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Neal R. Gross and Co., Inc.

 U.S. DEPARTMENT OF ENERGY

 + + + + +

 CENTRAL AIR CONDITIONER REGIONAL STANDARDS

 ENFORCEMENT WORKING GROUP

 + + + + +

 PUBLIC MEETING

 + + + + +

 TUESDAY

 AUGUST 26, 2014

 + + + + +

 The Public Meeting met in Room 8E-089,

1000 Independence Avenue, S.W., Washington,

D.C., at 9:00 a.m., Neil Eisner, Meeting

Facilitator, presiding.

PRESENT

NEIL EISNER, Meeting Facilitator 

TIMOTHY BALLO, Earthjustice

GARY CLARK, Goodman Global 

JORDAN DORIA, Ingersoll Rand

RAY ELLIS, Lincoln Electric Cooperative 

GARY FERNSTROM, California Investor Owned 

 Utilities 

JOHN GIBBONS, Carrier Corporation

MATTHEW LATTANZI, NORDYNE Inc. 

CHARLES McCRUDDEN, Air Conditioning

 Contractors of America 

JON MELCHI, HARDI

KAREN MEYERS, Rheem Manufacturing Company

ELIZABETH NOLL, Natural Resources Defense

 Council 

DOUG RAWALD, DOE Office of General Counsel
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BRYAN ROCKY, Johnson Controls 

HARVEY SACHS, American Council for an

 Energy-Efficient Economy 

AMY SHEPHERD, Air-Conditioning, Heating and

 Refrigeration Institute

CHARLES WHITE, Plumbing-Heating-Cooling

 Contractors - National Association 

DAVID WINNINGHAM, Allied Air Enterprises

ALSO PRESENT

KARIM AMRANE, Air-Conditioning, Heating, and 

 Refrigeration Institute

LAURA DEGITZ, Navigant Consulting

JEREMIAH FREEMAN, U.S. Department of Energy

DAVID HUNGERFORD, California Energy 

 Commission*

JOHN HURST, Lennox International 

EMILY MARCHETTI, U.S. Department of Energy 

DON SURRENA, National Association of Home

 Builders

ERIC STAS, DOE Office of General Counsel

*via teleconference
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CONTENTS

Call to Order and Opening Remarks. . . . . . . 4

 Neil Eisner

 Meeting Facilitator

Update on DOE Guidance Re: Issues. . . . . . . 7

 Raised by Members

 Doug Rawald

 Department of Energy

Questions and Comments About the . . . . . . .17

 Guidance

Basic Definitions. . . . . . . . . . . . . . .64

 Doug Rawald

 Department of Energy

Discuss Knowing Sales to Routine . . . .151, 320

Violator

 Doug Rawald

 Department of Energy

FTC Label. . . . . . . . . . . . . . . . . . 286

 Hampton Newsome

 Division of Enforcement

 Federal Trade Commission

Questions and Comments . . . . . . . . . . . 293

What Is an "Effective" Enforcement . . . . . 237

 Plan?

Wrap-Up. . . . . . . . . . . . . . . . . . . 375
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1 P-R-O-C-E-E-D-I-N-G-S

2 9:04 a.m.

3 MR. EISNER: Why don't we get

4 started? It seems some seats are still empty. 

5 Hopefully, they will get here shortly.

6 Did everybody get a copy of the

7 agenda? There are extra copies if anybody

8 needs one.

9 Is everybody set?

10 Okay. For those who are not aware

11 of it -- and I know there is a little bit of

12 confusion with some of you when you checked in

13 this morning -- tomorrow's meeting is not

14 going to be here. And then, Thursday we will

15 be here again. Tomorrow's meeting is going to

16 be at Harvey's headquarters, the National

17 Press Building, at 529 14th Street. It is at

18 529 14th Street, Northwest. For those of you

19 from out of town, just remember that

20 "Northwest," Suite 600. And Harvey is going

21 to send out some directions on that.

22 Harvey, do you want to mention
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1 anything else?

2 MEMBER SACHS: This is Harvey.

3 ACEEE is two blocks from Metro

4 Center. We certainly never advise anyone to

5 try parking anywhere in that quadrant. We are

6 two blocks from the White House, and it is the

7 old National Press Building.

8 The easiest way to get there is by

9 Metro to Metro Center Station, which is red

10 line, blue, orange, silver. And I will send

11 you directions.

12 The only other note of interest is

13 the coffee situation is analogous to that

14 here. There are lots of places for lunch

15 within the block, including the food court on

16 our second floor. But come with your own

17 coffee.

18 I am sorry we have never been able

19 to arrange for intensive security precautions

20 that characterize this building. If you need,

21 I can try to get someone to stand at the door

22 and emulate a scanner, but we don't know how
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1 to do that stuff. End of rant.

2 (Laughter.)

3 MR. EISNER: And we have one

4 change in membership that Doug wants to

5 mention.

6 MR. RAWALD: Right. So, this is

7 Doug Rawald.

8 For those people keeping track of

9 who is part of the group, we received an email

10 late last night that Charlie Harak from the

11 National Consumer Law Center is withdrawing

12 membership from the group. Those of you who

13 are here, we didn't meet him because he didn't

14 come to the last meeting because he was on

15 vacation. But he will not be taking part in

16 the group.

17 I have not talked to the program

18 head about replacing him, to know if we have

19 that option or not. But I will circle back

20 with folks and let them know. But he has

21 withdrawn his membership.

22 MR. EISNER: Okay. Any questions?
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1 (No response.)

2 Everybody has got the agenda. 

3 Well, let's get started.

4 And the first thing is going to be

5 an update on DOE Guidance. Doug is going to

6 go into that.

7 MR. RAWALD: Right. So, this is

8 Doug again.

9 So, hopefully, everyone checked

10 their email during the last two weeks and saw

11 the email from Jeremiah which linked folks to

12 the Draft Guidance we issued.

13 To give an explanation, as a

14 typical matter, DOE, when we issue guidance,

15 we issue it first in a draft form, so folks

16 can provide comment to that Guidance. We do

17 that just because we want to hear from people

18 about what they think of the Guidance before

19 go final with it or make changes based upon

20 what we hear from people.

21 So, the Guidance is directly

22 related to the questions we had discussed here
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1 two weeks ago and, hopefully, answers in large

2 part those questions, though I know there are

3 still lingering questions that still need to

4 be answered. Hopefully, the Guidance gives

5 some clarity that can take away the

6 obstructions that we had regarding proceeding

7 with the enforcement questions that we had

8 here.

9 But I definitely want to hear from

10 folks today, if there are still questions that

11 need to be answered, before we can really

12 engage fruitfully in enforcement, developing

13 an enforcement program.

14 Folks should feel free to respond

15 to the Guidance with their thoughts by

16 replying to the email address on the Guidance. 

17 So, if you have an opinion of the Guidance --

18 and I know some folks expressed opinions in

19 response when Ashley laid out some of the

20 Guidance last meeting on the record.

21 Please put them in the docket for

22 the Guidance, so everyone can read them. So,
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1 they are easier to respond to, so we can have

2 them all in one place. It just makes it a lot

3 simpler and it makes it a lot more effective

4 for public participation in the Guidance if

5 you respond to the docket as we have asked you

6 to.

7 But, once again, if you have any

8 questions or concerns about it, we can answer

9 them here. Ashley is out this week. So, I

10 will give you the best answer I can non11 technically-speaking about the Guidance, if

12 you have any questions about it. But,

13 hopefully, it speaks for itself, and I think

14 it is pretty comprehensive in answering a lot

15 of the questions that we had come up.

16 MR. EISNER: Anybody have any

17 questions? Comments?

18 (No response.)

19 Okay.

20 MR. RAWALD: This is Doug again.

21 So, do I take it that there is no

22 one who has any concerns with our ability to
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1 proceed at least with our fruitful discussion

2 over the next three days because of questions

3 that are still lingering from the Guidance? 

4 And we can engage in a positive discourse for

5 the next couple of days.

6 MEMBER ROCKY: This is Bryan Rocky

7 with Johnson Controls.

8 So, in general, I think the

9 Guidance answered the basic questions that

10 were talked about, and I think we can move

11 forward.

12 There are a couple of things of

13 concern that we will be commenting on. In

14 particular, the addition of the text that says

15 "an individual condensing unit or coil must

16 meet the current federal requirements." The

17 discussion on coil leads to some potential

18 issues, both in the U.S., but also in

19 discussions with Canada.

20 And again, it doesn't prevent us

21 from moving forward today, Doug, but there are

22 some things and some verbiage that I think
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1 still need to be, could be clearer and a

2 little more concise, but nothing that would

3 prevent us from moving forward.

4 MR. RAWALD: Okay, and I

5 appreciate that. And so, Bryan, you are

6 saying you guys are going to submit some

7 comments explaining that further?

8 MEMBER ROCKY: Yes, absolutely.

9 MR. RAWALD: Okay.

10 MR. EISNER: Okay. Other

11 questions? Comments?

12 MR. AMRANE: Karim. I am with

13 AHRI.

14 Of course, the Guidance also has

15 an impact on the label, the FTC label. Are we

16 expecting it to be part of the discussion

17 during these three days?

18 MR. RAWALD: Right, Karim. So,

19 this is Doug.

20 I talked with Hampton Newsome at

21 the FTC, as I said I would last meeting. I

22 explained to him what happened, what we
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1 discussed last meeting. We don't have a

2 transcript, so he wasn't able to read the

3 various commentary we had, which I think is

4 unfortunate, because I think it would have

5 helped him prepare for today.

6 He did agree to come today to

7 speak briefly with folks. So, he will be here

8 at least in the afternoon. Obviously, he has

9 a different schedule. He has different

10 concerns. He is not part of the group. So,

11 he can't be here for three days. But he does

12 want to be informed of what is going on, and

13 he will lay out some more information, I

14 think, that will help folks this afternoon.

15 So, please feel free to ask him

16 questions then, and he will do his best to

17 answer them, as prepared as he can be. 

18 Obviously, if he can't answer your question,

19 he will go back and try to answer them later

20 on. But I want him to come here and at least

21 be able to help people be informed on where

22 they are and what they are thinking. Okay?
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1 MEMBER MELCHI: This is Jon Melchi

2 with HARDI.

3 On June 20th, we submitted a

4 Request for Guidance from DOE on the question

5 of dry-shipped condensing units, which I think

6 would be extremely helpful as we are moving

7 forward in this. Is there any update on when

8 we may expect an answer from DOE on that

9 question?

10 MR. RAWALD: So, Jon, I am not

11 particularly familiar with the document you

12 submitted. I haven't read it recently, if I

13 have read it at all.

14 But what I understand is a lot of

15 this guidance answers, at least from a larger16 picture level, the R22 dry-shipped issue. The

17 question really that seems to be remaining for

18 R22, as I understand it, is how would you rate

19 an R22 system, or would we even allow you to

20 do that at all? Or would we rely upon what

21 has already been rated in the past and

22 certified?
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1 So, there is some more discussion

2 to be had there, more guidance to be given, or

3 a possible rulemaking to be taken. But I will

4 go back and take a look at the guidance or the

5 question you submitted and see what else I can

6 ferret out from that.

7 MR. EISNER: Anything else?

8 (No response.)

9 Does anybody feel that this

10 afternoon, when the FTC comes, if there are

11 too many unanswered questions, it is going to

12 be difficult to go further? Or are there

13 certain things we have to have this afternoon? 

14 Or are you all comfortable seeing how that

15 meeting goes and, then, talking about it

16 afterwards?

17 MEMBER MEYERS: This is Karen with

18 Rheem.

19 Are we going to -- I mean, look at

20 those Guidance that the stuff was sent in --

21 are we going to go over it at all in this

22 meeting or just --
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1 MR. EISNER: the two documents

2 that just came down?

3 MEMBER MEYERS: The two documents,

4 are we going to review them in this meeting?

5 MR. RAWALD: Right. So, I am

6 prepared to talk about them, if you would

7 like. Just tell me what you want to do.

8 So, we have this half-an-hour

9 block set aside to talk about it, and I am

10 prepared to discuss it now. I told you the

11 unfortunate reality is that Ashley is not

12 here, and she is the technical person who

13 everyone wants to hear from on these things. 

14 So, I will answer them all from a lawyer or

15 from my point of view. But, if I can't answer

16 the question, I can't answer the question.

17 But, as to the questions, please,

18 let's hear them. I don't know exactly what

19 you want to hear. I mean, the Guidance lays

20 out what it says in whole part. I don't want

21 to paraphrase it and I don't want to read it

22 because it is lengthy. But I want to be able
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1 to talk about it if you want to talk about it.

2 So, if there is a specific area you want to

3 discuss, then we can go into that.

4 MR. EISNER: And I forgot -- you

5 told me -- but is she on vacation or just on

6 other business?

7 MR. RAWALD: No, Ashley is on

8 vacation.

9 MR. EISNER: So, she is on

10 vacation, so is not reachable.

11 Would you like to go further into

12 the --

13 MEMBER MEYERS: Yes. This is

14 Karen with Rheem.

15 Can we pull it up, so that we are

16 all kind of on the screen? Is that possible?

17 MR. RAWALD: Yes. Let me talk to

18 Jeremiah about that.

19 And, Karen, just to be clear, do

20 you mean the longer Guidance or the short

21 Blower Coil Testing Guidance?

22 MEMBER MEYERS: The long document.
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1 MR. RAWALD: Okay, the longer one?

2 MEMBER WINNINGHAM: This is Dave

3 with Allied.

4 There is one question, also, on

5 this shorter one.

6 MR. RAWALD: Okay. So, we will

7 field Karen's question first and, then, we

8 will turn to yours, Dave.

9 And for those of you following

10 along on the phone or that are listening,

11 reading the transcript, we are now looking at

12 the four-page Guidance that DOE issues in a

13 draft form on August 20th regarding various

14 questions regarding rating and testing of

15 central air conditioner systems.

16 So, a particular page you want us

17 to turn to? I have one right here for you, if

18 you want to look at it. Well, that is not

19 going to help you then.

20 So, Jeremiah, if you can go to

21 page 3 of the PDF? So, we are looking at the

22 statement that says, "Individual coils or
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1 condensing units sold as replacements...." Is

2 that what you are talking about, Bryan?

3 MEMBER ROCKY: Yes, that is

4 correct.

5 MR. RAWALD: Okay.

6 MEMBER ROCKY: So, the addition of

7 the word "coil" changes a lot of the focus of

8 this. Up until this point, with dry-ship

9 units, we understand and acknowledge the

10 discussion on condensing units, which was

11 originally the discussion on dry-ship and now

12 has expanded to cover any replacement

13 condensing unit would make sense. But the

14 inclusion of the word "coil" in this case

15 changes the situation in the field

16 tremendously.

17 Particular in retrofit, a lot of

18 applications where a condensing unit can be

19 changed as an individual part, there are not

20 restrictions on the size of the unit. And

21 especially, we are going from an older unit

22 that had less SEER to a current unit that
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1 meets the 13 or 14 or future ratings is one

2 thing.

3 A coil, on the other hand -- I

4 almost hate to do this, to channel Terry Small

5 for a moment -- for manufactured housing, very

6 restrictive on the size of the location where

7 the coil can be installed, does also apply to

8 a lot of replacement situations for

9 residential furnaces where a coil is going in.

10 Or, in this case, if you were to

11 replace a coil as part of a blower coil, you

12 may not be able to do that legally now. You

13 would have to replace the air handler.

14 So, I know we had a lot of

15 discussion on condensing unit, but the

16 addition of the word "or coil" throws this

17 into a lot more uncertainty, and I think

18 definitely needs some discussion.

19 MR. RAWALD: Okay. So, Bryan, I

20 will make sure I step back and say what we are

21 trying to accomplish here, as I understand it,

22 is. And this is Doug from DOE.
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1 The requirements are that, if a

2 manufacturer makes a condensing unit or a coil

3 today, it has to comply with the standard when

4 tested. So, you can't make a coil that

5 wouldn't be able to comply with a standard as

6 a manufacturer. So, a manufacturer couldn't

7 make a coil that wouldn't be able to reach

8 what we currently have as a 13 SEER level when

9 paired with a condensing unit that would work

10 with it appropriately. So, that is the

11 situation.

12 So, what we are saying is, if you

13 are going into a region which requires a 14

14 SEER, that coil has to be able to accomplish

15 that when paired, when testing with one. Now

16 we understand that, when installed, it is

17 going to be installed with an old condensing

18 unit. So, it is not going to necessarily

19 achieve that as far as the unit goes, the

20 system.

21 But the coil itself, to be

22 manufactured and sold in the region, has to
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1 comply with the standard.

2 MEMBER ROCKY: So, this is Bryan

3 from Johnson Controls.

4 So, having said that, Doug,

5 basically, in a replacement situation, we

6 cannot provide, as a manufacturer, a

7 replacement service coil that matched what was

8 previously installed. We have to match using

9 a coil that we are selling today.

10 So, as you get into a coil for a

11 14 SEER air conditioner in Georgia, where it

12 was a 10 SEER unit before that had a coil

13 replacement required, I -- us, as an industry

14 -- may not be physically able to put the new

15 coil in that retrofit as a coil only.

16 MR. RAWALD: Well, I want to be

17 clear with the word "put" and put it into

18 perspective.

19 MEMBER ROCKY: Installed.

20 MR. RAWALD: Right. No, and I

21 know what you mean. I want to make sure what

22 we are saying.
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1 So, manufacturers today,

2 regardless, cannot manufacture, say, a SEER 10

3 coil. You couldn't make a new one. You could

4 have an old one in stock that you use as a

5 replacement part. But, because the current

6 standard is 13, you couldn't make a new 13, a

7 new 10 SEER coil, a coil that would not be

8 able to operate a 13 SEER. That would be

9 manufacturing a product that doesn't comply

10 with the standard.

11 MEMBER ROCKY: I'm sorry. So,

12 there is no such thing as a 13 or 10 SEER

13 coil, okay? Right?

14 MR. RAWALD: Uh-hum.

15 MEMBER ROCKY: There's three

16 components to this system. We have been

17 talking about the replacement of condenser

18 units for the last several years as the dry

19 charge.

20 MR. RAWALD: Uh-hum.

21 MEMBER ROCKY: So, we are now

22 expanding this to be coils as a replacement
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1 component and now must meet requirements of

2 current applications. So, is the line set the

3 next part? Because that is the third part of

4 the system that influences the performance of

5 the unit.

6 In a loose coil rating, and that

7 is where it gets back to, for central air

8 conditioners, single-speed, 13/14. So, we are

9 now, as a service replacement unit, you are

10 saying I cannot sell a service coil that was

11 part of a legitimate rated system as a 13 SEER

12 product in Georgia because it is now a 14 SEER

13 for that unit, even though at the time of

14 installation it was a valid, rated,

15 appropriate system?

16 MR. RAWALD: So, I think you are

17 raising an interesting question. And so, I

18 want to go back to a couple of different

19 things we have said.

20 So, first of all, we have the 18-

21 month sell-through. That allows folks for 18

22 months to sell through. So, if you have a
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1 coil that was part of a valid 13 system that

2 you manufactured before January 1st, you could

3 sell it in the region by July 1st of 2016.

4 The question that you seem to be

5 driving at is, okay, if I have a coil that

6 would work that was manufactured on January

7 2nd, could I sell it in the region or could I

8 sell it, if it was manufactured today, after

9 July 1st, 2016? That seems to be the main

10 question.

11 And I don't have an answer for you

12 beyond what we have said here. So, if there

13 is a concern, I want to hear it in your

14 comments, and it seems to be there will be

15 one. And then, we will consider it further.

16 But, right now, what the

17 Department is saying is that anything

18 manufactured has to comply with the standard. 

19 So, as you discussed, the coil operates with

20 the condensing unit, which has a SEER value,

21 but the coil must be capable of operating with

22 the condenser at a certain SEER value. And if
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1 it can't, then it wouldn't comply. And

2 therefore, it should not be sold or installed

3 in that region if it can't be complying with

4 that standard.

5 But I understand what you are

6 saying. It is certainly complicated, and I

7 don't mean to throw confusion into this. We

8 are trying to add clarity through this

9 Guidance. And I do understand where you are

10 coming from.

11 It sounds like this isn't an issue

12 that can stop us from talking about things

13 today, which is good, but it is something that

14 I will take back to folks and I will look

15 forward to reading in your written comments

16 about more implications of that and how we can

17 work it out.

18 I see a couple of hands up about

19 that.

20 MR. EISNER: If it were

21 manufactured solely for the purpose of

22 repairing a SEER 13 unit in Georgia, was it
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1 the intent of the Department to prohibit that?

2 MR. RAWALD: Right. So, this is

3 Doug.

4 So, the question becomes one of,

5 if we are talking about a 13 SEER and it is

6 manufactured, because it could be

7 manufactured, legally manufactured, that is a

8 slightly different question than if it is

9 being manufactured and didn't meet the

10 national standard at all.

11 So, the intent, as I read it, was

12 to say, hey, the coil could not be sold in the

13 region unless it could actually be capable of

14 meeting the 14 SEER level when combined and

15 tested with the condensing unit that was going

16 to be in a 14 SEER. That is how I understand

17 it.

18 Now this is a very non-technical

19 discussion that I am offering because I am not

20 a technical person. So, I am trying to do my

21 best to give you a good answer.

22 And I see a lot of hands. So, I
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1 definitely think I want to hear from people

2 here.

3 So, Harvey and, then, Don Surrena,

4 both are interested.

5 MEMBER SACHS: Doug, this is

6 Harvey Sachs.

7 And I may be slightly less

8 untechnical than you.

9 (Laughter.)

10 But let me just offer an

11 observation that amplifies your term that this

12 is very complicated. First of all, we have to

13 separate out the R22 issue from the

14 replacement of coils that were R410a to begin

15 with.

16 Secondly, contractors routinely

17 change the coil size they install with a

18 particular condensing unit to meet particular

19 site-specific needs. For example, if I am

20 installing a 3-ton condensing unit and space

21 is really tight, I might put in a smaller coil

22 that might or might not still be rated, but it
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1 is going to happen just because the contractor

2 is trying to make a living and satisfy his

3 customer.

4 But the implications of this to

5 me -- and I am trying to figure out myself

6 what to do, and I haven't studied this closely

7 -- are an irony. Let's assume that we do hold

8 this guy to installing a 14 SEER, or a coil

9 that will yield 14 SEER with that 13 SEER

10 condensing unit that was originally there. 

11 That will be a physically larger coil I think

12 in almost all cases. It will have much more

13 evaporating surface for the refrigerant.

14 And unless I start reducing the

15 fan speed, the net result, which is reasonably

16 sophisticated for many of the non-ACCA

17 contractors and non-PHCC contractors, unless

18 I do that, I am going to start giving, I

19 believe, less good humidity control for having

20 installed that larger evaporator.

21 I grew up in Atlanta and I lived

22 in Houston. If there is one thing I don't
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1 want in my air conditioner, it is less

2 humidity control.

3 So, without knowing an answer, I

4 think it is very important that we think this

5 one through to avoid some pretty negative

6 potential implications.

7 MR. RAWALD: No, I hear that,

8 Harvey. Thank you.

9 So, Don Surrena first and, then,

10 Gary Fernstrom.

11 MR. SURRENA: Don Surrena, NAHB.

12 What I am hearing -- and this is

13 why I am standing, to make sure I am hearing

14 what I am hearing -- is we have an existing

15 condition that was installed and met the Code

16 in 2010, and their coil goes bad and they have

17 to replace the coil. That's all. The rest of

18 the components are good.

19 They have to, then, take the

20 existing components and install a coil, if

21 they can, to bring it up to current standards

22 for whatever the SEER rating might be. And if
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1 they can't match a coil to it, then they have

2 to replace all of their unit?

3 MR. RAWALD: No. Don, I want to

4 cut you off there because that is not what we

5 are saying.

6 MR. SURRENA: I'm glad.

7 MR. RAWALD: So, what we are

8 saying is the coil itself that is used, the

9 replacement part, when tested with a

10 condensing unit, has to be able to achieve the

11 14 SEER. What the actual system that is

12 installed is going to do is not going to be 14

13 SEER, we get that, because the condensing unit

14 is going to be an old condensing unit.

15 But the coil can't be manufactured

16 and sold unless it is independently able to

17 achieve the 14 SEER level.

18 MR. SURRENA: In a new condition.

19 MR. RAWALD: Yes. Or a new

20 testing.

21 MR. SURRENA: So that, if the coil

22 requirements to do that, then, make the coils
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1 larger or different to the point where they

2 can't match with an existing system -- and I

3 am not technical enough to know whether that

4 happens or not. I am an old building

5 inspector for 20-some years. We didn't care

6 in those days. We wanted to know the SEER of

7 the unit and we were done.

8 This has changed the whole ball

9 game for Code enforcement, but will you be

10 able to make a coil that will fit existing

11 conditions without requiring a homeowner to

12 change their entire system to meet current

13 standards?

14 MR. RAWALD: And, Don, this is

15 Doug.

16 So, that sounds like a great

17 question for the manufacturers to give

18 opinions on in their response to the Draft

19 Guidance because that is something that the

20 implication of it needs to be understood. So,

21 that is the exact kind of question that would

22 need to be answered for us.
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1 MR. SURRENA: Great. I will wait

2 for it.

3 MR. RAWALD: Okay.

4 MR. SURRENA: Thank you.

5 MR. RAWALD: Gary has his hand up. 

6 Yes?

7 MEMBER FERNSTROM: So, this is

8 Gary Fernstrom, representing the California

9 IOUs. Sorry I was late. I got held up

10 checking my computer in.

11 I would like to support Harvey's

12 point. When we first started discussing

13 regional air-conditioning standards a couple

14 of years ago, Don Brundage from the Southern

15 Company was very concerned that standards

16 might inhibit humidity control in the

17 Southeast part of the country. So, from the

18 electric utility point of view, we want to

19 make sure that that issue is adequately

20 covered.

21 And I have a second point that was

22 called to my attention from my friends at the
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1 California Energy Commission. And they were

2 addressing the situation where a dry

3 condensing unit is installed as a replacement

4 for one that has failed, but the contractor

5 has chosen not to install the same size

6 condensing unit. So, maybe the old one wasn't

7 performing adequately, rather than a 2-ton, 3-

8 ton condensing unit is installed.

9 And I know you previously told us

10 that replacing the condensing unit is a

11 component or considered a component of the

12 system. My question is, is it still a

13 component of the system if it is of a

14 significantly different size than the

15 component that is replaced?

16 MR. RAWALD: Right. So, this is

17 Doug.

18 And so, I have studiously avoided

19 using the word "component". I think that has

20 thrown some confusion into it from the EPA. 

21 And so, I am trying to avoid using that

22 particular word for that reason.
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1 But what I will tell you is that

2 our current feeling is there is a restriction

3 on manufacturers being able to manufacture new

4 things, right? That's clear. And so, the

5 question, then, becomes, what can be installed

6 if a manufacturer can make it nationally, but

7 can't be sold regionally?

8 And so, from our point of view, if

9 a manufacturer can legally still manufacture

10 a condensing unit because it is going to be

11 compliant with the national standard, and it

12 would be sold in the North, that condensing

13 unit, if it is able to be operated -- or

14 excuse me -- if it is able to be used or rated

15 at a level of 14 SEER or above, when

16 effectively done in accordance with test

17 procedures or when tested with a component,

18 then it can be sold in the South as a

19 replacement part of a system that is otherwise

20 in place.

21 If it is a new system, the new

22 system that is put in place has to meet the 14
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1 SEER level. That is the basic, very much a

2 paraphrase of what the Guidance says, which I

3 don't like doing because it causes some

4 uncertainty when we paraphrase things. But

5 that is kind of what I am breaking down here

6 to explain to you, I think, Gary.

7 MEMBER FERNSTROM: Okay. So, let

8 me just respond to that, to make sure I

9 understand your answer.

10 And that would be, if the

11 replacement condensing unit meets the standard

12 or is capable of meeting the standard for that

13 area with the coil that it is tested with,

14 then it is okay to be sold irrespective of how

15 big or small it may be relative to the coil

16 that it is actually being connected to?

17 MR. RAWALD: That would be my

18 answer, not understanding the technical

19 implication of that and what that would mean. 

20 But that is currently the Department's

21 position as articulated.

22 MEMBER FERNSTROM: Okay. Well,
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1 just to respond, the technical implication is,

2 if you put a larger condenser on an existing

3 smaller coil, you get a lower overall

4 performance in the replacement.

5 MR. RAWALD: Again, this is Doug.

6 So, it is your position that the

7 replacement of the larger condensing unit that

8 is at a higher SEER value, when tested with

9 the component, in the system would actually

10 result in a lower SEER value than previously

11 was there because of the coil size?

12 MEMBER FERNSTROM: Yes. If the

13 replacement condensing unit is of a larger

14 size than what was originally there.

15 MR. RAWALD: Do the manufacturers

16 have a technical point of view to respond to

17 that? I just don't know the answer to that.

18 MEMBER WHITE: Well, this is Chuck

19 White, PHCC.

20 I am not a manufacturer, but I

21 would say my favorite answer is it depends.

22 (Laughter.)
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1 And it is a laboratory test. So,

2 a blanket statement that any unit is going to

3 be worse, if I took out a 1962 unit that was

4 a SEER 5, and I put something in, it could

5 very well be better. If you are significantly

6 larger on capacity, it is probably not going

7 to work because you have got way more suction

8 capacity than you have coil to evaporate. You

9 are going to change the equilibrium point. 

10 You are probably looking at freezing issues. 

11 But every one of those cases is going to be an

12 individual issue.

13 If you go up a half a ton, is it

14 probably going to work? Yes, you can get away

15 with it. But if you go from a 3-ton to a 5-

16 ton, the system is probably not going to work

17 without some other changes.

18 Circling back to the coil

19 question, which we started with, the

20 contractor, if you come to a job where you

21 have a failed coil, the No. 1 question is,

22 what are the dimensions? I know I need this
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1 tonnage, but what are the dimensions? Because

2 I have got to find something that is going to

3 fit in this spot.

4 So, if I have a coil that is

5 matched somewhere in the database to SEER 14,

6 it sounds like that makes it an okay unit. 

7 Now my question is, capacity-wise, can I make

8 it work? And that for some contractors is

9 pretty easy exploration; for other contractors

10 that is more of a challenge.

11 So, again, there is no across-the12 board blanket answer to that question, but I

13 think if the position is, as long as the coil

14 is listed and matched as a SEER 14 to

15 something, and I can take that as an

16 individual item, not as a system, not matched

17 to something, and replace a failed device,

18 then I think you are in pretty decent

19 condition. Again, giving ground on what the

20 rated system efficiency is going to be, if you

21 are doing it as a repair to an existing

22 system, I think you are going to make it work.
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1 MEMBER FERNSTROM: So, this is

2 Gary again.

3 That was a much better technical

4 answer than I gave. Replacing with a larger

5 unit is probably going to be better than what

6 was there originally, but not as good as it

7 probably should be if the unit were of the

8 proper size.

9 But I want to go back to the point

10 that the CEC raised. And they said that it is

11 not uncommon for contractors to come in and

12 put in a slightly-larger condensing unit than

13 was previously there with the existing coil.

14 And I was asking that question to

15 see whether or not that changed DOE's opinion

16 about the acceptability of these replacements

17 in general. And it sounds like it does not.

18 MR. RAWALD: And so, Gary, I am

19 only speaking from the Guidance as written,

20 and it is silent on that very question. So,

21 I will tell you that it doesn't, as currently

22 written, it doesn't affect that. But I
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1 certainly will take the issue back. We will

2 certainly discuss it and see if it affects the

3 opinion, because it is something that I have

4 not discussed with them before.

5 MEMBER FERNSTROM: Thank you.

6 MEMBER CLARK: This is Gary Clark

7 with Goodman.

8 You mentioned that the CEC

9 believes that contractors typically or it is

10 not unusual for them the condensing unit in a

11 replacement situation. Do you have any data

12 that would support that?

13 MEMBER FERNSTROM: No, just the

14 comment of Tav Commins from the CEC's new

15 Buildings Group. It is a market observation. 

16 I wouldn't suggest that it is typical in any

17 way, but it does happen and it is a concern.

18 MR. RAWALD: This is Doug.

19 We have talked quite a bit now

20 about the point that Bryan and Karen raised

21 about the coil. Both Karen and David had a

22 question on the blower coil testing document. 
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1 So, we will turn to that one.

2 Matt, do you have a question on

3 this document?

4 MEMBER LATTANZI: Just some

5 additional comment on I, too, have a concern

6 with the addition of coil being added in this

7 paragraph. And in addition to what I have

8 already heard, particularly Harvey's comments

9 on humidity, I absolutely agree with that.

10 But there is a practical field

11 problem here that we sort of touched around,

12 and that is some of these applications are

13 space constraint. So, the indoor appliance is

14 in an alcove of a fixed dimension. And if

15 that 14-SEER-capable coil is taller, for

16 example, there is a chance, a likely chance,

17 you would need to completely change out the

18 entire indoor appliance. And I think we

19 mentioned that.

20 But in many cases that coil is not

21 only going to be taller, it is going to be

22 wider to get the proper airflow. And the
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1 result there is we are asking this contractor

2 to widen the space that is fixed and has been

3 that same dimension for many, many decades. 

4 And they are just not going to knock down

5 walls and tear up drywall to make that coil

6 replacement, particularly if that original

7 size coil is still available and sold into the

8 north.

9 I think, again, I just want to

10 make mention of what I see as a problem from

11 a practical application standpoint.

12 Thank you.

13 MR. EISNER: If you took the word

14 "or coil" out, would you have to say something

15 else in another sentence about coils to be

16 clear or would that make everybody happy who

17 has got a problem with coils?

18 MEMBER LATTANZI: Well, I mean, I

19 guess my thought is that the word "coil"

20 should be omitted there.

21 MR. EISNER: And you don't need to

22 clarify anything about coils, add any other
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1 sentence? Okay.

2 MEMBER FERNSTROM: This is Gary

3 again.

4 We could take the word "coil" out

5 and eliminate the problem or alleviate the

6 problem. However, we would be compromising

7 efficiency by so doing. So, that is the

8 tradeoff I think that we are making.

9 MR. RAWALD: And this is Doug.

10 So, I want to be clear that this

11 is how the Department interprets what has

12 already been promulgated. So, we want to be

13 very careful because we have already looked at

14 the numbers. We have reached the standard for

15 a particular reason.

16 So, I want the folks back at the

17 program to go back and look at this comment. 

18 You know, we will read your comments when they

19 are submitted within the next 30 days and we

20 will think about the issue and come back with

21 a good answer.

22 And this has all been very helpful
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1 to me to understand better what we are talking

2 about here.

3 Bryan?

4 MEMBER ROCKY: Yes, Bryan from

5 JCI.

6 So, just to summarize, and then, I

7 promise I won't say anything more on this

8 issue. For new system applications, there is

9 absolutely no disagreement. For replacement

10 of a condenser unit, the verbiage that we have

11 discussed that is in the Guidance I think is

12 very understandable and has not changed in

13 substance.

14 The addition of the coil changes

15 the substance of the comment and the

16 direction. So, as I understand this Guidance,

17 if I have a compressor in a condenser unit go

18 out and I replace the compressor, there is no

19 issue to the Department. If I replace the

20 unit, the condensing unit, we meet the

21 regional requirements for that unit. The unit

22 has to meet the SEER for the region in it is,
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1 rated for the SEER it is involved in.

2 With this addition of coil, if I

3 replace the coil only as a service part, like

4 the compressor, there is no issue. But if I

5 have a contract that puts a new coil in, it is

6 like replacing a condenser unit. It has to be

7 part of a system.

8 MR. RAWALD: Could you go back one

9 step there? You said that, if you have it

10 replaced as a service part -- so, there are

11 two distinctions you offer on the coil. Can

12 you explain that a little further?

13 MEMBER ROCKY: So, an evaporator

14 coil generally has got a sheet metal case, and

15 it is an evaporator coil and your refrigerant,

16 connections, and everything else. In doing

17 that, you can replace, repair or replace the

18 component of the coil like you can replace a

19 compressor. You do not have to put in a whole

20 new set of sheet metal.

21 And Matt was talking about space

22 constraint. I think what this is going to
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1 drive to is the fact that many contractors,

2 because of the impact of cost and time to

3 replace it, will take out a failed coil and

4 put in a whole new box. This is going to

5 restrict that and I think drive them to where

6 we have to replace the component of a failed

7 coil with a new slab coil assembly. Like

8 replacing a compressor versus the condenser,

9 we are going to talk about replacing the coil

10 versus the coil assembly.

11 MR. RAWALD: No, I think it is a

12 very interesting point and not one I thought

13 of. So, I mean, I would really appreciate it

14 if in the written comments if the folks from

15 ACCA and, Chuck, if your folks could go ahead

16 and comment on how that would drive your

17 market, this kind of factor. Just in the

18 written comments. We don't need to talk about

19 it further here. I got a sense of what it is,

20 but for us to look at further.

21 And, Harvey, do you have one last

22 point on this? Because I think we pretty much
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1 understand where we are now.

2 MEMBER SACHS: I do. This is

3 Harvey from ACEEE.

4 I think it is pretty clear that

5 some of the people in the room, important

6 stakeholders, have less experience with field

7 operations and installations than others. I

8 am certainly quite happy to arrange a field

9 trip to one typical installation. It happens

10 to be mine. So that we can have a

11 conversation about what the issues are when

12 one is replacing equipment in an older house.

13 That is a standing offer. I

14 suspect that our friends at ACCA who are also

15 local would be happy to be represented on that

16 field trip.

17 But, Doug, it might be a way to

18 advance the conversation, and I am happy to

19 undertake that.

20 I don't charge for my advice, and

21 it is worth at least as much.

22 (Laughter.)
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1 MR. RAWALD: And with that said,

2 Jeremiah is going to pull up the other

3 Guidance, the Blower Coil Testing Guidance, so

4 we can talk to Dave and Karen about their

5 concerns here.

6 And, Dave, you can turn on your

7 microphone.

8 MEMBER WINNINGHAM: This is Dave

9 Winningham with Allied Air.

10 In the answer to the question

11 directly, it states there is no provision for

12 permitting use of a blower coil for testing

13 and rating in a split system. Can you

14 elaborate on what DOE means by that statement?

15 MR. RAWALD: So, this Guidance is

16 brief in that it is supposed to just simply be

17 saying, hey, we have said this already. And

18 so, what we are talking about here is the fact

19 that we have two tests, right? We have the

20 blower coil test and we had the coil-only

21 test.

22 And the only time you would use
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1 the boiler coil test is when you sell that

2 product as a blower coil. But, if it is sold

3 as a coil-only, then these are tested as a

4 coil-only. So, that is what we are getting at

5 here. So, if it is sold as both a blower coil

6 and a coil-only, it needs to be tested as a

7 coil-only. So, that is what we are saying.

8 There is no provision allowing for

9 you to test the blower coil and, then, market

10 that as a coil-only and get a higher SEER

11 value from it because that would be not what

12 it actually is doing. It is being used as a

13 coil-only in that marketing and sales.

14 MEMBER WINNINGHAM: Just to

15 elaborate on that, and it goes to the testing

16 and rating. And we understand that for a

17 single-speed, and we would agree, that we

18 would prefer the coil-only be used as the

19 basis for that grading. But there are many,

20 many combinations where you use that same coil

21 in a blower section to develop a rating.

22 MR. RAWALD: So, I am hearing what
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1 you are saying. So, are those products that

2 are sold with a blower or not with a blower?

3 MEMBER WINNINGHAM: They are sold

4 as a system. We sell them as a coil-only. We

5 sell them as a coil-only with a furnace and an

6 air handler. And all of those are valid

7 ratings today.

8 MEMBER LATTANZI: Doug, this is

9 Matt.

10 I think what we are saying here is

11 if you don't have an ARM, am I correct?

12 MR. RAWALD: No. This is not only

13 just an ARM. The ARM is supposed to meet our

14 testing. So, it is supposed to take that into

15 consideration. And Dave is nodding his head. 

16 So, I think they understand that.

17 MEMBER WINNINGHAM: Yes, that is

18 typically how the blower coil rating is

19 developed, is through an ARM.

20 MR. RAWALD: Right.

21 MEMBER WINNINGHAM: We test the

22 basic combination of coil-only and, then, we
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1 generate all of our other ratings through the

2 use of an ARM -- or typically.

3 MR. RAWALD: Uh-hum. And when you

4 test it, you are testing it with a coil-only,

5 and then, you are using the ARM to estimate

6 how it performs as a blower coil?

7 MEMBER WINNINGHAM: Right.

8 MR. RAWALD: Right.

9 MEMBER WINNINGHAM: This says

10 there is no provision for testing and rating.

11 MR. RAWALD: Uh-hum. Right. So,

12 I understand your question; I do. 

13 Unfortunately, I am not the right person to

14 answer probably.

15 MEMBER WINNINGHAM: Right.

16 MR. RAWALD: So, let me go back

17 and see if I can get something more for you

18 folks today about this.

19 MEMBER WINNINGHAM: Just to

20 elaborate, there are hundreds of thousands of

21 ratings that are based upon blower coil

22 combinations.
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1 MR. RAWALD: Right. And this

2 Guidance is meant to dispel what we think is

3 some confusion in the industry. And so, we

4 want to make sure it does that.

5 MEMBER WINNINGHAM: Yes.

6 MR. RAWALD: So, I want to make

7 sure we answer that now.

8 MEMBER LATTANZI: Right. For the

9 record, this is very common, that blower coil

10 rating.

11 MR. RAWALD: To use an ARM to give

12 a blower coil rating --

13 MEMBER LATTANZI: We all do that.

14 MR. RAWALD: -- for something that

15 is not sold as a blower coil?

16 MEMBER LATTANZI: No.

17 MR. RAWALD: Okay.

18 MEMBER LATTANZI: It is sold as a

19 blower coil.

20 MR. RAWALD: Uh-hum.

21 MEMBER LATTANZI: There is the

22 coil-only rating and, then, we use an ARM to
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1 generate other ratings.

2 MR. RAWALD: Your microphone is

3 off, Matt.

4 MEMBER LATTANZI: I'm sorry. This

5 is Matt Lattanzi. I'm sorry I had the

6 microphone off.

7 Yes, there is a coil-only rating

8 and, then, we use the ARM -- that has been

9 standard practice for many, many years -- to

10 generate additional ratings with other indoor

11 appliances where we have the blower coil.

12 MR. RAWALD: Right. So, just from

13 a theoretical point of view, what I see the

14 issue would be is, if you are using the blower

15 coil -- because using the blower coil test you

16 can get a higher SEER value, right? Am I

17 correct on that technically?

18 Dave, you're nodding your head. 

19 So, I guess I am correct here.

20 MEMBER WINNINGHAM: Yes.

21 MR. RAWALD: And using that to,

22 then, sell a coil-only at a higher SEER value,
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1 that is what we want to avoid, that people

2 would use the blower coil rating to, then, be

3 able to sell something that would in

4 application be used as a coil-only at a higher

5 rating, and therefore, actually be non6 compliant.

7 MEMBER WINNINGHAM: Yes. When we

8 do that, it is certified as a system --

9 MR. RAWALD: Uh-hum.

10 MEMBER WINNINGHAM: -- listing all

11 the components that make up that system.

12 MR. RAWALD: Okay.

13 MEMBER LATTANZI: Right. This is

14 Matt.

15 By definition, that is exactly

16 what the ratings do, what you described.

17 MR. RAWALD: Right. And so, that

18 would be a different basic model. So, let's

19 go back to the first idea, which is basic

20 model, right?

21 So, from our point of view -- and

22 I want to be clear because folks have
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1 different ideas of basic model and base model;

2 these terms are complicated -- so, from the

3 Department's point of view, what we try to

4 make clear in the first Guidance is that basic

5 model is what you deem it, but the basic model

6 is what you rate the thing at. So, you put

7 the components together and you say, hey,

8 these components together make the basic

9 model, and they are going to all share the

10 same rating.

11 And so, if you are rating your

12 blower coil unit differently than your coil13 only unit, then it is a different basic model

14 from the Department's perspective.

15 MEMBER WINNINGHAM: I understand

16 from the Department's perspective on basic

17 model and the Guidance that it provides. I am

18 not sure that that is something we are going

19 necessarily solve here. Maybe we do need to

20 work towards that. But that is not the way

21 the current AHRI Directory or the data that is

22 in the CCMS is structured.
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1 MR. RAWALD: Okay. That is

2 something more complicated to work out then. 

3 Okay. Understood.

4 Any other comments on this?

5 (No response.)

6 Karen, was that your question?

7 MEMBER MEYERS: Yes.

8 MR. RAWALD: Okay. You are

9 elected. I want to make sure you have your

10 chance to air your thoughts.

11 MEMBER MEYERS: Okay. So, I am

12 going to ask this question. If I have a 3-ton

13 unit, and you look at the first document and

14 it talks about your highest sales volume

15 combination, and then, you look at this

16 definition on how you rate coil-only versus a

17 blower coil -- so I am still trying to make

18 sure I understand what I can sell in the

19 South.

20 So, for this Rheem 3-ton

21 condensing unit that may have 100 different

22 ratings, maybe 200 different ratings because
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1 I can rate it as a coil-only, I can rate it

2 with various air handlers, other different

3 coils, various furnaces, hydronic air handlers

4 -- I can have tons of ratings for this very

5 same 3-ton unit -- so does the minimum rating

6 for this 3-ton unit that I am going to sell in

7 the South, out of all of these 200 other

8 ratings I have, paired with this same 3-ton

9 unit, does the minimum rating on that, this

10 unit that is getting sold in the South, have

11 to be a 14 or is it just the highest sales

12 volume combination?

13 MR. RAWALD: Right. And your

14 question is a very good one that gets right to

15 the heart of the matter. I think we talked

16 about it two weeks ago. And I will say that

17 the Department has not said that. We have not

18 said that.

19 So, there are a couple of

20 different talking points on that that I could

21 go on, but I want to make sure I talk to folks

22 to make sure we are all on the same page about
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1 what exactly we would say to that. We have

2 not responded to that exact question.

3 MEMBER MEYERS: Thank you.

4 MEMBER CLARK: This is Gary.

5 But doesn't the Guidance at this

6 point say that, in Karen's example, without

7 going through that again, that the tested

8 combination for that unit must be at least 14

9 SEER for the coil-only?

10 MR. RAWALD: So, there are two

11 layers to the Guidance. And this is what led

12 to part of my confusing statements last time

13 we spoke, which is, in speaking about parts

14 that are sold individually versus those

15 systems that are sold together.

16 So, when you are putting it into a

17 part or a piece of an existing system, that

18 piece you are putting into that system must be

19 tested as part of a combination compliant,

20 even though we understand that when installed

21 into an existing application, it won't be

22 installed with what it was tested with. We
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1 understand that. We get that.

2 But, when sold as a system, when

3 it is a new installation, the question that

4 Karen is getting at is, hey, do both parts

5 together, is that what drives what the minimum

6 is or is it the fact that it has to always be

7 able to reach at least 14 SEER and it can't be

8 below 14 SEER? That is what I hear her

9 question to be.

10 So, what I will tell you from what

11 seems to be the basis, the system as installed

12 needs to be able to achieve 14 SEER. So, the

13 open question is, well, can that be a

14 condensing unit that also goes to 13.6 SEER

15 with a different coil? Is that okay? Right? 

16 That is your question?

17 MEMBER MEYERS: That is my

18 question.

19 MR. RAWALD: Right. And I want to

20 make sure we get you a very good, very clear

21 answer because you want to be able to control

22 how your products are distributed, and I get
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1 that. Okay?

2 Harvey, you have a point on that?

3 MEMBER SACHS: I do, and this is

4 Harvey Sachs.

5 Doug, I think it would help all of

6 us to visualize what Karen has said. I would

7 like to make a request of Karen or another

8 manufacturer or my good friend Karim, that

9 actually have distribution data, that I have

10 got this SEER 14 condensing unit or a SEER 13

11 condensing unit, and for this whole cloud of

12 100 or 200 matched coils that that could be

13 sold with and different fan combinations, and

14 so on, what is the statistical distribution of

15 the SEER ratings? And that might help us

16 inform this question of where we want to set

17 that target for compliance.

18 Because this really is to me the

19 heart of the question, that there are so many

20 different combinations that are legally in

21 commerce, some of which will meet, some of

22 which will not. And I think it is absolutely
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1 critical that we all have an understanding and

2 a way that is easily enforceable.

3 Is that an unfair request?

4 MR. RAWALD: This is Doug.

5 So, I am not sure we need to go

6 into that level of detail because I think that

7 the question is, you have a condensing unit

8 that is capable of operating at 13.2 with one

9 coil, 13.4 with another coil, 14.2 with a

10 different coil, 14.4 with a coil.

11 Karen wants to know, can I sell

12 that condensing unit in the South with the

13 14.2 coil, knowing that it can be at other

14 points 13.2 or 13.6?

15 MEMBER SACHS: Doug, this is

16 Harvey.

17 I think the question is that your

18 mental model is a pretty tight cluster. My

19 mental model is a much wider distribution. I

20 can well imagine, for example, a match

21 designed to give extremely good humidity

22 control with a single-stage unit, with a
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1 simple motor that would downsize that

2 evaporator, and on the test be rated well

3 below 13. That would not be a unit that one

4 would want to sell. But, if we are rating on

5 most commonly-sold combination, I don't know

6 if I could sell that or not. I am sure all

7 the manufacturers do.

8 But I just have a mental model of

9 a much broader distribution of SEERS than you

10 seem to have for the same condensing unit.

11 MR. RAWALD: Right. So, as a

12 baseline, a company would not be able to

13 certify or manufacture, a condensing unit pair

14 that would be below the national standard. 

15 So, that is a baseline issue.

16 But what I think you are saying

17 is, hey, there is a condensing unit that will

18 operate, compliant with the national standard,

19 but with a different coil that will operate

20 well below the national standard. And so, I

21 understand that.

22 That must be true, right? Like if
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1 you put it with a really, really inappropriate

2 coil, the SEER value of the condenser will go

3 somewhere. There has to be a bottom somewhere

4 for that SEER value. I just don't know from

5 a technical point of view what that is.

6 MEMBER SACHS: Doug, this is

7 Harvey again.

8 There is a loaded term.

9 MR. RAWALD: Uh-hum.

10 MEMBER SACHS: What you call an

11 inappropriate coil may be appropriate for a

12 specific customer application.

13 MR. RAWALD: So, I think I have a

14 sense of Karen's question. Anything else on

15 this Guidance?

16 Karim has a point.

17 MR. AMRANE: Karim.

18 Just to follow up on that

19 question, Doug, why don't you get us an answer

20 because I think it is a critical question and

21 we need an answer from you before we can move

22 forward with it.
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1 MR. RAWALD: No, I understand. I

2 understand, and I will do my best, and I think

3 I have proven so far that I have been a good

4 agent here, trying to deliver mail. So, I

5 will do my best to try to keep delivering

6 mail.

7 MR. EISNER: Any other questions?

8 (No response.)

9 Okay, then, let's get on to basic

10 definitions.

11 Do you have a handout? Everybody

12 should have a copy.

13 MR. RAWALD: So, this is really a

14 brainstorming activity because we have terms

15 that are defined in the statute, both in 6295,

16 which is the enforcement provision, as well as

17 the prohibited acts section, and those are not

18 defined anywhere currently in our regulations

19 or in the statute.

20 And so, I think it is incumbent

21 upon us here to at least offer some

22 definitions for those terms. What I would
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1 turn to is the second slide here, which points

2 out in 6295 and it makes reference to folks in

3 the market who include dealers, contractors,

4 and installers without any defining terms.

5 So, what I would like to do is

6 throw it open to the room to define these

7 terms because I wouldn't know where to begin

8 since I am not the person that sits in these

9 roles. So, I thought it would be helpful if

10 folks could offer up some ideas on how to

11 define them.

12 MR. EISNER: Do we want to start

13 off with a suggestion?

14 MEMBER MEYERS: Yes. This is

15 Karen with Rheem.

16 To me, those are all

17 interchangeable terms. We personally don't

18 like the word "dealer". We use "contractor". 

19 As the former ACCA Chair used to say, "A

20 dealer deals drugs and a contractor installs

21 HVAC equipment." So, to me, those are all the

22 same thing.
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1 But, at least in my company, we

2 use the word "contractor". It is the person

3 that sells the unit to the homeowner, and

4 either him or his team installs the unit.

5 MR. EISNER: So, we could start

6 off by defining "dealer" under the statute as

7 not someone who sells drugs?

8 (Laughter.)

9 MEMBER MEYERS: I don't know that

10 many people use the word "dealer" anymore. I

11 don't know.

12 MEMBER WHITE: This is Chuck White

13 with PHCC.

14 I think we tend to think of

15 "dealer" as someone with a contractual

16 agreement with a manufacturer. So, I am an

17 XYZ dealer or an ABC dealer.

18 MR. EISNER: So, is that the first

19 phrase we want to put up here, "contractual

20 relationship with the manufacturer"?

21 MEMBER WHITE: I don't know if

22 that is the exact words you want to use. I
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1 don't have one of those lawyers' sheepskins,

2 but --

3 MR. EISNER: Well, let's just put

4 that up there now and we can start playing

5 with the words.

6 MEMBER WHITE: Sure. As opposed

7 to most contractors these days, some do have

8 this arrangement. But, even with that

9 arrangement, they still have the ability to

10 use other equipment, should the need arise or

11 specific requirement.

12 MR. EISNER: Is that a key element

13 that should be in the definition, that they

14 can sell other products?

15 MEMBER GIBBONS: This is John from

16 Carrier.

17 All dealers are contractors, but

18 not all contractors are dealers. We use the

19 term "dealer". It is kind of the more loyal

20 contractors are dealers, so more brand loyal,

21 I guess.

22 MR. EISNER: Is there any
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1 legislative history on that?

2 MR. RAWALD: I will defer that

3 question to our lawyers to look at in the next

4 break.

5 MR. EISNER: Okay.

6 MEMBER McCRUDDEN: This is Charlie

7 with ACCA.

8 I think that these were sort of

9 catch-all terms thrown into the Energy

10 Independence and Security Act when they were

11 trying to figure out how are we going to deal

12 with enforcement or how are we going to deal

13 with regional standards and, then,

14 enforcement.

15 I don't want to go too far. I

16 don't even know if we need to define "dealer"

17 unless we think it is a term that will be out

18 there. I mean, if we rely on "contractor" or

19 "installer," we may just be able to avoid

20 trying to define a term of art within the

21 industry.

22 But, to complicate it, I might
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1 throw in the word "technician," depending on

2 how you define "contractor". And I say that

3 because "contractor" can be a company, and I

4 think there are times when we refer to

5 "contractors" as "the company". And

6 "contractor" can be the individual. So, it

7 may be more important to make that

8 distinction.

9 And before we move on, maybe we

10 figure out, are we talking about the company

11 in terms of the defined terms for enforcement

12 or are we going to be talking about the

13 individuals? And sometimes, in the same way

14 you stated that this is maybe one and the

15 other, some contractors are installers, but

16 not all installers are contractors.

17 MR. RAWALD: And so, Charlie, from

18 an enforcement point of view -- this is

19 Doug --

20 MR. EISNER: Before we go further,

21 can we put that up there as a distinction?

22 MS. DEGITZ: Sure.
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1 MR. RAWALD: So, when we bring

2 actions against manufacturers, we do it

3 against the corporate enterprise. I mean,

4 that is what we do. And I would say that that

5 the preferred course of action from my point

6 of view right now would be to continue against

7 companies rather than individuals.

8 MEMBER McCRUDDEN: So, maybe the

9 first thing you write on the definition of

10 "contractor" is "the company or entity," to

11 make that clear.

12 MEMBER CLARK: This is Gary from

13 Goodman.

14 Just to follow up on what Charlie

15 is saying, and really Karen's comments also,

16 I mean, if we dropped the term "dealer"

17 completely, would anybody be opposed to that?

18 MR. EISNER: If we dropped it, is

19 that what you said?

20 MEMBER CLARK: Yes. Replace

21 "dealer" with "contractor". So, we don't even

22 have to worry about defining what a "dealer"
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1 is.

2 MR. RAWALD: This is Doug.

3 So, unfortunately, I operate at

4 the behest of Congress. And so, they have

5 given me a statute which contains the words;

6 they have to have meaning. And so, I have to

7 at least have some sort of meaning ascribed to

8 those words. If it is as simple as a "dealer"

9 equals a "contractor," that is fine, but I

10 need to have some sort of meaning.

11 My lawyers have let me know that

12 there is no legislative history regarding

13 these terms. So, we are really operating in

14 absence of information. I am sure Charlie has

15 better information since he has been involved

16 with this for a while.

17 But what is important, the reason

18 why these terms are important is because they

19 are not only here in 6295, but they are also

20 in that prohibited act that we discussed and

21 that we are going to discuss in the next

22 section.
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1 So, what it talks about is

2 "knowing sales to a distributor, contractor,

3 or dealer". So, those terms are defined in

4 the "prohibited acts". So, from the

5 manufacturers' point of view, I think they

6 want to know who these guys are because they

7 are going to be on the hook because they sell

8 to these people. So, I think we really have

9 a reason to want to know who these people are.

10 Yes, John Hurst from Lennox.

11 MR. HURST: John Hurst with

12 Lennox.

13 Can we agree that a "dealer" is a

14 "contractor"? Would we agree with that? 

15 Okay.

16 So, I would change the first to

17 say "an entity". It doesn't necessarily need

18 to be someone -- a "dealer," I'm under; I'm

19 sorry -- "an entity with a contractual

20 relationship with a manufacturer or

21 manufacturers," because I understand some

22 dealers can have contractual relationships
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1 with more than one manufacturer.

2 I look at, kind of along I think

3 what Charlie was saying, an installer and a

4 technician can work for a contractor. And

5 those are the physical individuals that

6 install or service equipment.

7 MEMBER MEYERS: This is Karen with

8 Rheem.

9 I guess I have trouble with the

10 word "contractual".

11 MR. HURST: "Relationship"?

12 MEMBER MEYERS: Sure.

13 MR. HURST: Just "relationship".

14 MEMBER MEYERS: Yes. I think it

15 is just too strong, yes.

16 MEMBER CLARK: This is Gary from

17 Goodman again.

18 When we say "manufacturers," in

19 fact, is it the manufacturer or the

20 distributor that the contractor has the

21 relationship with?

22 MR. HURST: It depends.
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1 MEMBER CLARK: Yes, it depends,

2 right?

3 MR. HURST: Yes. Well, I mean

4 some of us own our own distribution and some

5 of us have company-owned distribution.

6 MEMBER CLARK: So, do we. Yes,

7 "or distributor". There you go.

8 MR. RAWALD: Don Surrena has his

9 hand up in the back.

10 MR. SURRENA: Thank you. Don

11 Surrena.

12 I am a little uncomfortable with

13 "contractor". The builder is a contractor. 

14 He hires a subcontractor who installs the

15 equipment through his technicians. At what

16 level does the responsibility go to the

17 contractor? Does it stop with the installing

18 company or is the builder himself, then,

19 liable to make sure that what is installed

20 meets the code? You know, where does the buck

21 stop?

22 MR. RAWALD: Right, and that is a
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1 good question, and it has to accurately

2 reflect what the market does, right? So, who

3 is the person making those decisions with the

4 air-conditioning manufacturer or distributor? 

5 Who is the person that is making that call on

6 what air conditioner will be installed into

7 those homes that are being built?

8 MR. EISNER: But, for the purposes

9 of a definition, would it suffice to say "a

10 contractor or any subcontractor"?

11 MR. RAWALD: But what I hear Don

12 saying -- this is Doug -- is that he wants to

13 avoid liability for contractors who may

14 possibly be having subcontractors make the

15 decisions for them. They don't want to have

16 those guys be liable. That is what I think he

17 is saying.

18 MR. SURRENA: The builder at some

19 point doesn't want to have to know all the

20 requirements for plumbing, air conditioning,

21 heating, electrical. Somewhere your

22 subcontractor takes that responsibility. And
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1 I don't want to see the builder end up in the

2 definition because it is just not their

3 purview. That is not their warehouse. That

4 is not where they put their expertise. It is

5 to the subcontractors whom they hire who are

6 either distributor for a manufacturer -- or

7 that is where my concern starts to pop up.

8 MR. EISNER: Well, again, do you

9 want to have something like "the contractor or

10 subcontractor who is responsible for

11 installation"? You know, again, you usually

12 don't handle substance in it like that in a

13 definition.

14 MR. SURRENA: I understand.

15 MR. EISNER: Someplace else you

16 would say the person responsible would be the

17 one who made the decision.

18 MEMBER WHITE: This is Chuck White

19 with PHCC.

20 The contractor is going to offer

21 to perform services, installation services,

22 maintenance services. So, the company or
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1 entity that offers to perform services in

2 HVAC, or however you want to word that. And,

3 Mr. General Contractor, you have a contract,

4 so you work that out in your contract.

5 And I understand where you are

6 coming from.

7 MR. SURRENA: Thank you. I have

8 raised the issue, and I will go back to my

9 corner.

10 MEMBER SACHS: This is Harvey

11 Sachs from ACEEE.

12 With all due respect to the

13 gentleman from NAHB, I believe that the

14 general contractor or developer, whatever you

15 want to call that person, must own the

16 responsibility. That person writes a contract

17 for the installation according to code. If he

18 doesn't, he's "duh."

19 We have had too many problems. My

20 colleague Gary well understands from

21 California, where the investigations have been

22 done, that low bid has led to severely
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1 underperforming systems in every aspect. The

2 plumbing doesn't leak, but that is about the

3 only good thing you can say about the quality

4 of the mechanical systems in typical

5 production housing.

6 For that reason, the history of

7 housing in America, to me, it is important

8 that the term "contractor" include the person

9 who is responsible for offering the completed,

10 integrated system, the house, for sale to the

11 public.

12 MR. EISNER: John, did you have a

13 question?

14 MR. HURST: Just a comment. Maybe

15 backing a little bit what Harvey said, as a

16 manufacturer, oftentimes, we have direct

17 relationships with large builders. And so, it

18 would be, I think, problematic to go to the

19 subcontractor when our relationship is

20 directly with the large builder. Just a

21 consideration.

22 MR. EISNER: I will take one more,
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1 and then, I have got a written question. Go

2 ahead.

3 MR. SURRENA: This has thrown a

4 whole new light on the approach. If a general

5 contractor -- and I would look at that as a

6 large tract builder -- has a relationship with

7 the manufacturer, I don't disagree with it. 

8 But, if a general contractor, a small stick9 built builder, has hired a HVAC company to do

10 this, and he has put in his contract "the

11 house will be built to code," at what point

12 does he have to learn the HVAC industry or the

13 electrical industry when he relies on the

14 people that he has hired to do that?

15 He can write a clause in there

16 that would indemnify him from that, but if the

17 statute is going to back up to the builder, it

18 should also back up to the homeowner. They

19 are the ultimate people with the contract.

20 MR. RAWALD: So, Don, I hear what

21 you are saying. And I am going to offer a

22 corollary example from what we do today in the
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1 Department with our enforcement effort that

2 may at least give you an idea of where we come

3 from.

4 So, folks that have been familiar

5 with the stuff know that we consider importers

6 to be manufacturers. So, someone would

7 probably not argue that an importer oftentimes

8 knows nothing about the product they are

9 importing. They don't know the efficiency of

10 the external power supply or the motor they

11 are importing. They are simply importing.

12 But, from the Department's point

13 of view, the person who imports is the person

14 that we bring an action against. So, even if

15 that person never performed any testing, they

16 are relying upon the Chinese or Korean or

17 Japanese manufacturer to do the testing and to

18 make sure the product is compliant. The

19 importer is the one we hold responsible

20 legally. Now they can enter a contractual

21 agreement with that supplier from a foreign

22 country to indemnify them, if we hold them
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1 responsible for having a non-compliant

2 product, or they could break the contract and

3 say, "We're never buying from you again

4 because you've gotten us in trouble with the

5 Department of Energy."

6 But I am going to bring the action

7 against the importer, regardless of the fact

8 that they may not know anything about that

9 product, because they should know about it,

10 because that is what our requirements are,

11 that they should know about it.

12 And so, that may be a corollary

13 that brings you an example here of what we

14 think about general contractors. That is just

15 an example. I have not made a decision. I am

16 offering to use this thought for some guidance

17 on where we come from.

18 MR. EISNER: Is there any benefit,

19 before I get into the question from Craig, is

20 there any benefit to writing the rules so that

21 the Department has the flexibility of deciding

22 in this case it doesn't pay to penalize the
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1 builder; we should be penalizing the person

2 who installed it, especially if that

3 subcontractor has a history of doing this, for

4 example?

5 And I don't know. I would throw

6 that out there. Maybe, again, you don't have

7 to handle it in the definition. You give the

8 Department in the rule the discretion to

9 decide which one to penalize.

10 Craig Messmer had a comment or a

11 question.

12 "A contractor is one who is hired

13 by the building owner to install a product. 

14 The contractor may install it or hire an

15 installer."

16 These are, apparently, suggested

17 definitions.

18 "A dealer is a contractor with a

19 relationship with the product manufacturer. 

20 The relationship can be formal with a

21 contractor or informal in that they specialize

22 in that product from a specific manufacturer."
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1 Any comments on that? Do we want

2 to use any of that in what we been talking

3 about?

4 MR. RAWALD: This is Doug.

5 I will go hand it to Laura, so she

6 can add that to what we have.

7 MR. EISNER: Okay. And then,

8 Bruce Helft is online. And you have a

9 comment, Bruce?

10 (No response.)

11 He can't talk? Okay. We will get

12 back to him then.

13 Do you have -- no, behind you, do

14 you have a question?

15 MR. RAWALD: Don.

16 MR. EISNER: Don?

17 MR. SURRENA: Well, I have a

18 partial copy of the statute. Section 6302,

19 "Prohibited Acts," which is enforced through

20 Section 6303, only has prohibitions against

21 manufacturers or persons employed by

22 manufacturers. The only reference to
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1 distributors or contractors or installers is

2 a provision that manufacturers could be

3 penalized for knowingly selling a product to

4 a distributor, contractor, or dealer with

5 knowledge that the entity violates any

6 regional standard, application, applicable

7 product.

8 MR. RAWALD: No, Don, I understand

9 your point, which is that there is currently

10 no prohibited act in the statute in naming

11 dealers or installers or contractors as

12 someone that would be in an action. And we

13 discussed that earlier, which is that the

14 Department's opinion at the moment is that we

15 have legal authorities broad enough to do what

16 we need to do to make an effective enforcement

17 program. So, we could discuss more about

18 whether or not we need to have another

19 prohibited act or not.

20 But what is important is that that

21 last prohibited act's meaning, which is that

22 manufacturers can be held liable, certainly
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1 under the statute, for selling to contractors

2 they know knowingly do this. So, who are

3 those people? They need to know who those

4 people are, so they can make sure they avoid

5 them.

6 And so, we have to define them, so

7 they are on a good (unintelligible), so they

8 know what they are going to be held

9 responsible for. And I think that is only

10 fair to them, that we give them some guidance

11 on that. So, I think that is what we are

12 aiming at here.

13 And if we are telling them the

14 contractor is going to be the air-conditioning

15 guy who you never met, that is going to be

16 hard for them to really stop from happening,

17 sales to that person, because they are not

18 going to out and tell a general contractor,

19 "Make sure you don't use" Person XYZ; "only

20 use Acme because I know that he is okay." 

21 They are going to be talking to the general

22 contractor is what I am hearing here. And so,
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1 they want to be able to have the general

2 contractor be held responsible possibly. So,

3 that seems to be the question from the

4 manufacturer point of view that I hear right

5 now, as articulated by John Hurst earlier.

6 MR. SURRENA: Then, by that

7 explanation, wouldn't the contractor be the

8 person who has the direct relationship with

9 the manufacturer?

10 MR. RAWALD: And I will throw it

11 open to the room because I don't know.

12 MEMBER WHITE: Now this is Chuck

13 White with PHCC.

14 I think if you boil this down,

15 what we are talking about is a project that

16 everything went south on, that we have

17 problems. If everything goes well, this is a

18 non-event. All the good jobs we did, nobody

19 pats you on the back. But one thing goes

20 wrong, and now who is responsible?

21 And it is a chain reaction. I

22 don't want to debate the merits of the general
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1 contractor, subcontractor, all that. The fact

2 is the general hired the sub. If the sub is

3 bankrupt, if the sub has no insurance, if the

4 sub can't perform, it swims upstream.

5 And there should have been some

6 due diligence ahead of all the agony that got

7 started. There are times -- the favorite word

8 out there is we are going to "value-engineer"

9 this. Because whatever it was we decided we

10 wanted to do is too expensive, so you tell me

11 what to leave out, so we can make it

12 affordable.

13 And then, in any of these

14 situations it is a specific set of

15 circumstances and chain of events, and who did

16 what depends on what happened that day. But,

17 ultimately, I think -- and again, I am not a

18 lawyer -- whoever is in this chain of

19 contractual relationship is on the hook. And

20 however you sort that out, it gets sorted out.

21 But nobody wants to be at fault, but you all

22 sign the agreement.
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1 MR. RAWALD: And this is Doug.

2 I know this question of who is

3 liable is certainly important for figuring out

4 how we define these terms in some people's

5 minds. But, from a Department point of view,

6 when we typically define terms, we define them

7 pretty broadly because we want to make sure

8 that they encompass everything we want them to

9 encompass, and we don't want people to have

10 arguments, saying, "I don't fit in there,"

11 when they really meant to be, but because of

12 the way we wrote it, they didn't fit in there.

13 And so, we want to make sure that

14 it is broad enough that it encompasses

15 everything everyone wants without being overly

16 broad, that it doesn't include those we don't

17 want, but also that it provides significant or

18 sufficient clarity to the folks that are

19 looking at these things, so they can do the

20 right thing.

21 And so, the folks I think that

22 should be most concerned about this term would
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1 be the folks that would be held responsible

2 for dealing with these people. And so, I

3 think I do want to hear more from the

4 manufacturers because you are the people who

5 can't sell with these people if they are

6 breaking the rules. What makes the most sense

7 from you in knowing who these people are?

8 MR. EISNER: Any other comments? 

9 Do we want to go back to the language on the

10 board?

11 MEMBER MEYERS: Well, this is

12 Karen with Rheem.

13 Are we going to define

14 "distributor" because, for my company, we only

15 sell to a distributor.

16 MR. RAWALD: Right. So,

17 distributor -- this is Doug -- is already

18 defined in the statute.

19 MEMBER MEYERS: Okay.

20 MR. RAWALD: And so, we went over

21 last week or two weeks ago what that term is. 

22 And so, we are not going to rehash terms that
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1 are defined by the statute.

2 MR. EISNER: There may be a term,

3 I assume, within distributor that you could

4 make an argument should be defined, if you

5 think there is some confusion in the statutory

6 definition. I mean, I assume DOE wouldn't

7 have a problem with that.

8 MR. RAWALD: Neil, I can't say. I

9 don't know exactly what you are asking. We

10 have a term defined by the statute. So, we

11 are going to stick with that.

12 MR. EISNER: No, I am saying terms

13 used within the definition in the statute that

14 may need clarification.

15 MR. RAWALD: Okay. I haven't

16 heard that yet, but I understand.

17 MR. EISNER: John?

18 MR. HURST: John Hurst from

19 Lennox.

20 I think Craig has a good

21 suggestion here. Under contractor, I am a

22 little disturbed by the building owner, not by
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1 the building owner, but the term "by the

2 building owner". It could be a warranty

3 management company. It could be a facility

4 manager. I think we need to say a contractor

5 is one who is hired to install. I don't think

6 it matters who they are hired by because it

7 could be one of the warranty companies as

8 well.

9 And then, I think where it says,

10 "A contractor may install it or hire an

11 installer," you could say something to the

12 effect of "A contractor may employ installers

13 or subcontract to an installer."

14 MR. RAWALD: This is Doug.

15 Is that second sentence even

16 really necessary? Because we do simply define

17 installer and not even worry about defining

18 "within contractor," the fact that they may

19 install or not.

20 MEMBER SHEPHERD: This is Amy

21 Shepherd.

22 I guess to back up just a little
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1 bit, the section that you cited where you had

2 the three terms, that was actually the section

3 that the Department has to consider the impact

4 of the regional standards on those entities in

5 promulgating the rule.

6 The enforcement provision deals

7 with distributors, contractors, and dealers. 

8 So, it may be necessary to determine like how

9 installer fits within contractor for purposes

10 of a manufacturer knowing that, but those, to

11 me, seem to be the three key terms. So, I am

12 not quite sure why there is a need to have a

13 separate definition for "installer".

14 MR. RAWALD: There's not, Amy. 

15 You are absolutely correct. So, you are

16 pointing exactly to the statute that I am

17 looking at.

18 And so, the word "installer" only

19 appears that one time. The question is

20 whether there is any need in this group at

21 all, because that term exists, to define it,

22 and whether we think that could have
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1 independent legal significance. And I don't

2 know that.

3 So, I am putting it out to the

4 group because I don't know. And so, I am

5 hoping folks here can help me understand.

6 What it seems like to me is, from

7 a practical point of view, the installer is a

8 person who puts the thing in, right? And the

9 contractor is the person who is either doing

10 that work or they are the boss or the hirer of

11 that person doing that work, from a very

12 simplistic, non-intelligent point of view.

13 But that is my understanding. So,

14 I want to make sure, do folks think we need

15 clarity on this or are we comfortable with the

16 fact that that term will be defined, and it

17 doesn't really matter? The contractor and the

18 dealer are the terms that really matter for

19 the prohibited act. And so, we should define

20 those here. And I am comfortable with that. 

21 I just want to make sure we discuss the terms.

22 MEMBER CLARK: This is Gary from
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1 Goodman.

2 Back to the term "contractor,"

3 should we consider that, the contractor, to be

4 a business or a person? And so, personally,

5 I think it is a business. And so, I think we

6 should be explicit as far as that goes. But

7 others may have different opinions.

8 MEMBER SACHS: This is Harvey.

9 And I would love for that to be

10 the case, but I think I am sensitive to this

11 question of the tech who is buying off the

12 internet and installing in his after-hours

13 using his employer's stuff. So, that is why

14 I am a little bit concerned about defining it

15 as a business, even though that is where I

16 would like us to be.

17 MEMBER McCRUDDEN: This is Charlie

18 with ACCA.

19 I think we have in this definition

20 here on the board where it says, "the company

21 or entity that offers to perform the services

22 in HVAC," I think there will be companies that
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1 are violating or causing prohibited acts. I

2 think there will be individuals, to Harvey's

3 point, that will be out there doing this, too.

4 The upstanding contractors want

5 the protection from those. So, the upstanding

6 contractor wants the protection from the

7 company that is out there, but also this

8 individual. And I don't know if there is a

9 way to define "contractor". I don't know if

10 "company" or "entity," and if "entity"

11 captures individuals or not. And so, I will

12 look to you for that.

13 MR. RAWALD: This is Doug.

14 From a practical point of view, I

15 would view the term "entity" to be

16 encompassing of companies and individuals.

17 MEMBER BALLO: This is Tim Ballo.

18 There is in the DOE regs currently

19 a definition of "person," which includes "any

20 individual, corporation, company, association,

21 firm, partnership, society, trust, joint

22 venture, or a joint stock company," and it
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1 goes on from there. So, I think "person," if

2 we just use that, would cover us here.

3 MR. RAWALD: That is a good find. 

4 Thank you, Tim.

5 MEMBER DORIA: This is Jordan

6 Doria with Ingersoll Rand.

7 I think it is, just going back to

8 the question of do we need to define

9 "installer," I think it is important that we

10 do because, ultimately, we have compliance

11 that is triggered by installation. So, I

12 think to have that which is a requirement and

13 not have a definition of "installer," I think

14 it would create some asymmetry between the

15 definitions that we are working with here.

16 MEMBER WHITE: This is Chuck White

17 at PHCC.

18 And that is true, but, typically,

19 the contractor is responsible for his

20 installer's actions. That is why he has the

21 contractor's license. In some states, actual

22 technicians are licensed, but in many they are
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1 not.

2 MEMBER DORIA: I think that is a

3 fair point. I guess the bottom line is we

4 don't want to get into a situation where, if

5 we have a definition of "contractor" and,

6 then, people are pointing to each other saying

7 that they are ultimately not an installer, and

8 therefore, not guilty of doing an installation

9 improperly, we need to avoid that outcome.

10 MEMBER SACHS: This is Harvey, and

11 I have a problem with the second bullet under

12 "contractor" where it says, "one who is hired

13 to install a product". That leaves out

14 completely who has decided what product to

15 install. And to me, the contractor is the one

16 who is doing systems specification, which

17 might be approved by the building owner, is

18 doing sizing and is doing installation, and is

19 responsible for the right piece of gear going

20 in the right place.

21 MEMBER CLARK: So, would it be

22 appropriate to say "hired to specify and
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1 install"?

2 MEMBER SACHS: This is Harvey.

3 Gary, I am much more comfortable

4 with that. I am not sure it meets everyone's

5 needs, but it may be close enough for Doug's

6 interest in broad definitions.

7 MEMBER WHITE: This is Chuck

8 White.

9 That is probably true in the

10 residential market, but commercial and larger

11 is going to be a specifying engineer.

12 MR. RAWALD: Right. But this is

13 Doug.

14 So, let's keep this only to the

15 regional standards. So, these definitions

16 will not have broad implications for DOE. 

17 These definitions, as I see them, will be

18 geared toward the regional standards, which

19 are related only to residential central air20 conditioning split systems and single-package

21 systems that will be covered by the regional

22 standards.
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1 MEMBER WHITE: But I could have a

2 50-story condominium building in New York City

3 that is designed by a consulting engineer. It

4 is not specified by the contractor. There are

5 residential applications where he is not the

6 only one doing that.

7 Dallas is fine.

8 MR. EISNER: Are we getting close

9 on "contractor"?

10 MEMBER DORIA: This is Jordan

11 Doria with Ingersoll Rand.

12 I am not sure that I am

13 comfortable with the idea of adding in this

14 specified terminology. Basically, we are

15 saying now it is anybody who consults is now

16 somehow involved in this. I just, quite

17 frankly, don't see the need for that.

18 I think we keep it limited to the

19 person who actually performs the act. I mean,

20 that is the person who bears the requirement. 

21 Because they specify "and they install". So

22 now, you need to be doing both of those things
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1 potentially to meet that definition. And

2 then, if you are only doing one, then somehow

3 you are not liable? I don't think that is

4 what we want.

5 MR. HUNGERFORD: Hi. This is

6 David Hungerford. If I could jump in for a

7 second?

8 MR. EISNER: Yes.

9 MR. HUNGERFORD: Neil, can you

10 guys hear me?

11 MR. EISNER: Yes, we can.

12 MR. HUNGERFORD: I think we are

13 confusing here the idea of a role versus an

14 entity. And it seems like what we are trying

15 to define for legal purposes is the idea of a

16 role.

17 And so, in a simple sense, a

18 dealer is the entity that purchases the

19 equipment from the manufacturer or the

20 manufacturer's representative. The contractor

21 is the entity that the customer employs to

22 purchase the equipment for their premises or
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1 for their building. And the installer is the

2 entity that actually does the work through

3 their technician.

4 And so, any entity could fulfil

5 all of those roles or just a subset of those

6 roles. But it seems like it is the role that

7 is important rather than getting mixed up with

8 different configuration of entities that

9 fulfill multiple roles, is the comment.

10 MR. EISNER: Do you want to go

11 back and look at those three sentences and see

12 what you think of that?

13 MS. DEGITZ: Yes, yes.

14 MR. EISNER: And again, we could

15 use "person" instead of "entity".

16 Any comments on those? Does that

17 satisfy a lot of the concerns?

18 MEMBER SHEPHERD: What's

19 "contractor" now?

20 MR. EISNER: The contractor would

21 be the person the customer employs to install

22 the equipment, I think.
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1 MEMBER SHEPHERD: So, what is the

2 difference between an "installer" and a

3 "contractor"?

4 MR. EISNER: I'm sorry, it is a

5 little harder to point out where it is also --

6 maybe if I try to speak a little louder.

7 This would have to be something a

8 little different. The entity is the person

9 that the customer employs to -- somebody? It

10 can be the one installs it. Let's put it this

11 way: is everybody happy with this, "the

12 person who purchases the equipment"?

13 MEMBER SHEPHERD: I think that is

14 way too vague.

15 MEMBER SACHS: Wait a minute. Two

16 years ago, I purchased equipment through a

17 dealer to be installed in my house. I was the

18 purchaser. It was specified --

19 MR. EISNER: So, does this have to

20 be "that purchases the equipment from the

21 manufacturer"?

22 MEMBER DORIA: I would recommend
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1 we omit the "from whom". That is less

2 important. And just say "for the purpose of

3 reselling to an ultimate end-user," or

4 something along those lines, "ultimate

5 consumer," you know, something like that. And

6 just leave out where they get it from.

7 MR. EISNER: Thank you.

8 MEMBER FERNSTROM: So, this is

9 Gary for the California IOUs.

10 It seems like we are spinning all

11 of these things around the notion of

12 purchasing. And looking back at the CEC,

13 their appliance standards applied to those

14 selling the equipment, not those purchasing. 

15 And I think it makes it a lot easier because

16 those selling, then, are responsible for

17 complying with the regulations.

18 MEMBER DORIA: This is Jordan with

19 Ingersoll Rand.

20 I think that the problem with that

21 is that basically means, if you have a date of

22 manufacture, it is very easy to apply it to
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1 the seller. But, when you have something that

2 is not around date of manufacture, but the

3 date of install, an installation, it seems

4 that that necessarily starts consideration of

5 purchaser obligations and requirements.

6 MEMBER FERNSTROM: Yes. However,

7 somebody on down the line is always selling

8 it. So, the contractor sells it to the

9 customer, whoever that is. That may be the

10 homeowner. It may be a builder. It may be a

11 general contractor. But somebody is always

12 selling the equipment.

13 MR. SURRENA: Don Surrena, NAHB.

14 This may have used to have been

15 simple when you just had to have a certain

16 SEER rating for a certain single component. 

17 But now you have to design this system, and it

18 can have three different components that make

19 it comply or not have it comply under the

20 different circumstances for humidity or

21 whatever the reason.

22 And somebody has to design it. 
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1 They just can't go buy it and put it in. It

2 is the design that makes it compliant. It is

3 the knowledgeable installation of those

4 components that put the responsibility in

5 design and installation of a knowledgeable

6 person. You could have an installer that was

7 given three things to put in. He installs

8 them. He can install them whether they comply

9 or don't comply. He may know it; he may not

10 know it.

11 Where do you want the ultimate

12 responsibility to fall, on the person who

13 designed it and understood what was being put

14 into make it compliant? The pieces themselves

15 have no eyes. They don't know where they are

16 going. Someone does know what they are doing.

17 If it is the builder who designed

18 it and ordered its installation, or if it was

19 the HVAC contractor who designed and ordered

20 its installation, somewhere you have got to

21 differentiate that this is just not one piece

22 of a product that was brought into place and
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1 put there. It is three different components. 

2 It could be variations in multiple scenarios.

3 We have to disseminate how it came

4 to that proposed compliance level and who put

5 it in, whether they were knowing or whether

6 they ordered it installed. But to just have

7 these vague definitions doesn't give guidance

8 to define how the Department is going to

9 enforce it. It is the knowledge of what was

10 designed and ordered to be installed.

11 MEMBER WHITE: This is Chuck White

12 at PHCC.

13 And that I guess is true, but

14 correct me if I am wrong, Doug, the standard

15 or what we are here about is regional

16 efficiencies, not system design and size and

17 criteria and load calculations. All you have

18 to go on is the air conditioner that got put

19 in has to comply with SEER 14, which means the

20 condensing unit and the coil were matched and

21 they are listed on Karim's database, and we

22 can verify that.
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1 And from your point of view, Doug,

2 you don't care if it is 2-ton or 5-ton or 100-

3 ton. As long as it meets SEER 14, we satisfy

4 your requirements. Is that correct?

5 MR. RAWALD: That is correct,

6 Chuck.

7 MEMBER MEYERS: This is Karen with

8 Rheem.

9 I think I would repeat the

10 definition that you have for "dealer" for

11 "contractor," for the purpose of selling. And

12 I would probably put "and/or installing to the

13 consumer". And I think those definitions

14 should be the same.

15 And then, I think I would add a

16 line that says, "For purposes of enforcement,

17 these could be different or the same."

18 MS. DEGITZ: Could you repeat

19 that, Karen, the last part?

20 MR. EISNER: Well, don't you cover

21 what you just did by saying that about all? 

22 One person can perform all three functions?
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1 MEMBER MEYERS: I think that needs

2 to be included.

3 MR. EISNER: So "entity," this

4 could be the person that purchases the

5 equipment for the purpose of selling to the

6 consumer. Maybe the "contractor" could be

7 something like the person that oversees the

8 installation, and the "installer" can be the

9 entity that installs the equipment.

10 Start out with something simple. 

11 Go on to some other elements. But the

12 enforcement program, you may want to come back

13 and add to the simple definitions as you see

14 problems. Or you may decide you don't need

15 the definitions, that they are too simple. 

16 But start off with something simple like that.

17 And then, as I said, add a

18 sentence that would be an introductory or at

19 the end, that one person could perform one or

20 more functions, one or more of these

21 functions. It can be the same person.

22 MR. RAWALD: So, this is Doug.
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1 And I want to throw another

2 question into this, which is, we are doing

3 this now somewhat like the distributor

4 definition. And so, it is a question of how

5 do we make them separate and apart from

6 distributor. And I know Tim has the statute

7 in front of him. So, possibly he could turn

8 to 6291 and read the distributor definition

9 for us.

10 MEMBER BALLO: This is Tim.

11 "The term `distributor' means a

12 person (other than a manufacturer or retailer)

13 to whom a consumer product is delivered or

14 sold for purposes of distribution in

15 commerce."

16 So, looking at this, it seems the

17 distinction here is that the "dealer"

18 definition is for the purpose of selling to

19 the consumer, not just for distribution in

20 commerce.

21 MEMBER ROCKY: So, this is Bryan

22 Rocky.
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1 With that statement, I see no

2 difference in the terms "dealer" or

3 "contractor".

4 MR. EISNER: With what?

5 MEMBER ROCKY: Following on from

6 what Tim just read, if distribution means

7 moving product from manufacturers through a

8 distribution channel in commerce, the idea of

9 a dealer/contractor is selling to the end10 user, and they are the same term and they can

11 be used interchangeably. An "installer" or

12 "technician" becomes the person that actually

13 installs the equipment or services or replaces

14 the equipment.

15 We have gone round and round. I

16 see no difference between "dealer" and

17 "contractor" as far as what we are trying to

18 approach here.

19 MEMBER WHITE: This is Chuck

20 White.

21 I think I could agree with that. 

22 For the purposes of what we are after, I think
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1 that is probably correct.

2 MR. SURRENA: I am still absorbing

3 it. Don Surrena, NAHB.

4 The distributor gets the product

5 directly from the manufacturer or is the

6 manufacturer who distributes in different

7 areas. A person who sets themselves up as a

8 dealer sets themselves up through a

9 distributor or through the manufacturer to

10 sell that particular type of a product.

11 Normally, to be a dealer, when I

12 was in construction, to sell certain windows

13 I had to have a certain quantity I had bought

14 in a period of time. A contractor was the guy

15 who came in to either the distributor or

16 worked through a dealer and bought one unit

17 and went out and did it. He may buy different

18 brands at different times. But a dealer

19 normally worked with one specific

20 manufacturer. I think there is a

21 differentiation between dealer and contractor.

22 MEMBER ROCKY: I'm sorry -- this
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1 is Bryan -- I disagree with that. A

2 contractor or dealer can buy one; they can buy

3 a thousand systems. They are buying product

4 from a manufacturer or an independent

5 distribution to sell it to a

6 consumer/homeowner. That's it. And there is

7 nothing related to that. We are talking about

8 HVAC contractors. We are not talking general

9 contractors or anything else.

10 We are making this much more

11 complicated than it needs to be for this

12 rulemaking. This is someone who buys

13 residential air conditioners from someplace to

14 sell it to a homeowner. That is all this is,

15 and those first two terms are the same under

16 that definition, under that scope.

17 MR. EISNER: Harvey?

18 MEMBER SACHS: It seems to me --

19 this is Harvey Sachs -- trying to absorb what

20 I have heard this morning, that the first

21 point, distributor is what would generally be

22 known in business as a wholesaler. The dealer
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1 and contractor I see as being substantially

2 equivalent, if not entirely, and they would

3 both be subsumed as retailer.

4 And I think if we identify these

5 with those sort of standard business practice

6 terms, it is more helpful than it is harmful,

7 and it preserves Doug's generalizability.

8 So, I just make a suggestion that

9 we define "distributor" as the person who

10 serves the wholesale function, and "dealer" or

11 "contractor" is the person who serves the

12 retail function.

13 MR. RAWALD: Right. And so, to be

14 clear, though, we are not open to redefining

15 "distributor" because it is defined in the

16 statute. So, we are going to stick with the

17 definition we have.

18 MEMBER SACHS: Mea culpa.

19 (Laughter.)

20 MR. RAWALD: Right. But we can,

21 of course, use that advice. Now the word

22 "retailer" used is a loaded term because it is
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1 also defined in the statute, which Tim could

2 tell us what it means. But, generally, we

3 would view it to mean "big box stores" like

4 Best Buy and those kinds of things. But there

5 is a term defining "retailer," and it may help

6 us or it may hurt us to know what that means.

7 MR. EISNER: Amy?

8 MEMBER SHEPHERD: So, what if we,

9 instead of having -- is there a need to have

10 these discrete definitions for each of these

11 terms? What if, instead, we had sort of the

12 bucket of conduct? Because it sounds like it

13 depends. Sometimes people are one and

14 sometimes people are another.

15 So, what if we said something

16 like, "A dealer or contractor is an entity

17 who...."? We define the conduct that is at

18 issue here, that will need to be identified by

19 manufacturers.

20 So, they don't need to know is

21 this person a dealer, is this person a

22 contractor. They need to know, is this person
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1 doing the thing that I can be in trouble for? 

2 Are they installing it? And if we did that,

3 would that avoid some of these knots we seem

4 to be twisting ourselves into to come up with

5 these discrete definitions that aren't

6 necessarily going to be discrete?

7 MR. RAWALD: Right. So, this is

8 Doug.

9 From an enforcement point of view,

10 that would work, unless we define some sort of

11 different responsibilities for those people

12 down the road. And so, I think we could

13 certainly go in the opening position right now

14 of defining them the same. But if we decide

15 later on that we want to have these guys doing

16 different things or have different

17 responsibilities, then that may have to reopen

18 the definition. That is only reason why I

19 could see that being an issue.

20 MEMBER GIBBONS: This is John from

21 Carrier.

22 I agree with Amy, and I took a pen
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1 to it and wrote out, just to be consistent

2 with the definition of "distributor," I wrote

3 out, "The terms dealer/contractor means an

4 entity other than the manufacturer or

5 distributor to whom a consumer product is

6 delivered and eventually sold to an end-user."

7 And you can take my piece of paper

8 here.

9 MEMBER WHITE: This is Charlie

10 with ACCA.

11 While she is typing that up, could

12 we hear what the definition of "retailer" is?

13 MR. RAWALD: Tim, are you willing

14 to read it?

15 MEMBER BALLO: No.

16 (Laughter.)

17 The term "retailer" means "a

18 person to whom a consumer product is delivered

19 or sold, if such delivery or sale is for

20 purposes of sale or distribution in commerce

21 to purchasers who buy such product for

22 purposes other than resell."
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1 So, purchasers who buy such

2 product for purposes other than resell would

3 generally be known as consumers.

4 (Laughter.)

5 MR. RAWALD: That was written by

6 Congress. So, don't look at me.

7 (Laughter.)

8 So, the question is, is the

9 "retailer" definition, is that much akin to

10 what we are defining in "dealer" or a

11 "contractor" at the moment?

12 MR. EISNER: Do you want to focus

13 on this?

14 MEMBER CLARK: The only question I

15 have is "entity" -- or should it be "person,"

16 based on --

17 MEMBER SACHS: Gary, I could go

18 with "person".

19 MEMBER NOLL: This is Elizabeth at

20 NRDC.

21 Also, the delivered or sold versus

22 the selling or installing, are we missing a
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1 component? The "delivered" and "installed" to

2 me sounds a lot like the distributor and

3 retailer, and we have completely missed the

4 installation aspect.

5 MEMBER GIBBONS: John from

6 Carrier.

7 Are you suggesting change

8 "delivered" to "installed"?

9 MEMBER NOLL: I am only suggesting

10 that I feel like that is a component that is

11 still missing in what we are trying to design.

12 MR. EISNER: You are saying, what

13 is the difference between this and this?

14 MEMBER NOLL: It got changed. So,

15 when John defined "dealer" and "contractor,"

16 it said "delivered" and "sold". And I said

17 that was strikingly similar to "retailer" and

18 "distributor".

19 And in Karen's definition, we had

20 for the purpose of selling and/or installing. 

21 And I thought that more accurately captured

22 what we are trying to define.
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1 But, then, also, remembering what

2 Jordan's comment was on is it "and/or," is it

3 both --

4 MR. RAWALD: Yes, Laura, if you

5 could keep both options there rather than

6 deleting that one, that would be helpful I

7 think for me.

8 I mean, is this an effective time 

9 to break and think about this? Are people

10 pretty much tapped out from ideas? Can we

11 come back, clean this up a little bit, and

12 then, we could put some ideas on the screen,

13 and people could look at them again? Is that

14 a good idea? I see a lot of people nodding

15 their heads that a break would be appropriate.

16 MEMBER MEYERS: Yes. Do we still

17 need to come up with a definition for

18 "installer"? Is that the third piece of this

19 or not?

20 MR. RAWALD: Well, Amy is positive

21 that we don't need a definition for

22 "installer". Jordan has said that possibly
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1 one would be helpful. So, we have some ideas

2 put forward for one.

3 MEMBER SHEPHERD: I am just saying

4 I don't think it is required.

5 MR. RAWALD: It's not, right,

6 exactly.

7 MEMBER SHEPHERD: Right. It might

8 be a good idea, but --

9 MR. RAWALD: Not to put words in

10 your mouth.

11 MEMBER SHEPHERD: Yes, too late.

12 MR. RAWALD: I'm sorry. I

13 apologize.

14 MR. EISNER: Why don't we take a

15 15-minute break? Be back at 11:00 and see if

16 we can finish this.

17 (Whereupon, the foregoing matter

18 went off the record at 10:48 a.m. and went

19 back on the record at 11:07 a.m.)

20 MS. DEGITZ: Okay. Can everyone

21 read the screen or should I make it bigger? 

22 How is that? Okay.
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1 So, the top is the current

2 definitions. Below are the proposed

3 definitions that we discussed today.

4 The first two are the combined

5 definitions for "dealer" or "contractor". And

6 then, below that, a table of all the different

7 discussions and definitions we have that were

8 applicable only to one term. So, it would be,

9 if we are going to define "dealer," I put that

10 in that "dealer" column versus "contractor" or

11 "installer".

12 MR. EISNER: Can we blow that up

13 just a little bit?

14 MS. DEGITZ: Sure.

15 So, these are just the proposed

16 definitions? If you want to see DOE's

17 definition of "distributor" or "retailer," let

18 me know and I can scroll back up.

19 MR. EISNER: Any thoughts on where

20 we start it off or the proposal that everybody

21 agreed to?

22 MEMBER MEYERS: So, this is Karen
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1 with Rheem.

2 I will start it off. I think I

3 like the proposed definitions as written, and

4 I would add a bullet that also has the

5 "installer" defined. And then, a caveat at

6 either the beginning or the end that a person

7 could do one or all of these activities.

8 MS. DEGITZ: So, the first two

9 definitions are very similar. The only

10 difference is one has product is delivered and

11 sold and the second is product is sold and/or

12 installed. So, is there one you like more

13 than the other?

14 MEMBER MEYERS: I like the second

15 one better, just personally.

16 MS. DEGITZ: Okay. So, this was

17 your proposal, and what would you like to add?

18 MEMBER MEYERS: I would add

19 another bullet that has the "installer"

20 definition, just as it is written in the box. 

21 I would say it is a "person" to keep it

22 consistent.
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1 MS. DEGITZ: You said, "may

2 perform any of these functions"?

3 MEMBER BALLO: So, this is Tim

4 Ballo.

5 First, a minor point on the

6 "installer" bullet. We have been referring to

7 "consumer product," not "equipment". So, "a

8 person that installs a consumer product". And

9 "a consumer product," not "the consumer

10 product".

11 The main point that I had, though,

12 is I am not sure the dealer or contractor

13 portion of the definition is grammatically

14 correct. I don't understand where the end15 user comes in there.

16 MR. RAWALD: And, Tim, you are

17 referring to the fact that it says "install to

18 an end-user"? Right?

19 MEMBER BALLO: Yes.

20 MR. RAWALD: How about "for"? 

21 "Sold to or installed for...."

22 And so, this is Doug again.
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1 I do want to keep these

2 definitions limited to central air

3 conditioning, not to consumer products at

4 large. So, if we could narrow the scope?

5 MR. EISNER: You stick an extra

6 "to" in here or you want to say "for sale to

7 consumer". But you have got "to whom a

8 consumer product is sold to".

9 MR. RAWALD: Right, "is sold to

10 and/or installed for an end-user". Yes,

11 right, I see what you are saying. Uh-hum.

12 MS. DEGITZ: Oh, I see it.

13 MEMBER WHITE: This is Chuck

14 White.

15 Wouldn't be better to say "sells

16 or installs a consumer product to an end17 user"? Because the way it is put there, it

18 kind of sounds like the --

19 MEMBER MEYERS: This is Karen.

20 Do we want to change "consumer

21 product" to "a residential air conditioner"?

22 MS. DEGITZ: Yes, I will get
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1 there.

2 MR. RAWALD: She is going to do

3 that.

4 I do appreciate Laura's patience. 

5 I am sure it is very difficult to do this with

6 all of us staring at her.

7 MS. DEGITZ: Does "central air

8 conditioner" cover heat pump? It does? Okay.

9 MR. RAWALD: Right. So, her

10 question is, do we want to make the term a

11 little more narrow or is everyone comfortable

12 with the term "central air conditioner,"

13 knowing that it won't really matter?

14 MS. DEGITZ: "Who sells or

15 installs a residential" -- you wanted to

16 specify "a product covered by regional

17 standards" instead of "residential central air

18 conditioner"?

19 MEMBER BALLO: No, residential

20 central air conditioner is covered.

21 MR. RAWALD: Right. And if I hear

22 Charlie correctly, we don't want to bind
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1 ourselves to leave out future regional

2 standards or the definitions for those

3 regional standards.

4 MS. DEGITZ: Okay. "A dealer or

5 contractor is a person who sells or installs

6 a residential central air conditioner covered

7 by regional standards for an end-user."

8 MR. EISNER: Would it be clearer

9 if you moved -- instead of "to," "installs for

10 and end-user"?

11 MS. DEGITZ: Like this?

12 MR. EISNER: Is that clearer that

13 way?

14 MEMBER LATTANZI: This is Matt.

15 Should it be "who sells to and/or

16 installs"?

17 MR. EISNER: Is everybody happy

18 with that?

19 MR. RAWALD: Okay. So, grammar

20 always is difficult in this kind of forum. 

21 So, perhaps we all have a general sense now of

22 an idea that we all are coalescing around.
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1 Maybe we can give Laura a break

2 and we can at lunchtime put together a

3 grammatically-correct definition that will

4 work for everyone, and then, we can come back. 

5 I think it is very difficult to like parse

6 grammar in this particular forum this way, if

7 folks are okay with that.

8 MR. EISNER: And so, those are the

9 three bullets we want to keep. Again, I would

10 stress, I think as we go through the

11 enforcement program itself, we may want to

12 come back and say, all right, we're going to

13 have to add something or subtract something

14 from the definition. But to start off with

15 that, we have got a good set of bullets.

16 MEMBER McCRUDDEN: This is Charlie

17 with ACCA.

18 So, I may be getting ahead of

19 myself here. But I know that you can't go

20 after homeowners. But suppose you have a

21 situation where there is a homeowner who is

22 coordinating with someone. They are the end-
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1 user, but they could also, under this

2 definition, be the contractor, correct?

3 MR. RAWALD: Right. So, it is

4 possible, I guess if you were to parse it out,

5 that that person could fit within the legal

6 definition. And so, I think from the point of

7 view of this negotiation, we should discuss

8 how we feel about that.

9 MEMBER McCRUDDEN: Yes. Right. I

10 would support capturing homeowners who are

11 trying to skirt the system in a way, so that

12 homeowners themselves, they may not be the

13 traditional sense of an HVAC contractor, but

14 they could be, I think, deemed a

15 dealer/contractor in this situation.

16 MR. RAWALD: Okay. And this is

17 Doug.

18 And my preference, once again, is

19 the broad definitions, and then, we can

20 characterize our exclusions or things that

21 make sense as we go over it. But I think that

22 if there is a reason to want to capture these
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1 people because they feel they may be skirting

2 the rules and getting by, then let's make sure

3 the definition is broad enough to include

4 that.

5 MR. EISNER: Are there comments,

6 questions?

7 MEMBER BALLO: This is Tim.

8 I think we need to make a parallel

9 change to the "installer" definition, "person

10 that installs a residential central air

11 conditioner covered by regional standards".

12 MR. RAWALD: So, is everyone okay

13 with the approach of we will go ahead and fix

14 this grammatical or do a little wordsmithing

15 with it, and then, bring it back after lunch

16 and make sure it looks good for everyone? But

17 this is kind of where we are?

18 MEMBER DORIA: This is Jordan

19 Doria with Ingersoll Rand.

20 One comment I want to make, I

21 think this does a good job of really capturing

22 sort of where we are or where the current
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1 state of the industry is. I think it is just

2 always important to think about how that could

3 change and what that might mean for the

4 definitions.

5 As I am looking at it, we say a

6 dealer or a contractor is a person other than

7 a manufacturer or distributor. I think that

8 is accurate in terms of the state of play

9 today, but that is not a fundamental point. 

10 That could, in fact, be different, right? And

11 it is sort of up to manufacturers, were that

12 to be different, right?

13 So, just sort of putting it out

14 there, does this capture other permutations of

15 how the industry and the channel could operate

16 appropriately?

17 I guess, to put it in more stark

18 terms, an installer is a person. In theory,

19 that means a manufacturer, right? If we, as

20 manufacturers, started actually putting in the

21 product, I think that would capture

22 manufacturers.
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1 MR. EISNER: Well, do you want to

2 just simply add something here? "May perform

3 any of the functions defined above or those of

4 a manufacturer"?

5 Anybody have a reaction?

6 MEMBER SACHS: This is Harvey.

7 I think Jordan's point is almost

8 captured as instructions to Laura to make sure

9 that we are not closing off, through

10 definitions that we didn't intend, future

11 business models.

12 MEMBER ROCKY: This is Bryan

13 Rocky.

14 But by that discussion, Jordan and

15 Harvey both, if a manufacturer is going to act

16 today as a distributor, then we are covered

17 under definitions of a distributor. If a

18 manufacturer is going to act as a contractor,

19 then you are actually separating internally

20 the functions of a manufacturer and the

21 functions of a contractor. And you have to

22 meet the requirements, as defined for a
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1 contractor/dealer/installer.

2 MEMBER SACHS: To me, as long as

3 we don't exclude the possibility that a

4 manufacturer might want to, particularly a

5 dish manufacturer might want to integrate all

6 three levels within one single entity. I just

7 see no reason to forbid that through

8 regulation.

9 MEMBER DORIA: This is Jordan,

10 Ingersoll Rand, again.

11 I think that the issue, to Bryan's

12 point, is one of manufacturer/distributor as

13 we think of it in industry or

14 manufacturer/distributor as defined by the

15 Department, right?

16 And I think what we need to be

17 saying here is that a manufacturer/distributor

18 could choose to undertake certain activities

19 that would, then, mean, in addition to being

20 a manufacturer and potentially a distributor,

21 they now meet the definition of a dealer or

22 contractor. And they now have the obligations
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1 that come with that essentially treatment from

2 the Department.

3 MR. RAWALD: Right. And this is

4 Doug.

5 So, currently, under the statute,

6 as Amy pointed out earlier, the only issue of

7 concern for these folks is the requirement

8 that the manufacturer not sell to them. So,

9 if a manufacturer is wearing both hats, they

10 couldn't sell to themselves, if they knew they

11 were breaking the rules, right?

12 So, if we, as we go through the

13 negotiation, we develop more responsibilities,

14 we may want to revisit the definition to see

15 if that is an appropriate responsibility to

16 put on someone who could be a

17 manufacturer/installer.

18 So, I think at the moment with

19 what we have got, I am comfortable with this

20 as is. And then, we can kind of discuss those

21 possibilities as they evolve over the course

22 of the negotiation.
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1 MEMBER WHITE: This is Chuck

2 White.

3 At the risk of being dragged out

4 of the room, thinking along the lines of what

5 Charlie talked about, instead of saying "who

6 sells to," I think I would prefer "who

7 furnishes and/or installs". Because if a

8 consumer has it sitting in their garage, they

9 are still in the clear because they didn't

10 sell it; they bought it. So, if they furnish

11 it to someone to install, would it be better

12 to say "furnish and/or install a residential

13 central air conditioner," instead of "sell"?

14 MEMBER FERNSTROM: So, where did

15 the consumer buy it from?

16 MEMBER WHITE: I don't know. But

17 if they got a contractor out there to put it

18 in, if they have someone to put it in, they

19 have furnished it for being put in, to be put

20 in.

21 MR. SURRENA: And if they drag

22 Charlie out of the room, I agree with him. 
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1 From NAHB's perspective, I think that hones it

2 in a little better.

3 MEMBER WHITE: Because the person

4 that sold it is the person who, if you sold it

5 to the end-user, you are the person. So, if

6 they bought it from somebody online 10 states

7 away, you would have to somehow track them

8 down. That means the homeowner is innocent of

9 doing this because somebody else sold it to

10 them. But, if they furnish it, I bought it

11 from someone and now I furnish it to someone

12 to install it, you have put them in the chain

13 of liability. They are skirting the rules,

14 and they are the ones.

15 MR. HURST: Is that not implied,

16 though?

17 This is John Hurst from Lennox.

18 Is it not implied when you say

19 "and/or installs"? Do you think there needs

20 to be further clarification?

21 MEMBER WHITE: Chuck White.

22 Only if they are the ones that
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1 install it.

2 MR. RAWALD: Right. John, this is

3 Doug.

4 So, he is not talking about the

5 contractor. He is talking about the guy who

6 has it in his garage. He wants him to be

7 liable.

8 MR. HURST: Oh, okay.

9 MR. RAWALD: So, as a person who

10 has it --

11 MR. HURST: Got it.

12 MR. RAWALD: So, he is saying he

13 is furnishing it.

14 So, it is interesting because in

15 the statute we always use the word "distribute

16 in commerce," as opposed to the word "sell,"

17 which is much more narrow. So, perhaps the

18 word "distribute" might be consistent with the

19 statute or something like that, something akin

20 to that. So, they might work a little better

21 for folks.

22 MEMBER WHITE: Well, it is Chuck
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1 White again.

2 If you view "distribute in

3 commerce," the fact that it is sitting in my

4 garage.

5 MR. RAWALD: Right, that's is a

6 fair point. That is a fair point.

7 MEMBER WHITE: I would think it

8 was distributed in commerce when it arrived at

9 my garage, but not when it leaves my garage

10 and gets put in on my patio.

11 MR. RAWALD: Right. And Tim could

12 tell you there is a definition of

13 "distribution in commerce" in the statute, and

14 it probably wouldn't go that far. So, yes.

15 MEMBER MEYERS: So, Chuck, help me

16 understand. So, your issue is there is a unit

17 in a garage. How did that unit get to the

18 garage?

19 MEMBER WHITE: Somebody carried

20 it.

21 MEMBER MEYERS: So, the homeowner

22 is installing it himself? Is that your --
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1 MEMBER WHITE: It could be the

2 homeowner is installing it themselves. It

3 could be they have got some friend who knows

4 how to do this. It could be somebody working

5 on the side after hours.

6 MR. RAWALD: They bought it on

7 eBay.

8 MEMBER WHITE: Yes, a homeowner

9 buys one from an outside source and has it

10 shipped to their place. There is nothing --

11 nobody is going to search in the truck lines

12 to be sure a SEER 13 is not going to Florida.

13 MEMBER MEYERS: But would the

14 prohibited act be against the person who sold

15 it on eBay? Shouldn't that be the appropriate

16 prohibited act, not the homeowner who bought

17 it?

18 MR. RAWALD: And this is Doug.

19 I don't want to jump too far ahead

20 into prohibitions. I think what Charlie and

21 Chuck are hitting on is they are concerned of

22 trying to make the definitions broad enough to
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1 encompass anyone who might be handing the

2 installer this item to install. And so, if

3 that person is the homeowner and says, "Hey,

4 Installer, you come to my house and put this

5 in," that person should be defined as the

6 contractor or dealer because they are, in

7 fact, being the ones that are giving it to the

8 installer. That is what I hear Chuck and

9 Charlie saying.

10 MR. EISNER: Let's give a chance,

11 because it may be on this issue -- David

12 Hungerford online wants to say something.

13 David? David Hungerford?

14 MR. HUNGERFORD: Yes, I am here. 

15 Okay.

16 Yes, I was trying to break in a

17 couple of seconds ago. I think we want to

18 make sure to exclude the UPS guy.

19 (Laughter.)

20 Yes, somebody has an open

21 microphone.

22 Okay. We want to exclude the UPS
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1 guy. And is there no way to think about the

2 seller to the end-user as the entity that we

3 want to pay attention to and require

4 compliance, even in online commerce? Or are

5 we excluding that as an option?

6 MEMBER WHITE: This is Chuck

7 White, PHCC.

8 I agree. I think we would like to

9 be able to catch up with those, but are they

10 a distributor, and what level of

11 responsibility do the distributors share in

12 the agreed-upon settlement?

13 MEMBER SHEPHERD: This is Amy

14 Shepherd.

15 I think, also, inevitably dragged

16 into the other conversation here, which is to

17 determine what is an effective enforcement

18 plan, how broad do we need this liability to

19 go. So, I think when we have that discussion

20 about what will really make this effective, if

21 we can come up with something based just sort

22 of on what we have in the statute, whatever it
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1 might be, more limited things that make it

2 ineffective, then you don't need to go as

3 broadly.

4 Like if you are going to prohibit

5 the installation and the installer is going to

6 be liable for this, do you also need to have

7 the homeowner who furnishes it to him also

8 have liability for the same act? So, I think

9 a little bit that we are kind of in the next

10 section. I don't know how much we really want

11 to get into that discussion, just in terms of

12 definitions, because, as you said, as Doug

13 said, we can always come back. And if we

14 decide we need to change these to make it work

15 for what we have determined to be an effective

16 plan, we can do that.

17 MR. EISNER: Don?

18 MR. SURRENA: Thank you. Don

19 Surrena, NAHB.

20 To change "sells" to "furnish"

21 continues to cover all of the things we had

22 talked about, and it makes the inadvertent per
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1 se cheat also liable. Say they get the unit

2 from Canada, shipped in UPS, or from Mexico,

3 shipped in UPS. Are we going to go after some

4 entity in Mexico or Canada or are we going to

5 get the end-person who ordered it, had it put

6 in his garage, furnished it to an installer? 

7 The installer has some liability to know he

8 can't do it, but so does the person who made

9 the direct purchase, knowing or even not

10 knowing that they shouldn't have done it. I

11 think "furnish" is an easy compromise for

12 everything.

13 MR. EISNER: The statute defines

14 that, doesn't it? Is the definition broader

15 --

16 MR. HUNGERFORD: Well, this is

17 David. Can I jump in again?

18 MR. EISNER: Yes, David, go ahead.

19 MR. HUNGERFORD: Okay. I am

20 getting that feedback again. Okay.

21 There is a principle I have tried

22 to follow in thinking about regulations that
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1 there is always an optimum level of draft,

2 that there is going to be some cheating or

3 there is going to be somebody skirting the

4 rule. And trying to design a regulation to

5 cover all essential cases as opposed to one

6 that works effectively to get the vast

7 majority of cases often gets a better outcome,

8 especially if compliance is more

9 straightforward.

10 And so, when we talk about the

11 self-installed central air conditioner, I

12 think we are talking about a fairly small

13 margin of the market. The manufacturers could

14 probably help me with that. But I think that

15 it is a relatively-tiny portion of the market.

16 And I think trying to design the

17 regulation to catch that sort of an activity

18 may lead us to regulations and enforcement

19 procedures that are far too complex to be

20 effectively implemented.

21 MEMBER SACHS: This is Harvey.

22 And I just want to follow up on
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1 David's remark by suggesting that at his seat

2 at the California Energy Commission he has had

3 a fair amount of experience in trying to

4 devise effective enforcement mechanisms. And

5 there are some words in what he said that I

6 think resonate with all of us about means of

7 effectively assuring maximum compliance

8 without going after every last gnat on the

9 elephant's tail.

10 Thank you.

11 MR. STAS: Isn't the ultimate 

12 solution to that for this individual homeowner

13 trying to do the wrong thing that the

14 installer who is brought in to put it in

15 declines the job? The unit doesn't go in. 

16 Then, the homeowner is left to try to get

17 their money back from the eBay seller or

18 wherever they got this nefarious equipment.

19 THE COURT REPORTER: I'm sorry,

20 who was speaking?

21 MR. RAWALD: Eric Stas.

22 MR. STAS: Eric Stas.
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1 MEMBER SACHS: This is Harvey, and

2 I would like to ask a question that might be

3 informative here.

4 We have, in parallel with the

5 enforcement regime we are trying to do, a set

6 of EPA regulations on refrigerant handling. 

7 The bulk of the installs will be replacements,

8 unless we suddenly have an amazing change in

9 the housing industry in this interval.

10 And it may be that one of the

11 manufacturers or Chuck or Charlie can help me

12 understand how many violations there are when

13 a homeowner decides to do his own install,

14 hook up the line set and condensing unit and

15 the evaporator himself.

16 MEMBER McCRUDDEN: So, when you

17 say, how many violations, are we talking DOE

18 rules and EPA rules or?

19 MEMBER SACHS: The majesty of the

20 federal government.

21 MEMBER McCRUDDEN: Yes. So, we

22 know that 608 enforcement is pretty lackluster
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1 from EPA. And it is something I can talk

2 about when we get to prohibited acts and

3 things like that.

4 We, as an organization, are

5 frustrated with the lack of enforcement on

6 608. There is a fair bit of compliance that

7 goes with it. You have to be trained,

8 certified. You have to carry the card. You

9 are restricted on purchasing HCFCs. You have

10 to carry the equipment, and it takes time to

11 properly handle the refrigerant when servicing

12 or repairing.

13 It is our hope that this doesn't

14 end up the same way. But when we get to that,

15 I can elaborate on that more.

16 MEMBER SACHS: Sure. No, I

17 appreciate that, Charlie. And just as

18 background, reading between the lines, I am

19 hearing a possible suggestion that a non20 compliance bounty or a rat-out mechanism might

21 just be an interesting approach, just

22 foreshadowing a bit.
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1 MEMBER McCRUDDEN: You are

2 foreshadowing a bit, yes. Yes.

3 MR. EISNER: Other comments?

4 (No response.)

5 How do we want to leave this? Do

6 we want to leave "sell" in there for now? Do

7 we want to change it?

8 MR. HURST: I was just going to

9 ask if we could go back up to "retailer" once

10 we finish with this piece.

11 I would just like to make a

12 comment. In the "big box" programs with HVAC

13 manufacturers and dealers/contractors, they

14 don't take possession of the consumer product. 

15 It is a pass-through. So, it is never

16 technically delivered or sold to the retailer. 

17 I don't know if that matters in this

18 definition. But this isn't currently the way

19 it happens.

20 MR. RAWALD: Right. So, John,

21 this is Doug.

22 So, I am hearing you saying that
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1 this 1975 definition of "retailer" doesn't

2 reflect what currently happens in the air3 conditioning market.

4 MR. HURST: That's correct.

5 MR. RAWALD: Yes. So, that is

6 something that we could talk more about with

7 them. We need a more appropriate definition

8 for that. As we go on, if we decide that

9 retailers need to hold some sort of

10 responsibility in this process, we can think

11 of a way of making sure it is more clear for

12 those particular folks in this instance in

13 that particular industry.

14 MR. HURST: Yes, Doug, and instead

15 of bogging down the conversation, I will work

16 on some language that I think more accurately

17 reflects the current situation.

18 MR. RAWALD: Okay. Well, it seems

19 to me like we have really come to a consensus

20 on a general definition with some possible

21 nuances and possibly some grammatical changes. 

22 So, perhaps we could table the rest of this
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1 and move on to the next topic, with the

2 general idea of what we mean by these topics

3 at this point. Is everyone comfortable doing

4 that?

5 MEMBER MEYERS: This is Karen with

6 Rheem. Just one comment.

7 Do we want to change the word

8 "sells" to "distributes"? A couple of you

9 have made that comment.

10 MR. EISNER: Or do we want to use

11 this up here all the time, "delivers"?

12 MR. RAWALD: Right. So, the

13 suggestion from Chuck was "furnish," as Don

14 Surrena seconded. The word "furnish" is not

15 defined. So, there are some interesting

16 concerns about that.

17 "Sells," is the term we currently

18 have; "distributes" is defined in the statute

19 and might not be able to be stretching as far

20 as Charlie and Chuck would want.

21 So, there are some things to think

22 about. I think that I really need to go talk
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1 to the folks that I work with to make sure how

2 comfortable they would be with the different

3 variations, to come back to you guys with an

4 idea.

5 But I think we all have a general

6 sense of what these terms mean to us at this

7 point for discussing where we are with these

8 guys and who they are. So, I think that we

9 can hammer out some firmer language to vote on

10 as we go along, but I think we are good enough

11 to move on in my opinion, if everyone else is.

12 MR. EISNER: Does anybody

13 disagree?

14 MEMBER SACHS: This is Harvey.

15 Just one other question. I don't

16 think it is terribly important, but I would

17 have almost imagined that a retailer not

18 infrequently swaps inventory with other

19 retailers when somebody has got an emergency

20 and needs a widget or whatever. Is this

21 actually not happening? Or can we just leave

22 this definition knowing that it includes these
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1 occasional variations?

2 MR. RAWALD: You are talking about

3 the retail definition, Harvey? Is that what

4 you're --

5 MEMBER SACHS: Right.

6 MR. RAWALD: Right. So, the

7 retail definition, as I mentioned, it comes

8 from the statute. So, we have that piece of

9 it.

10 John Hurst is working on some

11 possible variations targeted towards the

12 regional enforcement that reflects the market

13 better. So, if there are some ideas for that,

14 maybe you can give him some thoughts on that. 

15 That would be helpful.

16 MEMBER SACHS: Thank you.

17 MR. EISNER: All right. If no one

18 objects then, let's go on to "Knowing Sales to

19 Routine Violator".

20 Can you hear me? Is it okay now?

21 MR. RAWALD: So, as Amy and I have

22 mentioned back and forth across the table
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1 several times, the significance of the

2 definitions is important for the prohibited

3 act that we know we have.

4 And so, we know that Congress put

5 into the Energy Independence and Security Act

6 and, therefore, added to EPCA, this prohibited

7 act that says -- in the next slide, please,

8 Laura -- "It shall be unlawful for any

9 manufacturer or private labeler to knowingly

10 sell a product to a distributor, contractor,

11 or a dealer" -- two of those terms we were

12 just dealing with -- "with knowledge that the

13 entity routinely violates any regional

14 standard applicable to that product."

15 If you go to the next slide, you

16 can see that we have a definition from

17 Congress on "knowingly" as well. And Dave

18 Calabrese mentioned last time that we were

19 meeting that the "knowingly" definition is

20 important because it is not just actual

21 knowledge; it is also a constructive

22 knowledge, as we call it in the law. So, what
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1 you should know. And so, manufacturers, what

2 they should know they are responsible for

3 oftentimes.

4 So, we know that that term is

5 defined. So, we really have some other areas,

6 however, in that previous definition that are

7 undefined.

8 If you can go back one slide?

9 So, an area I thought that I would

10 put out there for us to start discussing

11 really is what is "routinely" and what is

12 "violates" because that seems to be an area

13 for us to discuss, at least at some length. 

14 What do we really mean by that? And provide

15 some clarity for folks, so they know what they

16 are facing, a possible prohibited act for

17 committing, if we know what these routine

18 violations are.

19 But that was just my suggestion. 

20 If anyone has any other area they want to

21 start off with in discussing this, please

22 let's do. I just put that out there as kind
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1 of a talking point for us to begin with.

2 MR. EISNER: Does anybody want to

3 jump in with some comments?

4 (No response.)

5 Can we start off with "routinely"?

6 MEMBER FERNSTROM: This is Gary.

7 Rather than try to judge at this

8 point in terms of what constitutes a

9 violation, whether it happens routinely or

10 only once, maybe the extent of the occurrence

11 of violation ought to be taken up in the

12 determination of the penalty rather than

13 determining whether there was actually

14 violation or not.

15 So, I would suggest "routinely" is

16 irrelevant. If someone violates the

17 regulation, they violate the regulation.

18 MR. RAWALD: And this is Doug.

19 So, Gary, there is a question of

20 the person who installs it or causes the thing

21 to be put there or sold that way, whether they

22 should face some sort of penalty for it being
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1 there.

2 But this violation goes to, "Hey,

3 Manufacturer X, you can know if you sell to

4 Distributor Y, knowing that Distributor Y

5 always makes sure they go to the wrong place,

6 you're going to face a penalty, Manufacturer

7 X."

8 So, it is supposed to be stopping

9 Manufacturer X from selling to Distributor Y. 

10 So, the question is, how does Manufacturer X

11 know that Distributor Y is routinely

12 violating? Is it a one-time thing? Is it a

13 multiple-time thing? Is there a certain

14 number? Do we want to keep it ambiguous? I

15 mean, what do folks feel like they really need

16 to have sufficient clarity for them, but also

17 sufficient ability for the Department to

18 enforce, knowing that not one size fits all?

19 MEMBER FERNSTROM: Well, this is

20 Gary again.

21 In my opinion, the manufacturer is

22 far enough removed from what distributors may
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1 or may not be that they should not be held to

2 a very high standard of compliance. I

3 understand now why the term "routinely" is in

4 there, all right, but I find it hard to

5 understand how manufacturers should be

6 policing the purchasers of their products to

7 try and understand what they may or may not be

8 doing with them.

9 MR. EISNER: Does anybody have any

10 insight as to why Congress would write it this

11 way?

12 MEMBER McCRUDDEN: I don't think I

13 was in the room on this one. I was on some of

14 the other ones, but not this one.

15 MEMBER SACHS: This is Harvey, and

16 I will venture into say something, for I am

17 innocent of being either manufacturer or an

18 attorney or DOE.

19 My very specific question is

20 whether the manufacturers are comfortable with

21 this language. Because it seems to me that,

22 as close to a guarantee that DOE could go
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1 after them as could possibly have been written

2 into the law looking like a threat, barriers

3 to action against a manufacturer with these

4 two words "routinely" and "violates" just

5 really seem to be the manufacturers'

6 indemnification clause.

7 Am I reading it wrong? Is this

8 not the way you guys read it?

9 MEMBER DORIA: Harvey, this is

10 Jordan with Ingersoll Rand.

11 I mean, I don't know that I would

12 characterize it that way. I mean, imagine a

13 state where a distributor in Florida was

14 simply getting a bunch of 13 SEER product and

15 we were selling it to them. I mean, in that

16 particular instance, it would seem that that

17 would potentially be both routine and

18 certainly knowledge. So, I don't know that I

19 view it as that level of indemnification.

20 MEMBER SACHS: Okay, but that

21 still would be unlikely to be a borderline

22 case. That would be something where somehow
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1 the Department had learned of something that

2 was industrial-scale flagrant, which I am

3 certain no AHRI member would ever do.

4 MEMBER GIBBONS: This is John from

5 Carrier.

6 I think this more relates to like,

7 I'll pick Louisville, Kentucky, where Kentucky

8 is a 14 SEER state. Indiana, right across the

9 river, is 13 SEER. And we know the mix of

10 business is generally going to be 50 percent

11 Indiana, 50 percent Kentucky. And all of a

12 sudden, it goes to 80 percent 13 SEER. So, we

13 kind of smell a rat there, right?

14 MEMBER SACHS: Now that is very

15 helpful, John. And it sort of tells to me

16 that, suggests to me that avoidance to

17 tracking is pretty straightforward, if we get

18 this coil business taken care of. So, it

19 looks like something that would be hard to use

20 as a "gotcha," for DOE to use as a "gotcha".

21 MEMBER GIBBONS: And John again.

22 It goes back to the coil as well
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1 as the range that we talked about earlier, I

2 think referred to now as "the Karen comment".

3 (Laughter.)

4 So, once we wrap those up a little

5 tighter, then I think it makes it clearer for

6 everybody.

7 MEMBER SHEPHERD: This is Amy

8 Shepherd.

9 I mean, not to jump to the other

10 topic, but is there anything other than the

11 installation of equipment that is below the

12 regional standard that would be a violation? 

13 Because, to me, that seems like a much more

14 narrow discussion about what a violation is. 

15 It seems like, based on the statute, it is the

16 installation of a product that doesn't meet

17 the regional standard.

18 MR. RAWALD: I mean, from a purely

19 thinking-about-it-right-now point of view, I

20 think that is correct.

21 MEMBER NOLL: This is Elizabeth,

22 NRDC.
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1 Have we not been discussing,

2 though, if a manufacturer knowingly sells,

3 that that would be a violation?

4 MR. RAWALD: Right. So, I think

5 Amy is trying to define the term "violates,"

6 what else a violation would be.

7 MEMBER SHEPHERD: Right. Because

8 they have to have knowledge of a routine

9 something.

10 MR. RAWALD: Right. So, what is

11 the violation? The violation is installation

12 of a non-compliant unit.

13 MEMBER McCRUDDEN: You could also

14 have a violation on the labeling rules and the

15 information disclosure rules. That is FTC,

16 but that is regional standards. I mean, I

17 don't know how that dovetails, but that is a

18 violation.

19 MEMBER SHEPHERD: Well, it says

20 violation of -- "violates any regional

21 standard applicable to the product". So, I

22 mean, I guess that is up for discussion as to
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1 whether or not that is broad enough to

2 encompass the labeling requirements as well.

3 MEMBER BALLO: So, this is Tim.

4 It is in a different provision of

5 this section, but it is "unlawful for a

6 manufacturer or private labeler to distribute

7 in commerce a newcomer product to which a

8 labeling rule applies unless such product is

9 labeled in accordance with the labeling rule."

10 So, if you are not labeled correctly, it is a

11 totally separate thing.

12 MEMBER ROCKY: So, this is Bryan

13 Rocky with Johnson Controls.

14 The issue gets to be, from a

15 manufacturer's standpoint, the vast majority

16 of the information we have for sales of our

17 product are not related to systems. We sell

18 air conditioners. We sell coils. We sell air

19 handlers. We sell heat pumps. We sell

20 furnaces.

21 Now through warranty databases and

22 other things which we are going to talk about
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1 later on, there is some data that most

2 manufacturers have today relative to how

3 systems are installed with warranties that are

4 actually registered. But when we sell a

5 product, the vast majority of the situations,

6 nobody that is a manufacturer is going to be

7 able to tell you how that unit was sold or

8 installed as a system, especially with the

9 impact of the independent coil manufacturers

10 for air handlers and evap coils.

11 MR. RAWALD: And this is Doug.

12 So, I think what this prohibited

13 act acknowledges is that you know who you sell

14 to. And so, what it is saying is, if you sell

15 to Person X and you know Person X is breaking

16 the law, then you will be held responsible.

17 So, we can discuss the mechanism

18 by which manufacturers can be advised that

19 Person X they are selling to is a violator,

20 because I think that is up for grabs. We can

21 talk about different ways we could do that. 

22 I think that is a very fruitful discussion.
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1 But the question is, how do we

2 decide that Person X is someone that should

3 not be sold to? Like what malfeasance rises

4 to the level of being a routine violation?

5 And do we want to say, from a

6 manufacturer's point of view, I feel more

7 comfortable if this guy does it once, I want

8 him to be on a list, so that I don't sell to

9 him again, because I want to minimize my

10 liability, or I want to maximize my ability to

11 sell and it needs to be a hundred times he

12 breaks the law because I want to keep selling

13 to him as many times as possible before I am

14 finally held responsible? Those are the kinds

15 of extremes, as I see it, and there is

16 certainly a middle ground, a vast middle

17 ground.

18 But I kind of want to understand

19 from folks what works the best from all the

20 stakeholders' point of view on making an

21 effective ability to have manufacturers say,

22 "I don't want to sell to this person anymore
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1 because they are someone who routinely

2 violates the law."

3 MEMBER MEYERS: This is Karen with

4 Rheem.

5 So, back to Amy's question, by

6 "violating the law," you mean install the non7 compliant product?

8 MR. RAWALD: Right. So, that is

9 open for discussion. From my point of view,

10 I take that very simplistic view. I think

11 that makes the most sense.

12 A distributor has a role in this,

13 however. So, if a distributor is giving it to

14 somebody who is installing in a region because

15 distributors are typically located somewhere

16 closer to the region than manufacturers, then

17 they have to have some sort of role, too. But

18 the actual violation has to be installation.

19 So, if a distributor distributes

20 to an installer who, then, installs in a bad

21 place, how we would show that I don't know. 

22 That is a more complicated question. But the
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1 distributor has to have some sort of role in

2 it. So, the violation can't simply be

3 installation, because distributors are not

4 installing, right?

5 MEMBER MELCHI: This is Jon Melchi

6 with HARDI.

7 Well, in John's scenario, if I

8 have a distributor located in Louisville,

9 Kentucky, and a contractor comes and picks up

10 a handful, that distributor does not know

11 where that product is being installed. So, it

12 is difficult for me to see how you would pin

13 some sort of blame upon a distributor when,

14 once it leaves the store, it could be going to

15 south Texas or the Bahamas or somewhere else,

16 and we would have no idea.

17 So, exactly what were you

18 imagining, how were you imaging that they

19 would have some sort of knowledge of this?

20 MR. RAWALD: Now let me tell you

21 my imagination is blank.

22 (Laughter.)
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1 So, I am going to you folks

2 entirely for ideas because I think the statute

3 gives us words, and we want to make sure the

4 words make sense, and that is an effective

5 method of following it.

6 So, we have this fact that we are

7 saying the manufacturers who sell to

8 distributors, dealers, or contractors that

9 routinely violate the law, that that is a

10 violation to do that.

11 And so, the question is, okay,

12 distributors aren't really installing

13 anything. So, if the violation is only the

14 installation, is it actually in the prohibited

15 act there at all if you sell it to a

16 distributor or is there some sort of way to

17 make sure that, if there are distributors who

18 do know where the part ends up, you know,

19 there is a distributor who knows, yes, I'm

20 here on the border, but I'm merely dispensing

21 this out into the Southern Region, that that

22 person can somehow be blacklisted, or however,
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1 so that the manufacturer won't sell to them,

2 that is a kind of term I want to use with

3 some --

4 MEMBER MELCHI: Well, I would say

5 that -- this is Jon with HARDI -- that

6 distributors have agreements with their

7 manufacturers. I suspect that if a

8 manufacturer suspected that a distributor, a

9 non-HARDI member, of course, was routinely

10 violating the law in this aspect, their

11 agreement with that manufacturer would likely

12 be cancelled, and they would not be able to

13 sell equipment. And that is not necessarily

14 anything that the DOE would need to govern.

15 And typically, the way the

16 industry works, it would not be long before

17 every manufacturer at this table would be

18 aware of those distributors who were doing so

19 and had their contract cancelled.

20 And that is, I think, an example

21 of industry being able to police itself and

22 making sure that the industry is compliant
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1 without stretching kind of the bounds of what

2 DOE is capable of doing.

3 MEMBER McCRUDDEN: So, this is

4 Charlie with ACCA.

5 You said "blacklist," and I think

6 I heard you previously also use the word "a

7 list". So, we know the violations are going

8 to occur at the installation level. What

9 would DOE do or how do you now track or keep

10 aware of violations that are occurring under

11 your jurisdiction now?

12 MR. RAWALD: Right. So, if you

13 think back to my presentation two weeks ago,

14 we issue right now what are called Notices of

15 Noncompliance Determination. So, if we find

16 that a manufacturer has manufactured a product

17 that is noncompliant, we issue a notice. And

18 it is publicly put out there, and it is on our

19 website where we keep the information on that.

20 So, we know that Model XYZ and

21 Manufacturer ABC is noncompliant. So, that

22 information is put out that way. And then, we
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1 do keep track of that information, that we

2 have that.

3 And then, if we see that model

4 still out there, then, we, of course, would

5 follow up because it would be another

6 prohibited act that the company would be

7 committing. So, that is kind of that piece of

8 it.

9 Then, it was also an obligation to

10 inform Customs and Border Protection of those

11 findings because they can, then, stop those

12 things from being imported. So, we had that

13 piece of it as well.

14 So, that is a very simplistic

15 tool. Is there some translatability of that

16 tool under this process? Could we have a

17 finding of noncompliance of installers or

18 contractors or dealers, distributors, that DOE

19 then issues, and then, that becomes a list? 

20 And then, manufacturers are put on notice,

21 "Hey, listen, DOE found Distributor ABC to be

22 noncompliant with the regional standards, so
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1 you shouldn't sell to them."? That is a

2 possibility. I am just thinking off the cuff

3 here, but that is a possible translatable item

4 that we could bring from our current

5 enforcement scheme into the regional context.

6 MEMBER McCRUDDEN: And then, to

7 follow up, you mentioned a situation where you

8 found a model number. What if there were

9 multiple numbers? Does that trigger something

10 beyond the notice that you send out? Or, I

11 mean, how does that work when you have got,

12 say, multiple violations or a history?

13 MR. RAWALD: Right. So, we have

14 the Notice of Noncompliance Determination,

15 which is the method by which the Department

16 announces there is something they found

17 noncompliant. Then, we have the Notice of

18 Proposed Civil Penalty, which is the process

19 by which the Department charges money for

20 violations.

21 And so, we would find the various

22 models noncompliant. And then, we would,
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1 after finding out how many of the units of the

2 model were imported or sold within the United

3 States, we would, then, follow up with a

4 Notice of Proposed Civil Penalty possibly and

5 charge money for that.

6 And, of course, how many models

7 there are, there's a number of factors that

8 will go into how much money we would charge. 

9 And so, that all boils into what the penalty

10 should be.

11 But there is a finding of

12 noncompliance first, which it is possible, as

13 I said before, that that idea could translate

14 here into finding certain distributors,

15 dealers, or contractors noncompliant with the

16 regional standards, and therefore, kind of

17 putting people on notice, "Hey, that is

18 someone who we found to routinely violate." 

19 That is something that, thinking here as I am

20 talking to you guys, we could possibly use as

21 a base model for what we are doing.

22 MEMBER McCRUDDEN: And so, if
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1 there are multiple notices that go out from

2 the same manufacturers, do you just

3 essentially overlook those and each is a case4 by-case or does that sort of build a body that

5 is taken into account for the next action?

6 MR. RAWALD: Right. So, each

7 Notice of Noncompliance Determination is on

8 its own, right? Because just because you

9 found it was noncompliant before doesn't mean

10 it is more likely something else is

11 noncompliant. But, as far as assessing civil

12 penalties, the Department will consider the

13 past actions of a company. So, if a

14 manufacturer has a history of failing to meet

15 standards and they keep making things that

16 don't meet standards, it is likely the

17 Department will charge more money. Now it is

18 not the only factor we consider, but it is

19 certainly a factor we do consider.

20 Everybody is looking very quiet

21 suddenly.

22 So, I guess, to me, the question
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1 really, the baseline question really was, what

2 do we define as routine? Do we need a

3 definition for that? Or are people

4 comfortable with kind of the ambiguous term

5 that I can, then, apply at my leisure?

6 And I am comfortable with either. 

7 I think I am a good person, but I won't always

8 be at the Department.

9 (Laughter.)

10 So, who may be in my next shoes

11 filling this role?

12 So, I think folks need to really

13 think about, okay, what are we comfortable

14 with in this assessing? And I think really

15 goes into more what Jon and Charlie would be

16 because it is their people who are going to be

17 the ones assessed as routine violators.

18 From a manufacturer's point of

19 view, I think you probably just want to know

20 how do I assess it, so I know who the person

21 is, so I can avoid them.

22 MEMBER NOLL: So, this is
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1 Elizabeth at NRDC.

2 I would throw out there, too, in

3 this enforcement scheme that we are

4 developing, are we going to consider review of

5 this?

6 MR. RAWALD: You mean, like an

7 ability to challenge a determination?

8 MEMBER NOLL: No, no.

9 MR. RAWALD: Okay.

10 MEMBER NOLL: I meant more of, are

11 we on track? Kind if, how is it going? I

12 don't know the word that I mean to use. But

13 would that routine, then, be at some

14 prescribed interval?

15 MR. EISNER: You are talking about

16 in terms of whether the rule is effective?

17 MEMBER NOLL: The effectiveness of

18 a look-back, maybe that is where Charlie was

19 going; I don't know.

20 MEMBER McCRUDDEN: I know what you

21 are saying. You are sort of saying like,

22 after a year, let's assess how we are doing
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1 with this enforcement policy. I mean, I think

2 sometimes you will see that in like

3 legislation, that the agency will review how

4 effective have they been. That is not what I

5 was talking about, though.

6 MEMBER NOLL: Okay.

7 MEMBER McCRUDDEN: I was talking

8 about --

9 MEMBER NOLL: But I also think

10 that that might play into -- that may not play

11 into this definition of "routine". I mean,

12 because this is clearly "routinely violates,"

13 but that is where my mind goes.

14 MR. EISNER: That is why I also

15 asked in the beginning, is there a problem? 

16 There is a purpose for making it a statute. 

17 And if so, you have got something that is,

18 quote, "measurable" in terms of whether the

19 enforcement plan will deal with --

20 MR. RAWALD: You have to use the

21 microphone, Neil. It is still not working.

22 MEMBER NOLL: This is Elizabeth.
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1 Maybe we just table this for

2 later, as we are walking through the

3 enforcement, and this is not the time for how

4 we define "routinely violates".

5 MEMBER WHITE: Well, this is Chuck

6 White.

7 I did the difficult thing and I

8 Googled it. "A customary or regular course of

9 procedure."

10 MEMBER MEYERS: You could be a

11 judge.

12 (Laughter.)

13 MEMBER WHITE: I mean, it is an

14 everyday word. I don't know, are we looking

15 to somehow make it mean something different?

16 MEMBER CLARK: Looking at Tim, of

17 course, is "routinely" not defined anywhere or

18 in any other regulation that we might look to?

19 MEMBER BALLO: I am not aware of

20 it having any definition in the statute or in

21 DOE regs. I am wondering, though, in the

22 instance where DOE has actually gone after,
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1 say, an installer, the only realistic way that

2 is going to happen is if the installer is

3 routinely violating the statute, because the

4 Department doesn't have the resources to go

5 after someone who does one job bad, and that

6 is sort of ridiculous.

7 So, to the extent the Department

8 has already found someone in violation, I

9 mean, it would sort of have to be routine at

10 that at that point. So, at that point, if you

11 have the list of people we have gone after,

12 that should be very clear, that you can't deal

13 with those people, at least for some period of

14 time. I don't know if that ends at some

15 point. But I guess that doesn't answer the

16 situation, though, of they haven't been caught

17 yet.

18 MR. RAWALD: And this is Doug.

19 So, I guess from a departmental

20 resources perspective, what you are saying

21 makes some sense, but I don't want to say it

22 is a hard-and-fast rule, right? Because say
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1 Mrs. Smith calls up and says, "Hey, these

2 contractors have installed this unit in my

3 house, and it's not okay. It is definitely a

4 12 SEER. I've got the documents right here,

5 that it may be wrong."

6 And I go out and say, "Okay, Mrs.

7 Smith, I understand." And she calls me 12

8 times. I finally go out there and make sure

9 we check it out.

10 It is actually noncompliant. I am

11 going to say, "Okay, we know that ACME HVAC

12 Company installed this noncompliant unit."

13 Is that enough for a routine

14 violation? I mean, why we follow up with

15 certain cases can be from a variety of

16 factors. And there is a lot that goes into

17 it. And I don't want to commit to saying that

18 we will only bring actions against routine

19 violators because there could be onsies and

20 twosies that happen, and the Department is

21 going to reserve the right to do that.

22 So, the question to me is, are
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1 folks comfortable with the dictionary

2 definition of "routine"? I am; I am

3 comfortable because I know what I am going to

4 do. But I want to make sure the people who

5 are stakeholders in this are comfortable with

6 the fact that we will use routine and that we

7 will, then, define it.

8 And so, when I decide that

9 Distributor ABC is a routine violator and I

10 bring this action, and I post notice up there,

11 that everyone says, "Okay, DOE, we left it in

12 your purview to define `routine'. So, it is

13 okay. We are okay with that." So, I kind of

14 want to make sure everyone is comfortable with

15 that.

16 MEMBER MELCHI: This is Jon from

17 HARDI.

18 In that example Distributor ABC is

19 a routine violator, you would say, then, that

20 Distributor ABC knowingly sold to a contractor

21 who was going to perform the illegal act and

22 did so with knowledge that that was going to
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1 happen?

2 MR. RAWALD: So, I don't have a

3 term in mind. I like your language in some

4 way, but I have to think about it some more. 

5 If you could write it down and give it to me,

6 I could certainly think about it some more for

7 sure, because I think it is helpful to know

8 where we are coming from.

9 The distributor piece is harder, I

10 think, than the dealer and the contractor

11 piece, right, because of where they are in

12 this. But I think it needs to be defined, at

13 least in some way, for our satisfaction, the

14 group here, what we are saying. So,

15 manufacturers know what they are getting into

16 in dealing with distributors, and distributors

17 know what the beginning and end of their

18 concern would be.

19 MR. HURST: John Hurst with

20 Lennox.

21 The only thing I would change to

22 that is you can't ascribe a motive to
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1 somebody. So, it wouldn't be knowing that

2 they are going to; it is having knowledge that

3 they have done. That is the only caveat I

4 would put to that, because I don't know what

5 people are going to do.

6 MEMBER McCRUDDEN: So, this is

7 Charlie with ACCA.

8 I guess, as a stakeholder, I

9 honestly overlooked this section because I

10 thought this was a manufacturers' issue. But,

11 now that I think about it, it is my issue

12 because, for contractors, you are talking

13 about a blacklist. And so, for routine

14 violations to occur, you have to have a past

15 history of contractors.

16 So, I think the word "routinely"

17 here doesn't describe the manufacturer. It is

18 describing the actions of the entities beyond

19 the manufacturer.

20 MR. RAWALD: I absolutely agree. 

21 That is what "routine" means for us.

22 MEMBER McCRUDDEN: So, I guess I
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1 would prefer "routinely" defined in some way. 

2 I guess that is what I was trying to sort of

3 get out of you in terms of what are your

4 thresholds now for multiple violations or for

5 triggers, increases in penalties that are

6 assessed. I mean, do you have something now

7 that defines what the escalation is because

8 contractors -- and if you have done any

9 federal contracting work, you know that

10 blacklists are critical to your company's

11 reputation and, obviously, just operating.

12 So, I would like to know more

13 about what you are thinking or where you may

14 be going. And I would prefer to see it

15 defined, something defined for "routinely"

16 versus just the casual definition.

17 MR. RAWALD: Uh-hum.

18 MEMBER WHITE: And this is Chuck

19 White.

20 I would like to kind of throw this

21 in with that, discussions of they found a unit

22 with a serial number and it is wrong. It is
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1 kind of the reverse of the story from that

2 very old book. I found one unit; does that

3 make me "routine"? Well, it doesn't sound

4 routine unless it was my first day in

5 business. If I found two units, does that

6 make me routine? "Excuse me, Mr. DOE, if you

7 find five units, does that make me routine?"

8 "Routine" is everyday occurrence. 

9 So, if I am doing it as an everyday

10 occurrence, I don't think finding I goofed

11 once makes me a routine violator. That makes

12 me a one-off.

13 So, we know what "routine" means,

14 but what level of numbers? Does one mean

15 routine to you?

16 MEMBER CLARK: I think the big

17 question that we are kind of -- this is Gary

18 from Goodman -- that we are kind of circling

19 around is how proportionate is the enforcement

20 activity to the number of violations? You

21 know, there is no question, even if you

22 install one that is below the minimum
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1 efficiency standard, that you broke the law,

2 right, to Doug's earlier point? But the level

3 of enforcement activity for one versus

4 somebody who has done a thousand should

5 probably be proportionate in some way, right? 

6 And so, that is, I think, what is kind of

7 clouding a little bit of thoughts around what

8 "routine" is and what it is not.

9 MR. RAWALD: Right, and I guess

10 also what is important is, what do you deem to

11 be an "install"? So, say you have one of Don

12 Surrena's housing complexes, and all 100 of

13 the units that are being installed are

14 noncompliant. Is that a routine violation? 

15 Because it is one time, but it is 100 units. 

16 I mean, that seems pretty routine to me.

17 So, just sitting here thinking

18 about it, not taking a position of the

19 Department -- I am being very careful here

20 (laughter) -- but, just sitting here

21 spitballing ideas --

22 MEMBER MELCHI: This is Jon from
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1 HARDI.

2 That would be 100 different

3 installations, correct?

4 MR. RAWALD: Well, it would be,

5 exactly. So, that is how I would view it,

6 from a point of view of that. But it is one

7 kind of event. So, if he has 100 other units

8 or 100 other projects that he is doing and he

9 is not violating on those projects, you know,

10 where do we go here?

11 And Don Surrena would have to be

12 concerned with, well, who is the person that

13 is going to be on the, quote/unquote, "list,"

14 if there was such a list, the general

15 contractor that is building that housing or

16 the subcontractor that brought those units on

17 the premises?

18 So, that is the thorniness of

19 this. I think it does involve Jon, Charlie,

20 and Chuck's folks a lot more than you guys may

21 have thought about. And so, maybe you want to

22 caucus a little bit over lunch about this a
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1 little bit because it is really complex.

2 And the manufacturers will think

3 about, well, how far do we want to wing this

4 or how much are we willing to accept from a

5 person until we don't want to deal with them

6 anymore?

7 You know, if DOE has knowledge

8 that somebody has broken the law two or three

9 times, we want them to say it to us, so we can

10 stop playing with them, because we don't want

11 to be in the sandbox with someone that is

12 doing that. We want to be careful.

13 So, I guess you folks need to

14 think about that a little bit when you caucus.

15 MR. EISNER: And an effort to

16 define this doesn't have to be limited to one

17 violation every three days or one violation

18 per every 15 units sold. You could write a

19 rule that said DOE will consider the following

20 factors: the frequency in terms of timing,

21 the amount compared to the total sales. 

22 Nothing limits their judgment. But they have
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1 to balance a whole bunch of factors in

2 considering what it is.

3 I mean, I think you have pointed

4 out some important distinctions when you say

5 100 a day at one's jobsite, is that routine if

6 they have never done it before and there is no

7 evidence they have done it since? But 100 a

8 day? Or, if you sell thousands of units a

9 year to this company and they violated it 15

10 times in a year, is that routine?

11 So, these are factors you could

12 come up with that DOE should consider.

13 Yes?

14 MEMBER MELCHI: Jon from HARDI.

15 A challenge for me to wrap my head

16 around this is a manufacturer, when they

17 comply currently, you know, there is a

18 violation. It could be a transposition error

19 or something along those lines. But there is

20 an act, I guess you would say, either the act

21 of a product not meeting efficiency level or

22 data not being submitted properly.
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1 As we discuss this, if a

2 contractor did an illegal installation, that

3 is an act. For a distributor, it is difficult

4 for me to see exactly what the act would be

5 under, again, John's Louisville scenario,

6 where a product leaves -- my members aren't

7 mindreaders. So, you know, for them to know

8 in advance that somebody is going to violate

9 the law is very challenging.

10 MR. EISNER: But, if they do know,

11 if they got an email order to install them,

12 "We need these to install in...," and you

13 write back and say they can't be installed in

14 that state. They are paying us extra money to

15 ship them this product. And you say okay.

16 You got an email. Don't you want

17 him to be able to take enforcement action?

18 MR. RAWALD: And, Jon, I guess my

19 point of view is you represent a lot of

20 distributors. They must want a level playing

21 field. They don't want people cheating them. 

22 So, the question is, what is a violation by
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1 the distributor and what would folks be

2 comfortable with saying, "Hey, this makes it

3 more level, so that I know that Company X

4 isn't cheating and distributing what I can't

5 do."?

6 And I don't have a sense of the

7 business model. I mean, I am really relying

8 upon you guys to tell me here what works.

9 But it seems to me the Congress

10 gave us words here, that they are knowingly

11 selling to a distributor who routinely

12 violates any regional standard. So, how can

13 a distributor do that? There must be some

14 sort of meaning to that.

15 MEMBER MELCHI: Far be it from me

16 to interpret exactly what Congress means at

17 all times.

18 (Laughter.)

19 But, again, in that scenario, that

20 language up there, the distributor is still

21 removed from the violation.

22 MR. EISNER: It shouldn't be a
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1 problem if the distributor had no way of

2 knowing. If the distributor knows, and they,

3 in fact, were installed illegally, you know,

4 I think there may be a problem here that the

5 statute requires be addressed by the

6 Department of Energy.

7 MR. HURST: This is John Hurst

8 from Lennox.

9 I would suggest there's a couple

10 of issues that I think the manufacturers want

11 to talk about, and it is close to lunchtime. 

12 And I would make a suggestion that we have the

13 opportunity to caucus during lunch and do it

14 now.

15 MR. EISNER: Do you want to do a

16 longer lunch than normal or is an hour --

17 MR. HURST: Yes, go to what, 1:30?

18 MR. EISNER: 1:30?

19 MR. HURST: 1:30.

20 MR. EISNER: And I hereby legally

21 authorize you to caucus.

22 (Laughter.)
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1 MR. HURST: Thank you, Neil.

2 MR. EISNER: See you at 1:30.

3 (Whereupon, the foregoing matter

4 went off the record for lunch at 12:13 p.m.

5 and went back on the record at 1:19 p.m.)

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 
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1 

2 A-F-T-E-R-N-O-O-N 

3 S-E-S-S-I-O-N

4 1:33 p.m.

5 MR. EISNER: All right, let's get

6 started.

7 Does anybody have some good news

8 to report as a result of the caucuses? Did

9 anything come out that anybody wants to open

10 discussion with?

11 MEMBER FERNSTROM: This is Gary

12 for the California IOUs.

13 At lunchtime some of us were on

14 the phone with David Hungerford from the CEC. 

15 He is listening. And he didn't say this, but

16 it has been my experience, when I have tried

17 to participate in these kinds of activities

18 from afar through the webinar, it is hard to

19 be heard.

20 So, as a matter of process, I am

21 wondering if there isn't some way we can give

22 David better access to the discussion, so his
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1 point of view can appear on the record and be

2 part of our thinking.

3 MR. EISNER: That is something we

4 always want to do. I always ask if people

5 have more questions, but I am open to other

6 suggestions. I do get some stuff coming in. 

7 I guess it is coming over email or is it

8 through some other part of your --

9 MS. MARCHETTI: His line has been

10 unmuted this whole time.

11 MEMBER FERNSTROM: Okay. So, his

12 line is unmuted. And when he chooses to

13 speak, he can just unmute his own personal

14 phone and speak?

15 Okay. Thank you. That should

16 take care of it.

17 MR. EISNER: And if he is having

18 problems --

19 MS. MARCHETTI: Let us know.

20 MR. EISNER: -- let them know and,

21 then, they pass me a note.

22 But I think, again, people online,
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1 if you are listening when I say, "Does anybody

2 else have a comment, a suggestion?", jump in. 

3 We are ready for you to participate. And let

4 us know if it is not working well.

5 MEMBER FERNSTROM: Okay. It

6 sounds like that issue is resolved. Thank

7 you.

8 MR. EISNER: Okay. All right. 

9 Anybody have something they want to open with

10 as a result of the opportunity to caucus over

11 lunch? Any better language?

12 All in favor of Jordan?

13 (Laughter.)

14 MEMBER DORIA: So, I think just

15 what we were really talking about was what

16 role could different forms of notification

17 specifically from industry participants across

18 the value chain have in providing some sort of

19 indication that a violation has occurred or is

20 likely to have occurred.

21 And we didn't necessarily get to a

22 firm resolution, which was part of the reason
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1 it got passed around like a hot potato. But

2 I think what we were coming out on is that

3 there is agreement that, if a party in the

4 value chain were to in some manner come across

5 or have access to information that would

6 indicate a violation has, in fact, occurred,

7 there should be some mechanism for providing

8 notification of that to other parties, just to

9 make them aware.

10 And so, I think we didn't

11 necessarily coalesce around a specific

12 vehicle, but that was sort of what we had

13 talked through. If anyone wants to add to

14 that point?

15 MR. HURST: Yes, this is John

16 Hurst with Lennox.

17 I think we theoretically had an

18 issue with "routinely violates" in defining a

19 number. And we looked at other types of

20 crimes, if you will. You don't have a hall

21 pass when you routinely violate the drunk

22 driving law or speeding or murder or -- I know
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1 I am not saying that this is the same thing. 

2 But we were concerned that if you pick a

3 number that says 10, do you give a violating

4 contractor or a dealer, installer, nine

5 chances to violate the law with no penalty or

6 would they calculate that into some equation

7 that says I can get away with nine times

8 before any activity or action happens?

9 And I think, theoretically, we

10 don't like the idea of giving number ranges of

11 violations before somebody has to report. And

12 I think we wanted to take more of a proactive

13 approach to it and report violations, period,

14 not after a certain amount of numbers.

15 MR. EISNER: Is anybody

16 questioning whether the Department has the

17 authority to take action, at least under this

18 particular provision, if there has only been

19 one violation?

20 MR. HURST: Well, we were also

21 talking about what a manufacturer would do,

22 meaning if a manufacturer sees 10 violations,
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1 then we have an obligation to report versus a

2 violation is a violation and you report a

3 violation.

4 MR. EISNER: Other comments?

5 In the back of the room, Don?

6 MR. SURRENA: Don Surrena.

7 This sounds like a whistleblower

8 program, and the Department has broad

9 discretion, as it has already indicated. The

10 Department already polices this in some form

11 or manner. To have this turn into something

12 that, if one installer gets mad at another

13 installer and they start to turn people in, or

14 the neighbors start to peek in their blinds

15 and see equipment -- well, you can make a face

16 about it, but this stuff happens.

17 I was a code enforcement officer

18 for years. I know what people do. I know

19 their tendencies.

20 It is going down a slippery slope

21 when you start something like that.

22 MEMBER MELCHI: This is Jon Melchi
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1 with HARDI.

2 Along that same line,

3 hypothetically, there is a 1-800 number

4 somebody can turn somebody in or a

5 manufacturer reports that there is an illegal

6 installation. Does the DOE have the authority

7 to come to my house and check my air

8 conditioner to make sure that it is compliant?

9 MR. RAWALD: Are you asking me for

10 a response? Are you asking a question

11 hypothetically?

12 So, what your question that I

13 understand would be, does the Department of

14 Energy have the authority to go into an

15 individual consumer's house who did not report

16 any concern to investigate a concern possibly? 

17 And I don't have the answer to that question. 

18 I will have to talk to the lawyers about that. 

19 I don't know what the extent of our authority

20 would be.

21 MEMBER FERNSTROM: So, this is

22 Gary for the California IOUs.
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1 I would like to express a

2 fundamental opposition to the idea that

3 enforcement or compliance can be achieved by

4 some reporting system of this nature where

5 violators would be reported by others in the

6 industry or perhaps be reported for a bounty.

7 And to support that position, I

8 would like to cite my experience with the

9 California Energy Commission regulations

10 governing portable electric spas or hot tubs. 

11 The Department of Energy does not have any

12 energy regulations for these products, but

13 California does.

14 And it is well-known within the

15 industry, consisting of a few dozen makers of

16 these products, that some are, for some

17 unknown reason, reporting to the California

18 Energy Commission database energy efficiency

19 figures for these products that don't seem to

20 be realistic.

21 And none of the other

22 manufacturers in the industry have reported
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1 suspect of erroneous data being reported to

2 the California Energy Commission. This is

3 because most manufacturers don't consider it

4 appropriate to snitch on others.

5 So, I don't think that is a very

6 good approach. I think the approach that

7 needs to work or that would work would be some

8 sort of an audit or sampling approach where we

9 or DOE would look to see what is being

10 installed and, as a consequence of that,

11 identify improper installations if there are

12 any.

13 And that goes to the question of

14 whether DOE has the authority to go to

15 someone's house and look, which would

16 basically be the way you would conduct a

17 quality assurance program or one of the ways

18 that you would.

19 Another would be to look at the

20 type of equipment that is being shipped to a

21 distributor, say, centrally located in a state

22 that requires a higher standard, such as
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1 California.

2 MR. HURST: John Hurst with

3 Lennox.

4 I have two questions regarding

5 your idea. Audit what information? What

6 information are we talking about?

7 And then, what was the second part

8 of your statement? I will hold my thoughts

9 until I hear the answer to the question.

10 MEMBER FERNSTROM: This is Gary

11 again.

12 I'm sorry, could you repeat the

13 question, so I can respond?

14 MR. HURST: Sure, Gary. You

15 mentioned auditing information. What

16 information would you be auditing? And where

17 would the information come from?

18 MEMBER FERNSTROM: Well, that is a

19 key question. In order to conduct an audit or

20 a field inspection to determine compliance,

21 the Department I believe would need to have

22 addresses of sites where replacements had been
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1 done or where this equipment had been

2 installed.

3 Lacking that, some sort of

4 telephone survey might be done of consumers in

5 general to identify ones that have had this

6 type of work done. And they, then, could be

7 audited. But that type of survey would be

8 expensive, given the fact that most customers

9 have not had their condensing units changed

10 recently. So, you would have to survey a lot

11 of consumers to find ones that would be

12 candidates for an inspection.

13 MR. RAWALD: And this is Doug

14 Rawald.

15 I just want to approach Gary's

16 comment with kind of an appreciation for what

17 we do currently. So, in enforcing national

18 standards, we at the Department of Energy

19 respond both to complaints from consumers and

20 members of the industry and those kinds of

21 things, as well as we do audits. So, we kind

22 of use all of the tools at our disposal to do
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1 things.

2 Now an auditing process, just by

3 and large, is not necessarily a good use of

4 taxpayer funds unless it is somewhat targeted. 

5 So, there is some sort of art to targeting to

6 figuring out, okay, you should be judicious in

7 figuring out where you are targeting your

8 audits, right?

9 Like the IRS uses very strategic

10 methods of deciding, okay, who are we going to

11 audit per se. So, it is not as effective just

12 randomly to select people that you are going

13 to go audit because you are likely to waste a

14 lot of money finding nothing wrong. And so,

15 the point is to try to narrow down your

16 efforts to finding out and weeding out things

17 that are mistaken.

18 So, any auditing process needs to

19 have some sort of ability to be based on an

20 assessment of where are we likely going to

21 find areas of concern. And so, that is

22 something to keep in mind when developing kind
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1 of an auditing scheme: how do we assess what

2 would be the appropriate people to audit? Or

3 what would be the reasons to have an audit? 

4 Mixed in with some randomness possibly,

5 because you do want to make sure that you are

6 keeping a cross-section that makes sense, but

7 being concerned with preservation of resources

8 and spending the taxpayer dollars

9 appropriately and trying to come up with a

10 good enforcement scheme, I think.

11 So, those are kind of the

12 different things that you think about, I

13 think, when you are looking at an audit. From

14 my point of view, I think that it would nice

15 from an enforcement point of view to have as

16 many tools as I can at my disposal to

17 investigate and to enforce things, but I also

18 want to be reasonable and hear from you folks

19 what you think makes the most sense.

20 MEMBER FERNSTROM: So, this is

21 Gary.

22 To follow up on how you might
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1 target an audit program to bring about greater

2 economy, in California, anyway, you might

3 target residential housing developments that

4 were built 10 to 20 years ago, figuring that

5 in that length of time probably condensing

6 units would have failed and there would be

7 replacements.

8 Or, moving forward, there is no

9 sense looking at replacements that were done

10 before the standard goes into effect. So, we

11 would propose some sort of program looking at

12 replacements that we suspect would be done

13 after the standard went into effect.

14 So, it could be made more

15 efficient by targeting for sure. In my mind,

16 the ideal solution is to simply know where

17 this equipment is being installed and sample

18 a very small part of it.

19 MEMBER DORIA: This is Jordan

20 Doria with Ingersoll Rand.

21 To sort of go back to Gary's

22 comment on what role sort of policing those in
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1 the chain can have, I mean, I can't really

2 speak to the example you provided. But I

3 think it is important to keep in mind here

4 that, only speaking on the OEM side, we all

5 want this to work. We want there to be a 14

6 SEER, or just using that as the example in the

7 South.

8 So, we all have a vested,

9 essentially, a competitive interest, business

10 interest, in making sure that it has worked. 

11 So, I don't know how the example in California

12 may or may not be similar to that, but we want

13 it to work. Therefore, it would be in our

14 interest to actually do that kind of reporting

15 that we are talking about. And we think that

16 would similarly be true to some extent for

17 ACCA/PHCC members that might be disadvantaged

18 by those who would seek to skirt the law.

19 So, we think there are real market

20 forces that would compel people to actually

21 provide this information to make the system

22 work. And furthermore, that could actually
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1 help to some extent the Department in the

2 thing that Doug just outlined, that they need

3 some better way to target any kind of further

4 audit or whether it is audit or just further

5 investigation; that, at a minimum, getting

6 some kind of on-the-ground feedback from

7 people who are most knowledgeable could

8 certainly help with that.

9 MEMBER FERNSTROM: This is Gary

10 again.

11 Or to spin off the conversation I

12 had with David Hungerford right after lunch,

13 some sort of audit or sample could be done at

14 distributors' locations in contrast to maybe

15 customers' locations, because we would not

16 expect a large number of non-compliant pieces

17 of equipment to be shipped in to distributors

18 in the middle of states that have these higher

19 requirements.

20 And to go one step further to

21 these discussions we have been having about

22 the manufacturers' responsibility, the terms
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1 "routinely" and "violates," again, I think it

2 would be extremely difficult for the

3 manufacturer to find themselves responsible

4 for identifying noncompliance and being

5 obligated to report that.

6 MEMBER DORIA: Certainly. This is

7 Jordan.

8 If I could just clarify, I didn't

9 say that manufacturers will be obligated to go

10 out and find instances of noncompliance, but,

11 rather, that if it became a manufacturer were

12 essentially provided access or actually just

13 simply given information that either indicated

14 a violation had, in fact, occurred or was

15 significantly likely to have occurred, that

16 there would be some kind of, I will call it

17 reporting obligations. That is different than

18 going out and actually investigating.

19 MEMBER FERNSTROM: I understand.

20 MR. SURRENA: Don Surrena.

21 The Department has access to

22 information through the ARRA legislation which
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1 requires states to show how they are complying

2 with the Energy Code, and that gives them

3 access to building permit information that

4 would show here this activity had taken place. 

5 Not all communities require a permit for some

6 replacement or repair, but the majority of

7 them do.

8 So, the Department has information

9 and data that will be being supplied to them

10 by the states to show their compliance with

11 ARRA to find their own way of serving the data

12 to see where the best locations or where the

13 most activity was occurring for the

14 installation of new equipment.

15 MR. EISNER: Do you have any

16 program with states to get information about

17 permits, if even automatically?

18 MR. RAWALD: Right. So, from the

19 Enforcement Office point of view at the

20 Department of Energy, we don't have such a

21 program that we do that. But we can certainly

22 look into that. I mean, I think that part of
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1 the statute is telling us to look at these

2 building codes and these state practices for

3 more information, but we don't do that

4 currently. We don't have a current practice

5 of that.

6 But it is not necessary because we

7 enforce at the manufacturer level. That is

8 the problem, right? So, what Don is talking

9 about is from a different point of view, which

10 is new and unique about the regional

11 standards.

12 MEMBER FERNSTROM: So, this is

13 Gary.

14 To speak to the building permits,

15 measurement and evaluation we have done, that

16 would be the California utilities, and their

17 measurement and evaluation consultants have

18 found that compliance is actually pretty high

19 with the building code. And where permits are

20 taken out, generally, we don't need to worry

21 about that too much.

22 The problem is where building
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1 permits are not taken out and equipment is

2 installed without permit and may not meet

3 requirements in several ways, not just

4 efficiency.

5 MR. EISNER: Do you have any data

6 on the success of permits or just in general

7 what percentage of jobs that would be covered

8 by the requirement to get a permit are not

9 getting permits?

10 MEMBER FERNSTROM: I am not aware

11 of what percentage of work is done without

12 permit, where normally it would be required. 

13 But I wouldn't be surprised if some

14 information along those lines exists, and I

15 will look for it.

16 I also promised at the last

17 meeting to get for this group some information

18 on appliance standard compliance that the CEC

19 has developed through evaluation it has done

20 over the last several years. So, to the

21 extent that I can provide that, I will.

22 MR. EISNER: Thank you.
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1 John?

2 MR. HURST: So, two points.

3 MR. HUNGERFORD: This is David

4 Hungerford. If you could mute those

5 microphones?

6 MR. EISNER: Go ahead, David.

7 MR. HUNGERFORD: We have done some

8 studies on that, on the subject of

9 installation permits and what percentage are

10 getting pulled for changeouts. And

11 unfortunately, in California it is fairly low. 

12 And off the top of my head, I am not looking

13 at the studies, but the estimates I remember

14 are that more than half, maybe significantly

15 more than half, are being installed, the

16 replacements are being done without permits in

17 California.

18 And I don't know if that applies

19 to other states. Our permit costs are fairly

20 high around the state. And we also have

21 additional test procedures that are required

22 with a changeout, including pressure testing,
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1 duct blast, that sort of thing.

2 And a lot of people just don't

3 pull the permits, is what is going on. And we

4 are urging them, trying to work on compliance

5 with that particular standard for changeouts

6 now.

7 And so, if that helps think about

8 this discussion, what the problems might be --

9 that's all.

10 MR. EISNER: There are lots of

11 reasons not to get a permit. Do you have any

12 data that indicates whether people who do not

13 get a permit are more likely to be in

14 violation of the code than those who do get a

15 permit?

16 MR. HUNGERFORD: I would have to

17 look back at that study. It has been a couple

18 of years.

19 My general impression is, yes,

20 that the installations are of a lower quality. 

21 On what details, I am not certain. But,

22 certainly, they are not testing the ducts. 
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1 So, we have additional leakage and that sort

2 of thing, which reduces the efficiency

3 substantially.

4 Whether they are putting in non5 compliant equipment or whether they are

6 charging it properly and measuring air

7 properly, I can't say, not without checking

8 it, checking it out.

9 MR. EISNER: John?

10 MR. HURST: David beat me to the

11 punch. This is John Hurst with Lennox.

12 In other discussions regarding the

13 State of California, the permit percentage is

14 well south of 20 percent. And I would agree

15 with David that he who pulls a permit has a

16 higher chance of complying with the law than

17 those that don't.

18 I also wanted to address the

19 distributor shipments because we have regional

20 warehouses that we supply equipment to

21 branches for sale to dealers or contractors. 

22 And it really doesn't matter what we ship to
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1 that because we ship north and south out of

2 some of those distribution centers, those that

3 are particularly close to the border.

4 In addition, we have branches that

5 would ship to both sides of the river, if you

6 are close; for example, I think Cincinnati and

7 Louisville were mentioned earlier. So, we

8 would have branches where dealers would come

9 to and take the equipment right across the

10 river. So, I don't think auditing at the

11 distributor level or even at the branch level

12 can ensure compliance.

13 Now, granted, if you went to

14 Miami, Florida -- or maybe a bad example --

15 Chicago, Illinois, and you saw a lot of

16 equipment going south of the border, that may

17 be a different story.

18 But we also have distributors

19 where we ship equipment, hypothetically, say

20 to Maryland. And that goes to everywhere else

21 in the country.

22 So, the violation occurs at the
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1 point of installation, not at the point of

2 distribution. You can look for trends, but

3 just because product goes north of the border

4 or south of the border doesn't mean it is

5 going to be illegally installed.

6 MEMBER FERNSTROM: This is Gary.

7 In the examples you gave, that is

8 absolutely true. But one of you all has a

9 distributor in south San Francisco, and since

10 California and Nevada are both subject to this

11 regional standard, I would doubt that the

12 distributor in south San Francisco would be

13 distributing to Wyoming or selling equipment

14 to Wyoming.

15 So, for the states that don't have

16 significant border issues, looking at the

17 distributor might be helpful, but it certainly

18 wouldn't be a cure-all for those distributors

19 that are in areas where some areas are subject

20 to the higher standard and some are not.

21 MEMBER MELCHI: Jon Melchi with

22 HARDI.
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1 And just I guess for clarification

2 purposes, even if that distributor in the San

3 Francisco Bay Area were to have a 13 SEER air

4 conditioner, that is not illegal. So, it

5 would be auditing for what purpose? I guess

6 I just remain a little unclear.

7 And to echo, I think, John's point

8 earlier, there are lots of distributors with

9 distribution centers. In fact, one of our

10 members opened up a distribution center in

11 Chicago that services a lot of the new south

12 border area. So, you know, I think it would

13 be an inexact science at worst or at best.

14 MEMBER FERNSTROM: So, the case

15 where the 13 SEER air conditioner would be

16 okay would be if this residential-type air

17 conditioner were installed on a small

18 commercial premise. Is that what you are

19 talking about? No?

20 MEMBER MELCHI: No. My point was,

21 auditing a distributor's records and it shows

22 that maybe they took possession of a 13 SEER
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1 air conditioner doesn't show any sort of

2 violation because there is no violation for a

3 distributor holding that equipment.

4 MR. RAWALD: Right. If I hear

5 what Jon is saying -- this is Doug Rawald --

6 it is the mere warehousing of equipment is not

7 a violation. It is the fact that it is

8 installed. And so, the distributors holding

9 it in their warehouse, no matter where it is,

10 wouldn't be a violation, though it might be in

11 some way indicative of where it is going to be

12 installed, is what I think Gary's point is.

13 MEMBER MELCHI: And so, Gary, I

14 was thinking of one of my California members

15 when you were saying that, and I know that

16 they run up along the Pacific Coast. So,

17 there is a very good likelihood that in

18 Northern California somebody is holding 13

19 SEER equipment for the purposes of shipping it

20 to Washington State or Oregon. And that would

21 be completely legitimate and within --

22 MEMBER FERNSTROM: Well,
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1 absolutely, in the northern part of the State;

2 that is why I cited south San Francisco.

3 So, to give you an example of

4 where I think looking at the distributor might

5 be helpful, it comes from my experience with

6 swimming pool pumps. So, California requires

7 that two multi- or variable-speed swimming

8 pool pumps be utilized and installed in

9 residential filtration applications over 1

10 total horsepower.

11 So, if I were to go to a swimming

12 pool pump wholesaler, I would expect to see,

13 based on the number of commercial pools,

14 85,000, versus residential pools, 1.5 million,

15 I would expect to see substantially more two

16 multi- and variable-speed pumps than I would

17 single-speed pumps.

18 In fact, quite the reverse is

19 true. You will see three-four pallets of

20 single-speed pumps and maybe one pallet of

21 variable-speed pumps. So, that indicates from

22 looking at the distributor's location that
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1 something is wrong because a lot more single2 speed pumps seem to be moving through market

3 channels than the variable-speed, multi-speed,

4 two-speed ones that the regulations require.

5 MEMBER NOLL: So, can I ask a

6 question? One question for John. I think we

7 are talking about this under the current state

8 of play. So, I fully recognize that people

9 are distributing wherever they want to. Do

10 you not think that distributors would adapt to

11 the market and start to shift to the

12 appropriate regions?

13 And then, a followup, a little bit

14 of pushback on Jon, another Jon, if you were

15 to go to a distributor in Chicago and say,

16 "Why are you sending a bunch of 13 SEERs to

17 Florida?", you know exactly where they are

18 going. I don't understand how that is not

19 a -- that wouldn't help the Department isolate

20 and target inappropriate activity. Am I

21 missing a piece --

22 MEMBER MELCHI: This is John
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1 Melchi with HARDI.

2 When we are talking about

3 distribution centers, they would be shipping

4 to another distribution location and not

5 directly to a contractor, dealer, or

6 installer, typically.

7 MEMBER NOLL: You still end up

8 knowing at some point where it is going and

9 if --

10 MEMBER MELCHI: And as we have

11 discussed, there is no sort of illegal act for

12 a distributor to hold inventory. And if they

13 ship that inventory from Chicago to

14 Jacksonville, Florida, that is that company's

15 prerogative on how they want to handle and

16 manage their inventory. That does not

17 constitute an illegal act.

18 MEMBER FERNSTROM: So, this is

19 Gary.

20 No solution is perfect. But it

21 seems to me that the challenge facing us is

22 fairly simple. We have got an obligation to
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1 assure compliance. So, where are we going to

2 look?

3 Okay, well, we can look at the

4 manufacturer's shipping records. That is

5 going to tell us virtually nothing. Maybe we

6 might see a large number of shipments into an

7 area requiring a higher efficiency of lower8 efficiency equipment. You know, that would be

9 an indication, but it certainly wouldn't be

10 anything conclusive.

11 We can go look at the distributor. 

12 And as has been pointed out by folks in the

13 room, that is not perfect, either, because

14 distributors trade between themselves and ship

15 into both higher-efficiency and lower16 efficiency areas.

17 We can go to the site of

18 installation. That is perfect. You know,

19 that tells us where it was installed and

20 whether it is compliant or not. But, you

21 know, by golly, the recordkeeping and the

22 contractors and distributors, in particular,
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1 are not very excited about the prospect of

2 having to turn over that information.

3 So, that is the bottom line of the

4 problem that is facing us. We can do some

5 combination of all of them, which would

6 probably be good. Maybe this group is going

7 to find that some of those places we can look

8 are, for one reason or another, unacceptable. 

9 And then, we will have to rely on data we can

10 get that we have less confidence in, higher up

11 the distribution chain.

12 MR. EISNER: John?

13 MR. HURST: John Hurst with

14 Lennox.

15 Elizabeth, I want to address one

16 of your questions. Yes, we would adjust our

17 shipments based on where we think it should

18 go.

19 But, for example, you will see 13

20 SEER product going to Miami, Florida for

21 export. And so, somebody can come in and

22 audit and say, "This doesn't smell right," to
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1 use the pallets and the pumps example, but it

2 is not staying in Florida for installation. 

3 No crime or no violation has been committed.

4 So, yes, you can audit the

5 distributors, and you might see anomalies that

6 require further explanation, but we will want

7 to do the right thing. We will ship product

8 to where we think it should be consumed and

9 installed, but that doesn't preclude, again,

10 somebody picking up a truckload of it and

11 driving across the border, selling it online. 

12 That happens to our equipment. That is still

13 going to happen.

14 What we would like to do is maybe

15 put a little bit more teeth in it and say,

16 when we see somebody violating, if we get that

17 information back, we will report it. And the

18 idea of looking at this database, by the way,

19 which we don't have, and if we put teeth

20 against it, less people are going to even

21 provide information.

22 So, look at the permitting in
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1 California. Are all the bad actors out there

2 pulling permits? No, they are not. So, the

3 second you put teeth into this thing, for a

4 database that I currently don't have, you are

5 going to have less dealers reporting that

6 information. So, be careful what you ask for;

7 you might get it.

8 MEMBER FERNSTROM: Well, this is

9 Gary again.

10 With respect to less dealers

11 reporting information, in the extreme

12 compliance case I am envisioning a tag on

13 every air conditioner box that leaves the

14 factory. And the manufacturer writes on the

15 tag which distributor it went to and sends it

16 in.

17 And then, the distributor writes

18 which contractor bought it and sends it in. 

19 And then, the contractor writes where he

20 installed it and sends it in. Now, if

21 somebody doesn't tear it off and send it in,

22 the next person up the chain that reports it
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1 knows that there was an incomplete record on

2 this product.

3 Now I am not suggesting that is

4 the solution because that is the most onerous,

5 the most costly, the most tedious, but it is

6 also absolutely the most certain way to do it. 

7 Anything less than that is going to have

8 pluses and minuses associated with it.

9 MR. EISNER: Charlie?

10 MEMBER McCRUDDEN: On the pallet

11 issue, you know, I would sort of suggest that

12 that is only a snapshot. You saw on one day

13 three pallets full of one product and one

14 pallet full of another. And what you may not

15 see is that small pallet, that one pallet, is

16 just churned through every day and there are

17 three pallets sitting there every day for a

18 year. So, I know it was just an example you

19 put out there.

20 But my question to Doug or to

21 whoever is, audit authority, now we are

22 talking about going into and sort of auditing. 
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1 Now is audit authority different than

2 Information Collection Request authority? 

3 Under the authority you have now, could you go

4 to a contractor and ask or see certain

5 installation records based on potentially a

6 whistleblower call that says, "We think this

7 contractor is doing this."?

8 MR. RAWALD: So, Charlie, I

9 haven't asked the question or thought about

10 it. So, I am just thinking as we talk about

11 this.

12 So, audits are only good as far as

13 what records are retained. And so, the record

14 retention would really be what was pertinent

15 to the PRA, right? So, if we were to have

16 some sort of requirement that people retain

17 records that, therefore, we produced upon

18 auditing, that would require some authority

19 from the Paperwork Reduction Act in order for

20 us to require that.

21 So, that is what I see as the

22 issue. I think that currently the Department
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1 has wide ability to subpoena and ask for

2 things. The question is, we don't have any

3 sort of recourse for not getting things

4 because records aren't kept. That is the

5 problem there, as I see it. And the problem,

6 as Gary laid out, is the fact that records

7 aren't kept very well.

8 And it might be that the new

9 regulations could be a disincentive to people

10 keeping good records and actually cause people

11 to keep worse records because they don't want

12 to be caught.

13 So, these are the kind of thorny

14 problems I see with these questions.

15 MEMBER McCRUDDEN: How does your

16 current sort of whistleblower -- I mean, I

17 realize it is probably just manufacturers, but

18 how does that work?

19 MR. RAWALD: Right. So, we get

20 complaints from a lot of different sources. 

21 And what I want to make clear is that

22 oftentimes they are pretty effective. We have
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1 a number of cases that we have developed of

2 pretty sizable magnitude based upon consumer

3 or manufacturer complaints or just the parties

4 who have an interest for some reason or

5 another.

6 And what we do is we have a

7 website that advertises all of our

8 information. And then, we have an email. And

9 so, we encourage people to email us with any

10 sort of complaints. And so, we receive the

11 emails and we go through the emails in the

12 office. We have people that go through them. 

13 And then, we decide how to follow up on them.

14 And so, we, then, look at our

15 various investigative tools, our subpoenas,

16 our ability to ask for data, our ability to

17 look for information. And we use those tools

18 as appropriate to investigate that complaint.

19 So, you know, we get a lot of

20 complaints. We have limited resources, you

21 know, and we try to figure out what the most

22 judicious way to spend those resources would
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1 be.

2 So, I would view any sort of

3 whistleblower activity -- and this would be in

4 that same context; it would be a complaint to

5 us, and then, we would follow up on it.

6 I do want to say that

7 whistleblower complaints -- and I use the term

8 "whistleblower," but it is anyone, any sort of

9 complaint of this type -- are good and they

10 are well-received. And I think the Department

11 is happy with that.

12 We do not offer any rewards. 

13 People don't get any sort of cut of anything. 

14 There is no actual incentive to whistle-blow

15 and, then, if you are a competitor, you are

16 trying to rat your competitor.

17 On occasion, we do get the

18 completely frivolous complaint. But what I

19 will say is we don't take actions against

20 people that are frivolous.

21 What might happen, which is

22 burdensome to some folks, is that because of
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1 a complaint from another industry member, we

2 may ask for records from a company. And that

3 record-production process can be onerous for

4 some folks, both researching the records and,

5 then, producing them. And so, that is some

6 grief put on the individual based upon a

7 whistleblower complaint that may turn out to

8 be unsubstantiated.

9 But I also think there is some

10 value in the activity, the audit activity, in

11 that it encourages people to actually be doing

12 what they should be doing anyway. So, there

13 is some burden there, but there is also some

14 possible value in the long-term from that

15 process. But there are a lot of elements to

16 it.

17 Jon?

18 MEMBER MELCHI: Jon Melchi, HARDI.

19 Doug, just out of curiosity, is

20 this the first time the Department has had to

21 enforce an energy conservation standard at the

22 installation level? And, you know, it is the
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1 first one, to my knowledge, that you are not

2 enforcing directly upon the manufacturer at

3 the factory level, correct?

4 MR. RAWALD: Then, that is the

5 issue, right. So, our enforcement scheme has

6 developed and been predicated on enforcement

7 at the manufacturer level.

8 MEMBER MELCHI: Okay. So, just

9 taking it from, I guess, not the top-down, but

10 maybe the bottom-up -- and I know this is why

11 we are here -- but how would you envision, and

12 who would have the authority to enforce this

13 at that level? I.E., I understand that, you

14 know, I have heard building code folks

15 mentioned from time to time, but not every

16 community has those.

17 So, how would the Department, who

18 has the authority to do this, or could any

19 contractor call you up? And then, how would

20 the Department somehow proceed with something

21 at this level as opposed to just subpoenaing

22 homeowner records -- or I'm sorry --
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1 manufacturer records?

2 And I know I asked this earlier,

3 but would you, then, contact the homeowner and

4 proceed to go to the installation site and run

5 a field test to make sure that it is exactly

6 what was installed? I am just curious.

7 MR. RAWALD: Right. So, the

8 practicalities are certainly something I

9 haven't thought through to that extent. So,

10 the question is open as to how we would

11 approach going to a consumer's house, going

12 into their attic or the closet or their

13 basement to see what the air handler says, and

14 then, looking outside in the backyard or going

15 up on the roof and looking at the condensing

16 unit. There's a lot of layers to that, and I

17 don't have an answer for you.

18 You know, is it as simple as

19 simply asking them to produce the Energy Guide

20 Label, to give you the model number, or more

21 complicated?

22 I mean, what I will add is there
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1 is the added dimension of there could be a

2 product that is labeled as a 14 SEER that is

3 sold to them, but, actually, in practice that

4 model only functions as a 13 SEER. And so, it

5 was at the manufacturer level maybe not

6 compliant with the standard and was

7 mislabeled, and it shouldn't have been there

8 at all.

9 So, is there some kind of

10 requirement to actually test the physical unit

11 in the house to see what its actual SEER value

12 is, as opposed to relying on the pallet, what

13 the model numbers say those would be? There's

14 a lot of layers of complexity to that. And on

15 this score, I think it is helping me ferret it

16 out.

17 There are a lot of hands up over

18 here. So, Chuck and, then, Harvey.

19 MEMBER WHITE: Given the -- Chuck

20 White with PHCC -- freight train that is

21 bearing down upon us, after January 1, it will

22 be legal to install a SEER 14 unit anywhere in
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1 these United States. Anywhere in the Northern

2 Region, it will be legal to install the SEER

3 13. Why would any contractor of mine have to

4 fill out paperwork on any equipment in any of

5 those regions that is compliant? Why do we

6 want to create a database of every piece of

7 equipment in this nation?

8 MR. RAWALD: Right. And, Chuck, I

9 think that comment was made by a couple of

10 folks after the framework back in 2011. I

11 think AHRI actually spoke about, hey, we

12 should focus our efforts on only those things

13 that would be non-compliant in the region. 

14 So, basically, 13 SEER items being sold in the

15 South.

16 MEMBER WHITE: And the other thing

17 I want to add to that is, 18 months after

18 implementation, the buy-through is done, the

19 sell-through is done. But, in short order

20 after that date, probably even before that

21 date, but in short order after that date,

22 inventories are going to become adjusted. And
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1 the easiest thing for the contractor to do is

2 going to be go to his wholesale house, and the

3 wholesale house is going to have SEER 14

4 equipment. It is going to take its natural

5 course.

6 Are there going to be some

7 skaters? Yes. Are there going to be a lot of

8 them? I doubt it. Most contractors, it is

9 too much work; it is too much effort. There

10 is not enough benefit to going spending extra

11 time driving out of state, getting that piece

12 of equipment. It doesn't save you enough

13 money.

14 It is far easier to comply, and

15 contractors are into doing what is the easiest

16 thing. So, I guess that is my soapbox.

17 MEMBER SACHS: This is Harvey.

18 And I would like to make explicit

19 some parallel thinking that builds on what

20 Chuck has said. My goals, of course, are

21 maximum, avoiding as much as possible the

22 national energy losses associated with
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1 noncompliant equipment. But that requires

2 balance.

3 And there are two things that I

4 think can be used to help us by coming as

5 close as possible to making win/win for the

6 professional participants in the market,

7 manufacturers, distributors, and reputable

8 contractors.

9 One of those, an approach that

10 does heavily emphasize bottom-up

11 whistleblowing, I think that can be very

12 helpful, is getting us the feedback that, with

13 our data capabilities today, can be aggregated

14 pretty easily. You don't go after a

15 homeowner; you go after a pattern of

16 apparently noncompliant installations.

17 That requires some data. It

18 requires some information to be maintained by

19 the reputable contractors who already know

20 where they have installed equipment, so they

21 can sell the service contracts. It will

22 require some recordkeeping by the
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1 distributors, the leading ones of whom already

2 know which contractors are most susceptible to

3 the special offers, and some recordkeeping

4 that is basically, I hope, a small extension

5 by the manufacturers.

6 The hope is to use the old

7 business principle of fear, uncertainty, and

8 doubt, "FUD," to make this as self-executing,

9 self-enforcing as possible with the minimum

10 burden on each party. I think that is the

11 synthesis we are trying to get at here. What

12 is the least amount of data that each party

13 can hold that allows DOE to look like it can

14 enforce this?

15 End of rant.

16 MR. EISNER: Anything else?

17 MEMBER ELLIS: Yes, if I might

18 just for a moment. I have got a couple of

19 things that I want to ask of the group.

20 One, I will start off by kind of

21 an identifier that I am going to expose myself

22 about how little I actually know of most of
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1 what is going on. I sit back here and my head

2 is just kind of swimming trying to understand

3 why we are where we are at to some extent.

4 And, No. 1, Charles over lunch

5 tried to explain to me why the demarcation

6 line is where it is and why we have SEER 13

7 and SEER 14 differences throughout the

8 country.

9 And I guess my question of the

10 experts in the room would be, No. 1, what is

11 the cost difference between a SEER 13 and a

12 SEER 14 unit on average?

13 MEMBER McCRUDDEN: They can't talk

14 about that.

15 MEMBER MEYERS: Under advice of my

16 counsel, I can't answer that.

17 MEMBER ELLIS: Well, let me tell

18 you, just for instance here, I mean, you know,

19 my part at my utility -- I am the General

20 Manager there, and I look at our policies and

21 I see what we do from day-to-day. And even if

22 I don't know exactly what the engineer and his
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1 department is trying to accomplish, if I look

2 at something and it is costing us a great deal

3 of money for really no good reason, then I

4 look at that and I say, "We've got to throw

5 this out. We have got to start all over, and

6 we are going to try to rework this, so that it

7 actually does what we want accomplished."

8 And it seems like this whole thing

9 here --

10 MEMBER SACHS: Could I answer

11 that?

12 MEMBER ELLIS: Yes, in a second.

13 MEMBER SACHS: Okay.

14 MEMBER ELLIS: The whole thing is

15 that we are extremely worried about selling a

16 SEER 13 unit south of the Mason-Dixon line. 

17 And we can say we can sell the 14s to the

18 north. Is it because there is not enough

19 savings in the north, that it doesn't justify

20 the additional cost to install those units

21 north of that line? Is that one of the

22 reasons why we don't do that?
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1 Because it sounds to me as though

2 the Department of Energy is going to have to

3 really bulk-up here to be able to audit and

4 enforce this thing on every contract. You

5 know, doing it at the manufacturer level,

6 there are only so many. But, if you start

7 looking at contractors across the country,

8 there is going to be, if not thousands,

9 hundreds of thousands that are going to be

10 doing this, and you are going have to really

11 bulk-up.

12 And it is true, you know, in our

13 neck of the woods, literally, we don't even

14 have to have building permits for somebody to

15 build a home. So, there is no way to check it

16 there.

17 But, again -- and maybe I am

18 stupid for saying this out loud again -- you

19 know, we still have people install the right

20 units because we incentivize them through our

21 utility to do the right thing. They get money

22 back for installing the right one. And we
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1 inspect those. My utility inspects those, and

2 it has to meet the standards that are

3 developed by our wholesale supplier through

4 NEEA and the rest of the organization in the

5 Northwest.

6 And it seems like we are spending

7 an awful lot of time worrying about this

8 demarcation line on if somebody sells it

9 across the river and it is the wrong one. I

10 mean, literally, there is no climate change or

11 climate difference between one side of the

12 Ohio River and south of the Ohio River to me,

13 anyway.

14 And besides, have you got any idea

15 what it might cost the DOE to set up a

16 regulatory or enforcement wing, you know, of

17 DOE to get something like this done?

18 MR. RAWALD: Ray, I can answer

19 your question that I don't --

20 MEMBER ELLIS: Yes.

21 MR. RAWALD: -- but I am hoping to

22 see from the group what it would require. I
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1 know that Harvey wanted to answer part of your

2 question.

3 MEMBER SACHS: A couple of things. 

4 One of them is, for better or for worse, we

5 are stuck with having to do regional

6 enforcement now. We can't duck that. That is

7 why we were called together.

8 But, in response to your heartfelt

9 question of the difference in cost between a

10 13 and a 14, it is a pretty complicated

11 problem, and the manufacturers cannot respond. 

12 Their interpretation of the antitrust law is

13 that, wheresoever two of them are assembled,

14 they can't talk about prices.

15 But I'm not a manufacturer and I

16 would suggest now that the cost, as opposed to

17 the price, the premium for a SEER 14 over a

18 SEER 13, FOB manufacturer's shipping dock, is

19 in the tens of dollars, maybe in the low three

20 figures, my guess.

21 There may be in a significant

22 number of installations a significant
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1 difference in the price and a more significant

2 difference in the installation cost because of

3 the number of components for which custom4 fitting might be required, particularly the

5 coil.

6 So, the economics have to be

7 treated with a lot of granularity and a lot of

8 care.

9 MR. RAWALD: Uh-hum, right.

10 MEMBER SACHS: Is that helpful?

11 MR. RAWALD: Harvey, the

12 manufacturers are going to have a really hard

13 time talking cogently about this because of

14 the restrictions. But the Department of

15 Energy in the course of promulgating the

16 standard, obviously, put together some

17 economics on this. So, we could possibly have

18 our Navigant folks pull something that we have

19 said publicly and point Ray to that, to give

20 him some better, more granular numbers.

21 MEMBER SACHS: Right. And this is

22 Harvey again.
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1 It is all in something called the

2 Technical Support Document. And one thing

3 that we and the manufacturers will heartily

4 agree on is that it is wrong.

5 The Technical Support Document,

6 which carries all these very detailed economic

7 and manufacturing cost analyses, we will all

8 agree turns out to be wrong every time.

9 (Laughter.)

10 MR. RAWALD: And, Harvey, this is

11 Doug.

12 And I was talking to Laura from

13 our contractor here. She reminds me that this

14 is a Direct Final Rule. So, we may not have

15 as robust a Technical Support Document as you

16 might find in other cases.

17 So, I don't know what we have, but

18 we will see if we have anything that we can

19 give you that will give you some more --

20 MEMBER MELCHI: This is Jon from

21 HARDI.

22 And I don't believe that Technical
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1 Support Document included the cost of stranded

2 inventory --

3 MR. RAWALD: Right.

4 MEMBER MELCHI: -- or enforcement.

5 MEMBER NOLL: Doug, does it

6 include at any level the cost of shipment or

7 is that --

8 MR. RAWALD: Right. So, a typical

9 support document would. I don't know if this

10 one includes it because I wasn't here for the

11 rulemaking and I haven't ever looked at it. 

12 And I don't even know if we have such a

13 document as we usually have.

14 So, Laura and I will go back and

15 we will find an answer for folks.

16 MEMBER NOLL: Is that information

17 -- this is Elizabeth at NRDC -- is that

18 information generally restricted to talk

19 about? I mean, I think that might be a more

20 interesting question: at what percent or

21 portion of the appliance is the shipment cost? 

22 And if it is a significant cost, then does
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1 that restrict behavior?

2 MR. RAWALD: In other words, if it

3 costs so much to ship, would it be shipped not

4 very far?

5 MEMBER NOLL: It is cost6 prohibitive, that you are not going to be

7 shipping it all over the country a thousand

8 times. Or, if it is just five cents, then

9 you're right; then, we have to go out -- you

10 know, I think that might be a more interesting

11 question than the 13/14 SEER question.

12 MR. RAWALD: Right. Well, Laura

13 can go back and look at that, see what numbers

14 we have, and we can answer.

15 MR. HURST: This is John Hurst

16 with Lennox.

17 I was going to say, regardless of

18 the percentages and the cost and the things

19 that we can't talk about, I think it is fair

20 to assume that a contractor in the South

21 installing 13 SEER equipment is going to be at

22 a cost-advantage to a contractor that is
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1 following the law and installing as 14 SEER

2 unit.

3 And so, we can argue about, you

4 know, 80 percent, 20 percent, $15, $200, but

5 the fact remains that a dealer that has access

6 to 13 SEER equipment in the South will be at

7 a cost-advantage for a cost-conscious

8 consumer, and that is the majority of

9 consumers.

10 MEMBER ELLIS: So, this is Ray

11 from LEC.

12 Just to follow up, ask a question

13 on that, so, then, putting a 14 SEER unit in

14 the North, the same must be true?

15 MR. HURST: Sure, but consumers,

16 some consumers want more features on their

17 equipment. We sell sometimes very high SEER

18 equipment in Minneapolis, for example. Some

19 consumers want the best of the best regardless

20 of the price. And it just depends. It is

21 much like automobiles. Some are value-driven;

22 some are style-driven; some are feature-
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1 driven. And I think the same applies in the

2 HVAC space as well.

3 MEMBER ELLIS: Okay, but, then,

4 kind of what Chuck had mentioned earlier is

5 that, why on earth would a contractor, if you

6 have gone to this point where you are going to

7 enforce it and have the possibility of heavy

8 fines or jail time, trying to sit around with

9 your jail buddies and describe why you're in

10 jail, that you installed the wrong HVAC or air

11 conditioner, but why would they take the

12 chance, then, of installing a 13 SEER unit in

13 the South?

14 MR. HURST: I think two reasons. 

15 Great question. The reasons are if they feel

16 the penalty is --

17 MEMBER ELLIS: Doesn't equal the

18 crime?

19 MR. HURST: -- doesn't equal the

20 crime, and, then, the chance of being caught. 

21 So, if I think the penalty is low and the

22 chance of being caught is low -- so, for
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1 example, just round numbers, if it is a $200

2 civil penalty and I get caught one every

3 hundred times, it is a $2 cost-add to every

4 job that I have done. And if I get caught

5 once in a thousand times and it is a $200

6 penalty, it is -- what? -- a 20-cent cost-add.

7 So, you know, I have got teenaged

8 boys. They sometimes calculate risk and the

9 chance of being caught with the penalty, and

10 they roll the dice, and they don't comply. 

11 And I think the same could be true in this

12 example where people are going to assess the

13 risk versus the penalty and take their

14 chances.

15 MR. RAWALD: Right. And this is

16 Doug.

17 I did want to echo something John

18 said, so just to make it clear to Ray. So, we

19 don't have any criminal ability at all. So,

20 there are no criminal sanctions at all for

21 this.

22 There are criminal liabilities for
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1 false statements to the government that are

2 separate and apart from this. But, for these

3 purposes, if we were to decide a penalty for

4 violations, there would be no criminal

5 liability. It is a civil penalty. And the

6 maximum civil penalty we can assess is $200

7 per violation, however we decide what a

8 violation would be.

9 So, that is the kind of context we

10 are in. It is not a very high penalty, and

11 all things considered, if folks want to pass

12 along that cost, as John described. So, there

13 is always that concern.

14 We have kind of wandered far

15 afield from what we started after lunch. But

16 I think it has been very valuable to kind of

17 air all these thoughts out there.

18 But I want to take it back to the

19 idea of the routine violations. And it seems

20 like we talked a lot about how to detect a

21 violation, but I do still want to get a sense

22 of where people are with the idea of deciding
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1 is somebody is a routine violator.

2 We have, and Chuck put forward

3 before lunch, the idea of the dictionary

4 definition, and he, at least at the moment,

5 was comfortable with that being part of the

6 baseline. I want to kind of hear, how do

7 people feel about that as far as deciding if

8 someone is a routine violator and where people

9 are at with that thought of a routine

10 violator?

11 MEMBER McCRUDDEN: So, this is

12 Charlie with ACCA.

13 And again, I am looking at

14 "routine" and "violator" in this sentence up

15 on the display here, looking at the

16 "contractor" or the "distributor". I will

17 just speak to the contractor, actually.

18 You know, I think I would like at

19 least to see some type of safe harbor. There

20 is going to be an accidental installation, and

21 it could be -- I mean, I am just thinking in

22 my head -- you have got a contractor. His
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1 service area is both sides of a border. He

2 doesn't even think twice. He gets in the

3 basement and he puts something in there and

4 comes out. And then, slightly later, it turns

5 out, whoops, you've got the wrong product.

6 So, there is going to be mistakes

7 that are going to happen. And I think they

8 are going to be innocent mistakes. So, either

9 there is a safe harbor or an off ramp or some

10 type of way to account for that.

11 MR. RAWALD: And, Charlie, I guess

12 I would like to hear you -- and Chuck spoke on

13 this -- but in some way, to me, the risk of

14 being, quote/unquote, "blacklisted," because

15 that is the term we use it for, for being a

16 routine violator is actually more concerning

17 to a contractor than a $200 penalty from me

18 possibly?

19 MEMBER McCRUDDEN: So, I mean,

20 this is Charlie.

21 I will respond in the sense that I

22 think you are probably right. I think,
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1 because if you find yourself blacklisted, you

2 are going to find that your partner, or your

3 dealer/partner, or whatever we want to call

4 it, your manufacturer may choose not to work

5 with you anymore because they, themselves,

6 face an obligation here, which is the top part

7 of this. So, I think that is going to drive

8 concern.

9 The other thing I would sort of

10 suggest we think about is you are a

11 contractor. You have made mistakes. You have

12 realized the error of your ways. And now, you

13 want to get back. So, is there a way to

14 become unlisted from this directory?

15 MR. RAWALD: Right. So, you are

16 routinely violating it, but you are no longer

17 routinely violating it.

18 MEMBER McCRUDDEN: Right.

19 MR. RAWALD: So, could you be

20 now --

21 MEMBER McCRUDDEN: Or you find

22 yourself on this list. And now, is there a
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1 way to get yourself off of it?

2 MR. RAWALD: Right. And I guess

3 there is another permutation of this. This

4 goes back to definitions earlier. So, if you

5 are a contractor and you have been

6 blacklisted, and so, you go claim bankruptcy

7 and you hire yourself out to another

8 contractor. And now, you are an installer for

9 him. Are you still carrying that mark or is

10 his company that has hired you able to be

11 devoid of that? Or you reincorporate with a

12 different name.

13 MEMBER McCRUDDEN: And we may need

14 to go back to the definitions and address that

15 situation.

16 MR. RAWALD: Uh-hum. Just

17 something to think about, as we think about

18 these routine violators.

19 MR. EISNER: Yes, let me point out

20 a couple of points because I am hearing

21 different terms here that confuse me a little

22 bit. For example, "safe harbor," my
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1 understanding of safe harbor is you give an

2 interpretation of a statute or a regulation

3 and say, as long as you do it this way, we

4 won't take enforcement action against you.

5 You are talking about a situation

6 where the person violated the rule, as

7 everybody understands it. That is oftentimes

8 a situation in my experience where an agency

9 will use enforcement discretion, say this was

10 an innocent mistake; you shouldn't have done

11 it. That could mean a lower penalty or it

12 could mean no penalty. You have got limited

13 resources.

14 We are now also talking, another

15 problem is we are talking about things that we

16 haven't even agreed are necessary for an

17 enforcement program. Nobody has talked about

18 setting up a blacklist or anything like that.

19 The fact is, if they take

20 enforcement action, it is public information. 

21 There is nothing they can do about it. So,

22 how does somebody fix that? Just the way
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1 other things happen. It is in the

2 marketplace. They can't hide it. They are

3 not putting it out on a list and saying,

4 "Don't do business with this person." I think

5 you have to understand you may not need to

6 even get into that issue.

7 Now one other meaning, we talk

8 about cost of rules. One of the differences

9 between the first rule and the rule we are

10 talking about now is, oftentimes, an agency

11 assumes there are no costs of an enforcement

12 program because, as long as you comply, you

13 are not going to pay a penalty.

14 And if you assume that you are

15 going to bear the cost of compliance and get

16 charged every once in a while a penalty, that

17 is something you have to live with.

18 MEMBER McCRUDDEN: Well, to that

19 point, I would argue that the cost of

20 compliance can be meeting the obligations that

21 are necessary, whether it be a recordkeeping

22 requirement, or let's say it was a piece of
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1 equipment that you needed to have to carry out

2 a compliant job. Okay? So, you would have to

3 buy that equipment. So, there are costs that

4 are sort of baked into the regulation that may

5 not be part of compliance, may not be part of

6 an enforcement action, but that are part of

7 compliance.

8 MR. EISNER: But that is a

9 separate --

10 MEMBER McCRUDDEN: Right.

11 MR. EISNER: That is a separate

12 rule. And in this case, remember, although

13 the agency does have a responsibility for

14 analyzing the cost and the benefits of the

15 rule, it is a statutory mandate.

16 MEMBER McCRUDDEN: Right. To your

17 point about safe harbor, you are right. I am

18 probably throwing out a term I don't use as a

19 term of art correctly. So, I think I was

20 describing a situation where there would be

21 enforcement discretion.

22 But, again, that is something I
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1 think would be helpful and, then, again, a way

2 to become delisted, if necessary.

3 MR. EISNER: Yes?

4 MR. SURRENA: Don Surrena.

5 It sounds like we are putting

6 forth the idea that there is a large number of

7 installers, contractors that will do whatever

8 they can to skirt the law. I don't think that

9 is true. So, I believe we are looking at a

10 very small number, and we have focused-in on

11 the minutia rather than looking at what the

12 law says. The law for DOE is to have it be

13 unlawful for a manufacturer to knowingly do

14 this to his dealers, subcontractors, and so

15 forth.

16 So, the manufacturers police this

17 themselves. They do it through their dealers

18 or through public complaints or complaints

19 they get into their companies. And they put

20 these people on notice and stop selling to

21 them, so that they don't become in violation

22 of what the DOE regulation requires.
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1 To put this total enforcement low2 end burden down to the Department of Energy,

3 they will never have the resources to do it. 

4 They just won't. They can't do that. If they

5 hired every building official that was in the

6 country, they still wouldn't have enough

7 because the people who do this, I don't want

8 to say they are few and far between, but they

9 are not the majority of the installers.

10 So, we are looking to have

11 something corrected for a very small number of

12 disreputable contractors or unknowing

13 contractors. It is the unknowing ones we are

14 trying to figure out a way that they get some

15 form of dispensation. You get one or two

16 marks and, then, you get a "Get Out of Jail

17 Card Free," whatever it is.

18 But to this enforcement bottom-end

19 onto the Department of Energy is not the place

20 where it should go to. It will become totally

21 ineffective.

22 MEMBER MELCHI: This is Jon with
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1 HARDI.

2 And I know we are supposed to talk

3 about, I believe I saw it on here on Thursday,

4 but I think, again, this goes to the point of

5 DOE's responsibility as far as public

6 outreach, especially to the contractor

7 community and to the homeowner community.

8 You know, as we have discussed,

9 there's thousands and thousands of

10 contractors, and DOE is going to have a major

11 responsibility to help with outreach to those

12 entities to make sure compliance is met.

13 MEMBER FERNSTROM: Yes, this is

14 Gary.

15 Let me talk again to the

16 California example. Ray earlier asked a

17 question about what the cost was, and, of

18 course, nobody in the room could answer it.

19 But you all asked earlier what the

20 extent to which building permits are pulled

21 for air-conditioning work in California. And

22 I think David Hungerford or somebody over here
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1 said it was less than half, maybe as low as 20

2 percent of the work that is done.

3 The major barrier to pulling a

4 permit in California is, No. 1, the cost of

5 the permit, which can be a couple of hundred

6 dollars, and, No. 2, the fact that you have to

7 test and seal your ductwork, which is probably

8 $600.

9 So, a contractor goes out and says

10 to the customer, "I need to replace your air

11 conditioner condensing unit. It is going to

12 cost $3,000-4500, whatever. I can do it with

13 or without a permit. If I get the permit, it

14 is probably going to be $600 to $800 more

15 costly." And that amount of money is what

16 drives the permit acquisition down from 100

17 percent to less than half.

18 So, the notion that all

19 contractors are good may be true to the extent

20 that, maybe if they don't pull a permit,

21 everything is going to be just fine. But I

22 don't think we can count on, given market
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1 pressure, a contractor's good, honest nature

2 to make sure everything turns out correctly.

3 MR. EISNER: Let me ask a

4 question, too, here because I am hearing

5 different perspectives on who has got the

6 burden here. I have been hearing concerns

7 about, is this something we want to put on

8 DOE's shoulder? From the perspective of the

9 manufacturers, the distributors, et cetera, in

10 the room, is this a problem for you in the

11 sense that you may all of a sudden be charged

12 with the person who is constantly violating

13 the law or you are the person who is dealing

14 with someone who constantly or more than

15 routinely violates the law? And therefore,

16 you may be penalized by DOE for something you

17 didn't realize you had to do.

18 For example, let's assume that in

19 California you can learn something by looking

20 at permit records. And so, whether you are

21 selling to someone who is installing the one

22 unit in a dwelling in California, isn't the
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1 burden now back on you? If that can be

2 obtained easily and you are not getting it,

3 and you should get it if you want to do the

4 job right, is the burden on you, not on DOE?

5 And again, I ask this because I

6 don't have as good a feel as you do for how

7 the industry works. I am sure it is so much

8 a problem for them, though, from when I look

9 at it. Because if it comes to their attention

10 that information was reasonably available to

11 you and you just didn't get it, and you kept

12 selling to this person because you didn't want

13 to know more, their burden is not that

14 difficult. They get the records together and

15 they bring the enforcement action.

16 Using the example of you are

17 sending -- somebody calls you up and says, "I

18 want 100 SEER units delivered to a worksite in

19 a new residential community in Southern

20 California. I want them all to be 13s."

21 And you say, "Okay, I'll deliver

22 there." I don't know what you are going to do
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1 with them.

2 Well, it is a homesite, and they

3 want 100 delivered every month because they

4 are building 1,000 homes there. Does that put

5 you in a position of violating this provision

6 as a manufacturer? And does it put you if you

7 are a distributor in a position of being,

8 quote, "blacklisted" because of what you are

9 doing?

10 You make their job actually quite

11 simple. They were delivered right to a

12 homesite. What did you think they were going

13 to do with them?

14 Response?

15 MEMBER MEYERS: Yes. So, this is

16 Karen with Rheem.

17 I mean, I do agree with you. I

18 think before we can define "routinely

19 violates," we need to go back to what that

20 "knowingly" definition is in the context of

21 regional standards.

22 So, to me, I think that you have
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1 to, if you have knowledge that an illegal

2 installation has occurred, whether you are a

3 contractor or a distributor, and you had that

4 knowledge, that you should be required to do

5 something with that knowledge because you have

6 knowledge of an illegal act.

7 So, I think we need to understand

8 what that means. Because, when I read this

9 definition, you know, it says that, with

10 regional standards coming into effect, you

11 should, then, be more aware of what is going

12 on.

13 So, to your point, if you are

14 delivering 100 13 SEER units to Southern

15 California, it is pretty evident that an

16 illegal installation is going to take place.

17 MR. EISNER: Especially if you

18 deliver them to a homesite.

19 MEMBER MEYERS: So, are you not

20 required to do anything with that, as somebody

21 that is in this whole selling chain?

22 So, I think if we can understand
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1 what "knowingly" means and how that affects

2 everything, I mean, I think whether it is a

3 fellow contractors knows that another

4 contractor is doing wrong, whether a

5 distributor finds out that a contractor that

6 he has sold a unit to installed it illegally,

7 whether it is an OEM who has information that

8 they have a bad serial number or a serial

9 number in the wrong part of the country, then

10 we have some obligation to make that

11 information known.

12 And I think if we understand what

13 that is, then you can start to define

14 "routinely violates". But, right now, no one

15 knows what they are supposed to do. What does

16 "knowingly" actually mean in the context of

17 regional standards?

18 And I know that is probably not

19 something that we want -- you know, this is

20 huge, and I know it is not an easy thing for

21 us to discuss. But I think, going forward,

22 January 1st, 2015, it is going to be a
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1 different ball game, and we can't pretend that

2 it is not.

3 MEMBER McCRUDDEN: So, just to

4 understand -- this is Charlie from ACCA -- are

5 you suggesting that, if you are aware of a

6 violation, you are obligated to report it?

7 MEMBER MEYERS: I think that, if I

8 were aware of it, I should be required to take

9 some step. Whether that is contacting the

10 person that I have sold the unit to and having

11 them do additional followup -- I don't know

12 that I am saying you put it all in this

13 database, but I am saying I should be required

14 to do something with this information. The

15 database thing is not really my first choice

16 at all.

17 But I do think that, if you have a

18 contractor and his buddy is a good friend of

19 his, and he is putting in an illegal unit, and

20 he is down on his luck, he needs the job, he

21 needs the money, does that make it okay for

22 him not to report that or to not make
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1 knowledge available? I don't know.

2 MR. EISNER: Another scenario, if

3 I could for a second expand on what you are

4 saying, another scenario might be you are the

5 manufacturer. You get the call, "Can you

6 deliver them right to the jobsite?"

7 You say, "No, I can't deliver

8 them. You are not going to install in

9 California. It is a violation of law."

10 "Okay, thank you."

11 That you might want to report, as

12 a good business, to the DOE that they might

13 want to check out this distributor who was

14 trying to buy a thousand units, obviously, to

15 install in homes in California. I don't

16 suspect you would want to take the business

17 and, then, report it to them.

18 MR. RAWALD: This is Doug.

19 What I hear Karen saying is that

20 she wants some sort of affirmative requirement

21 for reporting, as opposed to a simple, you

22 know, moral obligation. That is what I am
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1 wondering about.

2 MEMBER MEYERS: Yes, and I don't

3 know that it is reporting, but it is a

4 requirement that -- and maybe Amy can jump in

5 here because I think she knows what I am

6 trying to say, because we kind of discussed

7 this in our caucus a little bit.

8 MEMBER SHEPHERD: Yes. I think

9 that, as opposed to requirement, I think as we

10 do talk about a safe harbor, I mean, I think

11 we are talking, also, about an incentive. 

12 Like if you can give an incentive to people

13 who have this information, that they will get

14 some sort of protection, especially when you

15 have something like routine, which can be

16 inherently vague; it is subject to enforcement

17 discretion -- if there is some sort of safe

18 harbor where, if people are reporting conduct,

19 let's say, to the Department, that they

20 wouldn't, then, be liable for a sale to that

21 person. Or something along those lines where

22 we create incentives for behavior up and down
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1 the chain to get the information to the

2 Department which, as you said, will weed the

3 good from the bad. Because that is the whole

4 purpose of an audit as well, is to get the

5 information to the Department.

6 But, if you don't have the

7 infrastructure and you are creating this

8 entire new system on a business model that

9 doesn't operate that way now, that is

10 extremely difficult. But, if we can find a

11 way to incentivize behavior that can easily

12 occur at low cost, that will get the people

13 who are doing the right thing, who may have

14 those additional costs because they are doing

15 the right thing, some sort of incentive to get

16 that information to the Department, so that it

17 can act on the people who aren't. I think

18 that is kind of what we had discussed and what

19 we would like to explore.

20 MR. EISNER: Harvey?

21 MEMBER SACHS: This is Harvey

22 Sachs.
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1 Amy, you said some things that

2 made my ears perk up to ceiling level. But I

3 also got a little bit confused. I mean, I

4 like the idea of, you put as "incentives"; I

5 would put it as things which tend to be self6 executing or self-enforcing.

7 But I think we are still hearing

8 "safe harbor" used in two different contexts. 

9 And maybe you can expand a little bit about

10 how you meant that term.

11 MEMBER SHEPHERD: Well, what I

12 would mean by a "safe harbor" is that, if we

13 can incentivize certain behaviors such that

14 the Department would say, if a manufacturer

15 does these things, if a manufacturer has a

16 system for, you know, identifying this

17 information or does report this information to

18 the DOE, that, then, that somehow gets

19 factored into any decisions that the DOE may

20 take as to enforcement. So, we are trying to

21 create an incentive for people to provide

22 information about violators to the Department.
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1 MEMBER SACHS: Okay. So, let me

2 see if I can translate it into something real

3 with totally hypothetical numbers.

4 This is Harvey again.

5 If a manufacturer has been

6 scrupulous about sending an email to DOE each

7 time it has a suspicious request for a hundred

8 units, but doesn't send a note to DOE when it

9 gets a request for 10 units that were SEER 13

10 for a southern distributor, they would be

11 given some grace. Hey, these people were

12 operating in an area where 10 units might have

13 had a legitimate use in terms of installations

14 along the border.

15 Is that the kind of thing you are

16 meaning?

17 MEMBER SHEPHERD: No.

18 MEMBER SACHS: Okay. Then, I am

19 misunderstanding. But I think it is

20 important.

21 MEMBER SHEPHERD: Yes. No, I do. 

22 And I am not saying I have the answer as to
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1 what exactly the parameters or exactly what

2 this looks like. But I think that what we

3 were trying to do is think of ways to

4 incentivize what people may already have the

5 ability to know up and down the chain and get

6 that information to the Department, so the

7 Department can act on that, and to think of

8 ways to encourage that behavior.

9 MR. EISNER: In your example, do

10 you distinguish between a company not knowing

11 that there is a violation, but suspecting

12 there might be, or, also, the company knowing

13 there is a violation, still participating, but

14 reporting it?

15 MEMBER SHEPHERD: Say that again?

16 MR. EISNER: When you are talking

17 about reporting, are you talking about

18 reporting -- you are a manufacturer, for

19 example -- are you talking about reporting a

20 request for delivery to Southern California? 

21 On the fact of it, it is legitimate, but you

22 think they are going to use it for illegal
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1 purposes? Or are you talking about a case

2 where you report it, even though you know it

3 is illegal, and you ship the product?

4 MEMBER SHEPHERD: Well, you don't

5 know it is illegal. I don't think that

6 analogy quite works because you don't know it

7 is illegal when you ship the product.

8 MR. EISNER: If they ask you to

9 ship it to the site where the homes are being

10 put in, do you think you can make a case you

11 didn't know they were going to be put in those

12 homes?

13 MEMBER SHEPHERD: Well, in that

14 specific, if they are given a specific

15 address, I mean, I don't think that is likely

16 at all, and I don't think that is really how

17 we are going to design an effective

18 enforcement.

19 We need to look at what most of

20 the circumstances are. So, I will go back to

21 the manufacturers for that.

22 MEMBER MEYERS: This is Karen from
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1 Rheem.

2 Very rarely for a residential HVAC

3 unit are the units going to be shipped direct

4 from the manufacturer.

5 MR. EISNER: I understand that. I

6 am using an example where you are south, the

7 company is south of San Diego. The

8 distributor is north of San Diego. The

9 distributor says, "Can you deliver them right

10 to the site where the thousand homes are going

11 in?"

12 MEMBER MEYERS: So, typically --

13 MR. EISNER: Does that happen?

14 MEMBER MEYERS: Very, very rarely,

15 because (a) the thousand homes aren't all

16 going to be ready for the HVAC unit at the

17 same time. So, they are going to go through

18 a distributor, because you are going to be

19 building 10 homes in this tract and 10 homes

20 in -- you know. And it all happens at

21 different times, when you install that unit.

22 So, very rarely would that -- in
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1 fact, I can't even think -- the commercial is

2 a different ball game. But, for residential

3 units, I just don't see that happening but

4 maybe once in a very rare blue moon. I just

5 don't see that happening, shipping it to a

6 residential -- for residential HVAC units.

7 MR. HURST: We would -- we own our

8 own distribution. So, the short answer to

9 your question is, yes, it would be reasonable

10 for me to assume, as a manufacturer that is

11 also a distributor, that if I was taking 13

12 SEER product to an installation site in San

13 Diego, that a violation is about to happen.

14 And I would expect our sales team

15 to have a frank discussion with the builder to

16 say, "You know the federal regulation states

17 this." And I would think, as a manufacturer,

18 it would be my responsibility to report that

19 installing dealer.

20 And that is what I think we were

21 getting back to earlier. I wasn't talking

22 about bounties. I am just saying a violation
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1 is a violation. I don't care if happened one

2 time or fifty times. A violation is a

3 violation.

4 And if you are a contractor or a

5 distributor or a manufacturer and you are not

6 aware of regional standards, I don't know what

7 planet you have been on. I don't know what TV

8 you listen to or radio, but this is pretty

9 pervasive in the industry. I don't think

10 there are a lot of folks out there -- hey, if

11 they don't, they are going to learn real

12 quick, and they should learn real quick

13 because at some point ignorance of the law

14 can't carry for five years.

15 "You know, I am just a simple,

16 stupid guy, and I have been stupid a long

17 time." It doesn't cut it. I mean, if we are

18 going to have teeth to this thing, let's

19 enforce the law and enforce it.

20 MEMBER CLARK: Yes, back to the

21 safe harbor statement, I guess the way that I

22 would like to think about it is, you know,
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1 let's pretend like somehow, as a manufacturer,

2 we become aware of an installation in Southern

3 California that didn't comply. We don't know

4 the past. You know, we just found out kind of

5 thing.

6 We would hate to run into a

7 situation where we report it to the Department

8 of Energy and that leads to this just

9 mushrooming of activity because we talked

10 about this one situation, right? And so, in

11 some way, it seems like we need to construct

12 things in a way that doesn't make people think

13 twice -- and I am just saying as a

14 manufacturer; the same would be for a

15 distributor; the same would be for a dealer. 

16 You would want to be able to talk about the

17 given situation and not necessarily talk about

18 your business for the past five years, right? 

19 So, you would want to partition this situation

20 off a little bit somehow with the safe harbor

21 statement.

22 MEMBER MELCHI: This is Jon with
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1 HARDI.

2 I keep wondering if there

3 shouldn't be some presumption -- having not

4 worked with DOE on these enforcement matters

5 before, if there is some presumption of

6 innocence for a contractor who installs -- you

7 know, if his company is reported for an

8 illegal install in Kentucky, and I guess to

9 Ray's point there, there is a hell of a lot of

10 difference between Ohio and Kentucky, and it

11 is not just the climate.

12 (Laughter.)

13 But that is just from somebody

14 born in Cincinnati.

15 (Laughter.)

16 But, you know, if he is turned in

17 by a fellow contractor or somebody else, I

18 think there would probably be -- is there a

19 presumption of innocence? And that gets to my

20 point earlier of exactly how would you prove

21 there was a violation, unless there is an

22 email, to Neil's point earlier, saying, "Hey,
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1 I want to install this in Lexington."? How

2 would that be proven? And is there a

3 presumption of innocence for that?

4 Maybe a little background on my

5 part. My grandfather was a contractor until

6 he quit installing systems at age 81, when my

7 Nana made him quit. And, you know, I am sure

8 he knew about all of the different

9 regulations, and I know he did, but maybe he

10 wouldn't be as prepared to deal with a DOE

11 inquiry as some of the manufacturers are

12 today.

13 And I think, wherever we go, we

14 need to think about, will that contractor have

15 the ability to represent themselves in an easy

16 manner without DOE coming directly at them in

17 what some may see as an overly-aggressive way?

18 MR. RAWALD: Right. So, what we

19 seem to be kind of swirling around here is

20 these consequences. And I think it is because

21 of the acknowledgment of the fact that being

22 deemed a routine violator would, indeed, be a
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1 consequence.

2 And so, the question is, what will

3 be the Department's mechanism or the science,

4 and what is a routine violator? And that is

5 the question that I guess I started with and

6 I want to come back to, is this determination

7 that someone is a routine violator, which,

8 then, triggers this kind of requirement that

9 you knowingly sold to this routine violator. 

10 I mean, someone has to be a routine violator

11 in order for a manufacturer to knowingly sell

12 to that person. And so, how do we determine

13 whether or not that person is, indeed, a

14 routine violator?

15 MEMBER MELCHI: Doug, I mean, we

16 are, as we have discussed, we are constrained

17 by certain definitions. And it says

18 "routinely," and "routinely" is not one.

19 Now I think we all have an

20 interest in making sure that this is

21 compliant. But, as far as we are talking

22 about in this room, "routinely" is more than
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1 one.

2 MR. EISNER: I mentioned earlier

3 that one approach for something like this that

4 could be effective is, instead of putting

5 numbers, so many violations in so many days

6 out of so many that are sold, you could list

7 criteria that the agency is to consider in

8 making a determination.

9 And it seems to me -- and I would

10 like to hear some thoughts on it after we

11 return from a break -- as to whether one of

12 the factors you will consider was whether

13 information provided by one of the parties to

14 the charge, so to speak, helped the agency

15 discover the violation.

16 So, if you are a manufacturer who

17 said, "You know, this guy may be violating the

18 rules here, and I have been selling them

19 equipment. And I am just finding out about

20 it," the agency can say, "Okay, we are not

21 going to charge the manufacturer here because

22 we wouldn't have found out about it without
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1 hearing from them."

2 It is a factor they can consider;

3 they can weigh-in with everything.

4 Do you want to wait until after

5 the break?

6 MR. RAWALD: This is Doug.

7 I just want to build on something

8 Neil said because he said "for the Department

9 to determine". And so, the question is, does

10 there need to be a departmental determination

11 that someone is a routine violator? I mean,

12 is that something that is necessary? Does it

13 make sense? Does it seem to be an important

14 part of the process in assessing this kind of

15 concern?

16 You know, does the Department need

17 to determine that Company XY&Z is a routine

18 violator before assessing a penalty against

19 the manufacturer for selling to that person? 

20 And so, I think I put that to you because we

21 haven't discussed that as a necessary pre22 condition. And so, it may or may not be, as
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1 folks want to talk about it.

2 MR. EISNER: Yes, and I did not

3 intend that to be a chart. I intended that to

4 be for decisions on whether to take

5 enforcement action.

6 Harvey? And then, we will take a

7 break.

8 MEMBER SACHS: This is Harvey.

9 I am hearing, but perhaps

10 extrapolating too far, that routine violator

11 is first signaled by the aggregation of

12 reports to DOE. And my own instinct is that

13 this reporting should be encouraged by holding

14 people harmless, by cash awards to

15 contractors, by whatever mechanisms are

16 appropriate.

17 But it is the building-up of

18 aggregation, aggregated data, that point

19 toward noncompliant installations that would

20 trigger the process, not because I think that

21 that is the only way, but I can't think of any

22 way that is more likely to be effective.
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1 And I am not interested in going

2 after the one-offs. It is the persistent

3 violator. I think it is a wonderful term.

4 Thank you.

5 MR. EISNER: Let's take a break. 

6 Come back at a quarter after 3:00.

7 (Whereupon, the foregoing matter

8 went off the record at 3:01 p.m. and went back

9 on the record at 3:17 p.m.)

10 MR. EISNER: We have Hampton

11 Newsome, who is going to join me upfront here,

12 who is willing to listen to your questions and

13 try to answer them, if he can, I'm sure.

14 MR. NEWSOME: Hampton Newsome.

15 Well, I keep in touch with

16 everybody over the phone. And it is funny

17 when I come to these meetings that I see all

18 these people that I kind of know over the

19 phone, but it is good to be here.

20 And we have moved offices

21 recently. So, we are only like four blocks

22 away. So, I can make it over here more often
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1 for meetings like this. You know, I am happy

2 to be here and to discuss a lot of these

3 issues.

4 But a lot of them have such small

5 involvement with what FTC does that, you know,

6 I just feel like I would be taking up space at

7 a lot of things.

8 But, with this particular

9 situation, what I am going to do is just go

10 through really quickly some of the things that

11 the FTC is doing and just some brief thoughts

12 I have. And then, we can just discuss.

13 I understand last week there was a

14 lot of discussion, or maybe it was the week

15 before. I think I was out of the office at

16 the time. So, we can follow up on some of

17 that stuff.

18 But I have to say I agree with

19 Ray's comment that, at least for me, this is

20 incredibly mind-bending. I am surprised there

21 are not a lot of little bowls of Advil around

22 the table for everybody. And, you know, I
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1 don't envy you in trying to -- oh, there you

2 go. Okay.

3 (Laughter.)

4 The Advil is over here.

5 But, anyway, so the FTC was

6 charged under the statute with doing labels

7 for the regional standards, to communicate

8 regional standards to installers, industry

9 members, consumers, et cetera.

10 And as everybody knows, we issued

11 a Final Rule early last year that has these

12 unusual labels, unusual for FTC because

13 there's lots of information on them, maps, and

14 things like that, and charts, and things like

15 that. And I think most everybody in here

16 participated in one way or another in that

17 proceeding.

18 So, there were labels for furnaces

19 and central air. And the furnace requirements

20 for regional standards, because of the

21 settlement and what is going on with that, we

22 are going to have to clean up those labels and
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1 create something for furnaces to update those

2 labels with information that doesn't have to

3 do with regional standards. And we sought

4 some comment on that process. And so, that is

5 something we will be working on this fall, to

6 just kind of clean that up.

7 We also published ranges for the

8 central air a week or two ago, but, as

9 probably some of you might know, we need to

10 send a correction notice on some of those

11 numbers. And that will hopefully come out in

12 the next couple of days. So, hold off on

13 those in terms of if you are doing labels.

14 So, that is kind of what is

15 happening with the FTC label. And just a

16 couple of things before we get into the

17 discussion, just my thoughts on this. And

18 obviously, I am just speaking for me and not

19 the Commission or anything like that.

20 The label, the element of the

21 label that deals with regional standards is

22 really there to help implementation of the
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1 standards and to help DOE in their program. 

2 And in my view, it should not be -- we don't

3 want that label to wag the dog of this

4 operation. The label can be changed if the

5 law changes. The label can be changed if

6 people think that there is a problem with it

7 and we need to update it.

8 It is possible that the work that

9 you guys are doing might lead to a legal

10 scheme, an enforcement scheme, that people,

11 when we were doing the label, that people

12 didn't really, you know, weren't anticipating. 

13 The label now assumes that this is enforced at

14 the installer label, and the information on

15 the label is really there to help the

16 installer and the consumer decide, well, can

17 I install this here. And if those rules

18 change, then we will need to change the label.

19 Now, that being said, any changes

20 to the label will have to be done at the speed

21 of rulemaking.

22 (Laughter.)
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1 So, we are looking at -- you know,

2 what we have got in place now for January is

3 what is in place. And I think we will all

4 need to live with it. And if this proceeding

5 results in differences and changes that we

6 need to look at, then we can look at the

7 label.

8 And if there are ideas, you know,

9 things that people are interested in changing

10 on the label, that can be discussed. And you

11 can always petition the Commission to change

12 the rule and that kind of thing.

13 My personal view is that at this

14 point, given the pretty weighty issues you

15 guys are discussing, it might make sense to

16 just hold off and see where we are before we

17 start fiddling around with the label. But,

18 you know, there might be different views on

19 that, and I might change my mind on that, too. 

20 But that is just my thought off the cuff.

21 And I guess that is about all I

22 have. And my last point is -- I don't have my
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1 glasses; I can't read it. So, if anybody has

2 any thoughts and wants to talk about it -- I

3 think I already covered it.

4 MR. RAWALD: And this is Doug.

5 And I would note that we have put

6 up on the screen behind Hampton the label for

7 split-system central air conditioners that

8 will be applicable on January 1st that shows

9 the range that we were discussing at our last

10 meeting.

11 MR. NEWSOME: Yes, and I

12 understand this, and I have talked with some

13 of you about the mini-range that we added to

14 the label in response to comments during the

15 proceeding. And before that, for decades, the

16 label, as everybody knows, had just one number

17 for these types of systems that reflected the

18 highest sales --

19 MR. RAWALD: The highest sales

20 volume combination.

21 MR. NEWSOME: -- volume, yes. And

22 with a little statement that said, you know,
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1 this will vary depending on what

2 coil/condenser combination is installed.

3 MR. EISNER: Any questions for

4 Hampton?

5 MEMBER CLARK: This is Gary Clark

6 from Goodman.

7 You know, you kind of joked about

8 the speed of rulemaking. I mean,

9 realistically, if we wanted to make a change,

10 you know, ballpark, how long would it take?

11 MR. NEWSOME: Well, we are

12 generally -- I think the quickest rule I ever

13 did was a couple of years ago on like

14 biodiesel or something, and we did it in like

15 six or seven months or something like that. 

16 And that was painful.

17 And here in this case, given all

18 the issues that are floating around, I don't

19 know. I can't guarantee it. And a lot of it

20 depends on how complicated the issues are,

21 what is happening with the workload elsewhere. 

22 So, at this point, certainly, anything we
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1 would start now would be well into next year.

2 MEMBER CLARK: Yes, okay.

3 As you mentioned in the past, the

4 only rating that was shown was the highest

5 sales volume tested combination. And there

6 were complaints about that because, you know,

7 depending on what you matched up the outdoor

8 unit with, you could get a significantly

9 different performance, which is what you have

10 depicted in the new change, which we think

11 makes a lot of sense.

12 But the fact of the matter is

13 that, at the same time, we took away showing

14 what the highest tested sales volume

15 combination is.

16 MR. NEWSOME: Uh-hum.

17 MEMBER CLARK: So, from our

18 perspective at Goodman, we would be a

19 proponent of making a minor change to what is

20 here and adding some denotation of what we

21 think the typical efficiency for this system

22 is going to be, like it used to be.
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1 MR. NEWSOME: Okay.

2 MEMBER CLARK: So, it would be in

3 addition to what we have here.

4 MR. NEWSOME: And what is the -- I

5 can imagine there are several benefits to

6 that, but just in your view, what are we

7 getting out of that?

8 MEMBER CLARK: For instance, with

9 a 14 SEER, with the 13 SEER minimum in the

10 North and the 14 SEER minimum in the South, as

11 part of the regulations, one of the

12 requirements for a unit that is sold in the

13 South is that its highest sales volume tested

14 combination is at least 14 SEER.

15 MR. NEWSOME: Uh-hum.

16 MEMBER CLARK: And so, for

17 instance, on the one that we have up here

18 where it shows 13.0 to 14.2, it is difficult

19 to decide if that is a qualifier for the

20 South --

21 MR. NEWSOME: Uh-hum.

22 MEMBER CLARK: -- just looking at
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1 the label.

2 MR. NEWSOME: Uh-hum.

3 MEMBER CLARK: So, for instance,

4 in this example, if we had, let's say, an open

5 triangle at 14 SEER or some denotation on

6 there that the highest sales volume tested

7 combination was 14 SEER, then, too, the dealer

8 or the homeowner in the South, they would be

9 able to readily understand that that unit if

10 a qualifier for the South.

11 MR. NEWSOME: Okay. Well, just to

12 back up, to deal with my ignorance here, are

13 you saying that if the high sales combination,

14 that that is the touchstone for whether it is

15 installed in the South or not? Is that true?

16 MR. RAWALD: This is Doug.

17 I want to jump in because that is

18 not exactly where we are, and that is part of

19 the confusion that we are having in this

20 discussion.

21 So, there are certain units that

22 can be sold not as a system as replacements
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1 into a current system. And those pieces that

2 are sold individually and to be put into an

3 existing system have to be able to be tested

4 in compliance with the regional standard. So,

5 those would be ones where, because high sales

6 volume combination is the touchstone of

7 testing, would have to be tested as a

8 combination in compliance with the standard.

9 When installing a system, what we

10 haven't said, and the question that Karen

11 asked this morning, and it is still an open

12 question, is, if it tested as a combination,

13 if there is a combination out there that

14 exists that is below 14 and a combination that

15 is above 14, is it okay to sell in the region? 

16 This label presumes that it would be, right,

17 that as long as it is matched with coil that

18 is performing above 14, it I okay? But we are

19 telling you the condenser might be above or

20 below 14, depending on what coil it is matched

21 with.

22 And so, that lack of an answer to
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1 that question that Karen asked this morning is

2 somewhat part of a problem that is indicative

3 of what the label might be talking about here.

4 So, in Karen's hypothetical, if we

5 were to say, as a Department, "Hey, you have

6 to have your minimum performance be 14, no

7 matter what coil you are mixed with," then

8 this would be not usable in the Southern

9 Region, and it would have to be at least 14 to

10 something above 14.

11 Whereas, if we were to come out,

12 as a Department, and say, "No, it's okay as

13 long as the final installed system performs at

14 14 or above," then this label become somewhat

15 -- you would say, okay, what are we getting in

16 here? What is the combination that works?

17 MEMBER CLARK: Yes, I guess my

18 comments were -- this is Gary again -- I guess

19 my comments were based on the fact that we got

20 clarifying information from the Department

21 earlier that did not answer Karen's. So, I am

22 playing with the cards we have got in front of
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1 us right now, which would say that that unit

2 that we have listed up here might be a

3 qualifier in the South.

4 MR. NEWSOME: Uh-hum.

5 MEMBER CLARK: But, in the example

6 I talked about, if the highest sales volume

7 tested combination was shown on that label,

8 and if it was 14, then it would be a

9 qualifier. Or, conversely, if the highest

10 sales volume tested combination was 13, and it

11 was shown on that chart, we would know that it

12 would be a non-qualifier --

13 MR. NEWSOME: Okay.

14 MEMBER CLARK: -- based on what we

15 know right now.

16 MR. NEWSOME: Yes. And certainly,

17 if the rules are set up in a way that it is

18 the high sales volume, then that number would

19 be very helpful, in addition to just

20 identifying the thing. But, if it is not,

21 then you kind of lose that benefit from it.

22 And I think, when you are thinking
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1 about these issues, this kind of brings up a

2 central concern for me is, as the label is set

3 up now, we don't want to be in a situation

4 where we change those numbers up top or the

5 way they are presented in a way that it states

6 or implies to people that it is illegal to put

7 this unit in a certain area, when, in fact,

8 under certain circumstances, it would be legal

9 to do so. You know, we kind of put a premium

10 on accuracy on the label.

11 So, that is just something to

12 think about, like, well, if we were trying to

13 fix this problem, are we creating a problem

14 with the label, so the label is no longer

15 accurate? And maybe that can be solved by

16 changing the label, or whatever, but it is

17 just something to think about.

18 MR. RAWALD: I guess I want to

19 give Karen a chance to talk. She mentioned at

20 the last meeting the idea of a southern label

21 versus a northern label. Is that still

22 something you think might be helpful, Karen?
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1 MEMBER MEYERS: Yes, I think that

2 is certainly one approach. But I guess my

3 question to you, Hampton, is, how do you

4 determine that range? Isn't it based upon the

5 DOE, the way that DOE tells you that that unit

6 has to be rated?

7 MR. NEWSOME: Yes, I think so. 

8 And I would have to check the rule. I don't

9 think we went into a lot of detail on it, and

10 it seems to be in the proceeding there wasn't

11 any real question. It was just, well, the

12 highest and lowest number, and that is what

13 the rule requires.

14 MR. RAWALD: Right, but the range

15 on the label is based upon the certified

16 combinations of various basic models the

17 manufacturer represents for that condensing

18 unit, based upon likely the use of an ARM

19 after testing the highest sales volume tested

20 combination.

21 So, you have your point in time

22 where your high sales volume tested
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1 combination is and, then, you use your ARM and

2 you come up with a range of combinations that

3 you would certify based upon different coils. 

4 And that is the range that would be on that

5 label.

6 MEMBER SACHS: Are you done,

7 Karen?

8 Hampton, this is Harvey Sachs, and

9 I am glad to see you in person and thanks for

10 coming over.

11 I think you may have heard by now

12 a couple of different things. One of them is

13 that this group, which was convened by the

14 Secretary, doesn't report to FTC at all, but

15 we came together in the hopes of reaching a

16 consensus. And what I have heard so far is

17 that we are not at consensus yet, but we are

18 working hard toward it.

19 But the one thing I heard two

20 weeks ago, when we met last, where there was

21 a consensus, is that your label is going to be

22 a key element of an effective regime for
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1 explaining this to consumers, for use by

2 contractors, and probably for enforcement as

3 well.

4 So, in that context, you don't owe

5 us nothing. But let's assume we do reach a

6 consensus here on the time table that we have

7 looked at or we have committed to trying to

8 reach, which would be October 30th adoption by

9 the parent Committee.

10 Is that consensus likely to carry

11 some weight with your Commissioners to

12 influence something analogous to a Direct

13 Final Rule, or whatever, that would allow a

14 proceeding to make the incremental changes in

15 the label that might really help occur

16 quickly?

17 MR. NEWSOME: Well, you know, I

18 can't predict exactly what will happen as this

19 moves along. But, obviously, if DOE comes out

20 with requirements that make these labels

21 obsolete, inaccurate, what have you, then we

22 will need to look at changing the labels, and
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1 in a timeframe that is consistent with the

2 implementation of the new enforcement regime. 

3 So, clearly, that kind of the first issue.

4 If the results don't really change

5 the content of the label, but there are lots

6 of ideas about, well, the label would serve

7 the program much better if this information or

8 that information was on that, then that is

9 also something we would consider.

10 We will obviously be following

11 this proceeding and talking to DOE staff. And

12 so, we are not going to be going back over

13 there and just forgetting about it.

14 MEMBER MEYERS: So, Hampton, this

15 is Karen with Rheem again.

16 You know, I would submit to you

17 that that label would be illegal in the South

18 because the least-efficient on that range is

19 not 13, per the new efficiency regulations, is

20 not 14. So, you have a range of 13 to 24.5

21 would show the legal, what you are saying are

22 legal minimum efficiency standards. That is
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1 not true, though, for units sold in the South. 

2 That range, that minimum should be 14.

3 MR. NEWSOME: Well, this label

4 applies to all products in this category. And

5 so, that range is accurate for all products. 

6 Now the information here on the regional

7 standards in the chart explains that in some

8 areas that 13 is not going to cut it. So,

9 that is the way this label is set up.

10 You know, I have heard people talk

11 about, well, that there should be multiple

12 labels, or whatever. And that is something

13 that, as you all move along, it is something

14 that you can consider.

15 But, for now, that range applies

16 to all the products, and it is not meant to be

17 necessarily a reflection of the standards. It

18 is a reflection of what is on the market

19 there.

20 It happens that, you know, always

21 the bottom of the range generally matches what

22 the lowest DOE number is.
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1 MEMBER SACHS: But just a nuance,

2 a product rated at less than 14 is not going

3 to be on the market in the South.

4 MR. NEWSOME: Okay.

5 MEMBER SACHS: And I think that is

6 what Karen is driving at. And I certainly

7 don't know where I am going to come out yet,

8 but I am sympathetic to this point of view

9 that that particular label may be quite

10 confusing to people who look at the bar and

11 don't see the fine print.

12 MR. NEWSOME: Uh-hum. Well, this

13 label, because of all the different standards

14 that apply here, because we are talking about

15 EER levels, too --

16 MEMBER SACHS: Yes.

17 MR. NEWSOME: -- in the rulemaking

18 the final product is a single label for this

19 product category. For other products, single20 package and for the furnaces that are now

21 obsolete, because those are much more

22 straightforward, those standards, we were able
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1 to have these kind of custom labels, like this

2 product, it can only be installed in these

3 states. And I think all of you have seen

4 that.

5 For this split-systems, because of

6 all of these numbers here, instead of having

7 eight different labels, we have this one

8 common label that has all the rules in one

9 place right there.

10 MEMBER SACHS: We certainly

11 appreciate that, and I am just trying to --

12 MR. NEWSOME: Yes, and I

13 understand the point you are raising. But

14 this is what was proposed during the

15 rulemaking and what came out of it.

16 MR. RAWALD: Yes, and, Hampton,

17 this is Doug.

18 So, I guess an interesting point

19 for the folks here might be, is there any sort

20 of precedent of, or would there be any

21 interest in, having differing labels based

22 upon the regions that are more akin to being
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1 explicit to what the standard would be for

2 that region? So, a northern versus a

3 southeastern versus a southwestern label, to

4 kind of eliminate the extra information that

5 is on the label and make it for that

6 particular region.

7 I can't imagine what extra burden

8 that would create as far as trying to label

9 these various products before they go out, but

10 I just wonder, from the Commission's point of

11 view, if there is anything else like that.

12 MR. NEWSOME: Well, for the other

13 product categories the labels are like that.

14 MR. RAWALD: Yes.

15 MR. NEWSOME: And I can't keep all

16 this stuff in my head, but for furnaces we

17 have a label that has, if it is below a

18 certain level, then it has a map of the U.S.

19 and says, "This product cannot be" -- or "can

20 only be installed in these states". So, yes,

21 the answer is, yes, it has been done.

22 But, for this particular product
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1 category -- and this is the only one, the

2 rulemaking, where we have this consolidated

3 label that has all the information in one

4 place, just because there are so many numbers

5 there.

6 MEMBER SACHS: This is Harvey.

7 And if I could offer a pet peeve

8 that I have heard from several people, it is

9 not a northern versus a southern label; it is

10 a national label versus perhaps a northern

11 label. It is one that can be sold anywhere

12 versus one that is restricted in its sales to

13 the Northern Region because it has a

14 relatively-low SEER.

15 MR. NEWSOME: Yes, and that is the

16 way it works for the other products. The

17 labels for products that are compliant

18 everywhere, there is no map or anything. 

19 There is just a statement that says this can

20 be installed anywhere, or whatever. I can't

21 remember the details, but --

22 MR. RAWALD: No, Harvey, I
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1 appreciate that point. I think it is a very

2 fine distinction, and one that I am not making

3 when I talk. And so, I really appreciate

4 that.

5 MEMBER SACHS: I was just

6 disclaiming responsibility for the statement. 

7 This was Harvey saying I picked it up from

8 somebody here and recycled it.

9 Thank you.

10 MR. EISNER: Any other questions,

11 comments?

12 MEMBER BALLO: This is Tim with

13 Earthjustice.

14 Just one point to follow up on,

15 though. Although the labels are distinct and,

16 as you say, they say the product can be

17 installed in any state, and there is another

18 label that says only in these states, the

19 range information for furnaces still starts at

20 80 for all products, whether they are in the

21 northern label or the southern label. So, I

22 guess we are asking for something different,
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1 then, for these products.

2 MR. NEWSOME: Okay.

3 MR. EISNER: Other comments?

4 Charlie?

5 MEMBER McCRUDDEN: This is Charlie

6 McCrudden with the Air Conditioning

7 Contractors of America.

8 You know, I realize that this

9 label is a tool for consumers to compare

10 similar products when making purchases. And

11 we are sort of shoehorning that into the

12 application of regional or the enforcement of

13 regional standards here.

14 And so, because of that, I think

15 legibility is so critical for the contractor

16 and the consumer. So, that is my plug from

17 the contractors' side, is that if there is a

18 reason to make changes to this label, if it is

19 possible, I think they would make these labels

20 much more legible and lead to greater

21 enforcement because I think -- and our

22 comments during the rulemaking process said
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1 this -- you know, the homeowner can be a last

2 check to an illegal installation. And that

3 can only be accomplished if they, too, can

4 understand. And that is part of what we will

5 do, I think, with DOE outreach on the changes

6 that come out. I know all the manufacturers

7 and everyone has pledged to help understand

8 legibility. So, that is my plug.

9 MR. NEWSOME: Uh-hum. I am

10 curious in terms of the installer. What are

11 your thoughts on this label? Like how often

12 are they going to be referring to it? I mean,

13 I don't know what -- I don't have anything in

14 particular in mind. But, just if you see it

15 once, a couple of times, do you recheck it

16 every couple of months to make sure I remember

17 this? Because they are not going to be using

18 it in every install.

19 MEMBER McCRUDDEN: Well, I mean,

20 under your new rules, the contractor has to

21 provide that label.

22 MR. NEWSOME: That is true, to the
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1 consumer. But, in terms of the function, this

2 is the only label we have that is kind of this

3 dual consumer/retailer label. We don't have

4 any other labels that really have a lot of

5 information for the seller on it. And so, it

6 is kind of like a new carrot; it is like this

7 hybrid label.

8 And I imagine that the retailer is

9 not going to be looking at it every day. "Let

10 me check my label again."

11 MEMBER McCRUDDEN: Well, okay, I

12 will just take it. We are not using the word

13 "retailer".

14 (Laughter.)

15 MR. NEWSOME: Yes. Well, I know. 

16 I use that because in this labeling program

17 most of the other products we are talking

18 about stores, you know.

19 MEMBER McCRUDDEN: We had about an

20 hour-and-a-half on --

21 MR. NEWSOME: Yes, and I didn't

22 mean to offend anybody.
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1 MEMBER McCRUDDEN: I am not sure

2 how to answer the question in terms of the

3 contractors' behavior with this label and how

4 often they refer to it. And do they become

5 sort of inured to it over time because it is

6 just there and it is on every box, and do they

7 notice it?

8 But, again, going back to the

9 point where, under your new rules, the

10 contractor has to provide this label to the

11 customer before the purchase occurs. And that

12 can be satisfied by providing the

13 manufacturers information because, under your

14 rules, the manufacturers have to make that

15 information in their materials or on their

16 websites. So, based on that, I am assuming

17 that that purpose is being met every time.

18 MR. NEWSOME: Uh-hum. Okay.

19 MR. EISNER: Other comments,

20 questions? Anybody online?

21 (No response.)

22 Okay. No more. Thank you for
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1 coming over.

2 MR. NEWSOME: All right. Well,

3 thanks.

4 MEMBER MEYERS: Sorry, I do have

5 one more question. You say on the label that

6 the system's efficiency rating depends on the

7 coil your contractor installs with this unit. 

8 So, what do you mean by that? Are you talking

9 about a coil-only rating?

10 MR. NEWSOME: We are talking about

11 the combination of the coil and condenser, and

12 that language has been on there since the

13 eighties, I think. I don't think it is that

14 much different than what's --

15 MEMBER MEYERS: So, not the

16 blower?

17 MR. NEWSOME: I think it is the

18 coil/condenser combination that kind of -- I

19 don't know --

20 MR. RAWALD: Yes, it may be a

21 little bit too technical in here.

22 MR. NEWSOME: Help me out.
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1 MR. RAWALD: So, it would be the

2 rating that you would certify to DOE is what

3 we are trying to reflect, understanding that,

4 of course, the blower can affect that rating. 

5 But this is what we are getting at here. We

6 are talking it varies, based upon the

7 different parts that you may use it with. And

8 I think the word "coil" has been used over

9 time, but I do understand the distinction that

10 the blower may also affect the rating, uh-hum.

11 That is something that you guys

12 could point out. I guess, to Hampton's

13 credit, they have been using the same language

14 for quite a long time. So, it is something

15 that never was pointed out before, but maybe

16 we should point out in the future.

17 MR. NEWSOME: I mean, is this is a

18 relatively-new thing?

19 MEMBER ROCKY: No.

20 MR. NEWSOME: So, it has been

21 there forever.

22 MEMBER ROCKY: So, Bryan Rocky.
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1 So, I believe, if I remember

2 right, that language came about in discussions

3 related to the independent coil manufacturers. 

4 Whereas, they cannot provide a rating on this

5 label, but we have to do, as the condenser

6 unit manufacturer. So, that, I think, was the

7 original text there. If you have an

8 independent coil, you might have a different

9 rating than what is on here. But it was

10 usually a minimum or above. It wasn't a

11 range, like we are talking about.

12 MEMBER LATTANZI: Yes, I'm sorry,

13 this is Matt Lattanzi.

14 If you go back one slide, the

15 language actually is different. It is quite

16 different. If you go back one slide, you can

17 see the difference.

18 There you go, right there. The

19 second bullet down.

20 MR. RAWALD: Right, but I think

21 the consistency here is that it still says

22 coils without recognition of the blower.
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1 MR. NEWSOME: The language is

2 different, but it is the same message.

3 MR. RAWALD: Uh-hum.

4 MR. NEWSOME: And this is just

5 less words in the new one.

6 MEMBER LATTANZI: I'm sorry, I

7 think it is more specific on the old label.

8 MR. NEWSOME: Because of the word

9 "slightly"?

10 MEMBER LATTANZI: No. Because of

11 the word "combined with the most common coil". 

12 I think, in my mind, that is the key

13 distinction between that label and the new

14 label.

15 MR. NEWSOME: That is because the

16 old label only had one number, and that was

17 the common coil. And the new label doesn't

18 have that information anymore, which was what

19 was proposed by industry. They wanted to

20 change that. So, that old language would no

21 longer be accurate on the label.

22 MEMBER LATTANZI: Okay.
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1 MR. RAWALD: Are there any other

2 questions for Hampton?

3 Karim?

4 MR. AMRANE: This is Karim with

5 AHRI.

6 Does the label apply to one basic

7 model or it applies to a range of basic

8 models?

9 MR. NEWSOME: What, a single label

10 or?

11 MR. AMRANE: Yes.

12 MR. NEWSOME: Well, we generally

13 allow, if the information on the label, if the

14 rating applies to several different models --

15 and this is common across product categories,

16 including white goods -- the manufacturer can

17 provide multiple model numbers on the label,

18 so that it could apply to several basic

19 models, as long as that information on the

20 label is accurate for all those models.

21 MR. EISNER: Okay. One more

22 chance. Anybody else?
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1 (No response.)

2 Comments? Questions? Online?

3 (No response.)

4 Okay.

5 MR. NEWSOME: All right. Well,

6 thanks a lot.

7 MR. EISNER: Thank you.

8 MR. NEWSOME: And if anything else

9 comes up, just let me know.

10 MR. EISNER: All right. We are

11 back to knowingly selling.

12 (Laughter.)

13 MR. RAWALD: Knowingly violating.

14 MR. EISNER: Anybody get some good

15 ideas during the break?

16 (No response.)

17 So, we are okay with where we are? 

18 Anybody want to tell me where we are?

19 (Laughter.)

20 MR. RAWALD: Right. So, as I

21 recall, Neil had posed a question to the

22 group, and then, I had thrown a second
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1 question to the group.

2 And so, I guess I would be curious

3 to hear if there are any thoughts on the need

4 for the Department, as a predicate matter, to

5 find someone to be a routine violator before

6 taking the step of bringing an action against

7 a manufacturer for knowingly selling to that

8 routine violator.

9 As I explained -- and I want to

10 translate this from what we currently do to

11 what may be in this context -- so, in the case

12 of a product that is found noncompliant, what

13 the Department does now is we first issue a

14 Notice of a Noncompliance Determination. We

15 say, hey, we tested your refrigerator and it

16 didn't meet the minimum standard.

17 And then, we go ahead, and after

18 issuing that notice, we, then, follow it up

19 with a Notice of Proposed Civil Penalties,

20 saying, okay, now because you sold this

21 refrigerator, we are going to charge you money

22 for selling that bad refrigerator.
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1 In the corollary context here with

2 this particular concern that we have here --

3 and there is something popping up on the

4 window; I don't know if we can get rid of that

5 -- well, the question is, do we a Notice of a

6 Finding that someone is a regional violator or

7 routine violator -- excuse me -- of the

8 regional standard before taking action against

9 the manufacturer for assessing civil penalties

10 for knowingly selling to that routine

11 violator?

12 There is hand up in the back from

13 Don Surrena. I guess he wants to jump right

14 in.

15 MR. SURRENA: Don Surrena, NAHB.

16 If it is a routine violator, they

17 have done it more than once. So, until they

18 become routine, whatever "routine" means, then

19 the Department wouldn't be inclined to let the

20 manufacturer know that there would be a

21 penalty.

22 But the Department could let them
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1 know if there was a violation of their product

2 use, so that the manufacturer could know who

3 it was that did it. That is how you would

4 establish routine. More than once could be

5 considered routine. Seven times could be

6 routine. It has got to be more than once to

7 be routine.

8 MR. EISNER: When you are using

9 that, though, part of the question is, for

10 enforcement purposes, not when the agency

11 knows it, but when the manufacturer knows it

12 or should have known it. So, the agency may

13 have reason to do an investigation. It does

14 the investigation and it finds out, once

15 again, for the past year, that this guy has

16 been installing these devices that are illegal

17 in that area, and the manufacturer should have

18 known it.

19 No prior knowledge information

20 published by the Department of Energy because

21 they didn't know about it. But, when they did

22 find out about it and investigate it, what if
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1 they found routine violations going on all the

2 time? And they can also show that the

3 company, the manufacturer, should have known

4 that or did that know that?

5 MR. SURRENA: If the manufacturer

6 knowingly continued it for 100 units, that is

7 knowingly. If they had no knowledge of it,

8 they were just making the sales, then it is

9 not knowingly known.

10 MR. EISNER: Knowledge is a

11 requirement, but the statute I believe says

12 "should have known".

13 MR. SURRENA: I believe it says

14 "should have". I don't know that, but --

15 MR. RAWALD: And the definition of

16 "knowingly," it is both actual knowledge and

17 we could say constructive knowledge under law,

18 which is should have known from your standard

19 practice. So, we don't want manufacturers

20 turning a blind eye. So, that is what the

21 "should have known" part is. So, that is what

22 knowingly can be defined, as both actual
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1 knowledge and should have known type of

2 knowledge.

3 MR. SURRENA: And circumstance

4 determines whether it was knowingly done. If

5 there's 100 cases of it, then an investigation

6 is taken to the manufacturer. If he did not

7 knowingly know it or shouldn't have known it,

8 then there is not a violation.

9 MEMBER SHEPHERD: So, Doug, you

10 are asking us whether we think that,

11 basically, there would never be a charge

12 against a manufacturer under this section

13 unless the Department has first issued a

14 Notice of Violation? Is that what you are

15 asking?

16 MR. RAWALD: I am asking you folks

17 if that is a necessary predicate, yes.

18 MEMBER SHEPHERD: Does everybody

19 get that?

20 MR. RAWALD: Uh-hum, right. And I

21 guess with that comes the corollary question,

22 which would be, is it only sales after such a
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1 notice would be issued or could I issue a

2 notice saying this person is a routine

3 violator, and, by the way, picking on Karen

4 because she is not here, "Rheem, you sold them

5 units now for the past year. You have been

6 knowingly violating that." Or do I have to

7 wait until after I make that notice and, then,

8 I can go after Rheem, to pick on Karen, with

9 no actual value to that statement?

10 MEMBER SACHS: Doug, this is

11 Harvey.

12 And us geeks would try to think

13 about a logic tree or a flowchart. And the

14 first question you asked is, once we have

15 identified a routine violator -- reports have

16 come in from somewhere and we followed them

17 up, and this is a routine violator -- should

18 we publish that information? And to me, the

19 answer -- and there may be counterarguments --

20 but the answer is a resounding yes.

21 I just picked up in The Washington

22 Post today a small news item about a
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1 California automobile dealer who has just been

2 arrested for resetting the odometers on 60,000

3 vehicles.

4 There is a naming and shaming

5 which happens in the marketplace. And if you

6 have had any sort of a quasi-due-process about

7 discovering that this, in fact, a routine

8 violator, I think the public needs to know.

9 MR. RAWALD: So, I think you raise

10 a couple of great points there. So, first of

11 all, in these corollary Notice of

12 Noncompliance Determinations that I keep

13 bringing us back to for manufactured products,

14 I would say that in my enforcement experience

15 some or many manufacturers actually find that

16 to be more of a penalty than the actual civil

17 penalty they pay to the government. You know,

18 the paying of thousands of dollars is much

19 less concerning to them than the public shame

20 of having produced or manufactured a

21 noncompliant product.

22 MEMBER SACHS: But in this case, a
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1 potential violator, if I am understanding you,

2 is not -- the habitual, the routine violator

3 would be some sort of scumbag contractor.

4 MR. RAWALD: Well, it would be a

5 distributor, dealer, or contractor, as

6 enumerated by the statute.

7 MEMBER SACHS: Right.

8 MR. RAWALD: Uh-hum.

9 MEMBER SACHS: And that has at

10 least some fig leaf of plausible deniability

11 for the manufacturer.

12 But the point is that, in terms of

13 community things, in terms of community

14 broadcast news, stuff like this, in terms of

15 publicity, utility incentive programs, and a

16 lot of other things, identifying that bad

17 actor is, I would think, a pretty powerful --

18 MR. RAWALD: And excuse me,

19 Harvey. I agree with you.

20 MEMBER SACHS: Okay.

21 MR. RAWALD: Yes. I agree with

22 you.
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1 MEMBER SACHS: So, then, the

2 question is, the next step in the logic flow

3 is enforcement action against the

4 manufacturer. And I am just trying to make

5 the point that, to me, that is a separate item

6 from the question of the initial disclosure.

7 MR. RAWALD: No, I am 100 percent

8 along the same lines of you, which is why I am

9 asking the question.

10 (Laughter.)

11 Do we need to have this predicate

12 action? I think there is some value in that. 

13 But it is out there, put on the table. We

14 have no regulation regarding it. As a

15 question for the group, do you believe that we

16 should create some sort of process by which we

17 issue a notice saying this person is a routine

18 violator, thereby putting the public shame,

19 and also putting the manufacturers on notice,

20 hey, you shouldn't be playing in the sandbox

21 with this person because they have been a

22 routine violator?
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1 MR. HURST: This is John Hurst

2 with Lennox.

3 I support that. I like the idea

4 of the Department being the arbiter as to who

5 is a bad actor or not. And that takes the

6 subjectivity out of the manufacturer's hands.

7 Can you go back to the other

8 definition that you had up there?

9 MR. RAWALD: The previous.

10 MR. HURST: The previous, yes.

11 Okay. So, here's the question

12 then: if the Department does identify a bad

13 actor, it is now unlawful for us to sell to

14 that bad actor. They are, in fact, out of

15 business. That is what we are saying.

16 MR. RAWALD: That is my question

17 to you, folks, as members of the industry. 

18 What would be the impact associated with a

19 finding by the Department? I can only tell

20 you from the manufacturers' point of view --

21 MR. HURST: It has teeth.

22 MR. RAWALD: Yes.
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1 MR. HURST: It's got teeth. 

2 You're out of business.

3 MR. RAWALD: Uh-hum.

4 MR. HURST: Yes.

5 MR. EISNER: And to put them out

6 of business, remember, it is not the day they

7 say, "We are bringing an action against you." 

8 It is the day it is upheld through all legal

9 challenges. That is the way I would read it.

10 MEMBER CLARK: Yes, that is what I

11 was wondering. You know, I guess I am okay

12 with what you are saying, as long as there is

13 due process, right? You know, we would hate

14 for the announcement to go out because there

15 is a thought that maybe there is an issue. 

16 And then, as you peel back the onion, six

17 months later you say, "Whoops, there really

18 wasn't a problem." Well, for six months, it

19 has been a big problem for somebody, which

20 doesn't seem right. So, as long as we put

21 things in the right order, you know, it makes

22 sense.
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1 MEMBER BALLO: This is Tim with

2 Earthjustice.

3 And I actually don't agree that

4 the manufacturer should have no liability

5 until there has been a finding by the

6 Department that there is routine violations

7 occurring, because that allows the

8 manufacturer to collude with the contractor or

9 the dealer or distributor, whoever, up to the

10 point where the Department makes a finding

11 and, then, say, "Oh, we're pulling back now

12 and we have clean hands."

13 MR. RAWALD: Right, and that gets

14 to my second question I had before, which is,

15 would any action against the manufacturer have

16 to wait until a Department finding or, if I

17 found someone was a routine violator, and, oh,

18 by the way, Company X -- and I named Karen's

19 company before, just out of pure convenience

20 -- has been dealing with that company for the

21 past year. So, they actually are liable for

22 what they have been doing. So, how do we view
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1 those two operating together, I guess is my

2 question.

3 MR. HURST: This is John Hurst

4 from Lennox.

5 And, Tim, we're not that evil.

6 (Laughter.)

7 I think, as manufacturers, as I

8 think through that, it would be incumbent upon

9 me -- these are our customers, by the way,

10 these folks that actually buy our equipment

11 and, then, install it. I have no desire to

12 put my customers out of business. What I want

13 them to do is I want them to install my

14 product correctly, and I want it to be

15 compliant with the law because a homeowner,

16 regardless of which side of the river, if they

17 get a noncompliant product and they have a

18 warranty issue, that ultimately comes back to

19 me.

20 So, I have no vested interest, as

21 a manufacturer, saying a contractor cheat

22 installed the wrong stuff. And if I am
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1 starting to see bad stuff, I am going to tell

2 my customer, and I am certainly going to tell

3 my District Manager and my Territory Manager,

4 "You need to get this contractor straight on

5 abiding by the law, because if he gets busted

6 or when he gets busted, he's out of business,

7 and that sale that you had to have last month

8 is gone." So, I think there is an incentive

9 for the manufacturer to ensure that their

10 customers are doing the right thing.

11 MEMBER MELCHI: This is Jon Melchi

12 with HARDI.

13 I want to echo what Gary said

14 about due process in this. If we are going to

15 talk about putting somebody out of business

16 for what may be two violations of this, it is

17 my assumption that every manufacturer at this

18 table has probably gotten a letter from you

19 more than twice. We are talking about, I

20 think, somebody's livelihood and what they do

21 for a living. So, I do want to make sure

22 that, if we are talking about making this sort
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1 of information, whether it is a two strikes

2 and you're out, a public airing of grievances,

3 that all steps have been taken to make sure

4 that you have, indeed, proven that they

5 knowingly and willfully violated the standard.

6 Because it just seems, you know, I

7 think we all want strict enforcement, but just

8 the thought of --

9 MR. EISNER: I think I am hearing

10 two different things here. I heard, one, you

11 have to find the installer is a bad operator

12 before you can go after the manufacturer for

13 doing --

14 MEMBER MELCHI: No, and I --

15 MR. EISNER: And you're saying now

16 you have to prove the manufacturer knowingly

17 and willingly did something.

18 MEMBER MELCHI: No. No, no. No,

19 what I am saying is that, if you are going to

20 make public or make known to a manufacturer

21 that a contractor has routinely violated the

22 regional standard, that every step needs to be
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1 taken properly -- and I am not clear what

2 those steps are today -- to ensure that that

3 is, indeed, the truth.

4 Because if you, for some reason,

5 put out a public list that says this guy is a

6 bad actor, then none of these manufacturers

7 will be able to sell to him. You have

8 effectively put him out of business. So,

9 everything needs to be done, all due processes

10 to make sure that that is, indeed, the case.

11 And today, I am still unclear as to how you

12 would prove that.

13 MR. RAWALD: Right. And, Jon,

14 this is Doug.

15 So, there is a blank slate as far

16 as what the process would be, right, because

17 this is a new process. So, the question is

18 maybe you folks -- and I am looking at you and

19 Charlie and also at Chuck, who would be the

20 ones representing people who would be affected

21 by such a finding -- could put together kind

22 of a list of the things that you think would
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1 be an appropriate method of finding or

2 according due process before reaching such a

3 finding. I think that might be at least kind

4 of a framework of, hey, here is what we think

5 we need before one of our guys should be found

6 to be a violator. That might be helpful for

7 us for discussion.

8 MR. EISNER: Let me also raise

9 another question that I am having a little

10 trouble putting my hands around here. We

11 still have to define what is "routine". So,

12 let's keep it simple. Three violations within

13 six months or three violations within a year,

14 that is it.

15 So, Case No. 1, a company does a

16 bad installation. The company, they shouldn't

17 have put that in. They propose a fine. The

18 company pays the fine, essentially, admitting

19 I did bad.

20 A month later, the same company

21 pays a fine, admitting they did it a second

22 time. The third time rolls around. They pay
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1 the fine. Now they have also met the standard

2 for "routine" if you establish this three in

3 six months.

4 So, what is it you are asking? 

5 You have still got to define what "routine"

6 is. And does "routine" automatically, when

7 you get to the third one, does that

8 automatically happen? The record is there on

9 the database that they have paid three fines

10 in six months. Therefore, they are a bad

11 operator.

12 Are you expecting, also, for DOE

13 to send out a letter to all manufacturers

14 saying, "You can't deal with this guy

15 anymore."?

16 MEMBER CLARK: So, this is Gary.

17 On the subject of what constitutes

18 "routine," I think it ought to take into

19 consideration how big the dealer is or what

20 the volume is because one or two sales for a

21 small dealer might constitute "routine," but

22 for a large dealer that is selling hundreds of
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1 these units every year, you know, one or two

2 instances might not constitute "routine".

3 MR. EISNER: And again, I would

4 ask a question. Do you want it to be

5 automatic, so it is very clear when it is

6 going to happen? So, if it is, instead of

7 three in six months, it is 3 percent of the

8 units that you have sold in six months, and

9 there are 2.9 percent, and the next

10 installation would put them over the top, so

11 they just don't install any more for the next

12 six months. Are they okay?

13 MEMBER BALLO: This is Tim.

14 I am not sure we should tailor the

15 regulations around the small end of the

16 market, I am basing it on as a percentage of

17 their total business, because I think the

18 small end of the market is going to escape

19 whatever we come up with.

20 I would be more interested in

21 coming up with, to the extent we want to

22 define "routine," which I guess I can
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1 understand the desire to do so, something that

2 is triggered either by a certain number of

3 violations within a time period or a certain

4 total number of products. So that we are

5 getting after the big players that have turned

6 to the dark side, I guess, for lack of a

7 better term.

8 MEMBER SACHS: Neil?

9 MR. EISNER: Harvey?

10 MEMBER SACHS: This is Harvey.

11 And I want to rewind the tape

12 about two minutes and just get back on the

13 record to Jon's very real concerns. I think

14 I used, in raising this topic of "routine

15 violators," the term "due process". But I

16 think there is a lot of discussion about what

17 that actually means. I certainly don't mean

18 something analogous to criminal law. Again,

19 I am not an attorney, but the standard has to

20 be much more lax than that. This is a civil

21 matter.

22 And I am just a little bit
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1 concerned that we could drag out the

2 disqualification of the contractor for many

3 years at exorbitant cost if we have a real bad

4 actor.

5 MR. EISNER: This is something for

6 the lawyers to look at then.

7 MEMBER SACHS: Yes.

8 MR. EISNER: Because you have all

9 referred to it as "putting them out of

10 business". That could be a constitutional

11 violation that would require the kind of due

12 process you describe perhaps.

13 MEMBER SACHS: We have there, if I

14 might comment, an assertion by Mr. Hurst, for

15 whom I have the greatest respect, but this is

16 not an established fact, either. There is

17 just an awful lot has got to be gone through

18 before we can say what the appropriate due

19 process is for that finding of a routine

20 violator.

21 MR. EISNER: So, was it an

22 established fact that Hurst was respected
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1 or --

2 (Laughter.)

3 MEMBER SACHS: Yes, I think it is

4 an established fact that Mr. Hurst is a 13,

5 the lowest common denominator.

6 (Laughter.)

7 So, John, I just wanted to make

8 sure that I don't accept the extrapolation

9 from what you were suggesting; I think that is

10 an open issue.

11 Thank you, and we return now to

12 our regular programming.

13 (Laughter.)

14 MEMBER MEYERS: So, this is Karen

15 with Rheem.

16 So, I am still very fuzzy on this. 

17 So, if there is a contractor who illegally

18 installs 10 Rheem units, how I am, as the

19 manufacturer, responsible for that when I

20 didn't sell him those units? I sold my units

21 to the distributor. And the contractor

22 installed them in an illegal region, but I
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1 didn't sell them to him.

2 So, you're coming after me as a

3 manufacturer and saying, "You have to quit

4 doing business with him." I'm not doing

5 business with him.

6 So, I am still very fuzzy on how

7 this would work because I don't see -- you

8 know, I am missing the connection.

9 MR. EISNER: I think -- and again,

10 you have got lawyers in the room to give you

11 advice on that -- you wouldn't have a problem

12 there. If the person you are dealing with you

13 should have known was violating, not some

14 person you didn't deal with and know nothing

15 about that person even having your product. 

16 So, it is knowingly sell a product to someone

17 you know, you deal with, that violates it.

18 And what you have described in

19 terms of the way the world works is the

20 manufacturer can sell to any one of those

21 people, the distributor, the dealer, because

22 you could perform all of those things.
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1 So, if you know the person or

2 should have known that the person is illegally

3 installing it, then you have got a problem. 

4 But, if you don't, and you are selling it to

5 a distributor who as far as you know is doing

6 a perfectly-legal job --

7 MEMBER MEYERS: Yes. Yes, I am

8 selling to the distributor, but the

9 distributor is not installing it.

10 MR. EISNER: Right. So, you

11 probably wouldn't be in a situation, if you

12 are not in a situation to know what the last

13 person in the chain is doing, you probably

14 have no problem under that.

15 MEMBER SACHS: Karen, this is

16 Harvey.

17 And to me, this is a "Get Out of

18 Jail Free Card" for you.

19 MEMBER MEYERS: That's what I'm

20 reading.

21 MEMBER SACHS: That is why, to me,

22 it is very important that this finding of
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1 routine violator establishes an action. 

2 Linking that to something you should have

3 known is a much higher bar. So, it is going

4 after, to the extent DOE can do that, the

5 guilty, the direct actor, rather than someone

6 indirect.

7 And if there are thousands of them

8 going to some production builder in Kalamazoo

9 -- no -- in Huntsville, Alabama, it is a

10 different story. But that is why I wanted to

11 focus on that routine violator side, because

12 they haven't made -- what they haven't

13 established with Jon's perfect process that

14 this was a routine violator, that has not

15 established, as I understand this as a non16 lawyer, that you bear responsibility for

17 should have been knowledgeable.

18 MR. EISNER: And again, maybe you

19 ought to bring in a lawyer to talk about this

20 or hiring --

21 MR. RAWALD: I'm right here.

22 (Laughter.)
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1 MR. EISNER: You are saying you

2 are giving it over to the lawyer.

3 MR. RAWALD: There are certain

4 Neil questions that are our initial law

5 questions; they are referring to law. This is

6 directly in my wheelhouse. So, I am clear to

7 talk about this.

8 (Laughter.)

9 MR. EISNER: Well, let me talk

10 about your situation, Karen. You sell to a

11 distributor. You don't know who the

12 distributor sells to, but you keep getting

13 complaints about your product being installed

14 improperly in Georgia. It wasn't qualified to

15 be sold in Georgia. Do you have some

16 responsibility to see if you can figure out

17 who is passing your product on where it is

18 illegally being installed? Somebody might

19 say, if you don't try to at least check on

20 that, you might have a problem.

21 You know it is being installed in

22 Georgia. You know it is your product. And
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1 you can directly establish that it was a

2 particular distributor. I don't know, and he

3 is about to give us an answer.

4 Doug?

5 MR. RAWALD: Right.

6 MR. HUNGERFORD: Can I jump in for

7 a second?

8 MR. RAWALD: Oh, Dave Hungerford

9 wants to jump in, apparently.

10 MR. EISNER: Go ahead, Dave.

11 MR. HUNGERFORD: If you could drop

12 those microphones?

13 I am a little confused here. 

14 Maybe I don't understand exactly how this

15 would work. But if you can presume to

16 identify a routine violator or a contractor

17 who is installing equipment that is improper

18 for the region, and you presume to be able to

19 refuse to sell to him by blackballing him in

20 some way, why couldn't you just put him on a

21 list that says, "Only sell this guy 14 SEER

22 units."?
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1 Am I oversimplifying it?

2 MR. RAWALD: And Dave's point is

3 correct, right? But the statute, what it says

4 is it "shall be unlawful for any manufacturer

5 or private labeler to knowingly sell a product

6 to a distributor with knowledge that entity

7 routinely violates any regional standard

8 applicable to the product."

9 So, it doesn't say that the

10 product itself has to be noncompliant with the

11 region. So, the statutory problem is that the

12 statute says selling any product. So, selling

13 a 25 SEER to that person, if you know they are

14 a routine violator, that would now be

15 unlawful, according to the reading of the

16 statute as drafted.

17 MR. EISNER: You are reading "the

18 product" to be the same as "any product"?

19 MR. HUNGERFORD: Yes, I see that. 

20 I am just thinking about how to implement that

21 and kind of impact a Draconian action like

22 that would take, especially if the,
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1 quote/unquote, "routine violator" were not,

2 you know, actively attempting to skirt the law

3 in some sort of unreasonable way. To be able

4 to say, "Sorry, we can't sell you the wrong

5 units" seems like the first line of

6 enforcement. And just a comment.

7 MEMBER NOLL: Can I ask a

8 question? So, just going back to make sure I

9 am thinking about this, this is the only

10 stated prohibited act in the statute? That

11 does not mean that we could not develop other

12 ones through this process, is that correct?

13 MR. RAWALD: So, the Department's

14 current position is that we can and have

15 interpreted a statutory authority to

16 promulgate prohibited acts in the regulations

17 that are not expressly drafted in the current

18 statute. This is the only one that is in the

19 statute currently.

20 MEMBER NOLL: Right.

21 MR. RAWALD: And so, we need to

22 understand what this one means and articulate
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1 around it, but we could open for discussion

2 the possibility of drafting other prohibited

3 acts, if you felt it was so prudent.

4 MEMBER NOLL: So, we are stuck on

5 the definitions and words in this that we need

6 to define, but that is not saying that, moving

7 forward, we couldn't develop other things that

8 may be, as Karen has alluded to, like this

9 could be just a whatever. It actually in

10 implementation is meaningless, and we develop

11 other pieces that give it a different -- that

12 make it effective?

13 MR. RAWALD: I think what we are

14 finding is this actually has some meaning, but

15 in a totally different context than what

16 people may have thought of this morning when

17 you walked into the room. Because whereas we

18 all viewed it as this is a provision that may

19 charge manufacturers money, when, in fact, it

20 may be a thing that will cut off at the knees

21 contractors, dealers, and distributors who

22 aren't playing ball correctly.
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1 And so, the question is, with that

2 spin on it, with that turn now on the

3 understanding, that has changed a lot of

4 perspective on this. I think it is worthy of

5 us thinking about it. I don't think we are

6 stuck on it. I think it is a question of,

7 wow, this really has a different meaning in

8 practice than what we had thought. And so,

9 let's think this through and how we want to

10 properly implement it.

11 MR. EISNER: Is this particular

12 provision only enforceable by DOE? Because it

13 says it is unlawful, can someone else enforce

14 the violation of law?

15 MR. RAWALD: Right, the way the

16 statute is drafted, it is the DOE.

17 MR. EISNER: Just DOE?

18 MR. RAWALD: Uh-hum.

19 MEMBER McCRUDDEN: So, this is

20 Charlie with ACCA.

21 Just imagine we have something in

22 place. We don't really need to get into the
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1 details. But let's you find there is a

2 violation by a contractor. Is that something

3 that you would, then, publish, no matter what? 

4 Does that appear on your enforcement under the

5 General Counsel's Office? Because you do

6 publish lots of violations. Do you publish

7 all of them?

8 MR. RAWALD: Right. So, the

9 Department's practice is every action we take

10 is posted publicly. And that is that we feel

11 it is a requirement under FOIA and certainly

12 the appropriate thing to do. We are spending

13 the taxpayers' money on these actions. So,

14 every action the Department takes, any notice

15 we issue, we do publicly post.

16 So, if we were to make or develop

17 some sort of process by which we are going to

18 make Notices of Finding of a routine violator

19 per se -- and I am just coming up with these

20 words now as I am here talking to you -- we

21 would as a practice, just like everything

22 else, publicly post that notice.
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1 MEMBER McCRUDDEN: Okay, but let's

2 set aside the "routine violator" definition. 

3 Let's say you have a violation by a

4 contractor.

5 MR. RAWALD: Uh-hum.

6 MEMBER McCRUDDEN: Would you

7 publish that as a standalone?

8 MR. RAWALD: So, if someone came

9 to us and said, "Hey, we know this guy had a

10 one-time mistake," and we go out and

11 investigate it, and we substantiate the one12 time mistake, would we feel obligated to post

13 that particular thing? There is not something

14 that is currently in practice that is

15 translatable to that. So, I think that would

16 be open to discussion on what we think about

17 that.

18 So, it seems like folks are saying

19 we want to have some sort of percolation of

20 aggregated activity before we would have some

21 sort of black mark for someone. And so, I

22 think out of fairness to the contractor -- and
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1 this is just Doug Rawald talking without any

2 sort of actual Department discussion on this

3 -- we would want to, before making that

4 public, have some sort of aggregate of

5 activity to put out there. I think that would

6 be at least somewhat more fair to the

7 individual because that one-off mistake, maybe

8 it is really a mistake and not worth the

9 actual black mark that may go along with it.

10 But manufacturers may want to be

11 put on notice if we find one problem with

12 someone, so they can kind of be a little wary

13 with what they are doing. So, I don't know

14 where the stakeholders are on this. So, I

15 want to make sure we have discussed it

16 fulsomely.

17 MEMBER McCRUDDEN: Well, and that

18 is what I was getting to, which is, if you

19 were to sort of post every violation by a

20 contractor or a distributor or even another

21 manufacturer, however you play it out, does

22 that become the de facto blacklist? And if it
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1 is public, do, then, the manufacturers decide,

2 whoa, even though we may have a threshold of

3 three strikes and you're out, we may choose

4 voluntarily not to deal with this person

5 anymore. And so, I think we have to be very

6 careful how we do this.

7 MR. RAWALD: Right. No, I could

8 see, as we think this through -- and trying to

9 do my own logic tree, though I am not as

10 advanced at this as Harvey is -- I can see a

11 lot of collateral consequences that I want to

12 make sure that we fully embrace and have

13 thought through.

14 The other possibility, to flip

15 this on its head, right, so rather than having

16 a list of routine violators, we could have a

17 list of agreed followers, and then, you fall

18 off that list if you don't follow the rules.

19 And so, similarly, now we have a

20 certification database that lists all the

21 compliant products. So, we have a database of

22 all compliant contractors and installers. And
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1 if you are no longer on that list, then that

2 is because you have been found to be someone

3 who committed a violation.

4 And so, there is some sort of

5 incentive to want to be on the list. And so,

6 people who are going to use contractors are

7 going to say, "Oh, I want to look at the list

8 to make sure that this contractor is on it." 

9 Exactly. Akin to Angie's List --

10 MEMBER McCRUDDEN: Well, yet, I

11 mean, let me tell you, we can probably go into

12 the problems with Angie's List and Yelp, which

13 is, you know, anyone can post; anyone can make

14 complaints. And in those cases, it is very

15 public. I think with this it is a little bit

16 different, but --

17 MR. RAWALD: Right. And just to

18 be clear, I don't think we would ever want to

19 have a database that is populated by people

20 that were not the Department.

21 MEMBER McCRUDDEN: Right.

22 MR. RAWALD: And this is just
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1 spitballing ideas. That is what we are doing

2 here, right? We are trying to come up with

3 ideas that work to make this thing happen.

4 But the exact opposite of a list

5 of bad actors would be a list of good actors

6 that is populated by people submitting a

7 certification to us saying, "I am Contractor

8 ABC and I swear and affirm that I will only

9 install compliant products." Now I am in the

10 DOE database. And so, I'm in the DOE database

11 and have sworn that I will do that. And then,

12 if DOE finds out that I do not do that, I fall

13 off the DOE database. So, that is an exact

14 reversal of what we are talking about.

15 MEMBER McCRUDDEN: Yes.

16 MR. RAWALD: And that is just a

17 different idea to kind of posit. Is that

18 something a little more palatable to people? 

19 And so, I am just trying to spitball different

20 notions.

21 MEMBER MEYERS: So, this is Karen.

22 I actually like that idea because
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1 it does a couple of things. It makes sure

2 that the contractor is aware of the

3 regulations and what he is responsible for. 

4 I think that is key, because he is, then, very

5 aware of what he has to do.

6 And maybe something that you

7 couple with that is now he has to take a 10-

8 question survey on whatever -- (laughter) --

9 but make sure he understands the regulations.

10 MR. EISNER: All you would certify

11 to is that he has submitted answers to

12 questions and established he knows what he has

13 to do with respect to installing this

14 particular type of device. And not mean that

15 I have checked to make sure he has all

16 necessary licenses, no complaints have been

17 filed against him; he is not in bankruptcy or

18 anything like that. So, it would be a very

19 limited --

20 MEMBER MEYERS: For enforcement of

21 regional standards.

22 MR. EISNER: And you would have to
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1 continue to check to make sure that person is

2 still doing -- you know, every year or every

3 six months or every time period --

4 MR. RAWALD: And let me tease this

5 out because we do have a process that is

6 translatable, and I like to give you guys

7 ideas from things that we currently do, so you

8 understand what the Department can possibly

9 accomplish.

10 So, we would have our

11 certification database where manufacturers, or

12 third parties on their behalf, submit forms to

13 us saying, "Here's my product and here's how

14 it functions, and I swear that it complies

15 with the standards I'm required to."

16 We don't require anything further. 

17 We take that as a boldface assertion. 

18 However, we do audit those. So, I may

19 occasionally follow up on someone's form and

20 say, "Hey, Company X, you told me that Model

21 ABC is compliant and it performs at this

22 level. Give me your test data."
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1 They give it back to me, and I do

2 a check on that and say, "Okay, it looks good"

3 or "No, it looks bad. Let me follow up now

4 with an investigation."

5 So, we could translate those

6 concepts into the contractor concept if you

7 want to explore that further. It is a

8 possible translatable activity.

9 MEMBER MELCHI: Doug, kind of a

10 question and a thought. This kind of reminds

11 me of EPA 608 certification that contractors

12 are required to have purchase certain

13 refrigerant.

14 MR. RAWALD: Let's assume I know

15 nothing about that.

16 MEMBER MELCHI: Okay. Each

17 company, contracting company, must have at

18 least one EPA-certified technician to be able

19 to purchase refrigerant from a distributor. 

20 But that applies company-wide, one per

21 company, say, and not per technician.

22 Were you thinking this --
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1 MEMBER WINNINGHAM: That is

2 incorrect. If you are going to access the

3 refrigerant circuit, you have to be EPA --

4 MEMBER MELCHI: I said to

5 purchase, not service, yes.

6 MEMBER WINNINGHAM: But I said my

7 technicians, to handle that refrigerant and do

8 anything with it, they all have to be

9 certified.

10 MEMBER MELCHI: No, that is fine,

11 but I was saying "purchase" because in this

12 instance somebody, a contractor would be

13 purchasing equipment, maybe not installing,

14 you know, all 10 units.

15 Were you thinking that this

16 registration would be done on a company-by17 company basis or on a technician-by18 technician?

19 MR. RAWALD: I hate to repeat the

20 fact that I am not thinking anything.

21 (Laughter.)

22 I mean, I am coming up with
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1 thoughts here in an attempt to brainstorm. 

2 So, I haven't thought through who would be --

3 MEMBER MELCHI: So, yes, posing --

4 MR. RAWALD: Right, but it seems

5 like to me that we currently require

6 certification at a company level. So, I could

7 see that being that way. But if there is some

8 sort of belief that having a technician-level

9 would be more prudent, I think it is an open

10 question. It depends on what people think.

11 We are in a market where it seems 

12 we have heard who the installers are. There

13 is movement of technicians into their own

14 companies and, then, movement of companies

15 back into being technicians, back and forth,

16 depending on how the pendulum swings.

17 So, is there some sort of benefit

18 in kind of keeping track of people at that

19 individual level? And I don't know. I don't

20 know. I am open to ideas.

21 MEMBER WHITE: This is Chuck White

22 with PHCC.
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1 So, from some other things that I

2 am involved with, certification has a very

3 specific definition. So, if you want to

4 create a list of certified contractors, who is

5 going to certify them? Because me writing on

6 a sheet of paper that I promise to do this

7 isn't good enough.

8 It sounds like you are creating

9 some form of a national license because, once

10 somebody is on that database, they are going

11 to point to it and say, "See, I can do this." 

12 And when they can't do it, you said they could

13 because you've got them on the list.

14 Not every state has requirements

15 for that. Creating that kind of a list is a

16 big undertaking. You are taking on

17 validation, and taking people's word for it

18 isn't good enough.

19 MR. EISNER: What is a rough

20 estimate as to the number of people who would

21 fit the definition of an "installer"?

22 MEMBER McCRUDDEN: If you go to
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1 the Census, I think between the HVAC and

2 plumbing, heating, cooling, which is the SIC

3 category, is it like 200,000? Yes, it is

4 about 200,000.

5 Now, in this case, though, since

6 we are talking about compliant equipment, it

7 is unlikely you are going to see people in the

8 North registering because we are only talking

9 about --

10 MR. RAWALD: I would posit there

11 would be no value at all for this list, right,

12 because --

13 MEMBER McCRUDDEN: Right.

14 MR. RAWALD: -- they wouldn't be

15 dealing with that?

16 MEMBER McCRUDDEN: Because, I

17 mean, this is only regional standards.

18 (Laughter.)

19 MR. EISNER: What if you are a

20 borderline --

21 MEMBER McCRUDDEN: If you are on

22 the border, sure. I mean, if you are going to
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1 be finding yourself --

2 MR. EISNER: But, also, would

3 people say, "I am only going to hire someone

4 who is certified."? And that means I am not

5 going to hire the guy in the next state who

6 doesn't do anything -- who may come into my

7 state to work on other things, but I am not

8 going to hire him because he is not certified?

9 MEMBER MEYERS: So, I think

10 "certified" is the wrong word.

11 MEMBER McCRUDDEN: It is

12 attesting.

13 MEMBER MEYERS: So, it is almost

14 like a code of conduct. I mean, like I have

15 to go through these courses within my company

16 that say I will act accordingly to this, and

17 I have to take these online tests, and I have

18 to do them once every X number of years,

19 depending upon the topic.

20 So, I don't think you are

21 certifying. And I think it would be a

22 terrible idea to try to certify contractors. 
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1 But it is more of a code of conduct,

2 acknowledgment that you understand the

3 standards; you will abide by the standards,

4 and you will conduct your business

5 accordingly.

6 And I have knowledge of what it

7 is. I have knowledge of what the appropriate

8 action is. I have knowledge of what the

9 consequences are, and I agree to abide by the

10 standards. I think it is more that.

11 And I think I would totally

12 disagree with a certified contractor, but just

13 someone who has taken the code-of-conduct

14 training on regional standards and understands

15 what it means and what the penalties are, and

16 that they will abide by them. It is as simple

17 as that.

18 MR. RAWALD: And this is Doug.

19 And so, we run into this all the

20 time with the word "certification," which I

21 did not acknowledge the Department uses

22 because it does cause confuses. But, when you
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1 talk about certification in the context of the

2 Department, we meaning a self-certification by

3 the individual up there complying with it.

4 I am totally and completely open

5 to different terminology, but that is what I

6 mean by the term "certification," is in the

7 context of the Department, what we currently

8 do with manufacturers is manufacturers self9 certify the compliance of their product.

10 So, what I am hearing from Chuck

11 is that that type of self-attestation, in

12 other words, oath of compliance, wouldn't

13 probably be good enough in his mind to --

14 MEMBER WHITE: Well, this is Chuck

15 White again.

16 We already deal with EPA 608

17 certification. If I have someone go out and

18 work on a system, he has to have that

19 certification. He has to pass the test, have

20 the rule, and if he doesn't and we get caught,

21 EPA comes and gives you a great big Christmas

22 fine.
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1 I already have to comply with SEER

2 requirements, AFUE requirements, a whole list

3 of things that we already require and we

4 already have to comply with. And I don't have

5 to get on some database and some

6 certification, and I am going to be in a

7 database because I am in the South, but I am

8 not in the North.

9 And now, we have created this

10 nuance that in the South you are going to have

11 14s, and somehow we are now no longer going to

12 be all good players. We are concerned about

13 the few people out there that are skirting all

14 these issues, and we are layering things on

15 all the people that are going to perform

16 exactly the way they performed December 31st

17 on January 2nd, but, suddenly, they have a

18 whole bunch of more regulations and

19 requirements and certifications to comply

20 with. So, if they screw up, you can catch

21 them. I fail to see how that is fair to the

22 legitimate actor in the industry.
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1 MEMBER MELCHI: There is a bit of

2 a burden-of-proof question here, too, which I

3 think is what Chuck is talking about.

4 But what I would also say, though,

5 is that we have no idea how many people are

6 out there presenting themselves as

7 contractors. And so, that would make it

8 simple for someone not to carry this action

9 out.

10 In my mind, I think of, I think

11 someone mentioned like, you know, going on a

12 webinar, looking at a presentation. And DOE

13 creates this webinar; every contractor has to

14 sit and have all of its service techs sit

15 through this for an hour or a half-hour,

16 whatever it is, and then, push a button with

17 their name and number. And that goes

18 somewhere. And then, it appears on your good

19 contractor list.

20 But, if we don't know how many are

21 out there, we don't know how many we have

22 caught, captured -- I'm sorry -- in this
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1 database. And so, then, we are sort of just

2 creating a requirement or a paperwork

3 requirement that doesn't really resolve the

4 question.

5 MR. RAWALD: Right. And I am

6 thinking about this. The value I would see of

7 this activity would be to the distributor and

8 to the manufacturer because they are able to

9 check who they are selling to and have that

10 person stated, whatever.

11 I am not enamored, I am not wedded

12 to anything. I am just putting out different

13 thoughts for folks.

14 MEMBER MEYERS: Yes, and here's

15 another thought. So, there is this online

16 website that any installer can access. He

17 goes through the 10 questions. He takes the

18 test. He earns a passing grade. He is able

19 to print out an acknowledgment that he took

20 the course. On that acknowledgment is a

21 number. He takes that number to the

22 distributor. The distributor knows that the
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1 guy has been informed and is aware of the

2 regional standards and agrees to act

3 accordingly.

4 I mean, I think that has got

5 benefits all up and down the chain because the

6 distributor has some assurance that the person

7 that he is selling to has at least been

8 trained on what regional standards and agrees

9 to abide by them.

10 The manufacturer has a little bit

11 of assurance that his distributor that he is

12 selling to is collecting this information and

13 is only selling, you know, if the distributor

14 makes that part of his business model, only

15 selling to people who have this

16 acknowledgment.

17 And he has to take it once every

18 five years, or whatever.

19 MEMBER BALLO: This is Tim at

20 Earthjustice.

21 And I think there is a potential

22 benefit for the contractor here, too, in that
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1 we could tailor reporting requirements to be

2 different or whatever reporting burden we are

3 going to require for the contractor, whatever

4 that is going to be could be, it could be

5 different depending on whether you are a

6 contractor that has taken that test and

7 promised that you are going to abide by the

8 rules versus if you are one that is not in the

9 system.

10 And I don't know how that would

11 work, but --

12 MR. RAWALD: Well, I don't want

13 the contractor folks to feel like that we are

14 pushing this thing that they haven't caucused

15 about and thought about the consequences of,

16 and that might be necessary to think this out

17 tonight, you guys.

18 MEMBER BALLO: Yes, I think --

19 MR. RAWALD: So, it is a different

20 game in how this works for you guys.

21 And also, maybe, Jon, you might

22 want to think about it and especially talk to
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1 Steve about it tomorrow and have some thoughts

2 on how it would affect you guys and your role

3 in this.

4 MEMBER MELCHI: Yes, this is Jon

5 Melchi with HARDI.

6 And just initially, in doing some

7 thinking, you know, with the EPA cards, it is

8 pretty easy because it doesn't matter which

9 state you are selling in. You know, again, if

10 I am checking a card, it does provide some

11 level of assurance in that Louisville/Indiana

12 scenario. But, again, once it leaves the

13 store, I can't guarantee that it is not going

14 to Kentucky unless I am doing a ride-along.

15 MEMBER ROCKY: But, if the

16 contractor has signed off his oath, given his

17 oath, then at least you have that recognition,

18 and that it is not from complete ignorance

19 that he is doing that act.

20 MR. HURST: This is John Hurst

21 from Lennox.

22 You know, thinking about carrots
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1 and sticks, maybe the burden increases kind of

2 in a painful way with a violator. So, a good

3 actor has a very low burden in terms of

4 reporting, but, quite frankly, if somebody is

5 a repeated violator, maybe the burden to

6 report everything that they install increases

7 commiserate with the amount of violations they

8 have committed. Just a thought.

9 MEMBER ELLIS: Doug, this is Ray

10 from LEC.

11 You know, what you are saying

12 about the good list actually makes some sense

13 to me. As a utility, a small utility, every

14 contractor that we have come on our place,

15 especially for installing new primary wire

16 underground -- I know this better than I know

17 HVAC (laughter) -- every contractor that digs

18 and installs conduit for us has to be

19 certified. Otherwise, we won't do the job.

20 That means an individual homeowner

21 could actually come in and we tell them how it

22 has to be done, and they can install it. And
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Neal R. Gross and Co., Inc.

1 then, we will install -- they can dig and

2 install the conduit, and then, we will install

3 the service after the fact.

4 And so, if manufacturers don't see

5 this person on the list, I'm sorry, I can't

6 sell you the equipment because you obviously

7 maybe don't know how to do it. I don't know. 

8 It is just an idea.

9 MR. RAWALD: Well, again, I feel

10 like folks are kind of running out of steam on

11 this, and it definitely, I think, merits some

12 overnight thought. Can we come back to it

13 tomorrow and talk about this again?

14 Just for folks' scheduling

15 purposes, Karim volunteered to take on a nine

16 o'clock slot tomorrow for AHRI. So, AHRI will

17 be the first order of business tomorrow to go

18 over their certification database. So, folks

19 who haven't seen it before will become

20 familiar with it and give us a little idea of

21 that.

22 I will also be prepared to talk
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1 about the DOE database in comparison to that,

2 so we understand the tools that we have out

3 there for certifications, just, once again, to

4 kind of arm ourselves on the information.

5 Jon has told me that Steve Porter

6 won't be in until later on. So, they are

7 going to be moving to one o'clock in the

8 after-lunchtime period to talk about the

9 distributors and the concerns they face.

10 I know that Neil had offered to

11 folks to have some stakeholders present. And

12 just so we can pull the curtain back, Carrier

13 had come to us at one point and said they

14 wanted to present something. I know, John, if

15 you are familiar with it, if you folks would

16 still be onboard with that?

17 MEMBER GIBBONS: Yes, we are

18 scheduled at 10:45.

19 MR. RAWALD: Okay. So, if anyone

20 else wants to present any idea, this is kind

21 of the, hey, you have an idea you want to put

22 before the group. We have the time. It is
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Neal R. Gross and Co., Inc.

1 allotted. Otherwise, we will circle back to

2 this conversation that we are leaving here, I

3 guess would be the most appropriate thing,

4 Neil, if that makes sense to you.

5 MR. EISNER: Yes.

6 MR. RAWALD: But, if anybody wants

7 to talk, please let Neil know and we can take

8 the time to just to air your ideas.

9 Once again, I can't stress enough

10 how much of a blank slate I have on this. I

11 know I said to Jon at least 12 times -- and I

12 don't mean to make you the bearer of that --

13 but, I mean, we really want to hear people's

14 ideas. I think it has been very helpful to me

15 today, a lot of the ideas that you guys have

16 put out there.

17 MR. EISNER: Okay. Anybody got

18 comments? Everybody comfortable with the

19 direction we are going in?

20 MEMBER SACHS: Everybody remember

21 where ACEEE is for tomorrow?

22 MR. RAWALD: Yes, Harvey, can you
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1 tell us the exact address again?

2 MEMBER SACHS: The building is at

3 the corner of F and 14th, Northwest, and it is

4 on the southeast corner of that building. It

5 is the historical or "hysterical" National

6 Press Building.

7 (Laughter.)

8 We are on the sixth floor.

9 You may be asked to sign-in. Just

10 look like you know where you are going. But

11 there is no security or anything else except

12 keys for the bathroom.

13 (Off-the-record comments.)

14 MR. EISNER: We're done.

15 (Whereupon, at 4:41 p.m., the

16 meeting was adjourned, to reconvene the

17 following day, Wednesday, August 27, 2014.)

18

19

20

21

22
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275:15 278:17

282:10,15 284:11

293:8 312:12,19

313:22 315:8

316:17 340:17

349:11 356:11

358:14 361:22

364:17,22 365:14

367:6 371:4

377:12,13

meaning 71:6,7,10

84:21 189:14

196:22 257:7

273:16 350:14

351:7 367:2

meaningless

350:10

means 48:14

103:21 106:19

109:11 110:6

114:2,6 116:3,17

130:19 135:8

144:6 181:21

183:13 189:16

266:8 267:1

322:18 340:17

349:22 365:4

366:15 374:20

meant 52:2 88:11

174:10 272:10

305:16

measurable 175:18

measurement

210:15,17

measuring 214:6

mechanical 78:4

mechanism 146:20

162:17 195:7

282:3

mechanisms 144:4

285:15

meet 6:13 10:16

23:1 26:9 27:18

31:12 34:22 44:20

44:22 50:13 60:21

100:1 131:22

132:21 159:16

172:14,16 211:2

242:2 321:16

meeting 1:5,11,12

1:15 3:3 4:13,15

6:14 8:20 11:21

12:1 14:15,22

15:4 26:14 35:12

152:19 187:21

211:17 257:20

292:10 300:20

378:16

meetings 286:17

287:1

meets 19:1 35:11

74:20 98:4 107:3

Melchi 1:20 13:1,1

165:5,5 167:4

179:16 184:22

187:14 189:15

197:22,22 216:21

216:21 217:20

218:13 220:22

221:1,10 231:18

231:18 232:8

245:20 246:4

260:22 279:22

282:15 334:11,11

335:14,18 360:9

360:16 361:4,10

362:3 369:1 373:4

373:5

member 5:2 10:6

11:8 13:1 14:17

15:3 16:13,22

17:2 18:3,6 21:2

21:19 22:11,15,21

27:5 32:7 35:7,22

36:12,18 39:1

40:5,6,13 41:4

42:18 43:2 44:4

45:13 47:2 48:8

49:14 50:3,8,17

50:21 51:7,9,15

51:19 52:5,8,13

52:16,18,21 53:4

53:20 54:7,10,13

55:15 56:7,11

58:3,4 59:17 60:3

61:15 63:6,10

65:14 66:9,12,21

67:6,15 68:6 70:8

70:12,20 73:7,12

73:14,16 74:1,6

76:18 77:10 86:12

89:11,19 91:20

93:22 94:8,17

95:17 96:5,16

97:2,10,21 98:2,7

99:1,10 101:18

102:1,13,15,22

103:8,18 104:6

106:11 107:7

108:1 109:10,21

110:5,19 111:22

112:18 113:18

114:8 115:20

116:9,15 117:14

117:17,19 118:5,9

118:14 119:16

120:3,7,11 121:22

122:14,18 123:3

123:19 124:13,19

125:19 126:14

127:16 128:9

129:7,18 131:6,12

132:2,9 134:1,14

134:16 135:3,21

136:22 137:7,15

137:19,21 138:1,8

138:13 140:6,13

143:21 145:1,16

145:19,21 146:16

147:1 149:5

150:14 151:5,16

154:6 155:19

156:12,15 157:9

157:20 158:3,4,14

158:21 159:7,21

160:7,13,19 161:3

161:12 164:3

165:5 167:4,9

168:3 170:6

171:22 173:22

174:8,10,17,20

175:6,7,9,22

176:5,10,13,16,19

179:16 181:6,22

182:18 183:16

184:22 187:14

189:15 192:11

193:11 194:5,14

197:22 198:21

201:10,18 204:20

205:19 207:9

208:6,19 210:12

211:10 216:6,21

217:14,20 218:13

218:22 220:5,22

221:7,10,18 225:8

226:10 228:15

231:1,18 232:8

234:19 235:16

236:17 238:17

239:13,15,17

240:10,12,13,14

242:20 243:3

244:10,21 245:20

246:4,5,16 247:5

248:10 249:3,17

252:11 253:19

254:18,21 255:13

257:18 258:10,16

260:22 261:13

265:15 266:19

268:3,7 270:2,8

271:21 272:11

273:1,17,18,21

274:15 275:4,13

275:22 276:12,14

278:20 279:22

282:15 285:8

293:5 294:2,17
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341:7,13 342:3,14

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349:7,20 350:4

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354:17 356:10,21

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202:20 206:17

217:10 218:14

288:9 330:17

membership 6:4,12

6:21

mental 61:18,19

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mention 4:22 6:5

42:10

mentioned 40:8

41:19 151:7,22

152:18 170:7

201:15 215:7

232:15 249:4

283:2 294:3

300:19 369:11

mere 218:6

merely 166:20

merits 86:22

375:11

message 318:2

Messmer 82:10

met 1:11 29:15

85:15 261:12

302:20 314:17

338:1

metal 45:14,20

method 166:5

170:15 337:1

methods 203:10

Metro 5:3,9,9

Mexico 142:2,4

MEYERS 1:21

14:17 15:3 16:13

16:22 56:7,11

58:3 59:17 65:14

66:9 73:7,12,14

89:11,19 107:7

108:1 119:16

121:22 122:14,18

124:19 137:15,21

138:13 149:5

164:3 176:10

239:15 265:15

266:19 268:7

270:2 275:22

276:12,14 301:1

304:14 315:4,15

342:14 344:7,19

357:21 358:20

365:9,13 370:14

Miami 215:14

223:20

microphone 48:7

53:2,6 139:21

175:21

microphones 212:5

347:12

middle 163:16,16

207:18

million 219:14

mind 175:13 180:3

203:22 205:15

206:3 291:19

312:14 318:12

367:13 369:10

mind-bending

287:20

mindreaders 188:7

minds 88:5

mine 47:10 235:3

mini-range 292:13

minimize 163:9

minimum 57:5,9

59:5 183:22 207:5

238:9 295:9,10

298:6 304:22

305:2 317:10

321:16

Minneapolis

248:18

minor 123:5

294:19

minuses 226:8

minute 102:15

minutes 340:12

minutia 259:11

mislabeled 234:7

missed 118:3

missing 117:22

118:11 220:21

343:8

mistake 256:10

353:10,12 354:7,8

mistaken 203:17

mistakes 253:6,8

254:11

misunderstanding

273:19

mix 158:9

mixed 101:7 204:4

298:7

model 54:18,20

55:1,1,5,5,9,13,17

61:18,19 62:8

168:20 169:3

170:8 171:2,21

189:7 233:20

234:4,13 271:8

319:7,17 359:20

371:14

models 131:11

170:22 171:6

301:16 319:8,14

319:19,20

moment 19:5 84:14

117:11 133:18

238:18 252:4

money 144:17

170:19 171:5,8

172:17 188:14

203:14 236:13

240:3 241:21

262:15 268:21

321:21 350:19

352:13

month 23:21 265:3

334:7 337:20

months 23:22

235:17 293:15

312:16 331:17,18

337:13 338:3,10

339:7,8,12 359:3

moon 277:4

moral 269:22

morning 4:13

112:20 297:11

298:1 350:16

motive 180:22

motor 62:1 80:10

mouth 120:10

move 10:10 63:21

69:9 149:1 150:11

305:13

moved 126:9

286:20

movement 362:13

362:14

moves 303:19

moving 10:21 11:3

13:6 110:7 205:8

220:2 350:6 376:7

multi 219:7,16

multi-speed 220:3

multiple 101:9

106:2 170:9,12

172:1 182:4

305:11 319:17

multiple-time

155:13

murder 195:22

mushrooming

279:9

mute 212:4

N

NAHB 29:11 77:13

104:13 111:3

141:19 322:15

NAHB's 135:1

name 255:12

369:17

named 332:18

naming 84:10

327:4

Nana 281:7

narrow 124:4

125:11 136:17

159:14 203:15

nation 235:7

national 2:4,16

4:16 5:7 6:11

26:10 34:11 62:14

62:18,20 202:17

236:22 309:10

363:9 378:5

nationally 34:6

natural 1:21 236:4

nature 199:4 263:1

Navigant 2:10

244:18

necessarily 20:18

55:19 72:17 104:4

115:6 167:13

194:21 195:11

203:3 279:17

305:17

necessary 91:16

92:8 210:6 256:16

257:21 259:2

284:12,21 325:17

358:16 372:16
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72:17 84:16,18

85:3 90:14 91:4

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119:17,21 129:8

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148:9 149:22

155:15 167:14

173:2,12 186:13

188:12 201:21

207:2 210:20

255:13 257:5

262:10 265:19

266:7 275:19

279:11 281:14

284:10,16 289:9

290:7,18 291:4,6

303:22 321:3

329:11 334:4

337:5 349:21

350:5 351:22

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needs 4:8 19:18

27:19 31:20 49:6

59:12 98:5 108:1

112:11 135:19

150:20 163:11

180:12 200:7

203:18 268:20,21

327:8 335:22

336:9

nefarious 144:18

negative 29:5

negotiation 128:7

133:13,22

neighbors 197:14

Neil 1:12,15 3:3

90:8 100:9 175:21

191:1 284:8

320:21 340:8

346:4 376:10

377:4,7

Neil's 280:22

net 28:15

Nevada 216:10

never 5:4,18 80:15

81:3 85:15 147:15

187:6 260:3

316:15 325:11

new 21:14 22:3,6,7

30:18,19 34:3,21

34:21 40:14 44:8

45:5,20 46:4,7

59:3 79:4 99:2

209:14 210:10

217:11 228:8

264:19 271:8

294:10 304:2,19

312:20 313:6

314:9 318:5,13,17

336:17 374:15

newcomer 161:7

news 192:7 326:22

328:14

Newsome 3:13

11:20 286:11,14

286:14 292:11,21

293:11 294:16

295:1,4,15,21

296:2,11 299:4,13

299:16 301:7

303:17 305:3

306:4,12,17

307:12 308:12,15

309:15 311:2

312:9,22 313:15

313:21 314:18

315:2,10,17,22

316:17,20 318:1,4

318:8,15 319:9,12

320:5,8

nice 204:14

night 6:10

nine 196:4,7 375:15

nodding 50:15

53:18 119:14

NOLL 1:21 117:19

118:9,14 159:21

173:22 174:8,10

174:17 175:6,9,22

220:5 221:7 246:5

246:16 247:5

349:7,20 350:4

non 9:10 54:5

146:19 164:6

214:4 345:15

non-ACCA 28:16

non-compliant

81:1 160:12

207:16 235:13

non-event 86:18

non-HARDI 167:9

non-intelligent

93:12

non-PHCC 28:17

non-qualifier

299:12

non-technical

26:18

noncompliance

168:15 169:17

170:14 171:12

172:7 208:4,10

321:14 327:12

noncompliant

168:17,21 169:22

170:17,22 171:15

172:9,11 178:10

178:12 184:14

237:1,16 285:19

321:12 327:21

333:17 348:10

NORDYNE 1:19

normal 190:16

normally 111:11

111:19 211:12

north 34:12 42:8

215:1 216:3

240:18,19,21

248:14 276:8

295:10 364:8

368:8

northern 218:18

219:1 235:1

300:21 308:2

309:9,10,13

310:21

Northwest 4:18,20

242:5 378:3

note 5:12 193:21

273:8 292:5

notice 168:17

169:20 170:10,14

170:17 171:4,17

172:7 179:10

259:20 289:10

314:7 321:14,18

321:19 322:5

325:14 326:1,2,7

327:11 329:17,19

352:14,22 354:11

notices 168:14

172:1 352:18

notification 194:16

195:8

notion 103:11

262:18

notions 357:20

NRDC 117:20

159:22 174:1

246:17

nuance 306:1

368:10

nuances 148:21

number 155:14

170:8 171:7

182:22 183:20

195:19 196:3,10

198:3 207:16

219:13 222:6

229:1 233:20

243:22 244:3

259:6,10 260:11

267:8,9 292:16

299:18 301:12

305:22 318:16

340:2,4 363:20

365:18 369:17

370:21,21

numbers 43:14

170:9 183:14

196:14 234:13

244:20 247:13

250:1 273:3 283:5

289:11 300:4

307:6 309:4

319:17

O

o'clock 375:16

376:7

oath 367:12 373:16

373:17

objects 151:18

obligated 208:5,9

268:6 353:12

obligation 169:9

197:1 221:22

254:6 267:10

269:22

obligations 104:5

132:22 208:17

257:20

observation 27:11

40:15

obsolete 303:21

306:21

obstructions 8:6

obtained 264:2

obviously 12:8,18

182:11 244:16

269:14 289:18

303:19 304:10

375:6

occasion 230:17

occasional 151:1

occasionally

359:19

occur 168:8 181:14

271:12 303:15

occurred 194:19,20

195:6 208:14,15

266:2

occurrence 154:10

183:8,10

occurring 168:10
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Off-the-record

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offend 313:22

offer 27:10 45:11

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offering 26:19 78:9

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officer 197:17

offices 286:20

official 260:5

oftentimes 78:16

80:7 153:3 228:22

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oh 124:12 136:8

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Ohio 242:12,12

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okay 4:10 6:22 9:19

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72:15 83:7,11

85:20 89:19 90:15

120:20,22 122:16

125:8 126:4,19

127:7 128:16

129:12 136:8

139:15,22 142:19

142:20 148:18

151:20 157:20

166:11 173:13

174:9 175:6 178:3

178:6,11 179:11

179:13,13 188:15

193:11,15 194:5,8

203:6,10 217:16

222:3 232:8

240:13 249:3

258:2 264:21

268:21 269:10

273:1,18 283:20

288:2 294:2 295:1

296:11 297:15,18

298:12,15 299:13

306:4 311:2

313:11 314:18,22

318:22 319:21

320:4,17 321:20

328:20 330:11

331:11 339:12

353:1 360:2,16

376:19 377:17

old 5:7 20:17 22:4

30:14 31:4 33:6

183:2 238:6 318:7

318:16,20

older 18:21 47:12

omit 103:1

omitted 42:20

on-the-ground

207:6

onboard 376:16

once 9:7 128:18

147:9 154:10

159:4 163:7

165:14 183:11

250:5 257:16

277:4 312:15

322:17 323:4,6,14

326:14 363:9

365:18 371:17

373:12 376:3

377:9

one's 187:5

one-off 183:12

354:7

one-offs 286:2

one-time 155:12

353:10

onerous 226:4

231:3

ones 135:14,22

139:7 156:14

173:17 202:5,11

220:4 238:1

260:13 297:5

336:20 349:12

onion 331:16

online 83:8 135:6

139:12 140:4

193:22 224:11

314:20 320:2

365:17 370:15

onsies 178:19

open 59:13 65:6

86:11 113:14

139:20 164:9

192:9 193:5 194:9

233:10 296:4

297:11 342:10

350:1 353:16

362:9,20 367:4

opened 217:10

opening 3:2 115:13

operate 22:8 62:18

62:19 71:3 130:15

271:9

operated 34:13

operates 24:19

operating 24:21

61:8 71:13 182:11

273:12 333:1

operation 290:4

operations 47:7

operator 335:11

338:11

opinion 8:17 39:15

40:3 84:14 150:11

155:21

opinions 8:18

31:18 94:7

opportunity 190:13

194:10

opposed 67:6 70:17

136:16 143:5

232:21 234:12

243:16 269:21

270:9

opposite 357:4

opposition 199:2

optimum 143:1

option 6:19 140:5

options 119:5

orange 5:10

order 3:2 188:11

201:19 227:19

235:19,21 282:11

331:21 375:17

ordered 105:18,19

106:6,10 142:5

Oregon 218:20

organization 146:4

242:4

original 42:6 317:7

originally 18:11

28:10 36:14 39:6

ought 154:11

338:18 345:19

outcome 97:9

143:7

outdoor 294:7

outlined 207:2

outreach 261:6,11

312:5

outside 138:9

233:14

overall 36:3

overlook 172:3

overlooked 181:9

overly 88:15

overly-aggressive

281:17

overnight 375:12

oversees 108:7

oversimplifying

348:1

owe 303:4

Owned 1:17

owner 82:13 90:22

91:1,2 97:17

P

P-R-O-C-E-E-D-...

4:1

p.m 191:4,5 192:4

286:8,9 378:15

Pacific 218:16

package 306:20

page 17:16,21

57:22

paid 338:9

painful 293:16

374:2

pair 62:13

paired 20:9,15 57:8

palatable 357:18

pallet 219:20

226:10,14,15,15

234:12

pallets 219:19

224:1 226:13,17

paper 116:7 363:6

paperwork 227:19

235:4 370:2

paragraph 41:7

parallel 129:8

145:4 236:19

parameters 274:1

paraphrase 15:21

35:2,4

parent 303:9

parking 5:5

parse 127:5 128:4

part 6:9,15 8:2

11:16 12:10 15:20

18:19 19:11 22:5

23:3,3,11 24:1

30:9 32:17 34:19

45:3,7,10 58:12

58:17,19 107:19

166:18 193:2,8

194:22 201:7

205:18 209:22

219:1 239:19

243:1 252:5 254:6

258:5,5,6 267:9

281:5 284:14
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participated

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participating

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17:16 18:17 27:18

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pattern 237:15

pay 81:22 140:3

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337:22

paying 188:14

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pays 337:18,21

PDF 17:21

peek 197:14

peel 331:16

peeve 309:7

pen 115:22

penalize 81:22 82:9

penalized 84:3

263:16

penalizing 82:1

penalties 172:12

182:5 321:19

322:9 366:15

penalty 154:12,22

155:6 170:18

171:4,9 196:5

249:16,21 250:2,6

250:9,13 251:3,5

251:6,10 253:17

256:11,12 257:13

257:16 284:18

322:21 327:16,17

pendulum 362:16

people 6:8 7:17,20

12:21 27:1 47:5

54:1 66:10 72:8,9

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249:14,15

recall 320:21

receive 229:10

received 6:9

recheck 312:15

recognition 317:22

373:17

recognize 220:8

recommend 102:22

reconvene 378:16

record 8:20 52:9

120:18,19 191:4,5

193:1 226:1

227:13 286:8,9

338:8 340:13

record-production

231:3

recordkeeping

222:21 237:22

238:3 257:21

records 217:21

222:4 227:5,13,17

228:4,6,10,11

231:2,4 232:22

233:1 263:20

264:14

recourse 228:3

recycled 310:8

red 5:9

redefining 113:14

reduces 214:2

reducing 28:14

Reduction 227:19

refer 69:4 314:4

reference 65:2

83:22

referred 159:2

341:9

referring 123:6,17

312:12 346:5

reflect 75:2 148:2

316:3

reflected 292:17

reflection 305:17

305:18

reflects 148:17

151:12

refrigerant 28:13

45:15 145:6

146:11 360:13,19

361:3,7

Refrigeration 2:3,9

refrigerator 321:15

321:21,22

refuse 347:19

regarding 8:6

17:13,14 71:12

201:4 214:12

329:14

regardless 22:2

81:7 247:17

248:19 333:16

regime 145:5

302:22 304:2

region 20:13,22

24:3,7 25:3 26:13

44:22 164:14,16

166:21 235:2,13

297:15 298:9

308:2,6 309:13

342:22 347:18

348:11

regional 1:3 32:13

44:21 68:13 84:6

92:4 98:15,18,21

106:15 125:16

126:1,3,7 129:11

151:12 152:13

159:12,17 160:16

160:20 169:22

170:5 171:16

189:12 210:10

214:19 216:11

243:5 265:21

266:10 267:17

278:6 288:7,8,20

289:3,21 297:4

305:6 311:12,13

322:6,8 335:22

348:7 358:21

364:17 366:14

371:2,8

regionally 34:7

regions 220:12

235:5 307:22

registered 162:4

registering 364:8

registration 361:16

regs 95:18 176:21

regular 176:8

342:12

regulation 132:8

143:4,17 154:17

154:17 176:18

256:2 258:4

259:22 277:16

329:14

regulations 64:18

103:17 142:22

143:18 145:6

199:9,12 220:4

228:9 281:9

295:11 304:19

339:15 349:16

358:3,9 368:18

regulatory 242:16

rehash 89:22

reincorporate

255:11

related 7:22 98:19

112:7 161:17

317:3

relates 158:6

relationship 66:20

72:20 73:11,13,21

78:19 79:6 82:19

82:20 86:8 87:19

relationships 72:22

78:17

relative 35:15

162:2

relatively-low

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relatively-new

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relatively-tiny

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Remarks 3:2

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remembering

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reminds 245:13

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removed 155:22

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repeat 107:9,18

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repeated 374:5

replace 19:11,13

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replacements 18:1

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replaces 110:13

replacing 6:18

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replying 8:16

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reported 199:5,6

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REPORTER

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reporting 199:4,17

206:14 208:17

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reports 198:5

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represent 188:19

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representative

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represented 47:15

representing 32:8

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represents 301:17

reputable 237:7,19

reputation 182:11

request 13:4 60:7

61:3 227:2 273:7

273:9 274:20

require 140:3

209:5 220:4 224:6

227:18,20 237:22

242:22 341:11

359:16 362:5

368:3 372:3

required 21:13

120:4 211:12

212:21 244:4

266:4,20 268:8,13

359:15 360:12

requirement 67:11

96:12 99:20 133:7

211:8 227:16

234:10 257:22

269:20 270:4,9

282:8 324:11

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requirements

10:16 20:1 23:1

30:22 44:21 75:20

81:10 104:5 107:4

131:22 161:2

207:19 211:3

288:19 295:12

303:20 363:14

368:2,2,19 372:1

requires 20:13

190:5 200:22

209:1 219:6 237:1

237:17,18 259:22

301:13

requiring 31:11

222:7

researching 231:4

resell 116:22 117:2

reselling 103:3

reserve 178:21

resetting 327:2

residential 19:9

98:10,19 99:5

112:13 124:21

125:15,17,19

126:6 129:10

134:12 205:3

219:9,14 264:19

276:2 277:2,6,6

residential-type

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resolution 194:22

resolve 370:3

resolved 194:6

resonate 144:6

resounding 326:20

resources 1:21

177:4,20 204:7

229:20,22 256:13

260:3

respect 77:12

225:10 341:15

358:13

respected 341:22

respond 8:14 9:1,5

35:8 36:1,16

201:13 202:19

243:11 253:21

responded 58:2

response 7:1 8:19

9:18 14:8 31:18

56:5 64:8 83:10

147:4 154:4

198:10 243:8

265:14 292:14

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responsibilities

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responsibility

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105:4,12 133:15

140:11 148:10

207:22 258:13

261:5,11 277:18

310:6 345:16

346:16

responsible 76:10

76:16 78:9 80:19

81:1 85:9 86:2,20

89:1 96:19 97:19

103:16 153:2

162:16 163:14

208:3 342:19

358:3

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242:4

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restricted 146:9

246:18 309:12

restriction 34:2

restrictions 18:20

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restrictive 19:6

result 28:15 36:10

42:1 192:8 194:10

results 291:5 304:4

retail 113:12 151:3

151:7

retailer 109:12

113:3,22 114:5

116:12,17 117:9

118:3,17 121:17

147:9,16 148:1

150:17 313:8,13

retailers 148:9

150:19

retain 227:16

retained 227:13

retention 227:14

retrofit 18:17

21:15

return 283:11

342:11

reversal 357:14

reverse 183:1

219:18

review 15:4 174:4

175:3

revisit 133:14

rewards 230:12

rewind 340:11

rework 240:6

Rheem 1:21 14:18

16:14 56:20 65:15

73:8 89:12 107:8

122:1 149:6 164:4

265:16 276:1

304:15 326:4,8

342:15,18

rid 322:4

ride-along 373:14

ridiculous 177:6

right 6:6 7:7 11:18

15:5 17:17 21:20

22:13 24:16 26:2

33:16 34:4 48:19

50:20 51:7,8,11

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345:21 347:5

348:3 349:20

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356:21 357:2

362:4 364:11,13

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rises 163:3

risk 134:3 250:8,13

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river 158:9 215:5

215:10 242:9,12

242:12 333:16

road 115:12

robust 245:15

Rocky 2:1 10:6,6

11:8 18:3,6 21:2

21:19 22:11,15,21

44:4 45:13 109:21

109:22 110:5

111:22 131:12,13

161:12,13 316:19

316:22,22 373:15

role 100:13,16

101:6 164:12,17

165:1 173:11

194:16 205:22

373:2

roles 65:9 101:5,6,9

roll 250:10

rolls 337:22

roof 233:15

room 1:11 47:5

65:6 86:11 134:4

134:22 156:13

197:5 222:13

239:10 261:18

263:10 282:22

343:10 350:17

rough 363:19

round 110:15,15

250:1

routine 3:10

151:19 153:17

157:17 160:8

163:4 173:2,17

174:13 175:11

177:9 178:13,18

179:2,6,9,12,19

181:13,21 183:3,4

183:6,7,8,11,13

183:15 184:8,14

184:16 187:5,10

251:19 252:1,8,9

252:14 253:16

255:18 270:15

281:22 282:4,7,9

282:10,14 284:11

284:17 285:10

321:5,8 322:7,10

322:16,18,18

323:4,5,6,7 324:1

326:2,15,17 327:7

328:2 329:17,22

332:6,17 337:11

338:2,5,6,18,21

339:2,22 340:14

341:19 345:1,11

345:14 347:16

348:14 349:1

352:18 353:2

355:16

routinely 27:16

152:13 153:11

154:5,9,15 155:11

156:3 157:4 164:1

166:9 167:9

171:18 175:12

176:4,17 177:3

181:16 182:1,15

189:11 195:18,21

208:1 254:16,17

263:15 265:18

267:14 282:18,18

282:22 335:21

348:7

rule 82:8 92:5

143:4 161:8,9

174:16 177:22

186:19 245:14

256:6 257:9,9

258:12,15 288:11

291:12 293:12

301:8,13 303:13

367:20

rulemaking 14:3

112:12 246:11

290:21 293:8

306:17 307:15

309:2 311:22

rules 81:20 89:6

129:2 133:11

135:13 145:18,18

160:14,15 257:8

283:18 290:17

299:17 307:8

312:20 314:9,14

355:18 372:8

run 218:16 233:4

279:6 366:19

running 375:10

S

S-E-S-S-I-O-N

192:3

S.W 1:11

Sachs 2:1 5:2 27:5

27:6 47:2 60:3,4

61:15 63:6,10

77:10,11 94:8

97:10 98:2 102:15

112:18,19 113:18

117:17 131:6

132:2 143:21

145:1,19 146:16

150:14 151:5,16

156:15 157:20

158:14 236:17

240:10,13 243:3

244:10,21 271:21

271:22 273:1,18

285:8 302:6,8

306:1,5,16 307:10

309:6 310:5

326:10 327:22

328:7,9,20 329:1

340:8,10 341:7,13

342:3 344:15,21

377:20 378:2

safe 252:19 253:9

255:22 256:1

258:17 270:10,17

272:8,12 278:21

279:20

sale 78:10 116:19

116:20 124:6

214:21 270:20

334:7

sales 3:10 49:13

56:14 57:11 72:2

85:17 151:18

161:16 186:21

277:14 292:18,19

294:5,14 295:13

296:6,13 297:5

299:6,10,18

301:19,22 309:12

324:8 325:22

338:20

sample 205:17

207:13

sampling 200:8

San 216:9,12 217:2

219:2 276:7,8

277:12

sanctions 250:20

sandbox 186:11

329:20

satisfaction 180:13

satisfied 314:12

satisfy 28:2 101:17

107:3

save 236:12

savings 240:19

saw 7:10 215:15

226:12 261:3

saying 11:6 20:12

21:22 23:10 24:17

25:6 30:5,8 48:17

49:7 50:1,10

62:16 70:15 73:3

75:12,17 79:21

88:10 90:12 97:6

99:15 107:21

118:12 120:3

124:11 132:17

134:5 136:12

139:9 147:22

162:14 166:7

174:21,21 177:20

178:17 180:14

189:2 196:1 218:5
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search 138:11

seat 144:1

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second 5:16 32:21

65:1 91:15 97:11

100:7 122:11,14

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317:19 320:22

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seconded 149:14

Secondly 27:16

seconds 139:17

Secretary 302:14

section 49:21 64:17

71:22 83:18,20

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161:5 181:9

325:12

security 5:19 68:10

152:5 378:11

see 14:5 25:18

26:22 39:15 40:2

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76:1 98:17 99:17

101:11 108:13

110:1,16 113:1

115:19 119:14

120:15 121:16

124:11,12 132:7

133:14 152:16

163:15 165:12

169:3 175:2

182:14 188:4

191:2 197:15

200:9 209:12

219:12,15,19

222:6 223:19

224:5,16 226:15

227:4,21 228:5,14

233:13 234:11

239:21 242:22

245:18 247:13

252:19 273:2

277:3,5 281:17

286:17 291:16

302:9 306:11

312:14 317:17

334:1 343:7

346:16 348:19

355:8,10 362:7

363:11 364:7

368:21 370:6

375:4

seeing 14:14

seek 206:18

seen 307:3 375:19

SEER 18:22 20:8

20:14 21:11,12

22:2,7,8,12 23:11

23:12 24:20,22

25:22 26:5,14,16

28:8,9,9 29:22

30:11,13,17 31:6

34:15 35:1 36:8

36:10 37:4 38:5

38:14 44:22 45:1

49:10 53:16,22

58:9 59:7,8,12,14

60:10,10,15 63:2

63:4 104:16

106:19 107:3

138:12 157:14

158:8,9,12 178:4

206:6 217:3,15,22

218:19 223:20

234:2,4,11,22

235:2,14 236:3

239:6,7,11,12

240:16 243:17,18

247:11,21 248:1,6

248:13,17 249:12

264:18 266:14

273:9 277:12

295:9,9,10,14

296:5,7 309:14

347:21 348:13

368:1

SEERs 62:9 220:16

sees 196:22

select 203:12

self 272:5 367:8

self-attestation

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self-certification

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self-enforcing

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self-executing

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self-installed

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sell 23:10,22 24:3,7

24:8 49:1 50:4,5

53:22 54:3 56:18

57:6 61:11 62:4,6

67:14 72:7 89:5

89:15 111:10,12

112:5,14 133:8,10

134:10,13 136:16

147:6 152:10

155:3 161:17,18

161:18,19,19

162:4,13,14 163:8

163:11,22 166:7

166:15 167:1,13

170:1 187:8

237:21 240:17

248:17 282:11

297:15 330:13

336:7 342:20

343:1,16,20

346:10 347:19,21

348:5 349:4 375:6

sell-through 23:21

235:19

seller 104:1 140:2

144:17 313:5

selling 21:9 84:3

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104:7,12 107:11

108:5 109:18

110:9 117:22

118:20 155:9

157:15 162:19

163:12 189:11

216:13 224:11

240:15 259:20

263:21 264:12

266:21 283:18

284:19 320:11

321:7,22 322:10

338:22 344:4,8

348:12,12 370:9

371:7,12,13,15

373:9

sells 66:3,7 104:8

124:15 125:14

126:5,15 134:6

141:20 149:8,17

160:2 242:8

346:12

send 4:21 5:10

170:10 225:21

273:8 289:10

338:13

sending 220:16

264:17 273:6

sends 225:15,18,20

sense 18:13 46:19

63:14 89:6 100:17

126:21 128:13,21

150:6 164:11

166:4 177:21

189:6 204:6,19

205:9 251:21

253:21 263:11

284:13 291:15

294:11 331:22

374:12 377:4

sensitive 94:10

sent 14:20

sentence 42:15

43:1 91:15 108:18

252:14

sentences 101:11

separate 27:13

92:13 109:5

161:11 251:2
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setting 256:18

settlement 140:12

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severely 77:22

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sheepskins 67:1

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shipments 214:19

222:6 223:17

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276:3

shipping 218:19

221:3 222:4

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shoehorning

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shoes 173:10

short 16:20 235:19

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shorter 17:5

shortly 4:5

shoulder 263:8

show 164:21 209:1

209:4,10 218:1

304:21 324:2

showing 294:13

shown 294:4 299:7

299:11

shows 217:21 292:8

295:18

SIC 364:2

side 138:5 206:4

242:11 311:17

333:16 340:6

345:11

sides 215:5 253:1

sign 87:22

sign-in 378:9

signaled 285:11

signed 373:16

significance 93:1

152:1

significant 88:17

216:16 243:21,22

244:1 246:22

significantly 33:14

37:5 208:15

212:14 294:8

silent 39:20

silver 5:10

similar 118:17

122:9 206:12

311:10

similarly 206:16

355:19

simple 62:1 71:8

100:17 104:15

108:10,13,15,16

221:22 233:18

265:11 269:21

278:15 337:12

366:16 369:8

simpler 9:3

simplistic 93:12

164:10 169:14

simply 48:16 80:11

91:16 131:2

157:14 165:2

205:16 208:13

233:19

single 104:16 132:6

220:1 306:18,19

319:9

single-package

98:20

single-speed 23:8

49:17 219:17,20

single-stage 61:22

sit 239:1 249:8

369:14,14

site 222:17 233:4

275:9 276:10

277:12

site-specific 27:19

sites 201:22

sits 65:8

sitting 134:8 137:3

184:17,20 226:17

situation 5:13

18:15 20:11 21:5

33:2 40:11 97:4

127:21 128:15

148:17 170:7

177:16 255:15

256:5,8 258:20

279:7,10,17,19

287:9 300:3

344:11,12 346:10

situations 19:8

87:14 162:5

six 293:15 331:16

331:18 337:13

338:3,10 339:7,8

339:12 359:3

sixth 378:8

sizable 229:2

size 18:20 19:6

27:17 33:5,14

36:11,14 39:8

42:7 106:16

155:18

sizing 97:18

skaters 236:7

skirt 128:11 206:18

259:8 349:2

skirting 129:1

135:13 143:3

368:13

slab 46:7

slate 336:15 377:10

slide 65:1 152:7,15

153:8 317:14,16

slightly 26:8 27:7

253:4 318:9

slightly-larger

39:12

slippery 197:20

slope 197:20

slot 375:16

small 19:4 35:15

79:8 143:12

205:18 217:17

226:15 238:4

259:10 260:11

287:4 326:22

338:21 339:15,18

374:13

smaller 27:21 36:3

smell 158:13

223:22

Smith 178:1,7

snapshot 226:12

snitch 200:4

soapbox 236:16

society 95:21

sold 18:1 20:22

25:2 26:12 30:16

34:7,12,18 35:14

42:7 49:2,5 50:2,3

52:15,18 57:10

58:14,15 59:2

60:13 109:14

116:6,19 117:21

118:16 122:11,11

123:21 124:8,9

135:4,4,9 138:14

147:16 154:21

162:7 163:3 171:2

179:20 186:18

234:3 235:14

267:6 268:10

282:9 283:6

295:12 296:22

297:2 305:1

309:11 321:20

326:4 339:8

342:20 346:15

solely 25:21

solution 144:12

205:16 221:20

226:4

solve 55:19

solved 300:15

somebody 102:9

104:7,11,22 135:6

135:9 137:19

138:4 139:20

143:3 150:19

164:14 181:1

184:4 186:8 188:8

196:11 198:4,4

218:18 223:21

224:10,16 225:21

241:14 242:8

252:1 256:22

261:22 264:17

266:20 280:13,17

310:8 331:19

334:15 346:18

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sorry 5:18 22:11

32:9 53:4,5 72:19

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201:12 232:22

315:4 317:12

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113:5 114:11

115:10 129:22

130:11,13 140:21

143:17 148:9

154:22 158:15

164:17 165:1,13

165:19 166:16

172:4 174:21

177:6,9 182:2

189:14 194:18

195:12 200:8

202:3 203:5,19

205:11,21,22

207:13 213:1

214:1 218:1

221:11 226:11,22

227:16 228:3,16

229:10 230:2,8,13

254:9 258:4

269:20 270:14,17

271:15 307:19

311:11 314:5

327:6 328:3

329:16 334:22

349:3 352:17

353:19,21 354:2,4

354:19 356:4

362:8,17 370:1

sorted 87:20

sought 289:3

sound 183:3

sounds 25:11 31:16

38:6 39:17 114:12

118:2 124:18

194:6 197:7 241:1

259:5 363:8

source 138:9

sources 228:20

south 34:18 56:19

57:7,10 61:12

86:16 165:15

206:7 214:14

215:1,16 216:4,9

216:12 217:11

219:2 235:15

240:16 242:12

247:20 248:6

249:13 276:6,7

295:10,13,20

296:8,10,15 299:3

304:17 305:1

306:3 368:7,10

southeast 32:17

378:4

southeastern 308:3

southern 32:14

166:21 264:19

266:14 273:10

274:20 279:2

298:8 300:20

309:9 310:21

southwestern

308:3

space 27:20 41:13

42:2 45:21 249:2

287:6

spas 199:10

speak 12:7 102:6

193:13,14 206:2

210:14 252:17

283:14

speaking 39:19

58:13 144:20

206:4 289:18

speaks 9:13

special 238:3

specialize 82:21

specific 16:2 63:12

67:11 82:22 87:14

111:19 156:19

195:11 275:14,14

318:7 363:3

specifically 194:17

specification 97:16

specified 99:4,14

102:18

specify 97:22 99:21

125:16

specifying 98:11

speed 28:15 220:2

290:20 293:8

speeding 195:22

spend 229:22

spending 204:8

236:10 242:6

352:12

spin 207:11 351:2

spinning 103:10

spitball 357:19

spitballing 184:21

357:1

split 48:13 98:20

split-system 292:7

split-systems 307:5

spoke 58:13 235:11

253:12

spot 38:3

staff 304:11

stakeholder 181:8

stakeholders 47:6

163:20 179:5

354:14 376:11

stand 5:21

standalone 353:7

standard 20:3,5

21:1 22:6,10

24:18 25:4 26:10

34:11 35:11,12

43:14 53:9 62:14

62:18,20 84:6

106:14 113:5

152:14 156:2

159:12,17 160:21

184:1 189:12

200:22 205:10,13

211:18 213:5

216:11,20 231:21

234:6 244:16

297:4,8 308:1

321:16 322:8

324:18 335:5,22

338:1 340:19

348:7

standards 1:3

29:21 31:13 32:13

32:15 68:13 92:4

98:15,18,22

103:13 125:17

126:2,3,7 129:11

160:16 169:22

171:16 172:15,16

202:18 210:11

242:2 265:21

266:10 267:17

278:6 288:7,8,20

289:3,21 290:1

304:22 305:7,17

306:13,22 311:13

358:21 359:15

364:17 366:3,3,10

366:14 371:2,8

standing 29:13

47:13

standpoint 42:11

161:15

staring 125:6

stark 130:17

start 28:14,18

65:12 66:5 67:4

108:10,16 121:20

122:2 127:14

153:10,21 154:5

197:13,14,21

220:11 238:20

240:5 241:6

267:13 291:17

294:1

started 4:4 7:3

32:12 37:19 87:7

130:20 192:6

251:15 282:5

starting 334:1

starts 76:7 104:4

310:19

Stas 2:18 144:11,21

144:22,22

state 130:1,8

157:13 158:8

188:14 200:21

210:2 212:20

214:13 218:20

219:1 220:7

236:11 310:17

363:14 365:5,7

373:9

stated 69:14 349:10

370:10

statement 17:22

37:2 48:14 110:1

201:8 278:21

279:21 292:22

309:19 310:6

326:9

statements 58:12

251:1

states 48:11 96:21

135:6 171:3

207:18 209:1,10

209:16 212:19

216:15 235:1

277:16 300:5

307:3 308:20

310:18

Station 5:9

statistical 60:14

statute 64:15,19

66:6 71:5 79:17

83:18 84:10 85:1

89:18 90:1,10,13

92:16 109:6

113:16 114:1

133:5 136:15,19

137:13 140:22

142:13 149:18

151:8 159:15
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sticks 374:1

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store 165:14

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stretching 149:19

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strikingly 118:17

strong 73:15

structured 55:22

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studiously 33:18

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stupid 241:18

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sub 87:2,2,3,4

subcontract 91:13

subcontractor

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subcontractors

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subject 212:8

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subjectivity 330:6

submit 11:6 304:16

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submitted 13:3,12

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358:11

submitting 357:6

subpoena 228:1

subpoenaing

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subset 101:5

substance 44:13,15

76:12

substantially 113:1

214:3 219:15

substantiate

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subsumed 113:3

subtract 127:13

success 211:6

suction 37:7

sudden 158:12

263:11

suddenly 145:8

172:21 368:17

suffice 75:9

sufficient 88:18

155:16,17

suggest 40:16

154:15 190:9

226:11 243:16

254:10

suggested 82:16

suggesting 118:7,9

144:1 226:3 268:5

342:9

suggestion 65:13

90:21 113:8

146:19 149:13

153:19 190:12

194:2

suggestions 193:6

suggests 158:16

Suite 4:20

summarize 44:6

supplied 209:9

supplier 80:21

242:3

supply 80:10

214:20

support 32:11

40:12 128:10

199:7 245:2,5,15

246:1,9 330:3

suppose 127:20

supposed 48:16

50:13,14 155:8

261:2 267:15

sure 19:20 21:21

29:13 32:19 35:8

52:4,7 55:18 56:9

56:18 57:21,22

59:20 61:5 62:6

67:6 69:22 71:14

73:12 74:19 80:18

85:4,19 88:7,13

92:12 93:14,21

98:4 99:12 121:14

123:12 125:5

129:2,16 131:8

138:12 139:18

146:16 148:11

150:1 155:5 166:3

166:17 167:22

178:8 179:4,14

180:7 198:8

201:14 204:5

205:15 206:10

233:5 248:15

261:12 263:2

264:7 281:7

282:20 286:13

312:16 314:1

334:21 335:3

336:10 339:14

342:8 349:8

354:15 355:12

356:8 358:1,9,15

359:1 364:22

surface 28:13

surprised 211:13

287:20

Surrena 2:16 27:3

29:9,11,11 30:6

30:18,21 32:1,4

74:8,10,11 75:18

76:14 77:7 79:3

83:17 86:6 104:13

104:13 111:2,3

134:21 141:18,19

149:14 185:11

197:6,6 208:20,20

259:4,4 322:13,15

322:15 324:5,13

325:3

Surrena's 184:12

survey 202:4,7,10

358:8

susceptible 238:2

suspect 47:14

167:7 200:1

205:12 269:16

suspected 167:8

suspecting 274:11

suspicious 273:7

swaps 150:18

swear 357:8 359:14

swimming 219:6,7

219:11 239:2

swims 87:4

swings 362:16

swirling 281:19

sworn 357:11

sympathetic 306:8

synthesis 238:11

system 13:19 20:20

22:16 23:4,11,15

24:1 30:11 31:2

31:12 33:12,13

34:19,21,22 36:9

37:16 38:16,20,22

44:8 45:7 48:13

50:4 54:8,11

58:17,18 59:2,11

78:10 104:17

106:16 128:11

162:8 199:4

206:21 271:8

272:16 294:21

296:22 297:1,3,9

298:13 367:18

372:9

system's 315:6

systems 17:15

58:15 78:1,4

97:16 98:20,21

112:3 161:17

162:3 281:6

292:17

T

table 121:6 148:22

151:22 167:17

176:1 287:22

303:6 329:13

334:18

tag 225:12,15

tail 144:9

tailor 339:14 372:1

take 8:5 9:21 14:4

25:14 29:19 38:15

40:1 43:4 46:3

50:14 78:22 116:7

120:14 147:14
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57:20 69:10,12

83:2 85:21 86:15

112:7,8 136:4,5

143:12 145:17

151:2 154:1

171:20 174:15

175:5,7 181:12

194:15 196:21

201:6 206:15

210:8 217:19

220:7 221:2

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274:19 275:1

277:21 282:21

298:3 304:11

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315:8,10 316:6

317:11 334:19,22

352:20 354:1

357:14 364:6,8

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talks 56:14 72:1

taller 41:15,21

tape 340:11

tapped 119:10

target 60:17 205:1

205:3 207:3

220:20

targeted 151:11

203:4

targeting 203:5,7

205:15

Tav 40:14

taxpayer 203:4

204:8

taxpayers 352:13

team 66:4 277:14

tear 42:5 225:21

tease 359:4

tech 94:11

technical 15:12

26:20 31:3 35:18

36:1,16 39:3 63:5

245:2,5,15,22

315:21

technically 53:17

147:16

technically-spea...

9:11

technician 69:1

73:4 101:3 110:12

360:18,21 361:18

technician-by

361:17

technician-level

362:8

technicians 74:15

96:22 361:7

362:13,15

techs 369:14

tedious 226:5

teenaged 250:7

teeth 224:15,19

225:3 278:18

330:21 331:1

teleconference 2:21

telephone 202:4

tell 15:7 34:1 39:21

59:10 85:18 87:10

114:2 137:12

162:7 165:20

189:8 222:5

239:17 320:18

330:19 334:1,2

356:11 374:21

378:1

telling 85:13 210:1

297:19

tells 158:15 222:19

301:5

tend 66:14 272:5

tendencies 197:19

tens 243:19

term 27:11 63:8

67:19 68:17,20

70:16 78:8 88:22

89:21 90:2,10

91:1 92:21 93:16

94:2 95:15 109:11

110:10 113:22

114:5 116:17

121:8 125:10,12

149:17 153:4

156:3 160:5 167:2

173:4 180:3 230:7

253:15 258:18,19

272:10 286:3

340:7,15 367:6

terminology 99:14

367:5

terms 55:2 64:14

64:22 65:4,7,17

68:9 69:11,11

71:13,18 72:3

88:4,6 89:22

90:12 92:2,11

93:18,21 110:2

112:15 113:6

114:11 116:3

130:8,18 141:11

150:6 152:11

154:8 174:16

175:18 182:3

186:20 207:22

255:21 273:13

289:13 312:10

313:1 314:2

328:12,13,14

343:19 374:3

terrible 365:22

terribly 150:16

Territory 334:3

Terry 19:4

test 34:16 37:1

48:20,21 49:1,9

50:21 51:4 53:15

62:2 212:21 233:5

234:10 262:7

359:22 367:19

370:18 372:6

tested 20:4 26:15

30:9 34:17 35:13

36:8 49:3,6 58:7

58:19,22 294:5,14

295:13 296:6

297:3,7,12 299:7

299:10 301:19,22

321:15

testing 16:21 17:14

20:15 30:20 40:22

48:3,12 49:15

50:14 51:4,10

80:15,17 212:22

213:22 297:7

301:19

tests 48:19 365:17

Texas 165:15

text 10:14 317:7

thank 29:8 32:4

40:5 42:12 58:3

74:10 77:7 96:4

103:7 141:18

144:10 151:16

191:1 193:15

194:6 211:22

269:10 286:4

310:9 314:22

320:7 342:11

thanks 302:9 315:3

320:6

theoretical 53:13

theoretically

195:17 196:9

theory 130:18

thing 7:4 19:2

22:12 28:22 55:6

65:22 70:9 78:3

86:19 88:20 93:8

115:1 144:13

154:20 155:12,13

161:11 176:7

180:21 196:1

207:2 213:1 214:2

224:7 225:3

235:16 236:1,16

240:8,14 241:4,21

245:2 254:9

267:20 268:15

271:13,15 273:15

278:18 279:5

291:12 299:20
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88:19 99:22

103:11 105:7

114:4 115:16

128:20 141:1,21

146:3 149:21

161:22 169:12

172:15 202:21

203:1,16 204:12

204:17 228:2,3

235:12 237:3

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247:18 251:11

256:15 257:1

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287:7,10 288:14

288:14 289:16

291:9 302:12

328:13,16 331:21

335:10 336:22

343:22 350:7

358:1 359:7 363:1

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10:8,10,22 12:3,4

12:14 13:5 19:17

23:16 27:1 28:11

29:4,4 33:19 35:6

38:13,18,22 41:18

42:9 43:8,20

44:11 45:22 46:5

46:11,22 47:4

50:10,16 52:2

57:15 60:5,22

61:6,17 62:16

63:13,20 64:2,20

66:14,14 68:8,17

69:4 72:5,8 73:2

73:14 75:16 78:18

81:14 85:9,11

86:14 87:17 88:21

89:3 90:5,20 91:4

91:5,9 92:22

93:14 94:5,5,10

94:19,22 95:2

96:1,7,9,12,13

97:2 99:18 100:3

100:12 101:12,22

102:13 103:15,20

107:9,13,15 108:1

110:21,22 111:20

113:4 115:12

119:7,9 120:4

122:2 127:5,10

128:6,14,21 129:8

129:21 130:1,2,7

130:21 131:7

132:11,13,16

133:18 134:6

135:1,19 137:7

138:20 139:17

140:1,8,15,19

141:8 142:11

143:12,14,16

144:6 148:10,16

149:21,22 150:5,8

150:10,16 156:12

158:6 159:2,5,20

160:4 162:12,20

162:22 164:10

166:2 167:20

168:5,13 173:7,12

173:13,14,19

175:1,9 180:4,6,7

180:10,12 181:11

181:16 183:10,16

184:6 185:19

186:2,14 187:3

190:4,10 193:22

194:14 195:2,10

195:17 196:9,12

200:5,6 204:10,12

204:13,14,19

206:3,15,19 208:1

209:22 213:7

215:6,10 217:7,12

218:12 219:4

220:6,10 223:17

224:8 227:6,22

230:10 231:9

234:15 235:9,11

237:4,11 238:10

246:19 247:10,19

249:1,14,21

250:11 251:16

252:18 253:2,7,22

253:22 254:7,10

255:17,17 257:4

258:19 259:1,8

261:4,22 262:22

265:12,18,22

266:7,22 267:2,12

267:21 268:7,17

270:5,8,9,10

271:17 272:7

273:19 274:2,3,7

274:22 275:5,10

275:15,16 277:1

277:17,20 278:9

278:22 279:12

280:18 281:13,14

281:20 282:19

284:20 285:20,21

286:3 287:15

288:15 290:6

291:3 292:3

293:12 294:10,21

299:22 300:12,17

300:22 301:1,7,9

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270:20 281:10

283:22 322:19

343:11 344:11

364:14 367:12

wow 351:7

wrap 159:4 187:15

Wrap-Up 3:21

write 70:9 79:15

156:10 180:5

186:18 188:13

writes 77:16

225:14,17,19

writing 81:20

363:5

written 25:15

39:19,22 46:14,18

79:1 117:5 122:3

122:20 157:1

wrong 86:20

106:14 144:13

155:5 157:7 178:5

182:22 203:14

220:1 242:9 245:4

245:8 249:10

253:5 267:4,9

333:22 349:4

365:10

wrote 88:12 116:1

116:2

Wyoming 216:13

216:14

X

X 155:3,7,9,10

162:15,15,19

163:2 189:3

332:18 359:20

365:18

XY&Z 284:17

XYZ 66:17 85:19

168:20

Y

Y 155:4,4,9,11

year 174:22 187:9

187:10 226:18

288:11 294:1

323:15 326:5

332:21 337:13

339:1 359:2

years 22:18 31:5

32:14 53:9 102:16

197:18 205:4

211:20 213:18

278:14 279:18

293:13 341:3

365:18 371:18

Yelp 356:12

yield 28:9

York 99:2

Z

0

1

1 37:21 219:9

234:21 239:4,10

262:4 337:15

1-800 198:3

1,000 265:4

1.5 219:14

1:19 191:5

1:30 190:17,18,19

191:2

1:33 192:4

10 21:12 22:2,7,12

135:6 196:3,22

205:4 273:9,12

276:19,19 342:18

358:7 361:14

370:17

10:45 376:18

10:48 120:18

100 56:21 60:12

107:2 184:12,15

185:2,7,8 187:5,7

262:16 264:18

265:3 266:14

324:6 325:5 329:7

1000 1:11

11:00 120:15

11:07 120:19

12 178:4,7 377:11
202-234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

Page 423

12:13 191:4

13 19:1 20:8 22:6,6

22:8,12 23:11

24:1 25:22 26:5

28:9 60:10 62:3

138:12 157:14

158:9,12 217:3,15

217:22 218:18

220:16 223:19

234:4 235:3,14

239:6,11 240:16

243:10,18 247:21

248:6 249:12

266:14 273:9

277:11 295:9

299:10 304:19,20

305:8 342:4

13.0 295:18

13.2 61:8,14

13.4 61:9

13.6 59:14 61:14

13/14 23:8 247:11

13s 264:20

14 19:1 20:13 21:11

23:12 26:14,16

28:8,9 30:11,12

30:17 34:15,22

38:5,14 57:11

58:8 59:7,8,12

60:10 106:19

107:3 158:8 206:5

234:2,22 236:3

239:7,12 243:10

243:17 248:1,13

295:9,10,14 296:5

296:7 297:14,15

297:18,20 298:6,9

298:10,14 299:8

304:20 305:2

306:2 347:21

14-SEER-capable

41:15

14.2 61:9,13 295:18

14.4 61:10

14s 240:17 368:11

14th 4:17,18 378:3

15 186:18 187:9

15-minute 120:15

151 3:10

17 3:7

18 23:20,21 235:17

1962 37:3

1975 148:1

1st 24:2,3,9 267:22

292:8

2

2 262:6

2-ton 33:7 107:2

2.9 339:9

20 205:4 214:14

248:4 262:1

20-cent 250:6

20-some 31:5

200 56:22 57:7

60:12

200,000 364:3,4

2010 29:16

2011 235:10

2014 1:8 378:17

2015 267:22

2016 24:3,9

20th 13:3 17:13

237 3:18

24.5 304:20

25 348:13

26 1:8

27 378:17

286 3:13

293 3:15

2nd 24:7 368:17

3

3 17:21 33:7 339:7

3-ton 27:20 37:15

56:12,20 57:5,6,8

3:00 286:6

3:01 286:8

3:17 286:9

30 43:19

30th 303:8

31st 368:16

320 3:10

375 3:21

4

4 3:2

4:41 378:15

5

5 37:4,15

5-ton 107:2

50 158:10,11

50-story 99:2

529 4:17,18

6

60,000 327:2

600 4:20

608 145:22 146:6

360:11 367:16

6291 109:8

6295 64:15 65:2

71:19

6302 83:18

6303 83:20

64 3:8

7

7 3:4

8

80 158:12 248:4

310:20

81 281:6

85,000 219:14

8E-089 1:11

9
NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 

C E R T I F I C A T E

This is to certify that the foregoing transcript 

In the matter of: 

Before: 

Date: 

Place: 

was duly recorded and accurately transcribed under 

my direction; further, that said transcript is a 

true and accurate record of the proceedings. 

 

 ----------------------- Court Reporter 

424

Central A/C Regional Standards

Enforcement Working Group Meeting

US DOE

08-26-14

Washington, DC