UNITED STATES OF AMERICA

DEPARTMENT OF ENERGY

**PUBLIC MEETING ON ENERGY CONSERVATION STANDARDS**  **FOR CERTAIN COMMERCIAL AIR CONDITIONING, HEATING AND WATER HEATING EQUIPMENT, i.e.,**  **CERTAIN EQUIPMENT IN ASHRAE STANDARD 90.1.2010**

U.S. Department of Energy 1000 Independence Ave., SW Washington, D.C. 20585 Room SE-089 Review Center 9:00 a.m.

Tuesday February 14, 2012

**Facilitator:** Doug Brookman Public Solutions Baltimore, MDExecutive Court Reporters (301) 565-0064 2 **Participants Identified:**

Robert Wilkins Danfoss Gary Nettinger Panasonic Air Conditioning Group Dave Winningham Allied Air

Steve Rosenstock Edison Electric Institute

Joanna Mauer Appliance Standards Awareness Project

Karim Amrane Air Conditioning, Heating and Refrigeration Institute Paul Doppel Mitsubishi Electric

Warren Beeton Emerson Climate Technologies

Gabriel Nelson E&E Publishing Mark Sharp Panasonic

Julia Farmer Underwriters Laboratories Jay Perkins Mitsubishi Electric

**Participants from DOE:**

Mohammed KhanExecutive Court Reporters (301) 565-0064 3 Ashley Armstrong
Eric Stas General Counsel’s Office

**Participants from Consultants:** Adam Darlington Navigant Consulting

Knute Svenson Navigant Consulting

Alison Williams Lawrence Berkeley National Laboratory Greg Rosenquist Lawrence Berkeley National Laboratory

David Winiarski Pacific Northwest National Laboratory

Mike Scott Pacific Northwest National Laboratory.

**Presenters:**

Mohammed Khan Adam Darlington

Knute Svenson
Dave Winiarski

Michael Scott

Alison Williams Ashley ArmstrongExecutive Court Reporters (301) 565-0064 4

**AGENDA**

**ITEM PAGE**  Welcome, Doug Brookman 5
Welcome for DOE, Mohammed Khan 5

Introductions 6 Agenda Review, Doug Brookman 8 Meeting overview, Mr. Khan 11 Scope, Mr. Darlington 15 Test Procedures, Mr. Darlington 26
Market Assessment, Mr. Svenson 57 Engineering Analysis, Mr. Svenson 73 Introduction to Markup Analysis, Energy Use Analysis, Life Cycle Costs and Payback Period Analysis, Mr. Winiarski 86 Markup Analysis, Life Cycle Costs, Mr. Scott 92 Shipments Analysis, National Impact Analysis, Utility Impact and Emissions Impact Analysis, Ms. Williams 123 Certification, Compliance & Enforcement Ms. Armstrong 138 Closing Remarks Mr. Khan 145Executive Court Reporters (301) 565-0064 5

P R O C E E D I N G S 1 MR. BROOKMAN: Good morning everyone and 2 welcome. This is the U.S. Department of Energy’s 3 public meeting on Energy Conservation Standards for 4 Certain commercial air conditioning, heating and water 5 heating equipment, i.e., certain equipment in ASHRAE 6 Standard 90.1.2010. 7 Today is Tuesday, February 14, 2012 here at 8 the Forestall Building in Washington, D.C. My name is 9 Doug Brookman from Public Solutions in Baltimore. Glad 10 you’re here. Glad we’re going to get an early start on 11 the day. 12 We’re going to start today with welcoming 13
remarks from Mohammed Khan. 14 **Welcoming Remarks** 15 MR. KHAN: Good morning, everybody . My 16 name’s Mohammed Khan. First and foremost I want to 17 welcome and thank everybody for participating today. 18 Today’s rulemaking is on certain ASHRAE commercial 19 equipment, and it includes a variety of classes of 20 There is a lot of information, technical information, 21 a lot of discussion in there, and so today we want to 22 do our best to convey and summarize the points that 23 are in the NOPR. We want to get your comments, hear 24 your questions, and then also ask you some questions 25Executive Court Reporters (301) 565-0064 6

about it as well. 1 So, because we have a lot to cover, I think 2 that’s it and we probably can get started. 3 MR. BROOKMAN: Okay, so let’s then proceed. It’s 4 our tradition to do introductions around the room. 5 I’ll start over here to my left, please say your name, 6 organizational affiliation. You can get used to 7 turning on the microphone. We’ve had a little bit of 8 an audio issue going this morning, so in order to get 9 a really clean, clear transcript, we need to be 10 diligent about speaking directly into the microphone. 11 So let’s – name and organizational affiliation. 12 **Introductions** 13 MR. WILKINS: Robert Wilkins, Danfoss. 14 MR. NETTINGER: Good morning. Gary 15 Nettinger. Panasonic Air Conditioning Group. 16 MR. WINNINGHAM: Dave Winningham. Allied 17 Air. 18 MR. ROSENSTOCK: This is Steve Rosenstock, 19 Edison Electric Institute. 20 MS. MAUER: Joanna Mauer, Appliance 21 Standards Awareness Project. 22 DR. AMRANE: Karim Amrane, Commercial 23 Heating and Refrigeration Institute. 24 MR. DOPPEL: Paul Doppel, Mitsubishi 25Executive Court Reporters (301) 565-0064 7

Electric. 1 MR. BEETON: Warren Beeton, Emerson Climate 2 Technologies. 3 MS. ARMSTRONG: Ashley Armstrong, Department 4 of Energy. 5 MR. STAS: Eric Stas, DOE, General Counsel’s 6 Office. 7 MR. KHAN: Mohammed Khan, Department of 8 Energy. 9 MR. BROOKMAN: Let’s go over here, Dave. 10 MR. WINIARSKI: David Winiarski, Pacific 11 Northwest National Laboratory. 12 MR. ROSENQUIST: Greg Rosenquist, Lawrence 13 Berkeley National Laboratories. 14 MS. WILLIAMS: Alison Williams, Lawrence 15 Berkeley National Laboratory. 16 MR. SVENSON: Knute Svenson, Navigant 17 Consulting. 18 MR. DARLINGTON: Adam Darlington, Navigant 19 Consulting. 20 MR. SCOTT: Mike Scott, Pacific Northwest 21 National Laboratory. 22 MR. BROOKMAN: You. Stand up, say your 23

name. 24 MR. NELSON: Gabriel Nelson, E&E Publishing. 25Executive Court Reporters (301) 565-0064 8

MR. BROOKMAN: Thank you. 1 MR. SHARP: Mark Sharp, also with Panasonic. 2 MS. FARMER: Julia Farmer, with Underwriters 3 Laboratories. 4 MR. PERKINS: Jay Perkins, Mitsubishi 5 Electric. 6 MR. BROOKMAN: Okay, so thanks to all of 7 you. Once again, glad to see you here and get an 8 early start on the day. All of you received a packet 9 when you walked in the door. I hope all of you 10 registered with Brenda or with Debby downstairs and 11 handed off a business card. The Department will 12 typically make a Xerox copy of all of those business 13 cards so that everybody knows who’s here. I’m going 14 to do a very brief agenda review and then we’ll just 15 proceed. 16 **Agenda Review** 17 MR. BROOKMAN: As you can see, and you all 18 have a copy of this in your hands, I hope, 19 immediately following this agenda review, there’s an 20 opportunity –- we’re going to have a brief overview by 21 Mohammed, and then there’s an opportunity for opening 22 remarks, for anybody that wishes to do so. Brief 23 summary comments on issues that are important to you. 24 From there, we’ll go directly into a 25Executive Court Reporters (301) 565-0064 9

description of the determination of scope and test 1 procedures. 2 We’ll take a break mid-morning, round about 3 10:30 or so, following the break we’re going to have 4 market assessment and engineering analysis presented. 5 And all of you received this packet of slides as well, 6 that will be the general format. This content will be 7 projected up on the screen and there’s opportunities 8 to comment as we go along. Following the market 9 assessment, we’re going to be talking about market 10 analysis, energy analysis, life cycle cost and payback 11 curve analysis. 12 We’ll break for lunch round about 12:15 or 13 so and then following lunch, shipments analysis, 14 national impact analysis, utility impact and emissions 15 impact analysis. And then rounding out the day, 16 certification and compliance, enforcement and finally 17 it is an opportunity for anybody that wishes to do so, 18 to make final comments, things that haven’t been 19 covered sufficiently in that time block you see at the 20 end of the agenda there, 2:15 to 2:30 or so. We’ll 21 also cover next steps and closing remarks there. 22 I think the Federal Register notice 23 suggested this meeting might go to four o’clock today. 24 We probably will get done a little bit early, but 25Executive Court Reporters (301) 565-0064 1 0

we’ll just see how it goes. We’ll try to be very 1 efficient about the conduct of the meeting as we’re 2 going along. 3 Questions and comments about the agenda? 4 There are several individuals that have 5 joined us via the web. We’ll do our best to 6 accommodate those that have joined us via the web, 7 that is, if you have questions that you would like – 8 or comments that you would like to have inserted into 9 the record, we’ll do our best to work with you. If 10 you send a question via the web, try and make it brief 11 and we’ll try and get it answered here. 12 So then, finally, I’d ask for your 13 consideration. If during the course of the meeting 14 today, if you could please speak one at a time. If 15 you could say your name for the record each time you 16 speak. There will be a complete transcript of this 17 meeting. I’m going to be cuing individuals by name 18 as best I can. I also wish to encourage follow on 19 comments. Sometimes the back and forth between 20 individuals can be very useful for the Department. If 21 you can, be concise. Share the air time. There’s a 22 lot to be said, I’m certain. 23 And keep the focus here. Please turn your 24 cell phones on silent. And limit sidebar 25Executive Court Reporters (301) 565-0064 1 1

conversations. We’re going to have to really focus on 1 getting our faces into these microphones today so we 2 get a nice, clean transcript. 3 Questions or comments before we begin. So I 4 think then we’ll go to Mohammed for an overview. 5 **Overview** 6 MR. KHAN: Well, good morning everyone. 7 Welcome, and thank you for participating in the 8 Department’s public meeting on energy conservation 9 standards and test procedures for certain commercial 10 heating, air conditioning, and water heating 11 equipment. My name again is Mohammed Khan and I’m the 12 project manager for this activity. 13 Today’s meeting serves multiple purposes. 14 Generally, our goal is to have a two-way discussion. 15 We want to convey the key points and concepts 16 associated with this rulemaking as well as hear and 17 listen to your thoughts and potential concerns. So 18 first the Department wants to receive comments on the 19 proposed standard levels and present the approaches 20 and results of the supporting analyses. Additionally, 21 we want to receive input on any aspect of the 22 methodologies, assumptions, and data sources used in 23 the analyses. 24 Let it be clear this forum is also for all 25Executive Court Reporters (301) 565-0064 1 2

interested parties to discuss and hear the issues 1 raised by others, and because your feedback is very 2 important, I encourage everyone to fully participate 3 and I urge you to submit any relevant data that will 4 help the Department. And finally, our goal today is 5 to describe the next steps in the rulemaking. 6 Let me point out also that today’s public 7 meeting is not the only opportunity for you to provide 8 comments. You may submit written comments to the 9 Department within the 75 day comment period for this 10 NOPR, which closes on the second of April. 11 This slide provides a sample call-out box 12 that we’ll use throughout our presentation today to 13 identify specific issues on which the Department 14 either seeks comment or information. The number and 15 order in which these boxes are presented correspond to 16 the 18 issues listed at the end of the NOPR. 17 As I mentioned earlier, your feedback is 18 very important, and I want to make sure that everyone 19 is clear on how to submit their comments. This slide 20 provides a postal, courier, email address, which are 21 appropriate for submitting your comments. Please 22 include the information here at the top so that it is 23 properly identified and catalogued once we receive it. 24 And let me restate that the comment period closes on 25Executive Court Reporters (301) 565-0064 1 3

April second. 1 There’s also another way that you can submit 2 your comments that’s not on the slide here, but it’s 3 in the Federal Register notice, and that’s 4 www.regulations.gov

. 5 MR. BROOKMAN: Steve Rosenstock. 6 MR. ROSENSTOCK: Hi. Steve Rosenstock, 7 Edison Electric Institute. It says that in addition, 8 if you want to send by mail to submit items on a 9 compact disk, in which case it’s not necessary to 10 include printed copies. Are you still accepting one 11 printed copy instead of the CD? 12 MS. DERR: His mic’s not on. 13 MR. BROOKMAN: So will you restate? 14 MR. KHAN: Yeah, I’ll restate what I just 15 said, which is typically -- currently these days we’re 16 not really receiving hard copy. You know, I guess, 17 with the other technology, it’s easier and more 18 efficient to – 19 MR. BROOKMAN: Yeah, so I guess what 20 Mohammed is saying is the Department’s prefers to 21 receive it in some sort of electronic media, either 22 via email or CD. 23 MR. ROSENSTOCK: Thank you. Steve 24 Rosenstock, again, I thank you. In other matters it’s 25Executive Court Reporters (301) 565-0064 1 4

been send electronically but also submit a signed 1 original, so that’s why I was just double-checking. 2 MR. BROOKMAN: Thank you for that. Okay. 3 MR. KHAN: Yeah. What’s driving this effort? 4 The Energy Policy and Conservation Act enacted in 1975 5 provides the legal authority and guidelines DOE must 6 follow to promulgate standards. EPCA directs DOE to 7 consider amending its energy conservations standards 8 for equipment listed in the relevant sections of 42USC 9 6313 every time ASHRAE Standard 90.1 is amended with 10 respect to this equipment. Additionally, DOE is 11 directed to review and adopt these standard levels 12 equal to the ASHRAE levels unless clear and convincing 13 evidence supports the adoption of more stringent 14 efficiency levels that would result in significant 15 additional energy savings, be technologically feasible 16 and be economically justified. 17 So at this point, we’d like to invite anyone 18 wanting to provide an opening statement or remark. 19 MR. BROOKMAN: Brief summary statement or 20 comments here at the outside? No comments at this 21 time? Okay. So we’re going to proceed with the 22 content in your packet. And first we’re going to hear 23 from Adam Darlington. 24

25Executive Court Reporters (301) 565-0064 1 5

**Determination of Scope** 1 MR. DARLINGTON: Good morning. I’m Adam 2 Darlington with Navigant Consulting. I’ll be going 3 through the determination of scope and the test 4 procedure updates being conducted as part of this 5 rulemaking. First let’s start with the determination 6 of scope. Basically, when determining the scope, DOE 7 first identified any changes in ASHRAE Standard 90.1. 8 Basically, the DOE is looking for an increase in the 9 efficiency levels in ASHRAE as compared to the federal 10 efficiency levels, and then DOE also looked at the 11 test procedures to identify updates to the test 12 procedures in ASHRAE 90.1. 13 This slide is basically – it’s a little bit 14 of what you saw, so I’ll just kind of summarize the 15 key points, but basically the point on this slide is 16 that previous versions of ASHRAE Standard 90.1 before 17 the 2010 version did not cover industrial 18 manufacturing or commercial process equipment. The 19 2010 edition now covers some of that equipment, 20 specifically air conditioners and condensing units 21 used in computer rooms. So DOE standards historically 22 have not covered the industrial process equipment in 23 the scope of its regulations. 24 And basically, this slide, the key point 25Executive Court Reporters (301) 565-0064 1 6

there is probably the last point in determining 1 whether a manufacturer’s products are within the scope 2 of DOE’s regulations, because there are a lot of 3 similarities between the types of equipment used for 4 comfort conditioning or space conditioning, versus the 5 industrial process equipment. And basically this 6 slide is meant to convey that these determinations are 7 going to be made on a case-by-case basis, depending on 8 factors such as how the model is advertised, marketed, 9 and used in buildings. 10 And now that brings us to the first issue of 11 the day. DOE is seeking comment on ways that 12 manufacturers differentiate commercial air 13 conditioning equipment used solely for manufacturing 14 industrial processes, versus the type that’s used to 15 cool buildings for comfort conditioning for occupants. 16 MR. BROOKMAN: A rather broad question here 17 at the outset. 18 MR. DARLINGTON: Yes, does anyone have any 19 kind of ideas – we’re looking for feedback or any ways 20 that would differentiate it, that would allow DOE to 21 differentiate between, okay, this is equipment that’s 22 only going to be used for industrial purposes, for 23 process cooling, versus this is equipment that’s only 24 going to be used for comfort cooling? 25Executive Court Reporters (301) 565-0064 1 7

DR. AMRANE: I’m going to give this a try. 1 I think you have to look at the test procedure and how 2 the equipment is being advertised. If it’s, for 3 example, advertised as being tested to, let’s say, in 4 the case of AHRI 340/360, then it’s fine. All 5 products tested to AHRI 340/360 then should meet the 6 minimum energy efficiency requirements of ASHRAE 90.1. 7 That’s how the ASHRAE standard looks at those 8 products. 9 MR. BROOKMAN: Ashley. 10 MS. ARMSTRONG: Hi, Karim, so a question 11 back to you. What if you have the same product by two 12 different manufacturers one that is tested to AHRI 13 340/360 and one that is not? They have a difference 14 of opinion about whether their product may or may not 15 be covered, and it seems like ASHRAE’s scope may be 16 fairly wide. 17 DR. AMRANE: Karim Amrane again, you say 18 it’s the same product? 19 MS. ARMSTRONG: Pretty much same exact 20 product in terms of design and functionality. 21 DR. AMRANE: By different companies? 22 MS. ARMSTRONG: By different companies. One 23 believes it may be covered, and one believes that it’s 24 not. What do you do in that case? If it can be 25Executive Court Reporters (301) 565-0064 1 8

tested? I mean, I would say scope of coverage, under 1 DOE is – and Eric, feel free to speak up here, but 2 it’s not determined whether it can or cannot be 3 tested. I mean that’s obviously one thing the 4 Department can consider, but scope of coverage – that 5 is not the ultimate determination. We have a waiver 6 process for those products that may be covered and 7 don’t feel like the test procedure may apply to them. 8 MR. BROOKMAN: Paul, go ahead. 9 MR. DOPPEL: Paul Doppel, Mitsubishi 10 Electric. You know, when a manufacturer designs their 11 equipment and markets it, it’s for a specific – 12 generally for purposes and applications that the 13 manufacturer deems that they can support. The 14 contractors in the U.S. market can take any piece of 15 equipment and apply it in their own way, like a lot of 16 – we’ve seen situations where Mitsubishi equipment has 17 been used for wine cellars, which is not an intended 18 process for that, and we’ve seen it for other things 19 too. It depends on where you’re looking defining, and 20 again, there’s not a standard for wine cellars, you 21 know, but our equipment is being used for that. So 22 our main intention – I think you have to look at what 23 the company’s main intention is, and their main 24 application is for that product. 25Executive Court Reporters (301) 565-0064 1 9

MR. BROOKMAN: In their product literature? 1 MR. DOPPEL: In their product literature and 2 how they’re supporting that. 3 MR. BROOKMAN: Ashley. 4 MS. ARMSTRONG: So are there – let me open 5 this up to anyone. Are there certain characteristics 6 that would be defined in the product literature that 7 makes it more for industrial applications as compared 8 to commercial building type applications? 9 MR. BROOKMAN: Karim. 10 DR. AMRANE: Karim Amrane. It could be 11 rating conditions. I mean, obviously, if you’re 12 selling a product for industrial processes you would 13 have different rating conditions, so in my opinion, it 14 is what I said. If a manufacturer is advertising this 15 as an air conditioner and publicizing the ratings 16 based on AHRI 340/360 which is covered by DOE, then 17 they should meet the minimum for those standards. 18 Now if it’s different application, industrial process, 19 then it’s different. 20 MR. BROOKMAN: I think that’s what the 21 Department was hoping for. Other simple descriptions 22 of how these systems would be differentiated? Or 23 thematic descriptions of how these systems would be 24 differentiated? Okay. Let’s proceed. 25Executive Court Reporters (301) 565-0064 2 0

MR. DARLINGTON: And as I just mentioned on one 1 of the previous slides, previous versions of ASHRAE 2 Standard 90.1 didn’t cover equipment that’s used 3 primarily to provide industrial manufacturing 4 commercial process cooling. ASHRAE Standard 90.1 in 5 2010 expanded its scope and now includes air 6 conditioners and condensing units used in computer 7 room applications. In the Notice of Data Availability 8 which DOE published on May 5, 2011, DOE tentatively 9 concluded that it has the authority now to cover 10 computer room air conditioners with the increase in 11 scope in ASHRAE Standard 90.1. DOE has reiterated 12 that position in its NOPR. 13 In addition to the computer room air 14 conditioners, DOE looked at the other products for 15 which ASHRAE Standard 90.1 increased its efficiency 16 levels, and this process shown here – the one 17 exception being on this slide that for single package 18 vertical air conditioners and heat pumps, ASHRAE 19 Standard 90.1 2010 did not contain increased standard 20 levels, but they were included in the NODA phase due 21 to a separate requirement in EPCA to review those 22 products. And this slide also shows DOE is proposing 23 to adopt the ASHRAE levels for all of the equipment 24 classes shown here on the slide, again with the 25Executive Court Reporters (301) 565-0064 2 1

exception of the single package vertical air 1 conditioners and heat pumps for which a separate 2 rulemaking is being conducted. 3 MR. BROOKMAN: Yes, Karim. 4 DR. AMRANE: Karim Amrane, AHRI. Regarding 5 single package vertical air conditioners, ASHRAE did 6 amend the standards for those products, although those 7 were not included in the 2010 revision, but they were 8 included as an addendum to 2010 version, and the 9 intent was for DOE to look at that as part of this 10 rulemaking. I understand the nuances here, but we, as 11 an industry, we do want DOE to review those levels as 12 well as part of this rulemaking. 13 MR. DARLINGTON: Yeah, and in light of the 14 addendum that came out for the SPVUs, I think, and I 15 can let DOE speak to this, but traditionally, they 16 review it on the three year cycle when the full 17 version is released, so – and I believe that was a 18 little bit after, so that’s the reason. 19 MR. BROOKMAN: Steve Rosenstock. 20 MR. ROSENSTOCK: Yes, just as an FYI, 21 following with Karim, I know those have been approved 22 by the board and I think they’re in the supplement, 23 aren’t they? Yes, they – so ASHRAE’s publishing a 24 supplement to 90.1 2010 where those levels will be 25Executive Court Reporters (301) 565-0064 2 2

included as an appendix list. So, officially it’s not 1 the – it wasn’t version 2010, but it will be 2 definitely published in the 2014, and basically it’s a 3 supplement to the 2010 version where those levels are 4 included. 5 MR. BROOKMAN: Thank you. Karim. 6 DR. AMRANE: If I may add, Karim Amrane, 7 AHRI, I guess we would like DOE to consider those 8 levels during this rulemaking that you’re doing right 9 now, seriously consider those levels 10 MR. BROOKMAN: Thank you. Ashley. 11 MS. ARMSTRONG: Hi Karim. So one of the 12 things that’s specific to us ... is the statute requires 13 DOE to do a rulemaking within a – added to EISA, as a 14 separate provision that requires DOE to do a separate 15 rulemaking regardless of whether ASHRAE acts, so we 16 are doing the separate rulemaking as part of that. We 17 will take into consideration that it’s there, that’s 18 just why it’s not in this rulemaking. 19 MR. BROOKMAN: And that is for single 20 package vertical air conditioners? Okay. Additional 21 comments – that slide, I think, is well written and 22 very descriptive. Additional comments related to that 23 slide? 24 MR. DARLINGTON: Okay. So we’ll just move 25Executive Court Reporters (301) 565-0064 2 3

on. This slide basically shows the reasoning for the 1 proposed adoption of the ASHRAE Standard 90.1 2010 2 levels for these equipment classes. You can see that 3 under the first bullet, there are very minimal energy 4 savings for a few classes of equipment, the water 5 cooled, evaporatively cooled equipment classes, as 6 well as those two particular sized classes of VRF heat 7 pumps. For computer room air conditioners, though, 8 there is a lack of clear and convincing evidence that 9 more stringent standards would be justifiable. This 10 was due to several factors, including the uncertainty 11 in the efficiency data, sort of a lack of efficiency 12 data available since these products weren’t previously 13 regulated. Uncertainty in the price-efficiency 14 relationship which we’ll discuss a little bit later, 15 once we talk about that, the inability to assess 16 future changes in equipment efficiencies, and then the 17 lack of shipment information for the United States – 18 and again, we’ll touch on both of those later when we 19 talk about the analysis for computer room air 20 conditioners. 21 And then as we mentioned on the previous 22 slide for SPVU – or single package vertical air 23 conditioners and heat pumps, the analysis is part of a 24 separate rulemaking. So this slide – 25Executive Court Reporters (301) 565-0064 2 4

MR. BROOKMAN: Hang on. Paul, please, go 1 ahead. 2 MR. DOPPEL: Paul Doppel, Mitsubishi 3 Electric. The inclusion of the room – the computer 4 room air conditioners brings up a question in that 5 Mitsubishi Electric has manufactured a certain product 6 type that over the years has been used in server rooms 7 and things of that nature. So, is there going to be a 8 clear definition of a system that’s called a computer 9 room unit, because again, our systems are established 10 as comfort air conditioners, but because they have 11 capabilities to operate at low ambient conditions in 12 cooling, they have been used for many years in those 13 type of applications. 14 MR. DARLINGTON: Right, and it’s difficult 15 to come up with a definition that clearly 16 distinguishes between those products that can be used 17 in comfort conditioning and also are sometimes used in 18 applications for computers. We’ll discuss that a 19 little bit later on when we talk about the proposed 20 definition, and you’ll see DOE’s proposed definition – 21 we’ll ask for comment at that time. 22 MR. BROOKMAN: Yes, Eric Stas. 23 MR. STAS: Eric Stas, DOE. I mean that’s an 24 area where we would specifically invite comments to 25Executive Court Reporters (301) 565-0064 2 5

help us come up with an objective and robust 1 definition for that term, so as much as just reacting 2 to what we put out there, we’d really like your input 3 to help come up with an objective distinction. 4 MR. BROOKMAN: Paul Doppel. 5 MR. DOPPEL: Paul Doppel, Mitsubishi 6 Electric. I just wanted to make sure that, you know, 7 a product like that wasn’t going to be sort of 8 required to meet both standards, just because it’s 9 being used. Again, if we don’t promote it, but it’s 10 used in that fashion, that’s the question that we 11 have. 12 MR. BROOKMAN: Ashley. 13 MS. ARMSTRONG: I think when we get to the 14 definitions part, the definitions for VRFs are right 15 before the definitions for computer room air 16 conditioners. If you read them as not being mutually 17 exclusive, like in other words, there could be some 18 overlap, please point that out to us. Because I don’t 19 think the intention would be two standards for the 20 same product. 21 MR. BROOKMAN: Thank you, that’s helpful. 22

Yes. 23 MR. DARLINGTON: And so now this briefly 24 summarizes the analysis for water-cooled and 25Executive Court Reporters (301) 565-0064 2 6

evaporatively-cooled air conditioners. The potential 1 energy savings analysis was done as part of the May 5, 2 2011 NODA that I alluded to earlier. And basically 3 the results of the potential energy savings analysis 4 was a very, very minimal amount of energy savings 5 above the ASHRAE Standard 90.1 2010 levels, which is 6 why DOE is proposing to adopt those levels. 7 And then similarly, with the variable 8 refrigerant flow water source heat pumps above 135 9 kBtu per hour, DOE conducted a potential energy 10 savings analysis as part of this NOPR and the details 11 of that are in the TSD. Some of the details are shown 12 on this slide, but essentially the sum of the national 13 energy savings for standards exceeding ASHRAE Standard 14 90.1 2010 were again found to be minimal. So that 15 takes us to the end of the determination of scope, and 16 if there are no comments, we’ll move on to the test 17 procedure section. 18 MR. BROOKMAN: Additional comments on 19 determination of scope? Okay. 20 **Test Procedures** 21 MR. DARLINGTON: Very briefly here. This 22 slide shows that EPCA requires DOE to amend its test 23 procedures to update them to the most recently 24 accepted industry standard, as referenced in ASHRAE 25Executive Court Reporters (301) 565-0064 2 7

Standard 90.1 2010, obviously, unless the Secretary 1 determines that clear and convincing evidence exists 2 that it would not meet the requirement for test 3 procedures in EPCA. Those requirements are shown in 4 the third bullet on this slide, that they be 5 reasonably designed to produce results reflecting 6 energy efficiency or energy use and that they not be 7 overly burdensome to conduct. And in addition to 8 that, EPCA requires DOE to conduct an evaluation of 9 its test procedures for the covered equipment at least 10

once every seven years. 11 And DOE reviewed the test procedures in 12 ASHRAE Standard 90.1 2010. Now in reading those test 13 procedures, DOE found that ASHRAE Standard 90.1 2010 14 updated its reference test procedures for a number of 15 test procedures. So the first group of test 16 procedures here on the slide are the ones that DOE is 17 proposing to update to the most recent version. 18 Basically, for all of these test procedures, DOE 19 reviewed the changes in the new version of the test 20 procedure as compared to the old version of the test 21 procedure to see if anything would greatly impact the 22 energy efficiency ratings of those equipments, or add 23 to the burden of the test method. In all of these 24 cases, DOE found that the changes were relatively 25Executive Court Reporters (301) 565-0064 2 8

minor and that they still met the requirements of EPCA 1 for test procedures, so DOE is proposing to adopt the 2 updated test methods. 3 And for the test procedures listed in the 4 second bullet, DOE is also proposing to adopt test 5 procedure AHRI 390 for single package vertical air 6 conditioners and heat pumps. AHRI 1230 with Addendum 7 1 for VRF multi-split systems, and ASHRAE 127 for 8 computer room air conditioners. 9 MR. BROOKMAN: Question. 10 MR. DOPPEL: Paul Doppel with Mitsubishi 11 Electric. On the 1230 standard, I think there’s – 12 it’s not real clear when you read through here – one 13 of the things that we did when we developed the 14 standard was to include systems that we called VRF 15 that are less than 65,000. So there’s a broad range 16 of products, as well as a water source, and, you know, 17 so in essence, these would be systems that are 18 covered, the multi-split systems less than 65 would 19 then be removed, sort of, from 210/240 and brought 20 into – underneath 1230. That is what we would hope 21 would come of this. 22 MR. DARLINGTON: This would apply only to 23 the commercial equipment classes. So as far as 24 residential – 25Executive Court Reporters (301) 565-0064 2 9

DR. AMRANE: Correct, we’re not thinking 1 about the residential right now, we’re thinking about 2 related 65 three-phase product here, that – 3 MR. DARLINGTON: Yes, DOE – 4 DR. AMRANE: -- covered within 90.1. 5 MR. DOPPEL: Commercial. When you say 6 commercial that usually is – there’s an implication 7 that’s three-phase. 8 MR. DARLINGTON: Right. 9 MR. DOPPEL: So the equipment we’re talking 10 about is single phase less than 65. 11 MR. BROOKMAN: Thanks, Paul. Was that 12 clear? 13 MR. DARLINGTON: Not sure. So are you 14 asking specifically about the single phase less than 15
65? 16 MR. DOPPEL: Right, because those are 17 covered by 1230 standard also. 18 MR. BROOKMAN: So, Paul, would you restate 19 what – what you’re trying to accomplish here? 20 MS. ARMSTRONG: Quick question before – 21 MR. BROOKMAN: Ashley Armstrong. 22 MS. ARMSTRONG: -- Ashley. They are covered 23 under a waiver now? Are they currently covered by a 24 waiver? 25Executive Court Reporters (301) 565-0064 3 0

MR. DOPPEL: They were at one time, but I 1 think it was three, at least three years ago, there 2 was a rulemaking that had multi-split systems -- 3

MS. ARMSTRONG: Correct. 4 MR. DOPPEL: -- put under 210/240 and 5 waivers were removed. So now with the 1230 standard, 6 the 1230 standard covers testing of systems less than 7 65,000, with all the appropriate references that would 8 be needed to do that. 9 MS. ARMSTRONG: Okay. 10 MR. DARLINGTON: Yeah, this rulemaking is 11 only going to cover the three-phase commercial 12 equipment, so I believe that single phase equipment 13 under 65,000 would be classified with the residential 14 product category. 15

MS. ARMSTRONG: So – 16 MR. DARLINGTON: So this would not update 17 the test method for those, right. 18 MS. ARMSTRONG: Right, and to change it from 19 210/240 you need a waiver, unless we address it in the 20 central air conditioner test procedure rule. 21 DR. AMRANE: I think it has already been 22 addressed. 23

MS. ARMSTRONG: Correct. 24 MR. BROOKMAN: Okay, Karim, thank you. 25Executive Court Reporters (301) 565-0064 3 1

Paul, did we resolve that? 1 MS. ARMSTRONG: Kind of. 2 MR. DOPPEL: I’m continuing to listen. 3 MR. BROOKMAN: Okay, that’s probably a good 4 practice. Do you have anything to add at this point? 5 MR. DOPPEL: No, I think I’m okay. 6 MR. BROOKMAN: Yes, please, Gary. 7 MR. NETTINGER: Gary Nettinger, Panasonic 8 Air Conditioning. Following up to Paul Doppel’s 9 comment, the VRF multi-split product below 65 is 10 designed virtually identical to that product above 65. 11 The phase is the main difference. So longer term, 12 what would be the process for us to get that type of 13 product incorporated into a commercial? 14 MR. DOPPEL: Paul Doppel with Mitsubishi 15 Electric. I think the – we sort of put the testing 16 procedures for those products in 1230, and the 210/240 17 I don’t think adequately addresses the VRF type 18 product, because that’s – I mean it was, I think at 19 AHRI was considered that that product would fold under 20 the 1230, because since we wrote the 1230 to include 21 those products. 22 MR. NETTINGER: And the testing process is, 23 of course, different between 210/240 and 1230. 24 MR. DOPPEL: Well, the testing – for 25Executive Court Reporters (301) 565-0064 3 2

variable systems – for variable speed equipment and 1 for VRF multi-split under 65, the testing is 2 essentially saying what is lacking in 210/240 is how 3 to deal with multiple indoor units, and that’s covered 4 in 1230. 5 MS. ARMSTRONG: And so – this is Ashley – 6 and 1230 you get out for single phase units, a SEER ... 7 comfort three phase unit in EER metric? 8 MR. DOPPEL: Yes, it’s all covered. Yes, 9 it’s all covered in 1230. 10 MS. ARMSTRONG: Okay. So maybe a couple 11 different processes, but we hear what you’re saying 12 what we have to deal with. We deal with residential 13 separate than commercial. This rulemaking is going to 14 be commercial three-phase, residential may be 15 separately, but we hear what you’re saying and we can 16 figure out where to go from here. 17 MR. DOPPEL: Right. 18 MR. DARLINGTON: Okay. I’ll just go on to 19 the last bullet of this slide. Basically, it’s to 20 clarify certain AHRI and ASHRAE test methods that are 21 being adopted or updated here contain certain 22 tolerances that allow the published ratings to be 23 within a certain percent of the measured ratings. For 24 example, some of them read that measured test results 25Executive Court Reporters (301) 565-0064 3 3

shall not be less than 95 percent of published 1 ratings. I just want to clarify here that DOE does 2 not intend to adopt those provisions when it updates 3 the test procedures. 4 MR. BROOKMAN: Yes, Steve Rosenstock. 5 MR. ROSENSTOCK: Steve Rosenstock. I 6 haven’t looked at the test procedures but aren’t they, 7 just because I’ll say, of testing equipment, 8 variations, that usually isn’t there – a lot of 9 equipment that I’ve seen, it’s plus or minus x percent 10 in terms of your final accuracy. So again, let’s just 11 say 13 SEER or whatever EER, there is going to be some 12 plus or minus in there just because of the accuracy of 13 the test equipment. This seems to indicate, this 14 slide, you know, I may be – it looks like, we’re not 15 going to allow any tolerance, so – and that’s not 16 good. 17

18 MR. DARLINGTON: DOE establishes its own 19 tolerances as part of the certification program, and 20 Ashley can – if you have anything to add on to that? 21 MR. BROOKMAN: Ashley. 22 MS. ARMSTRONG: We do have tolerances, and 23 they are meant for just that. We recognize that there 24 is unit to unit variation coming off the line, there’s 25Executive Court Reporters (301) 565-0064 3 4

the variation inherent in test equipment, there’s 1 variation inherent in lab to lab variability. There 2 are tolerances. They are product specific, and we 3 have them across the board for all the testing 4 manufacturers made for certification purposes. We 5 just want to make clear that our tolerances are in 6 Part 421, they’re applicable to this equipment, and 7 there are some – there is some language in the test 8 procedures being incorporated by reference that is not 9 completely consistent. It’s not exactly the same as 10 we do apply our tolerances, so we want to make clear 11 that our tolerances are different. It doesn’t mean 12 that you can have an additional tolerance, or one in 13 lieu of the other. But DOE does have separate 14 tolerances as we recognize the need for them. 15 DR. AMRANE: And what are they? Karim 16 Amrane with AHRI. Tell us the tolerances that you 17 have. 18 MS. ARMSTRONG: So it’s not as simple as the 19 five percent. It’s based on the unit to unit 20 variation, but effectively they’re based on the 95 21 percent confidence level which if you take two 22 identical units could correspond to close to five 23 percent. 24 DR. AMRANE: But again, you are applying 25Executive Court Reporters (301) 565-0064 3 5

something that was developed for white goods and 1 appliances 30 years ago to commercial product, and I 2 don’t think it’s applicable here. 3 MS. ARMSTRONG: So if you have suggestions 4 on how – 5 DR. AMRANE: Keep those tolerances in AHRI 6 standards, absolutely. 7 MS. ARMSTRONG: Okay. 8 MR. BROOKMAN: Mohammed. 9 MR. KHAN: Mohammed Khan, DOE. Karim, we 10 definitely appreciate that and recognize that there 11 definitely could be differences in what would be the 12 applicable appropriate tolerances, and to come up with 13 that accurate or appropriate tolerance level would 14 definitely require some significant testing. So if, 15 as you said, if you would provide something based on 16 some testing, that would be really great for the 17 Department. 18 MR. BROOKMAN: Steve Rosenstock. 19 MR. ROSENSTOCK: Steve Rosenstock – 20 MR. BROOKMAN: Steve – let Karim follow on. 21 I’m sorry. 22 DR. AMRANE: Karim Amrane, AHRI. Again, I 23 put the question to DOE, have you done any testing 24 that shows that the five percent tolerance that we 25Executive Court Reporters (301) 565-0064 3 6

have at AHRI still is not appropriate, and when you 1 compare the tolerances with what DOE has in its own 2 regs, have you done some testing? 3 MR. BROOKMAN: Ashley. 4

MS. ARMSTRONG: Yes. 5 DR. AMRANE: Tell us. 6 MS. ARMSTRONG: So some of the testing I 7 can’t share those results yet because it’s not public, 8 but yes, we’ve done some testing. I think some of 9 it’s going to be unit specific or model specific as to 10 what the results may show. Some may show quite a bit 11 wider variability than the five percent, others may 12 show a smaller variability. And like I said, we 13 welcome comments as to why they should be different 14 tolerances, in terms of the level, the 95 percent 15 confidence level, the 98, the 97 are product-specific. 16 They’re meant to apply the product specific 17 variability inherent within that product. They’re not 18 all – some of our lighting products that are high 19 volume, pretty streamlined manufacturing, are at 99 20 percent tolerance level. That is not something we 21 have adopted for commercial equipment. We would 22 recognize the differences there. 23 DR. AMRANE: If I may follow. Karim Amrane 24 with AHRI again. Those products were regulated since 25Executive Court Reporters (301) 565-0064 3 7

1992. The five percent tolerance in the HR still has 1 been there even before 1992. Why is it that DOE now, 2 suddenly, is changing the game? 3 MS. ARMSTRONG: I would say that, you know, 4 in 2006 we adopted ... for certification testing and 5 enforcement testing for commercial equipment. As part 6 of that rulemaking, we went through all this with 7 different types of tolerances. That rulemaking had 8 been going on for a number of years, and it set up 9 those tolerances then. We have never had the AHRI 10 five percent tolerance in our regs whole heartedly. 11 What we did have there was – and it wasn’t – that’s 12 how you run your verification program, and that is up 13 to you guys. But when manufacturers do their testing 14 for certification purposes, there are tolerances, 15 they’re now effective in Part 429, and they have been 16 around since 2006, that people should be using. 17 MR. BROOKMAN: Hang on one second. Are you, 18 Karim, nothing additional? Steve I want to finish 19 this stream out here, okay? So Robert, please. 20 MR. WILKINS: Robert Wilkins with Danfoss. 21 Let me preface my comment by saying I’m not taking 22 sides. I’m not saying one way of doing it is better 23 than the other way of doing it. But I would urge that 24 DOE work with industry to resolve and to come up with 25Executive Court Reporters (301) 565-0064 3 8

a common set of tolerances so that, for goodness sake, 1 we don’t come out of this rulemaking process with two 2 separate sets of standards, and two separate purposes. 3 So, I’m just urging DOE to work with the industry to 4 find a solution and find tolerances that are practical 5 and workable, rather than having two separate sets. 6 MR. BROOKMAN: Any additional comments on 7 this subject, because we’re about to move on? Steve 8 Rosenstock. 9 MR. ROSENSTOCK: Thank you. Steve 10 Rosenstock, EEI. We normally don’t comment on test 11 procedures, but I’m just thinking, just based on this 12 discussion that, you know, if, I’ll say the DOE 13 tolerances are a lot higher confidence level, let’s 14 say it’s 98, 99 percent in terms of some of the 15 certain products, there are additional costs to 16 manufacturers and at some point is going to be 17 reflected in probably the cost of the products, so in 18 some ways I can understand, well, you know, maybe 19 there’s a thought that we need to test to a tighter 20 tolerance to make sure we’re getting those energy 21 savings, but the end result could be, if those costs 22 go up to the consumers for the higher efficiency 23 product and an increase in incremental cost, again, 24 laws of unintended consequences is you raise the 25Executive Court Reporters (301) 565-0064 3 9

initial price, fewer customers are willing to make 1 that incremental investment for that higher efficiency 2 savings. So again, just down the road, a possible 3 unintended consequence of I’ll say, two different 4 tolerances meeting separate tests for certification 5 versus DOE. Thank you. 6

MR. BROOKMAN: Warren. 7 MR. BEETON: Warren Beeton, Emerson. I’d 8 also add that the DOE process is a snapshot in a short 9 period of time compared to what AHRI’s analysis of 10 test tolerance requirements are, product standard 11 tolerances has been done over years, as Karim said. 12 So there’s a risk for DOE on both sides of being too 13 tight or too wide, because they’re looking at a very 14 limited test set in a limited period of time. So I 15 would encourage DOE to strongly consider what the 16 industry has already established as the best set of 17 tolerances to use. And also, I assume that DOE – and 18 this is a question – will DOE be showing what they are 19 going to propose and the analysis behind it for 20 discussion before trying to set tolerances. 21 MR. BROOKMAN: Hold on for a minute. 22 MS. ARMSTRONG: Can I answer that real quick 23 before you move on? 24 MR. BROOKMAN: Ashley, please. 25Executive Court Reporters (301) 565-0064 4 0

MS. ARMSTRONG: So our tolerances are 1 adopted. They’ve been adopted since 2009, I mean 2 2006, and they’ve been established for the commercial 3 HVAC equipment. To Steve’s point, I believe off the 4 top of my head, I don’t have the CFR in front of me, I 5 don’t believe there’s anything tighter than the 6 manufacturer’s 95 percent confidence for the equipment 7 we’re talking about to here. Some cases I believe 8 it’s a little bit broader than that, but that’s just 9 off the top of my head. We did that through the 10 rulemaking process. That being said, we’re happy to 11 work with Karim and industry to see if they need to be 12 revisited. I don’t know that we will do it in this 13 proceeding, but we will definitely look at that. 14 MR. BROOKMAN: Warren, you want to follow 15

on? 16 MR. BEETON: Were those tolerances different 17 than AHRI tolerances? 18 MR. BROOKMAN: Ashley? 19 MS. ARMSTRONG: The way we do our tolerances 20 is not a flat five percent. It’s based on the 21 variation of the sample that was tested. So yes, the 22 way it’s done is different. 23 MR. BEETON: My question wasn’t the way it 24 is done, my question was are the tolerances that you 25Executive Court Reporters (301) 565-0064 4 1

ended up with different than what AHRI uses in its 1 standards? 2 MS. ARMSTRONG: What I said is you can’t 3 apply five percent equally. In certain cases, 4 depending on the variation of the sample, the five 5 percent doesn’t go across the board, because if you 6 use a 95 percent confidence limit, it’s going to 7 depend on the distribution of that sample. So it’s 8 not just a five percent on top of the standard. It 9 could be tighter or looser depending on the variation 10 in that sample itself. 11 MR. BROOKMAN: Paul Doppel. 12 MR. DOPPEL: Paul Doppel, Mitsubishi 13 Electric. The five percent standard has been around 14 for a number of years and here’s the real implication 15 for this. Manufacturers have known this five percent, 16 and so when they’re developing, designing systems, 17 they look for ways to come up with consistency within 18 a certain level. And then that design has to be 19 developed into an assembly process, and that assembly 20 process, those things have to – everything has to work 21 together to be within that tolerance. So if there’s a 22 variable tolerance, I mean, it’s like Russian 23 roulette. And if you’re going to make something 24 tighter, then manufacturers have to go back and spend 25Executive Court Reporters (301) 565-0064 4 2

significant amounts of money to review all their 1 process, review all their designs, and what Steve 2 Rosenstock said, is exactly what’s going to be true. 3 Even for the standard efficiency products, especially 4 with those, because there’s no tolerance less than the 5 minimum, then the products are going to be almost out 6 of reach because, you know, manufacturers have to have 7 certainty about what they are doing when they do their 8 designs, do their manufacturing processes. And this 9 does not provide that at all. 10 MR. BROOKMAN: Karim. 11 DR. AMRANE: Karim Amrane, AHRI. I guess I 12 would like to add that those DOE tolerances were not 13 developed for commercial products. I don’t think DOE 14 did any analysis on those products. I think they 15 adopted what was done for white goods and consumer 16 products. Again, commercial products are very 17 different and I think they need special attention. 18 Now, the idea to do over the tolerance without 19 changing what DOE has today is not going to be 20 acceptable to industry. Somehow those have to go 21 together. If you want to use the 95 percent AHRI 22 standard, you will have to address that standard in 23 the DOE regs at the same time. 24 MR. BROOKMAN: Any additional comments? 25Executive Court Reporters (301) 565-0064 4 3

Okay. 1 MR. DARLINGTON: Okay. Moving on. A number 2 of comments that DOE is – a number of issues that DOE 3 is seeking comment on, I know we had a lot of 4 discussion about the tolerances, but here DOE is also 5 seeking comment on its proposed adoption of the test 6 procedures that we went over on the previous slide, so 7 if anyone has any general comments about those test 8 procedures or DOE’s proposed adoption of them, now 9 would be the time. 10

MR. BROOKMAN: Joanna Mauer. 11

MS. MAUER: Joanna Mauer. So I want to 12 comment on the proposed test procedure for the 13 computer room air conditioners and I don’t pretend to 14 be an expert on computer room air conditioners, but my 15 understanding is that these products essentially are 16 always operating at part load in the field. But I 17 think DOE notes in the NOPR that the SCOP metric 18 doesn’t capture part load performance. And so my 19 understanding is that the SCOP metric doesn’t well 20 reflect how these products are actually performing in 21 the field. And I also understand there can be 22 significant energy savings from variable speed fans, 23 for example, and those technologies might not be 24 captured in the SCOP metric. So I don’t have a 25Executive Court Reporters (301) 565-0064 4 4

specific recommendation at this point, but we’d urge 1 DOE to consider a test procedure that does capture 2 part load performance. 3 MR. BROOKMAN: Okay. Thank you. 4 MR. DARLINGTON: And just a note. So DOE is 5 proposing this because this was the industry standard 6 adopted by ASHRAE. I noted our concerns with the part 7 load operation and the variable speed, but I think 8 it’s a similar situation for all other commercial 9 products are rated using an EER metric. 10

MR. BROOKMAN: Joanna. 11 MS. MAUER: So I guess, you know, DOE does 12 have the ability – DOE certainly has to look at the 13 ASHRAE test procedures, and I understand that. I 14 think DOE does have the ability to make changes if the 15 test procedures don’t do a good job of representing 16 the actual performance of the products. I think the 17 products, you know, we’d like DOE to adopt the IEER 18 metrics that are also an ASHRAE standard which capture 19 part load, but that’s a separate issue. 20 MR. BROOKMAN: Do you think that in this 21 case that what DOE is proposing doesn’t reflect real 22 world conditions? 23 MS. MAUER: Yeah. That’s right. And 24 because of that, DOE can’t capture these technologies 25Executive Court Reporters (301) 565-0064 4 5

that will have significance in the field, but the 1 benefits won’t be reflected in the test procedure. 2 MR. BROOKMAN: Karim. 3 DR. AMRANE: Karim Amrane, AHRI. I guess to 4 answer your question, I think right now that’s the 5 only test procedure available, that’s the ASHRAE 6 standard and I think DOE has, well, is basically 7 adopting what ASHRAE has done. But in the future we 8 are, the AHRI, are putting together a product section 9 on data centers and we will be writing a standard and 10 that standard will definitely have a part load metric 11 eventually. So I think it’s for maybe the next round, 12 eventually that one day there will be a test procedure 13 to look at, I think, it would be a good idea too. 14 MR. BROOKMAN: Do you have a time table for 15 that, Karim? 16 DR. AMRANE: Again, no, we’re just putting 17 the product section together, you know, when the 18 standard will be written, I don’t know, but I – 19 MR. BROOKMAN: Will it be a three year 20 cycle? 21 DR. AMRANE: Oh, yes, it will be before the 22 three year cycle. Yes, for sure. 23 MR. BROOKMAN: Mohammed. 24 MR. KHAN: Mohammed Khan, DOE. And of 25Executive Court Reporters (301) 565-0064 4 6

course, the Department will consider whatever 1 potential benefits there really would yield from that 2 revised test procedure, versus whatever potential 3 additional burdens there may be as well, in making its 4 determination as to whether it makes sense to adopt 5 it. 6 MR. BROOKMAN: Additional comments? You see 7 three issues boxes here. The Department is seeking 8 comment on all of these test procedures and also 9 adoption of the new test procedures. So any 10 additional comments because we’re about to move on 11 from here. And of course, if you come up with more, 12 the Department would like details in writing. Okay. 13 MR. DARLINGTON: All right? 14 MR. BROOKMAN: Yeah. 15 MR. DARLINGTON: So this test procedure, 16 this slide basically relates to DOE’s efforts as it is 17 testing equipment. DOE sometimes receives ad hoc 18 requests to tailor the test procedures during the 19 testing set up and operation. This slide is basically 20 to provide general guidance that for DOE’s efforts, 21 the Department only uses conditions that are specified 22 in the DOE test procedures or that is presented in the 23 installation operating manuals, and DOE is not 24 currently using any additional information. 25Executive Court Reporters (301) 565-0064 4 7

Now DOE just wishes to harmonize the way it 1 conducts its testing, with the way that the testing is 2 being done by manufacturers and independent test labs. 3 And that brings us to the next issue, which is, you 4 know, for these given test procedures that we’ve 5 discussed, are there additional settings, other 6 additional tolerances and specifications in the test 7 procedure where more information would help DOE to 8 replicate the tests and the ratings that are being 9 achieved in those tests? 10 MR. BROOKMAN: Adam, will you go back to the 11 preceding slide? Please? Twenty-two. 12

MR. DARLINGTON: Sure. 13 MR. BROOKMAN: Let’s just give everybody a 14 chance to digest this. 15 MR. DARLINGTON: So it’s a lot written on 16 the slide, but the basic point that it’s conveying 17 here is that, what I just said basically, that the 18 Department’s only going to use, and is only using, you 19 know, information in its test procedures and in the 20 installation manuals. 21 MR. BROOKMAN: Okay. Karim. 22 DR. AMRANE: Karim Amrane, AHRI. As you 23 know, AHRI runs certification programs, verification 24 programs and has been running those for many years, 25Executive Court Reporters (301) 565-0064 4 8

and it is true that every program that we run we have 1 what we call an operational manual. It’s documented, 2 describes the verification program, and in those 3 documents sometimes there are clarification about test 4 procedures and how to run the test. And to the extent 5 that this could help DOE, then we are going to 6 encourage DOE to look at those documents and to adopt 7 them, reference them, any way DOE can, absolutely. 8 MR. BROOKMAN: Paul. 9 MR. DOPPEL: Paul Doppel, Mitsubishi 10 Electric. I think, especially in the case of VRF 11 systems, it would be essential to adopt also the – or 12 incorporate the operations manual because that 13 provides good guidance in there, additional guidance 14 on how to set up the systems and what things are 15 required by the manufacturer in order to do the 16 testing. 17 MR. BROOKMAN: Okay. Additional comments? 18 MR. DARLINGTON: Okay. This brings us to 19 the break-in provisions. So in DOE’s review of AHRI’s 20 certification program that Karim just alluded to, DOE 21 discovered that AHRI allows for a compressor break-in 22 period for its certification program for commercial 23 equipment. Basically this allows the compressor to 24 warm up to achieve optimum performance, and DOE 25Executive Court Reporters (301) 565-0064 4 9

believes this is more representative of the 1 performance in the actual field, so DOE is proposing 2 to allow manufacturers optionally, at their 3 discretion, to use this break-in period. Now DOE is 4 proposing the break-in period be allowed up to 16 5 hours to break in the product, and if manufacturers do 6 choose to use this optional period, DOE would require 7 them to report the length of time used to break in the 8 product. 9 And DOE is seeking comments about the use of 10 this compressor break-in period as part of the AHRI 11 test procedures which it’s adopting, and about the 12 need for this break-in period. 13

MR. BROOKMAN: Warren. 14 MR. BEETON: Is that break-in period the 15 same as what we allow, Karim, do you know? It is. 16 Okay. The break-in period is absolutely required for 17 compressor – to stabilize compressor performance and 18 efficiency. That would be my comment. 19 MR. BROOKMAN: Thank you. Karim. 20 MR. AMRANE: Karim Amrane, AHRI. I think we 21 would support that proposal. 22 MR. BROOKMAN: Thank you. Great. Additional 23 comments on the break-in period. Going on. 24 MR. DARLINGTON: And moving on. Again, a 25Executive Court Reporters (301) 565-0064 5 0

lot of language on this slide, but I’ll just summarize 1 quickly. So AHRI 1230 for VRF systems, DOE reviewed 2 it and found certain provisions that allowed for or 3 required manufacturer assistance in conducting the 4 test. So DOE, basically, the purpose of this slide is 5 to facilitate some discussion so DOE can learn more 6 about how these systems operate and achieve steady7 state conditions for testing, and DOE is interested, I 8 guess, sort of somewhat limiting the manufacturer’s 9 role in the testing so that independent and repeatable 10 tests could be achieved without as much manufacturer 11 involvement. 12 And so that brings us to the comment 13 request, issue number nine, DOE is seeking comment 14 about the testing conditions, operating points, test 15 set-up, anything else for the VRF systems that would 16 allow DOE to run the test independently. 17 MR. BROOKMAN: Paul Doppel. 18 MR. DOPPEL: Paul Doppel, Mitsubishi 19 Electric. You know, I think we have to take a look at 20 really how these systems operate and then how we came 21 up with the testing for them. And VRF, or variable 22 speed, variable refrigerant flow, or variable speed 23 systems, all the sensors, everything within the system 24 is providing information to the inverter drive or to 25Executive Court Reporters (301) 565-0064 5 1

the intelligence in that system to tell the compressor 1 to move to speeds, change speeds to achieve the 2 optimum to provide the necessary heating or cooling 3 for that condition. 4 However, when we do the testing, when we set 5 up the testing, what we had to do was use something 6 that was sort of equivalent with what the unitary 7 manufacturers were doing so that we could provide 8 similar ratings, similar efficiencies. We requested 9 waivers from AHRI standard 340/360, which was based on 10 EER and COP and IPLV at the time, which has changed to 11 IEER. So in doing those, what we’ve ended up having 12 to do is to – and this actually also applies to 13 systems less than 65,000, where we have to do five 14 tests to determine SEER and five tests to determine 15 HSPF. But all of these, whether it’s the below 65 or 16 greater than 65, we’re having to fix the compressor 17 speed which is fully intended, when the system is 18 operating, to float. So this creates additional 19 stabilization issues within the system, and in some, 20 many cases it takes longer to test these systems, and 21 actually they’re not operating as efficiently as they 22 would if they were allowed to float freely. 23 So, that’s kind of the background on how we 24 got to where we’re testing these standards. So with 25Executive Court Reporters (301) 565-0064 5 2

the VRF systems, and even with the multi-split systems 1 less than 65, these are complex systems and it’s not 2 like taking a five ton or a 20 ton rooftop unit and 3 rolling it into the test room and attaching the 4 thermostat and some duct work and running it. These 5 systems have to be fully assembled, could have up to 6 three outdoor units that have to be put together. You 7 could have up to 12 indoor units that would have to be 8 put together. You have all the piping, all the wiring 9 joining those together, so there’s – you have to make 10 sure that the systems are functioning properly from a 11 mechanical perspective, and also on a control basis. 12 And each of the manufacturers has a different type of 13 control. Each of the manufacturers does heat recovery 14 differently. So there’s a lot that goes into setting 15 up and running these systems. 16 You know, a rooftop system can be set up and 17 tested almost within one shift at the Intertek or 18 whatever lab. VRF systems take sometimes more than 19 two shifts of work just to set the system up to be 20 tested. So it’s extremely complex, and there has to 21 be verification that the system is operating properly, 22 and each manufacturer has special diagnostic tools to 23 be able to go in there. So that – these diagnostic 24 tools require special training. And so, to do these 25Executive Court Reporters (301) 565-0064 5 3

tests and it’s just – I don’t think it’s possible to 1 be able to independently set up one and test one of 2 these systems without the manufacturer there, not only 3 to verify the setup, but also to provide assistance in 4 making sure that the system is operating properly, to 5 properly set the conditions for each of the tests that 6 are being conducted, and then also to provide 7 assistance if there’s issues in stabilization of 8 system operation. 9 MR. BROOKMAN: Yes, Gary. 10 MR. NETTINGER: Gary Nettinger, Panasonic. 11 I, as a manufacturer of VRF equipment, I appreciate 12 the Department’s interest to take the manufacturers’ 13 involvement out of the testing process to insure 14 consistency, but with this type of product, as Paul 15 Doppel mentioned, the equipment is constantly 16 fluctuating. Without the manufacturer’s intervention 17 to fix the compressor speed, I don’t believe that 18 steady state could be achieved in a test facility. 19 MR. BROOKMAN: Is that what the 20 manufacturer’s doing? 21 MR. NETTINGER: They’re fixing the 22 compressor speed. 23 MR. BROOKMAN: Speed. 24 MR. NETTINGER: So that we can achieve – 25Executive Court Reporters (301) 565-0064 5 4

MR. BROOKMAN: They’re not doing other 1 things as well? 2 MR. NETTINGER: No, motor speed only. And 3 that’s defined in the operations manual of 1230. Also 4 I think it’s important to have the manufacturers’ 5 involvement to oversee the installation of the 6 equipment. There are so many distribution joint kits 7 and restrictions on the piping, we need to be sure 8 that ITS or whatever the test facility that’s testing 9 the equipment is doing it the same way it’s designed 10 to be installed and the same we’ve tested it in our 11 own facilities, otherwise, there’s no way that we 12 would be within tolerance. So manufacturers have to 13 be involved, at least at this time, I believe. 14 MR. BROOKMAN: Okay. Paul. 15 MR. DOPPEL: Paul Doppel, initial comment on 16 the testing. The collection of the data is extremely 17 important and again, the comparison to a rooftop, you 18 have one point of air flow. With VRF systems, you 19 could possibly have 12 points of air flow that have to 20 be gathered together, or tested individually, in order 21 to get the proper capacity measurements. And if 22 that’s not done properly, and if there’s not agreement 23 that it’s being done properly, then it’s really not an 24 adequate test. And Intertek has worked with AHRI in 25Executive Court Reporters (301) 565-0064 5 5

setting up the testing procedures and the collection. 1 In fact, there’s another meeting that’s going on with 2 the engineering committee of the ductless products 3 section to further that comparison of testing – 4 collection data to make sure that those things are 5 being adequately measured. 6 Now, at AHRI, you know, the fact that 7 manufacturers are present for these conditions is 8 something that has been in this 1230 standard, and 9 non-VRF manufacturers, you know, like Carrier, Trane, 10 Lennox, Johnson Controls or Emerson or all other 11 manufacturers that are present there, have been – have 12 seen this and these test standards have been approved. 13 So what we do is deemed to be equal with every other 14 test standard, and it’s passed the scrutiny of all 15 other manufacturers, otherwise we would not have been 16 able to have had that test standard approved. So it’s 17 an accepted practice at AHRI by all the manufacturers. 18 MR. BROOKMAN: Okay. Warren. 19 MR. BEETON: Our company – Warren Beeton, 20 Emerson. Our company also makes compressors that are 21 used in these products, they’ve variable capacity and 22 our experience is exactly what we’re hearing from our 23 customer base here. In fact, I go so far to say if 24 you did not have the manufacturer involvement, I think 25Executive Court Reporters (301) 565-0064 5 6

that would be counterproductive to try to achieve good 1 test results, which we’re all interested in. 2 MR. BROOKMAN: Okay. Thank you. I thought 3 that was covered pretty thoroughly there. Final 4 comments before we move on? Did we get all the issues 5 that you wanted covered, Adam? 6

MR. DARLINGTON: Yes. 7 MR. BROOKMAN: Okay. Let’s move on. 8 MR. DARLINGTON: So that actually ends my 9 segment. Are we scheduled for a break now? 10 MR. BROOKMAN: Yeah, let’s take a break now. 11 Now is a good time. It’s ten minutes after ten. For 12 those of you that aren’t familiar with the Forrestal 13 Building, you must wear this badge in a visible spot 14 above your waist in the building. There are rest 15 rooms on both ends of the hall. There’s a coffee shop 16 down on the ground floor directly down the elevator 17 shafts, just about where we’re situated here, across 18 the hallway. We’re going to break for 15 minutes, 19 which means we’ll resume at 10:25. For those of you 20 who are joining us via the web, I’m glad you’re still 21 with us. We’ll try and keep you engaged and answer 22 questions as that opportunity presents itself. We’ll 23
resume at 10:25. 24 (Whereupon, at 10:10 a.m., the meeting was 25Executive Court Reporters (301) 565-0064 5 7

recessed for a 15 minute period.) 1 MR. BROOKMAN: Okay. Let’s resume. I 2 should start by saying I thought the discussion this 3 morning was very productive, and so that’s appreciated 4 by the Department. Thanks to all of you for doing 5 that. We’re going to proceed with the next content 6 area, which is market assessment and engineering 7 analysis. All of you have this content in your 8 slides. We’re going to hear from Knute Svenson. 9 But before we do, I’ve been asked to tell 10 those that are joining via the webinar that our 11 webmaster has already sent those of you – there were 12 questions about how you access the slides, and still 13 participate in the webinar, and our webmaster has sent 14 you a direct link so you ought to be able to toggle 15 that direct link and pull up those slides for those of 16 you that haven’t already done so via the web. 17 Okay. So now we’re going to hear from Knute 18

Svenson. 19 **Market Assessment** 20 MR. SVENSON: Okay. My name is Knute 21 Svenson. I’ll be talking about the market assessment 22 and engineering analysis in today’s presentation. As 23 you can see, we’re on the second stage of (adjusting 24 sound) – sorry – as you see, we’re on the second stage 25Executive Court Reporters (301) 565-0064 5 8

of the rulemaking. On the first stage we talked about 1 the NODA, that DOE released the Notice of Data 2 Availability on May 5, 2011. In that document, DOE 3 presented its preliminary energy savings analysis. 4 Then DOE will take your comments today and any 5 comments you submit and revised the analysis in the 6 NOPR, and come out with a final rule some time later 7 this year with an effective date three or four years 8 after that. 9 To begin the market assessment, DOE 10 conducted a market assessment for those equipment 11 classes DOE determined were within the scope of 12 review. The purpose of the market assessment is to 13 determine the available equipment efficiencies, 14 manufacturers, and shipment information. DOE looked 15 at three main sources for this information, the AHRI 16 directory of certified product performance, the CEC 17 appliance efficiency database, and individual 18 manufacturers’ websites. 19 Now, for computer room air conditioners, 20 which is basically the subject of the bulk of the 21 presentation, DOE got all its information from the CEC 22 database and individual manufacturers’ websites, 23 because AHRI doesn’t currently have a separate 24 database for computer room air conditioners. 25Executive Court Reporters (301) 565-0064 5 9

As always, if you want more details and 1 descriptions of the methodology and results for the 2 market assessment, please refer to chapter two of the 3

NOPR TSD. 4 Now I will get into definitions. There is 5 no current formal definition for VRF systems for DOE, 6 because these product classes were not a formal 7 subclass of commercial air conditioners. Thus DOE is 8 proposing this following definition for VRF systems. 9 This definition was taken from AHRI, ASHRAE 90.1 and 10 AHRI 1230. I don’t know if anyone needs to read the 11 definition. It’s pretty lengthy. 12 Then on the next slide we have a definition 13 for VRF multi-split heat pumps and for heat recovery, 14 a unique aspect of this equipment class. 15 MR. BROOKMAN: Just pause for a moment 16 there. Give them a chance. Okay. 17 MR. SVENSON: Next, we have a definition for 18 computer room air conditioners. This is a difficult 19 equipment class to define because DOE must define an 20 equipment class in such a way that it does not overlap 21 with any other covered equipment class. Computer room 22 air conditioners pose a difficulty because they have 23 the same mechanical components as normal commercial 24 air conditioners, and there are no physical 25Executive Court Reporters (301) 565-0064 6 0

distinguishing elements of computer room air 1 conditioners from normal commercial air conditioners. 2 Thus DOE is proposing to define this equipment based 3 on how it’s advertised, marketed or sold, and based on 4 the test procedure used to rate its performance. 5 DOE is seeking comment on the definitions we 6 propose for the VRF systems and definition for 7 computer room air conditioners. Specifically, DOE is 8 interested in whether there’s any physical features or 9 components that allow DOE to distinguish computer room 10 air conditioners from commercial packaged air 11 conditioners used for comfort conditioning. 12 MR. BROOKMAN: Paul. 13 MR. DOPPEL: Paul Doppel, Mitsubishi 14 Electric. A concern I see when you have this 15 definition is that you are specifically excluding the 16 parts that are covered by standard 127 almost – it 17 looks like you’re excluding them from being used in 18 other applications. And my concern is that, you know, 19 you might say that if your product is covered by 20 210/240, 340/360, or 1230 should be included in this 21 definition. My concern is that you might say you 22 can’t use it if you’re covered by these other 23 standards, you can’t use it in this application, when 24 that, in fact, would be restricting trade. Because 25Executive Court Reporters (301) 565-0064 6 1

there are a lot of applications, there are a lot of 1 situations where products already on the market that 2 are not computer room air conditioners can be used in 3 those applications. 4 So this definition, to me, seems to be 5 lacking. I don’t have something that’s off the top of 6 my head to use here instead, but this one I have 7 concerns with. 8 MR. SVENSON: Just to clarify, I guess your 9 main issues just the fact that we’re specifying this 10 test procedure that’s rated? Are you okay with the 11 advertising sold and marketed part? Or just the whole 12 definition? 13 MR. DOPPEL: Well, you’re saying that such 14 equipment may not be marketed or advertised as 15 equipment in any other space conditioning application, 16 and may not be rated in accordance with those others. 17 So it just – it seems like you’re trying to provide a 18 total exclusion of the application of these products 19 when, in fact, they could be used in other – they 20 possibly could be used in other applications. 21 MR. BROOKMAN: Mohammed first. 22 MR. KHAN: Mohammed Khan, DOE. We certainly 23 appreciate that concern, but again, this is a proposed 24 definition, and what we’re really intending to do here 25Executive Court Reporters (301) 565-0064 6 2

is develop a definition that clearly delineates this 1 product and so I appreciate the fact that you said you 2 don’t have a proposed revised definition, if you will, 3 at this time, but if you could think about it, and I 4 encourage all others to do the same as well, because 5 we understand that concern, to later come up with a 6 suggestion that might be workable. 7 MR. BROOKMAN: This gets back to the first 8 question of the day in fact. Gary, go ahead. 9 MR. NETTINGER: Gary Nettinger, Panasonic. 10 It’s – I guess I have a question and a statement. 11 First, I’d like to hear from DOE a little bit more 12 about what the goal is of creating this product class. 13 And my statement is, as you’ve heard earlier this 14 morning, we manufacture products that are frequently 15 used in computer rooms, ATMs, small data rooms. If we 16 separate, or if this definition is created, I see a 17 barrier to where we market the equipment and it’s 18 basically going to force me to have the same product 19 under two different categories, even though it’s 20 identical. One I would have for comfort cooling, and 21 the other would be computer room applications. They 22 could then be rated to different standards even though 23 it’s the same equipment. So it’s going to be a 24 challenge for the manufacturers. 25Executive Court Reporters (301) 565-0064 6 3

MR. BROOKMAN: Paul. 1 MR. DOPPEL: Paul Doppel, Mitsubishi 2 Electric. Gary was talking about the one to one 3 systems, but I mean, if you look at a VRF system, a 4 VRF system could do a data room with one indoor unit; 5 it could do water heating with another indoor unit; it 6 could process outside air with another unit. So, you 7 know, with VRF systems there’s a lot of complexities, 8 and I’m not trying to – I’m just saying that there’s 9 concern again that by creating sort of barriers, 10 saying you can’t advertise this as anything else, 11 well, if we advertise that you can use our products in 12 data rooms does that mean then that we have to 13 register that as a data room product? 14 MR. BROOKMAN: Okay. Warren. 15 MR. BEETON: More of a question than 16 anything else, but from what I just heard, it sounds 17 like there are, even for the computer room 18 applications, there are different ways of applying a 19 product, and so this whole venture sounds like it 20 might not be practical to have a separate category 21 that has a meaningful rating procedure, a meaningful 22 standard. 23 MR. BROOKMAN: Eric Stas. 24 MR. STAS: Eric Stas, DOE. Let me just try 25Executive Court Reporters (301) 565-0064 6 4

to jump in here. I mean, when ASHRAE 90.1 in this 1 latest version gave us standards and classes for 2 computer room air conditioners, we’re trying to now 3 find a way to figure out objectively which is in the 4 computer room bucket and which is in the regular air 5 conditioner bucket. So we’re asking you to help us 6 and we’re trying to help you define what’s in and 7 what’s out. So the concerns you’re raising are the 8 same concerns we’re finding, and that’s why we’re 9 asking these questions. So these definitions are 10 trying to help delineate things. So, I understand 11 your concerns, but, you know, when you say you don’t 12 want to be rated to two standards, we’re also trying 13 to find a way to not rate you to two standards. So 14 we’re all trying to get to the same end point, so 15 don’t misinterpret. 16 MR. BROOKMAN: Robert. 17 MR. WILKINS: Just curious here. Is it 18 possible to be able to – to enable a product to be 19 rated in one bucket or another bucket without putting 20 any restrictions on possible use of that product. So 21 you leave it to the manufacturer and leave it up to 22 competitive pressures to decide which bucket it’s 23 rated in, but then allow it to be marketed wherever 24 it’s technically possible to market it. And I think 25Executive Court Reporters (301) 565-0064 6 5

if you could do something like that – if manufacturer 1 A rated the product in this bucket, and manufacturer B 2 had difficulty competing, that manufacturer won’t get 3 the product rated over there. So I think the 4 competitive market forces can come to bear to help you 5 achieve what you want to achieve without putting 6 artificial barriers or restrictions in between. Just 7 an idea. 8 MR. BROOKMAN: Provided it’s rated properly 9 then the manufacturer could deploy that product 10 wherever – 11 MR. WILKINS: Yeah, you can buy an 12 automobile to use as a family automobile or to use as 13 a commercial automobile. It’s still an automobile and 14 it still gets 27 miles to the gallon. It has a 15 rating, but it can be used in either/or. You don’t 16 have a restriction that this must be rated as a 17 commercial car or a residential car and therefore 18 cannot be used in the other bucket. 19 MR. BROOKMAN: Eric Stas. 20 MR. WILKINS: Let me say I’m overly 21 generalizing, but that could be a philosophy that 22 might be helpful. 23 MR. STAS: Eric Stas, DOE. Let me just 24 raise this point back to you. I mean, we have two 25Executive Court Reporters (301) 565-0064 6 6

separate product classes already, one for the computer 1 room, one for the comfort conditioning side. The 2 levels might vary over time. You know, they might not 3 be in lock step forever, so if manufacturer is given 4 the choice, what’s to stop everyone from suddenly 5 making their product rated to the less stringent of 6 the two categories – classes? 7 MR. WILKINS: Robert Wilkins, Danfoss again. 8 I think two things. One you folks are going to be 9 watching this closely, and as you see one rating 10 diverge from the other rating, you’re going to 11 naturally say we need to level this up. So I think 12 that’s one corrective mechanism. The other is just 13 market pressures that customers want to buy efficient 14 products and if one competitor’s marketed product is 15 more efficient than the other one, business is going 16 to migrate in that direction. It’s normal competitive 17 market pressures. 18 Now, I don’t know that that’s a perfect 19 answer, but I’m urging that those kinds of ways of 20 doing it – I’m urging consideration of those methods, 21 not to create artificial barriers. You know, my wife 22 drives an SUV. Someone else might use it in his 23 construction business. But it doesn’t need to have 24 different kinds of ratings for different purposes. 25Executive Court Reporters (301) 565-0064 6 7

MR. STAS: Eric Stas, DOE. I think DOE, of 1 course, will fully consider once all the options are 2 available, and I sort of mention some of these things 3 to sort of sensitize you all to some of the things 4 we’re worried about, so that while we maybe pursue 5 that one line of exploration, at least you can think 6 of some of the concerns we have and maybe come up with 7 alternates that address some of those other concerns 8 as well. So we fully flush out the whole range of 9 possibilities. 10 MR. BROOKMAN: Yes, Karim. 11 MR. AMRANE: Karim Amrane, AHRI. I guess I 12 – you know, is the distinction consistent with the 13 actual definition? 14 MR. SVENSON: Well, there’s no definition – 15 agreed on definition in ASHRAE, just – 16 MR. AMRANE: There isn’t? 17 MR. SVENSON: All we – I found is you define 18 data room, but there’s no definition specifically that 19 describes computer room air conditioners. 20 MR. AMRANE: Not in the ASHRAE 127 standard 21 also there is no definition there? 22 MR. SVENSON: I can’t – I was surprised, but 23 my feeling is there probably isn’t, otherwise we would 24 be set off of it. 25Executive Court Reporters (301) 565-0064 6 8

MR. AMRANE: Okay. 1 MR. BROOKMAN: Paul Doppel. 2 MR. DOPPEL: Paul Doppel, Mitsubishi 3 Electric. You know, a system, whether it’s a data 4 room system or a comfort cooling system, I mean it’s 5 like the old joke about the thermostat – how does it 6 know whether it’s heating – keeping something hot or 7 keeping something cold? The system blows cold air or 8 blows hot air, and it may cold air that’s a little bit 9 drier in this situation than that. And so to try to 10 come up with – what you’re doing is basically you’d 11 have to come up with different efficiency standards or 12 some other metric, and that really makes it kind of 13 difficult. I mean there are different standards for 14 heat pumps and air conditioners because of the 15 additional bits of equipment in there. But it just 16 seems – this just seems like a problematic situation. 17 MR. BROOKMAN: Gary. 18 MR. NETTINGER: Gary Nettinger, Panasonic. 19 Computer rooms – there’s very few that require very, 20 very strict conditions. I suppose very sophisticated 21 computer rooms, data centers, require maybe 50 percent 22 RH, plus or minus ten percent, and a specific 23 temperature, but there’s very few like that. So I 24 think as you look into this a little bit more, you’ve 25Executive Court Reporters (301) 565-0064 6 9

got to probably look at more the computer room itself, 1 and, you know, there’s some equipment that is 2 manufactured specifically for computer rooms. Their 3 operating range is different. The tolerance on RH or 4 temperature control is a little tighter, so you 5 probably need to consider that. But 95 percent of the 6 data centers that are used, or probably more than 7 that, are less sensitive to those and they’re able to 8 take on a more, let’s say, comfort cooling type of 9 system. 10 MR. BROOKMAN: So it might be possible to 11 differentiate a few different types of computer rooms 12 and that might be the way you subdivide this? 13 MR. NETTINGER: I suppose you could, but I 14 think what we’re looking at right now is getting 15 probably over-complex, and, you know, I’m not sure the 16 value, considering how many computer rooms require 17 that specific of a HVAC system is maybe not worth the 18 effort. 19 MR. BROOKMAN: Eric. 20 MR. STAS: Eric Stas, DOE. One thing I want 21 to point out as we discuss this, you know, when ASHRAE 22 90.1 put these computer room air conditioners in the 23 latest version, that triggered DOE to act. And unless 24 we come up with a clear and convincing evidence that 25Executive Court Reporters (301) 565-0064 7 0

we need to go more stringent than the ASHRAE level, 1 that could direct us to adopt the ASHRAE level, so to 2 that extent, we’re sort of compelled to make these 3 standards for computer room air conditioners. So it’s 4 not necessarily that DOE necessarily even wanted to 5 venture into this area, it’s a complex area. Maybe 6 we’d all have less headaches if we didn’t have to 7 confront it, but we’re directed to, so that’s why 8 we’re trying to – 9 MR. BROOKMAN: Gotcha. Karim. 10 MR. AMRANE: Karim Amrane, AHRI. And I’d 11 have to agree. And that proposal came from the data 12 center – manufacturers of air conditioners for data 13 centers, the few companies that are specialized in 14 this area, and they work within the ASHRAE community 15 and the ASHRAE has a Standard 127 that rates those 16 products. Again, it’s something different, there’s no 17 ... and so on, and ASHRAE worked with those 18 manufacturers and basically came up with the proposal. 19 So I guess test procedure or questioning the ... and so 20 on. So I think we are passed that. 21 Now, as I said, AHRI is putting together a 22 product section that will look at – that will gather 23 those manufacturers and there will probably be a 24 revision to the standard because we have an 25Executive Court Reporters (301) 565-0064 7 1

understanding with ASHRAE when AHRI arrives at their 1 performance standard and ASHRAE writes the ... of test, 2 and eventually that could change. The 127. And if it 3 changes, we will have to go back to ASHRAE 90.1 and 4 ASHRAE 90.1 will have to look at this and then 5 eventually we’ll have to look at the test procedure. 6 But I think, you know, first I understand 7 why DOE – what’s DOE is facing now, and DOE has to 8 look at what ASHRAE has done. 9 MR. BROOKMAN: Okay. Dave Winiarski. 10 MR. WINIARSKI: This is – 11 MR. BROOKMAN: Use the microphone, Dave. 12 Hit the button. 13 MR. WINIARSKI: This is Dave Winiarski, 14 Pacific Northwest National Laboratory. I did want to 15 make a statement here, trying to follow a little bit 16 of the conversation, that there, as far as I 17 understand, there will be no restrictions on the use 18 of comfort cooling equipment for serving computer 19 rooms. So if you have a VRF system or other system, 20 that can still be used to satisfy a computer room in a 21 building. This restriction is coming from the other 22 side, which would prevent a product that is designed 23 and marketed and tested, specifically, for use as a 24 computer room air conditioner according to ASHRAE 127, 25Executive Court Reporters (301) 565-0064 7 2

is restricted from being advertised for use in other 1 applications. If those manufacturers have other 2 applications they are certainly marketing their 3 specific – what some people call precision cooling 4 equipment,that may be a concern by itself. But I 5 don’t think this is a strong concern for the other 6 comfort cooling equipment. 7 MR. BROOKMAN: Okay. Thanks for that. 8 Okay. Additional comments? Nothing else at this 9 point? Okay. 10 MR. SVENSON: All right, so then DOE took 11 the data from those two sources the CEC database and 12 individual manufacturers’ websites and broke them out 13 into 30 different equipment classes based on ASHRAE 14 90.1. Those equipment classes depend upon the cooling 15 type, the sensible cooling capacity, orientation, and 16 whether or not there is a fluid economizer. DOE found 17 1364 different models from 22 different equipment 18 lines from five different manufacturers. That number 19 may seem high, but what tends to happen is one unit 20 could be optionally be air cooled, water cooled, or 21 glycol cooled, and then within those, upflow or 22 downflow, so for like that one unit, you would have 23 six different optional configurations which will fall 24 into six different equipment classes. So that kind of 25Executive Court Reporters (301) 565-0064 7 3

describes why that number is a little high. 1

2 **Engineering Analysis** 3 Next we’ll get into the engineering 4 analysis. The goal of the engineering analysis is to 5 characterize the relationship between the increased 6 efficiency and the cost required to get to that 7 increased efficiency. DOE chose an efficiency level 8 approach in conjunction with pricing survey in this 9 rulemaking. 10 There are six steps here for the engineering 11 analysis. We’ll go into each of those steps in more 12 detail in the ensuing slides, but here are just a 13 brief overview. 14

 First, DOE chooses a representative equipment 15 size for analysis, then 16

 It will define the baseline model, then 17

 Develop the efficiency levels for analysis 18

 Then DOE obtains pricing data and constructs 19 price efficiency curves 20

 Next, DOE takes such price efficiency curves 21 and scales them to the equipment classes that 22 were not directly analyzed, and 23

 Lastly will get into the results. 24 Now, the first step, DOE needs to choose a 25Executive Court Reporters (301) 565-0064 7 4

representative equipment size on which it will base 1 all of its analysis. DOE chose the average sensible 2 capacity rounded to the nearest ton for each equipment 3 class for computer room air conditioners. DOE noted 4 that within each size category for computer room air 5 conditioners, there was not any variation between the 6 cooling type, orientation, and the presence of a fluid 7 economizer, so DOE was able to choose the 8 representative sensible cooling capacity based on just 9 the size categories. 10 So for the small computer room air 11 conditioners, those with cooling capacity less than 12 65,000 BTUs, DOE chose the three ton capacity. Then 13 for the large computer room air conditioners with a 14 cooling capacity between 65,000 and 240,000 BTUs per 15 hour, DOE chose 11 tons. And for the very large, DOE 16 chose 24 tons. That said, DOE directed downstream 17 analysis around these numbers. 18 MR. BROOKMAN: Steve Rosenstock. 19 MR. ROSENSTOCK: Steve Rosenstock, EEI. For 20 the large unit, does that tonnage represent kind of 21 the high point of the bell curve in terms of 22 distribution or -- because, you know, with the other 23 it seems like the midpoint of the range, but here 24 you’re on the low end of the range. 25Executive Court Reporters (301) 565-0064 7 5

MR. SVENSON: So that number is based on the 1 average of the sensible capacities found in that 2 entire size category, and you’re talking about the 3 very large, greater than 240,000, so most – we found 4 that most equipment tended to be on the lower end of 5 that range, so it’s closer to the lower range. 6 MR. ROSENSTOCK: Thank you. 7 MR. SVENSON: All right. Next, DOE defines 8 the baseline model. The baseline level is used as a 9 reference point against which DOE measures any changes 10 resulting from amended energy conservation standards. 11 A baseline model typically represents the model having 12 features and technologies normally found in the 13 equipment class offered for sale. Usually DOE will 14 choose the baseline efficiency level as the federal 15 energy conservation standard, however, in this case, 16 computer room air conditioners are not currently 17 regulated, so they do not have a federal energy 18 conservation standard. But since EPCA requires DOE to 19 adopt the ASHRAE levels or higher, DOE chose the 20 ASHRAE efficiency levels as the baseline levels. 21 And then, lastly, to simplify the 22 engineering analysis, DOE only selected levels for the 23 downflow class. We found that there’s really no 24 difference between the upflow and downflow class. 25Executive Court Reporters (301) 565-0064 7 6

They all have the same components, just organized in a 1 different way, and they would have the same 2 technological advancements as the downflow class, and 3 so the class benefit analysis would be pretty much the 4 same between these two classes. 5 All right, next, DOE will develop the 6 efficiency levels for analysis. Since DOE does not 7 currently regulate the computer room air conditioners, 8 manufacturers are not required to report their 9 efficiency information. So DOE had to rely on 10 efficiency information found in the manufacturer 11 literature and the CEC appliance database. However, 12 SCOP is a new metric adopted by ASHRAE, so all the 13 efficiency information DOE did find was in a form 14 ofEER, so DOE needed a method in order to convert 15 these EER numbers into SCOP. In the appendix of 16 ASHRAE Standard 127 there is this rule of thumb 17 formula that converts the old EER into the SCOP, and 18 you can see the formula on that slide. 19 For those equipment classes for which DOE 20 had enough efficiency information, DOE would identify 21 the max tech efficiency level on the market, and then 22 DOE chose three evenly spaced points between the 23 baseline level and the max tech efficiency level for 24 five efficiency levels for analysis. For those 25Executive Court Reporters (301) 565-0064 7 7

equipment classes for which there were little or no 1 efficiency information, DOE based its levels off of a 2 similar equipment class using the efficiency 3 difference found in ASHRAE 90.1. So, for instance, 4 DOE didn’t have enough efficiency information for the 5 water-cooled class with the fluid economizer, so DOE 6 took the efficiency levels they developed for the 7 water-cooled class without the fluid economizer and 8 subtracted .05 from the SCOP, which is that difference 9 found in ASHRAE. 10

MR. BROOKMAN: Joanna Mauer. 11 MS. MAUER: Joanna Mauer. Did DOE attempt 12 to compare the SCOP levels in 90.1 to the current 13 California standards that I recognize the difficulty 14 of comparing SCOP to EER. 15 MR. SVENSON: We did use the rule of thumb 16 to compare those levels. Again, we’re not positive 17 how accurate the rule of thumb formula is. 18 MS. MAUER: Can you say, using the rule of 19 thumb, how the levels in 90.1 compare to the 20 California standards? 21 MR. SVENSON: They’re close in some 22 categories and I think they are – California levels 23 may be a little higher than the current ASHRAE 24 standards. 25Executive Court Reporters (301) 565-0064 7 8

MS. MAUER: Okay. Again, I think we’d 1 certainly be concerned if DOE is going to preempt the 2 California standards and set standards – national 3 standards at a level that are lower than the current 4 California standards, and I believe the California 5 standards have been in effect since like 2006 so these 6 aren’t new standards based on kind of better than may 7 be available now. 8 And maybe if I can just ask another 9 question. Is there some inherent difference between 10 the computer room air conditioners and kind of 11 conventional packaged AC equipment that would make the 12 CRAC units less efficient? 13 MR. SVENSON: I’m not aware of any. 14 MS. MAUER: Okay, so, you know, if there’s 15 no inherent – something inherent that makes the 16 equipment less efficient, I don’t see a reason why the 17 levels couldn’t be comparable in stringency to what 18 the levels were in commercial package equipment, and I 19 think if we are having – and I appreciate that DOE’s 20 trying to resolve these issues, the definitions, but 21 especially if there is possibility that manufacturers 22 could rate their equipment to the product class with 23 the lower standards that is a significant difference, 24 I think that’s a concern. 25Executive Court Reporters (301) 565-0064 7 9

MR. BROOKMAN: Thank you. Steve Rosenstock. 1 MR. ROSENSTOCK: Steve Rosenstock, EEI. I 2 was just thinking that typically for the computer room 3 units, aren’t typical test conditions show much lower 4 temperature and relative humidity compared to the 5 packaged units, so that would have an impact on 6 efficiency levels right there, just because of 7 different test conditions. I mean significantly 8 lower. So that, you know, when you have to take out 9 much more humidity and lower – let’s say 68 degrees, 10 50 percent humidity for the computer room, versus 74 11 degrees, 55, 60 percent for – again, I don’t know what 12 the test procedure numbers are, but just the internal 13 conditions can make a significant difference in terms 14 of the efficiency levels that you’re going to see 15 because of the differences in the test procedure. 16 MR. BROOKMAN: Karim. 17 MR. AMRANE: Karim Amrane, AHRI. I believe 18 those kinds of questions were raised within the ASHRAE 19 90.1 committee when this proposal was discussed, and I 20 think – and at that time we had a lot of input from 21 those manufacturers who make those products, and I 22 think there’s the understanding, from those 23 discussions, that what they were proposing was somehow 24 equivalent to those conventional air conditioners, 25Executive Court Reporters (301) 565-0064 8 0

rooftop units, or something like that. 1 So again, I think what’s happening here, we 2 are talking about the first go-round, this is the 3 first time they are going to be regulated, and 4 eventually, if those manufacturers, as I said, AHRI is 5 forming a product section, we will have a 6 certification program, and within the next few years 7 there will be a way to see those efficiencies and to 8 be able to raise them if the efficiency needs to be 9 raised. 10 MR. BROOKMAN: Okay. 11 MR. SVENSON: Next, DOE conducted a pricing 12 survey. We contacted the five known manufacturers of 13 this equipment and were able to obtain efficiency and 14 pricing information from three of those manufacturers. 15 DOE selected models for pricing that were close to 16 representative sensible cooling capacity as possible, 17 generally within 15 percent. DOE received pricing 18 information for 32 total models and DOE used this 19 pricing data, together with the SCOP information to 20 produce price efficiency curves. 21 Then DOE obtained efficiency information. 22 DOE only had enough pricing and efficiency data to 23 directly analyze four equipment classes - the small 24 air-cooled equipment class, the large air-cooled 25Executive Court Reporters (301) 565-0064 8 1

equipment class, and the small and large water-cooled 1 equipment classes. Now for the remaining eleven 2 equipment classes, DOE had to scale the price 3 efficiency curves from these four classes. 4 So this is a little bit of a graphic of how 5 we scaled the price efficiency curves. Just to give 6 you an example, if you look at the top right arrow, to 7 go from the large air-cooled equipment class to the 8 very large air-cooled equipment class, DOE subtracted 9 0.2 from the SCOP which again, is that difference 10 found in ASHRAE, and we also multiplied the price by 11 1.44, which is the average increase in price we found 12 from our pricing survey. 13 Another thing to point out from our pricing 14 survey is that we found that water-cooled computer 15 room air conditioners were the same price as glycol16 cooled computer room air conditioners. 17 And lastly, for classes with the fluid 18 economizer, we used the corresponding class without 19 the fluid economizer and subtracted .05 from the SCOP 20 as we discussed earlier, and we multiplied the price 21 by 1.0582 which is again the average price we found 22 for having a fluid economizer. 23 If you’d like to see a full set of results 24 for the engineering – 25Executive Court Reporters (301) 565-0064 8 2

MR. BROOKMAN: No, go ahead. Keep going. 1 MR. SVENSON: If you’d like to see a full 2 set of results for the engineering analysis, you can 3 refer to chapter three of the NOPR TSD. Based on the 4 pricing data that was obtained, DOE observed a 5 positive correlation between price and increase 6 efficiency for the small and large air-cooled 7 equipment and the large water-cooled equipment. 8 However, DOE observed that there was a negative 9 correlation between price and increase efficiency for 10 small water-cooled equipment class. DOE notes that 11 there’s other factors other than the efficiency of the 12 equipment that could impact the pricing. For 13 instance, how competitive the market is, warranty, et 14 cetera. DOE believes that this negative correlation 15 is not representative of this equipment class because 16 of these factors – and these factors also could have 17 influenced results for the positive correlation 18 equipment classes as well. DOE would also like to 19 note that there was a lack of data and there’s a lot 20 of uncertainty in the data that also could kind of 21 increase the margin of error for these results. 22 MR. BROOKMAN: Okay. Steve Rosenstock. 23 MR. ROSENSTOCK: Steve Rosenstock, EEI. 24 Again, thank you for that, but going back to that 25Executive Court Reporters (301) 565-0064 8 3

previous slide 44, I guess, you know, it said you only 1 had data for the four classes, and then you have these 2 scaling factors. I guess my – was there like limited 3 pricing information, where you just got the 1.44 and 4 1.9 scaling factors for all sizes? Or – it just seems 5 like – you did the scaling, but how much information 6 do you have to be confident those scaling factors 7 worked across all sizes in those, especially for the 8 very large units? 9 MR. SVENSON: Well, as we said, there’s a 10 lot of uncertainty in the data. We had some data for 11 all these classes that we were able to make some of 12 these general kind of correlations, but we are aware 13 the data is very uncertain and we’re not extremely 14 confident in any of these results, but that’s because 15 of the uncertainty – 16 MR. ROSENSTOCK: And Steve Rosenstock, EEI. 17 What was the variation – I see the 1.44 and 1.9 – what 18 was kind of the variation that you saw with the data 19 set in terms of price differentials? In the range? 20 MR. SVENSON: In terms of like a tolerance 21 for the price? 22 MR. ROSENSTOCK: No, no, no. In terms of 23 what was the range? Was it 1.34 to 1.54 or was it 24 1.04 to 1.84? What kind of variation did you see in 25Executive Court Reporters (301) 565-0064 8 4

some of the – 1 MR. SVENSON: I would – 2 MR. DARLINGTON: We don’t have that off 3 hand, but – 4 MR. BROOKMAN: Use the microphone. This is 5 Adam Darlington. 6 MR. DARLINGTON: We don’t have that 7 information off hand. We obviously don’t provide the 8 actual pricing data that we collected, so that we 9 don’t reveal anything. But as far as the range, I 10 mean, so typically for the four green product classes, 11 we were able to collect enough data, you know, four or 12 five points, to get a general trend. And then in 13 those remaining product classes, we only had a couple 14 of points, and basically from those points we tried to 15 come up with an average sort of difference. Now, you 16 know, where it says the 1.44, whether that range, you 17 know, we had one that was 1.33 and one that was 1.6, 18 you know, the same price and one that was double it, I 19 don’t know off the top of my head, but I don’t think 20 that there was that big of a range, and we could 21 probably look into the data and maybe follow up if 22 you’re very interested. 23 MR. ROSENSTOCK: Steve Rosenstock. And 24 again, that’s fine, but I’m just saying, this 25Executive Court Reporters (301) 565-0064 8 5

definitely is – has significant impact in terms of the 1 economic analysis. 2 MR. DARLINGTON: Yeah, I agree, absolutely, 3 and that’s part of the issue here and part of why the 4 approach is to sort of adopt the ASHRAE levels because 5 DOE is charged with kind of presenting a clear and 6 convincing case that more stringent levels are 7 justifiable, and basically with the computer room air 8 conditioners, there’s a specific problem because 9 they’re currently unregulated, and so there’s not a 10 whole lot of data out there to base an analysis on, 11 especially with the lack, you know, the complete lack 12 of efficiency data. And then for the few products 13 that we were able to convert the efficiency data on to 14 get the pricing data for that was also a challenge. 15 So I think – I guess the overarching point is that 16 there is a good amount of uncertainty in the actual 17 price-efficiency relationship, based on what was done 18 and the lack of data that was available to us. 19 MR. ROSENSTOCK: Steve Rosenstock, EEI. I 20 definitely appreciate that and since we’re going to be 21 at the final rule stage, if there is a way to, in the 22 final rule, just to say data sets were limited and 23 we’re basing this on a limited data set in terms of 24 all of the life cycle analysis that we’re going to do. 25Executive Court Reporters (301) 565-0064 8 6

Thank you. 1 MR. BROOKMAN: Thank you. 2 MR. SVENSON: And DOE invites comment about 3 the pricing analysis or any data information about the 4 price-efficiency relationship for computer room air 5 conditioners. 6 MR. BROOKMAN: Any additional comments on 7 these pricing issues? Or others? Nothing additional? 8 Okay. Moving on to markups and next we’re going to 9 hear from Michael Scott and actually Dave Winiarski’s 10 to – Dave’s going to go first. Dave Winiarski. 11 **Introduction to Markups Analysis; Energy Use Analysis;** 12 **Life-Cycle Costs and Payback Period Analysis** 13 MR. WINIARSKI: So, hi. My name is Dave 14 Winiarski, I’m with the Pacific Northwest National 15 Laboratory, and I’ll be introducing this section five 16 which is up here, which is discussing markups 17 analysis, energy use analysis, and how those feed into 18 DOE’s life cycle cost and payback period analysis. 19 I’m going to start off this with a 20 discussion of energy use and then use load 21 characterization section. This slide here shows how 22 that and the markups analysis both feed directly into 23 the life-cycle cost and payback period analysis. 24 So for the energy use characterization of 25Executive Court Reporters (301) 565-0064 8 7

computer room air conditioners, what we did is what’s 1 called a bin temperature analysis, where first we 2 establish a performance map for how the efficiency of 3 a computer room air conditioner in any one of the 15 4 classes that we’ve identified for the analysis behaves 5 as a function of external conditions. In this case, 6 external conditions being either defined by products 7 which respond primarily to outdoor air dryable 8 temperature – those are the air-cooled products, 9 obviously; but also we’re presuming that the glycol10 cooled products respond outdoor air temperature 11 because they are generally used with what’s called a 12 dry evaporative cooler – or dry cooler outside which 13 cools the glycol loop which the air conditioner is – 14 or serving air conditioner for its condensing section. 15 For water-cooled units, those are generally 16 – they’re not used with a dry cooler, they’re used 17 with an evaporative type cooler, either directly or 18 indirectly, and so they are responding to outdoor wet 19 bulb temperature performance. 20 The basis of the analysis is we establish 21 these performance maps for each class of equipment, in 22 this case each specific size of equipment within those 23 classes as a function of either the dry bulb 24 temperature or wet bulb temperature, and then we 25Executive Court Reporters (301) 565-0064 8 8

perform an annual energy consumption analysis where we 1 pair the performance at each bin temperature – we bin 2 them in five degree temperature bins, for instance 65 3 to 70 degrees outdoor temperature would be a bin. We 4 come up with the power use in that bin and then we end 5 up multiplying it by the number of hours in that bin 6 in a particular climate. The analysis was done for 7 239 specific climates using typical meteorological 8 year data, the specific set was the TMY3 data. And 9 then we further aggregate from those 239 climate 10 locations into state average unit energy consumption 11 for each class of computer room air conditioners, and 12 those state by state average numbers are what actually 13 feed the life-cycle cost analysis. 14 So the next slide, I want to discuss briefly 15 the basic process and assumptions that are used in the 16 performance maps. To start off with, the performance 17 maps, you need to understand a little bit of what’s 18 the load on these computer room air conditioners. And 19 to be quite frank, there isn’t a lot of data out there 20 on typical loading for computer room air conditioners. 21 The assumption that we used for this was that in any 22 given hour for which we’re establishing the power, the 23 computer room is loaded or provides a load on the air 24 conditioner equivalent to 65 percent of the sensible 25Executive Court Reporters (301) 565-0064 8 9

capacity of the air conditioner. That number was 1 based on an Australian study, a minimum energy 2 performance standard study. It also correlates well 3 with some California code enhancement studies that 4 were produced, I think, just in the last couple years. 5 The efficiency again, is assumed to be a 6 function of the condensing fluid temperature, or where 7 you’re looking at air-cooled products, the air 8 temperature, unless it varies with the temperature 9 bin. In addition, and somewhat unique for this 10 product class, ASHRAE defined separate product classes 11 for equipment with and without economizers, which is a 12 little unique compared to other types of air 13 conditioning equipment. So where economizers were 14 fluid economizers, either the glycol-cooled products 15 or the water-cooled products, with a separate fluid 16 economizer that’s incorporated in the product, we 17 actually included the load reductions from those 18 economizers directly in this analysis. A key point is 19 that we did not include reductions for air side 20 economizers, which may be used with some air side 21 equipment, but we had very little data on how often or 22 how frequent that’s used. 23 Supply fan power was based on manufacturer 24 data that we could find for specific products. In 25Executive Court Reporters (301) 565-0064 9 0

this analysis, the supply fan power is assumed to be 1 constant at all levels, so the energy savings is 2 coming from largely improvements in the refrigeration 3 portion, not on the supply fan portion. 4 MR. BROOKMAN: Yes, Steve. 5 MR. ROSENSTOCK: Steve Rosenstock. Edison 6 Electric Institute. On the graphic in this slide, on 7 the Y axis it says EIR, what does that stand for? 8 MR. WINIARSKI: EIR is the energy input 9 ratio. It’s basically a term that’s often used in 10 building performance models, like Energy Plus or DOE2, 11 and it reflects the amount of power that’s used or 12 provided to the condensing unit relative to the 13 capacity output of the condensing unit. In this case, 14 condensing unit, I’m really referring to the entire 15 refrigeration system, minus the fan system. 16 MR. ROSENSTOCK: So – Steve Rosenstock, 17 thank you. So EIR T versus nominal, so T is based on 18 the outdoor ambient? 19 MR. WINIARSKI: Exactly, so if you’re 20 looking at this graph, what you’re seeing here is that 21 as the outdoor temperature gets lower and lower, the 22 energy input required to achieve a certain amount of 23 capacity also gets lower and lower. Which is, in this 24 particular case, we didn’t have performance curves 25Executive Court Reporters (301) 565-0064 9 1

from actual products that were being analyzed, 1 however, the ASHRAE 127 standard has an appendix which 2 had examples of performance at different conditions, 3 and so the plots you see here are actually based on 4 that appendix. 5 MR. ROSENSTOCK: Thank you. 6 MR. WINIARSKI: So that’s again taking into 7 account that performance varies with condensing 8 conditions and in addition we also have some part load 9 performance curves as the equipment becomes unloaded 10 in the analysis to take into account things like 11 compressor cycling. So that’s also taken into 12 account. And this allow us to come up with 13 essentially a power – an average power consumption for 14 each outdoor temperature bin. 15 From then on, it’s a relatively 16 straightforward analysis. The power in a given bin is 17 equal to the power of what I’m calling the condensing 18 section, which is really the compressor and the 19 refrigeration portion of the system. That’s added to 20 the supply fan power which gives you the total power 21 in any given temperature bin. We then develop for 22 each of the specific climates that were analyzed, 23 essentially the sum product of the power in each bin 24 times the number of hours in each bin over the year. 25Executive Court Reporters (301) 565-0064 9 2

That gives us the unit energy consumption for that 1 product class and particular size in that climate. 2 In order to come up with the state energy 3 consumption on average, we have specific weights that 4 reflect the presence of that particular climate in a 5 given state, for example, California might have – I 6 don’t know the number off hand, but maybe 15 different 7 climates that are included in that, each with a given 8 weight. We weighed all the unit energy consumptions 9 by climate with those weights to get the state by 10 state energy use figures. And that’s what’s fed 11 directly into the LCC spreadsheet. 12 The LCC spreadsheet also is able, when it 13 does its analysis, which will be discussed here 14 shortly, to come with sort of national average unit 15 energy consumption estimates. And this process is 16 repeated for each of the efficiency levels analyzed. 17 And that’s really the summary. If there’s 18 any questions I can take them now. 19 MR. BROOKMAN: No questions. 20 MR. WINIARSKI: All right. 21 MR. BROOKMAN: Michael Scott. 22 **Markups Analysis; Life-Cycle Costs Analysis** 23 MR. SCOTT: Okay, so moving on here, what 24 I’ll be talking about is the markups analysis and the 25Executive Court Reporters (301) 565-0064 9 3

life-cycle cost analysis. In order to do this, we 1 have typically, when we’ve done one of these life2 cycle cost analyses and mark-up analyses, we have to 3 specify distribution channels for the equipment of 4 interest, and then to talk about what types of 5 businesses a piece of equipment may go through until 6 it reaches the consumer. And typically those may have 7 several branches. 8 However, in this case, it is our belief that 9 computer room air conditioners really pretty much 10 there’s a manufacturer dealing with a mechanical 11 contractor who’s doing the installing, and may be 12 doing some markup on the equipment, and that’s true 13 for either replacement or new construction. Our 14 belief is that in most cases computer rooms are not 15 really installed in new construction as specifically 16 as computer rooms and a general contractor, for 17 example, would not be involved. And we have virtually 18 no data on that. This is largely an assumption on our 19 part, so we are interested in comments that people who 20 are involved in the industry might have on that and 21 tell us a bit more about how the equipment is actually 22 distributed, because that may affect the analysis. 23 However, with that particular distribution 24 channel that’s shown on slide 52, then we proceed with 25Executive Court Reporters (301) 565-0064 9 4

the markup analysis. Our source of data for the 1 mechanical contractor, which is the only markup past 2 the manufacturers in this case, the source of data for 3 that was the 2007 economic census applied to the – for 4 the particular part of the construction industry that 5 is the most relevant for this kind of equipment, and 6 that is HVAC contractors. It’s the most detailed code 7 available for this type of construction. 8 We do a workup of the components of the 9 costs of the mechanical contractor. Those costs are 10 divided into what we call variant costs which scale 11 with the price of the equipment, or which we believe 12 scale with the price of the equipment, and those 13 portions of the costs of the contractor that do not 14 scale with the cost of the equipment. And we scale 15 that with the cost of – essentially the cost of goods 16 sold, which in the case of the mechanical contractors 17 is subcontractor costs, it’s installing labor costs, 18 and one other component which is in the TSD but 19 escapes my memory at the moment. 20 The remaining costs are what constitutes the 21 markup of the cost of goods sold, primarily the 22 general operating costs of the contractor, and those 23 are primarily labor, occupancy, factors like 24 advertising, depreciation, and then finally profit. 25Executive Court Reporters (301) 565-0064 9 5

And some of those components, particularly the labor 1 and occupancy costs, we characterize as invariant with 2 the price of the equipment, and so we have both a 3 baseline markup, which is characteristic of baseline 4 equipment, and then for more efficient equipment, as 5 that price gets higher, the markup does not follow it, 6 instead it’s somewhat less because the belief is that 7 labor and occupancy costs do not scale with the price 8 of the equipment. 9 The averages that you see on the slide, the 10 baseline markup of 1.474 and the incremental markup of 11 1.184 are national averages, and we were able to 12 provide in the technical support document, a range of 13 occupancy cost factors that are unique to each state, 14 because labor costs and occupancy costs, particularly, 15 vary across the country. And then when we do the 16 actual analysis using Monte Carlo analysis, then we 17 are drawing from the cost in the individual states 18 rather than the national average. 19 Similarly, for sales taxes, what we see on 20 the slide here is a population-weighted average for 21 the country, however there are states that don’t 22 actually have a sales tax, there are states for which 23 that tax is higher, and so again, we’re drawing from a 24 distribution of taxes. The information that’s 25Executive Court Reporters (301) 565-0064 9 6

provided on the slide here is to give you an idea of 1 the overall average. 2 So I’ll stop right there for the markup 3 factor and give people a chance to ask questions if 4 they wish. Otherwise, I’ll just move on. 5 MR. BROOKMAN: So comments both on the 6 distribution channels and also these markup factors? 7 No additional – Gary. 8 MR. NETTINGER: I’ll make a comment. As we 9 proceed through this process with computer room air 10 conditioners, it’s becoming more and more clear to me 11 that these are in fact – you are in fact looking at 12 precision air conditioners, not products that are 13 sometimes applied to computer room air conditioners. 14 MR. BROOKMAN: And when you say precision, 15 what are the characteristics there? 16 MR. NETTINGER: They are designed strictly 17 for computer room or industrial equipment cooling, not 18 for comfort cooling at all, so that kind of goes back 19 to our definition that – I guess from a definition 20 standpoint, I’m becoming more and more opposed to this 21 being regarded as computer room air conditioning or a 22 computer room standard, because there’s lots of other 23 systems that could be used for computer rooms. 24 On the channel to the market, I can’t be 25Executive Court Reporters (301) 565-0064 9 7

specific on this, but I do believe that in many cases 1 it will be manufacturer to a distributor. There will 2 be a markup there. There may sometimes be a sales rep 3 agency or manufacturer’s rep agency involved. If it’s 4 a sales rep agency, there will probably be a markup as 5 well, and then it will go on to the mechanical 6 contractor and the consumer. So I think that – 7 generally I think you’re probably missing one step in 8 the markup process. 9 MR. SCOTT: Yeah, one thing I probably 10 should have mentioned was that as we have them set up 11 here and we’re going to have to double check with our 12 colleagues over at Navigant, but our understanding 13 when we were handed the original prices here that get 14 marked up is that those were actually delivered prices 15 from the manufacturer or the distributor. So we would 16 have already accomplished that in the manufacturer/ 17 distributor markup. But thank you very much for that 18 information, that helps. 19 MR. BROOKMAN: Would you be willing to 20 venture on the scale of the markups listed here? 21

MR. NETTINGER: No. 22 MR. BROOKMAN: I didn’t think so. Okay. 23 MR. SCOTT: All right. That it? We’ll move 24 on. Oh, one more. 25Executive Court Reporters (301) 565-0064 9 8

MR. BROOKMAN: Joanna Mauer. 1 MS. MAUER: Joanna Mauer. Actually just a 2 question for Gary or anyone else. Are there 3 distinguishing equipment designed specifically for 4 precision cooling from equipment that may be designed 5 for comfort cooling but may be used in these other 6 applications? Are there other characteristics, 7 physical characteristics, other characteristics that 8 could be – to distinguish those two types of 9 equipment? 10 MR. NETTINGER: That’s obviously going back 11 to the definition. Very difficult to define a firm 12 role. I think it’s just the requirements of that 13 particular data room or computer room, and how 14 precisely they need their humidity controlled. You 15 know, computer room air conditioning is usually 16 designed for primarily sensible cooling, not much 17 latent. I just don’t want to see this going in the 18 direction where the result of this analysis or testing 19 efficiency rating, whatever is to become of this, 20 prevents comfort cooling – or obstructs an HVAC system 21 that’s designed for comfort cooling, such as Panasonic 22 or any manufacturer’s equipment to be used or marketed 23 into a common computer room application. Most 24 computer rooms do not require high precision 25Executive Court Reporters (301) 565-0064 9 9

equipment. 1 MR. BROOKMAN: Paul. 2 MR. DOPPEL: Paul Doppel, Mitsubishi 3 Electric. Probably the most distinguishing 4 characteristic would be the ability to apply cooling 5 operation at very low temperatures, and most standard 6 comfort cooling systems go down maybe 55 degrees, and 7 then providing cooling lower than that is a stretch, 8 and so systems have to be specially designed to be 9 able to operate down to ten, zero, minus 20, that 10 takes special requirements for those. 11 But to Gary’s point, I can – again, I’m 12 having the same concern that there could be an 13 exclusion of products that normally could do this job 14 because it says – the requirement might be that it has 15 to comply with ASHRAE standard 127. 16 MR. BROOKMAN: Yes, Warren. 17 MR. BEETON: Could DOE clarify something? 18 I’m not a little confused here. I thought the 19 proposal that was on the table was to prohibit the 20 marketing or sale of precision cooling equipment for 21 general air conditioning, but not prevent the sale or 22 marketing of general equipment for computer room 23 application. Is that wrong? 24 MR. BROOKMAN: Dave Winiarski. Use the 25Executive Court Reporters (301) 565-0064 1 00

microphone. 1 MR. WINIARSKI: Yeah. Dave Winiarski. To 2 preface that, we’re not trying to obviously restrict 3 the sale, or we’re trying to make sure that the 4 equipment that’s sold into that precision cooling 5 application – let me rephrase that. That equipment 6 that is designed specifically for that precision 7 cooling and computer room application and is tested in 8 accordance with that need, will meet this requirement, 9 but the Department is not putting restrictions on the 10 ability of using comfort cooling equipment for that 11 computer room application. Does that clarify? 12 MR. BROOKMAN: Karim. 13 MR. AMRANE: Karim Amrane, AHRI. I guess 14 what Gary is saying is that there is this equipment 15 which is also sold in computer room application, which 16 are not for precision cooling, but they still do the 17 same kind of job. They are there for comfort cooling, 18 but as well as for the computer rooms. 19 MR. BEETON: Right, and I’m assuming that 20 that equipment is rated to AHRI 220/240 or 340/360 and 21 designed for comfort applications primarily, but could 22 also be used for the computer room application. 23 MR. BROOKMAN: Ashley. 24 MS. ARMSTRONG: Just a comment – what the 25Executive Court Reporters (301) 565-0064 1 01

Department, I think, is trying to do and it has little 1 to do with how a manufacturer may market their 2 equipment or what – if you want to get into 3 overlapping markets – but we’re trying to clearly 4 distinguish in our definitions what standards and 5 testing procedures you need to use. In other words, 6 where are you covered? And if the definition is 7 overly vague or overly broad, then you could end up in 8 a situation which encompasses two different testing 9 procedures and two different standards for the same 10 equipment, and this is where we need your help in 11 distinguishing. We’re trying to clearly distinguish 12 between the two. 13 MR. BROOKMAN: Okay. Paul. 14 MR. DOPPEL: Just a comment on the 15 application side. I mean, if someone wants to use 16 this type of equipment to do comfort cooling, I mean, 17 they’ve got a lot of money for one. And there 18 shouldn’t be a restriction from doing that. And 19 again, the definition seems to imply restrictions on 20 applicability, you know, both ways. 21

MR. BROOKMAN: Warren. 22 MR. BEETON: Just to clarify. Our company 23 makes computer room air conditioning, so we have an 24 interest in this. What we’re reading on the chart 25Executive Court Reporters (301) 565-0064 1 02

that appeared some time ago was only the prohibition 1 of marketing or sale of what I will call precision 2 cooling units that are marketed as and tested to a 3 precision cooling standard, the ASHRAE 127, to 4 prohibit the sale in general air conditioning. That’s 5 what that chart said. But there was nothing that said 6 the other way around, to prohibit the application of 7 general air conditioning equipment for computer room 8 cooling. Am I correct? 9 MR. BROOKMAN: Ashley. 10 MS. ARMSTRONG: Right, so it seems like what 11 you would advocate, if I’m stating this correctly, is 12 that you guys would advocate in the definition section 13 removing the part about marketing or advertising. 14 MR. BROOKMAN: Ashley, can you refer to the 15 slide that you’re looking at? 16 MS. ARMSTRONG: Thirty-three. 17 MR. BROOKMAN: Thirty-three. So let’s do 18 that again, so we get this – 19 MS. ARMSTRONG: We don’t have to go back, 20 we’ve already dealt with that, but at the same time, 21 that seems to be what I’m hearing. In other words, if 22 somebody makes a particular design, what we need to 23 make sure is the definition is clear as to which 24 bucket if falls into. 25Executive Court Reporters (301) 565-0064 1 03

MR. BROOKMAN: Hang on just a second. 1 MR. BEETON: I’m not advocating, I’m just 2 trying to clarify. And again, I thought it was a yes 3 or no question. That what DOE proposed in that chart 4 was simply to prohibit the sale and marketing of 5 equipment rated to ASHRAE 127 for general air 6 conditioning, but not to prohibit the application of 7 equipment rated under the commercial air conditioning 8 standards for computer room use. 9 MS. ARMSTRONG: That is correct. 10 MR. BROOKMAN: Okay. Thank you, Ashley. 11 Robert. 12 MR. WILKINS: Robert Wilkins, Danfoss. When 13 we first started this conversation, we had this 14 discussion about restriction of sale of this type of 15 equipment in this sector or this type of equipment in 16 that sector. But what I’ve kind of heard the 17 evolution of the dialogue going is that there could be 18 or there’s a suggestion there could be a standard for 19 precision computer room air conditioning equipment, 20 and a standard for conventional commercial air 21 conditioning equipment. But the question I – and I 22 think that makes sense. But the question I’m raising 23 is, if you have those two standards – this is 24 precision equipment with high cost, high performance 25Executive Court Reporters (301) 565-0064 1 04

capability over wide outdoor ambient range, et cetera, 1 et cetera, and standard equipment. Then is there any 2 need at all for any restriction of sale, cross sale? 3 If the computer manufacturer can figure out how to use 4 a basic standard commercial air conditioner to meet 5 those needs, why should we restrict him from doing 6 that, and likewise, if that high end customer wants to 7 spend an exorbitant amount of money to put a very 8 precision piece of equipment into a commercial office 9 building, why should we restrict that? 10 MR. BROOKMAN: Warren, follow on. 11 MR. BEETON: And I think a comment earlier 12 was to the effect that no one is going to be likely to 13 try to apply precision cooling equipment for general 14 air conditioning. 15 MR. BROOKMAN: Gary. 16 MR. NETTINGER: Gary Nettinger, Panasonic. 17 I’m not opposed to the marketing aspect of it in the 18 definition. Within this room we’re speaking more and 19 more often about precision air conditioning equipment. 20 I think that term would be a lot more appropriate for 21 use in this standard, rather than computer room, 22 because if we – if it’s classified as precision air 23 conditioning equipment, it doesn’t restrict any 24 market. It doesn’t impeded how I sell my equipment or 25Executive Court Reporters (301) 565-0064 1 05

how they sell their equipment. 1 MR. BROOKMAN: Robert. 2 MR. WILKINS: Gary, I think that’s a great 3 point. For example, the equipment might be used in 4 some specialized laboratory, biomedical laboratory for 5 example, where you had to have very strict climate 6 control. Same type of requirements is not a computer 7 room. So the distinction that I’m hearing is more 8 it’s precision equipment and standard commercial air 9 conditioning equipment, with no prohibitions of where 10 the equipment could be utilized. That would be left 11 up to the commercial forces, market forces to 12 determine. 13 MR. BROOKMAN: Thank you. Paul. 14 MR. DOPPEL: Paul Doppel, Mitsubishi 15 Electric. I just wanted – I support those two 16 comments, because again, that makes more sense for the 17 market to determine how the product is being applied, 18 rather than trying to use a definition in DOE language 19 to try to sort that out. So I support Gary’s calling 20 it precision. 21 MR. BROOKMAN: Eric Stas. 22 MR. STAS: So in your written comments, 23 would it be possible to come up with some objective 24 measures or distinctions of what constitutes a 25Executive Court Reporters (301) 565-0064 1 06

precision air conditioner that could be put in this 1 computer room definition? So that we don’t have to 2 get into marketing and sale. 3 MR. WILKINS: Eric, you’re looking at me 4 because I made the comment, and that’s reasonable. 5 But I would defer that to the people that manufacture 6 those types of products, probably. 7 MR. STAS: Let me ask the question more 8 broadly. 9 MR. WILKINS: And I – and just to add that I 10 was only trying to facilitate a little bit here and – 11 MR. BROOKMAN: So Eric would like to direct 12 that question to manufacturers in the room. Would it 13 be possible to describe this precision equipment in a 14 way that is distinctive and – people are pointing at 15 you, Warren. 16 MR. AMRANE: Karim Amrane, AHRI. As I 17 indicated several times already, we are bringing those 18 manufacturers in house, so we will get you some better 19 definition. 20 MR. BROOKMAN: What’s the time frame? I’m 21 sorry to press you on that. 22 MR. AMRANE: Karim Amrane, AHRI. We will 23 have a discussion on this particular rulemaking before 24 the comment deadline, so we will get you some 25Executive Court Reporters (301) 565-0064 1 07

information. 1 MR. BROOKMAN: Thank you. Thanks a lot. 2 Okay. That was productive. Final comments on this 3 series of issues because we’re going to be moving on 4 here. Okay. 5 MR. SCOTT: Okay. Just to complete the 6 life-cycle cost analysis and payback period analysis 7 discussion, as people who have been involved in this 8 before know, this is an economic evaluation from the 9 end user perspective, so this is the value to the user 10 when the equipment is put in place and operated. The 11 results are expressed as life-cycle cost savings, that 12 is, the difference between a baseline piece of 13 equipment and the equipment at a standard level, and 14 then we also calculate a simple payback period and we 15 report that in the analysis. And I have a sort of a 16 simple diagram here on the slide that reminds me that 17 it’s a combination of first cost, which is the end 18 user price, or the marked up price, plus installation 19 costs for the equipment, and then looking out into the 20 future, there’s a discounted cash flow of costs which 21 are electricity, in this case, repair and maintenance 22 costs. And all of those are combined using the 23 discount rate so that we have an equivalent present 24 value measure, and we can look at the differences in 25Executive Court Reporters (301) 565-0064 1 08

life-cycle costs between the two levels. So that’s 1 generally how it’s carried out. 2 I’m not going to be talking so much about 3 electricity cost today. Basically this equipment goes 4 into commercial buildings of a couple of different 5 types, for computer rooms in those buildings, and 6 we’re using average commercial prices for each of the 7 states, escalated going forward, using Energy 8 Information Administration forecasts and then from the 9 information types of buildings, then sometimes those 10 have different prices than the commercial average, so 11 we take that into account. 12 What I am going to talk about a little bit 13 more today is installation costs and the repair and 14 maintenance costs because they’re kind of a unique 15 problem to this rulemaking. There was virtually – 16 there was very little installation costs information 17 available. What we were able to find is that RS 18 Means’s CostWorks system does provide information that 19 allows mechanical contractors to bid jobs for 20 installing computer room air conditioning, so what we 21 were able to do is calculate installation costs at 22 various cooling capacities and create a cost curve 23 relationship for each of the cooling types, for air24 cooled, water-cooled, and glycol-cooled. 25Executive Court Reporters (301) 565-0064 1 09

But we had no information about variation in 1 that equipment cost by efficiency level, nor did we 2 really expect any, because we believe that this 3 equipment is—even more efficient equipment— is likely 4 to be about as expensive to install as more 5 conventional baseline equipment. The principal 6 difference in installation costs appears to be the 7 capacity of the system, and we were able to take that 8 into account, but then we assume that installation 9 cost itself would not vary with efficiency level. And 10 that’s all reported in the technical support document. 11 However, we are interested in observations 12 from people in the room here and on the web concerning 13 whether they believe installation costs really ought 14 to increase as a function of efficiency as opposed to 15 capacity. And if so, how should that increase in cost 16 be estimated or derived? Because we have pretty much 17 exhausted the data that we have. 18 MR. BROOKMAN: See the question there. I 19 don’t think we have anything. 20 MR. SCOTT: I guess silence means consent. 21

Not sure. 22 MR. BROOKMAN: So as you reflect on this 23 point, or you can come back later with comments, that 24 would be helpful to get back to the Department on. 25Executive Court Reporters (301) 565-0064 1 10

Yes, Robert. 1 MR. WILKINS: Robert Wilkins, Danfoss. I 2 don’t have anything to respond directly to this 3 question. However, indirectly, I’m reminded of the 4 work we did a few years ago when we established 13 5 SEER in residential systems. And we raised the 6 minimum from ten to 13, and that worked fairly well in 7 new construction, but it created a lot of problems in 8 retrofit and replacement, because the installation 9 costs were so substantial. Maybe the installation 10 costs were incrementally higher in new construction, 11 but in the replacement market, they were substantially 12 higher because the indoor unit simply wouldn’t fit in 13 the closet where the old one was. It was much larger, 14 the units were larger. And so I don’t know whether 15 that’s directly relevant here, but I offer that as one 16 point to consider. 17

MR. BROOKMAN: Warren. 18 MR. BEETON: I’d have to see if our folks in 19 that division have any comments, but I question – I 20 would bet that a lot of equipment that goes into 21 installations where attention is paid to energy 22 efficiency, that there will be costs, not caused by 23 the equipment, but caused by the intention of the 24 consulting engineer or whoever designed that and also 25Executive Court Reporters (301) 565-0064 1 11

the equipment that goes with it, that will tend to be 1 more efficient as a consequence. So they might be 2 associated or correlated, but not necessarily driven 3 by the equipment rating. I don’t know if you’re still 4 – if that’s part of what you’re interested in or not. 5 MR. SCOTT: We’re certainly interested in 6 anything you can tell us about the installation 7 process that – I don’t know what we can take into 8 account and what we actually can’t take into account, 9 but we’re certainly interested in everything you can 10 tell us about it. 11 MR. BROOKMAN: And it’s for that equipment 12 or the ancillary equipment supporting that equipment? 13 MR. SCOTT: If there is, say, substantial 14 amount of cost in ancillary equipment, and 15 particularly if it changes by efficiency level, that’s 16 worth knowing here, I think. 17 MR. BROOKMAN: Okay. So we’re moving on to 18 repair costs. 19 MR. SCOTT: Right. Again, there was very 20 little data available, however RS Means did provide 21 some data on one-time repair costs for air-cooled 22 equipment. They really didn’t have anything on water23 cooled or glycol-cooled. And what we did as an 24 attempt to do an analysis here was to use some logic 25Executive Court Reporters (301) 565-0064 1 12

and look at repair costs as a percentage of original 1 equipment cost for different equipment capacities. 2 The reason for doing that was we felt we needed a 3 percentage type relationship, since we didn’t have 4 actual equipment cost – actual repair costs for all 5 classes of equipment. And the other thing that we 6 observed was when we graphed out the repair costs, it 7 appeared as though initially there’s a relatively 8 large amount of labor cost associated as a percentage 9 of the overall cost, and then as the equipment gets 10 larger, it’s more the equipment that begins to 11 dominate the labor. And so the percentage of labor 12 continued – the percentage of labor stopped going up 13 as the equipment became more expensive, but the 14 overall cost of labor went up proportionately. 15 So in showing all that in some cost curves, 16 and then estimated for each of the classes of 17 equipment, we multiplied the calculated percentage 18 from the cost curve at each capacity times the 19 original equipment cost at that same capacity, and 20 that allowed us to develop a table of one-time 21 baseline repair costs which were then converted into a 22 baseline average annual repair cost. Basically, we 23 annualized a one-time repair cost over the life of the 24 equipment. 25Executive Court Reporters (301) 565-0064 1 13

And then for higher efficiency levels, we 1 believe that to the extent that the material portion 2 of the baseline repair cost was the most important 3 thing, we scaled the material portion of the repair 4 cost for the more efficient equipment, but we did not 5 scale the labor portion of the repair cost, again, 6 going with the philosophy that the material cost was 7 the primary thing that distinguished the efficiency 8 levels and with what we’ve just said about the 9 installation cost, that may not be true. But that’s 10 what we did. 11 And then for maintenance cost, RS Means 12 basically had two maintenance costs allowed in their 13 system. About $84 a year for units up to about 20 14 tons capacity, 240 KBTU per hour, and another quote of 15 $102 per year for larger units. These are routine 16 maintenance costs, so they’d include things like 17 cleaning the evaporator coils, lubricating motors, 18 cleaning condenser coils, checking and refilling 19 refrigerant as necessary and similar activities. And 20 again, this would be an average over a period of 21

years. 22 We basically said that those costs were 23 almost entirely attributable to labor expenses and we 24 assume that those did not vary by efficiency level. 25Executive Court Reporters (301) 565-0064 1 14

I think I’ll stop there for any comments on 1 all of that. 2

MR. BROOKMAN: Joanna. 3 MS. MAUER: Joanna Mauer. Could you just 4 explain again what – when you refer to one time 5 baseline cost. 6 MR. SCOTT: Yes, the RS Means says if you’re 7 going to do a major repair on a computer room air 8 conditioner, this is the cost of doing that. They 9 don’t really specify what all they’re doing, but it’s 10 a very high price, actually, it’s a substantial 11 portion of the original installed cost. The 12 impression you get is it’s almost a take it all out 13 and throw it away and bring in a new room, just about. 14 MS. MAUER: So, if the assumption that this 15 is something that might occur once during the life of 16 the equipment – 17 MR. SCOTT: Right. 18 MS. MAUER: -- and not something that is 19 actually occurring annually? 20 MR. SCOTT: Right. There’s an equivalent 21 with annual, yeah. 22 MS. MAUER: I guess my concern is 23 annualizing the repair cost, is that the present value 24 of the annualized repair cost is that going to be the 25Executive Court Reporters (301) 565-0064 1 15

same as the present value of the repair cost in the 1 actual year that it occurs? I understand there’s a 2 lot of uncertainty in this particular case that we’re 3 – it sounds like you’re not sure what the actual – 4 what the cost represents, necessarily. 5 MR. SCOTT: Right. 6 MS. MAUER: But I think we see this in other 7 dockets as well where, you know, I think there are 8 cases where you’re replacing the compressor, you’re 9 replacing something that’s really just occurring once 10 in some future year, and so it’s just not equivalent, 11 I think, as this. 12 MR. SCOTT: In some rulemakings I’ve been 13 involved with, we’ve actually had some information 14 about how long the time period goes before you 15 actually have a major repair, typically, and we’ve 16 sampled from distributions. So if it’s usually between 17 year eight and year 12, we’ll just draw from that 18 distribution, and then annualize the result of that. 19 Here we simply don’t know that. 20 MS. MAUER: And I guess I don’t understand 21 why it makes sense to annualize, you know, whether 22 it’s a distribution between some number of years or a 23 certain year, if you’re annualizing it, then you’re 24 getting a higher present value, I think, than if you 25Executive Court Reporters (301) 565-0064 1 16

actually took the present value of when the crisis 1 would occur. 2 MR. BROOKMAN: Dave Winiarski, try to answer 3 this, and then Warren, to you. Dave – and use the 4 microphone. 5 MR. WINIARSKI: Yeah, Mike may have just 6 been about to say this, but one thing you can think of 7 it is if you sort of look at the repair cost and then 8 bring back what that cost would be back to present 9 value, you can think of I put a chunk of money away to 10 cover that eventual occurrence, and so once it’s 11 converted to present value, for the purpose of the LCC 12 analysis, it’s not going to make a lot of difference, 13 you know, whether you spread it over multiple years or 14 it occurred in one particular year during the 15 analysis. 16 MS. MAUER: So you’re saying the present 17 value – you’re doing it in such a way that the present 18 value is equivalent, whether you’re taking the present 19 value of a cost in a given year, or the present value 20 of a stream of annualized costs? 21 MR. WINIARSKI: That’s the idea. 22 MR. BROOKMAN: Yes, Warren. 23 MR. BEETON: And also another factor is that 24 for compressors which would be a source of significant 25Executive Court Reporters (301) 565-0064 1 17

portion of a repair cost, those failure rates look 1 like a classic bathtub curve with a very tiny front 2 end and a very tiny back end. So it’s basically a 3 flat curve, and whether you do it for one year or for 4 each year, doesn’t really matter. I think your 5 analysis is good. 6 MR. BROOKMAN: Okay. Thank you. Just a 7 process note. We’re ahead of schedule, which is based 8 on all of your good effort here today, and I’m going 9 to suggest we just keep pressing on and finish this 10 without pausing for lunch. I think we can do it, say, 11 probably in an hour or less. 12 MR. SCOTT: Okay, I’ll press on then. 13 MR. BROOKMAN: Pressing on. 14 MR. SCOTT: So discount rates. As I said 15 before, we bring those annual costs back to the 16 present using discount rates that represent how future 17 monetary expenditures, or benefits, or costs for that 18 matter are discounted to the present and indicate what 19 value the consumer would place on the dollar of those 20 future costs. So discount rates are going to vary 21 with the type of customer, because different customers 22 have different views of the future, and that’s created 23 by the particular circumstances. It’s quite common, 24 for example, on commercial entities to do something 25Executive Court Reporters (301) 565-0064 1 18

called a capital asset planning model which take a 1 weighted average of the cost of equity and debt, 2 depending on how much equity and how much debt they’re 3 carrying. 4 And we’re fortunate that there is a website 5 that actually has a source of data on individual, 6 private companies. And we sorted through those – 7 there’s actually several thousand, and we came up 8 with a sample of 938 companies involved in the 9 industries that we think are likeliest to use this 10 kind of computer room: health care, education, 11 finance, and services. And for those computers then – 12 those air conditioners that were placed in a private 13 building, then we sampled from that distribution of 14 938 companies as a way to obtain estimates of what the 15 discount rate might potentially be. 16 This equipment is also used by universities, 17 by state and local government, and by school 18 districts. Well, state and local government, 19 including school districts, typically have a bond 20 rating of some kind that they would use for capital 21 expenditures, and we chose a mid-range municipal bond 22 rate that applies to state and local governments and 23 to education institutions of a ten year AA municipal 24 bond rate. Then for the federal government, we used a 25Executive Court Reporters (301) 565-0064 1 19

geometric average of long-term greater than ten year 1 US government securities to try to get an idea of what 2 the borrowing rate likely would be there. 3 And then we sampled from the distribution. 4 So we had some air conditioners in public buildings, 5 some air conditioners in private buildings, and the 6 whole thing taken together then was part of our LCC 7 analysis. 8 MR. BROOKMAN: Steve Rosenstock. 9 MR. ROSENSTOCK: Steve Rosenstock, EEI. In 10 terms of this website, did they have information on 11 retail companies that are using these type of services 12 for tracking sales and/or internet service providers? 13 MR. SCOTT: They do have information on 14 publicly traded retail companies, yeah, so your 15 suggestion would be that we add retail to this as 16 well? 17 MR. ROSENSTOCK: If possible, if it doesn’t 18 cause too much of an analytical burden. And especially 19 on the – if there’s the large, I would say, internet 20 service providers, if there’s information on them, 21 that would be helpful as well. 22 MR. SCOTT: Yeah, we have some information 23 on internet service providers, I believe. There’s a 24 question here as to the application, I guess, of the 25Executive Court Reporters (301) 565-0064 1 20

equipment. There was some discussion in the team 1 about whether, for example, server farms were part of 2 this, and we thought they were not. But there’s some 3 – I see some frowns in the room. Maybe I’m speaking 4 out of turn. 5 MR. BROOKMAN: Dave Winiarski, I see first. 6 MR. WINIARSKI: Not a frown, however. But I 7 think that the issue is a real one. The type of 8 equipment that we’re talking about, the direct 9 expansion cooling units, are obviously used in 10 computer room closets and some small application. How 11 that carries on to very large server farms is a big 12 unknown for us. I think our belief is that generally 13 once you get into large server farms you’re talking 14 about computer room air handlers, which generally are 15 served by chillers, rather than small DX type 16 equipment. But certainly, we’d welcome any comments 17 to that from manufacturers. 18 MR. BROOKMAN: Okay. You were hoping to get 19 this in writing, I presume, in detail. 20 MR. WINIARSKI: Sure, to the extent that – 21 in fact, anyone involved in the industry who has some 22 sense as to really what type of buildings and what 23 type of businesses use the DX type computer room air 24 conditioners that we’re talking about here, and the 25Executive Court Reporters (301) 565-0064 1 21

relative proportion of how they use them, would be 1 useful to have in detail, yes. 2 MR. BROOKMAN: Okay. 3 MR. SCOTT: And so what we finish with here 4 is there’s going to be a lifetime for the equipment, 5 and there’s some literature on that. We were able to 6 locate seven sources. There’s a range, anywhere from 7 ten years to 25 years. Looking at that literature as 8 a whole, it appears that an average of perhaps 15 9 years might be an appropriate average lifetime for the 10 equipment. Lifetime is probably not shorter than ten 11 unless there’s some kind of a major failure, and then 12 probably not longer than 25 years. We chose, as is 13 commonly used procedures, to use a Weibull 14 distribution which is a statistical distribution that 15 characterizes activities like the survival of 16 equipment and infrequent failure events. 17 So that’s what went into the life-cycle cost 18 assessment. I’ll summarize the results briefly. In 19 general, the life-cycle cost savings that you’ll find 20 in chapter six and in the appendices in the TSD, and 21 also in the NOPR, tended to be pretty strongly 22 negative above the ASHRAE level. There weren’t very 23 many levels above the ASHRAE level in any of the 24 equipment that had a positive life-cycle cost savings, 25Executive Court Reporters (301) 565-0064 1 22

even given the uncertainties that we’ve been 1 discussing here. Where the exceptions occurred, there 2 were generally pretty good reasons for it, or some 3 contrary evidence out of the payback periods. 4 For example, for the smallest air-cooled 5 units at the first two levels, we did have positive 6 life-cycle cost savings. However, the payback periods 7 were fairly long, and the life-cycle cost savings were 8 not particularly large. For medium and large air9 cooled units, we did actually have payback periods 10 that were shorter than four years, but also keep in 11 mind some of the uncertainties we’ve been talking 12 about here. 13 For the smallest water-cooled and glycol14 cooled units which are derived from them in this 15 analysis, the payback periods were negative, and 16 ordinarily you would think that would be a good thing 17 because it would suggest that you’re not only having 18 operating cost savings, but you’re also having first 19 cost savings. However, as was described this morning, 20 we question whether the price analysis on that 21 equipment was showing something that was truly real 22 for that equipment. 23 And then for the medium and large water24 cooled and glycol-cooled units, we did have some 25Executive Court Reporters (301) 565-0064 1 23

positive LCC savings. However, the payback periods 1 generally were greater than nine years. In fact, they 2 were generally greater than the lifetime of the 3 equipment by quite a substantial margin. And we had 4 three cases where we had negative payback periods for 5 some of the equipment with fluid economizers. And in 6 looking at those, what was happening was that the 7 negative payback period was not because the equipment 8 was getting cheaper as it got more efficient, but in 9 fact, the repair costs were beginning to dominate the 10 electricity savings, so we were getting actually, 11 instead of having operating cost savings, we were 12 having operating cost costs as the equipment became 13 more efficient. Again, the payback periods were 14 generally longer than equipment lifetime, for the 15 reasons I’ve just given you, the two reasons for that. 16 So that kind of summarizes what the outcome 17 of the LCC analysis was, in general. 18 MR. BROOKMAN: Okay. So comments on that, on LCC and 19 payback period analysis. No? Okay, we’re going to 20 move directly then to – thank you, Mike – to shipments 21 analysis, national impact analysis, utility impact and 22 emissions impact analyses. Alison Williams. 23 **Shipments Analysis, National Impact Analysis, utility** 24 **impact and emissions impact analyses** 25Executive Court Reporters (301) 565-0064 1 24

MS. WILLIAMS: Thank you. So I’m going to 1 start with the National Impact Analysis. The purpose 2 of this is to estimate the national energy savings for 3 adopting standards for efficiency levels in ASHRAE 4 Standard 90.1 2010 as well as more stringent levels. 5 And for more stringent levels we also look at the 6 national economic impact in terms of net present 7 value. 8 The first component of this is the shipments 9 analysis. We did not have any shipments data for the 10 United States for CRACs, so we started with historical 11 and forecasted data for Australia as part of their 12 rulemaking process. We use the ratio of business 13 establishments in the U.S. and Australia to inflate 14 Australian shipments to the U.S. market. And that 15 inflator was about 13.2. We then extrapolated the 16 trend that was in the Australia report to estimate 17 future shipments out to the end of our analysis 18 period. We disaggregated shipments into our 15 19 product classes, first using Australia market shares 20 for the six categories they had, and then using model 21 availability in the U.S. to further disaggregate into 22 all the product classes. And again in this analysis 23 we did not distinguish between upflow and downflow 24 units for reasons discussed previously, so there are 25Executive Court Reporters (301) 565-0064 1 25

15 instead of 30 here. 1 National energy savings are calculated over 2 the standard 30 year period, beginning with the 3 earliest compliance date which would be based on the 4 adoption of the ASHRAE level. This would be 2012 for 5 the small CRACs and 2013 for CRACs larger than 65 kBtu 6 per hour. 7 The net present value, or NPV analysis, 8 extends later because it covers the life cycle 9 installation and operational expenses, so it goes 10 through 2055 or 2056 to account for all the operating 11 cost savings, for shipments through 2041 and 2042. 12 This assumes a 15 year product lifetime, the average 13 of what Mike discussed earlier. 14 Both these analyses account for a delay 15 between when DOE can require compliance with standards 16 if they set the level at ASHRAE, which is 2012 or 17 2013. A more stringent level would not require 18 compliance until 2017. 19 We used national average customer prices, 20 energy use, energy prices, repair and maintenance 21 costs from the LCC analysis that Mike just discussed. 22 Again, these inputs were based on the downflow units 23 but assumed to represent upflow units as well. The 24 annual time series were discounted to 2012 and we used 25Executive Court Reporters (301) 565-0064 1 26

a constant price assumption for the default NIA 1 forecasts. 2 We distributed shipments into each of the 3 efficiency levels considered, including the market 4 baseline, ASHRAE level, and four higher efficiency 5 levels. This was based on the model data that was 6 discussed earlier. And the assumption for the 7 standards case was that equipment less efficient than 8 the standard would roll up to the standard level, but 9 the standard would not affect shipments at the higher 10 efficiency levels. Once a standard is in place, the 11 new equipment enters the market at the rolled up 12 efficiency levels, but in both the base case and the 13 standards case, the efficiency distributions are 14 frozen throughout time. 15 So we have three specific issues we’re 16 looking for comment on for the NIA. First would be 17 whether there would be a rebound effect in computer 18 room energy use. We’re also interested in whether 19 shipments would change with the higher standard 20 levels. And finally, any comments on our base case 21 distribution or our prediction of standards case 22 distributions. 23 MR. BROOKMAN: Steve Rosenstock. 24 MR. ROSENSTOCK: Steve Rosenstock, EEI. 25Executive Court Reporters (301) 565-0064 1 27

Looking at this distribution in slide 69 for the air1 cooled CRACs I saw that you didn’t have a – you have 2 max tech there of five percent of sales. Wherever 3 I’ve seen the max tech in other rulemakings, it’s 4 usually much much less than five percent, only because 5 just the technology basically almost prototypes and 6 not available on the marketplace, so just kind of 7 curious, with this technology, how you estimated five 8 percent for the max tech case? 9 MS. WILLIAMS: So in this case, the max tech 10 is actually a market maximum. 11 MR. ROSENSTOCK: It’s already max? 12 MS. WILLIAMS: Yeah, so we have a small bin 13 at the end of it, so what we then did to get to that 14 level was five percent. So I’m not entirely sure what 15 the numbers are off the top of my head for all the 16 other ones, but it is a market maximum, not any 17 prototype or level of that sort. 18 MR. BROOKMAN: Karim. 19 MR. AMRANE: Karim Amrane, AHRI. I guess in 20 looking at that chart, it doesn’t appear to be close 21 to any other type of air conditioner. I mean if you 22 look, for example, the residential AC or the 23 commercial AC, you would see that the majority of the 24 products sold in the market will be at the base case 25Executive Court Reporters (301) 565-0064 1 28

level, and very little at the upper efficiency level. 1 So I’m surprised to see that the 45 percent are the 2 medium efficiency level. What about the baseline? I 3 don’t know. It doesn’t seem right to me. 4 MR. BROOKMAN: Robert. 5 MR. WILKINS: Karim, this is Robert Wilkins, 6 Danfoss. I was wondering the same thing and I was 7 bouncing around in the back of my head some possible 8 explanation. But then I thought, you know, in normal 9 commercial office buildings, the equipment is - the 10 buyer of the equipment is so far removed from the 11 tenant, there’s a classic example that the buyer is 12 buying this low cost cheap stuff because he’s so far 13 removed from the tenant that has to pay the electric 14 bill that he has got this inducement to buy this cheap 15 low efficiency equipment. Likewise, in the home, new 16 construction, for example, the builder is separated 17 from the home owner. The home owner is typically not 18 buying the equipment. 19 But in this case, if I heard your arguments 20 and your research and the work you did earlier on, 21 this stuff is sold to the people that are operating 22 the computer room or the laboratory or whatever, and 23 therefore they have done all of this analysis, not 24 only this, but even better because they’ve done it for 25Executive Court Reporters (301) 565-0064 1 29

their own geographic location, their own utility 1 rates, their own climate. They figured out what’s the 2 right equipment to give them the right payback for 3 their business. And so that could possibly be, and my 4 hypothesis is that’s why that people are already 5 buying the higher efficiency product. I’d welcome any 6 feedback on my crazy hypothesis. 7 MR. ROSENQUIST: This is Greg Rosenquist 8 from LBL. This is strictly based on model 9 availability. So it’s, you know, it certainly could 10 be that reason what you just described, but really 11 it’s just simply taking a percentage of the market in 12 each one of these efficiency levels. It’s based 13 strictly on model availability. 14 MR. WILKINS: But the market availability by 15 -- the manufacturer meets the market demand of what 16 the consumer is specifying. They’re not producing 17 something that a customer doesn’t want, I still think 18 it reinforces the argument, the hypothesis. 19 MR. BROOKMAN: Paul. 20 MR. DOPPEL: Paul Doppel, Mitsubishi 21 Electric. In support of what Rob was saying, another 22 way to look at that is if you look at the dollar value 23 of the equipment that’s in that room, and also the 24 importance of maintaining operation, it’s easy to see 25Executive Court Reporters (301) 565-0064 1 30

that more would be spent on the best possible cooling 1 equipment to maintain – and, you know, a lot of places 2 even put in double systems just to make sure that 3 there is a backup there in case there’s an issue. 4 MR. BROOKMAN: Okay. Additional comments 5 here? 6 MS. WILLIAMS: Okay. So just to sum up the 7 NIA results, cumulatively across all the 15 product 8 classes, ASHRAE - adoption of the efficiency levels in 9 ASHRAE result in .01 quad of savings. Going higher 10 would result in anywhere from .07 to .98 quads. 11 However, the cumulative NPV savings across all product 12 classes range from negative $2.25 billion dollars to 13 $0.1 billion dollars. 14 That’s all I have for the NIA. 15 MR. BROOKMAN: Steve Rosenstock. 16 MR. ROSENSTOCK: One quick one to follow up 17 on what Paul said. In the analysis, and I hadn’t 18 looked at the technical support document, what 19 percentage of the units are considered to be pure 20 backup and plus one units where they’re only operated 21 if the primary unit fails? 22 MR. BROOKMAN: Steve Winiarski. 23 MR. WINIARSKI: This is Dave Winiarski. In 24 the – it’s really not taken into account explicitly, 25Executive Court Reporters (301) 565-0064 1 31

but it’s in looking at that 65 percent load factor 1 figure, there’s a discussion in the TSD which talks 2 about that issue and it’s kind of built in so, you 3 know, if you purchased – if you need nine units, you 4 purchase a tenth, or something like that, and that 5 helps to reduce the average load factor on all pieces 6 of equipment, but it’s not an explicit calculation, 7 and we don’t separately analyze back up units from the 8 remainder in the stock. 9 MR. ROSENSTOCK: Steve Rosenstock, EEI. But 10 again, what I think you did kind of reinforce my point 11 is that there might be ten percent of the units, 12 again, if it’s nine and you purchase ten, then ten 13 percent of the units sold are purchased that are going 14 to have minimal or no energy consumption during the 15 year, they’re just purely backup. So that again, I 16 don’t know what the percentage is, and then in certain 17 computer rooms, I know they have full backup, where 18 they buy – they need five units for that 65 percent 19 load, they have five backup units. So it’s actually 20 50 percent of the units that’s in that room are not 21 being used at all. So again, I don’t know if that data 22 is available. It might only be a ten percent, might 23 only be a five percent, but it could have – again, 24 it’s not explicit, but there could be an impact on 25Executive Court Reporters (301) 565-0064 1 32

some of the savings estimated if the percentage is 1 high. 2 MR. BROOKMAN: Okay. Thank you. Yes. 3

Joanna Mauer. 4 MS. MAUER: Joanna Mauer. So just a couple 5 of observations, I think that the previous – the table 6 on the previous slide, I think shows that certainly 7 significantly higher efficiency levels are certainly 8 technically feasible and there’s – showing that 9 there’s lot of models on the market that significantly 10 exceed the levels in 90.1 2010, and then the – I 11 realize that it’s going to permanate (ph) savings 12 estimates, but range of a tenth of a quad to a quad is 13 – I would certainly consider to be significant 14 potential savings. 15 Another observation is that the two product 16 classes that make up the bulk of the energy savings 17 potential, the medium and large air cooled air 18 conditioners also have clearly positive net present 19 value, both the three and seven percent discount 20 rates, suggests to me that there are significant cost 21 effective energy savings that could be achieved from 22 higher efficiency levels. 23 MS. WILLIAMS: I think it was Adam went into 24 before some of the - a lot of this analysis was a lot 25Executive Court Reporters (301) 565-0064 1 33

of uncertainties, so although some of the results 1 might suggest you could go higher in some cases, we 2 did not feel we had clear and convincing - or DOE did 3 not feel they had clear and convincing evidence 4 because of some of the reasons we suggested earlier. 5 MR. BROOKMAN: Dave Winiarski. 6 MR. WINIARSKI: Dave Winiarski, Pacific 7 Northwest National Lab. One point I would like to 8 emphasize and hopefully we get some feedback from the 9 industry on was that in the analysis of the air-cooled 10 products, we specifically did not incorporate air11 cooled economizers in helping to reduce the load on 12 the equipment. We have very little data on how often 13 or frequent they might be used with this class of 14 equipment, but obviously, that would reduce the loads 15 and to some extent the life-cycle cost savings and the 16 national energy savings potential. So to the extent 17 that anyone could provide information like that, it 18 would be useful for the analysis. 19 MR. BROOKMAN: Okay. Karim. 20 MR. AMRANE: Karim Amrane, AHRI. I guess 21 question to David. But I believe that 90.1 has a 22 requirement on the economizer for data centers and 23 have you looked at that? 24 MR. WINIARSKI: Yeah, actually I looked at 25Executive Court Reporters (301) 565-0064 1 34

that in a fair amount of detail. The issue is that 1 90.1 does have requirements for economizers, but it 2 has a tremendous amount of exceptions for those 3 requirements. You have to basically, I think that the 4 way that the exceptions are written, they’re really 5 looking at requiring economizers in systems that use 6 large air handlers and water-cooled buildings, and 7 that for this class of equipment, because of the way 8 90.1 was written, it appears that the requirements for 9 economizers that would be required for comfort cooling 10 applications don’t apply, necessarily, to those for 11 computer room applications. 12 MR. BROOKMAN: Additional comments or 13 questions. 14 MS. WILLIAMS: Okay. So moving on to the 15 downstream analyses. DOE conducted a utility impact 16 analysis to assess the impacts on the domestic energy 17 supplies from the standard. This was done using NEMS18 BT, which is a variation of NEMS used by EIA for their 19 Annual Energy Outlook, and this model assesses the 20 impacts from standards as deviations from the AEO 21 reference case, and as a result - avoided capacity 22 forecasts. 23 DOE also assesses the emissions from the 24 power plants and the implications that standards have 25Executive Court Reporters (301) 565-0064 1 35

for this. This comes out of the same NEMS-BT model. 1 DOE looks at carbon dioxide, sulfur dioxide, nitrogen 2 oxides and mercury. I should note that NEMS-BT does 3 not show any measurable impact on SO2 because of the 4 clean air amendments that cap SO2 emissions. There 5 are also some nitrogen oxide caps that limits what 6 NEMS-BT shows for those. 7 MR. BROOKMAN: Yes, Steve Rosenstock. 8 MR. ROSENSTOCK: Steve Rosenstock, EEI. On 9 this one, just again, I don’t know how DOE is going to 10 incorporate it, but there are – EPA did announce a 11 standard on mercury for power plants that are going 12 to go into effect, as I recall, within the next three 13 to four years, which is basically near the beginning 14 or right before the beginning of certain standards are 15 going to take effect, and in terms of carbon dioxide, 16 EPA is on track to put out rules on emissions caps for 17 power plants, so at that point I’m just kind of 18 curious when these rules are announced and put in 19 place, is DOE going to use the same rationale for CO2 20 and mercury as it does for NOX and sulfur dioxide? 21 MS. WILLIAMS: So generally, DOE will 22 include, when NEMS is updated, it will include some of 23 the newer rules, especially if there’s a transport 24 rule that deals with NOX. I think that wasn’t taken 25Executive Court Reporters (301) 565-0064 1 36

into account in AEO 2011, so when AEO 2012 comes out 1 it will take that into account, and we will redo the 2 analysis, so whenever the future rules come out that 3 affect this, NEMS will be updated, and at that point, 4 DOE will be able to take those into account in these 5 analyses. 6 MR. ROSENSTOCK: Again, thank you. Steve 7 Rosenstock, EEI. So you’ll take the same approach in 8 terms of the economic numbers assigned to these 9 emissions? 10 MS. WILLIAMS: So in terms of the 11 monetization, not sure if I can answer that question, 12 so I’ll move on to this very quickly. Currently DOE 13 monetizes CO2 using the values for the social cost of 14 carbon developed during interagency process. So as 15 the interagency group revises those values, DOE will 16 take those new values into account. And similarly, 17 the values for NOX that DOE has been using. Does 18 anyone else have more – 19 MR. BROOKMAN: Greg Rosenquist. 20 MR. ROSENQUIST: Yeah, it’s whenever the 21 interagency agreement gets updated, then DOE uses 22 those numbers to monetize carbon, so and since it’s 23 developed through this interagency process – 24 MR. ROSENSTOCK: Right. Steve Rosenstock. 25Executive Court Reporters (301) 565-0064 1 37

Yeah, I understand that, but the way DOE approaches 1 it, once there’s a cap like there is with sulfur 2 dioxide, DOE says there’s no impact on the upstream 3 emission from the downstream efficiency standard. So 4 you’re going to take that – I assume you’re going to 5 take that approach with CO2, correct? 6 MS. ARMSTRONG: I think the best thing to 7 say is if the rules got – if rules come into effect, 8 we would deal with it at that time. 9 MR. ROSENSTOCK: Well, again, Steve 10 Rosenstock. I appreciate that, thank you very much, 11 but again, the reason I ask that, you’re talking about 12 a 30 year period – 13 MS. ARMSTRONG: No, I understand. 14 MR. ROSENSTOCK: -- and within five years of 15 that 30 year period, the cap will be in place. 16 MS. ARMSTRONG: Sure. We understand, but 17 the rules have to be promulgated first. 18 MR. ROSENSTOCK: They are being promulgated. 19 MS. ARMSTRONG: I understand. 20 MR. ROSENSTOCK: And they’re finalized, but 21 they – 22 MS. ARMSTRONG: We would need finalized 23 before we can speculate. 24 MR. ROSENSTOCK: You can’t use a sensitivity 25Executive Court Reporters (301) 565-0064 1 3 8

case where – 1 MS. ARMSTRONG: You can suggest that we 2 should. 3 MR. ROSENSTOCK: Okay. Thank you. 4 MR. BROOKMAN: Okay. Thank you. That last 5 set of comments from Ashley. Okay. So yes? 6 MS. WILLIAMS: That’s all. 7 MR. BROOKMAN: That’s all with that. So 8 Ashley Armstrong to talk about certification, 9 compliance, and enforcement. 10 **Certification, compliance, and enforcement** 11 MS. ARMSTRONG: Okay. I only have one 12 slide. I want to generally explain how our savings 13 plans work for certification, and I understand that 14 we were just earlier – some of the potential issues 15 or concerns with the time, but I do want to make you 16 aware because there are already on the books, and 17 they have been adopted for ASHRAE equipment and ... or 18 as the certification ... come in December 31 st of this 19 year for products that either have to be in 20 compliance with standards, manufacturers are required 21 to use these sampling plans in absence of DOE 22 revising them and going through that process again. 23 So we’re not going to – you test the minimum units of 24 the basic model, that minimum number is no less than 25Executive Court Reporters (301) 565-0064 1 39

ten. Unless DOE promulgates some other alternative 1 to testing, like I said, ... type rule that we’re 2 working on now, you can test more than two units to 3 our discussion, the actual sample of the basic model, 4 but you’re required to test no less than two. You 5 determine which federal standards apply, depending on 6 the product, the references are there. And you 7 calculate your mean and it’s two or more, you 8 calculate your mean of your sample. You determine 9 your rating values. This has to do with the 10 distribution of your confidence limit or a lower 11 confidence limit depending on if it’s an efficiency 12 standard or if it’s a consumption standard, and then 13 you actually generate your certification rating. And 14 what you can do is you can always rate more 15 conservatively, but you can’t do the overrate. This 16 will give you the maximum number you can rate at. 17 So it’s not as simple as just running the 18 test once, that’s the number that’s on that you 19 certify that that’s the number that you make 20 representations of. I just wanted to make that 21 clear. It’s really, as I stated earlier, DOE is more 22 than willing to work with both industry as well as 23 AHRI to address some of the concerns, but I did want 24 to go over quickly just these are required for some 25Executive Court Reporters (301) 565-0064 1 40

of the equipment we talked about today. It’s not 1 subject to existing standards. We’re going through 2 the process of adding it to – proposing to add it to 3 the program. You won’t be required to certify, DOE 4 will address any certification requirements in a 5 later rule, but you wouldn’t be required to certify. 6 A total compliance with standards is 7 required, so it will be some time down the road, 8 however if you do make some representations about 9 equipment’s efficiency, you do have to do it with our 10 test procedures as well as our sampling plans. 11 MR. BROOKMAN: Karim. 12 MR. AMRANE: Karim Amrane, AHRI. What 13 you’re saying here, does it apply to VRFs as well as 14 data centers, computer rooms, or what are the 15 products you are talking about here? 16 MS. ARMSTRONG: It will apply to VRFs and 17 data centers in terms of testing. But they will not 18 be required to certify compliance with the standards 19 until the compliance date of the actual standard DOE 20 adopts. So if they make representations earlier than 21 that, whether in the product literature, in marketing 22 tools, in a certified directory, they need to do it 23 following these steps, but, you know, they don’t have 24 to do it until the compliance date. And at the 25Executive Court Reporters (301) 565-0064 1 41

moment we don’t have certification requirements on 1 the books for those types of equipment because just 2 in the process of adjusting them in our program. 3 Okay? 4 All right, I’m going to turn it back over to 5

you. 6 MR. BROOKMAN: Frank Stanonik. Find a 7 microphone, Frank. 8 MR. STANONIK: Frank Stanonik, AHRI. 9 Ashley, you just made me think of something and I 10 want to make sure that we’ve got it right. There’s 11 some other things in this NOPR about just updating 12 test methods, without any associated change in the 13 level. And at least in some cases, the determination 14 has been made that using the new test procedures 15 doesn’t change anything. 16 I’m assuming, and I’m looking for 17 verification, that in those cases that in effect, 18 this updating of the test procedure does not put any 19 other obligation on the manufacturer to do retests. 20 MS. ARMSTRONG: So we will explicitly 21 address that, but unless the rating is going to 22 change, that is correct. 23 MR. STANONIK: Okay. Thanks. 24 MR. BROOKMAN: Okay, go on. 25Executive Court Reporters (301) 565-0064 1 42

MR. BEETON: I just have a question or maybe 1 a comment, or a combination about the tolerance 2 issue. You know, as a component manufacturer of 3 compressors, we have lived with the ARI tolerance 4 system, plus or minus five percent on the equipment, 5 which can mean a tighter tolerance on the components, 6 of course, and it’s a very extensive management 7 process at our company to stay within those 8 tolerances. Now all of a sudden I’m hearing today 9 for the very first time that because you’re now going 10 to have an independent verification method that is 11 going to be separate from ARI’s that we may be 12 subject to something different, which we don’t know. 13 You haven’t disclosed it. 14 MS. ARMSTRONG: So let me clarify it. One 15 is – I said nothing today about an independent 16 verification program. DOE does have the discretion 17 to test at any time, should it want to, or should it 18 have a reason to. It doesn’t mean that -- DOE 19 doesn’t have a formalized verification program up and 20 running right now. The second part is these are 21 actually sampling plans for certification testing, 22 and certification testing is something a manufacturer 23 does before it actually certifies the efficiency of 24 their product. They are not new. They’ve been 25Executive Court Reporters (301) 565-0064 1 43

adopted since 2006, the CFR since 2006. There is 1 nothing new about these. 2 MR. BROOKMAN: Warren, go ahead. 3 MR. BEETON: But, we’re going to be subject 4 to different tolerance requirements as a consequence 5 of what the rulemaking today than we have been in the 6 past, is that not correct? 7 MS. ARMSTRONG: So it’s going to depend on 8 the – I guess the ultimate answer is yes, there will 9 be definitely, and they’re based upon the 10 distribution of the two units you test. It’s not a 11 straight out plus or minus five percent. It could be 12 pretty close to that, but if you have high 13 variability, then the ... could be less. 14 MR. BEETON: So are you saying that based on 15 a test of a model, a model, which could be two units, 16 you’re going to decide what the variation – allowable 17 variation is for that model based on the test of two 18 units? 19 MS. ARMSTRONG: The tolerances already have 20 variation built in them. They’re based on an upper 21 and lower confidence limit. It’s going to supposedly 22 reflect – it’s going to tell you what your rating can 23 be. It’s not for determining the compliance with the 24 standard. 25Executive Court Reporters (301) 565-0064 1 44

MR. BEETON: Oh, okay. 1 MS. ARMSTRONG: It’s not for enforcement 2 purposes. It’s just going to tell you what your 3 rating can be. 4 MR. BEETON: Okay. 5 MS. ARMSTRONG: The plus or minus five 6 percent that they run in the verification program, we 7 have an enforcement tolerance which is different than 8 these. And that’s how they were determined – 9 MR. BEETON: Then my comment has to do with 10 that. And it has to do – I just want to repeat our 11 concern, not as an equipment manufacturer, but as a 12 component manufacturer that this is a very huge issue 13 for us to see a change which we don’t know you’re 14 going to specify. You just said today that the 15 information is not available, right. 16 MS. ARMSTRONG: It’s been on the books in 17 CFR since 2006. I can show you. I can come over 18 there and show you exactly where you can find it. 19 MR. BEETON: Okay. But we, you know, Karim 20 mentioned that ARI is opposed to this. As a 21 component manufacturer, we’re very much concerned 22 about this issue. That’s my comment. 23 MR. AMRANE: Karim Amrane, AHRI. The fact 24 that it’s in CFR 2006 doesn’t mean it’s correct, 25Executive Court Reporters (301) 565-0064 1 45

though. 1 MS. ARMSTRONG: And I can relate to that. 2 MR. AMRANE: So that is why, if DOE is ... is 3 five percent for the test procedure, for the HR 4 standard, I think DOE has, at the same time, has to ... 5 that to make sure that this other confidence thing ... 6 We cannot – as an industry, we will not accept ... five 7 percent, without DOE looking as well at that part of 8 the – 9 MS. ARMSTRONG: That’s fair, and DOE will 10 work with you. DOE has never had the five percent in 11 its regs. So, I mean at this point, we will work 12 with you to work with this, but the five percent has 13 never been in our regs. 14 MR. BROOKMAN: Okay. Final comments on the 15 sampling plans and these specifics that are listed 16 here. Okay. I think we’ve covered everything that’s 17 in the agenda to be covered. Now there’s another 18 opportunity for anybody that wishes to do so to make 19 additional comments here as we move towards closing. 20 And you can see the Department here specifically 21 invites comment on some issues listed. Yes. 22 **Closing Remarks** 23 MR. STANONIK: Frank Stanonik, AHRI. Just a 24 question, trying to assimilate all this information. 25Executive Court Reporters (301) 565-0064 1 46

In the case of the computer room air conditioners, 1 you shipment data from Australia because that’s all 2 you could find. So first question is, does Australia 3 have efficiency requirements for commercial room air 4 conditioners? 5 MR. BROOKMAN: Alison. Alison, you’ve got 6 to find the microphone, please. 7 MS. WILLIAMS: (off mic) Yes. 8 MR. STANONIK: Okay. Are those efficiency 9 requirements different than what I’ll call a comfort 10 air conditioner? 11 MR. BROOKMAN: So the first question 12 Alison’s going to answer now, once she pushes her 13 green button. Yes, thank you. 14 MS. WILLIAMS: Alison Williams, LBNL. Yes, 15 Australia regulates computer room air conditioners. 16 They call them close control air conditioners. 17 MR. STANONIK: Is the efficiency requirement 18 different in Australia than for a comfort air 19 conditioner? 20

MS. WILLIAMS: I – 21 MR. WINIARSKI: I think that they may have a 22 different metric, and therefore they would have a 23 different standard than a – 24 MR. STANONIK: Probably the most important 25Executive Court Reporters (301) 565-0064 1 47

question. Does Australia in some way regulate what 1 can be used in a computer room? 2 MR. WINIARSKI: I don’t believe so. 3 MR. STANONIK: And the reason I was asking 4 again, realizing you’re using the best tools you can, 5 we’ve heard here that in fact, depending, let’s say, 6 on what’s going on in that computer room and what’s 7 required in terms of let’s say precision or 8 reliability, you could use comfort air conditioner in 9 some computer rooms, in some other rooms you might 10 use a computer room air conditioner. And what I was 11 trying to establish was if the situation was 12 different in Australia, for example, if in Australia 13 they said every computer room had to have a unit 14 listed for that use, then your proportioning won’t 15 work, okay, because in fact we are a different market 16 condition. But if appears we don’t know that. 17 MR. WINIARSKI: Yeah, I was going to say I 18 have no first hand knowledge of them, but I believe 19 that their basic process is similar to our process 20 where it’s regulated as a manufactured component, but 21 I have no idea what’s in their codes and standards 22 for the buildings themselves. My suspicions is that 23 they would have no restraint, that you could use a 24 standard comfort air conditioner. 25Executive Court Reporters (301) 565-0064 1 48

MR. STANONIK: One last question about the 1 analysis you’ve been doing. And I, for one, we’ve 2 heard a lot about, again, depending on whether the 3 computer room equipment is being used for, there is a 4 higher demand for reliability and a much lower 5 tolerance for air conditioning unit failure, and all 6 that factors into the computer room air conditioner 7 equipment cost, installation, maintenance, all that 8 stuff. Have you tried to kind of work that into the 9 analysis that in fact there’s just a different – the 10 precision not only relates to maintaining a very 11 tighter band of cooling or temperature, but in fact a 12 very different tolerance for either equipment 13 breakdown or reliability? 14 MR. WINIARSKI: Yeah, our analysis doesn’t 15 do that explicitly by any means. To the extent that 16 that’s reflected in the cost of units, so that may 17 be, but our analysis doesn’t incorporate it. 18 MR. BROOKMAN: Steve Rosenstock. 19 MR. ROSENSTOCK: Steve Rosenstock, EEI. In 20 terms of just the general kind of final comments. I 21 appreciate what all the work that DOE has done in 22 adopting the ASHRAE levels. I think it will help in 23 terms of just again, reinforcing energy savings. I 24 work on ASHRAE quite a lot and ASHRAE has really 25Executive Court Reporters (301) 565-0064 1 49

worked very hard to look at everything in terms of 1 the improving efficiency in commercial buildings, so 2 I think where you’ve adopted ... levels, I think it 3 kind of supports a lot of the details that ASHRAE 4 does because they have to be cost effective, and I 5 think it will really help efficiency for all 6 commercial buildings and the federal government 7 buildings. Thank you. 8

MR. BROOKMAN: Joanna. 9 MS. MAUER: Joanna Mauer. I just wanted to 10 reiterate that we – the concern with the levels that 11 DOE adopts for computer room air conditioners end up 12 being weaker than the current California standards, 13 but also we’d be concerned if the levels are 14 significantly lower than the levels for other 15 commercial package air conditioners, because there’s 16 not a technical basis for that, so we encourage DOE 17 to look at those things. 18 MR. BROOKMAN: Thank you. So you can see 19 these are closing remarks. Additional comments and 20 issues that you wish to raise. Paul. 21 MR. DOPPEL: Paul Doppel, Mitsubishi 22 Electric. I’d also like to thank DOE for the efforts 23 to the ASHRAE new products into the CFR. This is a 24 last step for VRF products to be sort of fully 25Executive Court Reporters (301) 565-0064 1 50

integrated into the industry, and so we view this as 1 an important step. And want to recommend that DOE 2 works closely with AHRI on the test standard. Any 3 concerns that you have with that, to see if there’s 4 something that we can work out to be sure that DOE 5 feels that the standard is representative of all 6 other standards in the industry, and there’s a way to 7 test these very complex systems with manufacturer 8 representatives present, because it is essential for 9 that to take place. 10 And also we recommend that the operations 11 manuals that AHRI be included in any materials that 12 are incorporated for reference by DOE. 13 MR. BROOKMAN: Okay. Other closing 14 comments. I see none, so the Department always hands 15 out an evaluation form at the end of these meetings, 16 so I’m going to pass these around, and on my part, I 17 thank you. We had a very productive meeting. And 18 I’ll turn it back to Mohammed Khan. 19 MR. KHAN: Mohammed Khan, DOE. Just want to 20 again express appreciation for all the input that we 21 received today. It’s been a wide scope of input, a 22 lot of concerns that we heard regarding the test 23 standards, the test procedure concerns as well. 24 And at this point here, I just want to 25Executive Court Reporters (301) 565-0064 1 51

reiterate the importance of comments, written 1 comments, and again here’s how you would do it, and 2 again, the deadline is April 2 nd , and if at all 3 possible, I would like to request that you get your 4 comments in earlier than that. Generally we say the 5 comments come in right about that date and of course 6 we have to analyze and go through the comments and 7 incorporate them into the final rule, which we need 8 to turn around very shortly after that anyway. So 9 again, if you could get it in sooner, that would be 10 better. 11 So, with that, I just want to say thank you 12 very much for a very productive day. 13 (Whereupon, at 1:00 p.m., the meeting in the 14 above captioned matter was adjourned.) 15

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REPORTER'S CERTIFICATE

This is to certify that the attached proceedings
before:

U.S. DEPARTMENT OF ENERGY
In the Matter of:

**PUBLIC MEETING ON ENERGY CONSERVATION STANDARDS**  **FOR CERTAIN COMMERCIAL AIR CONDITIONING, HEATING AND WATER HEATING EQUIPMENT, i.e.,**  **CERTAIN EQUIPMENT IN ASHRAE STANDARD 90.1.2010** Were held as herein appe ars and that this is the original transcript ther eof for the file of the Department, Commissio n, Board, Adminis trative Law Judge or the Agency. Further, I am neith er counsel for or related to any party to the abo ve proceedings.



### Debra Derr Official Reporter Dated: February 21, 2012