Summary of the Third Meeting of the 

Working Group on Medium-Voltage Distribution Transformers 

of the Energy Efficiency and Renewable Energy Advisory Committee 

November 8-9, 2011 

Richard W. Parker, Facilitator 

Note: This meeting summary has been prepared for the convenience of the Working Group. It has 

not been approved by the Working Group and should not be construed or taken to represent the official 

position of the Working Group or any member as to what transpired at the meeting. 

 The Working Group on Medium-Voltage Transformers (“MV Group”) held its third meeting on Nov. 

8-9, hosted by Edison Electric Institute in Washington, DC. A list of attendees is included with the 

official transcript of the meeting. 

 After the welcome and introductions, the facilitator noted the extraordinary amount of feedback 

received on the engineering and economic analysis in past meetings and online since the past meeting (as 

well as in private conversations with Navigant and LBNL staff). He noted that much of this discussion 

had occurred only very recently, that the consultants had worked hard to try to absorb this feedback and 

integrate it where appropriate into revised analysis, though much of that feedback was received only very 

recently after the group’s internal deadlines had passed. The facilitator expressed the hope that 

participants would consider the existing analysis as the basis for further discussions of standards, and that 

the discussion over the next two days would focus on negotiating actual standards based on that analysis. 

 Mr. Parker then proposed an agenda for the day, which was adopted. He then opened the floor for 

questions and comments on the analysis of liquid immersed design lines (1-5), with a focus on clarifying 

questions and the hope that these questions could be answered in 15 minutes or so. 

Discussion of Liquid Immersed Transformers (Design Lines 1 – 5) 

Pole weight 

 In response to a question from a public interest advocate, Ms. Coughlin of LBNL confirmed that their 

model assumed a pole changeout for pole-mounted transformers whenever the weight of the standardscase transformer exceeded 115 percent of the weight of the base case transformer. A utility 

representative noted that this assumption was conservative in that weight would not likely be an issue 

until transformer size reached 75 kVA or higher. Another utility representative noted, on the other hand, 

that many poles have other utilities on them, which might require a changeout for increased transformer 

size even on smaller poles. 

Paradox of zero incremental costs in some cases 

 Another participant asked why in some cases there appeared to be no incremental first cost as one 

moves from one EL to a higher EL. The answer from LNBL was that the optimizing model in some cases 

chooses the same design under multiple standard levels (e.g. because it’s the optimum design at at CSL 2 

and also at CSL3). 

 

Cost of money 

 Another participant asked whether the LCC used both 3 percent and 7 percent cost of money. Ms. 

Coughlin answered that, no, 3 and 7 percent are used in the NIA, but the LCC employs a distribution of 

discount rates, with a median rate of 4.7 percent in real terms. 

Margin of error 
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 A transformer manufacturer representative asked whether the modeled efficiencies included a margin 

for manufacturing variability to ensure compliance under test conditions (which would mean that the 

actual efficiency would need to be somewhat higher than the standard level). Mr. Coffey of Navigant 

replied that the efficiencies in the engineering analysis did not include a margin of variability bu that 

current test procedures already include a mathematical allowance for statistical variation. 

Apparent discrepancy between ABB and DOE analysis of materials selection 

 A public interest advocate stated that in the previous meeting one manufacturer had displayed pie 

charts of actual sales of transformers over a year period that showed M3 steel transformers being shipped 

at efficiency levels higher than DOE’s model suggests is “doable.” The question was whether DOE 

consultants had, since then, compared the model results with the data that ABB presented in the last 

meeting. Mr. Rivest indicated that his team had not attempted to determine whether efficiency levels 

being shipped by ABB are achievable with silicon steels by changing the A and B factor inputs in the 

DOE optimization model. 

 Mr. Patterson of ABB pointed out that the DOE team had optimized using an array of A and B factor 

inputs, and “did not have the capability to run an optimization given an efficiency input” and that the 

latter was a separate problem from the former. If you were optimizing for efficiency you would make a 

family of efficiency curves, which would be a straight line on a log-log curve that would become 

asymptotic at the upper limit of that particular grade of steel.” ABB was able to manufacture with M3 

steel at higher efficiencies because they are designing for efficiency and not an A/B factor. So “where 

DOE data curves up, ABB’s data was still running in that straight line.” 

 He noted, however, that DOE data and tools can be used to perform the analysis at hand, but should 

not work by basing LCC results on discrete points and individual designs. Rather, DOE should fit a curve 

through the scatterplots and based the LCC from the curve. 

 Mr. Rivest replied that there are different price-efficiency curves for different steels and that the point 

of intersection for different curves and steels as efficiency levels increase depends significantly on the 

relative prices of steels (and/or amorphous metal), and that a “lot of the sensitivity runs have centered 

around that differential.” He noted also that the Efficiency Levels do not correspond to the same amount 

of energy savings or loss reductions across different design lines, so care must be taken in interpreting the 

results. His team understood that what might be achievable in one kVA rating with M3 may not be 

achievable in another. 

 A public interest advocate inquired whether it was the case that for design line 1, did the DOE 

analysis indicate that at efficiency level 3 the model picked 100 percent amorphous core transformers? 

Mr. Rivest said that the analysis did so indicate, even though there were other designs available in the 

database that used ZDHM, M2 or M3 and which met the specified efficiency level, but which were not 

picked because they were higher cost. Mr. Rivest noted, however, that in the real world one would not 

expect to see the abrupt transition from one steel to another (or to amorphous metal) that was appearing 

the materials selection portion of the LCC/NIA. 

 Another industry participant responded, however, that there is a huge matrix of possible designs. The 

fact that one design, or a handful of designs might be built at a given efficience level with M2 or M3 steel 

does not prove that these steels are viable materials for the “entire envelope of requirements in the 

marketplace.” 

 A public interest advocate responded that a 15 percent market share for M3 steel transformers at 

higher ELs certainly suggested a level that is way past the cost-effectiveness point. Mr. Rivest replied 

that the slides reported no sales data by kVA rating, so it was not possible to draw such conclusions about 
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cost-effectiveness from across the kVA space “from the data we have.” To which, the public interest 

advocate responded that that means further investigation is needed. 

Agreement that abrupt steel transitions in LCC analysis are not realistic 

 In response to another question from a utility representative, Mr. Rivest confirmed that the existing 

analysis showed an abrupt transition to 100 percent amorphous metals at a point that lies anywhere from 

EL0 to EL2, depending on the design line but in practice there would likely be a more gradual transition 

out to roughly a 40 percent loss reduction, where amorphous metal would dominate. 

Dollars per watt concerns 

 A utility representative pointed out that for Design Line 1, for a 50 kVA single-phase pad mounted 

transformer at the 50 percent test point, the core losses would be 102 watts, the winding losses are 148 

watts, so total losses would be 250 watts. To go from the base case (99.08% efficiency) to Efficiency 

Level 1 (99.16% efficiency) would yield a reduction of 0.2 watts at an incremental first cost of $343. He 

said that is equivalent to paying $1700 for a watt. He said that made no sense. 

 A transformer manufacturer rep (“A”) responded that his review suggested that DOE data for a 50 

kVA single phase pad showed the lowest cost unit of $2,000 to a 234 Watt loss and $3500 for a unit that 

reduced losses to 108 watts, meaning that “you’re paying $1500 for 126 watts.” He asked Mr. Rivest 

whether he agreed. 

 Mr. Rivest explained that that statistic is misleading because it assumes that everyone buys 

transformers at the minimum efficiency (the standard level) whereas the LCC analysis assumes that 

companies will buy a range of efficiency with the standard level being the lowest efficiency and other 

purchases higher efficiency. Also, when the engineering data shows a flat boundary curve and the LCC 

selects off that curve, there is not a lot of change in the price of EL 2, 3 and 4 transformers, so people 

would buy at higher efficiency and save more money. In that case, looking at the cost of an EL2 

transformer and comparing it to an EL2 level of savings would be misleading. (T54) 

Regression vs. boundary curve 

 Mr. Rivest agreed, however, that the problem is that “we’re not using a regression. We’re using 

discrete points of efficiency and selecting designs at those discrete points, so it’s creating a lumpiness that 

wouldn’t exist if we had a regression.” 

Pads vs poles 

 Prior to the introduction of the formal agenda item for the pads vs poles issue, Mr. Patterson of ABB 

had noted that the DOE price-efficiency relationship is largely is broadly consistent with his company’s 

pad mount curve. However, he noted that “for pole mount data the price increase is more than twice.” He 

noted that conversations with DOE staff are continuing to try to explain the discrepancy. 

 Mr. Rivest had replied that he had compared the ABB data for incremental cost vs efficiency, and that 

when he normalized for the same set of assumptions there’s good agreement. However, the ABB data 

showed more design options and a more linear incremental cost than the DOE data. He said that looking 

at percent changes in price vs percent change in efficiency created a confusing picture because the base 

price was quite different, but when the metric is normalized to dollars and watts things are coming much 

more in line. 

 When the issue recurred during the discussion of the pads vs poles agenda item, Mr. Patterson 

reiterated his belief that the data warrant treating poles as a separate equipment class, and suggested that 

this could be done simply by having a “simple multiplier that says if it’s this equipment class you move 
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the losses by X amount.” Facilitator Parker asked whether he was proposing creating a technical work 

group to work out what such a multiplier might be and Mr. Patterson said that would be his proposal. 

Another industry representative noted that it might make more sense to wait until it was clear what 

efficiency level seemed likely for pads, because the distinction between poles and pads at that efficiency 

level might not be great. Because poles and pads are built in the same plant, his company would prefer 

that they have the same efficiency level if possible. 

 A public interest advocate noted that his group is open to the idea of separate treatment of poles and 

pads, but that they would be looking to the cost-effectiveness data to see what the multiplier should be. 

 Mr. Rivest said he believed the analysis in place (which already distinguishes between poles and pads 

design levels) would allow them to implement Mr. Patterson’s proposal. 

 A utility industry representative noted that, depending on precisely what multiplier is chosen, this 

approach might end up creating a standard level between two existing ELs. 

 

Refurbishment 

Representatives from steelmakers, transformer manufacturers and utilities all expressed concern over 

the risk of a large-scale shift to refurbishment if the first cost of transformers were to increase. One utility 

rep noted that he had done some checking on rebuilding and that “you can rebuild a transformer [for] just 

slightly less than what you pay for a [new] transformer today.” 

 One steelmaker representative asked whether the existing analysis had factored in that 20 percent or 

25 percent of transformers may be refurbished, and whether it had considered the possible impact on 

manufacturing. The DOE staff response was that refurbishment estimates were considered in the 

shipments analysis portion of the NIA. However, they noted that the refurbishment market is currently so 

small that they don’t have data that will allow them to characterize those costs with any degree of 

accuracy. So they need from industry concrete data on the costs of refurbishment, and so far they have 

not received that information. 

 The facilitator noted that decisions must be made on the basis of analysis, and that incorporating 

refurbishment more systematically into the analysis requires data on refurbishment costs, and the analysts 

have been open to and awaiting comment on that but that hard data has not come in. 

 With that the meeting recessed for half an hour. 

Advocates’ proposal 

After the recess the Advocates presented their proposal, which generally called for roughly 25 percent 

lower losses overall than the current standard (approximately TSL 5 level, but based on the TSL 4 

criterion of ensuring multiple steel options for compliance), based on DOE data. Specifically: 

 DL 1: EL4 

 DL 2: EL4 

 DL 3: EL3 

 DL 4: EL4 

 DL5: EL4 

 The public interest group spokesperson noted that this would save 1.4 quads of energy and save 

consumers either $11 billion or $13 billion, depending on which version of the DOE analysis one referred 

to. He stated that he also believe that the DOE estimate understated benefits because it used prices for 

M3 that are significantly higher than are found in the market today, and that the advocates looked forward 
5

to sensitivity analysis that would use more current prices. He also believed that the DOE analysis 

incorporated far too many pole replacements, correction for which would further increase estimated 

benefits. He observed that for DL1, based on DOE data, 99 percent of consumers would have positive 

LCC impact, and the mean payback period would be 10 years. For DL2, 74 percent of consumers would 

enjoy LCC savings, with a payback of 25 years (the longer payback period reflecting the special 

constrains of poles). For DL 3, 99 percent are better off with mean payback of 5 years. For DL4, 99 

percvent are better off with mean payback of 4 years For DL 5, 97 percent are better of with mean 

payback of 8 years. 

 He noted that the advocates are open to proposals for different standards for different BIL ratings, and 

for poles vs pads. He also noted that advocates are flexible on effective dates and would consider phasing 

in the standard. They are also willing to commit to working with utilities in a joint approach to NARUC 

to ensure that utility commissions are supportive of higher minimum efficiency standards. They said they 

are not willing to consider increasing the efficiency level by 0.5, and if that is only counter-offer the 

advocates would just leave it to DOE to decide. 

 Another advocate noted that he did not think that the Department would land at the 0.5 level in a 

contested rulemaking based on the record before it. But he noted that the advocates are “trying to 

maintain options in the market place for core materials”, that that is an important criterion and one they 

are trying to meet with their proposal. 

 He noted, drawing on the ABB slides presented at the prior meeting (see Annex [ ] ) that ABB data 

showed actual sales of M3 transformers being sold up to EL4 for DL 1. For DL2 likewise, ABB data 

showed products using M3 being sold out to EL 4, and M2 out to EL 5. 

 Mr. Patterson responded that EL 4 and 5 is misleading. The advocates responded that their main 

point is that a 25 percent reduction in losses is possible using M-grade steel, and the fact that a substantial 

portion of ABB shipments (roughly half for single phase pads) at the higher efficiency levels used Mgrade steel shows that such steels are competitive with amorphous metal at these levels. What this means, 

according the advocates, is that the TSL 4 criterion of multiple steel choices can be met at EL 4 even 

though DOE analysis does not show it. (T85) 

Reactions by other members 

 A steelmaker spokesman objected that the advocates seemed to be relying selectively on DOE 

analysis – the positive LCC savings up to EL 4 – while discounting the part of the DOE analysis that they 

didn’t like -- which showed amorphous metal shipments going from 25,000 tons per year to 160,000 tons 

per year. This didn’t seem proper to that participant. 

 In response to the advocates’ proposal, an industry spokesman responded that even though ABB data 

showed sales of M3 and M2 transformers at higher efficiencies, prices were not included and in any case 

ABB acknowledged that these transformers were often purchased for reasons other than efficiency. 

While ABB certainly data showed that M3 and M2 are technically capable of achieving EL4 in the liquid 

immersed design lines, they did not prove that such are economically viable options. Indeed, the DOE 

analysis seemed to show that amorphous metal is the “right choice for . . EL2, 2 and 4 and up” and for 

some design lines even for EL1. 

 He reiterated the need for separate treatment of different BIL classes, of poles vs pads, and reiterated 

the concern with a shift to refurbished units if refurbishment costs are 80 percent or less than the first cost 

of the new, higher-efficiency transformer. He displayed certain charts by GE Prolec that he said 

suggested that prices of M3 transformers increase much more rapidly with efficiency than predicted in the 

Navigant analysis would suggest. 
6

 Another transformer manufacturer rep noted that even though amorphous transformers have lower 

core losses than silicon steel units, their load losses are higher and these losses peak at times of day when 

electricity prices are at their highest. Ms. Coughlin of LBNL responded that the DOE LCC analysis did 

not assume a test procedure loading, that they assumed a distribution of loads centered at 35 percent for 

most utilities, and 25 percent for utilities serving low-density populations, and that the LBNL model took 

into account the fact that electricity prices are higher at times of day when loads are high.