go forward. MR. BROOKMAN: Thank you. Additions? (No response.) MR. BROOKMAN: No additional comments? Yes, Phil. MR. MANTHEI: Phil Manthei, Alliance Laundry Systems. I did bring a packet of about 25 pages of our**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 06

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 comments here. MR. BROOKMAN: Great. Okay. So we’ll hand those around. Then I think that’s all we had to cover, with the exception of Next Steps and Closing Remarks and before I turn it back to Stephen Witkowski, my thanks to all of you for very direct, I think, good exchange today. We covered so much ground effectively, efficiently. I would reference for your consideration Slide 66 and 67 where the department requests specific comment on these issues. I know they would appreciate your comments in written form addressing as many of these as you’re able to. That would be helpful to them and also I’d ask for your consideration, please. There’s an evaluation form at the bottom of your materials. Please take a few minutes to fill it out and I believe that we distributed already a photocopy of the attendees, the business cards. If you didn’t get one, there ought to be one at the sign-in desk. So I hand it back then to Stephen Witkowski for Closing Remarks. Next Steps and Closing Remarks 22 23 24 25 MR. WITKOWSKI: Very briefly, I just want to refer you to Slide 69 in terms of submitting your comments.**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 07

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 If you have any problems, and hopefully you won’t, also feel free to contact me directly. I want to thank you all for coming today and for contributing to a very lively and informative discussion. As far as the TSD goes, actually I made 40 copies, I burned 40 copies of it during lunch, and I have them available to take with you. We will, of course, get them up on to the website shortly, as I mentioned earlier, but please, I would ask that you only take one copy, though, and if you have any problems with them, also don’t hesitate to contact me, if for some reason it doesn’t read or whatever. I will see that you get a copy immediately, although it should be up on the website early next week. With that, I thank you very much for coming. MR. BROOKMAN: I see Ed Osann. MR. OSANN: Ed Osann. Last month, the e-mail portal for submitting comments for NEPA rules had some problems accepting comments. Has that been resolved? MR. WITKOWSKI: That has been resolved. We had an IT problem and you shouldn’t -- that shouldn’t happen again. However, if it does, please contact me. I guarantee you that your comments will be accepted and**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 08

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 we will do additional tests to make sure that the portal’s up and running. MR. BROOKMAN: Okay. Thanks to all of you. Safe travels. (Whereupon, at 3:10 p.m., the meeting was concluded.)**EXECUTIVE COURT REPORTERS, INC. (301)**  **565-0064** 2 09 **REPORTER'S CERTIFICATE** 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 This is to certify that the attached proceedings before: **UNITED STATES DEPARTMENT OF ENERGY** In the Matter of: **PUBLIC MEETING ON ENERGY CONSERVATION STANDARDS FOR RESIDENTIAL DISHWASHERS, DEHUMIDIFIERS, AND COOKING**  **PRODUCTS, AND COMMERCIAL CLOTHES WASHERS** Were held as herein appears and that this is the original transcript thereof for the file of the Department, Commission, Board, Administrative Law Judge or the Agency. Further, I am neither counsel for or related to any party to the above proceedings.



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22 Official Reporter Dated: November 19, 2008