From: Robert Berman [mailto:bermaneconomics@gmail.com] 

Sent: Wednesday, September 21, 2011 2:05 PM 

To: Richard Parker 

Cc: Corkran, Jerry L; Caitlin Johnson; rick.anderson@faypwc.com; tballo@earthjustice.org; 

ScottB@lvmetals.com; john.caskey@nema.org; john.cymbalsky@ee.doe.gov; 

adelaski@standardsasap.org; Teckman@nwcouncil.org; gbf1@pge.com; carlos.gaytan@ge.com; 

rgreeson@federalpacific.com; bruce.r.hirsch@bge.com; mhyland@appanet.org; 

dave.millure@metglas.com; snadel@aceee.org; wes.patterson@us.abb.com; Eric.Petersen@aksteel.com; 

Raymond.Polinski@atimetals.com; srosenstock@eei.org; rroy@nrdc.org; robert.saint@nreca.coop; 

chuck.simmons@pgnmail.com; mark.stoering@xcelenergy.com; cabolduc@lbl.gov; kcoughlin@lbl.gov; 

Brian Coffey; gjrosenquist@lbl.gov; Michael Rivest; Jerry Hodge; jrossetti@mlgw.org; 

Jim.creevy@nema.org; Meyers, Aaron; Daniel.Cohen@hq.doe.gov; jmauer@standardsasap.org; 

greg.coulter405@gmail.com; bsmith@federalpacific.com; pkumar@publicpower.org; Trujillo, Antonio; Phil 

Hopkinson; ahofmann@publicpower.org; BermanEconomics@gmail.com; Paul.Ryan@hitmet.com; 

jerry.schoen@aksteel.com; mwaltner@nrdc.org; kwinder@mleainc.com; chad.kennedy@us.schneiderelectric.com; eduardorobles@eaton.com; vijay.tendulkar@onyxpower.com; carlosgsiqueiros@eaton.com; 

thomas.patzner@us.schneider-electric.com; Marusinec, Richard M; Schneider, Jeffrey A; Loomans, 

Michael T; Poole, Raymond L; Moore, Jack C; Smith, Jennifer 

Subject: Re: Distribution Transformers Committee requested areas for the DOE to Investigate before 

final rules are selected. 

Any chance we could get the transcript of the last meeting? It would be helpful for both ground 

rules questions as well as additional analysis questions / clarifying questions. If it's already been 

posted I apologize for missing it. Can you please send a link? 

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703‐281‐0490

703‐655‐8398 (cell)

BermanEconomics@gmail.com

On Sep 21, 2011, at 1:39 PM, Richard Parker wrote: 

Jerry (and larger group), 

Thanks, Jerry, for your comments, queries and suggestions. My apologies to all for the late 

notice on the Ground Rules. The compressed time frame for this rulemaking has us all 

scrambling, but we will do our best to get key docs to group well in advance of meetings in the 
future (to the extent that analytical requirements and resource limitations allow). Most of the 

ground rules document is boilerplate for negotiated rulemakings. We had an extensive 

discussion about the parts that are not. But given your concern I will re-open the groundrules for 

online discussion, as needed, and clearance. I will do that in a separate email thread. 

Would c.o.b Monday be reasonable deadline for comments on groundrules in your view, with 

aim of taking online poll towards middle of next week? 

As for the deadlines for talks, the Dec 22 term sheet deadline can be altered by unanimous 

consent of the group, but you should know that it is really a practical deadline that results from 

working backwards from the Jan. 30 court deadline (assuming court approves revised settlement 

agreement). So regardless of what is in our ground rules, that will be the de facto deadline for 

meeting the court deadline unless and until the plaintiffs agree to further extend that deadline. 

Your substantive comments are appreciated. I will consult with DOE/Navigant/LBL staff and 

develop a joint preliminary response which we will then post online is some appropriate format 

for further review and comment. 

All best, 

Richard Parker 

On Tue, Sep 20, 2011 at 3:57 PM, Corkran, Jerry L <Jerry.Corkran@cooperindustries.com> 

wrote: 

I am submitting following items for requests for investigation by the DOE. Some of the 

questions listed below were presented before or during the first meeting, but I have not 

received sufficient information to answer the questions and requests listed below:

1. A good portion of the recent meetings were concerned with the review and 

revisions of the ground rules for the Negotiated Rulemaking Working Group. A 

copy of this document was issued dated as “Final 9/15/11” during the second 

day of the meetings. I was concerned and puzzled about why a legal document 

of this type was not issued well in advance of the working group meetings. The 

document has a legal tone and application that makes its review beyond my 

capabilities to determine if it is suitable to govern the working group and its 

suitability for me to accept w/o reservations. I have submitted it to a Cooper 

Power Systems attorney for review to determine if it requires changes before 

agreeing to its content. I am objecting to the Sept. 23 deadline for comments 

and suggestions on this item and request that we be able to submit input on 

suggested changes after out attorney has an opportunity to review the 

document. At this time I am objecting to the “4. Agreement” rule with details of 

the objection or withdrawal of my objections to be made after our attorney 

reviews the document. I also object to the 3 d. Deadline for Negotiations to 

terminate at Dec. 22, 2011. I suggest that this date be determined by the 

working group during the third meeting in Nov. after the working group has a 

knowledge of the time needed to complete the process. 
2. Would the DOE provide the actual design information for the least-cost 

transformer designs? Sufficient design information should be included to allow 

the transformer manufacturers to compare the same design created on their 

programs to the DOE created designs.

3. Would the DOE request transformer design quotations from multiple 

manufacturers for the transformer efficiency loss levels that the DOE considers 

buildable? This would provide the DOE with actual designs which the 

manufacturers are capable of building. These designs could be compared to 

the designs which the DOE is currently using to generate the efficiency data 

projections.

4. Would the DOE request quotations from multiple manufacturers optimized 

for the lowest total owning costs at evaluated loss levels that they are 

considering. The evaluation A and B factors would vary by a 4:1 ratio to reflect 

a maximum efficiency at a 50% load. Suggested A and B factors are 0/0, $4/$1, 

$8/$2, $12/$3, and $16/$4.

5. The DOE transformer designs show a large scale movement to amorphous 

core steel due to it lower loss characteristics. Review of the DOE transformer 

designs indicates that there might be a 700% increase in usage of the 

amorphous core steel over present annual production of this material. The 

DOE is requested to create projections listing what price increases and material 

shortages are to be expected if the use of this material is forced by transformer 

efficiency rules that dictate its use.

6. Because there is only one major supplier of amorphous core steel in the 

world that meets the efficiency levels used by the DOE in their optimizations, 

which is Hitachi in Japan and Metglas in the US (which is owned by Hitachi); is 

it legal for a law to be created at the DOE’s suggestion, forcing the exclusive use 

of this material in Distribution Transformers to meet the efficiency 

requirements chosen by the DOE?

7. The DOE is requested to show that adequate supplies of the materials 

produced within the United States exist to manufacture the required 

transformers that will meet the transformer efficiency requirements chosen for 

the proposed changes from the existing transformer efficiency requirements. If 

sources of materials are required from outside the United States, the DOE is 

requested to estimate what jobs will be lost and the dollar cost within the United 

States over the 30 year average and 60 year maximum life of the transformers 

as compared to using materials available within the United States.

8. Regarding the assumptions that the DOE made to use an average 

distribution transformer life of 30 years in their transformer efficiency payback 

calculations; the IEEE Transformer committee in the various technical 

standards which apply to Distribution transformers specifies an average life of 
20.5 years. We recommend that the 20.5 year average Distribution 

Transformer life be used by the DOE in their payback analysis. How did the 

DOE arrive at the 30 year anticipated life?

9. Regarding the payback times used by the DOE, the document 10 CFR Part 

431 was issued on October 12, 2007 to list the required efficiency levels for 

distribution transformers. On page 58220 of this document, various payback 

intervals between 5.1 and 21.6 years are listed for the efficiencies chosen for this 

standard. In the Preliminary Technical Document (TSD):Energy Efficiency 

Program for Commercial and Industrial Equiptment :Distribution 

Transformers dated March 2011, pay back intervals are listed on page ES-16 

Table ES.2.7 for the various standard levels. The DOE is requested to explain if 

these pay back intervals are based on a change from the existing efficiency 

standard? If the change is from the existing efficiency standard, the DOE is 

requested to add the years of payback as listed in 19CFR Part 431 to the years 

listed on the March 2011 document. 

10.The DOE used a 50% anticipated loading factor for the 30 year anticipated 

average life calculations used in their transformer efficiency evaluations. What 

is the source of the 50% loading factor used over a 30 year average and 60 year 

maximum expected life for the transformers evaluated? The DOE is requested 

to consult the power companies to learn what load factors they expect for 

transformers in service for up to 60 years. This item is very important, because 

as the loading level increases, the efficiency of an amorphous core design will 

decrease when compared to a silicon core design if they are both optimized to 

the same A and B factors. The amorphous core design may have a the higher 

efficiency at a 50% average loading but, this efficiency advantage will disappear 

as the average load increases and the silicon core steel designs become more 

efficient than the amorphous core steel designs when they are both optimized to 

the same A and B factors. 

11. Regarding the payback intervals to be used by the DOE to select the 

efficiency levels to be recommended, the level of loading is based on many 

assumptions that may change, a payback interval of 5 to 10 years is 

recommended to avoid forcing transformer purchases based on changeable 

assumptions that likely will result in the longer paybacks never happening. 

12.Electric autos are expected to take an increasing percentage of the auto 

market. The July 2011 IEEE Power and Energy magazine estimates that in 5 

years, 15% of the global new vehicle market will be electric autos. The DOE is 

requested to allow for the increased load factor for charging electric vehicles 

over the 60 year span they have chosen to consider for transformer loading. 

13.The DOE is requested to get in touch with Marketing and/or Business 

Development persons at the major auto manufacturers to learn what their 

projections are regarding the projected growth and market share for electric 
vehicles. What market share do these companies project for electric autos and 

how will that added load to the electrical systems affect the projected average 

loading over the next 60 years?

14.For pole type distribution transformers, the higher efficiency designs used 

by the DOE to evaluate the transformer efficiencies have a very significant 

increase in weight and also in transformer overall height. The DOE is 

requested to factor in the increased pole loading and related need to replace 

existing poles in some cases to allow the mounting of the heavier pole type 

transformers. Some of the higher efficiency transformers will have a total 

weight of twice that of the existing transformer which is being replaced.

15.The DOE is requested to change percentage efficiency targets to a method of 

controlling the transformer efficiency using the lowest total owning cost (TOC) 

optimized designs using TOC A and B factors written into law to control 

transformer efficiencies. The advantage of using the TOC A and B factors to 

control transformer efficiency is that it allows the transformer quotations to 

respond to the available materials. For example if copper conductors are 

required to meet a specified efficiency, transformer manufacturers would not be 

able to quote if a flood cut off the copper supply. Using the TOC A and B 

factors, each manufacturer would be allowed to quote, if they used the correct A 

and B factors. Another example is if the customer prefers to raise the basic 

insulation level (bil) of the requested transformer design, the manufacturers will 

optimize to the specified bil using the correct A and B factors. The end result is 

that the higher bil would be just slightly less efficient than a lower bil because of 

the added insulation required to obtain the higher basic insulation level. I 

raised this question during the first meeting, but did not receive a response from 

the DOE about this subject , therefore I am requesting that this subject be 

considered and responded to by the DOE before they proceed with the final rule 

making. The total owning cost approach will handle the variations that occur 

within the industry and also result in a similar improvement in efficiency as 

would transformer efficiency targets. It will allow the transformer efficiencies 

to be increased as justified, using all the factors they are currently using to 

create target transformer efficiencies. The DOE approach currently uses A and 

B loss evaluation factors in their evaluations of what transformer efficiencies 

are justified. The A and B loss evaluation factors could be written into the law 

rather than specifying the transformer efficiencies. The law could require that 

all manufacturers only quote total owning cost optimized designs using these A 

and B factors for all quotations, just as they are now forced to quote target 

efficiencies. The transformer manufacturers would be required to maintain 

files showing they met the law by only quoting designs which were optimized 

using the A and B factors according to the total owning cost method of reducing 

transformer losses. Utility companies have a familiarity with the Total Owning 

Cost approach to transformer purchases because they have routinely used the 

TOC method of obtaining efficient transformer designs since about 1980. 
Regards,

 Jerry Corkran

Staff Engineer

Cooper Power Systems