## U.S. DEPARTMENT OF ENERGY

OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

PUBLIC WORKSHOP ON POSSIBLE IMPACTS OF ENERGY EFFICIENCY STANDARDS FOR

FLUORESCENT LAMP BALLASTS
FORRESTAL BUILDING WASHINGTON, DC



### APRIL 28, 1998

1 

# u.s.. DEPARTMENT OF ENERGY

OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY PUBLIC WORKSHOP ON POSSIBLE IMPACTS OF ENERGY EFFICIENCY STANDARDS FOR FLUORESCENT LAMP BALLASTS
FORRESTAL BUILDING WASHINGTON, DC

APRIL 28, 1998

1 

# u.s.. DEPARTMENT OF ENERGY

OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY PUBLIC WORKSHOP ON POSSIBLE IMPACTS OF ENERGY EFFICIENCY STANDARDS FOR FLUORESCENT LAMP BALLASTS
FORRESTAL BUILDING WASHINGTON, DC

APRIL 28, 1998

1MODERATOR:

Douglas Brookman, Brookman-King: We have had a few changes in the Staffing in the Office of Codes and Standards, and because of that we are going to do a slight change to the agenda and then Michael McCabe is going to start off with the opening remarks. 

### WELCOMING REMARKS AND INTRODUCTIONS: Michael McCabe, Director, Office of Codes and Standards, DoE: Good morning, I am Michael McCabe. I am the Director of DoE's Office of Codes and Standards. One of the things we are trying to do with the process is to make the meeting as open as possible. With the number of people sitting in the back, a number of you may have valuable insight into this process, because in the past when we had people sitting in the back it has been very difficult to provide input. I invite anybody who would like to move up please free. I would like to welcome everybody to todays workshop. This is one in a series of workshops, public meetings, that we've had with interested parties on the applications of ballast standards. We have had a significant change of Staff, so I've 

### been asked to introduce Carl Adams. Carl will be the Team Leader for this rule making. He will introduce in his remarks the other member of the team. Anthony Balducci who had been leading us is about to leave the Department, and so at this point in time felt it was appropriate for Carl to lead the workshop. There will be some questions as far as history and background that we may have to struggle through, but with I think Carl's involvement and the briefing he has received and others who have been involved in the process who will be introduced later will be able to fill in the blanks for him and for me. Again this process we are having today, the workshop, has evolved, as designed not to be a workshop where we had an auxiliary paradigm, we've had DoE Staff and Contractors Staff, sitting at the head table and had individuals come up speaking one at time to the panel who gave questions back. What we encourage is an open exchange of information, ideas, and opinions on topic that have been identified; and also for you to


### 2 MODERATOR: Douglas Brookman, Brookman-King: We have had a few changes inthe Staffing inthe Office ofCodes and Standards, and because ofthat we are going to do a slight change to the agenda and then MichaelMcCabe is going to start offwiththe opening remarks. 

### WELCOMING REMARKS AND INTRODUCTIONS: Michael McCabe, Director, Office ofCodes and Standards, DoE: Good morning, I amMichael McCabe. I amthe Director ofDoE's Office ofCodes and Standards. One ofthe things we are trying to do with the process is to make the meeting
as open as possible. Withthe number ofpeople sitting in the back, a number ofyou may have valuable insight into this process, because in the past when we had people sitting in the back it 

### has beenvery difficult to provide input. I invite anybody who would like to
move up please free. I would like to welcome everybody to todays workshop. This is one in a series ofworkshops, public meetings, that we've had with interested parties onthe applications ofballast standards. We have had a significant change ofStaff, so I've been asked to introduce Carl Adams. Carl

### will be the TeamLeader for this rule making. He 

### will introduce in 

### his remarks the other member ofthe team. Anthony Balducci who had beenleading us is about to leave the Department, and so at this point 

### in time felt it was appropriate for Carl to lead the workshop. There 

### will be some questions
as far as history and background that we may have to struggle through, but withI think Carl's involvement and the briefing he 

### has received and others who have beeninvolved in the process who 

### will be introduced later 

### will be able to 

### fill in the blanks for him and for
me. Againthis process we are having today, the workshop, 

### has evolved, as designed not to be a workshop where we had an auxiliary paradigm, we've had DoE Staff and Contractors Staff, sitting at the head table and had individuals come up speaking one at time to the panel who gave questions back. What we encourage is an openexchange of information, ideas, and opinions ontopic that have been identified; and also for you to


### 2 MODERATOR: Douglas Brookman, Brookman-King: We have had a few changes inthe Staffing inthe Office ofCodes and Standards, and because ofthat we are going to do a slight change to the agenda and then MichaelMcCabe is going to start offwiththe opening remarks. 

### WELCOMING REMARKS AND INTRODUCTIONS: Michael McCabe, Director, Office ofCodes and Standards, DoE: Good morning, I amMichael McCabe. I amthe Director ofDoE's Office ofCodes and Standards. One ofthe things we are trying to do with the process is to make the meeting
as open as possible. Withthe number ofpeople sitting in the back, a number ofyou may have valuable insight into this process, because in the past when we had people sitting in the back it 

### has beenvery difficult to provide input. I invite anybody who would like to
move up please free. I would like to welcome everybody to todays workshop. This is one in a series ofworkshops, public meetings, that we've had with interested parties onthe applications ofballast standards. We have had a significant change ofStaff, so I've been asked to introduce Carl Adams. Carl

### will be the TeamLeader for this rule making. He 

### will introduce in 

### his remarks the other member ofthe team. Anthony Balducci who had beenleading us is about to leave the Department, and so at this point 

### in time felt it was appropriate for Carl to lead the workshop. There 

### will be some questions
as far as history and background that we may have to struggle through, but withI think Carl's involvement and the briefing he 

### has received and others who have beeninvolved in the process who 

### will be introduced later 

### will be able to 

### fill in the blanks for him and for
me. Againthis process we are having today, the workshop, 

### has evolved, as designed not to be a workshop where we had an auxiliary paradigm, we've had DoE Staff and Contractors Staff, sitting at the head table and had individuals come up speaking one at time to the panel who gave questions back. What we encourage is an openexchange of information, ideas, and opinions ontopic that have been identified; and also for you to


### 2identify other topics that you would like to address. Doug Brookman will be facilitating

today's meeting and Carl will be going over the agenda. We had shared that approximately a month ago after had some dialog with a number of parties about the issues. So we hope that the agenda is complete. The topics that are identified, are those certainly that we want to address and believe they are the ones that those that we dealing with would like addressed as well. I do not profess that it includes everything that may
come up. So we encourage those who have issues, have questions, please raise them. We will try to deal with them to the extent that we and you are capable of doing today. I would like to again welcome everybody. Carl Adams: Well good morning again. I am Carl Adams, the new Team Leader for the lamp ballast standards rulemaking and I am also the presiding official for today's workshop, The other members of the team for the lamp ballast rulemaking are: Barbara Twigg and Barry Berlin both from the Office of Codes and Standards; Eugene Margolis from the Office of the General Counsel; and Mark Friedrichs from the Office of Policy and International Affairs. On behalf of the Department of Energy, I would like to thank all of you for taking the time to participate in this workshop. Copies of the slides that will be used today are available at the front desk. See Brenda or Sandy if you don't have a copy of them. Also available are copies of the documents that were referenced in the Federal Register notice and are also on the Office of Codes and Standards home page at: www.eren.doe.gov/buildings/codes_standards/notices. Anyone attending today's workshop or anyone who submitted comments will be added to our mailing list for future mailings. The Department of Energy is required by statue to establish energy conservation standards for fluorescent lamp ballasts which are designed to achieve the maximum improvement in energy efficiency which the Secretary determines is techonologically feasible and economically justified. This rulemaking was to have been completed in 1992. Obviously we are way behind schedule. The comments received here today and those


### 3 identify othertopics that you would like to address. Doug Brookman

### will be facilitating today's meeting and Carl will be going overthe agenda. We had shared that approximately a month ago after had some dialog with a number ofparties about the issues. So we hope that the agenda is complete. The topics that are identified, are those certainly that we want to address andbelieve they are the onesthat those that we dealing withwould like addressed as well. I do not profess that it includes everythingthat may
come up. So we encourage those who have issues, have questions, please raise them. We 

### willtryto deal withthemto the extent that we and you are capable ofdoing today. I would like to again welcome everybody. Carl Adams: Well good morning again. I am Carl Adams, the new TeamLeader for the lamp ballast standards rulemaking and I am also the presiding official for today's workshop, The other members ofthe team for the lamp ballast rulemaking are: Barbara Twigg and Barry Berlin bothfrom the Office ofCodes and Standards; Eugene Margolis from the Office ofthe Genera] Counsel; andMarkFriedrichs from the Office ofPolicy and InternationalAffairs. Onbehalfofthe Department ofEnergy, I would like to thank all of you for taking the time to participate in this workshop. Copies ofthe slides that 

### will be used today are available at the front desk. See Brendaor Sandy 

### ifyou don't have a copy ofthem. Also available are copies ofthe documents that were referenced in the Federal Register notice and are also onthe Office ofCodes and Standards home page at: www.eren.doe.govlbuildings/codes_standards/notices. Anyone attending today's workshop or anyone who submitted comments 

### willbe added to our mailing list for future mailings. The Department ofEnergyis required by statue to establish energy conservation standards for fluorescent lamp ballasts which are designed to achieve the maximum improvement in energy efficiency which the Secretary determines is techonologically feasible and economicallyjustified. This rulemaking was to have been completed in 1992. Obviously we are way behind schedule. The comments received here today and those


### 3 identify othertopics that you would like to address. Doug Brookman

### will be facilitating today's meeting and Carl will be going overthe agenda. We had shared that approximately a month ago after had some dialog with a number ofparties about the issues. So we hope that the agenda is complete. The topics that are identified, are those certainly that we want to address andbelieve they are the onesthat those that we dealing withwould like addressed as well. I do not profess that it includes everythingthat may
come up. So we encourage those who have issues, have questions, please raise them. We 

### willtryto deal withthemto the extent that we and you are capable ofdoing today. I would like to again welcome everybody. Carl Adams: Well good morning again. I am Carl Adams, the new TeamLeader for the lamp ballast standards rulemaking and I am also the presiding official for today's workshop, The other members ofthe team for the lamp ballast rulemaking are: Barbara Twigg and Barry Berlin bothfrom the Office ofCodes and Standards; Eugene Margolis from the Office ofthe Genera] Counsel; andMarkFriedrichs from the Office ofPolicy and InternationalAffairs. Onbehalfofthe Department ofEnergy, I would like to thank all of you for taking the time to participate in this workshop. Copies ofthe slides that 

### will be used today are available at the front desk. See Brendaor Sandy 

### ifyou don't have a copy ofthem. Also available are copies ofthe documents that were referenced in the Federal Register notice and are also onthe Office ofCodes and Standards home page at: www.eren.doe.govlbuildings/codes_standards/notices. Anyone attending today's workshop or anyone who submitted comments 

### willbe added to our mailing list for future mailings. The Department ofEnergyis required by statue to establish energy conservation standards for fluorescent lamp ballasts which are designed to achieve the maximum improvement in energy efficiency which the Secretary determines is techonologically feasible and economicallyjustified. This rulemaking was to have been completed in 1992. Obviously we are way behind schedule. The comments received here today and those


### 3submitted during the written comment period will assist the Department in developying

the notice of proposed rulemaking which is now planned for February 1999. The following are procedural items which most of you are aware of. However, this being a Federal proceeding I am required to read this. So, pay attention because there may be a quiz. Doug Brookman will be facilitating the workshop and will be setting the guidelines for conducting the workshop and providing other pertinent information. In approximately two weeks, a complete copy of the transcript will be available for inspection and copying at the Department of Energy's Freedom of Information reading room, located down the hall in Room 1E-190. Anyone wishing to purchase a copy of the transcript may make arrangements with the court reporter. To provide the Department with as much pertinent information and as many views as can be reasonable obtained, and to enable interested persons to express their views, the workshop will be conducted in accordance with the following procedures: The focus of this workshop is for the Department to listen to comments pertaining to the inputs to the Life Cycle Cost, National Energy Impacts and Utility/Enviromnental Analysis sections of the Technical Support Document and the methodology for conducting the Manufacturer Impact Analysis to be utilized in the Technical Support Document to support the proposed rule for fluorescent lamp ballasts. We will begin with introductions, then discuss the agenda and expand on the agenda it necessary to provide everyone with an opportunity to discuss their topic. DoE topics will remain on the agenda as lead presentations in their respective areas. 

### We'll take an hour lunch break at a convenient time near 12 noon which is on your own. There is a snack bar one floor below us. There is the DoE cafeteria on the second floor of the west building, and a number of restaurants in the underground mall at L'Enfant Plaza up the street. It will reduce interruptions if everyone who wants to speak waits to be recognized. Please remember to speak into the microphones, especially those in the audience, and state your name and your company each time before you speak for the court reporter.
4 submitted during the written comment period 

### will assist the Department in developying the notice ofproposed rulemaking which is nowplanned for February 1999. The following
are procedural items which most ofyou are aware of However, this being a Federal proceeding I amrequired to read this. So, pay attentibnbecause there may be a quiz. Doug Brookman

### will be facilitating the workshop and 

### will be setting the guidelines for conducting the workshop andproviding other pertinent information. 

### Inapproximately two weeks, a complete copy ofthe transcript 

### willbe available for inspection and copying at the Department ofEnergy's FreedomofInformationreading room, located downthe hall in Room lE-190. Anyone wishing to purchase a copy ofthe transcript may make arrangements withthe court reporter. To provide the Department with as muchpertinent information and as many views as canbe reasonable obtained, and to enable interested persons to express their views, the workshop 

### willbe conducted in accordance withthe fo!low::ng ,rocedures: The focus oft.his workshop is for the Department to listento comments pertaining to the inputs to the Life Cycle Cost, NationalEnergy Impacts and UtilitylEnvirorunental Analysis sections ofthe Technical Support Document and the methodology for conducting the Manufacturer Impact Analysis to be utilized in the Technical Support Document to support the proposed rule for fluorescent lamp ballasts. We 

### willbegin with introductions, then discuss the agenda and expand onthe agenda ifnecessary to provide**every~me** with an opportunityto discuss their topic. DoE topics 

### will remam onthe agenda as lead presentations in their respective areas. We'll take anhour lunchbreak at a convenient time near 12 noonwhich is on your own. There is a snack bar one floor below us. There is the DoE cafeteria on the second floor ofthe west building, and a number ofrestaurants in the underground mall at L'Enfant Plaza up the street. It

### will reduce interruptions ifeveryone who wants to speak waits to be recognized. Please remember to speak into the microphones, especially those inthe audience, and state your name and your company eachtime before you speak for the court reporter.
4 submitted during the written comment period 

### will assist the Department in developying the notice ofproposed rulemaking which is nowplanned for February 1999. The following
are procedural items which most ofyou are aware of However, this being a Federal proceeding I amrequired to read this. So, pay attentibnbecause there may be a quiz. Doug Brookman

### will be facilitating the workshop and 

### will be setting the guidelines for conducting the workshop andproviding other pertinent information. 

### Inapproximately two weeks, a complete copy ofthe transcript 

### willbe available for inspection and copying at the Department ofEnergy's FreedomofInformationreading room, located downthe hall in Room lE-190. Anyone wishing to purchase a copy ofthe transcript may make arrangements withthe court reporter. To provide the Department with as muchpertinent information and as many views as canbe reasonable obtained, and to enable interested persons to express their views, the workshop 

### willbe conducted in accordance withthe fo!low::ng ,rocedures: The focus oft.his workshop is for the Department to listento comments pertaining to the inputs to the Life Cycle Cost, NationalEnergy Impacts and UtilitylEnvirorunental Analysis sections ofthe Technical Support Document and the methodology for conducting the Manufacturer Impact Analysis to be utilized in the Technical Support Document to support the proposed rule for fluorescent lamp ballasts. We 

### willbegin with introductions, then discuss the agenda and expand onthe agenda ifnecessary to provide**every~me** with an opportunityto discuss their topic. DoE topics 

### will remam onthe agenda as lead presentations in their respective areas. We'll take anhour lunchbreak at a convenient time near 12 noonwhich is on your own. There is a snack bar one floor below us. There is the DoE cafeteria on the second floor ofthe west building, and a number ofrestaurants in the underground mall at L'Enfant Plaza up the street. It

### will reduce interruptions ifeveryone who wants to speak waits to be recognized. Please remember to speak into the microphones, especially those inthe audience, and state your name and your company eachtime before you speak for the court reporter.
4Side conversations should be kept to a minimum to avoid interrupting the presenter; if a

lengthy discussion is needed, please move to a corner of the room or out of the room. It may be necessary to cut off debate on some topics to maintain the schedule. There may be time at the end of the workshop for additional discussions of significant issues. I encourage all persons present to participate as much as possible so that the Department may get a full spectrum of opinion on these topics. This workshop is scheduled to end by 5 p.m. today. Topics which have not been completely discussed can be addressed in written comments. The deadinr; fcr written comments and data submissions following t his workshop will be determined based on responses received today. Although I will be shooting for a thirty day comment period. So, please keep that in mind as we go through. All comments and data submitted wi l be considered before DoE publishes the notice of proposed rulemaking. All written comments and data submissions will be available for public inspection at the DoE "Freedom of Information Reading Room. Phone number (202) 586-6020. Written comments should be addressed to the Department of Energy as noted in the Federal Register notice for today's workshop. Ten copies of the documents or data are requested. In addition, the Department would appreciate an electronic copy of the comments or data
. The Department is using WordPerfect 6.1. No faxed comments will be accepted. Any persons submitting information which he or she believes to be confidential and exempt by law from public disclosure should submit one complete copy and ten copies from which information claimed to be confidential has been deleted. In accordance with the procedures established at 1 OCFR 1004.11, the Department of Energy shall make its own determinations as to whether the information shall be exempt from public disclosure. In keeping with the regulations of these facilities, there is no smoking allowed in this room or building
. The restrooms are down the hall to your left and right. Phones are located in the main lobby area. Again, we appreciate the time and effort you have taken in preparing for this workshop, and are please to receive your


### 5 Side conversations should be kept to a minimumto avoid interrupting the presenter; 

### ifa lengthy discussion is needed, please move to a comer ofthe roomor out ofthe room. It maybe necessary to cut offdebate on some topics to maintain the schedule. There may be time at the end ofthe workshop for additional discussions ofsignificant issues. I encourage all personspresentto participate as much as possible so that the Department may get a full spectrum ofopinion onthese topics. This workshop is scheduled to end by 5 p.m. today. Topics whicn have not been completely discussed can be addressed in written comments. The deadline fer written comments and data submissions following t his workshop 

### will be determined based onresponses received today. Although I 

### will be shooting for a thirty day comment period. So, please keep that in mind as we go through. All comments and data submitted 

### wiil be considered before DoE publishes the notice ofproposed rulemaking. All written comments and data submissions 

### will be available for public inspection at the DoE FreedomofInformationReading Room. Phone number (202) 586-6020. Written comments should be addressed to the Department ofEnergy as noted in the Federal Register notice for today's workshop. Tencopies ofthe documents
or data are requested. In addition, the Department would appreciate an electronic copy of the comments or data. The Department is using WordPerfect 6.1. No faxed comments 

### willbe accepted, Any persons submitting informationwhichhe or she believes to be confidential and exempt by iaw from public disclosure should submit one complete copy and ten copies from which information claimed to be confidential 

### has been deleted. 

### Inaccordance 

### with the procedures established at 10CFR 1004.11, the Department of Energy shall make its owndeterminations as to whether the information shall be exempt from public disclosure. Inkeeping withthe regulations ofthese facilities, there is no smoking allowed inthis room or building. The restrooms are downthe hall to your left and right. Phones are located in the main lobby area. Again, we appreciate thetime and effort you have taken inpreparing for this workshop, and are please to receive your
5 Side conversations should be kept to a minimumto avoid interrupting the presenter; 

### ifa lengthy discussion is needed, please move to a comer ofthe roomor out ofthe room. It maybe necessary to cut offdebate on some topics to maintain the schedule. There may be time at the end ofthe workshop for additional discussions ofsignificant issues. I encourage all personspresentto participate as much as possible so that the Department may get a full spectrum ofopinion onthese topics. This workshop is scheduled to end by 5 p.m. today. Topics whicn have not been completely discussed can be addressed in written comments. The deadline fer written comments and data submissions following t his workshop 

### will be determined based onresponses received today. Although I 

### will be shooting for a thirty day comment period. So, please keep that in mind as we go through. All comments and data submitted 

### wiil be considered before DoE publishes the notice ofproposed rulemaking. All written comments and data submissions 

### will be available for public inspection at the DoE FreedomofInformationReading Room. Phone number (202) 586-6020. Written comments should be addressed to the Department ofEnergy as noted in the Federal Register notice for today's workshop. Tencopies ofthe documents
or data are requested. In addition, the Department would appreciate an electronic copy of the comments or data. The Department is using WordPerfect 6.1. No faxed comments 

### willbe accepted, Any persons submitting informationwhichhe or she believes to be confidential and exempt by iaw from public disclosure should submit one complete copy and ten copies from which information claimed to be confidential 

### has been deleted. 

### Inaccordance 

### with the procedures established at 10CFR 1004.11, the Department of Energy shall make its owndeterminations as to whether the information shall be exempt from public disclosure. Inkeeping withthe regulations ofthese facilities, there is no smoking allowed inthis room or building. The restrooms are downthe hall to your left and right. Phones are located in the main lobby area. Again, we appreciate thetime and effort you have taken inpreparing for this workshop, and are please to receive your
5

### comments and opinions. At this time, I would like to turn it over to Doug Brookman to

begin the introductions, and then we'll go to the agenda review. Doug Brookman: Good morning, again. I am Doug Brookman. Nice to see so many of you back and for those of you are new, especially welcome you for this first time. 

### We are accustom of having everybody introduce themselves and so will do that. [Attendees introduced themselves indicating their company or department] Mike Rivest, Arthur D. Little, Inc. Quentin L%)one , Arthur D. Little, Inc. Isaac Turiel, Lawrence Berekely National Laboratory Valeria Whelan, Nature Resource of Canada Barbara Atkinson, Lawrence Berekely National Laboratory Bill Black, Copper Development Associates, Inc. Gene Foley, Allinance to Save Energy Richard Rattray, OSRAM Sylvania Howard Wolfman,lVotorola Lighting, Inc. Edwin Brush, BBF & Associates Patricia Franco, Philips Electronics Robert Pelino, Transformer Company Jerry Prideaux, Powerlighting Products, Inc. Tom Schooler, Powerlighting Products, Inc. Norm Grimshaw, Advance Transformer, Inc. Bob Wisbey, Advance Transformer, Inc. Mike Stein, MagneTek, Inc. Mark Perlis, Dickstein Shapiro Morin & Oshinsky Barry Berlin, Department of Energy Eugene Margolis, Counsel for the Program, DoE


### 6 comments and opinions. At this time, I would like to turnit overto Doug Brookmanto

. beginthe introductions, and then we'll go to the agenda review. Doug Brookman: Good morning, again. I amDoug Brookman. Nice to see so many ofyou back and for those ofyou are new, especially welcome you for this first time. We are accustom ofhaving everybody introduce themselves and so 

### will do that. [Attendees introduced themselves indicating their company or department] Mike Rivest, Arthur D. Little, Inc. Quentin**Loone~,** Arthur D. Little, Inc. Isaac Turiel, Lawrence BerekelyNational Laboratory Valeria Whelan, Nature Resource ofCanada Barbara Atkinson, Lawrence BerekelyNational Laboratory Bill Black, Copper Development Associates, Inc. Gene Foley, Allinance to Save Energy Richard Rattray, OSRAM Sylvama Howard WoIiinan, MotorolaLighting, Inc. EdwinBrush, BBF & Associates Patricia Franco, Philips Electronics Robert Pelino, Transformer Company Jerry Prideaux, Powerlighting Products, Inc. Tom Schooler, Powerlighting Products, Inc. Norm Grimshaw, Advance Transformer, Inc. Bob Wisbey, Advance Transformer, Inc. Mike Stein, MagneTek, Inc. MarkPerlis, Dickstein Shapiro Morin & Oshinsky Barry Berlin, Department ofEnergy Eugene Margolis, Counsel for the Program, DoE


### 6 comments and opinions. At this time, I would like to turnit overto Doug Brookmanto

. beginthe introductions, and then we'll go to the agenda review. Doug Brookman: Good morning, again. I amDoug Brookman. Nice to see so many ofyou back and for those ofyou are new, especially welcome you for this first time. We are accustom ofhaving everybody introduce themselves and so 

### will do that. [Attendees introduced themselves indicating their company or department] Mike Rivest, Arthur D. Little, Inc. Quentin**Loone~,** Arthur D. Little, Inc. Isaac Turiel, Lawrence BerekelyNational Laboratory Valeria Whelan, Nature Resource ofCanada Barbara Atkinson, Lawrence BerekelyNational Laboratory Bill Black, Copper Development Associates, Inc. Gene Foley, Allinance to Save Energy Richard Rattray, OSRAM Sylvama Howard WoIiinan, MotorolaLighting, Inc. EdwinBrush, BBF & Associates Patricia Franco, Philips Electronics Robert Pelino, Transformer Company Jerry Prideaux, Powerlighting Products, Inc. Tom Schooler, Powerlighting Products, Inc. Norm Grimshaw, Advance Transformer, Inc. Bob Wisbey, Advance Transformer, Inc. Mike Stein, MagneTek, Inc. MarkPerlis, Dickstein Shapiro Morin & Oshinsky Barry Berlin, Department ofEnergy Eugene Margolis, Counsel for the Program, DoE


### 6Carl Adams, Office of Codes & Standards, DoE Michael McCabe, Office of Codes & Standards, DoE Stephen Treado, NIST Barbara Twigg, DoE Virginia Allen, Flexiwatt, LLC. Eugene Andert, Rae Magnet Wire Company Gerald Beatty, LTV Steel Company David Bender, Copper Development Associates, Inc. Larry Clark, Optic Sales, Inc. Tom Eckman, Nortwest Power Planning Council Diane Fisher, Lawrence Berekely National Laboratory Craig Davenport, Intertex Testing Service 

### Wayne Causey, Howard Industries, Inc. Ric Erdheim, National Electrical manufacturers Association John Forseyth, Texas Instruments, Inc. Gregory Gerber, Texas Instruments, Inc. Thomas Hagen, T&J Enterprises, Inc. Dennis Kurowski, LTV Steel Company, Inc. Roy Jones, Texas Instruments, Inc. Ed Psamm. American Council for an Energy-Efficient Economy Joe Mohr, Advance Transformer Mohit Pande, Arthur D. Little, Inc. 

### Mike Martin, California Energy Commission Diane Moorefield, PEPCO Herb Rice, Steiner-Group Steve Rosenstock, Edison Electric Institute Anthony Von Holle, Armco Inc.


### 7 Carl Adams, Office ofCodes 

### & Standards, DoE Michael McCabe, Office ofCodes 

### & Standards, DoE Stephen Treado, NIST BarbaraTwigg, DoE Virginia Allen, Flexiwatt, LLC. Eugene Andert, Rae Magnet Wire Company Gerald Beatty, LTV Steel Company David Bender, Copper Development Associates, Inc. Larry Clark, Optic Sales, Inc. TomEckman, Nortwest Power Planning Council Diane Fisher, Lawrence BerekelyNational Laboratory Craig Davenport, Intertex Testing Service Wayne Causey, Howard Industries, Inc. Ric Erdheim, National Electrical manufacturers Association JohnForseyth, Texas Instruments; InG. Gregory Gerber, Texas Instruments, Inc. Thomas Hagen, T

### &J Enterprises, Inc. Dennis Kurowski, LTV Steel Company, Inc. Roy Jones, Texas Instruments, Inc. EdPsamm. American Council for anEnergy-Efficient Economy Joe Mohr, Advance Transformer Mohit Pande, Arthur D. Little, Inc. Mike 

### Martin, California Energy Commission Diane Moorefield, PEPCO HerbRice, Steiner-Group Steve Rosenstock, EdisonElectric Institute Anthony VonHolle, Armco Inc.
7 Carl Adams, Office ofCodes 

### & Standards, DoE Michael McCabe, Office ofCodes 

### & Standards, DoE Stephen Treado, NIST BarbaraTwigg, DoE Virginia Allen, Flexiwatt, LLC. Eugene Andert, Rae Magnet Wire Company Gerald Beatty, LTV Steel Company David Bender, Copper Development Associates, Inc. Larry Clark, Optic Sales, Inc. TomEckman, Nortwest Power Planning Council Diane Fisher, Lawrence BerekelyNational Laboratory Craig Davenport, Intertex Testing Service Wayne Causey, Howard Industries, Inc. Ric Erdheim, National Electrical manufacturers Association JohnForseyth, Texas Instruments; InG. Gregory Gerber, Texas Instruments, Inc. Thomas Hagen, T

### &J Enterprises, Inc. Dennis Kurowski, LTV Steel Company, Inc. Roy Jones, Texas Instruments, Inc. EdPsamm. American Council for anEnergy-Efficient Economy Joe Mohr, Advance Transformer Mohit Pande, Arthur D. Little, Inc. Mike 

### Martin, California Energy Commission Diane Moorefield, PEPCO HerbRice, Steiner-Group Steve Rosenstock, EdisonElectric Institute Anthony VonHolle, Armco Inc.
7John Wells, WorkSmart Energy Enterprises, Inc. Ed Yandek, General Electric Company John Yodis, The P.D. Geroge Company James Giarrusso, United Tool & Stamping Company John Giarrusso, Jr., United Tool & Stamping Company Glenn Scltleede, Energy Market & Policy Analysis, Inc. Sayed Azimi, Energetics Raemond Beebe, Phelps Dodge Industries Company Rolland Jones, Jr. Bolmet, Inc. 

### Randall Moorhead, Philips Electronics Corporation Kyle Pltsor, National Electrical Manufacturers Association Paul Santuzzi, WCI Steel, Inc. Todd Straka, Interek Testing Service Tim Treacy, Inland Steel Company Earl Sherman, ISO John Bauer, ARMCO Inc. Patrick Kelly, USX Corporation


### Thank you. Did anybody not get a chance to introduce themselves? Everybody knows Sandy and Brenda. Everybody. Let me welcome and thank you again. Thank you all for being on time, so we could start on time. We have a full agenda for today. About two years ago when we started process improvement. Was it longer than that? In that range, we started off meetings like this with ground rules and overtime they emerged as NORMS, characterized as NORMS, the way this group and other that preceded it the way we come to expect to have here today. And simply it would be we ask individuals to speak one at a time. Please say your name for the record. Be concise. There's a lot to be said on all of these topics and you need to be mindful of sharing the air


### 8 JohnWells, WorkSmart Energy Enterprises, Inc. Ed Yandek, General Electric Company John Yodis, The P.D. Geroge Company James Giarrusso, United Tool & Stamping Company John Giarrusso, Jr., United Tool & Stamping Company Glenn Scltleede, Energy Market 

### & Policy Analysis, Inc. Sayed Azimi, Energetics Raemond Beebe, Phelps Dodge Industries Company Rolland Jones, Jr. Bolmet, Inc. Randall Moorhead, Philips Electronics Corporation Kyle Pltsor, National Electrical Manufacturers Association Paul Santuzzi, WCI Steel, Inc. Todd Straka, Interek Testing Service Tim Treacy, Inland Steel Company Earl Sherman, ISO John Bauer, ARMCO Inc. Patrick Kelly, USX Corporation

Thank you. Did anybody not get a chance to introduce themselves? Everybody knows Sandy and Brenda. Everybody. Let me welcome and thankyou again. Thankyou all for being ontime, so we could start ontime. We have a full agenda for today. About two years ago when we startedprocess improvement. Was it longer than that? Inthat range, we started offmeetings like this with ground rules and overtime they emerged asNORMS, characterized as NORMS, the way this group and otherthat preceded it the way we come to expect to have here today. And simply it would be we ask individuals to speak one at a time. Please sayyour name for the record. Be concise. There's a lot to be said on all ofthese topics and you need to be mindful ofsharing the 

### air
8 JohnWells, WorkSmart Energy Enterprises, Inc. Ed Yandek, General Electric Company John Yodis, The P.D. Geroge Company James Giarrusso, United Tool & Stamping Company John Giarrusso, Jr., United Tool & Stamping Company Glenn Scltleede, Energy Market 

### & Policy Analysis, Inc. Sayed Azimi, Energetics Raemond Beebe, Phelps Dodge Industries Company Rolland Jones, Jr. Bolmet, Inc. Randall Moorhead, Philips Electronics Corporation Kyle Pltsor, National Electrical Manufacturers Association Paul Santuzzi, WCI Steel, Inc. Todd Straka, Interek Testing Service Tim Treacy, Inland Steel Company Earl Sherman, ISO John Bauer, ARMCO Inc. Patrick Kelly, USX Corporation

Thank you. Did anybody not get a chance to introduce themselves? Everybody knows Sandy and Brenda. Everybody. Let me welcome and thankyou again. Thankyou all for being ontime, so we could start ontime. We have a full agenda for today. About two years ago when we startedprocess improvement. Was it longer than that? Inthat range, we started offmeetings like this with ground rules and overtime they emerged asNORMS, characterized as NORMS, the way this group and otherthat preceded it the way we come to expect to have here today. And simply it would be we ask individuals to speak one at a time. Please sayyour name for the record. Be concise. There's a lot to be said on all ofthese topics and you need to be mindful ofsharing the 

### air
8time as much as you can. Listen as an ally. The better the listening, the better the quality

of the discourse I find. The listening proceeds the (not audible) The more we adhere to that as a standard, the better off we are going to be. There are no dumb questions in this room today. Not a single one. And we want to encourage questions. We want to the exchange of information. And, I will be recognizing people to speak. I will try to keep it moving as fast as possible. I will ask for your consideration. I will be cueing people to speak. So, I am going to try also at my (not audible) to allow people to kind of jump into the cue and make certain comments. If those comments are not short, you will not be recognized again for another. I do want to keep this dynamic, but I want to be fair and let everybody speak. You understand the dilemma there. That's what I am trying to do up here. So, that's the basic thing that I am trying to achieve. All of you I believe received a copy of the agenda. I am going to review now for those of you who wish to follow along with me. That's a very brief status update on the standards program. Follow these introductions and this agenda review. And then moving on to page two, we get into the subsistent aspects of the workshop today. Input to the technical support document specifically Life Cycle Cost Analysis. And you can see the subelements that will be described there. The basic format for these workshops tends to be brief presentation, billeted presentation followed by Q and A and discussion. So after Life Cycle Cost Analysis, mid-morning in there sometime, when it is appropriate we will take a break. But we will keep pressing on until mid morning if we can. That is if we will keep working until we are required to stop by convenience. There is a lot to cover, we really want to keep the pace up the best we can. So, we'll take break mid-morning, after Life Cycle Cost analysis we will talk about National Energy Impacts, followed by Utility/Environmental Analysis. And as Carl said in his comments you are on your own for lunch and we will take a full hour for lunch. We encourage you to stay close by, if you go to L'Enfant Plaza sometimes it's hard to get back in the span of an hour. Whenever we break, what ever we say will be a start time we will start back up at that time.


### 9 time as much as you can. Listen as an ally. The better the listening, the betterthe quality ofthe discourse I find. The listening proceeds the (not audible) The more we adhere to that as a standard, the better offwe are going to be. There are no dumb questions in this
roomtoday. Not a single one. And we want to encourage questions. We want to the exchange ofinformation. And, I 

### will be recognizing people to speak. I 

### will tryto keep it moving as fast as possible. I will ask for your consideration. 

### I 

### will be cueing to speak. So, I amgoing to try also at my (not audible) to allow people to people kind of jump into the cue and make certain comments. Ifthose comments are not short, you 

### will not be recognized again for another. I do want to keep this dynamic, but I want to be fair and let everybody speak. Youunderstand the dilemma there. That's what I amtrying to do up here. So, that's the basic thing that I amtrying to achieve. All ofyou I believe received a copy ofthe agenda. I am going to review now for those ofyou who wish to follow along withme. That's a very briefstatus update on the standards program. Follow these introductions and this agendareview. And then moving onto page two, we get into the subsistent aspects ofthe workshop to

### dEy. Input to the technical support document specifically Life Cycle Cost Analysis. And you can see the subelements that 

### will be described there. The basic format for these workshops tends to be briefpresentation, billeted presentation followed by 

### Qand A and discussion. So after Life Cycle Cost Analysis, mid-morning in there sometime, when it is appropriate we 

### will take a break. But we 

### will keep pressing onuntil mid morning ifwe can. That is ifwe 

### will keep working until we are required to stopby convenience. There is a lot to cover, we really want to keep the pace up the best we can. So, we'll take break mid-morning, after Life Cycle Cost analysis we 

### will talk about National Energy Impacts, followed by UtilitylEnvironmental Analysis. And as Carl said in 

### his comments you are onyour ownfor lunch and we 

### will take a full hour for lunch. We encourage you to stay close by, ifyou go to L'Enfant Pla;r,a sometimes it's hard to get backinthe span ofanhour. Whenever we break, what ever we say 

### will be a start time we 

### will start back up atthat time.


### 9 time as much as you can. Listen as an ally. The better the listening, the betterthe quality ofthe discourse I find. The listening proceeds the (not audible) The more we adhere to that as a standard, the better offwe are going to be. There are no dumb questions in this
roomtoday. Not a single one. And we want to encourage questions. We want to the exchange ofinformation. And, I 

### will be recognizing people to speak. I 

### will tryto keep it moving as fast as possible. I will ask for your consideration. 

### I 

### will be cueing to speak. So, I amgoing to try also at my (not audible) to allow people to people kind of jump into the cue and make certain comments. Ifthose comments are not short, you 

### will not be recognized again for another. I do want to keep this dynamic, but I want to be fair and let everybody speak. Youunderstand the dilemma there. That's what I amtrying to do up here. So, that's the basic thing that I amtrying to achieve. All ofyou I believe received a copy ofthe agenda. I am going to review now for those ofyou who wish to follow along withme. That's a very briefstatus update on the standards program. Follow these introductions and this agendareview. And then moving onto page two, we get into the subsistent aspects ofthe workshop to

### dEy. Input to the technical support document specifically Life Cycle Cost Analysis. And you can see the subelements that 

### will be described there. The basic format for these workshops tends to be briefpresentation, billeted presentation followed by 

### Qand A and discussion. So after Life Cycle Cost Analysis, mid-morning in there sometime, when it is appropriate we 

### will take a break. But we 

### will keep pressing onuntil mid morning ifwe can. That is ifwe 

### will keep working until we are required to stopby convenience. There is a lot to cover, we really want to keep the pace up the best we can. So, we'll take break mid-morning, after Life Cycle Cost analysis we 

### will talk about National Energy Impacts, followed by UtilitylEnvironmental Analysis. And as Carl said in 

### his comments you are onyour ownfor lunch and we 

### will take a full hour for lunch. We encourage you to stay close by, ifyou go to L'Enfant Pla;r,a sometimes it's hard to get backinthe span ofanhour. Whenever we break, what ever we say 

### will be a start time we 

### will start back up atthat time.


### 9After lunch, or whenever we get to it Other Analyses to be Performed, you can see them

listed there; and then after that Manufacturer Impact Analysis Methodology. Later on in the afternoon Manufacturer Impact Analysis-Cash Flow Analysis and then Manufacturer Interviews. An accounting of what came from those interviews. And then finally, the end of the day, The Schedule for conducting the Manufacturer Impact Analysis, you can subelements there. We will close out the day, doing Next Stop and Evaluation of the Workshop. We plan to adjourn by five. Sometimes we do better than that. We should however make it all the way through this agenda no later than five today. That is the plan. The agenda as written typically comes from Staff at DoE doing a significant about of, thinking about what should be covered and talking to people about what 

### additional should be covered. If items are not concluded in the agenda, we flag them, we will note them, we'll find the time appropriate to discuss at this time. Then we will find a way to fit those into the discussion. Yes, Bob. Bob Wisbey, Advance Transformer, Inc: Doug, there is one thing we would like to see added to the agenda. There are manufactures that are not ballast manufactures. There are lamp manufacturers. There manufactures of various components and materials which supply the ballast industry. We would like to see these people have an opportunity to express their thoughts and views in terms because they have not participated in the workshops before. We would like to see an agenda item added to that, prior to the Cash Flow Analysis. -Doug Brookman: Are you in a position to characterize the nature of their comments? I want to make sure it is kind of germane to the topic. Bob Wisbey: Yes. I think in most cases today, most companies would like an opportunity to



### 10 After lunch, orwhenever we get to it Other Analyses to be Perfonned, you can see them listed there; and then after that Manufacturer Impact Analysis Methodology. Later onin the afternoon Manufacturer Impact Analysis-Cash Flow Analysis and thenManufacturer Interviews. An accounting ofwhat came from those interviews. And then finally, the end· ofthe day, The Schedule for conducting the Manufacturer Impact Analysis, you can subelements there. We 

### will close out the day, doing Next Stop and Evaluation ofthe Workshop. We plan to adjourn by five. Sometimes we do better than that. We should however make it all the way throughthis agenda no later than five today. That is the plan. The agenda as written typically comes from Staffat DoE doing a significant about**o~** 

### thinking about what should be covered and talking to people about what additional should be covered. Ifitems are not concluded in the agenda, we flag them,
we 

### will note them, we'll find the time appropriate to discuss atthis time. Thenwe 

### will find
a way to fit those into the discussion. Yes, Bob. Bob Wisbey, Advance Transfonner, Inc: Doug, there is one thing we would like to see added to the agenda. There are manufactures that are not ballast manufactures. There are lamp manufacturers. There manufactures ofvarious components and materials which supply the ballast industry. We would like to see these people have an opportunity to express their thoughts and views 

### in terms because they have not participated in the workshops before. We would like to see
an agenda item added to that, prior to the Cash Flow Analysis

.

. Doug Brookman: Are you in a positionto characterize the nature oftheir comments? I want to make sure it is kind ofgennane to the topic. Bob Wisbey: Yes. I 

### think in most cases today, most companies would like an opportunity to

10 After lunch, orwhenever we get to it Other Analyses to be Perfonned, you can see them listed there; and then after that Manufacturer Impact Analysis Methodology. Later onin the afternoon Manufacturer Impact Analysis-Cash Flow Analysis and thenManufacturer Interviews. An accounting ofwhat came from those interviews. And then finally, the end· ofthe day, The Schedule for conducting the Manufacturer Impact Analysis, you can subelements there. We 

### will close out the day, doing Next Stop and Evaluation ofthe Workshop. We plan to adjourn by five. Sometimes we do better than that. We should however make it all the way throughthis agenda no later than five today. That is the plan. The agenda as written typically comes from Staffat DoE doing a significant about**o~** 

### thinking about what should be covered and talking to people about what additional should be covered. Ifitems are not concluded in the agenda, we flag them,
we 

### will note them, we'll find the time appropriate to discuss atthis time. Thenwe 

### will find
a way to fit those into the discussion. Yes, Bob. Bob Wisbey, Advance Transfonner, Inc: Doug, there is one thing we would like to see added to the agenda. There are manufactures that are not ballast manufactures. There are lamp manufacturers. There manufactures ofvarious components and materials which supply the ballast industry. We would like to see these people have an opportunity to express their thoughts and views 

### in terms because they have not participated in the workshops before. We would like to see
an agenda item added to that, prior to the Cash Flow Analysis

.

. Doug Brookman: Are you in a positionto characterize the nature oftheir comments? I want to make sure it is kind ofgennane to the topic. Bob Wisbey: Yes. I 

### think in most cases today, most companies would like an opportunity to

10make a very brief comment relevant to the impact on their industry or their company. A

brief comment for the record characterizing the impact of potential new regulations on their companies and industries. Doug Brookman: 

### You said before the Cash Flow Analysis? Bob Wispy: That would be the preference. That would be my recommended. Between C and D would be my preference because once we get into D it will be a very complex and detailed technical analysis. The other related request I would like to make is that since the manufactures impact portion of this is really only the afternoon portion, there are a number of people that will be attending the afternoon, I believe, who are not here this morning because they do not have a particular interest in this part of it. So I request that the introductions be redone again at the beginning of the afternoon session. Doug Brookman: We can certainly redo that. Additional comments, questions, thoughts on the agenda? I see none at this time. So we will let the Department entertain you request and we will come back on that. Any other preliminaries before we get into the agenda? Carl Adams: Let me just say that I can accommodate both of these requests that have been requested. By way of a status update, I am just going to show the schedule of events that hopefull lead to -- [Slides] you can see we are here on April the 28th at the workshop. And as I said earlier the status is we are behind schedule. We hope to have developed and send out the Manufacture Impact Analysis (MIA) Survey by June 11. We hope to visit manufactures sometime during the time frame of July. The Manufacture Impact Analysis is hoped to be available in late September. We will have another workshop in late October to discuss the Manufacture Impact Analysis results and the Life --Cycle Cost Analysis results. That will hopefully lead to the Notice of Proposed

11 make a very briefcomment relevant to the impact ontheir industry ortheir company. A briefcomment for the record characterizing the impact ofpotential new regulations on their companies and industries. Doug Brookman: You said before the CashFlow Analysis? BobWisbey: That would be the preference. That would be myrecommended. Between C and D would be my preference because once we get into D it 

### will be a very complex and detailed technical analysis. The otherrelated request I would like to make is that since the manufactures impact portion ofthis is really only the afternoonportion, there are a number ofpeople that 

### will be attending the afternoon, I believe, who are not here this morning because they do not have a particular interest in this part ofit. So I request that the introductions be redone again at the beginning ofthe afternoon session. Doug Brookman: We can certainly redo that. Additional comments, questions, thoughts onthe agenda? I see none at this time. So we 

### will let the Department entertainyou request and we 

### will come back onthat. Any otherpreliminaries before we get into the agenda? CarlAdams: Let mejust saythat I can accommodate both ofthese requests that have been requested. Byway ofa status update, I amjust going to showthe schedule ofevents that hopefulliead to
-- [Slides] you can see we are here onApril the 28th at the workshop. And as I said earlier the status is we are behind schedule. We hope to have developed and send outthe Manufacture Impact Analysis (MIA) Survey by June 

### 11. We hope to visit manufactures sometime during the time frame ofJuly. The Manufacture 1mpact Analysis is hoped to be available in late September. We 

### willhave another workshop in late October to discuss the Manufacture Impact Analysis results and the Life -Cycle Cost Analysis results. That 

### will hopefully lead to the Notice ofProposed

11 make a very briefcomment relevant to the impact ontheir industry ortheir company. A briefcomment for the record characterizing the impact ofpotential new regulations on their companies and industries. Doug Brookman: You said before the CashFlow Analysis? BobWisbey: That would be the preference. That would be myrecommended. Between C and D would be my preference because once we get into D it 

### will be a very complex and detailed technical analysis. The otherrelated request I would like to make is that since the manufactures impact portion ofthis is really only the afternoonportion, there are a number ofpeople that 

### will be attending the afternoon, I believe, who are not here this morning because they do not have a particular interest in this part ofit. So I request that the introductions be redone again at the beginning ofthe afternoon session. Doug Brookman: We can certainly redo that. Additional comments, questions, thoughts onthe agenda? I see none at this time. So we 

### will let the Department entertainyou request and we 

### will come back onthat. Any otherpreliminaries before we get into the agenda? CarlAdams: Let mejust saythat I can accommodate both ofthese requests that have been requested. Byway ofa status update, I amjust going to showthe schedule ofevents that hopefulliead to
-- [Slides] you can see we are here onApril the 28th at the workshop. And as I said earlier the status is we are behind schedule. We hope to have developed and send outthe Manufacture Impact Analysis (MIA) Survey by June 

### 11. We hope to visit manufactures sometime during the time frame ofJuly. The Manufacture 1mpact Analysis is hoped to be available in late September. We 

### willhave another workshop in late October to discuss the Manufacture Impact Analysis results and the Life -Cycle Cost Analysis results. That 

### will hopefully lead to the Notice ofProposed

11

### Rulemaking in February 1999, and there will be a Public Hearing following that in the

March time frame. And the Final Rule hopefully in October 1999. Again the purpose this workshop is to hear the views of any persons and gather information concerning the inputs to the Life Cycle Cost, National Energy Impact UtilityAnalysis and the methodology for conducting the Manufacturing Impact Analysis for the Technical Support Document as the proposed rule on Fluorescent Lamp Ballast. Now making our way into our first topic. Again we have a lot of information to go over today. Hopefully we can move along. As I am sure all of you know, the original Technical Support Document was completed in November 1993. It was published in March of 1994 as part of the HR Proposed Rule. Some call this the black box era. More importantly, no one outside the walls of DoE saw the analysis or the inputs to the analysis prior to its publication. After the Technical Support Document was published there were a series of meetings which followed the publication to discuss how the analysis was done and what the inputs were that went into the analysis. As a result of these meetings there was a revised analysis in February 1996 for the Life Cycle Cost and the Energy Savings. In dune of 1996 a Public Workshop was conducted on the new reports followed by the publication in July 1997 of the Process Improvement Rule, which indicated the Department's commitment to implementing a better, more inclusive and open rulemaking process. For this particular rule, the Lamp Ballast Rule, a series of stake 

### over interviews was planned with the Department's Staff member visiting the manufactures and other interested parties. The information drawn from these interviews contributed to a new price survey. Additionally, a variability analysis on key parameters was to be concluded. The National Energy Savings would be presented in more detail, for example using forecast. It would also contain a energy forecast using different electricity price projections. The second draft was published in July 1997 and released for comment. A distributors survey has been performed to check ballast prices. There's also been additional research on ballast lifetimes; an analysis of the

12 Rulemaking in February 1999, and there 

### will be a Public Hearing following that in the Marchtime frame. And the Final Rule hopefully in October 1999. Againthe purpose this workshop is to hear the views ofany persons and gather information concerning the inputs to the Life Cycle Cost, NationalEnergy Impact UtilityAnalysis andthe methodology for conducting the Manufacturing Impact Analysis for the Technical Support Document asthe proposedrule onFluorescent Lamp Ballast. Nowmaking our way into our first topic. Again we have a lot ofinformationto go over today. Hopefully we canmove along. 

### As I am sure all ofyou know, the original Technical Support Document was completed inNovember 1993. Itwas published in March of1994 as part ofthe HRProposed Rule. Some call this the black box era. More importantly, no one outside the walls ofDoE sawthe analysis orthe inputs to the analysis prior to its publication. After the Technical Support Document was published there were
a series ofmeetings which followed the publicationto discuss howthe analysis was done and what the inputs were that went into the analysis. 

### As a result ofthese meetings there was a revised analysis 

### inFebruary 1996 for the Life Cycle Cost and the Energy Savings. In June of1996 a Public Workshop was conducted onthe newreports followed bythe publication in July 1997 ofthe Process Improvement Rule, which indicated the Department's commitment to implementing a better, more inclusive and open rulemaking process. Forthis particular rule, the Lamp Ballast Rule, a series ofstake
over interviews was planned withthe Department's Staffmember visiting the manufactures and other interested parties. The information drawn from these interviews contributed to a newprice survey. Additionally, a variability analysis on key parameters wasto be concluded. The National Energy Savings would be presented in more detail, for example using forecast. Itwould also contain a energy forecast using different electricityprice projections. The second 

### draft was published in July 1997 and released for comment. A distributors survey 

### has beenperformed to check ballast prices. There's also been additional research onballast lifetimes; an analysis ofthe
12 Rulemaking in February 1999, and there 

### will be a Public Hearing following that in the Marchtime frame. And the Final Rule hopefully in October 1999. Againthe purpose this workshop is to hear the views ofany persons and gather information concerning the inputs to the Life Cycle Cost, NationalEnergy Impact UtilityAnalysis andthe methodology for conducting the Manufacturing Impact Analysis for the Technical Support Document asthe proposedrule onFluorescent Lamp Ballast. Nowmaking our way into our first topic. Again we have a lot ofinformationto go over today. Hopefully we canmove along. 

### As I am sure all ofyou know, the original Technical Support Document was completed inNovember 1993. Itwas published in March of1994 as part ofthe HRProposed Rule. Some call this the black box era. More importantly, no one outside the walls ofDoE sawthe analysis orthe inputs to the analysis prior to its publication. After the Technical Support Document was published there were
a series ofmeetings which followed the publicationto discuss howthe analysis was done and what the inputs were that went into the analysis. 

### As a result ofthese meetings there was a revised analysis 

### inFebruary 1996 for the Life Cycle Cost and the Energy Savings. In June of1996 a Public Workshop was conducted onthe newreports followed bythe publication in July 1997 ofthe Process Improvement Rule, which indicated the Department's commitment to implementing a better, more inclusive and open rulemaking process. Forthis particular rule, the Lamp Ballast Rule, a series ofstake
over interviews was planned withthe Department's Staffmember visiting the manufactures and other interested parties. The information drawn from these interviews contributed to a newprice survey. Additionally, a variability analysis on key parameters wasto be concluded. The National Energy Savings would be presented in more detail, for example using forecast. Itwould also contain a energy forecast using different electricityprice projections. The second 

### draft was published in July 1997 and released for comment. A distributors survey 

### has beenperformed to check ballast prices. There's also been additional research onballast lifetimes; an analysis ofthe
12impact of utility DSM programs on the fluorescent lamp ballast market; and the creation

of a spreedsheet model to be used in parallel with the forecasting model. It is hoped that these additions will strengthen the analytical foundations of the ballast rulemaking by providing the improved methods, more accurate data, and a more comprehensive picture of the lamp ballast industry. I would now like to introduce Isaac Turiel of Lawrence Berekely National Laboratory who conducts the analysis under the direction DoE. And he will further discuss the proposed analysis. Isaac Turiel, Lawrence Berekely National Laboratory: Good morning everybody. Thank you. I see a lot of familiar faces here. This is a very large team effort. [Slides with Reference entitled Public Workshop on Fluorescent Lamp Ballasts presentation by Appliance & Lighting Standards Group at Lawrence Berekeley National Laboratory. And the next view shows the people who have been working on this project. Three of us are here today, myself, Barbara Atkinson and Diane Fisher. First part of the presentation deals with the Life-Cycle Cost and in regards to cost, the first cost we look at are the five most important parameters that are inputs to the analysis, and the last part deals with the sensitivity analyses that we do, that is the variability and uncertainty analysis. And that is the part that Diane Fisher will present. One of the variables is say what we've done before, what's proposed for the Technical Support Document the next analysis, and what is the rationale for making those choices. The first parameter is the Annual Lighting Hours and for this one we just have this one slide here and it shows what values we have chosen for the operating hours for lamps. And you can see they vary from 3600 hours for the lowest in the commercial sector up to a maximum of 5000 hours for 8 foot high output lamp in the industrial sector. And we also did a single-value sensitivity analysis for a low of 2500 hours and a high of 8000 hours for each ballast type. In addition, we did a probability-based sensitivity analysis and we used lighting hours distribution from Xenergy's database they produced that we purchased. The proposal for the TSD is that no change is being made for lighting


### 13 impact ofutility DSM programs onthe fluorescent lamp ballast market; and the creation ofa spreedsheet modelto be used inparallel withthe forecasting model. It is hoped that these additions 

### will strengthen the analytical foundations ofthe ballast rulemaking by providing the improved methods, more accurate data, and a more comprehensive picture ofthe lamp ballast industry. I would now like to introduce Isaac Turiel ofLawrence BerekelyNational Laboratory who conducts the analysis under the direction DoE. And he 

### will further discuss the proposed analysis. Isaac Turiel, Lawrence BerekelyNational Laboratory: Good morning everybody. Thank you. I see a lot offamiliar faces here. This is a very large teameffort. [Slides withReference entitled Public Workshop on Fluorescent Lamp Ballasts presentationby Appliance & Lighting Standards Group at Lawrence BerekeleyNationalLaboratory. And the next view shows the people who have beenworking onthis project. Three ofus are here today, myself: BarbaraAtkinson and Diane Fisher. First part ofthe presentation deals withthe Life-Cycle Cost and in regards to cost, the first cost we look at are the five most important parameters that are inputs to the analysis, and the last part deals withthe sensitivity analyses that we do, that is the variability and uncertainty analysis. And that is the part that Diane Fisher 

### will present. One ofthe variables is say what we've done before, what's proposed for the Technical Support Document the next analysis, and what is the rationale for making those choices. The first parameter is the Annual Lighting Hours and for this one wejust have this one slide here and it shows what values we have chosenfor the operating hours for lamps. And you can see they vary from 3600 hours for the lowest inthe commercial sectorup to a maximum of5000 hours for 8 foot high output lamp inthe industrial sector. And we also did a single-value sensitivity analysis for a low of2500 hours and a high of 8000 hours for eachballast type. In addition, we did a probability-based sensitivity analysis and we used lighting hours distribution from Xenergy's database they produced that we purchased. The proposal for the TSD is that no change is being made for lighting
13 impact ofutility DSM programs onthe fluorescent lamp ballast market; and the creation ofa spreedsheet modelto be used inparallel withthe forecasting model. It is hoped that these additions 

### will strengthen the analytical foundations ofthe ballast rulemaking by providing the improved methods, more accurate data, and a more comprehensive picture ofthe lamp ballast industry. I would now like to introduce Isaac Turiel ofLawrence BerekelyNational Laboratory who conducts the analysis under the direction DoE. And he 

### will further discuss the proposed analysis. Isaac Turiel, Lawrence BerekelyNational Laboratory: Good morning everybody. Thank you. I see a lot offamiliar faces here. This is a very large teameffort. [Slides withReference entitled Public Workshop on Fluorescent Lamp Ballasts presentationby Appliance & Lighting Standards Group at Lawrence BerekeleyNationalLaboratory. And the next view shows the people who have beenworking onthis project. Three ofus are here today, myself: BarbaraAtkinson and Diane Fisher. First part ofthe presentation deals withthe Life-Cycle Cost and in regards to cost, the first cost we look at are the five most important parameters that are inputs to the analysis, and the last part deals withthe sensitivity analyses that we do, that is the variability and uncertainty analysis. And that is the part that Diane Fisher 

### will present. One ofthe variables is say what we've done before, what's proposed for the Technical Support Document the next analysis, and what is the rationale for making those choices. The first parameter is the Annual Lighting Hours and for this one wejust have this one slide here and it shows what values we have chosenfor the operating hours for lamps. And you can see they vary from 3600 hours for the lowest inthe commercial sectorup to a maximum of5000 hours for 8 foot high output lamp inthe industrial sector. And we also did a single-value sensitivity analysis for a low of2500 hours and a high of 8000 hours for eachballast type. In addition, we did a probability-based sensitivity analysis and we used lighting hours distribution from Xenergy's database they produced that we purchased. The proposal for the TSD is that no change is being made for lighting
13hours

. There will be some more information presented on this subject, as I said a little

bit later
. This next slide I would like to talk about is Ballast Prices. What we did is for the 1997 report was that the average prices were obtained from a survey that was done for LBNL by Gough and Associates (not audible) LRI, Lighting Research Institute. And in the survey ballast manufactures and fixture manufactures were asked to estimate OEM prices and Lighting Maintenance Companies to estimate contractor prices. And with mark

-ups that were developed in the survey, these were used to generate the end-user price. It was done for three different distribution channels. We did not perform a price sensitivities analysis in that last channel

. There were a lot of comments on the markups that we used to generate the end

-user prices and what we tried to do was get some more information on ballast prices. And what we did was conducted a survey to do this in a more direct manner. And what we've done as we contacted electrical distributors. All together thirty were contacted , and twenty-two of those responded with pricing information

. And that information is in your hard copy handout, the table there which shows each of the individual responses that we received. And they were asked to assume the quote for this price was at least 100 ballasts, and they were for a 2-lamp 120 volt fixtures. I want to point out that not all distributors provided quotes for each of the five ballasts types. Mike Stein, MagneTek, Inc: As we go through this is it appropriate to comment? Isaac Turiel: Maybe for each parameter might be the best way to do it. Mike Stein: So once you go through the whole price analysis. Isaac Turiel: Yes, maybe some things might be answered as I go through the other ones. Then after that, that would be good before we go to the next parameter.



### 14 hours. There 

### will be some more informationpresented onthis subject, as I said a little bit later. This next slide I would like to talk about is Ballast Prices. What we did is for the 1997 report was that the average prices were obtained from a surveythat was done for LBNL by Gough and Associates (not audible) 

### LRI, Lighting ResearchInstitute. And in the survey ballast manufactures and fixture manufactures were asked to estimate OEM prices and Lighting Maintenance Companies to estimate contractorprices. And with mark-ups that were developed in the survey, these were used to generate the end-user price. It was done for three different distribution channels. We did not perform a price sensitivities analysis inthat last channel. There were a lot ofcomments onthe markups that we used to generate the end-user prices and what wetried to do was get some more information onballast prices. And what we did was conducted a surveyto do this in a
more direct manner. And what we've done as we contacted electrical distributors. 

### All together thirty were contacted, and twenty-two ofthose responded with pricing information. And that information is inyour hard copy handout, the table there which shows each ofthe individual responses that we received. And they were asked to assume the quote for this price 

### was at least 100 ballasts, 

### and they were for a 2-lamp 120 volt fixtures. I want to point out that not all distributors provided quotes for each ofthe five ballasts types. Mike Stein, MagneTek, Inc: As we go throughthis is it appropriate to comment? Isaac Turiel: Maybe for eachparameter might be the best way to do it. Mike Stein: So once you go through the whole price analysis. 

### Isaac Turiel: Yes, maybe some things might be answered as I go throughthe other ones. Then after that, that would be good before we go to the next parameter.
14 hours. There 

### will be some more informationpresented onthis subject, as I said a little bit later. This next slide I would like to talk about is Ballast Prices. What we did is for the 1997 report was that the average prices were obtained from a surveythat was done for LBNL by Gough and Associates (not audible) 

### LRI, Lighting ResearchInstitute. And in the survey ballast manufactures and fixture manufactures were asked to estimate OEM prices and Lighting Maintenance Companies to estimate contractorprices. And with mark-ups that were developed in the survey, these were used to generate the end-user price. It was done for three different distribution channels. We did not perform a price sensitivities analysis inthat last channel. There were a lot ofcomments onthe markups that we used to generate the end-user prices and what wetried to do was get some more information onballast prices. And what we did was conducted a surveyto do this in a
more direct manner. And what we've done as we contacted electrical distributors. 

### All together thirty were contacted, and twenty-two ofthose responded with pricing information. And that information is inyour hard copy handout, the table there which shows each ofthe individual responses that we received. And they were asked to assume the quote for this price 

### was at least 100 ballasts, 

### and they were for a 2-lamp 120 volt fixtures. I want to point out that not all distributors provided quotes for each ofthe five ballasts types. Mike Stein, MagneTek, Inc: As we go throughthis is it appropriate to comment? Isaac Turiel: Maybe for eachparameter might be the best way to do it. Mike Stein: So once you go through the whole price analysis. 

### Isaac Turiel: Yes, maybe some things might be answered as I go throughthe other ones. Then after that, that would be good before we go to the next parameter.
14Howard Wolfinan, Motorola Lighting, Inc.:

And where is the hard copy you referred to? Isaac Turiel: 

### The package there in from of you I'm not sure. (Discussion about pages 7, 8, and 11 not being duplicated fully.) Our apologies to you.I will have to read some of those numbers until we get the inserts. I am sorry about that.What's here is the summary and the results for five different ballast types. I will read what they are. Starting from the left hand side, this is all for 2-lamp ballasts. And the first one is F40T12, Magnetic; next one is F40T12, Electronic; F32T8, Electronic; then we have F96T12, Magnetic; and F96T12, Electronic. Right below is the number of quotes -- the highest is 21 and the lowest on the right hand side is 9. That's the range of the number of quotes, responses we received, For the next row shows what the average value is plus 13%. The reason for 13% was the markup we got from the LRI study that was used from the contractors to the end-user. A 13% markup. So we added that into the average. You will be getting this momentarily. The next row is what the price was in the draft report. And then the row below it is the price difference (percentage). I will just say a little bit about the price difference between the draft report and the average plus 13%. We found that all the numbers from the survey are higher than the numbers from the draft report, except for the second one which is very low, the F40T12 Electronic is 1.4% and the others are on the order of 20% higher. Next slide, just repeats the data on top and the new information is on the bottom. What we have done is if you will look at the Delta Price between the electronic ballast and the magnetic ballast but for the 2F40T12 and the 2F96T12. So what we find for the price difference looking at the 4 foot T12 is that the Draft Report was $10.92 and in the survey it's $9.47. So that's the Delta Price come's out to be lower by around 12%. An 8 foot T12 they are very close to each other. $10.59 for the Draft



### 15 Howard Wolfinan, MotorolaLighting, Inc.: And where is the hard copy you referred to? Isaac Turiel: The package there in from ofyou I'mnot sure. (Discussion about pages 7,8, and 11 not being duplicated fully.) Our apologies to you.! 

### will have to read some ofthose numbers until
we getthe inserts. I am sorry about that.What's here is the summary and the results for five different ballast types. I willread what they are. Starting :fromthe left hand side, this is all for 2-lamp ballasts. And the first one is F40T12, Magnetic; next one is F40T12, Electronic; F32T8, Electronic; thenwe have F96T12, Magnetic; and F96T12, Electronic. Right below is the number ofquotes
-- the highest is 21 and the lowest onthe right hand side is 9. That's the range ofthe number ofquotes, responses we received, For the next row shows what the average value is plus 13%. The reason for 13% was the markup we got from the LRI study that was used from the contractors to the end-user. A 13% markup. So we added that into the average. You

### will be getting this momentarily. The next row is what the price was inthe draft report. And thenthe row below it is the price difference (percentage). I 

### willjust say a little bit about the pnce difference between the draft report and the average plus 13%. We found that all the numbers :fromthe survey are higher thanthe numbers :fromthe draft report, except for the second one whichis very low, the F40T12 Electronic is 1.4% andthe others are onthe order of20% higher. Next slide,justrepeats the data ontop andthe new information is on the bottom. What we have done is 

### if you 

### will look atthe DeltaPrice between the electronic ballast and the magnetic ballast but for the 2F40T12 and the 2F96T12. So what
we find for the price difference looking at the 4 foot T12 is that the Draft Report was $lO.92 and in the survey it's $9.47. So that's the DeltaPrice come's out to be lower by around 12%. An 

### 8 foot T12 they are very close to each other. $lO.59 for the Draft

15 Howard Wolfinan, MotorolaLighting, Inc.: And where is the hard copy you referred to? Isaac Turiel: The package there in from ofyou I'mnot sure. (Discussion about pages 7,8, and 11 not being duplicated fully.) Our apologies to you.! 

### will have to read some ofthose numbers until
we getthe inserts. I am sorry about that.What's here is the summary and the results for five different ballast types. I willread what they are. Starting :fromthe left hand side, this is all for 2-lamp ballasts. And the first one is F40T12, Magnetic; next one is F40T12, Electronic; F32T8, Electronic; thenwe have F96T12, Magnetic; and F96T12, Electronic. Right below is the number ofquotes
-- the highest is 21 and the lowest onthe right hand side is 9. That's the range ofthe number ofquotes, responses we received, For the next row shows what the average value is plus 13%. The reason for 13% was the markup we got from the LRI study that was used from the contractors to the end-user. A 13% markup. So we added that into the average. You

### will be getting this momentarily. The next row is what the price was inthe draft report. And thenthe row below it is the price difference (percentage). I 

### willjust say a little bit about the pnce difference between the draft report and the average plus 13%. We found that all the numbers :fromthe survey are higher thanthe numbers :fromthe draft report, except for the second one whichis very low, the F40T12 Electronic is 1.4% andthe others are onthe order of20% higher. Next slide,justrepeats the data ontop andthe new information is on the bottom. What we have done is 

### if you 

### will look atthe DeltaPrice between the electronic ballast and the magnetic ballast but for the 2F40T12 and the 2F96T12. So what
we find for the price difference looking at the 4 foot T12 is that the Draft Report was $lO.92 and in the survey it's $9.47. So that's the DeltaPrice come's out to be lower by around 12%. An 

### 8 foot T12 they are very close to each other. $lO.59 for the Draft

15

### Draft Report and $10.34 just slightly lower on the survey. Those are the results that we

obtained form the quotes. Howard Wolfinan: What was the time period during which these quotes were gathered? Isaac Turiel: 

### Over the last twelve months. So the proposal in the TSD are the following: Use the Draft Report prices as input to the TSD. To do a sensitivity analysis with high and low prices obtained from the telephone survey. And we would also do a probability based sensitivity analysis using the distribution of the telephone survey prices. Then we turn to rationale. Although the price difference between the magnetic and electronic is somewhat lower in the phone survey no change in prices is proposed for the TSD. But also since the ballast price are a very important parameter in the LCC analysis, this time we will do a sensitivity analysis on that. It was not done on the previous analysis. I will stop here for a second to see if there are any questions on ballast prices. Mike Rivest, Arthur D. Little, Inc.: Trying to comment on direct material we had the meeting not what we've presented here but I think it is very important that we understand your rationale and try to make sense of what you just proposed. The statement was made that the ballast manufactures were asked to estimate OEM to distributors markups and they estimated 35 to 40% for magnetic ballasts and 10% for electronic ballasts. We are trying to figure out when that was asked of them? The survey asked a completely different question. The survey asked how much the industry average OEM price using both tables, we estimate the average industry electrical distributor price to be. These are apples and oranges -- to different (not audible). Now let me try to explain this and what happened to this. So the first question we answered was what was the ballast manufacture price, the OEM (not audible) , it's right here. Then what would you estimate


### 16 Draft Report and $10.34just slightly lower onthe survey. Those are the results that we obtained form the quotes. Howard Wol:finan: What was the time period during whichthese quotes were gathered? Isaac Turiel: Over the last twelve months. So the proposal inthe TSD are the following: Use the Draft Report prices as input to the TSD. To do a sensitivity analysis with high and low prices obtained from the telephone survey. And we would also do a probability based sensitivity analysis using the distribution ofthe telephone survey prices. Thenwe turnto rationale. Althoughthe price difference betweenthe magnetic and electronic is somewhat lower in the phone survey no change inprices is proposed for the TSD. But also since the ballast price are a very important parameter in the LCC analysis, this time we 

### will do a sensitivity analysis onthat. It
was not done onthe previous analysis. I 

### will stop here for a second to see ifthere are any questions onballast prices. Mike Rivest, Arthur D. Little, Inc.: Trying to comment ondirect material we had the meeting not what we've presented here but I think it is very importent 

### that we understand your rationale and try to make sense ofwhat youjustproposed. The statement was made thatthe ballast manufactures were asked to estimate OEMto distributors markups and they estimated 35 to 40% for magnetic ballasts and 10% for electronic ballasts. We are trying to figure out whenthat was asked ofthem? The survey asked a completely different question. The survey asked howmuchthe industry average OEMprice using bothtables, we estimate the average industry electrical distributor price to be. These are apples and oranges -- to different (not audible). Now let me tryto explain this and what happened to this. So the first question we answered was what was the ballast manufacture price, the OEM (not audible) , it's right here. Thenwhat would you estimate
16 Draft Report and $10.34just slightly lower onthe survey. Those are the results that we obtained form the quotes. Howard Wol:finan: What was the time period during whichthese quotes were gathered? Isaac Turiel: Over the last twelve months. So the proposal inthe TSD are the following: Use the Draft Report prices as input to the TSD. To do a sensitivity analysis with high and low prices obtained from the telephone survey. And we would also do a probability based sensitivity analysis using the distribution ofthe telephone survey prices. Thenwe turnto rationale. Althoughthe price difference betweenthe magnetic and electronic is somewhat lower in the phone survey no change inprices is proposed for the TSD. But also since the ballast price are a very important parameter in the LCC analysis, this time we 

### will do a sensitivity analysis onthat. It
was not done onthe previous analysis. I 

### will stop here for a second to see ifthere are any questions onballast prices. Mike Rivest, Arthur D. Little, Inc.: Trying to comment ondirect material we had the meeting not what we've presented here but I think it is very importent 

### that we understand your rationale and try to make sense ofwhat youjustproposed. The statement was made thatthe ballast manufactures were asked to estimate OEMto distributors markups and they estimated 35 to 40% for magnetic ballasts and 10% for electronic ballasts. We are trying to figure out whenthat was asked ofthem? The survey asked a completely different question. The survey asked howmuchthe industry average OEMprice using bothtables, we estimate the average industry electrical distributor price to be. These are apples and oranges -- to different (not audible). Now let me tryto explain this and what happened to this. So the first question we answered was what was the ballast manufacture price, the OEM (not audible) , it's right here. Thenwhat would you estimate
16

### the difference be from this price to this price, ballast manufacture and distributors.

And that's information we gave in the survey. What was indicated in the write up was this direction for the price. What was the different between the OEM and the distributor markup? And there is no such markup We only sell to two channels. We sell to the OEM. We sell to the distributor. And we are interested that you did a survey from this. We never had a price problem with this last line information, the data that you published on distributor price is reasonable. It represents 37% of the market. The problem is that 63% of the market, we have prices -- the magnetic ballast was marked up 84% and the electronic ballast marked 38%. And that's the channel for the year. And then there is a dotted line and we don't know what happens there as far as these prices or here or here. So you spend so much time on a survey that I don't know had any comments with the numbers you put in there. It would have been more interesting if you went to the distributor and brought fixtures with those ballast in them. And then we maybe would have had a better idea of the fixture cost. You go buy the same fixture with a magnetic ballast and an electronic ballast and then you know what the fixture price is here. You know what the ballast manufacture sells the fixture to OEM, and then maybe we'll have an idea of what this is. And this is the number that you can (not audible), the end-user price right here on the doted line. And you didn't try to solve that problem (not audible). Isaac Turiel: I think it is reasonable what said. But I think we were trying to answer part of the question, how reasonable were the prices? And trying to get it the most direct way. In the previous analysis by LRI, I didn't do the original work on that. But my memory is that we didn't really get distributor prices. We had to go and get distributor prices. So, therefore there was new work done. We didn't have distributor pricing. We were trying to get those for the survey. In addition to that, yes, it makes sense to do what you said to do. Also try to get with the fixture, with the ballast in the fixture. I agree with that..


### 17 the difference be from this price to this price, ballast manufacture and distributors. Andthat's information we gave inthe survey. What was indicated in the write up was this direction for the price. What wasthe different betweenthe OEM and the distributor markup? And there is no such markup We only sell to two channels. We sell to the OEM. We sell to the distributor. And we are interested that you did a survey from this. We never had a price problemwiththis last line information, the data that youpublished
on distributorprice is reasonable. It represents 37% ofthe market. The problem is that 63% ofthe market, wehave prices -- the magnetic ballast was marked up 84% and the electronic ballast marked 38%. And that's the channel for the year. Andthenthere is a dotted line and we don'tknow what happens there as far as these prices orhere orhere. So you spend so muchtime on a survey that I don't knowhad any comments withthe numbers you put inthere. Itwould have beenmore interesting ifyou went to the distributor and brought fixtures withthose ballast in them And thenwe maybe would have had a better idea ofthe fixture cost. You go buythe same fixture with a magnetic ballast and an electronic ballast and then you know what the fixture price is here. You know what the balla'3t manufacture sells the fixture to OEM, and then maybe we'll have an idea ofwhat this is. And this is the number that you can(not audible), the end-user price right here onthe doted line. And you didn't tryto solve that problem (not audible). Isaac Turiel: I think it is reasonable what said. But I think we were trying to answer part of the question, howreasonable were the prices? And trying to get it the most direct way. Inthe previous analysis byLRI, I didn't do the original work onthat. But my memory is that we didn't really get distributor prices. We hadto go and get distributor prices. So, therefore there was new work done. We didn't have distributor pricing. We
were trying to get those for the survey. In additionto that, yes, it makes sense to do what you said to do. Also try to get withthe fixture, with the ballast inthe fixture. I agree with that

..
17 the difference be from this price to this price, ballast manufacture and distributors. Andthat's information we gave inthe survey. What was indicated in the write up was this direction for the price. What wasthe different betweenthe OEM and the distributor markup? And there is no such markup We only sell to two channels. We sell to the OEM. We sell to the distributor. And we are interested that you did a survey from this. We never had a price problemwiththis last line information, the data that youpublished
on distributorprice is reasonable. It represents 37% ofthe market. The problem is that 63% ofthe market, wehave prices -- the magnetic ballast was marked up 84% and the electronic ballast marked 38%. And that's the channel for the year. Andthenthere is a dotted line and we don'tknow what happens there as far as these prices orhere orhere. So you spend so muchtime on a survey that I don't knowhad any comments withthe numbers you put inthere. Itwould have beenmore interesting ifyou went to the distributor and brought fixtures withthose ballast in them And thenwe maybe would have had a better idea ofthe fixture cost. You go buythe same fixture with a magnetic ballast and an electronic ballast and then you know what the fixture price is here. You know what the balla'3t manufacture sells the fixture to OEM, and then maybe we'll have an idea ofwhat this is. And this is the number that you can(not audible), the end-user price right here onthe doted line. And you didn't tryto solve that problem (not audible). Isaac Turiel: I think it is reasonable what said. But I think we were trying to answer part of the question, howreasonable were the prices? And trying to get it the most direct way. Inthe previous analysis byLRI, I didn't do the original work onthat. But my memory is that we didn't really get distributor prices. We hadto go and get distributor prices. So, therefore there was new work done. We didn't have distributor pricing. We
were trying to get those for the survey. In additionto that, yes, it makes sense to do what you said to do. Also try to get withthe fixture, with the ballast inthe fixture. I agree with that

..
17Doug Brookman:

Mike, will you say again for the record. Mike Rivest: 

### The existing information is the ballast price to the end user as it goes through the fixture channel

. We sell it to the OEM fixture manufacture and they put it in a fixture and they we're trying to determine the ballast price in the fixture. Because if you sold it as ballast, you could have sold it with the fixture. So we didn't have any idea, and obviously the survey was to survey the fixture manufactures and you didn't get information? Were they on the list of survey originally (two persons speaking at same time). Isaac Turiel: There was very little response at all. Gene Foley, Alliance to Save Energy: (not audible) mark up than the distributor? Eugene Margolis, DoE: 

### There are parallel distribution chains from the distributor down to the end user. The survey is responding to one distribution (not audible) individual ballast. Almost 2/3's of the market, 2/3s of the ballast price study (not audible) in a ballast but a fixture that includes a ballast so that we could determine the mark up on the on the ballast portion of the fixture product to acquire a modest ... Gene Foley: But you still haven't answered my question

. The mark up in the fixture manufacture with the additional component, you are saying is going to be diff erent for that ... Eugene Margolis: The mark up between the OEM and the distributor and there are the mark ups on the fixture (not audible). Then you determine of that make up on the fixture what portion of that will the distributor (not audible) ballast within a fixture. Actually, that is


### 18 Doug Brookman: Mike, 

### will you say again for the record. Mike Rivest: The existing information is the ballast price to the enduser as it goes throughthe fixture channel. We sell it to the OEM fixture manufacture and they put it in a fixture and they we're trying to determine the ballast price in the fixture. Because 

### ifyou sold it as ballast, you could have sold it withthe fixture. So we didn't have any idea, and obviously the survey was to surveythe fixture manufactures and you didn't get an information? Were they onthe list ofsurvey originally (two persons speaking at same time). Isaac Turiel: There was very little response at all. Gene Foley, Alliance to Save Energy: (not audible) mark up thanthe distributor? Eugene Margolis, DoE: There are pE<Iallel distribution chains from the distributor downto the end user. The survey is responding to one distribution (not audible) individual ballast. Almost 2/3's ofthe market, 2/3s ofthe ballast price study (not audible) in a ballast but a fixture that includes a ballast so that we could determine the mark up onthe
onthe ballast portion ofthe fixture product to acquire a modest

... Gene Foley: Butyou still haven't answered my question. Themark up in the fixture manufacture withthe additional component, you are saying is going to be different for that

... Eugene Margolis: The mark up betweenthe OEMand the distributor and there are the mark ups onthe fixture (not audible). Thenyou determine ofthat make up onthe fixture what portion of that 

### will the distributor (not audible) ballast within a fixture. Actually, that is


### 18 Doug Brookman: Mike, 

### will you say again for the record. Mike Rivest: The existing information is the ballast price to the enduser as it goes throughthe fixture channel. We sell it to the OEM fixture manufacture and they put it in a fixture and they we're trying to determine the ballast price in the fixture. Because 

### ifyou sold it as ballast, you could have sold it withthe fixture. So we didn't have any idea, and obviously the survey was to surveythe fixture manufactures and you didn't get an information? Were they onthe list ofsurvey originally (two persons speaking at same time). Isaac Turiel: There was very little response at all. Gene Foley, Alliance to Save Energy: (not audible) mark up thanthe distributor? Eugene Margolis, DoE: There are pE<Iallel distribution chains from the distributor downto the end user. The survey is responding to one distribution (not audible) individual ballast. Almost 2/3's ofthe market, 2/3s ofthe ballast price study (not audible) in a ballast but a fixture that includes a ballast so that we could determine the mark up onthe
onthe ballast portion ofthe fixture product to acquire a modest

... Gene Foley: Butyou still haven't answered my question. Themark up in the fixture manufacture withthe additional component, you are saying is going to be different for that

... Eugene Margolis: The mark up betweenthe OEMand the distributor and there are the mark ups onthe fixture (not audible). Thenyou determine ofthat make up onthe fixture what portion of that 

### will the distributor (not audible) ballast within a fixture. Actually, that is


### 18

### fairly simple to do. Because the ballast is adds (not audible)

(there are about three or four persons speaking all a one time) Mark Perlis, DSMO: The point that you (not audible) vastly different mark up for magnetic ballast and the electronic ballast in these analysis. Typically in the study used 84% mark up for magnetic ballasts and 38% for electronic ballasts. We believe that the (not audible) the new work that was presented relates to the pricing ballast sold (not audible) We never objected to the pricing of (not audible) Doug Brookman: 

### And I am sure the Department and LBNL would like to hear what your thoughts are about what the numbers might actually be. Isaac Turiel: Do you feel the end user prices are inaccurate? I know these mark ups are inaccurate. I certainly understand that. 

### Bob Wisbey: Yes, we do feel the end user price are inaccurate because (not audible) use the inaccurate mark up. In October we provided a very extensive (not audible) of what we thought was (not audible) Our opinion have not changed on this. The work that you have done here that you've got (not audible) touches on an area that reconfirm that the distributor prices were for ballast sales as opposed to ballast incorporated in fixtures, was correct and we are (not audible) in the previous study. But the dominant (not audible) i n your study 63% of the ballast to different users and we agree with the 63% as being a reasonable estimate. 63% of the ballast to different users as part of (not audible) Isaac Turiel: 

### I am still not clear about the differential price between the magnetic and electronic. I haven't really got a picture yet. Are you think it should be higher, lower, the same? Just the differential. The difference.


### 19 fairly simple to do. Because the ballast is adds (not audible) (there are about three or four persons speaking all a one time) MarkPerlis, DSMO: The point that you (not audible) vastly different mark up for magnetic ballast and the electronic ballast inthese analysis. Typically inthe studyused 84% markup for magnetic· ballasts and 38% for electronic ballasts. We believe that the (not audible) the new work that waspresentedrelates to the pricing ballast sold (not audible) We never objected to the pricing of (not audible) Doug Brookman: And I am sure the Department and LBNL would like to hear whatyour thoughts
are about whatthe numbers might actually be. Isaac Turiel: Do you feel the end user prices are inaccurate? I knowthese markups are inaccurate. I certainly understand that. BobWisbey: Yes, we do feel the end user price are inaccurate because (not audible) use the inaccurate mark up. In October we provided a very extensive (not audible) ofwhat we thought was (not audible) Our opinionhave not changed onthis. The workthat you have done here that you've got (not audible) touches onan areathat reconfinnthat the distributor prices were for ballast sales as opposedto ballast incorporated in fixtures, was correct and we are (not audible) inthe previous study. But the dominant (not audible) 

### i

n your study 63% ofthe ballast to different users and we agree withthe 63% as being a reasonable estimate. 63% oftheballast to different users aspart of(not audible) Isaac Turiel: I am 

### still not clear about the differential price betweenthe magnetic and electronic. I haven't really got a picture yet. Are youthink it should be higher, lower, the same? Just the differential. The difference.
19 fairly simple to do. Because the ballast is adds (not audible) (there are about three or four persons speaking all a one time) MarkPerlis, DSMO: The point that you (not audible) vastly different mark up for magnetic ballast and the electronic ballast inthese analysis. Typically inthe studyused 84% markup for magnetic· ballasts and 38% for electronic ballasts. We believe that the (not audible) the new work that waspresentedrelates to the pricing ballast sold (not audible) We never objected to the pricing of (not audible) Doug Brookman: And I am sure the Department and LBNL would like to hear whatyour thoughts
are about whatthe numbers might actually be. Isaac Turiel: Do you feel the end user prices are inaccurate? I knowthese markups are inaccurate. I certainly understand that. BobWisbey: Yes, we do feel the end user price are inaccurate because (not audible) use the inaccurate mark up. In October we provided a very extensive (not audible) ofwhat we thought was (not audible) Our opinionhave not changed onthis. The workthat you have done here that you've got (not audible) touches onan areathat reconfinnthat the distributor prices were for ballast sales as opposedto ballast incorporated in fixtures, was correct and we are (not audible) inthe previous study. But the dominant (not audible) 

### i

n your study 63% ofthe ballast to different users and we agree withthe 63% as being a reasonable estimate. 63% oftheballast to different users aspart of(not audible) Isaac Turiel: I am 

### still not clear about the differential price betweenthe magnetic and electronic. I haven't really got a picture yet. Are youthink it should be higher, lower, the same? Just the differential. The difference.
19Unknown:

We provided all this in our October comments. (not audible) Doug Brookman: Additional comments on this point before we move back to the presentation. Gene Foley: The only reason there would be problem is get some how a (not audibleO ballast incorporated in a fixture (not audible) A fixture manufacture marked up the ballast more going into a fixture than it would be marked up going (not audible) distribution? 

### Unknown: A fixture manufacture doesn't even touch a ballast going straight to distribution (not audible) Gene Foley: Mark up as a process (not audible) Unknown: It is our contention that the mark up of the magnetic vs electronic ballast in terms of percentage mark up are much (not audible) Mike Rivest: Thank you clarifying that. Robert Pelino, Transformer Company: Page 10 caption, Ballast Price Rationale. I don't see any rationale for there being no change in prices for the TSD's? Isaac Turiel: 

### You are saying why did we lower that differential? The rational was it was not a very big change and that's really the only rationale. It was only about 11 or 12% differential.. In other words the differential is about 11 % lower according to this survey that we had used in the report.


### 20 Unknown: We provided all this in our October comments. (not audible) Doug Brookman: Additional comments onthis point before we move backto the presentation. Gene Foley: The only reasonthere would be problem is get some how a (not audibleO ballast incorporated in a fixture (not audible) A fixture manufacture marked up the ballast more going into a fixture than it would be marked up going (not audible) distribution? Unknown: A fixture manufacture doesn't even touch a ballast going straight to distribution (not audible) Gene Foley: Markup as a process (not audible) Unknown: It is our contention that the mark up ofthe magnetic vs electronic ballast in terms ofpercentage mark up are much (not audible) Mike Rivest: Thank you clarifying that. Robert Pelino, Transformer Company: Page 10 caption, Ballast Price Rationale. I don't see any rationale for there being
no change in prices for the TSD's? Isaac Turiel: You are saying why did we lower that differential? The rational was it was not
a very big change and that's really the only rationale. Itwas only about 11 or 12% differential.. Inother words the differential is about 11% lower according to this survey that we had used inthe report. 

### 20 Unknown: We provided all this in our October comments. (not audible) Doug Brookman: Additional comments onthis point before we move backto the presentation. Gene Foley: The only reasonthere would be problem is get some how a (not audibleO ballast incorporated in a fixture (not audible) A fixture manufacture marked up the ballast more going into a fixture than it would be marked up going (not audible) distribution? Unknown: A fixture manufacture doesn't even touch a ballast going straight to distribution (not audible) Gene Foley: Markup as a process (not audible) Unknown: It is our contention that the mark up ofthe magnetic vs electronic ballast in terms ofpercentage mark up are much (not audible) Mike Rivest: Thank you clarifying that. Robert Pelino, Transformer Company: Page 10 caption, Ballast Price Rationale. I don't see any rationale for there being
no change in prices for the TSD's? Isaac Turiel: You are saying why did we lower that differential? The rational was it was not
a very big change and that's really the only rationale. Itwas only about 11 or 12% differential.. Inother words the differential is about 11% lower according to this survey that we had used inthe report. 

### 20Barbara Atkinson, Lawrence Berekely National Laboratory:



### The price differential for the 4 foot was lower so keeping prices the same (not audible) Doug Brookman: Barbara, please say that again. Barbara Atkinson: 

### The price difference at least for that piece of the market was now lower. To keep this price difference rather than reduce the price. Isaac Turiel: Yes. That's more cost effective. Doug Brookman: 

### Additional questions before we move on with the presentation. Mark Perlis: I think you might want to reanalyze ... Doug Brookman: Mark, do you think you speak into that microphone. Mark Perlis: The table that says Comparison of Ballast Prices , when you're comparing the various price in Draft Report, are the price in the Draft Report (not audible) you have there. Isaac Turiel: 

### Yes, taken off the end user price. Mark Perlis: That includes the contractor mark up price? Isaac Turiel: Right

. The one right above it says Average plus 13%.



### 21 Barbara Atkinson, Lawrence BerekelyNational Laboratory: The price differential for the 4 foot was lower so keeping prices the same (not audible) Doug Brookman: Barbara, please say that again. BarbaraAtkinson: The price difference at least for that piece ofthe market was now lower. To keep this price difference rather thanreduce the price. Isaac Turiel: Yes. That's more cost effective. Doug Brookman: Additional questions before we move onwiththe presentation. Mark Pedis: I think you might want to reanalyze

... Doug Brookman: :Mark, do youthink you speak into that microphone. MarkPedis: The table that says Comparison ofBallast Prices, whenyou're comparing the various price in Draft Report, are the price in the Draft Report (not audible) you have there. Isaac Turiel: Yes, taken offthe end user price. Mark Pedis: That includes the contractor mark up price? Isaac Turiel: Right. The one right above it says Average plus 13%.

21 Barbara Atkinson, Lawrence BerekelyNational Laboratory: The price differential for the 4 foot was lower so keeping prices the same (not audible) Doug Brookman: Barbara, please say that again. BarbaraAtkinson: The price difference at least for that piece ofthe market was now lower. To keep this price difference rather thanreduce the price. Isaac Turiel: Yes. That's more cost effective. Doug Brookman: Additional questions before we move onwiththe presentation. Mark Pedis: I think you might want to reanalyze

... Doug Brookman: :Mark, do youthink you speak into that microphone. MarkPedis: The table that says Comparison ofBallast Prices, whenyou're comparing the various price in Draft Report, are the price in the Draft Report (not audible) you have there. Isaac Turiel: Yes, taken offthe end user price. Mark Pedis: That includes the contractor mark up price? Isaac Turiel: Right. The one right above it says Average plus 13%.

21Okay. Turning to another controversal subject. Now we'll talk about Ballast

Lifetime. There are a lot of comments about ballast lifetime. I'll tell you what we did on the Draft Report. We used 45,000 hours for both magnetic and electronic ballasts and there were point sensitivities of a higher number 60,000 and lower 33,000 hours. And we also did a probability-based sensitivity analysis with a distribution of lifetimes. So that's what was done before. What's proposed for this Technical, Support Document is to use 50,000 hours which is not very much different for both magnetic and electronic ballasts with point sensitivities of 80,000 and 33,000 hours. And a new distribution could be used for probability-based sensitivity analysis which is based upon data on reports from T&J Enterprises on Replacement Rates of Electronic and Magnetic ballasts. By the way there is a memo which in hard copy available at the desk when you came in. I don't know if you all have taken it but it is there, it's on the second table. This view graft here shows data than comes out that memo that was sent to LBL by T&J Enterprises. And what it says is the cumulative failure probability. It tells you for example, magnetic ballast 50% would fail acoxding to this theoretical analysis by about 50,000 hours roughly. And it's nct to different in terms of the 50% mark for the electronic ballast. They are both very equal. There are a number of assumptions that go into this that are listed in that memo to help you out. Today, there really are no good standards that we know of that would tell you what those lifetimes should really be. If there were they probability there very (not audible) ---how reliable these ballasts are. So, if you knew how good eight years ago you can imagine how useful that would be in terms of how good there are going to be now or three years from now. That's the reason for doing this theoretical analysis, it was in response to comments that were made, that this could 

### be done. So what comes out of this is that replacement lifetime of 50% of the magnetic and electronic ballasts was calculated by this memo. And half of them are replace, magnetic by 52,00 hours and electronic at 56,500 hours. And at 50,000 hours is being proposed as the lifetime, consistent with previous stakeholder comments



### 22 Okay. Turning to another controversal subject. Nowwe'll talk about Ballast Lifetime. There are a lot ofcomments about ballast lifetime. I'll tell you what we did onthe Draft Report. We used 45,000 hours for bothmagnetic and electronic ballasts and there were point sensitivities ofa higher number 60,000 and lower 33,000 hours. And we also did a probability-based sensitivity analysis with a distribution of lifetimes. So that's what was done before. What's proposed for this Technical Support Document is to use 50,000 hours which is not very much different for bothmagnetic and electronic ballasts withpoint sensitivities of80,000 and 33,000 hours. And a new distribution could be used for probability-based sensitivity analysis which is based upon data onreports from T&JEnterprises onReplacement Rates ofElectronic and Magnetic ballasts. Bythe waythere is a memo which in hard copy available at the desk whenyou
came in. I don't know ifyou all have takenit but it is there, it's onthe second table. This view graft here shows data thaT comes outthat memo that was sent to LBL by T&J Enterprises. And what it says i.e;; the cumulative failure probability. Ittells you for example, magnetic ballast 50%**wO~Jld** fail according to this theoretical analysis by about 50,000 hours roughly. And it's net to different in terms ofthe 50% mark for the electronic ballast. They are both very equal. There are a number ofassumptions that go into this that are listed in that memo to help you

### out. Today, there really are no good standards that we know ofthat would tellyou 'Nhat those lifetimes should really be. 

### If there were they probability there very (not audible) ---howreliable these ballasts are. So, ifyouknew how good eight years ago you can imagine howusefulthat would be in terms ofhow goodthere are going to be now orthree years from now. That's the reasonfor doing thi.§ theoretical analysis, it was in response to comments that were made, that this could be done. So what comes out ofthis 

### is that replacement lifetime of50% of the magnetic and electronic ballasts was calculated bythis memo. And

### halfofthem
are replace, magnetic by 52,00 hours and electronic at 56,500 hours. And at 50,000 hours is being proposed as the lifetime, consistent withprevious stakeholder comments
22 Okay. Turning to another controversal subject. Nowwe'll talk about Ballast Lifetime. There are a lot ofcomments about ballast lifetime. I'll tell you what we did onthe Draft Report. We used 45,000 hours for bothmagnetic and electronic ballasts and there were point sensitivities ofa higher number 60,000 and lower 33,000 hours. And we also did a probability-based sensitivity analysis with a distribution of lifetimes. So that's what was done before. What's proposed for this Technical Support Document is to use 50,000 hours which is not very much different for bothmagnetic and electronic ballasts withpoint sensitivities of80,000 and 33,000 hours. And a new distribution could be used for probability-based sensitivity analysis which is based upon data onreports from T&JEnterprises onReplacement Rates ofElectronic and Magnetic ballasts. Bythe waythere is a memo which in hard copy available at the desk whenyou
came in. I don't know ifyou all have takenit but it is there, it's onthe second table. This view graft here shows data thaT comes outthat memo that was sent to LBL by T&J Enterprises. And what it says i.e;; the cumulative failure probability. Ittells you for example, magnetic ballast 50%**wO~Jld** fail according to this theoretical analysis by about 50,000 hours roughly. And it's net to different in terms ofthe 50% mark for the electronic ballast. They are both very equal. There are a number ofassumptions that go into this that are listed in that memo to help you

### out. Today, there really are no good standards that we know ofthat would tellyou 'Nhat those lifetimes should really be. 

### If there were they probability there very (not audible) ---howreliable these ballasts are. So, ifyouknew how good eight years ago you can imagine howusefulthat would be in terms ofhow goodthere are going to be now orthree years from now. That's the reasonfor doing thi.§ theoretical analysis, it was in response to comments that were made, that this could be done. So what comes out ofthis 

### is that replacement lifetime of50% of the magnetic and electronic ballasts was calculated bythis memo. And

### halfofthem
are replace, magnetic by 52,00 hours and electronic at 56,500 hours. And at 50,000 hours is being proposed as the lifetime, consistent withprevious stakeholder comments
22that have been made that a lot of people say it should be around 50,000 hours based on

their experience and knowledge. We haven't see the data. We recommending here 50,000 hours for ballast lifetime. Bob Wisbey: 

### I think the change to 50,000 hours is certainly something we have no problem with. In fact, I think, in a workshop several years ago at least suggested that 50,000 hours was probably the most recent number used (not audible) We have no objection whatsoever to the change of 45,000 to 50,000. We do have a minor disagreement with the sensitivity analysis (not audible) and this is a general standard that deals with (not audible) which we feel that in sensitivity analysis that are being made, they should be made so that balance around the average point. In this case here 33,000 hours to (not audible) Doug Brookman: And again can you say what the, for those of us who are straining to remember these sensitivity analysis, i.e. What is the benefit of doing it that way would be? Bob Wisbey: When it's done unbalanced you can wind up presenting and showing a very distorted view as part of the sensitivities are.
Doug Brookman: Thank you for the remarks on proving something rather that (laughter -- not audible) Let me acknowledge also that the Department now has better copies of the (laughter - not audible) are available over here with Sandy and Brenda. Copies of page 7, 8 and 11. Additional questions for Isaac or comments. Gene Foley: Just to refresh my memory, why was 80 and 33 chosen, was there any rationale to this?



### 23 that have beenmade that a lot ofpeople say it should be around 50,000 hours based on their experience and knowledge. We haven't see the data. We recommending here 50,000 hours for ballast lifetime. Bob Wisbey: I think the change to 50,000 hours is certainly something wehave no problem with. Infact, I think, in a workshop severalyears ago at least suggested that 50,000 hours was probablythe most recent number used (not audible) We have no objection whatsoever to the change of45,000 to 50,000. We do have a minor disagreement withthe sensitivity analysis (not audible) and this is a general standard that deals with (not audible) which
we feel that in sensitivity analysis that are being made, they should be made so that balance around the average point. In this case here 33,000 hours to (not audible) Doug Brookman: And again canyou say what the. for those ofus who are straining to remember these sensitivity analysis, i.e. what is the benefit ofdoing it that way would be? Bob Wisbey: When it's done unbalfu"1ced you canwind up presenting and showing a very distorted view as part ofthe sensitivities are.
Doug Brookman: Thank you for the remarks onproving something ratherthat (laughter

-- not audible) Let me acknowledge also that the Department now

### has better copies ofthe (laughter

- not audible) are available over here with Sandy and Brenda. Copies ofpage 7, 8 and 11. Additional questions for Isaac or comments. Gene Foley: Just to refreshmy memory, whywas 80 and 33 chosen, was there any rationale to this?

23 that have beenmade that a lot ofpeople say it should be around 50,000 hours based on their experience and knowledge. We haven't see the data. We recommending here 50,000 hours for ballast lifetime. Bob Wisbey: I think the change to 50,000 hours is certainly something wehave no problem with. Infact, I think, in a workshop severalyears ago at least suggested that 50,000 hours was probablythe most recent number used (not audible) We have no objection whatsoever to the change of45,000 to 50,000. We do have a minor disagreement withthe sensitivity analysis (not audible) and this is a general standard that deals with (not audible) which
we feel that in sensitivity analysis that are being made, they should be made so that balance around the average point. In this case here 33,000 hours to (not audible) Doug Brookman: And again canyou say what the. for those ofus who are straining to remember these sensitivity analysis, i.e. what is the benefit ofdoing it that way would be? Bob Wisbey: When it's done unbalfu"1ced you canwind up presenting and showing a very distorted view as part ofthe sensitivities are.
Doug Brookman: Thank you for the remarks onproving something ratherthat (laughter

-- not audible) Let me acknowledge also that the Department now

### has better copies ofthe (laughter

- not audible) are available over here with Sandy and Brenda. Copies ofpage 7, 8 and 11. Additional questions for Isaac or comments. Gene Foley: Just to refreshmy memory, whywas 80 and 33 chosen, was there any rationale to this?

23Isaac Turiel:

The 33,000 came again from this LRI study made by the Lighting Maintenance Company and that was a number that they had come up with. That 33,000 hours. The 80,000 hours, there have been some comments by some manufactures who 

### make electronic ballast that 80,000 something hours is something that is quite feasible if not already feasible. Richard Rattray, OSRAM Sylvania: 

### I just wanted to make a point that originally that high sensitivity was actually 60,000 hours not 80,0)0 and that was a change that was made (no audible) and that was the first time we heard it was a comment from a manufacture. (not audible) Doug Brookman: Any additional comments and data would be welcomed by the Department. Barbara Atkinson: The comments would be whether we chose these two numbers for the single value sensitivity. we're also going to do (not audible) analysis due to the (not audible) from the T&J Enterprises report. Isaac Turiel: Right. Thanks Barbara. Now lets turn to Electricity Prices and in the 1997 report the data we used was EIA;'s AEO 1997 report. And we used the same electricity prices.
The bottom section is not shown, we have another gap in the data.
Sector Low Average High Commercial $.055 $.075 $.105 Industrial $.030 $.048 $.065

24 Isaac Turiel: The 33,000 came again from this LRI study made bythe Lighting Maintenance Company and that was a number that they had come up with. That 33,000 hours. The 80,000 hours, there have been some comments by some manufactures who make electronic ballast that 80,000 something hours is something that is quite feasible 

### ifnot already feasible. Richard Rattray, OSRAM Sylvania: Ijust wanted to make a point that originally that high sensitivity was actually 60,000 hours not 80,000 and that was a change that wasmade (no audible) and that was the first time we heard it was a comment from a manufacture. (not audible) Doug Brookman: Any additional comment., and datawould be welcomed bythe Department. BarbaraAtkinson: The comments would be whether we chose these two numbers for the single value sensitivity. we're also going to do (not audible) analysis due to the (not audible) from the T&JEnterprises report. Isaac Turiel: Right. Thanks Barbara. Now lets turnto ElectricityPrices and inthe 1997 report the data we used was EIA;'s AEO 1997 report. And we used the same electricityprices.

The bottom section is not shown, we have another gap in the data.

Sector Commercial Industrial Low $.055 $.030 Average $.075 $.048

24 High 

### $ .105 $.065 Isaac Turiel: The 33,000 came again from this LRI study made bythe Lighting Maintenance Company and that was a number that they had come up with. That 33,000 hours. The 80,000 hours, there have been some comments by some manufactures who make electronic ballast that 80,000 something hours is something that is quite feasible 

### ifnot already feasible. Richard Rattray, OSRAM Sylvania: Ijust wanted to make a point that originally that high sensitivity was actually 60,000 hours not 80,000 and that was a change that wasmade (no audible) and that was the first time we heard it was a comment from a manufacture. (not audible) Doug Brookman: Any additional comment., and datawould be welcomed bythe Department. BarbaraAtkinson: The comments would be whether we chose these two numbers for the single value sensitivity. we're also going to do (not audible) analysis due to the (not audible) from the T&JEnterprises report. Isaac Turiel: Right. Thanks Barbara. Now lets turnto ElectricityPrices and inthe 1997 report the data we used was EIA;'s AEO 1997 report. And we used the same electricityprices.

The bottom section is not shown, we have another gap in the data.

Sector Commercial Industrial Low $.055 $.030 Average $.075 $.048

24 High 

### $ .105 $.065The average prices were used for all years in the LCC calculations. And we also did a

probabilty-based sensitivity analysis which was performed with 1995 investor-owned and 1994 publicly-owned utility sales and revenue data. the high and low single-value sensitivities were used and that is shown in the box here [above]. Those were the values shown in the 1997 report. 

### Carl Adams: Let me just say those number are on page 8 of the Summary of Inputs for the Technical Support Document. Isaac Turiel: 

### That was the additional handout page 8. [dated April 20, 1998] In the TSD proposal is now to make a change in Life Cycle Cost Analysis and use a time Series of Average Prices from EIA's AEO updated in the 1998 report. that is a little different than we've done before. And the Probability-based Sensitivity Analysis we propose to do the same way but we would update it with new data from electric utility companies. And again from recent distribution form we select values near the endpoints of these distributions as we said before. The rationale for doing that is that a time series of electricity prices would provide more accurate picture when prices are changing -- whether they are going up or down -- will be put into the LCC analysis that we will be doing next. In the sensitivity analysis will be performed again because there is a large variability in electricity prices and we want to be able to reflect that in the analysis. We are proposing to use average prices as opposed to marginal prices. For the commercial sector and the industrial sector the marginal prices are a function of both kW demand and kWh energy use charges and these vary by season, by the utility area, by the facility whatever arrangement they may have with their utility companies, and it is very difficult to make any kind of accurate determination unless you go building by building. 

### There is also the Advisory Committee which is looking into that. There is a

25 The average prices were used for all years in the LCC calculations. And we also did a probabilty-based sensitivity analysis whichwas performedwith 1995 investor-owned and 1994 publicly-owned utility sales and revenue data. the high and low single-value sensitivities were used and that is shown inthe boxhere [above]. Those were the values shownin the 1997 report. Carl Adams: Let mejust saythose number are onpage 8 ofthe Summary ofInputs for the Technical Support Document. Isaac Turiel: That was the additional handout page 8. [dated April 20, 1998] Inthe TSD proposal is nowto make a change inLife Cycle Cost Analysis and use a time Series ofAverage Prices from EIA's AEO updated in the 1998 report. that is a little different thanwe've done before. And the Probability-based Sensitivity Analysis we propose to do the same way but we would update it withnew data from electric utility companies. And again from recent distribution form we select values near the endpoints ofthese distributions as we said before. The rationale for doing that is that
a time series ofelectricity prices would provide more accurate picture whenprices are changing -- whether they are going up or down -- 

### will be put into the LCC analysis that
we 

### will be doing next. Inthe sensitivity analysis 

### will be performed againbecause there is
a large variability in electricity prices and we wantto be able to reflect that inthe analysis. We are proposing to use average prices as opposed to marginal prices. Forthe commercial sector and the industrial sector the marginal prices are a function ofbothkW demand and kWh energy use charges and these vary by season, bythe utility area, by the facility whatever arrangement they mayhave withtheir utility companies, and it is very difficult to make any kind ofaccurate determinationunless you go building by building. There is also the Advisory Committee which is looking into that. There is a

25 The average prices were used for all years in the LCC calculations. And we also did a probabilty-based sensitivity analysis whichwas performedwith 1995 investor-owned and 1994 publicly-owned utility sales and revenue data. the high and low single-value sensitivities were used and that is shown inthe boxhere [above]. Those were the values shownin the 1997 report. Carl Adams: Let mejust saythose number are onpage 8 ofthe Summary ofInputs for the Technical Support Document. Isaac Turiel: That was the additional handout page 8. [dated April 20, 1998] Inthe TSD proposal is nowto make a change inLife Cycle Cost Analysis and use a time Series ofAverage Prices from EIA's AEO updated in the 1998 report. that is a little different thanwe've done before. And the Probability-based Sensitivity Analysis we propose to do the same way but we would update it withnew data from electric utility companies. And again from recent distribution form we select values near the endpoints ofthese distributions as we said before. The rationale for doing that is that
a time series ofelectricity prices would provide more accurate picture whenprices are changing -- whether they are going up or down -- 

### will be put into the LCC analysis that
we 

### will be doing next. Inthe sensitivity analysis 

### will be performed againbecause there is
a large variability in electricity prices and we wantto be able to reflect that inthe analysis. We are proposing to use average prices as opposed to marginal prices. Forthe commercial sector and the industrial sector the marginal prices are a function ofbothkW demand and kWh energy use charges and these vary by season, bythe utility area, by the facility whatever arrangement they mayhave withtheir utility companies, and it is very difficult to make any kind ofaccurate determinationunless you go building by building. There is also the Advisory Committee which is looking into that. There is a

25meeting next week and we will be looking to see what they have to say after that

meeting. Bob Wisbey: First of all, we agree with the concept of using the Time Series of Average Prices over time. There is a major issue with the point that Glenn was just making. Slides I put out there right now is an excerpt from the Formal Recommendations of the Advisory Committee for DoE. This Formal Recommendation that has been sent, as I understand at this point, from Dan Reicher to the Secretary. And it says very simply for its Life Cycle Cost Analysis and all future rulemaking by the Department of Energy and its Contractors should replace the use of Average Energy Prices with Marginal Energy Prices. I don't think that given the climate of the process improvement of the process the DoE has undergone in this area and given the establishment of the Formal Advisory Committee, I do not feel in my interpretation that either LBNL or DoE really has reasonable option to disregard this advice. They have asked for advice, it has been formally prepared and it says it shall use the marginal electricity price. I certainly agree with what Isaac is saying it's very difficult to determine: I'm a little bit puzzled by the inability to get some information because this work was originally dxlone by the Economic Subcommittee of the Advisory Committee. I am a member of that subcommittee. I have sat in all of the meetings. A great amount of data and discussion has taken place within that subcommittee regarding this very subject. In fact, a large body of data was presented for discussion in the group that shows the difference between average price and the marginal price is in the range of 7 to 11 %. And the comments that we provided in October, we suggested using 10% as a difference between average and marginal means. Average prices realitivily is easy to access. Marginal prices vary widely from



### 26 meeting next week and we 

### will be looking to see what theyhave to say after that meeting.
BobWisbey: First ofall, we agree withthe concept ofusing the Time Series ofAverage Prices
overtime. There is a major issue withthe pointthat Glenn wasjustmaking. Slides I put out there right now is an excerpt from the FormalRecommendations ofthe Advisory Committee for DoE. This Formal Recommendation that has been sent, as I understand at this point, from DanReicher to the Secretary. And it says very simply for its Life Cycle Cost Analysis and all future rulemaking bythe Department ofEnergy and its Contractors shouldreplace the use ofAverage EnergyPrices withMarginalEnergy Prices. I don't 

### think that giventhe climate ofthe process improvement ofthe process the DoE has undergone inthis area and giventhe establishment ofthe FormalAdvisory Committee, I do not feel in my interpretationthat either LBNL or DoE really has reasonable option to disregard this advice. Theyhave asked for advice, it has been formally prepared and it says it shall use the marginal electricity price. I certainly agree withwhat Isaac is saying it's very difficult to**determine~** I'm a little bit puzzled by the inability to get some information because this work was originally done bythe Economic Subcommittee ofthe Advisory Committee. I am a member ofthat subcommittee. I have sat in all ofthe meetings. A great amount ofdata and discussionhas takenplace withinthat subcommittee regarding this very subject. Infact, a large body ofdatawas presented for discussion inthe group that showsthe difference between average price and the marginal price is inthe range of7 to 11

### %. And the comments that we provided in October, we suggested using 10% as a difference between average and marginal means. Average prices realitivily is easy to access. Marginal prices vary widely from

26 meeting next week and we 

### will be looking to see what theyhave to say after that meeting.
BobWisbey: First ofall, we agree withthe concept ofusing the Time Series ofAverage Prices
overtime. There is a major issue withthe pointthat Glenn wasjustmaking. Slides I put out there right now is an excerpt from the FormalRecommendations ofthe Advisory Committee for DoE. This Formal Recommendation that has been sent, as I understand at this point, from DanReicher to the Secretary. And it says very simply for its Life Cycle Cost Analysis and all future rulemaking bythe Department ofEnergy and its Contractors shouldreplace the use ofAverage EnergyPrices withMarginalEnergy Prices. I don't 

### think that giventhe climate ofthe process improvement ofthe process the DoE has undergone inthis area and giventhe establishment ofthe FormalAdvisory Committee, I do not feel in my interpretationthat either LBNL or DoE really has reasonable option to disregard this advice. Theyhave asked for advice, it has been formally prepared and it says it shall use the marginal electricity price. I certainly agree withwhat Isaac is saying it's very difficult to**determine~** I'm a little bit puzzled by the inability to get some information because this work was originally done bythe Economic Subcommittee ofthe Advisory Committee. I am a member ofthat subcommittee. I have sat in all ofthe meetings. A great amount ofdata and discussionhas takenplace withinthat subcommittee regarding this very subject. Infact, a large body ofdatawas presented for discussion inthe group that showsthe difference between average price and the marginal price is inthe range of7 to 11

### %. And the comments that we provided in October, we suggested using 10% as a difference between average and marginal means. Average prices realitivily is easy to access. Marginal prices vary widely from

26installation to installation, from place to place etc. But some reasonable

estimate must be used. And with this Formal Recommendation, we don't really believe it's optional to go back and continue to use the average price. Doug Broo : Thank you. Comments, questions following on Bob's slide. Isaac Turiel: (not audible) 10%, I could be wrong, and I ask someone from DoE to answer that. I felt that was only for residential that Steven Rosenstock had done those calculations for. Carl, you were there perhaps you can comment. 

### Carl Adams: I believe that is true that the data that was presented by the subcommittee had to do with residential. It did not get into the demand charges. (portion not audible -- several persons speaking) 

### Bob Wisbey: I was under the impression that, that was (not audible) but I was prepared to argue the point by any means. It was an aggregated number is my impression. Mark Perlis: Isaac, there is another document over here on the table that appears to be a computer spreadsheet. The first page Energy Saving and New Present Values for Ballasts. Isaac Turiel: We're going to talk about that later. Mark Perlis: Well when you get into the electricity price projections then on the left side it says EIA Annual Energy Outlook 1998 and it has a time period for commercial and industrial electricity prices.


### 27 installationto installation, from place to place etc. But some reasonable estimate must be used. And withthis Formal Recommendation, we don't really believe it's optional to go back and continue to use the average price. Doug Brookman: Thankyou. Comments, questions following onBob's slide. Isaac Turiel: (not audible) 10%, I could be wrong, and I ask someone from DoE to
answer that. I felt that was only for residential that StevenRosenstock had done those calculations for. Carl, you were there perhaps you can comment. Carl Adams: I believe that is true that the datathat was presented bythe subcommittee hadto do withresidential. It did not get into the demand charges. (portionnot audible -- several persons speaking) Bob Wisbey: I was under the impressionthat, that was (not audible) but I was prepared to argue the point 

### by any means. It was an aggregated number is my impression. MarkPertis: Isaac, there is another document over here onthe table that appears to be a computer spreadsheet. The first page Energy Saving andNewPresent Values for Ballasts

.

. Isaac Turiel: We're going to talk about that later. Mark Pedis: Well whenyou get into the electricity price projections then onthe left side it says EIAAnnual Energy Outlook 1998 and it 

### has a time period for commercial and industrial electricity prices.
27 installationto installation, from place to place etc. But some reasonable estimate must be used. And withthis Formal Recommendation, we don't really believe it's optional to go back and continue to use the average price. Doug Brookman: Thankyou. Comments, questions following onBob's slide. Isaac Turiel: (not audible) 10%, I could be wrong, and I ask someone from DoE to
answer that. I felt that was only for residential that StevenRosenstock had done those calculations for. Carl, you were there perhaps you can comment. Carl Adams: I believe that is true that the datathat was presented bythe subcommittee hadto do withresidential. It did not get into the demand charges. (portionnot audible -- several persons speaking) Bob Wisbey: I was under the impressionthat, that was (not audible) but I was prepared to argue the point 

### by any means. It was an aggregated number is my impression. MarkPertis: Isaac, there is another document over here onthe table that appears to be a computer spreadsheet. The first page Energy Saving andNewPresent Values for Ballasts

.

. Isaac Turiel: We're going to talk about that later. Mark Pedis: Well whenyou get into the electricity price projections then onthe left side it says EIAAnnual Energy Outlook 1998 and it 

### has a time period for commercial and industrial electricity prices.
27Isaac Turiel:

Yes. Mark Perlis: Are those the rates that you are planning to use? Isaac Turiel: 

### At the moment unless we have different directions. Mark Perlis: That raises the question in my mind because the annual energy outlook that I have has different prices than the ones you have on that sheet. Isaac Turiel: Are they the same dollars? Mark Perlis: Yes, in kW hours. Isaac Turiel: 

### No, I mean for the same year. Mark Perlis: In 1997 dollars, 95 dollars. Sometimes they can be a little different. Isaac Turiel: 

### Yes, I don't have 1997. 1 do have 2000. Mark Perlis: But those are '97 dollars. Isaac Turiel: They are expressed in'97 dollars. I don't know if what you are looking at is also expressed in '97 dollars. 

### Mark Perlis: What year did the AEO '98 express their dollars? Isaac Turiel:


### 28 Isaac Turie!: Yes. Mark Perlis: Are those the rates that you are planning to use? Isaac Turie!: At the moment unless we have different directions. Mark Perlis: That raises the question 

### in my mind because the annual energy outlook that I have has different prices thanthe ones youhave onthat sheet. Isaac Turie!: Are they the same dollars? Mark Perlis: Yes, 

### in k W hours. Isaac Turiel: No, I mean for the same year. Mark Perlis: In 1997 dollars, 95 dollars. Sometimes they canbe a little different. Isaac Turiel: Yes, I don't have 1997. I do have 2000. Mark Perlis: Butthose are '97 dollars. Isaac Turie!: They are expressed 

### in '97 dollars. I don't know 

### ifwhat you are looking at is also expressed 

### in '97 dollars. Mark Perlis: What year did the ABO '98 express their dollars? Isaac Turie!:
28 Isaac Turie!: Yes. Mark Perlis: Are those the rates that you are planning to use? Isaac Turie!: At the moment unless we have different directions. Mark Perlis: That raises the question 

### in my mind because the annual energy outlook that I have has different prices thanthe ones youhave onthat sheet. Isaac Turie!: Are they the same dollars? Mark Perlis: Yes, 

### in k W hours. Isaac Turiel: No, I mean for the same year. Mark Perlis: In 1997 dollars, 95 dollars. Sometimes they canbe a little different. Isaac Turiel: Yes, I don't have 1997. I do have 2000. Mark Perlis: Butthose are '97 dollars. Isaac Turie!: They are expressed 

### in '97 dollars. I don't know 

### ifwhat you are looking at is also expressed 

### in '97 dollars. Mark Perlis: What year did the ABO '98 express their dollars? Isaac Turie!:
281995 or 1996

Mark Perlis: What you have done is inflated ... Isaac Turiel: Like 2%. Two percent difference that you're looking at then that can explain that. Mark Perlis: Okay, (not audible) Doug Brookman: As I understand this is to be taken up later on? Right? Mark Perlis: No. It's to be taken up right now. There are two other points I wanted to make about electricity price. First is that, NEMES supports the use of the annual energy outlook 1998. It is very important to recognize that the 1998 is the first time that EIA has really attempted annual forecast to assume deregulation in the future. But it is doing so again in line with what Mr. Scltleede said before (not audible) on the side of higher rather than lower electricity prices in this respect. As I read the report, it only assumes deregulation in three parts of the country, California, New York, and New England. No deregulations anywhere else. That's number one. And number two, don't really assume that there will be any competitive prices even in those parts of the country until 2008. And I would suggest that there are many, many, many analyst in the electricity sector who believe that those are some what if not very pessimistic assumptions. And that is very possible if not likely that before this was supported here, before the May NOPR, and certainly before October of 1999 when the final rule goes out, there will be another AEO '99 that will be out in December. And that will probably show even lower electricity price for the out years. So there is probably a trend line


### 29 1995 or 1996 MarkPerlis: Whatyou have done is inflated

... Isaac Turiel: Like 2%. Two percent difference that you're looking at thenthat canexplainthat. Mark Perlis: Okay, (not audible) Doug Brookman: 

### As I understand this is to be takenup later on? Right? MarkPerlis: No. It's to be takenup right now. There are two other points I wanted to make about electricity price. First is that, NEMES supports the use ofthe annual energy outlook 1998. It is very important to recognize that the 1998 is the first time that EIAhas really attempted annual forecast to assume deregulation inthe future. But it is doing so again in line with what Mr. Scltleede said before (not audible) onthe side ofhigher rather than lower electricity prices inthis respect. As I read the report, it only assumes deregulation in three parts ofthe country, California, New York, and New England. No deregulations anywhere else. That's number one. And numbertwo, don't really assume that there 

### will be any competitive prices evenin those parts ofthe countryuntil 2008. And I would suggest that there are many, many, many analyst in the electricity sector who believe that those are some what 

### if

not very pessimistic assumptions. Andthat 

### is verypossible 

### if not likely that before this was supported here, before the MayNOPR, and certainly before October of1999 whenthe 

### final rule goes out, there 

### will be another ABO '99 that 

### will be out inDecember. And that 

### will probably show even lower electricity price for the out years. So there is probably a trend line
29 1995 or 1996 MarkPerlis: Whatyou have done is inflated

... Isaac Turiel: Like 2%. Two percent difference that you're looking at thenthat canexplainthat. Mark Perlis: Okay, (not audible) Doug Brookman: 

### As I understand this is to be takenup later on? Right? MarkPerlis: No. It's to be takenup right now. There are two other points I wanted to make about electricity price. First is that, NEMES supports the use ofthe annual energy outlook 1998. It is very important to recognize that the 1998 is the first time that EIAhas really attempted annual forecast to assume deregulation inthe future. But it is doing so again in line with what Mr. Scltleede said before (not audible) onthe side ofhigher rather than lower electricity prices inthis respect. As I read the report, it only assumes deregulation in three parts ofthe country, California, New York, and New England. No deregulations anywhere else. That's number one. And numbertwo, don't really assume that there 

### will be any competitive prices evenin those parts ofthe countryuntil 2008. And I would suggest that there are many, many, many analyst in the electricity sector who believe that those are some what 

### if

not very pessimistic assumptions. Andthat 

### is verypossible 

### if not likely that before this was supported here, before the MayNOPR, and certainly before October of1999 whenthe 

### final rule goes out, there 

### will be another ABO '99 that 

### will be out inDecember. And that 

### will probably show even lower electricity price for the out years. So there is probably a trend line
29in their forecast downwards. And that (not audible) the sensitivity analysis

that we choose to perform. And I think that if anything this is an example where you do need to have a more unbalanced on sensitivity analysis 

### because I think AEO is on the high side to start with. And we urge you to take that into account and to acknowledge in your reports that we intend in the future to rely on the latest projects that are available, because they do expect next years projects to be very different. Doug Brookman: Additional comments before we go back to the presentation. Isaac Turiel: We always try to use the latest forecast. You might note that on that handout that you are looking at, that there is a GRI forecast. (not audible). That shows a stepper decline than AEO '98. (not audible) 

### This is the last one, I believe, Discount Rates. What we did in the 1997 Draft Report we used 4, 8, and 12% real discount rates for the LCC analysis. What is proposed for the Technical Support Document is to use 4, 8 and 15% discount rates real for the Life Cycle Cost analysis. The upper bound of change to be consistent with the Interlaboratories Working Group report, also know as the Five Lab Study, in there is a range of discount rates that were used for 

### the building sector, they used an upper range of 15% in that report. And that is basically where it is. Any comments? Doug Brookman: 

### I see no comments on discount rate. Isaac Turiel: If that's the case we will go onto the next part which is a section of what was done. There were a number of comments made that the population being used for annual lighting hours in terms of distribution for electricity prices

30 in their forecast downwards. And that (not audible) the sensitivity analysis that we choose to perform. And I think that 

### ifanything this is an example where you do need to have a more unbalanced on sensitivity analysis because I think ABO is onthe high side to start with. And we urge you to take that into account and to acknowledge in your reports that we intend in the future to rely onthe latest projects that are available, because they do expect next years projects to be very different. Doug Brookman: Additional comments before we go backto the presentation. Isaac Turiel: We always try to use the latest forecast. Youmight note that onthat handout that you are looking at, that there is a GRI forecast. (not audible). That shows a stepper decline thanABO '98. (not audible) This is the last one, I believe, Discount Rates. What we did in the 1997 Draft Report we used 4, 8, and U% real discount rates for the LCC analysis. What is proposed for the Techru.cal Support Document is to use 4,8 and 15% discount rates real for the Vfe Cycle Cost analysis. The upper bound ofchange to be consistent withthe Interlaboratories Working Group report, also know as the Five Lab Study, in there is a range ofdiscount rates that were used for the building sector, they used anupper range ofl5% in that report. And that is basically where it is. Any comments? Doug Brookman: I see no comments ondiscount rate. Isaac Turiel: Ifthat's the case we 

### will go onto the next part which is a section ofwhat was done. There were a number ofcomments made that the populationbeing used for annual lighting hours in terms of distribution for electricityprices
30 in their forecast downwards. And that (not audible) the sensitivity analysis that we choose to perform. And I think that 

### ifanything this is an example where you do need to have a more unbalanced on sensitivity analysis because I think ABO is onthe high side to start with. And we urge you to take that into account and to acknowledge in your reports that we intend in the future to rely onthe latest projects that are available, because they do expect next years projects to be very different. Doug Brookman: Additional comments before we go backto the presentation. Isaac Turiel: We always try to use the latest forecast. Youmight note that onthat handout that you are looking at, that there is a GRI forecast. (not audible). That shows a stepper decline thanABO '98. (not audible) This is the last one, I believe, Discount Rates. What we did in the 1997 Draft Report we used 4, 8, and U% real discount rates for the LCC analysis. What is proposed for the Techru.cal Support Document is to use 4,8 and 15% discount rates real for the Vfe Cycle Cost analysis. The upper bound ofchange to be consistent withthe Interlaboratories Working Group report, also know as the Five Lab Study, in there is a range ofdiscount rates that were used for the building sector, they used anupper range ofl5% in that report. And that is basically where it is. Any comments? Doug Brookman: I see no comments ondiscount rate. Isaac Turiel: Ifthat's the case we 

### will go onto the next part which is a section ofwhat was done. There were a number ofcomments made that the populationbeing used for annual lighting hours in terms of distribution for electricityprices
30perhaps were not the correct ones to use. And we investigated it by looking

at the Green Lights data base and Diane Fisher is going to discuss the findings of that research. 

### Diane Fisher, Lawrence Berekely National Laboratory: Isaac has told you about many of the (not audible) estimates that were used for important input parameters in the Life Cycle Cost analysis. In addition to 

### the points estimates, we also did some studies which we use distribution to represent the likely range of values for some of these inputs that end users would be likely to experience. And I am going to be talking about two of those distributions, namely the electricity price distribution and the lighting offering distribution. And I will stop after (not audible) to take questions 

### and then I will stop again after the lighting hours discussion. So in the draft report we used the distribution of U.S. commercial electricity prices for utilities across the U.S. to represent the electricity price distribution that would represent ballast end user electricity prices. And for lighting hours we used the distribution of lighting hours found in the XenCAP database that we used it to derive the average values of lighting hours that were used in the analysis. And based on both of these distributions we then came up with estimates of what fraction of end users would be Life Cycle Cost winners by either Life Cycle Cost being reduces, and losers by Live Cycle Cost increase (not audible) distribution. For particular technology, such as magnetic (not audible) or magnetic to electronics, and we found based on the distributions that a rather high percentage of end users would in fact be LCC winners. However those conclusions were questioned and the argument was made that distribution that we used would not accurately represent end users who would be impacted by standards because those end users who have high electricity prices or high lighting operating hours would have been most likely to have pushed voluntarily to more efficient ballasts. So those end users impacted by standards would be a the lower end for both the electricity price and the lighting hour distributions,

31 perhaps were not the correct onesto use. And we investigated it by looking at the GreenLights database and Diane Fisher is going to discuss the findings ofthat research. Diane Fisher, Lawrence Berekely National Laboratory: Isaac has told you about many ofthe (not audible) estimates that were used for important input parameters inthe Life Cycle Cost analysis. In additionto the points estimates, we also did some studies whichwe use distribution to represent the likely range ofvalues for some ofthese inputs that endusers would be likely to experience. AndI am going to be talking about two of those distributions, namely the electricity price distribution and the lighting offering distribution. And I 

### will stop after (not audible) to take questions and then I 

### will stop again after the lighting hours discussion. So in the draft report we used the distribution ofU.S. commercial electricity prices for utilities across the U.S. to represent the electricity price distribution that wouldrepresent ballast enduser electricity prices. And for lighting hours we used the distribution oflighting hours found inthe XenCAP database that we used it to derive the average values oflighting hours that were used in the analysis. And based onboth ofthese distributions we then came up with estimates ofwhat fraction ofendusers wouldbe Life Cycle Cost winners by either Life Cycle Cost being reduces, and losers by Live Cycle Cost increase (not audible) distribution. Forparticular technology, such as magnetic (not audible) or magnetic to electronics, and we found based onthe distributions that a rather highpercentage of end users would infact be LCC winners. Howeverthose conclusions were questioned and the argument was made that distributionthat we used would not accurately**represen~** endusers who wouldbe impactedby standards because those endusers who have high electricityprices or high lighting operating hours wouldhave beenmost likely to have pushed voluntarily to more efficient ballasts. So those end users impacted by standards would be a the lower end for boththe electricity price and the lighting hour distributions,
31 perhaps were not the correct onesto use. And we investigated it by looking at the GreenLights database and Diane Fisher is going to discuss the findings ofthat research. Diane Fisher, Lawrence Berekely National Laboratory: Isaac has told you about many ofthe (not audible) estimates that were used for important input parameters inthe Life Cycle Cost analysis. In additionto the points estimates, we also did some studies whichwe use distribution to represent the likely range ofvalues for some ofthese inputs that endusers would be likely to experience. AndI am going to be talking about two of those distributions, namely the electricity price distribution and the lighting offering distribution. And I 

### will stop after (not audible) to take questions and then I 

### will stop again after the lighting hours discussion. So in the draft report we used the distribution ofU.S. commercial electricity prices for utilities across the U.S. to represent the electricity price distribution that wouldrepresent ballast enduser electricity prices. And for lighting hours we used the distribution oflighting hours found inthe XenCAP database that we used it to derive the average values oflighting hours that were used in the analysis. And based onboth ofthese distributions we then came up with estimates ofwhat fraction ofendusers wouldbe Life Cycle Cost winners by either Life Cycle Cost being reduces, and losers by Live Cycle Cost increase (not audible) distribution. Forparticular technology, such as magnetic (not audible) or magnetic to electronics, and we found based onthe distributions that a rather highpercentage of end users would infact be LCC winners. Howeverthose conclusions were questioned and the argument was made that distributionthat we used would not accurately**represen~** endusers who wouldbe impactedby standards because those endusers who have high electricityprices or high lighting operating hours wouldhave beenmost likely to have pushed voluntarily to more efficient ballasts. So those end users impacted by standards would be a the lower end for boththe electricity price and the lighting hour distributions,
31So to examine that possibility, we looked at data from one large voluntary program

namely the EPA's Green Lights Program. We obtained an extract of that database completed through July 30, 1997. There are a variety of measure that these 

### implemented but we looked at only those measures that involved installation of electronic ballasts in retrofit situations. And that gave us 10 million ballasts in 1.5 billion square feet. And this graft shows year by year the number of electronic ballasts installed in Green Light projects through 1996 which is the last year of complete data that we have. And you will see that there are up abound 3.5 millions ballasts per year which is a significant program. That's roughly 10% of annual electronic ballasts shipments. We used this data to do both electricity price distribution and operating hours distribution, so we would like to compare those to the previous distributions that we had used. So for electricity price is not directly reported in the Green Lights project report, however they did report the dollars saved by the project and the kWh saved by the project. And clearly they had to use electricity prices to come up with the dolars saved. So we assume, and we calculated it to come up the electrii^.ity price. And then we adjusted that to 1995 dollars to be comparable with the utility data that we were using. For the distribution of U.S commercial electricit-' prices we calculated an average price for each utility by dividing the commercial revenues by its commercial sales sales in kWh. These are data that were reported to the EIA which they publish. We used 1995 data for investor-owned utilities which represented about 80% of the market and 1994 data for publicly-owned utilities this was the most recent data available at the time that we did the distribution. We are proposing to update to 1996 data which is not the most recent available. In both data sets, we then grouped the data into 1-cent intervals and calculated the fraction in Green Light of ballasts that fell into each of these intervals or for electricity the fraction of commercial sales that fell into each


### 32 So to examine that possibility, we looked at data from one large voluntary program namely the EPA's Green Lights Program. We obtained an extract ofthat database completed throughJuly 30, 1997. There are a variety ofmeasure that these implemented but we looked at only those measures that involved installation ofelectronic ballasts in retrofit situations. And that gave us 10 million ballasts in 1.5 billion square feet. And this graft shows year byyear the number ofelectronic ballasts installed in Green Light projects through 1996 which is the last year ofcomplete datathat we have. And you will see that there are up abound 3.5 millions ballasts peryear which is a significant program. That's roughly 10% ofannual electronic ballasts shipments. We used this data to do both electricityprice distribution and operating hours distribution, so we would like to compare those to the previous distributions that we had used. So for electricity price is not directly reported in the GreenLights project report, however they did report the dollars saved by the project and the kWh saved bythe project. And clearly they had to use electricity prices to come up withthe**donar~** saved. So we assume, and we calculated it to come up the electri;ityprice. 

### Pilld thenwe adjusted that to 1995 dollars to be comparable with the utility data that we were using. Forthe distribution ofU.S. commercial electricity prices we calculated an average price for eachutility by dIviding the commercialrevenues by its commercial sales sales in kWh. These are data that were reported to the EIAwhichthey publish. We used 1995 data for investor-owned utilities whichrepresented about 80% ofthe market and 

### 1994 data for publicly-owned utilities this
was the most recent data available atthe time that we did the distribution. We are proposing to update to 1996 data which is not the most recent available. Inbothdata sets, we then grouped the data into I-cent intervals and calculated the fraction in Green Light ofballasts that fell into each ofthese intervals or for electricity the fraction ofcommercial sales that fell into each
32 So to examine that possibility, we looked at data from one large voluntary program namely the EPA's Green Lights Program. We obtained an extract ofthat database completed throughJuly 30, 1997. There are a variety ofmeasure that these implemented but we looked at only those measures that involved installation ofelectronic ballasts in retrofit situations. And that gave us 10 million ballasts in 1.5 billion square feet. And this graft shows year byyear the number ofelectronic ballasts installed in Green Light projects through 1996 which is the last year ofcomplete datathat we have. And you will see that there are up abound 3.5 millions ballasts peryear which is a significant program. That's roughly 10% ofannual electronic ballasts shipments. We used this data to do both electricityprice distribution and operating hours distribution, so we would like to compare those to the previous distributions that we had used. So for electricity price is not directly reported in the GreenLights project report, however they did report the dollars saved by the project and the kWh saved bythe project. And clearly they had to use electricity prices to come up withthe**donar~** saved. So we assume, and we calculated it to come up the electri;ityprice. 

### Pilld thenwe adjusted that to 1995 dollars to be comparable with the utility data that we were using. Forthe distribution ofU.S. commercial electricity prices we calculated an average price for eachutility by dIviding the commercialrevenues by its commercial sales sales in kWh. These are data that were reported to the EIAwhichthey publish. We used 1995 data for investor-owned utilities whichrepresented about 80% ofthe market and 

### 1994 data for publicly-owned utilities this
was the most recent data available atthe time that we did the distribution. We are proposing to update to 1996 data which is not the most recent available. Inbothdata sets, we then grouped the data into I-cent intervals and calculated the fraction in Green Light ofballasts that fell into each ofthese intervals or for electricity the fraction ofcommercial sales that fell into each
32

### of these intervals. So the cost distribution here would be the solid line without the any

tick marks on it is the commercial electricity distribution, the other line with the markers on it is the Green Lights distribution of electricity. Just to explain what the distribution means, if you look at the peak of the commercial electricity distribution that shows that there's nearly 25% of the commercial electricity prices fell in the 5 to 6 cent interval. And then the bottom grant is the cumulative fraction, so if you take say 9 cents as an example and follow that up to the curve, for both commercial electricity and Green Lights about 8-tenths of the either ballast or the commercial electricity falls below 9 cents per kWh. And what I would like you to note about this distribution is that there is not a whole lot of difference between the cumulative fraction of Green Lights vs ballast vs commercial electricity sales. The fraction of data above or below any given electricity price is similar for the two data sets. In fact the averages of the two distributions are also quite similar. For commercial electricity the average is 7.8 cents per kWh or the Green Light ballast is 7.9 cents per kWh. So based on these distributions we conclude that the efficient ballasts installed in the Green Light program are not found disproportionately in regions with high electricity prices. 

### Mark Perlis: Would you go back to your first slide. The third bullet, is LBNL in agreement if there were a disproportionate distribution the end users (not audible) The key question under lines the (not audible) The question I want to ask, I don't believe that DoE ever gone on record on this I'm not sure if (not audible) Does the Department now agree that economy (not audible) Diane Fisher: Well I can't speak for the Department.


### 33 ofthese intervals. So the cost distribution here would be the solid line without the any tick marks onit is the commercial electricity distribution, the other line withthe markers
on it is the Green Lights distribution ofelectricity. Just to explain what the distribution means, 

### ifyou look at the peak ofthe commercial electricity distribution that shows that there's nearly 25% ofthe commercial electricity prices fell inthe 5 to 6 cent interval. And thenthe bottom grant is the cumulative fraction, so 

### if youtake say 9 cents as an example and follow that up to the curve, for bothcommercial electricity and GreenLights about 8-tenths ofthe either ballast orthe commercial electricity falls below 9 cents per kWh. And what I would like you to note about this distribution is that there is not
a whole lot ofdifference betweenthe cumulative fraction ofGreenLights
vs ballast vs commercial electricity sales. The fraction ofdata above or below any given electricityprice is similar for the two data sets. Infact the averages ofthe two distributions are also quite similar. For commercial electricity the average is 7.8 cents perkWh orthe Green Light ballast is 7.9 cents per kWh. So based onthese distributions we conclude thatthe efficient ballasts installed in the GreenLight programare not found disproportionately in regions withhigh electricityprices. Mark Per1is: Would you go backto your first slide. The third bullet, is LBNL in agreement 

### ifthere were a disproportionate distribution the end users (not audible) The key question under lines the (not audible) The question I want to ask, I don't believe that DoE ever gone onrecord onthis I'mnot sure 

### if (not audible) Does the Department now agree that economy (not audible) Diane Fisher: Well I can't speak for the Department.
33 ofthese intervals. So the cost distribution here would be the solid line without the any tick marks onit is the commercial electricity distribution, the other line withthe markers
on it is the Green Lights distribution ofelectricity. Just to explain what the distribution means, 

### ifyou look at the peak ofthe commercial electricity distribution that shows that there's nearly 25% ofthe commercial electricity prices fell inthe 5 to 6 cent interval. And thenthe bottom grant is the cumulative fraction, so 

### if youtake say 9 cents as an example and follow that up to the curve, for bothcommercial electricity and GreenLights about 8-tenths ofthe either ballast orthe commercial electricity falls below 9 cents per kWh. And what I would like you to note about this distribution is that there is not
a whole lot ofdifference betweenthe cumulative fraction ofGreenLights
vs ballast vs commercial electricity sales. The fraction ofdata above or below any given electricityprice is similar for the two data sets. Infact the averages ofthe two distributions are also quite similar. For commercial electricity the average is 7.8 cents perkWh orthe Green Light ballast is 7.9 cents per kWh. So based onthese distributions we conclude thatthe efficient ballasts installed in the GreenLight programare not found disproportionately in regions withhigh electricityprices. Mark Per1is: Would you go backto your first slide. The third bullet, is LBNL in agreement 

### ifthere were a disproportionate distribution the end users (not audible) The key question under lines the (not audible) The question I want to ask, I don't believe that DoE ever gone onrecord onthis I'mnot sure 

### if (not audible) Does the Department now agree that economy (not audible) Diane Fisher: Well I can't speak for the Department.
33

### Mike McCabe:

We are trying to understand the whole range (not audible) of the regulation (not audible) looking at the Green Light study (not audible) The comment that is made to me (not audible) Mark Perlis: We will reiterate the point that we made in our written comment. We feel very strongly about it. The second point, I would make is that what you have studied 

### in lighting after (not audible) the distribution of the electronic ballast have not been istributed (not audible) magnetic ballasts (not audible) It is quite possible that the new purchases of electronic ballasts might be distributed uniformly with electricity prices, but that the purchases of magnetic ballasts (not audible) And I would like an acknowledgment from LBNL today of that fact. It is conceivable that the magnetic ballasts purchasers would be disproportionately located in low electricity price for low lighting hours of users. Diane Fisher: Well the average sets of (not audible) impact of electricity price I would expect both distributions to be shifted. The purchases of electronic ballast to be shifted to higher electricity prices and magnetic ballasts purchases to be shifted to lower electricity prices. And we find for the purchases of electronic ballasts set that is not the case. They are not shified And purchase total market will be the sum of those two
. So it's a little difficult for me to see how you could have electronic ballast being evenly distributed and magnetic ballast being all concentrated on one end of the spectrum.
(Portion not audible. Several people speaking at the same time with some very low toned. )



### 34 Mike McCabe: We are trying to understand the whole range (not audible) ofthe regulation (not audible) looking at the GreenLight study (not audible) The comment that is made to me (not audible) MarkPedis: We 

### will reiterate the point that we made in ourwritten comment. We feel very strongly about it. The second point, I would make is that what you have studied in lighting after (not audible) the distribution ofthe electronic ballast have not been istributed (not audible) magnetic ballasts (not audible) 

### Itis quite possible that the new purchases ofelectronic ballasts might be distributed uniformly with electricity prices, butthat the purchases ofmagnetic ballasts (not audible) And I would like an acknowledgment from LBNL today ofthat fact. Itis conceivable that the magnetic ballasts purchasers would be disproportionately located in low electricity price for low lighting hours ofusers. Diane Fisher: Well the average sets of (not audible) impact ofelectricity price I would expect



## - bothdistributions to be shifted. The purchases ofelectronic ballast to be shifted to higher electricity prices and magnetic ballasts purchases to be shifted to lower electricity prices. And we find for the purchases ofelectronic ballasts set that is not the case. They are not shifted Andpurchase totalmarket 

### will be the sum ofthose two. So it's a little difficult for me to see howyou couldhave electronic ballast being evenly distributed and magnetic ballast being all concentrated on
one end ofthe spectrum.
(Portion not audible. Severalpeople speaking at the same time with
some very low toned. )

34 Mike McCabe: We are trying to understand the whole range (not audible) ofthe regulation (not audible) looking at the GreenLight study (not audible) The comment that is made to me (not audible) MarkPedis: We 

### will reiterate the point that we made in ourwritten comment. We feel very strongly about it. The second point, I would make is that what you have studied in lighting after (not audible) the distribution ofthe electronic ballast have not been istributed (not audible) magnetic ballasts (not audible) 

### Itis quite possible that the new purchases ofelectronic ballasts might be distributed uniformly with electricity prices, butthat the purchases ofmagnetic ballasts (not audible) And I would like an acknowledgment from LBNL today ofthat fact. Itis conceivable that the magnetic ballasts purchasers would be disproportionately located in low electricity price for low lighting hours ofusers. Diane Fisher: Well the average sets of (not audible) impact ofelectricity price I would expect



## - bothdistributions to be shifted. The purchases ofelectronic ballast to be shifted to higher electricity prices and magnetic ballasts purchases to be shifted to lower electricity prices. And we find for the purchases ofelectronic ballasts set that is not the case. They are not shifted Andpurchase totalmarket 

### will be the sum ofthose two. So it's a little difficult for me to see howyou couldhave electronic ballast being evenly distributed and magnetic ballast being all concentrated on
one end ofthe spectrum.
(Portion not audible. Severalpeople speaking at the same time with
some very low toned. )

34Barbara Atkinson:

The electricity voluntary program and EOA ask the participants to (not audible) to do retrofits that have a (not audible) Then you expect that people with lower electricity prices then would not have that rate of return and would not (not audible) 

### Mark Perlis: Well let's go to that point. We don't agree that magnetic ballasts purchasers, that this epidious from EPA Green Light, even if we accepted it on it's own (not audible) does not prove the distribution of magnetic ballasts purchases, and that is the key issue of (not audible) Speaking of the Green Light, first let me just point out, NEMES had it a different survey approach how the electronic purchasers might be distributed. They went to actual retrofit programs that were supported in industry publication, and they were matched up with electricity prices -- they show a high correlation to high electricity prices and to the (not audible) (person who spoke here was not audible) Mark Perlis: (not audible) we find a lot of these programs are disproportionately located in high electricity price states. The EPA Green Lights, you are (r_.ot audible) I don't think it is correct to make the assumption that every participant in Green Lights, especially those who (not audible), has made a decision ballast by ballast that even installation by installation, is earning a 20% return, therefore (not audible) tend to be larger companies that make decisions on a nationwide bases, and decided to participate even where it's not economic, because they want to do good (not audible). It is very valuable to the company for what ever reason to be a participant systems wide, company wide, nation wide in the Green Lights program. I think the presumption that this particular voluntary program indicates how purchases who (not audible) in the market on economic


### 35 Barbara Atkinson: The electricity voluntary program and EOA askthe participants to (not audible) to do retrofits that have a (not audible) Thenyou expect that people with lower electricity prices then would not have that rate ofreturn and would not (not audible) MarkPedis: Well let's go to that point. We don't agree that magnetic ballasts purchasers, that this epidious from EP A GreenLight, even ifwe accepted it onit's own (not audible) does not prove the distribution ofmagnetic ballasts purchases, and that is the key issue of(not audible) Speaking ofthe Green Light, first let mejustpoint out, NEMES had it a different survey approachhow the electronic purchasers might 

### be distributed. They went to actual retrofit programs that were supported in industry publication, and they were matched up with electricity prices -- they show a high correlationto high electricity prices and to the (not audible) (person who spoke here was not audible) Mark Perlis: (not audible) we find a lot ofthese programs are disproportionately located in high electricity price states. The EPA Green Lights, you are (not audible) I don't think it is correct to make the assumption that every participant in Green Lights, especially those who (not audible), has made a decision ballast by ballast that even installation by installation, is earning a 20% retmn, therefore (not audible) tend to be larger companies that make decisions ona nationwide bases, and decided to participate even where it's not economic, because they want to do good (not audible). Itis very valuable to the company for what
everreason to be a participant systems wide, company wide, nation wide in the Green Lights program. I think the presumption that this particular voluntary programindicates how purchases who (not audible) inthe market on economic


### 35 Barbara Atkinson: The electricity voluntary program and EOA askthe participants to (not audible) to do retrofits that have a (not audible) Thenyou expect that people with lower electricity prices then would not have that rate ofreturn and would not (not audible) MarkPedis: Well let's go to that point. We don't agree that magnetic ballasts purchasers, that this epidious from EP A GreenLight, even ifwe accepted it onit's own (not audible) does not prove the distribution ofmagnetic ballasts purchases, and that is the key issue of(not audible) Speaking ofthe Green Light, first let mejustpoint out, NEMES had it a different survey approachhow the electronic purchasers might 

### be distributed. They went to actual retrofit programs that were supported in industry publication, and they were matched up with electricity prices -- they show a high correlationto high electricity prices and to the (not audible) (person who spoke here was not audible) Mark Perlis: (not audible) we find a lot ofthese programs are disproportionately located in high electricity price states. The EPA Green Lights, you are (not audible) I don't think it is correct to make the assumption that every participant in Green Lights, especially those who (not audible), has made a decision ballast by ballast that even installation by installation, is earning a 20% retmn, therefore (not audible) tend to be larger companies that make decisions ona nationwide bases, and decided to participate even where it's not economic, because they want to do good (not audible). Itis very valuable to the company for what
everreason to be a participant systems wide, company wide, nation wide in the Green Lights program. I think the presumption that this particular voluntary programindicates how purchases who (not audible) inthe market on economic


### 35natural grounds. Many of those participants in the Green Lights program do not

make there decisions based on economic justifications. And I'm not sure if 

### you have any evidence that they do. Gene Foley: One of the requirements of EPA (not audible) they do a detailed audit in the facilities. It is a requirement. You have to count every single lamp, and every single fixture in every single building and you have to report that. (not audible) report available, to determine how many installations were over the threshold vs under the threshold. All of the reports that I have received back indicate that there not only over the threshold, but they are over threshold by substantial, substantial amount. So to say that any number of Green Light upgrades are lower than the required amount, first of all they have to analyze them on an individual bases not on a nationwide bases. (not audible) 

### Barbara Atkinson: (not audible) that their average distribution is 40% of the lighting project. (Gene Foley and Barbara Atkinson interchange conversation however it's not audible) 

### Glen Scltleede: Are all of the participants in Green Lights program, commercial rather than industrial? 

### Diane Fisher: There are some industrial participants, but for the purposes of this distribution we compared only the commercial participants to the U.S. commercial electricity rates. Glen Scltleede: So industrial is out of this in terms of (not audible) If you asses the commercial in all parts of the study then that particular (not audible) wouldn't be there.
36 natural grounds. Many ofthose participants in the GreenLights program do not make there decisions based on economicjustifications. And I'mnot sure if you have any evidence that they do. Gene Foley: One ofthe requirements ofEPA (not audible) they do a detailed audit in the facilities. Itis a requirement. Youhave to count every single lamp, and every single fixture inevery single building and youhave to report that. (not audible) report available, to determine howmany installations were over the threshold
vs under the threshold. All ofthe reports that I have received back indicate that there not only over the threshold, but they are over threshold by**substantia~** substantial amount. So to say that any number ofGreenLight upgrades are lower thanthe required amount, first ofall theyhave to analyze themon an individual bases not on a nationwide bases. (not audible) BarbaraAtkinson: (not audible) that their average distribution is 40% ofthe lighting project. (Gene Foley and Barbara Atkinson interchange conversation however it's not audible) Glen Sc1tleede: Are all ofthe participants in GreenLights program, commercial ratherthan industrial? Diane Fisher: There are some industrialparticipants, but for the purposes ofthis distribution
we compared only the commercial participants to the U.S. commercial electricity rates. Glen Sc1t1eede: So industrial is out ofthis in terms of(not audible) 

### Ifyou asses the commercial inall parts ofthe study thenthat particular (not audible) wouldn't be there.


### 36 natural grounds. Many ofthose participants in the GreenLights program do not make there decisions based on economicjustifications. And I'mnot sure if you have any evidence that they do. Gene Foley: One ofthe requirements ofEPA (not audible) they do a detailed audit in the facilities. Itis a requirement. Youhave to count every single lamp, and every single fixture inevery single building and youhave to report that. (not audible) report available, to determine howmany installations were over the threshold
vs under the threshold. All ofthe reports that I have received back indicate that there not only over the threshold, but they are over threshold by**substantia~** substantial amount. So to say that any number ofGreenLight upgrades are lower thanthe required amount, first ofall theyhave to analyze themon an individual bases not on a nationwide bases. (not audible) BarbaraAtkinson: (not audible) that their average distribution is 40% ofthe lighting project. (Gene Foley and Barbara Atkinson interchange conversation however it's not audible) Glen Sc1tleede: Are all ofthe participants in GreenLights program, commercial ratherthan industrial? Diane Fisher: There are some industrialparticipants, but for the purposes ofthis distribution
we compared only the commercial participants to the U.S. commercial electricity rates. Glen Sc1t1eede: So industrial is out ofthis in terms of(not audible) 

### Ifyou asses the commercial inall parts ofthe study thenthat particular (not audible) wouldn't be there.


### 36Diane Fisher:



### Yes. (not audible) accept commercial for the comparison. We didn't do the industrial distribution because the numbers are a lot smaller and it's harder to bet a (not audible) sample. Bob Wisbey: I'll try to do this briefly. We find a notion yet that the electronic ballast manufactures or the electronic ballast purchasers and users areonly distributed through the electricity price range and the burning hours range to be fundamental preposterous. It just doesn't make any logical sense. What is shown up here is a chart that was part of the submission that we did in October, it's not new, and if you very simply look at the top. It has the states 1 isted in descending order of the average commercial electricity price in 1995 and it has the lighting projects that were done that were recorded in energy user news. The last 1,000 projects that were recorded in there, and we have simply counted the projects by state. And what we see is the top group, if you look at group total the first one, the top ten states by electricity price had 27.5% of the population in the U.S. and they had 45.7% of the retrofit projects. They were disproportionate number of retrofits in the high electricity price states by almost a factor of 2 to 1. This is a part of the October submission that we made. Doug Brookman: Final comments and questions before we move on to the presentation, Diane Fisher: So we did something similar for lighting hours. In this case for both Green Lights and Xenergy data numbers were plotted separated for 4 ft., 8 ft. and 8 ftHO ballast. That is in keeping with what we did in the report where we had separate operating hours for each of those types of ballast. And numbers were calculated separately for the commercial and industrial sector. And then for each of those data we again grouped data into intervals and calculated these


### 37 Diane Fisher: Yes. (not audible) accept commercial for the comparison. We didn't do the industrial distribution because the numbers are a lot smaller and it's harder to bet a (not audible) sample. BobWisbey: I'll tryto do this briefly. We find a notionyet thatthe electronic ballast manufactures or the eleCtronic ballast purchasers and users areonly distributed throughthe electricity price range and the burning hours range to be fundamental preposterous. Itjust doesn't make any logical sense. What is shownup here is a chart that was part ofthe submissionthat
we did in October, it's not new, and ifyou very simply look at the top. It 

### has the states 1 isted in descending order ofthe average commercial electricityprice in 1995 and it 

### has the lighting projects that were done that were recorded in energy user news. The last 1,000 projects that were recorded in there, andwe have simply countedthe projects by state. And what we see is the top group, ifyou look at group total the first one, the topten statesby electricity price had 27.5% ofthe populationin the U.S. and theyhad 45.7% of the retrofit projects. They were disproportionate number ofretrofits in the high electricity price statesby almost a factor of2to 

### 1. This is a part ofthe October submissionthat we made. Doug Brookman: Final comments and questions before we move onto the presentation, Diane Fisher: So we did something similar for lighting hours. In

### this case for both Green Lights and Xenergy data numbers were plotted separated for 4 ft., 8 ft. and 8 ftHO ballast. That is inkeeping withwhat we did in the report where we had separate operating hours for each ofthose types of

### ballast. And numbers
were calculated separately for the commercial and industrial sector. And then for each ofthose datawe again grouped data into intervals and calculated these
37 Diane Fisher: Yes. (not audible) accept commercial for the comparison. We didn't do the industrial distribution because the numbers are a lot smaller and it's harder to bet a (not audible) sample. BobWisbey: I'll tryto do this briefly. We find a notionyet thatthe electronic ballast manufactures or the eleCtronic ballast purchasers and users areonly distributed throughthe electricity price range and the burning hours range to be fundamental preposterous. Itjust doesn't make any logical sense. What is shownup here is a chart that was part ofthe submissionthat
we did in October, it's not new, and ifyou very simply look at the top. It 

### has the states 1 isted in descending order ofthe average commercial electricityprice in 1995 and it 

### has the lighting projects that were done that were recorded in energy user news. The last 1,000 projects that were recorded in there, andwe have simply countedthe projects by state. And what we see is the top group, ifyou look at group total the first one, the topten statesby electricity price had 27.5% ofthe populationin the U.S. and theyhad 45.7% of the retrofit projects. They were disproportionate number ofretrofits in the high electricity price statesby almost a factor of2to 

### 1. This is a part ofthe October submissionthat we made. Doug Brookman: Final comments and questions before we move onto the presentation, Diane Fisher: So we did something similar for lighting hours. In

### this case for both Green Lights and Xenergy data numbers were plotted separated for 4 ft., 8 ft. and 8 ftHO ballast. That is inkeeping withwhat we did in the report where we had separate operating hours for each ofthose types of

### ballast. And numbers
were calculated separately for the commercial and industrial sector. And then for each ofthose datawe again grouped data into intervals and calculated these
37

### fraction of ballasts of each data set that fell into each of those interval. And I

will be mostly talking about the results from 4 ft commercial lamp ballast because some of the other distributions we did have problems with small sample sizes. In some case you see large peak due that are due to just one Green Lights project. But all of those distributions are in your handouts. This is the distribution for 4 ft commercial ballast -- the solid line without tick marks is the Xenergy project data and the line with the tick marks is the Green Lights program data. Something that I would like you to notice about this distribution is that there are distinct peaks at 2000, 3000, 4000, and 5000 hrs/yr. And this is something that we found in the Green Lights -- I had it on my first slide -- Green Lights data is self-reported and does have some of the problems inherent with self-reported data. For one thing, these numbers indicate to us that a lot of the numbers that were being reported for lighting hours were approximate. And I would also like for you to notice that there is a large peak in the GL at 8750 hr/yr, which is continuous operation that is lacking in the Xenergy data set. I should also mention this Xenergy data. was based on very detailed audits, on-site audits with auditors who were trying to rectify the audit results with Xenergy balances with the utility bills. Was not required of the GL participants. We are not quite sure why there is that 8760 GL and not with Xenergy. One possibility is that GL project did in fact target fixtures that were operating continuously. In any case we do see a difference here between the GL distribution and the Xenergy distribution. The GL you see particularly in the cumulative that in fact the GL distribution is some what shifted to the right toward high operating hours. That should result in the GL average annual operating hours being 4300 hr/yr, where as with the Xenergy data it's 3600 hr/yr. A large part of that shifted due to that peak at 8750, if you take that out the average for GL is 3900 hr/yr which is closer to the 3600 hr/yr.



### 38 fraction ofballasts ofeach data set that fell into each ofthose interval. And I 

### willbe mostly talking about the results from 4 

### ft commercial lamp ballast because
some ofthe other distributions we did have problems with small sample sizes. 

### In
some case you see large peak due that are due tojust one GreenLights project. But all ofthose distributions are in your handouts. This is the distribution for 4 

### ft commercial ballast -- the solid line without tick marks is the Xenergy project data and the line withthe tick marks is the Green Lights program data Something that I would like you to notice about this distribution is that there are distinct peaks at 2000,3000,4000, and 5000 hrs/yr. And this is something that we found inthe Green Lights -- I had it onmy first slide -- Green Lights data is self-reported and does have some ofthe problems inherent with self-reported data. For one thing, these numbers indicate to us that a lot ofthe numbers that
were being reported for lighting hours were approximate. And I would also like for you to notice that there is a large peak in the GL at 8750 hr/yr, which is continuous operatIonthat 

### is lacking in the Xenergy data set. I should also mention this Xenergy datawas based on very detailed audits, on-site audits with auditors who were trying to rectuythe audit results with Xenergy balances withthe utility bills. Was not required ofthe GL participants. We are not quite sure why there is that 8760 GL and not withXenergy. One possibility is that GL project did in fact target fixtures that were operating continuously. 

### Inany case we do see a difference here betweenthe GL distribution and the Xenergy distribution. The GL you see panicularly in the cumulative that in fact the GL distribution is some what shifted to the right toward high operating hours. That should result in the GL average annual operating hours being 4300 hr/yr, where as withthe Xenergy datait's 3600 hr/yr. A large part ofthat shifted due to that peak at 8750, 

### ifyou take that out the average for GL is 3900 

### hr/yr which is closer to the 3600 

### hr/yr.

38 fraction ofballasts ofeach data set that fell into each ofthose interval. And I 

### willbe mostly talking about the results from 4 

### ft commercial lamp ballast because
some ofthe other distributions we did have problems with small sample sizes. 

### In
some case you see large peak due that are due tojust one GreenLights project. But all ofthose distributions are in your handouts. This is the distribution for 4 

### ft commercial ballast -- the solid line without tick marks is the Xenergy project data and the line withthe tick marks is the Green Lights program data Something that I would like you to notice about this distribution is that there are distinct peaks at 2000,3000,4000, and 5000 hrs/yr. And this is something that we found inthe Green Lights -- I had it onmy first slide -- Green Lights data is self-reported and does have some ofthe problems inherent with self-reported data. For one thing, these numbers indicate to us that a lot ofthe numbers that
were being reported for lighting hours were approximate. And I would also like for you to notice that there is a large peak in the GL at 8750 hr/yr, which is continuous operatIonthat 

### is lacking in the Xenergy data set. I should also mention this Xenergy datawas based on very detailed audits, on-site audits with auditors who were trying to rectuythe audit results with Xenergy balances withthe utility bills. Was not required ofthe GL participants. We are not quite sure why there is that 8760 GL and not withXenergy. One possibility is that GL project did in fact target fixtures that were operating continuously. 

### Inany case we do see a difference here betweenthe GL distribution and the Xenergy distribution. The GL you see panicularly in the cumulative that in fact the GL distribution is some what shifted to the right toward high operating hours. That should result in the GL average annual operating hours being 4300 hr/yr, where as withthe Xenergy datait's 3600 hr/yr. A large part ofthat shifted due to that peak at 8750, 

### ifyou take that out the average for GL is 3900 

### hr/yr which is closer to the 3600 

### hr/yr.

38

### Given the large uncertainties inherent in self-reported GL data, it is difficult to

determine if the difference is significant. Mark Perlis: Well my first comment is that here you see a significant (not audible) Isaac Turiel: We've had some discussions about the distributions and what was found with DoE and it's very difficult to tell on both counts -- it could be price and operating hours they are both self-reported numbers. And numbers that are put into electricity price we don't know how carefully they obtained those numbers. How did they get them? Did they look at there last bill? Did they look at the kWh charged or did they actually try to figure out the average? We don't know how they got that. So it's true for both electricity and operating hours. This was a large data base that had a lot of information. It would be reasonable to try to investigate that and see if we can answer the question that was proposed, the populations their . differences And even now there are still uncertainties to a degree. We don't know for sure. On the other hand, you presented so data too, it's a smaller sample. That was self-reported too by people putting in data. But I think what I am saying it is very difficult to know the interest. I don't think that anybody in this room knows what the interest in terms of having real data, we can have guess and opinions. But we don't know for the actual population of people who have (not audible) We do not know the -- you have to go right to those people. Mark Perlis: (not audible) The reason has become important is because in the past DoE and LBNL have done all of their LCC analysis by using (not audible) on an average customer, the average consumer base. We have challenged you, I think perhaps for the first time, and I don't know whether other industries have challenged DoE on this or not, or if it is relevant for the residential customer. We don't have a


### 39 Given the large uncertainties inherent in self-reported GL data, it is difficult to determine ifthe difference is significant. Mark Perlis: Well my first comment is that here you see a significant (not audible) Isaac Turie!: We've had some discussions about the distributions and what was found with DoE and it's very difficult to tell onboth counts
-- it could be price and operating hours they are both self-reported numbers. And numbers that are put into electricity price we don't know how carefully they obtained those numbers. How did they get them? Did they look at there last bill? Didthey look at the kWh charged or did they actually tryto figure out the average? We don't know how they got that. So it's true for both electricity and operating hours. This was a large data base that had a lot ofinformation. Itwould be reasonable to try to investigate that and
see ifwe can answer the question that was proposed, the populations their

. differences And evennowthere are still uncertainties to a degree. We don't know for sure. Onthe other hand, you presented so datatoo, it's a smaller sample. That was self-reported too bypeople putting indata. But I think what I am saying it is very difficult to knowthe interest. I don't think that anybody in this roomknows what the interest in terms ofhaving real data, we canhave guess and opinions. But we don't know for the actual population ofpeople who have (not audible) We do not knowthe

-- youhave to go right to those people. Mark PerIis: (not audible) The reason has become important is because in the past DoE and LBNL have done 

### all oftheir Lee analysis by using (not audible) onan average customer, the average consumer base. We have challenged you, I think perhaps for the first time, and I don't know whether other industries have challenged DoE
onthis or not, or ifit is relevant for the residential customer. We don't have a
39 Given the large uncertainties inherent in self-reported GL data, it is difficult to determine ifthe difference is significant. Mark Perlis: Well my first comment is that here you see a significant (not audible) Isaac Turie!: We've had some discussions about the distributions and what was found with DoE and it's very difficult to tell onboth counts
-- it could be price and operating hours they are both self-reported numbers. And numbers that are put into electricity price we don't know how carefully they obtained those numbers. How did they get them? Did they look at there last bill? Didthey look at the kWh charged or did they actually tryto figure out the average? We don't know how they got that. So it's true for both electricity and operating hours. This was a large data base that had a lot ofinformation. Itwould be reasonable to try to investigate that and
see ifwe can answer the question that was proposed, the populations their

. differences And evennowthere are still uncertainties to a degree. We don't know for sure. Onthe other hand, you presented so datatoo, it's a smaller sample. That was self-reported too bypeople putting indata. But I think what I am saying it is very difficult to knowthe interest. I don't think that anybody in this roomknows what the interest in terms ofhaving real data, we canhave guess and opinions. But we don't know for the actual population ofpeople who have (not audible) We do not knowthe

-- youhave to go right to those people. Mark PerIis: (not audible) The reason has become important is because in the past DoE and LBNL have done 

### all oftheir Lee analysis by using (not audible) onan average customer, the average consumer base. We have challenged you, I think perhaps for the first time, and I don't know whether other industries have challenged DoE
onthis or not, or ifit is relevant for the residential customer. We don't have a
39

### residential product. We have commercial and industrial products
. And for

those customers we believe, we have come to believe, not that all of the purchases of the energy efficient or the non

-energy efficient products are commonly distributed among the population. (not audible) 

### (non-audible

-- several people having independent conversations) Bob Wisbey: This again is a slide from the submittal we made in October. This is a breakeven curve and I don't expect everybody to figure this out. On the left hand axis is the burring hours or the horizontal axis is electricity price, the black curve there is the breakeven curve. And anybody who has an installation that had the electricity price and burning hours above and to the right of that curve would be, so call 

### (not audible) required a rot more efficient ballast. And going to the left and below would be a sa caul ooEr. The analysis of this particular curve with this particular set of variables shows (not audible) detail submittal, shows 38% of installations would be losers in that they were require to install a more efficient ballast. The other percentage would be winners. One of the reasons why we want this the comment with the 20% difference in burning hour between the surveys. There was a 3600 hour and 4300 hour numbers in the survey which was shown. By coincidence the (not audible) is the same breakeven curve but with the axis shifted by 20% . In this curve, as you can see now, much larger percentage of the users are below and to the left of the line. In fact, in this particular one 70% would be losers, if the variable of the average points were shifted by 20%. But it is in the October submission that we made and explaining the extensive detail how it was done. Doug Brookman: Thank you. Bob. Are you done with your presentation? Diane Fisher:


### 40 residential product. We have commercial and industrial products. And for those customers we believe, we have come to believe, notthat all ofthe purchases ofthe energy efficient orthe non-energy efficient products are commonly distributed among the population. (not audible) (non-audible -- severalpeople having independent conversations) BobWisbey: This again 1S a slide fromthe submittal we made in October. This is a breakeven
curve and I don't expect everybodyto figure this out. Onthe left hand 

### axis is the burning hourr. Oflthe horizontal 

### axis is electricity price, the black curve there is the breakeven cmve. And anybody who has aninstallationthat had the electricity price and burning hours above andto the right ofthat curve would be, so call (not audible) required a iot more efficient ballast. And going to the left and below wouldbe a S0 caH 1003t;r. The analysis ofthis particular curve withthis particular set ofvariables shows (not audible) detail submittal, shows 38% ofinstallations wouldbe losers 

### L.'l that they were require to install a more efficient ballast. The other percentage would be winners. One ofthe reasons why we want 

### this the comment withthe 20% difference in burning hourbetween the surveys. There was a 3600 hour and 4300 hour numbers in the survey which was shown. 

### By coincidence the (not audible) is the same breakeven
curve but with the 

### axis shifted by 20%. Inthis curve, as you can see now, muchlargerpercentage ofthe users are below and to the left ofthe line. Infact, inthis particular one 70% would be losers, 

### ifthe variable ofthe average points were shifted by 20%. But it is inthe October submission that we made and explaining the extensive detail how it was done. Doug Brookman: Thank you. Bob. Are you done withyourpresentation? Diane Fisher:
40 residential product. We have commercial and industrial products. And for those customers we believe, we have come to believe, notthat all ofthe purchases ofthe energy efficient orthe non-energy efficient products are commonly distributed among the population. (not audible) (non-audible -- severalpeople having independent conversations) BobWisbey: This again 1S a slide fromthe submittal we made in October. This is a breakeven
curve and I don't expect everybodyto figure this out. Onthe left hand 

### axis is the burning hourr. Oflthe horizontal 

### axis is electricity price, the black curve there is the breakeven cmve. And anybody who has aninstallationthat had the electricity price and burning hours above andto the right ofthat curve would be, so call (not audible) required a iot more efficient ballast. And going to the left and below wouldbe a S0 caH 1003t;r. The analysis ofthis particular curve withthis particular set ofvariables shows (not audible) detail submittal, shows 38% ofinstallations wouldbe losers 

### L.'l that they were require to install a more efficient ballast. The other percentage would be winners. One ofthe reasons why we want 

### this the comment withthe 20% difference in burning hourbetween the surveys. There was a 3600 hour and 4300 hour numbers in the survey which was shown. 

### By coincidence the (not audible) is the same breakeven
curve but with the 

### axis shifted by 20%. Inthis curve, as you can see now, muchlargerpercentage ofthe users are below and to the left ofthe line. Infact, inthis particular one 70% would be losers, 

### ifthe variable ofthe average points were shifted by 20%. But it is inthe October submission that we made and explaining the extensive detail how it was done. Doug Brookman: Thank you. Bob. Are you done withyourpresentation? Diane Fisher:
40I'm done, unless anyone has questions for me.

Doug Brookman: I think before long we should entertain a break. Additional comments, questions on the presentation or on the other comments that have been made before we

move on. 

### BREAK 11:15 A.M. Doug Brookman: I am going to make sure that we stop for lunch about 12:30 or in that range. Isaac Turiel: Okay were are going to turn from LCC analysis to the National Energy Impacts. And to start with we are going to talk about shipments, a key input to any National Energy Savings and then we will go on to discuss spreadsheet after that. We will demonstrate the spreadsheet which calculates National Energy Savings. Under shipments, I going to talk about historical data and a little bit about utility DSM programs (shipment forecast). The historical data is data supplied to us by NEMA and it's on shipments of ballast from 1993 to 1997. Disaggregated by magnetic, electronic and cathode cutout ballasts and it's for several different lamp ballast systems. So we looked at both what peycent of the total were magnetic in different product classes and also the upward magnitude of shipments of the magnetic ballast. Without the help of (not audible) we could not have presented this data. Thank you. What is shown here is from 1993 to 1997 for three different types of ballast -- All 4ftT12's, 8ftT12's and 8ftT12HO -- This aggregation does three types. And what we see is looking at the top two [4ftT12 and 8ftT12] there is not very much change that occurs -- pretty level. The 8ftT12/HO is basically on the order 50%. So about half of those ballast are magnetic and half of them electronic. Now I will look at the absolute magnitude and see what's happening. Right now we are looking at 2F40T12 Ballasts, these are magnetic keep in mind.



### 41 I'm done, unless anyone has questions for me. Doug Brookman: I think before long we should entertain a break. Additional comments, questions
onthe presentation or onthe other comments that have beenmade before we
move on. BREAK 11:15 A.M. Doug Brookman: I am going to make sure that we stop for lunch about 12:30 or inthat range. Isaac Turiel: Okay were are going to turn from LCC analysis to the National Energy Impacts. Andto start withwe are going to talk about shipments, a key input to anyNational Energy Savings and then we will go onto discuss spreadsheet afterthat. We 

### will demonstrate the spreadsheet which calculates NationalEnergy Savings. Under shipments, I going to talk about historical data and a little bit about utility DSM programs (shipment forecast). The historical data is data supplied to us byNEMA and it's on shipments ofballast from 1993 to 1997. Disaggregated by magnetic, electronic and cathode cutoutballasts and it's for several different lamp ballast systems. So we looked at bothwhat percent ofthe total were magnetic in different product classes and also the upward magnitude ofshipments ofthe magnetic ballast. Without the help of(not audiNe) we could not have presented this data. Thank you. What is shownhere is from 1993 to 1997 for three different types ofballast

-- A114ftTI2's, SftT12's and SftT12HO

-- This aggregation does three types. And what we see is looking at the top two [4ftT12 and SftTI2] there is not very much change that occurs -- pretty level. The SftT12IHO is basically on the order 50%. So about halfofthose ballast are magnetic and halfofthem electronic. NowI 

### will look at the absolute magnitude and see what's happening. Right now we are looking at 2F40T12 Ballasts, these are magnetic keep in mind.
41 I'm done, unless anyone has questions for me. Doug Brookman: I think before long we should entertain a break. Additional comments, questions
onthe presentation or onthe other comments that have beenmade before we
move on. BREAK 11:15 A.M. Doug Brookman: I am going to make sure that we stop for lunch about 12:30 or inthat range. Isaac Turiel: Okay were are going to turn from LCC analysis to the National Energy Impacts. Andto start withwe are going to talk about shipments, a key input to anyNational Energy Savings and then we will go onto discuss spreadsheet afterthat. We 

### will demonstrate the spreadsheet which calculates NationalEnergy Savings. Under shipments, I going to talk about historical data and a little bit about utility DSM programs (shipment forecast). The historical data is data supplied to us byNEMA and it's on shipments ofballast from 1993 to 1997. Disaggregated by magnetic, electronic and cathode cutoutballasts and it's for several different lamp ballast systems. So we looked at bothwhat percent ofthe total were magnetic in different product classes and also the upward magnitude ofshipments ofthe magnetic ballast. Without the help of(not audiNe) we could not have presented this data. Thank you. What is shownhere is from 1993 to 1997 for three different types ofballast

-- A114ftTI2's, SftT12's and SftT12HO

-- This aggregation does three types. And what we see is looking at the top two [4ftT12 and SftTI2] there is not very much change that occurs -- pretty level. The SftT12IHO is basically on the order 50%. So about halfofthose ballast are magnetic and halfofthem electronic. NowI 

### will look at the absolute magnitude and see what's happening. Right now we are looking at 2F40T12 Ballasts, these are magnetic keep in mind.
41Again we are looking a data we got on shipments from NEMA. And we have

five data points only, 1993 to 1997 not very much to forecast what is going to happen down to the future. And the last point 1997 is for a half a year. And in consultation with members of NEMA we (not audible) for the first six months 

### so we could get a full year of testing Now what we have, those values are up on the order for this particular ballast, starts around 7M and comes down to about 6M and show for 1997 roughly a number to the year before. (not audible) Somewhere about 2001 2015, 2016, or 2017 there would be no more magnetic ballasts. That's one trend line. On the other hand (not audible) That was for the 8 foot magnetic ballasts. This one is for the 4 ft magnetic ballast. Again it is kind of very similar. It comes down from something like 28M or so down to about 23M the seems to just sit in that one data point, not change very much from one year to the next. And the trend line shows that around 2015, 2016 it will go to zero for magnetic ballast. So we showed examples of historical information. Those two ballast where the most of the potential energy savings would be, that's why we put them up there. With the 8 ft and the 4 ft 2-lamp ballasts is where most of the savings potential lie in (not audible) to electronics. And there is another non-regulatory program that may impact shipments in the future. And we talked about GL already on this list. Utility DSM I want to say a little about very shortly. And NEMA has a program which they may want to say something about if they like. ASHRAE/IES 90.1 which effects new building construction in the future. And there's FEMP also -- Federal programs. These are all programs that effect, trying to get electronic ballasts in the market. 

### I'd like to turn to the Utility DSM Program. Before showing that we analyzed some data we got from utility companies but after looking through it I wanted to put this in front before sharing the results because one of the things

42 Again we are looking a datawe got on shipments from NEMA. And we have five data points only, 1993 to 1997 not very much to forecast what 

### is going to happen downto the future. And the last point 1997 

### is for a halfa year. And in consultationwith members ofNEMAwe (not audible) for the first six months
so we could get a 

### full year oftesting Nowwhat we have, those values are up on the order for this particular ballast, starts around 7M and comes down to about 6M and show for 1997 roughly a number tothe year before. (not audible) Somewhere about 2001 2015,2016, or 2017 there would be no more magnetic ballasts. That's one trend line. Onthe otherhand (not audible) That was for the 8 foot magnetic ballasts. This one 

### is for the 4 

### :ft magnetic ballast. Again it 

### is kind ofvery similar. Itcomes down from something like 28M or so downto about 23Mthe seems tojust sit in that one data point, not change very much from one year to the next. Andthe trend line shows that around 2015, 2016 it 

### will go to zero for magnetic ballast. So we showed examples ofhistorical information. Those two ballast where the most ofthe potential energy savings would be, that's why we put themup there. With the 8 

### ft and the 4 

### ft 2-lamp ballasts 

### is where most ofthe savings potential lie in (not audible) to electronics. And there 

### is another non-regulatory programthat may impact shipments inthe future. And we talked about GL already onthis list. Utility DSM I want to say
a little about very shortly. And NEMA has a programwhich theymay want to say something about 

### ifthey like. ASHRAEIIES 90.1 which effects newbuilding construction inthe future. And there's FEMP also

-- Federal programs. These
are 

### all programs that effect, trying to get electronic ballasts in the market. I'd like to turnto the Utility DSMProgram. Before showing that we analyzed some datawe got from utility companies but after looking through it I wanted to put this in front before sharing the results because one ofthe things

42 Again we are looking a datawe got on shipments from NEMA. And we have five data points only, 1993 to 1997 not very much to forecast what 

### is going to happen downto the future. And the last point 1997 

### is for a halfa year. And in consultationwith members ofNEMAwe (not audible) for the first six months
so we could get a 

### full year oftesting Nowwhat we have, those values are up on the order for this particular ballast, starts around 7M and comes down to about 6M and show for 1997 roughly a number tothe year before. (not audible) Somewhere about 2001 2015,2016, or 2017 there would be no more magnetic ballasts. That's one trend line. Onthe otherhand (not audible) That was for the 8 foot magnetic ballasts. This one 

### is for the 4 

### :ft magnetic ballast. Again it 

### is kind ofvery similar. Itcomes down from something like 28M or so downto about 23Mthe seems tojust sit in that one data point, not change very much from one year to the next. Andthe trend line shows that around 2015, 2016 it 

### will go to zero for magnetic ballast. So we showed examples ofhistorical information. Those two ballast where the most ofthe potential energy savings would be, that's why we put themup there. With the 8 

### ft and the 4 

### ft 2-lamp ballasts 

### is where most ofthe savings potential lie in (not audible) to electronics. And there 

### is another non-regulatory programthat may impact shipments inthe future. And we talked about GL already onthis list. Utility DSM I want to say
a little about very shortly. And NEMA has a programwhich theymay want to say something about 

### ifthey like. ASHRAEIIES 90.1 which effects newbuilding construction inthe future. And there's FEMP also

-- Federal programs. These
are 

### all programs that effect, trying to get electronic ballasts in the market. I'd like to turnto the Utility DSMProgram. Before showing that we analyzed some datawe got from utility companies but after looking through it I wanted to put this in front before sharing the results because one ofthe things

42we find is the rebates mostly for T8 lamp/ballasts that are occurring in this program when

you look at it in detail

-- not for T12

. There's no focus on T12 lamp/ballast as far as I could tell
. There are very few rebates that occurred. And that mostly replacement market. The DSM appear to be mostly retrofit, large scale market. It is not clear, I will say right up front, whether this analysis of DSM programs will tell us a lot about the 

### future T 12 lamp/ballast shipment forecasts

. And the shift base particularly for replacement markets. This slide here tells us something about the methodology. I will say basically we contacted about 30 different utilities

-- 15 of those (not audible) DSM program in the country out of those 30. We only got data from 9, it's very difficult to get this kind of data

. Very few people were available to provide this kind of information and they don't have it in any reports

. They have to go look it up in a data base and give it to you
. The kind of data we got was how much they were spending on energy efficiency programs and what percent of that was devoted to electronic ballast
. In the example I am going to show here, just to show how we did it, for the year 1994 the samples that we looked at 13% of the energy efficiency spending was from electronic ballast and the average rebate per ballast in that same year was $10 .70. Now to try to get a national estimate you have to make a big leap . For your sample applies to the nation as a whole. That's the only way to get some kind of, at least one way to get a national estimate of how many ballasts were rebated. We made that assumption that the percentage and dollars per ballasts as a sample was the same for the nation. And we knew what the total spending is for the nation, we have this data $1.6 Billion for example in 1994 energy efficiency

. And we take 13% devoted to electronic ballasts we get $207 Million devoted to electronic ballasts nationally. Following that same example , you divide that number $207 Million by the average rebate per ballast of $10.70, you get a result of about 19.4 Million electronic ballast rebate

. There is a report on the table that has all these details about this analysis

. The next graft which shows what the results . On the very top are the total number of electronic ballasts shipped in each of those years 1993 to 1997.


### 43 we find is the rebates mostly for TS lamplballasts that are occurring in this programwhen you look at it in detail-- not for T12. There's no focus onT12lamplballast as far as I could tell. There are very few rebates that occurred. And that mostly replacement market. The DSM appear to be mostly retrofit, large scale market. 

### Itis not clear, 

### I 

### will say right up front, whether this analysis ofDSMprograms 

### will tell us a lot about the future T12lamplballast shipment forecasts. Andthe shift base particularly for replacement markets. This slide here tells us something about the methodology. I 

### will say basically we contacted about 30 different utilities

-- 15 ofthose (not audible) DSM program in the country outofthose 30. We only got data from 9, it's very difficult to get this kind ofdata. Very few people were available to provide this kind ofinformation and they don't have it in any reports. They have to go look it up in a database and give it to you. 

### The kind ofdata we gotwas howmuchthey were spending onenergy efficiency programs and what percent ofthat was devoted to electronic ballast. Inthe example I am going to show here,justto showhow we did it, for the year 1994 the samples that we looked at 13% ofthe energy efficiency spending was from electronic ballast and the average rebate perballast in that same year was $10.70. Nowto tryto get a national estimate youhave to 

### make a big leap. Foryour sample applies to the nation as a whole. That's the only way to get some kind of, at least one way to get a national estimate of howmany ballasts were rebated. We made that assumptionthat the percentage and dollars perballasts as a sample wasthe same for the nation. And we knew what the total spending is for the nation, we have this data $1.6 Billion for example in 1994 energy efficiency. And wetake 13% devotedto electronic ballasts we get $207 Million devoted to electronic ballasts nationally. Following that same example, you divide that number $207 Million bythe average rebate per ballast of$10.70, you get a result ofabout 19.4 Million electronic ballast rebate. There is a report onthe table that 

### has 

### all these details about this analysis. The next graft which shows what the results. Onthe very top are the total number ofelectronic ballasts shipped in each ofthose years 1993 to 1997.
43 we find is the rebates mostly for TS lamplballasts that are occurring in this programwhen you look at it in detail-- not for T12. There's no focus onT12lamplballast as far as I could tell. There are very few rebates that occurred. And that mostly replacement market. The DSM appear to be mostly retrofit, large scale market. 

### Itis not clear, 

### I 

### will say right up front, whether this analysis ofDSMprograms 

### will tell us a lot about the future T12lamplballast shipment forecasts. Andthe shift base particularly for replacement markets. This slide here tells us something about the methodology. I 

### will say basically we contacted about 30 different utilities

-- 15 ofthose (not audible) DSM program in the country outofthose 30. We only got data from 9, it's very difficult to get this kind ofdata. Very few people were available to provide this kind ofinformation and they don't have it in any reports. They have to go look it up in a database and give it to you. 

### The kind ofdata we gotwas howmuchthey were spending onenergy efficiency programs and what percent ofthat was devoted to electronic ballast. Inthe example I am going to show here,justto showhow we did it, for the year 1994 the samples that we looked at 13% ofthe energy efficiency spending was from electronic ballast and the average rebate perballast in that same year was $10.70. Nowto tryto get a national estimate youhave to 

### make a big leap. Foryour sample applies to the nation as a whole. That's the only way to get some kind of, at least one way to get a national estimate of howmany ballasts were rebated. We made that assumptionthat the percentage and dollars perballasts as a sample wasthe same for the nation. And we knew what the total spending is for the nation, we have this data $1.6 Billion for example in 1994 energy efficiency. And wetake 13% devotedto electronic ballasts we get $207 Million devoted to electronic ballasts nationally. Following that same example, you divide that number $207 Million bythe average rebate per ballast of$10.70, you get a result ofabout 19.4 Million electronic ballast rebate. There is a report onthe table that 

### has 

### all these details about this analysis. The next graft which shows what the results. Onthe very top are the total number ofelectronic ballasts shipped in each ofthose years 1993 to 1997.
43

### Again that's NEMA data

. Starting around 23M and going up to 35M almost

in 1997. Again based on six months for 1997. We have two different estimates in 1993 of what percent of the ballast were subsidized through electric utility rebates

. So the reason for the two numbers is we had two different samples -- we had 6 utilities that provided all of the information we asked for. We had a larger sample of 9 utilities that provided some of those details, but some were left out and we had to do a little more extrapolating. We did it two different ways. The lower one alludes to 9 utilities samples, and upper to the 6 utilities samples. So for the first year it say that depending which sample you used from 41 to 47% of the ballast were subsidized. Going on further that number goes up, but you have twe very difr'erert estimates from roughly 50 to 3/4 being subsidized. The following year is about 50%, it doesn't matter which sample
. Then it comes down a lot (not audible) 1995 to 1996 there is this big fall off, and then we only have data from one of those sample, the 6 utilities, falls off even more

. We learn, there is 

### less money going into ballast rebates. How that is going to effect the (not audible) (Presenter had difficulty with microphone

-- not functioning) Isaac Turiei: I just want to show one more worksheet before, the description, how it operates and you'll have to look at this at your leisure when you get it back to your offices just the same. This is the information on where the energy savings are confirmed when you changed from a, lets look at the very top one. One at F40T12 energy saver lamp. You have the baseline information. The normalized fixture watts, the price, kilowatt hours per year you use and then shows incremental costs going from baseline (not audible) cutout or baseline to home electronic. That would be like $10.80 in this example here. Baseline to electronic. And then kilowatt hour savings would show 36 kilowatt hours for that change from baseline to electronic. This information is provided for 1F40, 2F40, 2F96, 2F96H0. Those four categories. The second category the weighted average, the 2F40T 12 and the weighted

44 Again that's NEMA 

### data. Starting around 23M and going up to 35M almost in 1997. Againbased on six months for 1997. We have two different estimates in 1993 ofwhat percent ofthe ballast were subsidized through electric utility rebates. So the reason for the two numbers is we had two different samples

-- we had 6 utilities that provided all ofthe informationwe asked for. We had
a larger sample of9 utilities that provided some ofthose details, but some were left out and we hadto do a little more extrapolating. We did it two different ways. The lower one alludes to 9 utilities samples, and upper to the 6 utilities samples. So for thefirst year it saythat depending which sample youused from 41 to 47% ofthe ballast were subsidized. Going onfurther that number goesup, butyou have 

### hvo very different estimates from mughly 50to 3/4being subsidized. The following year is about 50%, it doesn't matter which sample. Thenit comes down
a lot (not audible) 1995 to 1996 there is this big fall off, andthenwe only have data from one ofthose sample, the 6 utilities, falls offevenmore. We learn, there is less money going into ballast rebates. Howthat is going to effect the (not audible) (Presenter had difficulty withmicrophone

-- not functioning) Isaac Turiel: 

### 1

just want to show one more worksheet before, the description, how it operates and you'll have to look at this at your leisure whenyou get itback to your officesjustthe same. This is the informationonwhere the energy savings are confirmedwhenyou changed from 

### a, lets look

### at the verytop one. One at F40T12 energy saver lamp. You have the baseline information. The normalized fixture watts, the price, kilowatt hours peryear youuse and then shows incremental costs going from baseline (not audible) cutout orbaseline to home electronic. That would be like $10.80 inthis example here. Baseline to electronic. And thenkilowatt hour savings would show 36 kilowatt hours for that change frombaseline 

### to electronic. This information is provided for IF40, 2F40, 2F96, 2F96HO. Those four categories. The second categorythe weighted average, the 2F40T12 and the weighted
44 Again that's NEMA 

### data. Starting around 23M and going up to 35M almost in 1997. Againbased on six months for 1997. We have two different estimates in 1993 ofwhat percent ofthe ballast were subsidized through electric utility rebates. So the reason for the two numbers is we had two different samples

-- we had 6 utilities that provided all ofthe informationwe asked for. We had
a larger sample of9 utilities that provided some ofthose details, but some were left out and we hadto do a little more extrapolating. We did it two different ways. The lower one alludes to 9 utilities samples, and upper to the 6 utilities samples. So for thefirst year it saythat depending which sample youused from 41 to 47% ofthe ballast were subsidized. Going onfurther that number goesup, butyou have 

### hvo very different estimates from mughly 50to 3/4being subsidized. The following year is about 50%, it doesn't matter which sample. Thenit comes down
a lot (not audible) 1995 to 1996 there is this big fall off, andthenwe only have data from one ofthose sample, the 6 utilities, falls offevenmore. We learn, there is less money going into ballast rebates. Howthat is going to effect the (not audible) (Presenter had difficulty withmicrophone

-- not functioning) Isaac Turiel: 

### 1

just want to show one more worksheet before, the description, how it operates and you'll have to look at this at your leisure whenyou get itback to your officesjustthe same. This is the informationonwhere the energy savings are confirmedwhenyou changed from 

### a, lets look

### at the verytop one. One at F40T12 energy saver lamp. You have the baseline information. The normalized fixture watts, the price, kilowatt hours peryear youuse and then shows incremental costs going from baseline (not audible) cutout orbaseline to home electronic. That would be like $10.80 inthis example here. Baseline to electronic. And thenkilowatt hour savings would show 36 kilowatt hours for that change frombaseline 

### to electronic. This information is provided for IF40, 2F40, 2F96, 2F96HO. Those four categories. The second categorythe weighted average, the 2F40T12 and the weighted
44average comes from the ones below. There is four different, what it is those 2F40T12

ballast's are occurring in different kind of fixtures so you've get different energy savings and also different price differentials depending on what fixture depending on whether it is was a falling out fixture, two or three. That is what we tried to do here. We have market shares on the right hand side from 38 down to 7 and 53 depending on what fixture type. And then we are doing weighted averages of what is being saved with each of those fixtures because all of that is put back into the top part to tell you what are the savings you get for a two lamp magnetic ballast in exchange for electronics. It is weighted among those four different fixture types. It is shown where Barbara is pointing to in those boxes there. For example the weighted average on energy savings vary from baseline to electronic is 37 kilowatt-hours per year when you weight all of those together. So I'm sure there will be many questions when you all have a chance to look at it and I will be happy to try and answer those in detail. Barbara Atkinson: 

### Am I correct that if you wanted to add a savings for electronic to T8 you could do it here. Isaac Turiel: Oh sure, yes. It definitely could be done. Brookman: If there is any comment from the back please use the microphone. Tom Hagen, T & J Enterprises: In the format fixtures you are using two electronic reference targets? Isaac Turiel: Yes. No, one electronic and two magnetic. Hagen: Did I miss something down there on the format (not audible)? Isaac Turiel: No. One is electronic register. At the level two you see on the left maybe you see.

45 average comes from the ones below. There is four different, what it is those 2F40T12 ballast's are occurring in different kind offixtures so you've get different energy savings and also different price differentials depending onwhat fixture depending onwhether it is
was a falling out fixture, two or three. That is what we tried to do here. We have market shares onthe right hand side from 38 down to 7 and 53 depending onwhat fixture type. Andthen we are doing weighted averages ofwhat is being saved with each ofthose fixtures because all ofthat is put back into the top part to tell you what are the savings you get for a two lamp magnetic ballast in exchange for electronics. Itis weighted among those four different fixture types. Itis shown where Barbara is pointing to inthose boxes there. For example the weighted average on energy savings vary from baseline to electronic is 37kilowatt-hours per year whenyou weight 

### all ofthose together. So I'm
sure there 

### will be many questions whenyou all have a chance to look at it and I 

### will be happy to try and answer those 

### in detail. BarbaraAtkinson: AmI correct that ifyou wanted to add a savings for electronic to T8 you could do it here. Isaac Turiel: Oh sure, yes. It definitely could be done. Brookman: Ifthere is any comment from the backplease 

### use the microphone. TomHagen, T 

### & 

### J Enterprises: Inthe format fixtures you are using two eiectronic reference targets? Isaac Turiel: Yes. No, one electronic and two magnetic. Hagen:Did I miss something downthere onthe format (not audible)? Isaac Turiel: No. One is electronic register. At the level two you see onthe left maybe you see.
45 average comes from the ones below. There is four different, what it is those 2F40T12 ballast's are occurring in different kind offixtures so you've get different energy savings and also different price differentials depending onwhat fixture depending onwhether it is
was a falling out fixture, two or three. That is what we tried to do here. We have market shares onthe right hand side from 38 down to 7 and 53 depending onwhat fixture type. Andthen we are doing weighted averages ofwhat is being saved with each ofthose fixtures because all ofthat is put back into the top part to tell you what are the savings you get for a two lamp magnetic ballast in exchange for electronics. Itis weighted among those four different fixture types. Itis shown where Barbara is pointing to inthose boxes there. For example the weighted average on energy savings vary from baseline to electronic is 37kilowatt-hours per year whenyou weight 

### all ofthose together. So I'm
sure there 

### will be many questions whenyou all have a chance to look at it and I 

### will be happy to try and answer those 

### in detail. BarbaraAtkinson: AmI correct that ifyou wanted to add a savings for electronic to T8 you could do it here. Isaac Turiel: Oh sure, yes. It definitely could be done. Brookman: Ifthere is any comment from the backplease 

### use the microphone. TomHagen, T 

### & 

### J Enterprises: Inthe format fixtures you are using two eiectronic reference targets? Isaac Turiel: Yes. No, one electronic and two magnetic. Hagen:Did I miss something downthere onthe format (not audible)? Isaac Turiel: No. One is electronic register. At the level two you see onthe left maybe you see.
45Tom: Oh ok.

Isaac Turiel: 

### Level zero, level one, level two, not two of them. Tom: It is one floor lamp T12 electronic register ballast. Is that what you see up there? Isaac Turiel: Yes, correct. (Not audible) Before we go away from the spreadsheets are there any other questions on the spreadsheets? 

### Howard Wolfman: When we get back from lunch would it be possible to have copies that are a little more legible than the ones in the hand out, of this one sheet? Turiel: (Not audible - many people discussing matter) Howard Wolfinan 

### Maybe you could make it bigger. Unknown: You could do it on the one lamp type or one ballast type (not audible). Turiel: Or you could take one. Sure. Howard Wolfrnan: Its not the size, this if a fax copy a copy of a fax. Isaac Turiel: 

### You mean clarity ok not the size. Is there a clean copy somewhere? I don't have it with me. We will work on that and see what we can do. Brookman: Any additional questions, comments?


### 46 Tom: Ohok. Isaac Turiel: Level zero, level one, level two, not two ofthem Tom: It is one floor lamp TI2 electronic register ballast. Isthat what you see up there? Isaac Turiel: Yes, correct. (Not audible) Before we go away from the spreadsheets are there any other questions onthe spreadsheets? Howard Wol:finan:

Turiel: Whenwe get back from lunch would it be possible to have copies that are a little more legible thanthe ones inthe hand out, ofthis one sheet?
(Not audible

- 

### many people discussing matter) Howard Wol:finan; Maybe you could make it bigger. Unknown: You could do 

### it onthe one lamp type or one ballast type (not audible). Turiel: Oryou could take one. Sure. Howard Wolfman: Its not the size, this 

### ifa fax copy a copy ofa fax. Isaac Turie!: You mean clarity oknot the size. Is there a clean copy somewhere? I don't have itwith
me. We 

### will work onthat and see what we cando. Brookman: Any additional questions, comments?
46 Tom: Ohok. Isaac Turiel: Level zero, level one, level two, not two ofthem Tom: It is one floor lamp TI2 electronic register ballast. Isthat what you see up there? Isaac Turiel: Yes, correct. (Not audible) Before we go away from the spreadsheets are there any other questions onthe spreadsheets? Howard Wol:finan:

Turiel: Whenwe get back from lunch would it be possible to have copies that are a little more legible thanthe ones inthe hand out, ofthis one sheet?
(Not audible

- 

### many people discussing matter) Howard Wol:finan; Maybe you could make it bigger. Unknown: You could do 

### it onthe one lamp type or one ballast type (not audible). Turiel: Oryou could take one. Sure. Howard Wolfman: Its not the size, this 

### ifa fax copy a copy ofa fax. Isaac Turie!: You mean clarity oknot the size. Is there a clean copy somewhere? I don't have itwith
me. We 

### will work onthat and see what we cando. Brookman: Any additional questions, comments?
46Brookman:

Any additional questions, comments? Mark Perlis: I just wanted to commend LDL for making up less(not audible) on the (not audible) model. Isaac Turiel: You're welcome. Brookrnan: Any additional comments? Before we close out this segment? Norm Grimshaw: Norm Grimshaw from Advance Transformer. The data that you show here and the trend line matches very well with the data that we have been keeping all along. Let me show this and I think it will support your data quite well. What I have here, ignore the solid dark lines. There are twelve data point rolls to straighten out some of the highs and lows in the market but the bottom curve is the census data on electronic ballast all the way back to 1987, I believe it is. Where it was very low in the market and it has been coming up. The center curve is the CBM data, Certified Ballast Manufacturers data, that we collect on just the types of ballast that are in this study so the comparison is very close, not totally accurate but it is about 95%. The reason I show it is that it gives us a much longer trend line than what we have been able to collect. The top curve is the addition of the two. By dividing the electronics by the total we get the penetration of the electronics into the marketplace. Again 95% accurate but you can see where it is and you can see what the trend line is. That backs up the data that Isaac just showed you where the T12 is going pretty much to zero. I personally don't believe that it will ever go zero if Michael will not put out a regulation. And after Michael Rivest did this on the interview thing for the manufacturers impact this is the kind of data I think we are going to use in our spreadsheet for the GRIM model. What the top line is, is the curve that you just saw of the volumes

47 Brookman: Any additional questions, comments? Mark Pedis: Ijust wanted to commend LDL for making up less(not audible) onthe (not audible) model. Isaac Turiel: You're welcome. Brook1;nan: Any additional comments? Before we close outthis segment? Norm Grimshaw: Norm Grimshaw from Advance Transformer. The data that you show here and the trend line matches very well withthe datathat we have beenkeeping alI along. Let me show this and I think it 

### will support your data quite well. What I have here, ignore the solid dark lines. There are twelve datapoint rolls to straighten out some ofthe highs and lows in the market but the bottomcurve is the census data onelectronic ballast all the way back to 1987, I believe it is. Where it was very low inthe market and it has been coming up. The center curve is the CBM data, Certified Ballast Manufacturers data, that we collect on justthe types ofbalIast that are 

### inthis study so the comparison is very close, not totally accurate but it is about 95%. The reasonI show it is that it gives us a much longer trend line than what we have been able to collect. The top curve is the addition ofthe two. By dividing the electronics by the total we get the penetration ofthe electronics into the marketplace. Again 95% accurate but you can see where it is and you can see what the trend line is. That backs up the datathat Isaacjust showed you where the T12 is going pretty muchto zero. I personally don't believe that it 

### will ever go zero 

### ifMichael

### will not put out a regulation. And after Michael Rivest did this onthe interview thing for the manufacturers impact this is the kind ofdataI think we are going to use in our spreadsheet for the GRIM model. What the top line is, is the curve that youjust saw ofthe volumes 

### 47 Brookman: Any additional questions, comments? Mark Pedis: Ijust wanted to commend LDL for making up less(not audible) onthe (not audible) model. Isaac Turiel: You're welcome. Brook1;nan: Any additional comments? Before we close outthis segment? Norm Grimshaw: Norm Grimshaw from Advance Transformer. The data that you show here and the trend line matches very well withthe datathat we have beenkeeping alI along. Let me show this and I think it 

### will support your data quite well. What I have here, ignore the solid dark lines. There are twelve datapoint rolls to straighten out some ofthe highs and lows in the market but the bottomcurve is the census data onelectronic ballast all the way back to 1987, I believe it is. Where it was very low inthe market and it has been coming up. The center curve is the CBM data, Certified Ballast Manufacturers data, that we collect on justthe types ofbalIast that are 

### inthis study so the comparison is very close, not totally accurate but it is about 95%. The reasonI show it is that it gives us a much longer trend line than what we have been able to collect. The top curve is the addition ofthe two. By dividing the electronics by the total we get the penetration ofthe electronics into the marketplace. Again 95% accurate but you can see where it is and you can see what the trend line is. That backs up the datathat Isaacjust showed you where the T12 is going pretty muchto zero. I personally don't believe that it 

### will ever go zero 

### ifMichael

### will not put out a regulation. And after Michael Rivest did this onthe interview thing for the manufacturers impact this is the kind ofdataI think we are going to use in our spreadsheet for the GRIM model. What the top line is, is the curve that youjust saw ofthe volumes 

### 47

### from the census and CDM and you can see the slope is a little bit steeper from the 95 to

99 era on. I have used the square footage of buildings out of your report last year Table 5.1 and that is the exact same percentage increase in buildings or percentage increase in total ballast, just an assumption but I think we will at least keep up with the square footage. Hopefully we will penetrate even more. But that is the total number of ballast that will be sold. The bottom line, the magnetic ballast I think will continue on down on about the 5% a year rate that is going down now. And it will level off at some level where applications demand a magnetic ballast. A line frequency ballast so that is, rather than go all the way to zero. I think that probably is a more realistic curve and of course the center line is just the difference between the two. Barbara Atkinson: Norm, why do you add the CDM and the census numbers? Norm Grimshaw: 

### In the CDM system virtually the only ballast that we count and have for years are the same ones in your study. Give or take one or two, it is very close and the only ones we are making in electronic are the ones in your study. Very close and so by comparing those two which is data that we have all the way back into the 80's gives us a much fuller chart than we have been able to out together for you. Barbara Atkinson: Did you say you added the two together? Norm Grimshaw: That is the top line, yes. Unknown: One is electronic and one is magnetic is that what I get? Norm Grimshaw: The census stated is all electronic. Unknown:


### 48 

### from the census and CDM and you can see the slope is 

### a little bit steeper from the 95 to 99 era on. I have used the square footage ofbuildings out ofyour report last year Table 5.1 and that is 

### the exact same percentage increase in buildings orpercentage increase in total ballast,just an assumption but I think we will at least keep up with the square footage. Hopefully we will penetrate even more. Butthat is 

### the total number ofballast that will be sold. The bottomline, the magnetic ballast I think will continue on down on about the 5% a year rate that is 

### going down now. And it will level offat some level where applications demand a magnetic ballast. A line frequency ballast so that is, 

### rather than go all the way to zero. I think that probably is 

### a more realistic curve and ofcourse the center line is

### just the difference between the two. Barbara Atkinson: Norm, why do you add the CDM and the census numbers? Norm Grimshaw: Inthe CDM systemvirtually the only ballast that we count and have for years are the same
ones in your study. Give ortake one ortwo, it is 

### very close and the only ones we are making in electronic are the ones in your study. Very close and so by comparing those two which is datathat we have all the way back into the 80's gives us a much fuller chart than we have been able to put together for you. Barbara Atkinson: Did you say you added the two together? Norm Grimshaw: That is 

### the top line, yes. Unknown: One is electronic and one is magnetic is that what I get? Norm Grimshaw: The census stated is all electronic. Unknown:
48 

### from the census and CDM and you can see the slope is 

### a little bit steeper from the 95 to 99 era on. I have used the square footage ofbuildings out ofyour report last year Table 5.1 and that is 

### the exact same percentage increase in buildings orpercentage increase in total ballast,just an assumption but I think we will at least keep up with the square footage. Hopefully we will penetrate even more. Butthat is 

### the total number ofballast that will be sold. The bottomline, the magnetic ballast I think will continue on down on about the 5% a year rate that is 

### going down now. And it will level offat some level where applications demand a magnetic ballast. A line frequency ballast so that is, 

### rather than go all the way to zero. I think that probably is 

### a more realistic curve and ofcourse the center line is

### just the difference between the two. Barbara Atkinson: Norm, why do you add the CDM and the census numbers? Norm Grimshaw: Inthe CDM systemvirtually the only ballast that we count and have for years are the same
ones in your study. Give ortake one ortwo, it is 

### very close and the only ones we are making in electronic are the ones in your study. Very close and so by comparing those two which is datathat we have all the way back into the 80's gives us a much fuller chart than we have been able to put together for you. Barbara Atkinson: Did you say you added the two together? Norm Grimshaw: That is 

### the top line, yes. Unknown: One is electronic and one is magnetic is that what I get? Norm Grimshaw: The census stated is all electronic. Unknown:
48Okay, I'm sorry.

Norm Grimshaw: The CDM data is all magnetic. Unknown: Okay to get the total. Norm Grimshaw: They compare very closely and it gives us a much longer trend than we have otherwise. Barbara Atkinson: I assume you will be submitting these with your costs? Norm Grimshaw: They have been in all our reports yes. Unknown: Questions for Norm's presentation before we move on or comments. Thank you Norm. Unknown: I want to talk about the one that Mike designed. Unknown: 

### This is just a reminder and a request from the Department - those of you that have slides and have shown slides or have visuals to present, please make a copy of those available to the Department. Either at the conclusion of this meeting or as they cover your comments. Unknown: What I'm going to do now is go the last two slides of the morning presentation and one was one that Mike Stein commented on which showed what the results were from using that spreadsheet from two different scenarios. You actually have it so I guess maybe I can start discussing it while we are trying to get it up there. The one that says what the energy savings were that were obtained by using a constant shipment scenario and take that trend line that we showed before. (Not audible) I think it is a 1.1 quad. The low number up to that, 4.5 roughly for the high number and we will get that up here right now


### 49 Okay, I'm sorry. Norm Grimshaw: The CDMdata is all magnetic. Unknown: Okayto get the total. Norm Grimshaw: They compare very closely and it gives us a much longer trend thanwe have otherwise. BarbaraAtkinson: I assume you

### will be submitting these withyour costs? Norm Grimshaw: They have beenin all ourreports yes. Unknown: Questions for Norm's presentationbefore we move onor comments. Thank youNorm. Unknown: I want to talk about the one that Mike designed. Unknown: This isjust a reminder and a request from the Department

- those ofyou that have slides and have shown slides or have visuals to present, please make a copy ofthose available tlO the Department. Either at the conclusion ofthis meeting or asthey cover your comments. Unknown: What I'mgoing to do nowis go the hb1; two slides ofthe morning presentationand one
was one that Mike Stein commented onwhich showed what the results were from using that spreadsheet :fromtwo different scenarios. You actually have 

### it so I guess maybe I
can start discussing it while we are trying to get it up there. The one that says what the energy savings werethat were obtained by using a constant shipment scenario and take thattrend line that we showed before. (Not audible) I think it is a 1.1 quad. The low number up to that, 4.5 roughly for the high number and we 

### will get that up here right now.
49 Okay, I'm sorry. Norm Grimshaw: The CDMdata is all magnetic. Unknown: Okayto get the total. Norm Grimshaw: They compare very closely and it gives us a much longer trend thanwe have otherwise. BarbaraAtkinson: I assume you

### will be submitting these withyour costs? Norm Grimshaw: They have beenin all ourreports yes. Unknown: Questions for Norm's presentationbefore we move onor comments. Thank youNorm. Unknown: I want to talk about the one that Mike designed. Unknown: This isjust a reminder and a request from the Department

- those ofyou that have slides and have shown slides or have visuals to present, please make a copy ofthose available tlO the Department. Either at the conclusion ofthis meeting or asthey cover your comments. Unknown: What I'mgoing to do nowis go the hb1; two slides ofthe morning presentationand one
was one that Mike Stein commented onwhich showed what the results were from using that spreadsheet :fromtwo different scenarios. You actually have 

### it so I guess maybe I
can start discussing it while we are trying to get it up there. The one that says what the energy savings werethat were obtained by using a constant shipment scenario and take thattrend line that we showed before. (Not audible) I think it is a 1.1 quad. The low number up to that, 4.5 roughly for the high number and we 

### will get that up here right now.
49Ok, as it says here we looked at those two possible scenarios, constant declining

shipments and we found from 1.1 to 4.5 quad and I mean you can't really compare that because the different shipments were used (not audible) but just to give you an idea of what was in the draft report that would range from 1.5 to 5.3 quad. If there aren't any questions here I will just go on to the very last. Unknown: (Not audible) is the 97 draft of the two numbers shown. The most likely case would be 2.1 quad. There was a page that was on the low side that shows .5 as the sensitivity or extreme (not audible) and there was a number on the other side of 2.1 (not audible) which is another extreme shown of 5.3 which would put those at a very extreme scenario which has almost no chance of happening and we found the balance there again objectionable and what we particularly found objectionable was that in all of that report the Federal Register notice was put out it said savings are up to 5.3 quads and we found that just to be an extreme gross exaggeration and we found that objectionable. We would note that if the sensitivity balances on either side of the central and most likely scenario are in balance that certainly it won't be wrong and information wrong and strike it from (not audible). Unknown: Finally the Utility Environmental Analysis. The proposal to use NEMS, the National Energy Modeling System the EIA Model. The reason is that a better representation, not perfect but a better representation of the complexity of the energy market and its also of the same places we are getting our electricity price forecast is a more consistent approach to use that. The output that would come out of this would be both for utility and the environmental analysis would be the change in net generating capacity, change in national generating fuel mix, retail electricity price and also we get information on carbon dioxide and nitrogen oxide emission reduction. So this was previously done by a model called ASEUM. The proposal that they tend now is to convert to a DOE/EIA model NEMS so I have prepared notes to tell you about that.


### 50 Ok, as it says here we looked at those two possible scenarios, constant declining shipments and we found from 1.1 to 4.5 quad and I meanyou can't really compare that because the different shipments were used (not audible) butjustto give you anidea of what was in the draft report that would range from 1.5 to 5.3 quad. Ifthere aren't any questions here I 

### willjust go onto the very last. Unknown: (Not audible) is the 97 draft ofthe two numbers shown. The most likely case would be 2.1 quad. There was a page that was onthe low side that shows .5 as the sensitivity or extreme (not audible) and there was a number onthe other side of2.1 (not audible) which is another extreme shown of5.3 which would put those at a very extreme scenario which has almost no chance ofhappening and we found the balance there again objectionable and what we particularly found objectionable was that 

### in all ofthat report the Federal Register notice was put out it said savings are up to 5.3 quads and we found thatjustto be an extreme gross exaggeration and we found that objectionable. We would note that 

### ifthe sensitivity balances oneither side ofthe central and most likely scenario are in balance that certainly it won't be wrong and information wrong and strike it from (not audible). Unknown: Finally the Utility Environmental Analysis. The proposalto use NEMS, the National Energy Modeling Systemthe EIAModel. The reason is that a betterrepresentation, not perfect but a better representation ofthe complexity ofthe energy market and its also of the same places we are getting our electricity price forecast is a more consistent approach to use that. The output that would come out ofthis would be bothfor utility and the environmental analysis would be the change in net generating capacity, change 

### innational generating fuel mix, retail electricityprice and also we get information on carbon dioxide and nitrogen oxide emissionreduction. So this was previously done by a model called ASEUM. The proposalthat they tend now is to convert to a DOEIEIAmodelNEMS so I have prepared notes to tell you about that.
50 Ok, as it says here we looked at those two possible scenarios, constant declining shipments and we found from 1.1 to 4.5 quad and I meanyou can't really compare that because the different shipments were used (not audible) butjustto give you anidea of what was in the draft report that would range from 1.5 to 5.3 quad. Ifthere aren't any questions here I 

### willjust go onto the very last. Unknown: (Not audible) is the 97 draft ofthe two numbers shown. The most likely case would be 2.1 quad. There was a page that was onthe low side that shows .5 as the sensitivity or extreme (not audible) and there was a number onthe other side of2.1 (not audible) which is another extreme shown of5.3 which would put those at a very extreme scenario which has almost no chance ofhappening and we found the balance there again objectionable and what we particularly found objectionable was that 

### in all ofthat report the Federal Register notice was put out it said savings are up to 5.3 quads and we found thatjustto be an extreme gross exaggeration and we found that objectionable. We would note that 

### ifthe sensitivity balances oneither side ofthe central and most likely scenario are in balance that certainly it won't be wrong and information wrong and strike it from (not audible). Unknown: Finally the Utility Environmental Analysis. The proposalto use NEMS, the National Energy Modeling Systemthe EIAModel. The reason is that a betterrepresentation, not perfect but a better representation ofthe complexity ofthe energy market and its also of the same places we are getting our electricity price forecast is a more consistent approach to use that. The output that would come out ofthis would be bothfor utility and the environmental analysis would be the change in net generating capacity, change 

### innational generating fuel mix, retail electricityprice and also we get information on carbon dioxide and nitrogen oxide emissionreduction. So this was previously done by a model called ASEUM. The proposalthat they tend now is to convert to a DOEIEIAmodelNEMS so I have prepared notes to tell you about that.
50Unknown:

Final questions or comments based on the spreadsheet or any of what has proceeded this. Michael 

### Michael Rivest: As far as the HEMS model, you will be doing the analysis correct? Unknown: Correct. Michael Rivest: And with a HEMS is exactly as EIA has it at that point in time or with some modification? Unknown: Well it is going to be called NEMS slash something or other but in terms of really being different, it is not really going to be different. Unknown: I think that EIA has always been what I would like to make clear, this will not be an analysis that will be done by EIA but will be an analysis using a model that we derived from EIA NEMS model. The EIA will take (not audible) of their tools and their work quite seriously. I don't want it to appear to anybody that it is an EIA analysis. Unknown: Thank you for that clarification. Final questions or comments before we move on to the last presentation before lunch. Okay Barry Berlin is next and Barry I will let you. Barry Berlin: Thank you very much. Hi, I'm Barry Berlin. As part of department improvement we made some commitment in our department to take a look at employment impacts. The direct employment impact will be determined in the manufacturer impact analysis. The indirect employment impact, which can be quite large, will be analyzed separately and that is what I'm going to talk about today. You get an idea of how much expenditure is involved. The commercial sector spends approximately twenty-five and a half billion



### 51 Unknown: Final questions or comments based onthe spreadsheet or any ofwhat has proceeded this. Michael Michael Rivest: 

### As far as the NEMS model, you 

### will be doing the analysis correct? Unknown: Correct. Michael Rivest: And with a NEMS is exactly as EIA has it atthat point in time orwith some modification? Unknown: Well it is going to be called NEMS slash something or otherbut in terms ofreally being different, it is not really going to be different. Unknown: I think that EIAhas always beenwhat I would like to make clear, this 

### will not be an analysis that 

### will be done by EIAbut 

### will be an analysis using a model that we derived from EIANEMS model The EIA

### willtake (not audible) oftheir tools and their work quite seriously. I don't want it to appearto anybody that it is anEIA analysis. Unknown: Thank you for that clarification. Final questions or comments before we move onto the last presentation before lunch. OkayBarry Berlin is next and BarryI 

### will let you. Barry Berlin: Thank you very much. 

### Hi, I'mBarryBerlin. 

### As part ofdepartment improvement we made some commitment in our department to take a look at employment impacts. The direct employment impact 

### will be determined inthe manufacturer impact analysis. The indirect employment impact, which canbe quite large, 

### will be analyzed separately and that is what I'm going to talk about today. You get an idea ofhow much expenditure is involved. The commercial sector spends approximately twenty-five and a halfbillion
51 Unknown: Final questions or comments based onthe spreadsheet or any ofwhat has proceeded this. Michael Michael Rivest: 

### As far as the NEMS model, you 

### will be doing the analysis correct? Unknown: Correct. Michael Rivest: And with a NEMS is exactly as EIA has it atthat point in time orwith some modification? Unknown: Well it is going to be called NEMS slash something or otherbut in terms ofreally being different, it is not really going to be different. Unknown: I think that EIAhas always beenwhat I would like to make clear, this 

### will not be an analysis that 

### will be done by EIAbut 

### will be an analysis using a model that we derived from EIANEMS model The EIA

### willtake (not audible) oftheir tools and their work quite seriously. I don't want it to appearto anybody that it is anEIA analysis. Unknown: Thank you for that clarification. Final questions or comments before we move onto the last presentation before lunch. OkayBarry Berlin is next and BarryI 

### will let you. Barry Berlin: Thank you very much. 

### Hi, I'mBarryBerlin. 

### As part ofdepartment improvement we made some commitment in our department to take a look at employment impacts. The direct employment impact 

### will be determined inthe manufacturer impact analysis. The indirect employment impact, which canbe quite large, 

### will be analyzed separately and that is what I'm going to talk about today. You get an idea ofhow much expenditure is involved. The commercial sector spends approximately twenty-five and a halfbillion
51dollars for lighting in 1996 and industrials looks like it is approximately two billion dollars.

The story is on this is that basically any money saved in energy expenditures or spent elsewhere will be moving from areas where the labor intensity such as in the energy industry is fairly low to sectors of the economy where the labor intensity might be higher. You get a job generation from that. There is an input/output model developed in a PNLL that we can use to make this estimation and it will be available to everybody who wants it. A spreadsheet model. Thirty-Five specters of the economy interconnected and obviously shifts from sector will move into another sector and thus we can track the employment effects from that. And the last line is just talking about how the reduced expenditures will move into other sectors so the money will move into other sectors and cause the net employment to benefit. A couple of studies that have shown up. In 1994 former Secretary O'Leary testified before the Senate Appropriations Committee that for every million dollars of energy saved there was a net increase in employment of 10 to 20 jobs. I have not seen the study but that was an estimate and another wrinkle. Skip Lazur of Eaton James, who is recognized as some sort of expert in this area has estimated that for every quadrillion ETU's of energy saved that there is a net increase of 52,000 jobs and I have not seen that study either. Just to give you an idea of some of the efforts that might be involved. One other thing that I have been asked to talk about is this Regulatory Impact Analysis. This is something we do for the Office of Management and Budget when we send our rule makings for their review. It has been required by a series of executive orders beginning in this program at the present time. Unknown: Pardon me for interrupting. There may be questions on your first presentation. Barry Berlin: Okay, I apologize. Any, questions on the employment impact work that we are going to try to do. 

### Unknown:
52 dollars for lighting in 1996 and industrials looks like it is approximatelytwo billion dollars. The story is onthis is that basically any money saved in energy expenditures or spent elsewhere 

### will be moving from areas where the labor intensity such as in the energy industry is fairly lowto sectors ofthe economy where the labor intensity might be higher. You get ajob generation from that. There is aninput/output model developed in a PNLL that we can use to make this estimation and it will be available to everybody who wants it. A spreadsheet model. Thirty-Five specters ofthe economyinterconnected and obviously shifts from sector 

### will move into another sector and thus we cantrackthe employment effects from that. And the last line isjusttalking about howthe reduced expenditures 

### will
move into other sectors so the money 

### will move into other sectors and cause the net employment to benefit. A couple ofstudies that have shown up. In 1994 former Secretary O'Learytestified before the Senate Appropriations Committee that for every million dollars ofenergy saved there was a net increase in employment of 10 to 20jobs. I have not seenthe study but that was an estimate and another wrinkle. Skip Lazur of EatonJames, who is recognized as some sort ofexpert inthis area

### has estimated that for every quadrillion ETU's ofenergy saved that there is a net increase of52,000jobs and I have not seenthat study either. Just to give you an idea ofsome ofthe efforts that might be involved. One other thhlg that I have been asked to talk about is this Regulatory Impact Analysis. This is something we do for the Office ofManagement and Budget whenwe send ourrule makings for their review. Ithas beenrequired by a series of executive orders beginning in this program at thepresent time. Unknown: Pardonme for interrupting. There may be questions onyour first presentation. Barry Berlin: Okay, I apologize. Anyquestions onthe employment impact workthat we are going to tryto do. Unknown:
52 dollars for lighting in 1996 and industrials looks like it is approximatelytwo billion dollars. The story is onthis is that basically any money saved in energy expenditures or spent elsewhere 

### will be moving from areas where the labor intensity such as in the energy industry is fairly lowto sectors ofthe economy where the labor intensity might be higher. You get ajob generation from that. There is aninput/output model developed in a PNLL that we can use to make this estimation and it will be available to everybody who wants it. A spreadsheet model. Thirty-Five specters ofthe economyinterconnected and obviously shifts from sector 

### will move into another sector and thus we cantrackthe employment effects from that. And the last line isjusttalking about howthe reduced expenditures 

### will
move into other sectors so the money 

### will move into other sectors and cause the net employment to benefit. A couple ofstudies that have shown up. In 1994 former Secretary O'Learytestified before the Senate Appropriations Committee that for every million dollars ofenergy saved there was a net increase in employment of 10 to 20jobs. I have not seenthe study but that was an estimate and another wrinkle. Skip Lazur of EatonJames, who is recognized as some sort ofexpert inthis area

### has estimated that for every quadrillion ETU's ofenergy saved that there is a net increase of52,000jobs and I have not seenthat study either. Just to give you an idea ofsome ofthe efforts that might be involved. One other thhlg that I have been asked to talk about is this Regulatory Impact Analysis. This is something we do for the Office ofManagement and Budget whenwe send ourrule makings for their review. Ithas beenrequired by a series of executive orders beginning in this program at thepresent time. Unknown: Pardonme for interrupting. There may be questions onyour first presentation. Barry Berlin: Okay, I apologize. Anyquestions onthe employment impact workthat we are going to tryto do. Unknown:
52You went through that pretty fast.

Norm Grimshaw: 

### Just one question. Obviously this is a totally new subject as far as (not audible) is concerned and if it is something that is being done these days I assume that we are going to see what is being done and have a chance to comment on (not audible). Barry Berlin: 

### Absolutely. As things develop and are being made available for public review including the model which Bill, which will be used, that will be made available. Unknown: Thank you. Any questions. Barry Berlin: The other thing I was asked to talk about is this Regulatory Impact Analysis that is required by OMB when we send our rules over there. The first executive order to affect the program was one under President Carter where the goal was that if we could achieve the efficiency gained on the energy savings by a cheaper cost method such as an alternative to regulations that the agency or whoever was doing it at that time was supposed to do that. Under President Reagan there was a similar executive order. They were basically cost minim^ticn kinds of activities. The President executive order under President Clinton the way it exists says that for significant regulatory actions which in this program an annual impact of three million dollars per year or more that we have to conduct this review of alternatives of regulation. One of the methods that we are going to use to look at these alternatives will be a NEM spreadsheet. The spreadsheet will give us the answers but the impact of both of these options will happen through changes in shipments when we look at tax credits, rebates and so on. The biggest impact is in shipment that as Isaac Turiel said earlier shipments are an input to these spreadsheets so we will have to develop the shipments forecast elsewhere and it is mostly (not audible) and we will report the energy savings and input value in the different alternatives. The other


### 53 You went throughthat pretty fast. Norm Grimshaw: Just one question. Obviously this is a totally new subject as far as (not audible) is concerned and 

### ifit is something that is being done these days I assume that we are going to see what is being done and have a chance to comment on (not audible). Barry Berlin: Absolutely. As things develop and are being made available for public review including the model which Bill, which 

### will be used, that will be made available. Unknown: Thank you. Any questions. Barry Berlin: The other thing I was askedto talk about is this Regulatory Impact Analysis that is required by OMB when we send ourrules overthere. The first executive orderto affect the programwas one under President Carter where the goal was that 

### ifwe could achieve the efficiency gained on the energy savings by a cheaper cost method such as an alternative to regulations that the agency orwhoever was doing it at that time was supposed to do that. Under President Reagan there was a similar executive order. They
were basically cost minirruzation kinds ofactivities. The President executive order under President Clintonthe way it exists says that for significant regulatory actions whichin this program an annual impact ofthree million dollars peryear or more that we have to conductthis review ofalternatives ofregulation. One ofthe methods that we are going to
use to look at these alternatives 

### willbe a NEM spreadsheet. The spreadsheet 

### will give us the answers but the impact ofboth ofthese options 

### will happenthrough changes in shipments when we look at tax credits, rebates and so on. The biggest impact is in shipment that asIsaac Turiel said earlier shipments are aninput to these spreadsheets so
we 

### will have to develop the shipments forecast elsewhere and it is mostly (not audible) and
we 

### will report the energy savings and input value inthe different alternatives. The other
53 You went throughthat pretty fast. Norm Grimshaw: Just one question. Obviously this is a totally new subject as far as (not audible) is concerned and 

### ifit is something that is being done these days I assume that we are going to see what is being done and have a chance to comment on (not audible). Barry Berlin: Absolutely. As things develop and are being made available for public review including the model which Bill, which 

### will be used, that will be made available. Unknown: Thank you. Any questions. Barry Berlin: The other thing I was askedto talk about is this Regulatory Impact Analysis that is required by OMB when we send ourrules overthere. The first executive orderto affect the programwas one under President Carter where the goal was that 

### ifwe could achieve the efficiency gained on the energy savings by a cheaper cost method such as an alternative to regulations that the agency orwhoever was doing it at that time was supposed to do that. Under President Reagan there was a similar executive order. They
were basically cost minirruzation kinds ofactivities. The President executive order under President Clintonthe way it exists says that for significant regulatory actions whichin this program an annual impact ofthree million dollars peryear or more that we have to conductthis review ofalternatives ofregulation. One ofthe methods that we are going to
use to look at these alternatives 

### willbe a NEM spreadsheet. The spreadsheet 

### will give us the answers but the impact ofboth ofthese options 

### will happenthrough changes in shipments when we look at tax credits, rebates and so on. The biggest impact is in shipment that asIsaac Turiel said earlier shipments are aninput to these spreadsheets so
we 

### will have to develop the shipments forecast elsewhere and it is mostly (not audible) and
we 

### will report the energy savings and input value inthe different alternatives. The other
53thing that I want to talk about is the alternatives that we have looked at in the past. The

no action alternative is essentially the base case forecast which is we do nothing in this department other than what the market is going to do by itself. Now the no action alternative includes all the non-regulatory actions going on into which DFM, energy stock and so on. So those programs will be counted in base case forecast as a no action alternative. Consumer tax credits, in the past we have looked at a tax credit of about 15% for the increase price of an efficient appliance. This was originally developed under the Energy Tax Act of 1978 and we maintain that as an assumption. Other assumptions can be used but that is the one we are using right now. Making an investment tax credit we have assumed in the past that an investment tax credit of 20% of the increased price for investment for energy equipment and tools for producing energy efficient appliances and we will probably continue that assumption. Consumer rebates again were the Energy Tax Act of 1978 we are assuming a 15% rebate at the increased price for efficient appliances. Prescriptive standards we are going to remove at this time. The problem with prescriptive standards is that we prescribe a component of some sort or a design and it affects manufacturers different ways because most manufacturers build their units in different ways so that it might affect one manufacturer who estimate radical changes and another manufacturer who makes no changes and it creates a very unlevel playing field. The other problem is that just changing a component and making it more efficient doesn't guarantee the efficiency of the unit, which could lead, and then therefore the energy savings are uncertain. So we probably won't even look at this one again. Plus this attempts to be (not audible) in this department that we wouldn't want a prescriptive standard anyway. Voluntary standards, this really should be read as voluntary targets. The old targets the program. Most people may not know this but when this program began it began in the Department of Commerce after the oil crisis shock of 73-74 they developed a targets program. It never really got off the ground but in 75 the Energy Cost and Compensation Act transferred the activity to the FDA but the Commerce had the Act briefly. We look at


### 54 thing that I want to talk about is the alternatives that we have looked at inthe past. The
no action alternative is essentially the base case forecast which is we do nothing inthis department otherthan what the market is going to do by itself Nowthe no action alternative includes all the non-regulatory actions going on into which DFM, energy stock and so on. So those programs 

### will be counted inbase case forecast as a no action alternative. Consumer tax credits, in the past we have looked at a tax credit ofabout 15% for the increase price ofan efficient appliance. This was originally developed under the Energy Tax Act of 1978 andwe maintain that as an assumption. Other assumptions can be used but that is the one we are using right now. Making an investment tax credit we have assumed in the past that an investment tax credit of20% ofthe increased price for investment for energy equipment and tools for producing energy efficient appliances and
we 

### will probably continue that assumption. Consumer rebates again were the Energy Tax Act of 1978 we are assuming a 15%rebate at the increased price for efficient appliances. Prescriptive standards we are going to remove at this time. The problemwithprescriptive standards is that we prescribe a component ofsome sort or a design and it affects manufacturers different ways because most manufacturers build their units in different ways so that it might affect one manufacturer who estimate radical changes and another manufacturer who makes no changes and it creates a very unlevel playing field. The other problemis thatjust changing a component and making it more efficient doesn't guarantee the efficiency ofthe unit, whichcould lead, andthentherefore the energy savings are uncertain. So we probably won't even look at this one again. Plus this attemptsto be (not audible) in this department that we wouldn't want a prescriptive standard anyway. Voluntary standards, this really should be read as voluntary targets. The oldtargetsthe program. Most people may not knowthis but whenthis programbeganit beganin the Department ofCommerce after the oil crisis shock of73-7 4 they developed a targets program. 

### Itnever really got offthe ground but in 75 the Energy Cost and Compensation Act transferred the activity to the FDAbut the Commerce had the Act briefly. We look at
54 thing that I want to talk about is the alternatives that we have looked at inthe past. The
no action alternative is essentially the base case forecast which is we do nothing inthis department otherthan what the market is going to do by itself Nowthe no action alternative includes all the non-regulatory actions going on into which DFM, energy stock and so on. So those programs 

### will be counted inbase case forecast as a no action alternative. Consumer tax credits, in the past we have looked at a tax credit ofabout 15% for the increase price ofan efficient appliance. This was originally developed under the Energy Tax Act of 1978 andwe maintain that as an assumption. Other assumptions can be used but that is the one we are using right now. Making an investment tax credit we have assumed in the past that an investment tax credit of20% ofthe increased price for investment for energy equipment and tools for producing energy efficient appliances and
we 

### will probably continue that assumption. Consumer rebates again were the Energy Tax Act of 1978 we are assuming a 15%rebate at the increased price for efficient appliances. Prescriptive standards we are going to remove at this time. The problemwithprescriptive standards is that we prescribe a component ofsome sort or a design and it affects manufacturers different ways because most manufacturers build their units in different ways so that it might affect one manufacturer who estimate radical changes and another manufacturer who makes no changes and it creates a very unlevel playing field. The other problemis thatjust changing a component and making it more efficient doesn't guarantee the efficiency ofthe unit, whichcould lead, andthentherefore the energy savings are uncertain. So we probably won't even look at this one again. Plus this attemptsto be (not audible) in this department that we wouldn't want a prescriptive standard anyway. Voluntary standards, this really should be read as voluntary targets. The oldtargetsthe program. Most people may not knowthis but whenthis programbeganit beganin the Department ofCommerce after the oil crisis shock of73-7 4 they developed a targets program. 

### Itnever really got offthe ground but in 75 the Energy Cost and Compensation Act transferred the activity to the FDAbut the Commerce had the Act briefly. We look at
54this at this just as a performance standard that we are considering are achieved with either

a five or a ten year delay to get the estimate. In consumer education we are also going to do away with. The Energy Star program effectively did that and that will be counted as ongoing any effects from that will be outstanding base (not audible) forecast on a no action alternative and the performance standards of course are the standards that we might decide to propose. For the new list looks like the old list except minus those two options. We have also identified a mass government purchase idea. In this scenario what we will do is we will assume that all federal, state and local purchases are valid from the energy efficient point and that would be the working assumption. This idea has its origins as many of you may know in the Old Swedish energy - what would be a refrigerator program. The golden parrot program where the government purchased energy efficient refrigerators and installed them in the housing units in the various jurisdictions. This was a very successful program that we mimicked in this country by utilities where it was less successful and we needn't get into the reasons for that. But that was the origin of the idea of having governments use their purchasing power to stimulate market (not audible) and that is what we will assume for this. 

### Unknown: Barry make sure that you don't do some double accounting on that one because I think the federal government purchasing is pretty well part of the base now because of the executive order that requires the energy approval on the part of the federal government. Barry Berlin: Thank you, you are right. Earlier we heard that FEM had the purchasing program and that would be counted in the base case and there are also some local jurisdictions that have used mass purchases in their locality for purchasing efficiency. So that too would be in a base case forecast. There would be some (not audible) out but would not be totally federal, state and local minus current activity. 

### Unknown:

55 this at thisjust as a performance standard that we are considering are achieved with either
a five or a tenyear delay to getthe estimate. In consumer educationwe are also going to do away with. The Energy Starprogrameffectively did that andthat

### will be counted as ongoing any effects from that

### will be outstanding base (not audible) forecast on a no action alternative andthe performance standards ofcourse are the standards that we might decide to propose. Forthe newlist looks like the old list except minus those two options. We have also identified a mass government purchase idea. 

### Inthis scenario what we 

### will do is we 

### will assume that 

### all federal, state and localpurchases are valid from the energy efficient point and that wouldbe the working assumption This ideahas its origins as many ofyou may know inthe Old Swedish energy - what wouldbe a refrigerator program. The goldenparrot programwhere the government purchased energy efficient refrigerators and installed theminthe housing units inthe variousjurisdictions. This was a very successfulprogramthat we mimicked inthis country by utilities where it was less successful and we needn't get into the reasons for that. But that was the origin ofthe idea ofhaving governments use their purchasing powerto stimulate market (not audtble) and that is what we will assume for this. Unknown: Barry make surethatyou dun't do some double accounting onthat one because I think the federal government purchasing is pretty well part ofthe base nowbecause ofthe executive orderthat requires the energy approval onthe part ofthe federal government. Barry Berlin: Thank you, you are right. Earlier we heard thatFEM hadthe purchasing programand that wouldbe counted 

### in the base case and there are also some localjurisdictionsthat have used mass purchases intheir locality for purchasing efficiency. So that too wouldbe in a base case forecast. There would be some (not audible) out but would notbe totally**federa~** state and localminus current activity. Unknown:
55 this at thisjust as a performance standard that we are considering are achieved with either
a five or a tenyear delay to getthe estimate. In consumer educationwe are also going to do away with. The Energy Starprogrameffectively did that andthat

### will be counted as ongoing any effects from that

### will be outstanding base (not audible) forecast on a no action alternative andthe performance standards ofcourse are the standards that we might decide to propose. Forthe newlist looks like the old list except minus those two options. We have also identified a mass government purchase idea. 

### Inthis scenario what we 

### will do is we 

### will assume that 

### all federal, state and localpurchases are valid from the energy efficient point and that wouldbe the working assumption This ideahas its origins as many ofyou may know inthe Old Swedish energy - what wouldbe a refrigerator program. The goldenparrot programwhere the government purchased energy efficient refrigerators and installed theminthe housing units inthe variousjurisdictions. This was a very successfulprogramthat we mimicked inthis country by utilities where it was less successful and we needn't get into the reasons for that. But that was the origin ofthe idea ofhaving governments use their purchasing powerto stimulate market (not audtble) and that is what we will assume for this. Unknown: Barry make surethatyou dun't do some double accounting onthat one because I think the federal government purchasing is pretty well part ofthe base nowbecause ofthe executive orderthat requires the energy approval onthe part ofthe federal government. Barry Berlin: Thank you, you are right. Earlier we heard thatFEM hadthe purchasing programand that wouldbe counted 

### in the base case and there are also some localjurisdictionsthat have used mass purchases intheir locality for purchasing efficiency. So that too wouldbe in a base case forecast. There would be some (not audible) out but would notbe totally**federa~** state and localminus current activity. Unknown:
55Any questions on this part.

Unknown: Barry does this mean that the department has concluded that this is a significant regulatory action and requires regulatory impact analysis. 

### Barry Berlin: Well if we estimate the effect on the economy will be an annual effect of one hundred million dollars then we would conduct the regulatory impact analysis that is required by the executive order. Unknown: Has the department decided that changing ballast standards would have a one million dollar impact on the economy? Barry Berlin: We don't know where the standards would come out so we haven't derived that. In the past all the rule making has been in excess of whatever the figure was and when we have gone to OMB (not audible) of an impact analysis. Unknown: And when you go to OMB before the gain , before the (not audible) or only before final rule. Barry Berlin: They wouldn't want to, it will be after the number they don't want to see anything until it is proposed. Unknown: But will it be before you go with the final rule. In other words, will the public or stakeholders have an opportunity to comment on it independently of the final rule going to OMB? Barry Berlin:



### 56 

### Any questions onthis part. Unknown: Barry does this mean that the department has concluded that this is a significant regulatory action and requires regulatory impact analysis. BarryBerlin: Well ifwe estimate the effect onthe economy 

### will be an annual effect ofone hundred million dollars then we would conduct the regulatory impact analysis that is required by the executive order. Unknown: Has 

### the department decided that changing ballast standards would have a one million dollar impact onthe economy? Barry Berlin: We don't know where the standards would come out so we haven't derived that. In the past all 

### the rule making has been in excess ofwhatever the figure was and when we have gone to OMB (not audible) ofan impact analysis. Unknown: And when you go to OMB before the gain, before the (not audible) or only before final rule. Barry Berlin: They wouldn't want to, it 

### will be after the number they don't want to see anything until it is proposed. Unknown: But 

### will it be before you go withthe final rule. 

### In other words, 

### will the public or stakeholders have an opportunity to comment onit independently ofthe 

### final rule going to OMB? Barry Berlin:

56 Any questions onthis part. Unknown: Barry does this mean that the department has concluded that this is a significant regulatory action and requires regulatory impact analysis. BarryBerlin: Well ifwe estimate the effect onthe economy 

### will be an annual effect ofone hundred million dollars then we would conduct the regulatory impact analysis that is required by the executive order. Unknown: Has 

### the department decided that changing ballast standards would have a one million dollar impact onthe economy? Barry Berlin: We don't know where the standards would come out so we haven't derived that. In the past all 

### the rule making has been in excess ofwhatever the figure was and when we have gone to OMB (not audible) ofan impact analysis. Unknown: And when you go to OMB before the gain, before the (not audible) or only before final rule. Barry Berlin: They wouldn't want to, it 

### will be after the number they don't want to see anything until it is proposed. Unknown: But 

### will it be before you go withthe final rule. 

### In other words, 

### will the public or stakeholders have an opportunity to comment onit independently ofthe 

### final rule going to OMB? Barry Berlin:

56Well the regulatory impact analysis will be printed in the technical support document that

accompanies the proposal. Unknown: Oh it would be? I didn't realize that. Eugene Margolis: 

### We came out last fall with room air conditions and we had said that based on the old product rule making it would be above one hundred million. In effect it was under that so there has been a (not audible) which we came out with the final rule which has been under that number. Bob Wisbey: I just have a real brief comment. The study of the alternatives of regulatory action. As Mike (not audible) this morning earlier, we are in the midst a fundamental market transformation in this product area and I think the important thing to look at is what the results are in terms of what happens in the market transformation in magnetic and electronic and not spend nearly so much time trying to worry about why those things are happening or did they happen because of this program or did they happen because of that program or some other program but the fact is they are happening and they are happening for a real mixture of these reasons and being able to attribute the cause of why they happen to individual programs is irrelevant and unimportant. What is relevant and important is the speed at which the transformation takes place. Barry Berlin: Well that is true but the importance of analyzing for example the mass government purchase is what effect that would have to have on how much is going on for current government purchases simply to make that calculation. But that is all it would be used for. Thank you. Mark Perlis:



### 57 Well the regulatory impact analysis 

### will be printed in the technical support document that accompanies the proposal. Unknown: Ohit would be? I didn't realize that. Eugene Margolis: We came out last fall with room air conditions and wehad said that based onthe old productrule making it would be above one hundred million. 

### In effect it was under that so there has been a (not audible) whichwe came out withthe:final rule which has been under that number. Bob Wisbey: Ijusthave a real briefcomment. The study ofthe alternatives ofregulatory action. As Mike (not audible) this morning earlier, we are in the midst a fundamental market transformation inthis product areaand I think the important thing to look at is what the results are in terms ofwhat happens in the market transformation in magnetic and electronic and not spend nearly so muchtime trying to worry about why those things are happening or did they happenbecause of

### this program or did they happenbecause ofthat program or some otherprogrambutthe fact is they are happening and they are happening for a real mixture ofthese reasons and being able to attribute the cause ofwhythey happen to individualprograms is irrelevant andunimportant. What is relevant and important is the speed at which the transformationtakes place. Barry Berlin: Well that is true butthe importance ofanalyzing for example the mass government purchase is what effect that would have to have onhowmuch is going onfor current government purchases simply to make that calculation. But that is all it would be used for. Thankyou. MarkPerlis:



### 57 Well the regulatory impact analysis 

### will be printed in the technical support document that accompanies the proposal. Unknown: Ohit would be? I didn't realize that. Eugene Margolis: We came out last fall with room air conditions and wehad said that based onthe old productrule making it would be above one hundred million. 

### In effect it was under that so there has been a (not audible) whichwe came out withthe:final rule which has been under that number. Bob Wisbey: Ijusthave a real briefcomment. The study ofthe alternatives ofregulatory action. As Mike (not audible) this morning earlier, we are in the midst a fundamental market transformation inthis product areaand I think the important thing to look at is what the results are in terms ofwhat happens in the market transformation in magnetic and electronic and not spend nearly so muchtime trying to worry about why those things are happening or did they happenbecause of

### this program or did they happenbecause ofthat program or some otherprogrambutthe fact is they are happening and they are happening for a real mixture ofthese reasons and being able to attribute the cause ofwhythey happen to individualprograms is irrelevant andunimportant. What is relevant and important is the speed at which the transformationtakes place. Barry Berlin: Well that is true butthe importance ofanalyzing for example the mass government purchase is what effect that would have to have onhowmuch is going onfor current government purchases simply to make that calculation. But that is all it would be used for. Thankyou. MarkPerlis:



### 57

### One other question Barry and because of the list of alternatives I find that the notions and

study of consumer tax credits or manufactures tax credits , politically
... beside the point but in terms of the department focusing on things that might be more realistic such as the departments and support. The lighting industry has long suggested that energy efficiency standards might be re-evaluated on a systems basis rather than on an individual component basis and I guess if you are going to go to all the trouble of estimating impact from different types of programs that could (not audible) energy efficiency at least from the lighting context perhaps you should be considering systems (not audible) of lighting rather than individual components approach even as an alternative. Barry Berlin: These are all alternatives to the regulation that is being proposed. Mark Perlis: Exactly how are you going to compare all these alternatives to standards just in terms of net costs to the economy? Barry Berlin: Well mostly in terms of energy savings because that is what we used in the past and net present value according to the spreadsheet. Those in the metrics we have reported in the past under regulatory impact. Unknown: Additional questions or comments on Barry's presentation
. So these are the alternatives that would be considered? Barry Berlin: Right. Unknown: As you decided whether to go forward or not. Barry Berlin:



### 58 One other questionBarry and because ofthe list ofalternatives I find that the notions and study ofconsumer tax credits or manufactures tax credits, politically

... beside the point but in terms ofthe department focusing onthings that might be more realistic such as the departments and support. The lighting industry 

### has long suggested that energy efficiency standards might be re-evaluated on a systems basis rather than on anindividual component basis and I guess 

### ifyou are going to go to all the trouble ofestimating impact from different types ofprograms that could (not audible) energy efficiency at least from the lighting context perhaps you should be considering systems (not audible) oflighting rather than individual components approach even as an alternative. Barry Berlin: These are all alternatives to the regulation that is being proposed. Mark Perlis: Exactly how are you going to compare all these alternatives to standardsjust in terms of net costs to the economy? Barry Berlin: Well mostly in terms ofenergy savings because that is what we used in the past and net present value according to the spreadsheet. Those in the metrics we have reported in the past under regulatory impact. Unknown: Additional questions or comments onBarry's presentation. So these are the alternatives that would be considered? Barry Berlin: Right. Unknown: 

### As you decided whether to go forward or not. Barry Berlin:



### 58 One other questionBarry and because ofthe list ofalternatives I find that the notions and study ofconsumer tax credits or manufactures tax credits, politically

... beside the point but in terms ofthe department focusing onthings that might be more realistic such as the departments and support. The lighting industry 

### has long suggested that energy efficiency standards might be re-evaluated on a systems basis rather than on anindividual component basis and I guess 

### ifyou are going to go to all the trouble ofestimating impact from different types ofprograms that could (not audible) energy efficiency at least from the lighting context perhaps you should be considering systems (not audible) oflighting rather than individual components approach even as an alternative. Barry Berlin: These are all alternatives to the regulation that is being proposed. Mark Perlis: Exactly how are you going to compare all these alternatives to standardsjust in terms of net costs to the economy? Barry Berlin: Well mostly in terms ofenergy savings because that is what we used in the past and net present value according to the spreadsheet. Those in the metrics we have reported in the past under regulatory impact. Unknown: Additional questions or comments onBarry's presentation. So these are the alternatives that would be considered? Barry Berlin: Right. Unknown: 

### As you decided whether to go forward or not. Barry Berlin:



### 58What would make a proposal to OMB that has an annual impact on the economy of a

hundred million dollars or more OMB requires you go to the respective sides and we send as a result this to O for their consideration
. We have never had any feedback from 

### O M on what they do with this, if anything. Unknown: Back on the indirect (not audible) impacts, what kind of track is that on for completion of (not audible)? Barry Berlin: Well at this point tre model is still being developed. I think it is mostly completed. I am not (not audible) in its development but from there we will proceed in some sort of orderly fashion

. I haven't really been. Unknown: Would this likely be available prior to the (not audible) or. Barry Berlin: My self is that it is nearing completion and may be available before the seasons over but I can't say for certain

. I haven't been in touch with the developers at BNL. Unknown: Is it also included in the TSB (not audible)? Barry Berlin: We hadn't thought about it but it probably should be yes, I think that it would be. Any numbers that would work. 

### Carl Adams: My guess would be that without looking at the scheduling for this particular item is that it should be available at this next workshop that we are currently speaking of in late October where we would have the manufactured impact analysis and life cycle costs results that this, the results of this would be available at that time. 

### Douglas Brookman:
59 What would make a proposalto OMB that 

### has an annual impact onthe economy ofa hundred million dollars or more OMB requires you go to the respective sides and we send
as a result this to OMB for their consideration. We have never had any feedback from OMB onwhat they do with this, 

### ifanything. Unknown: Back onthe indirect (not audible) impacts, what kind oftrack is that on for completion of (not audible)? Barry Berlin: Well atthis point tre model is 

### still being developed. I think it is mostly completed. I am not (not audible) in its development but from there we 

### will proceed in some sort oforderly fashion. I haven't really been. Unknown: Would this likely be available priorto the (not audible) or. Barry Berlin: My selfis that it is nearing completion and may

### be available before the seasons over but I can't say for certain. I haven't beenin touch withthe developers at BNL. Unknown: Is it also included in the TSB (not audible)? Barry Berlin: We hadn't thought about it but it probably should be yes, I thinkthat it would be. Any numbers that would work. Carl Adams: Myguess would 

### be that without looking atthe scheduling for this particular itemis that it should be available at this next workshop that we are currently speaking ofin late October where we would have the manufactured impact analysis and life cycle costs results that this, the results ofthis would 

### be available at that time. Douglas Brookman:
59 What would make a proposalto OMB that 

### has an annual impact onthe economy ofa hundred million dollars or more OMB requires you go to the respective sides and we send
as a result this to OMB for their consideration. We have never had any feedback from OMB onwhat they do with this, 

### ifanything. Unknown: Back onthe indirect (not audible) impacts, what kind oftrack is that on for completion of (not audible)? Barry Berlin: Well atthis point tre model is 

### still being developed. I think it is mostly completed. I am not (not audible) in its development but from there we 

### will proceed in some sort oforderly fashion. I haven't really been. Unknown: Would this likely be available priorto the (not audible) or. Barry Berlin: My selfis that it is nearing completion and may

### be available before the seasons over but I can't say for certain. I haven't beenin touch withthe developers at BNL. Unknown: Is it also included in the TSB (not audible)? Barry Berlin: We hadn't thought about it but it probably should be yes, I thinkthat it would be. Any numbers that would work. Carl Adams: Myguess would 

### be that without looking atthe scheduling for this particular itemis that it should be available at this next workshop that we are currently speaking ofin late October where we would have the manufactured impact analysis and life cycle costs results that this, the results ofthis would 

### be available at that time. Douglas Brookman:
59This is the best place to have the kind of exchange that produces more light than heat, if

you wish. Just to use a metaphor. So that is what we hope to do in this workshop environment and there are other venue for you to do produce a record. Okay. So having said that then let me turn to Carl and Carl is going to lead off talking about manufacturer impact analysis methodology. 

### Carl Adams: I am Carl Adams, with the office of Codes and Standards at DoE and the new team leader for the florescent lamp ballast (not audible). This next section of our workshop is in regard to the Department's legislative requirement to determine the economic impact of standards on manufacturers. There are two mentions of this. One is that in determining whether economically justified DoE is required to consider the economic impact on manufacturers as well as consumers and the impact of any lessening of competition is determined by the attorney general. In search of a better way to complete this task the Department committed to a detailed review of the manufacturing impact analysis methodologies in the July 1996 Process Improvement Rule. This articulated principal for generic analysis framework the Department will do the following: provide for early stakeholder input, utilize an annual cash flow approach to determine quantitative impact, develop estimates of critical variables drawing on multiple sources both quantitative and qualitative. Report the distribution of impact on manufacturers. Use models that easy to understand and account for uncertainty. Consider the cumulative impact of regulation and the impact on manufacturing capacity, plant closures and loss of capital investment. These principals were expanded to the manufacturing impact analysis workshop held in March of 1997. Today's presentation will discuss this analytical framework has been applied to the ballast industry. Crucial to our effort were the manufacturer site visits and interviews which Department staff members conducted in late 96 and early 97. These helped to shape the conclusion that the Department should go further than only considering a pro typical firm against which manufacturing impacts could be measured. The new


### 60 This is the best place to have the kind ofexchange that produces more light thanheat, 

### if you wish. Just to use a metaphor. So that is what we hope to do in this workshop environment and there are other venue for youto do produce a record. Okay. So having said that then let me turnto Carl and Carl is going to lead offtalking about manufacturer impact analysis methodology. Carl Adams: I am CarlAdams, withthe office ofCodes and Standards at DoE and the newteamleader for the florescent lamp ballast (not audible). This next section ofour workshop is in regard to the Department's legislative requirement to determine the economic impact of standards onmanufacturers. There are two mentions ofthis. One is that in determining whether economicallyjustified DoE is required to consider the economic impact on manufacturers as well as consumers and the impact ofany lessening ofcompetition is determined bythe attorney general. 

### In search ofa better way to complete this task the Department committed to a detailed review ofthe manufacturing impact analysis methodologies inthe July 1996 Process Improvement Rule. This articulated principal for generic analysis framework the Department 

### will do the following: provide for early stakeholder input, utilize an annual cash flow approachto determine quantitative impact, develop estimates ofcritical variables drawing onmultiple sources both quantitative and qualitative. Report the distribution ofimpact onmanufacturers. Use models that easyto understand and account for uncertainty. Consider the cumulative impact ofregulation and the impact onmanufacturing capacity, plant closures and loss ofcapital investment. These principals were expanded to the manufacturing impact analysis workshop held in March of 1997. Today's presentation 

### will discuss this analytical framework has been applied to the ballast industry. Crucialto our effort were the manufacturer site visits and interviews which Department staffmembers conducted in late 96 and early 97. These helped to shape the conclusionthat the Department should go further than only considering a pro typical 

### firm against which manufacturing impacts could be measured. The new
60 This is the best place to have the kind ofexchange that produces more light thanheat, 

### if you wish. Just to use a metaphor. So that is what we hope to do in this workshop environment and there are other venue for youto do produce a record. Okay. So having said that then let me turnto Carl and Carl is going to lead offtalking about manufacturer impact analysis methodology. Carl Adams: I am CarlAdams, withthe office ofCodes and Standards at DoE and the newteamleader for the florescent lamp ballast (not audible). This next section ofour workshop is in regard to the Department's legislative requirement to determine the economic impact of standards onmanufacturers. There are two mentions ofthis. One is that in determining whether economicallyjustified DoE is required to consider the economic impact on manufacturers as well as consumers and the impact ofany lessening ofcompetition is determined bythe attorney general. 

### In search ofa better way to complete this task the Department committed to a detailed review ofthe manufacturing impact analysis methodologies inthe July 1996 Process Improvement Rule. This articulated principal for generic analysis framework the Department 

### will do the following: provide for early stakeholder input, utilize an annual cash flow approachto determine quantitative impact, develop estimates ofcritical variables drawing onmultiple sources both quantitative and qualitative. Report the distribution ofimpact onmanufacturers. Use models that easyto understand and account for uncertainty. Consider the cumulative impact ofregulation and the impact onmanufacturing capacity, plant closures and loss ofcapital investment. These principals were expanded to the manufacturing impact analysis workshop held in March of 1997. Today's presentation 

### will discuss this analytical framework has been applied to the ballast industry. Crucialto our effort were the manufacturer site visits and interviews which Department staffmembers conducted in late 96 and early 97. These helped to shape the conclusionthat the Department should go further than only considering a pro typical 

### firm against which manufacturing impacts could be measured. The new
60

### manufacturing impact discussed in the framework expanded the scope of impact

considered and the range of firms analyzed. As described in the process rule the Department will try to understand and consider how standards impact different categories of manufacturers. You can see from this slide from the generic framework that we talk in terms of having a couple of sub-groups, be they large, small, whatever but in the case of ballast it was determined from the visits that they sub-groups should actually be the individual manufacturers themselves. Additionally what we used to do is go to a prototypical firm but also just looked at financial impacts and now we are going to include employment impacts, competitive impacts and capacity impacts as well. The hope is that this analytical approach will produce a much more comprehensive picture and enable the Department to reach accurate and well supported conclusions. I would now like to introduce Mike Rivest of Arthur D. Little who is conducting this analysis under the direction of DoE who will discuss in greater detail how the new methodology will work with respect to florescent lamp ballast. Mike. Michael Rivest: Good afternoon. I would just like to quickly review the agenda with you. In this first session the first half an hour I would just like to bring everyone back to March of last year and go over the generic methodology that we developed together and I would like to point out that ballast manufacturers particularly have a great role in shaping the outcome of that generic methodology because a lot of the issues that came out the sub group analysis for example and the employment and capacity impact really reflect a lot of the concerns that were given to DoE during the last duration of analysis. So I think that as we look forward to tailoring this to ballast there is already a lot of ballast that underline the generic methodology. Once I have described the general approach also showing the interaction between the manufacturing impact analysis and the other analysis section that Mike talked about this morning I would like to get into a more nuts and bolts discussion on the quantitative impacts and the approach we are proposing to try and quantify the


### 61 manufacturing impact discussed in the framework expanded the scope ofimpact considered and the range of:firms analyzed. As described in the process rule the Department 

### will tryto understand and consider how standards impact different categories ofmanufacturers. You can see from this slide from the generic framework that we talk in terms ofhaving a couple ofsub-groups, be they large, small, whatever but in the case of ballast it was determined fromthe visits that they sub-groups should actually be the individual manufacturers themselves. Additionally what we used to do is go to a prototypical 

### firm but alsojust looked at financial impacts and now we are going to include employment impacts, competitive impacts and capacity impacts as well. The hope is that this analytical approach

### will produce a much more comprehensive picture and enable the Department to reach accurate and well supported conclusions. I would now like to introduce Mike Rivest ofArthur D. Little who is conducting this analysis under the direction ofDoE who 

### will discuss in greater detail howthe new methodology 

### will work with respect to florescent lamp ballast. Mike. Michael Rivest: Good**afternoon~** I wouldjust like to quickly review the agenda withyou. Inthis first sessionthe first 

### halfanhour I wouldjust like to bring everyone back to Marchoflast year and go over the generic methodology that we developed together and I would like to point out that ballast manufacturers particularly have a great role in shaping the outcome ofthat generic methodology because a lot ofthe issues that came outthe sub group analysis for example and the employment and capacity impact really reflect a lot ofthe
concerns that were given to DoE during the last duration ofanalysis. So I think that as we look forward to tailoring this to ballast there is already a lot ofballast that underline the generic methodology. Once I have described the general approach also showing the interaction betweenthe manufacturing impact analysis and the other analysis sectionthat Mike talked about this morning I would like to get into a more nuts and bolts discussion
onthe quantitative impacts and the approach we are proposing to try and quantify the
61 manufacturing impact discussed in the framework expanded the scope ofimpact considered and the range of:firms analyzed. As described in the process rule the Department 

### will tryto understand and consider how standards impact different categories ofmanufacturers. You can see from this slide from the generic framework that we talk in terms ofhaving a couple ofsub-groups, be they large, small, whatever but in the case of ballast it was determined fromthe visits that they sub-groups should actually be the individual manufacturers themselves. Additionally what we used to do is go to a prototypical 

### firm but alsojust looked at financial impacts and now we are going to include employment impacts, competitive impacts and capacity impacts as well. The hope is that this analytical approach

### will produce a much more comprehensive picture and enable the Department to reach accurate and well supported conclusions. I would now like to introduce Mike Rivest ofArthur D. Little who is conducting this analysis under the direction ofDoE who 

### will discuss in greater detail howthe new methodology 

### will work with respect to florescent lamp ballast. Mike. Michael Rivest: Good**afternoon~** I wouldjust like to quickly review the agenda withyou. Inthis first sessionthe first 

### halfanhour I wouldjust like to bring everyone back to Marchoflast year and go over the generic methodology that we developed together and I would like to point out that ballast manufacturers particularly have a great role in shaping the outcome ofthat generic methodology because a lot ofthe issues that came outthe sub group analysis for example and the employment and capacity impact really reflect a lot ofthe
concerns that were given to DoE during the last duration ofanalysis. So I think that as we look forward to tailoring this to ballast there is already a lot ofballast that underline the generic methodology. Once I have described the general approach also showing the interaction betweenthe manufacturing impact analysis and the other analysis sectionthat Mike talked about this morning I would like to get into a more nuts and bolts discussion
onthe quantitative impacts and the approach we are proposing to try and quantify the
61impacts between positive and negative in terms of the dollar value. After the break I

would like to actually show you my current in development version of the GRIM model which will be linked to the net spreadsheet that we showed this morning. I've got a limit of net I and you are up to net 3 so I've got a little work to do. It is work in progress but I think there is enough there to show you the direction we are taking and it is also early enough that we can shape that direction. We might be able to bring in some of your input immediately. I envision that the spreadsheet itself would be complete within the next six weeks or so, so after the comments here and maybe some phone calls, etc. I hope to have the spreadsheet finished. In the final section I asked Quentin Looney who works with us to describe a little bit the process we intend to use for our second major tool which is a survey instrument, a survey guide as you will. It is not really a survey it is more really an interview questionnaire. It is a series of (not audible) points that has a purpose first of all to discuss a cashflow analysis assumption that we were making but also to try and get a handle on some of the other impacts which are important and are not necessarily the outcome of the tax flow analysis. I am very happy to note there are suppliers for the ballast industry here and although neither of those tools has been tailored to supplier industries we will see that consideration of their impact (not audible) as we go through the analysis. I will complete by looking at schedules for the actual conduct of the analysis. Mike Perlis: (Not audible) a half an hour. Michael Rivest: Right we will break just after the generic methodology. I was just overviewing the presentation. It just quickly talks about the generic framework and some of the phases in the analysis. The first phase which will be ballast industry profile, you realize that the generic methodology was being developed in amidst of the ballast rule so the essential step which is profiling the industry was in fact conducted a little later than the ballast (not audible) since we were already on to the analysis but the interviews that were held were


### 62 impacts betweenpositive and negative interms ofthe dollar value. After the break I would like to actually show you my current in development version ofthe GRIMmodel which 

### will be linked to the net spreadsheet that we showedthis morning. I've got a limit ofnet 1 and you are up to net 3 so I've got a little workto do. It is work inprogress but I thinkthere is enoughthere to showyou the direction we are taking and it is also early enoughthat we can shape that direction. We might be able to bring in some ofyour input immediately. I envisionthat the spreadsheet itselfwould be complete within the next six weeks or so, so after the comments here and maybe some phone calls, etc. I hope to have the spreadsheet finished. Inthe final sectionI asked Quentin Looneywho works with us to describe a little bit the process we intend to use for our second major tool which is a surveyinstrument, a survey guide as you 

### will. It is not really a survey it is more really an interview questionnaire. Itis a series of(not audible) points that 

### has a purpose first ofall to discuss a cashflow analysis assumptionthat we were making but also to try and get a handle on some ofthe other impacts which are important and are not necessarily the outcome ofthe taxflow analysis. I amvery happyto note there are suppliers for the ballast industry here and although neither ofthose tools has beentailored to supplier industries we will see that consideration oftheir impact (not audible) as we go throughthe analysis. I 

### will complete by looking at schedules for the actual conduct ofthe analysis. Mike Perlis: (Not audible) a halfanhour. Michael Rivest: Right we 

### willbreakjust afterthe generic methodology. I wasjust overviewing the presentation. Itjust quickly talks about the generic framework and some ofthe phases 

### in the analysis. The first phase which 

### will be ballast industry profile, yourealize that the generic methodology was being developed in amidst ofthe ballast rule so the essential step which is profiling the industry was in fact conducted a little later thanthe ballast (not audible) since we were already onto the analysis but the interviews that were held were 

### 62 impacts betweenpositive and negative interms ofthe dollar value. After the break I would like to actually show you my current in development version ofthe GRIMmodel which 

### will be linked to the net spreadsheet that we showedthis morning. I've got a limit ofnet 1 and you are up to net 3 so I've got a little workto do. It is work inprogress but I thinkthere is enoughthere to showyou the direction we are taking and it is also early enoughthat we can shape that direction. We might be able to bring in some ofyour input immediately. I envisionthat the spreadsheet itselfwould be complete within the next six weeks or so, so after the comments here and maybe some phone calls, etc. I hope to have the spreadsheet finished. Inthe final sectionI asked Quentin Looneywho works with us to describe a little bit the process we intend to use for our second major tool which is a surveyinstrument, a survey guide as you 

### will. It is not really a survey it is more really an interview questionnaire. Itis a series of(not audible) points that 

### has a purpose first ofall to discuss a cashflow analysis assumptionthat we were making but also to try and get a handle on some ofthe other impacts which are important and are not necessarily the outcome ofthe taxflow analysis. I amvery happyto note there are suppliers for the ballast industry here and although neither ofthose tools has beentailored to supplier industries we will see that consideration oftheir impact (not audible) as we go throughthe analysis. I 

### will complete by looking at schedules for the actual conduct ofthe analysis. Mike Perlis: (Not audible) a halfanhour. Michael Rivest: Right we 

### willbreakjust afterthe generic methodology. I wasjust overviewing the presentation. Itjust quickly talks about the generic framework and some ofthe phases 

### in the analysis. The first phase which 

### will be ballast industry profile, yourealize that the generic methodology was being developed in amidst ofthe ballast rule so the essential step which is profiling the industry was in fact conducted a little later thanthe ballast (not audible) since we were already onto the analysis but the interviews that were held were 

### 62instrumental to that. Talking about the strong end industry cashflow that we are putting

together to get some feedback and to be a touch stone then we will talk about how we might aggregate following interviews with manufacturers that we might go back and integrate them into a definitive industry cashflow. As Carl mentioned the commitments of the interpretive rule were to take this away at least from some degree from the quantitative focus of the task which in essence the manufactured impact analysis was the running of the model and providing input into a model and now we have added a large qualitative assessment component to the analysis and our main instrument for conducting this analysis are manufacturer and stakeholder interviews and we intend to be frequently consulting with any interested party in the rule. The analytical rule that I touched on it a littler earlier is the government regulatory impact model. This spreadsheet works in itself that was I believe its development was commissioned by the three trade associations and was adopted by DoE last year when they developed the generic methodology. Recapping there is really three phases to the analysis. There is the development of the profile and the definition of the issues. We've got carrying out of an industry cashflow analysis and we have the industry stagmentation and subgroup analysis to try and understand the individual impacts on various subgroups. This is also part of the generic framework of typical rule making. Just showing you how the three phases of the manufactured impact are related to the overall analysis in rule making. The engineering analysis normally would provide a lot of the cost input data of the manufacturing costs of various types of ballast's and various efficiency levels. Some of the price forecasts are incorporated into the life cycle cost analysis. The national benefits analysis, the spreadsheet we saw this morning. The net spreadsheet contains a lot of the forecasts for shipment and what the GRIM industry cashflow does is that it incorporates the prices, the quantities, the costs along with some other financial information to create an industry cashflow. The second component of the analysis, which involves individual visits with manufacturers, consists also of the cashflow when we try and understand the variances between the cashflows of the individual


### 63 instrumental to that. Talking about the strong end industry cashflowthat we are putting together to get some feedback and to be a touch stone thenwe 

### will talk about how we might aggregate following interviews with manufacturers that we might go back and integrate them into a definitive industry cashflow. As Carl mentioned the commitments of the interpretive rule were to take this away at least from some degree from the quantitative focus ofthe task which in essence the manufactured impact analysis was the running ofthe model and providing input into a model and now we have added a large qualitative assessment component to the analysis and ourmain instrument for conducting this analysis are manufacturer and stakeholder interviews and we intend to be frequently consulting with any interested party in the rule. The analytical rule that I touched on it a littler earlier is the government regulatory impact model. This spreadsheet works in itself that was I believe its development was commissioned by the three trade associations and
was adopted by DoE last year whenthey developed the generic methodology. Recapping there is reallythree phases to the analysis. There is the development ofthe profile and the definition ofthe issues. We've got carrying out ofanindustry cashflow analysis and we have the industry stagmentation and subgroup analysis to try and understand the individual impacts onvarious subgroups. This is also part ofthe generic framework oftypical rule making. Just showing youhowthe three phases ofthe manufactured impact are related to the overall analysis in rule making. The engineering analysis normally would provide a lot ofthe cost input data ofthe manufacturing costs ofvarious types ofballast's and various efficiency levels. Some ofthe price forecasts are incorporated into the life cycle cost analysis. The national benefits analysis, the spreadsheet we sawthis morning. The net spreadsheet contains a lot ofthe forecasts for shipment and what the GRIMindustry cashflow does is that it incorporates the prices, the quantities, the costs along with some other financial informationto create anindustry cashflow. The second component ofthe analysis, which involves individual visits with manufacturers, consists also ofthe cashflow whenwe try and understand the variances betweenthe cashflows ofthe individual
63 instrumental to that. Talking about the strong end industry cashflowthat we are putting together to get some feedback and to be a touch stone thenwe 

### will talk about how we might aggregate following interviews with manufacturers that we might go back and integrate them into a definitive industry cashflow. As Carl mentioned the commitments of the interpretive rule were to take this away at least from some degree from the quantitative focus ofthe task which in essence the manufactured impact analysis was the running ofthe model and providing input into a model and now we have added a large qualitative assessment component to the analysis and ourmain instrument for conducting this analysis are manufacturer and stakeholder interviews and we intend to be frequently consulting with any interested party in the rule. The analytical rule that I touched on it a littler earlier is the government regulatory impact model. This spreadsheet works in itself that was I believe its development was commissioned by the three trade associations and
was adopted by DoE last year whenthey developed the generic methodology. Recapping there is reallythree phases to the analysis. There is the development ofthe profile and the definition ofthe issues. We've got carrying out ofanindustry cashflow analysis and we have the industry stagmentation and subgroup analysis to try and understand the individual impacts onvarious subgroups. This is also part ofthe generic framework oftypical rule making. Just showing youhowthe three phases ofthe manufactured impact are related to the overall analysis in rule making. The engineering analysis normally would provide a lot ofthe cost input data ofthe manufacturing costs ofvarious types ofballast's and various efficiency levels. Some ofthe price forecasts are incorporated into the life cycle cost analysis. The national benefits analysis, the spreadsheet we sawthis morning. The net spreadsheet contains a lot ofthe forecasts for shipment and what the GRIMindustry cashflow does is that it incorporates the prices, the quantities, the costs along with some other financial informationto create anindustry cashflow. The second component ofthe analysis, which involves individual visits with manufacturers, consists also ofthe cashflow whenwe try and understand the variances betweenthe cashflows ofthe individual
63manufacturers and the what we call the industry cashflow situation. And also to try and

get an understanding of the other impacts which are part of the process rule. Actually impacts on the competition of (not audible) but the impacts on employment and on manufacturing capacity. This would be a good time to stop. My other slides actually get into tailoring of the generic methodology throughout the ballast rule. This might be a good time to break. Mark Perlis: I would like to pose a question before we move on to brief comments from industry representatives. The first Mark Perlis: The first thing Mike that you refer to the ballast industry profile and it had to do with or simultaneously for ballast (not audible). Is it the chart at page 12 in the handout here basically the profile? Michael Rivest: No. No. No that was just an illustrative industry statistic type slide. What I mean by industry profile, when the analysis was set up and manufacturing impacts were calculated I guess in'94 they said these are the industry shipments. So many magnetic ballast, so many electronic ballast, there are four or five players in the industry, we are going to make up a prototypical firm which has a 20% of the market share of magnetic and electronic and we are going to run the numbers. What we did in the industry profile is that we visited the manufacturers and we understood very quickly that there were people who made only magnetic, some make only electronic, some are big, some are small and most of all we realized that the set up of the analysis which was wrong when you are talking about technology change from magnetic to electronic. I think in one day I did both types of plans and I saw very little commonality until that very last step where they put it in the box so to me the profiling is the understanding of the issues to allow us this structure and the -analysis that makes sense.


### 64 manufacturers and the what we call the industry cashflow situation. And also to try and get an understanding ofthe other impacts which are part ofthe process rule. Actually impacts onthe competition of(not audible) but the impacts on employment and on manufacturing capacity. This would be a goodtime to stop. My other slides actually get into tailoring ofthe generic methodology throughout the ballast rule. This might be a good time to break. Mark Perlis: I would like to pose a question before we move onto briefcomments from industry representatives. The first Mark Perlis: The first thing Mike that you refer to the ballast industry profile and it had to do with or simultaneously for ballast (not audible). Is it the chart at page 12 in the handout here basically the profile? Michael Rivest: No. No. No that wasjust anillustrative industry statistic type slide. What I mean by industry profile, whenthe analysis was set up and manufacturing impacts were calculated I guess in '94 they said these are the industry shipments. So many magnetic ballast, so many electronic ballast, there are four or five players in the industry, we are going to make up a prototypical 

### firm which has a 20% ofthe market share ofmagnetic and electronic and we
are going to runthe numbers. What we did inthe industry profile is that we visited the manufacturers and we understood very quickly that there were people who made only magnetic, some make only electronic, some are big, some are small and most ofall we realized that the set up ofthe analysis which was wrong whenyou are talking about technology change :from magnetic to electronic. I think: in one day I did bothtypes of plans and I saw very little commonality until that very last step where they put 

### it in the box
so to me the profiling is the understanding ofthe issues to allow us this structure and the analysis that makes sense.
64 manufacturers and the what we call the industry cashflow situation. And also to try and get an understanding ofthe other impacts which are part ofthe process rule. Actually impacts onthe competition of(not audible) but the impacts on employment and on manufacturing capacity. This would be a goodtime to stop. My other slides actually get into tailoring ofthe generic methodology throughout the ballast rule. This might be a good time to break. Mark Perlis: I would like to pose a question before we move onto briefcomments from industry representatives. The first Mark Perlis: The first thing Mike that you refer to the ballast industry profile and it had to do with or simultaneously for ballast (not audible). Is it the chart at page 12 in the handout here basically the profile? Michael Rivest: No. No. No that wasjust anillustrative industry statistic type slide. What I mean by industry profile, whenthe analysis was set up and manufacturing impacts were calculated I guess in '94 they said these are the industry shipments. So many magnetic ballast, so many electronic ballast, there are four or five players in the industry, we are going to make up a prototypical 

### firm which has a 20% ofthe market share ofmagnetic and electronic and we
are going to runthe numbers. What we did inthe industry profile is that we visited the manufacturers and we understood very quickly that there were people who made only magnetic, some make only electronic, some are big, some are small and most ofall we realized that the set up ofthe analysis which was wrong whenyou are talking about technology change :from magnetic to electronic. I think: in one day I did bothtypes of plans and I saw very little commonality until that very last step where they put 

### it in the box
so to me the profiling is the understanding ofthe issues to allow us this structure and the analysis that makes sense.
64

### Mark Perlis:

That is very helpful. The reason for my question is because the generic document that you all were reading dated April 10th Ballast Manufacturing Tax Analysis (not audible) which you inserted the box material about ballast specifics lays out a somewhat ambitious data book that will be prepared and I wondered whether that is going to be done and at which point that is going to be shared with the industry and how that fits in , I understand that can't, it was supposed to have been done even before you get started on all these cashflow analysis and even before the next round of interviews I would imagine. Michael Rivest: 

### What I would say is that the context of that data book exist and the various analysis set up to produce to date such as historical shipments information, names of manufacturers, a lot of the issues came out of the interview summaries from last year so I didn't envision putting together a data book, per say at this point. I think that we understand the issues sufficiently and that would be just a mere exercise in paperwork. Mark Perlis: Perhaps but the generic rule that was, the generic approach that was spelled out over a year ago in response to the process improvement rule process indicates that it will be provided to stakeholders for review and comment and indeed in the next section (not audible) for industry knowledge are going to be identified to provide information and access to the viewers a characterization for a fee and you might not think it is necessary, it is part of the generic approach here that was presented to all the affected industry and it seems we are getting away from the reverse approach in favor of (not audible). And I guess I was wondering why. Michael Rivest: Just for the reason I said. I don't think what you are asking is unreasonable, I think it can be done. It is a matter of gathering a lot of information that is already in LB & L's



### 65 MarkPedis: That is very helpful. The reason for my question is because the generic document that you all were reading dated April 10thBallast Manufacturing Tax Analysis (not audible) which you inserted the boxmaterial about ballast specifics lays out a somewhat ambitious data bookthat 

### will be prepared and I wondered whether that is going to be done and at which point that is going to be shared with the industry and howthat fits 

### in, I understand that can't, it was supposed to have been done evenbefore you get started on all these cashflow analysis and evenbefore the next round ofinterviews I would imagine. Michael Rivest: What I would say is that the context ofthat databook exist and the various analysis set up to produce to date such as historical shipments information, names ofmanufacturers, a lot ofthe issues came out ofthe interview summaries from last year so I didn't envision putting together a databook, per say at this point. I think that we understand the issues sufficiently and that would bejust a mere exercise in paperwork. Mark Pedis: Perhaps but the generic rule that was, the generic approachthat was spelled out over a year ago inresponse to the process improvement rule process indicates that it 

### will be provided to stakeholders for review and comment and indeed inthe next section (not audible) for industry knowledge are going to be identified to provide information and
access to the viewers a characterization for a fee and youmight not think it is necessary, it is part ofthe generic approach here that was presented to all the affected industry and it
seems we are getting away from the reverse approach in favor of(not audible). And I guess I was wondering why. Michael Rivest: Just for the reason I said. I don't think what you are asking is unreasonable, I think it cml be done. It is a matter ofgathering a lot ofinformationthat is already in LB & L's

65 MarkPedis: That is very helpful. The reason for my question is because the generic document that you all were reading dated April 10thBallast Manufacturing Tax Analysis (not audible) which you inserted the boxmaterial about ballast specifics lays out a somewhat ambitious data bookthat 

### will be prepared and I wondered whether that is going to be done and at which point that is going to be shared with the industry and howthat fits 

### in, I understand that can't, it was supposed to have been done evenbefore you get started on all these cashflow analysis and evenbefore the next round ofinterviews I would imagine. Michael Rivest: What I would say is that the context ofthat databook exist and the various analysis set up to produce to date such as historical shipments information, names ofmanufacturers, a lot ofthe issues came out ofthe interview summaries from last year so I didn't envision putting together a databook, per say at this point. I think that we understand the issues sufficiently and that would bejust a mere exercise in paperwork. Mark Pedis: Perhaps but the generic rule that was, the generic approachthat was spelled out over a year ago inresponse to the process improvement rule process indicates that it 

### will be provided to stakeholders for review and comment and indeed inthe next section (not audible) for industry knowledge are going to be identified to provide information and
access to the viewers a characterization for a fee and youmight not think it is necessary, it is part ofthe generic approach here that was presented to all the affected industry and it
seems we are getting away from the reverse approach in favor of(not audible). And I guess I was wondering why. Michael Rivest: Just for the reason I said. I don't think what you are asking is unreasonable, I think it cml be done. It is a matter ofgathering a lot ofinformationthat is already in LB & L's

65

### documents, the interview summaries and to be put together in one central data book. I

think it is a doable task if people think that is something that would be useful. Mark Perlis: Well there was a process here that was implementing process improvement in the instance of the Department and while somebody has to go first, the ballast industry has to go first, I guess it would look a little odd if we are going to skip a bunch of steps because we have to get the first one done and it would be redundant to (not audible) to be done otherwise. But I think that (not audible). Michael McCabe: The generic approach has been discussed with other industries as well evolving the process of other industries and specifically the cloths washer industry. They argue that it is unnecessary, that the data being presented and discussed (not audible) and they can revisit that issue. Michael Rivest: I will tell you about one issue that came up very strongly, for example with another association. They had very serious concerns about DoE putting in one central location a lot of industry statistics which although are all public are not all in one place so there is some uneasiness with that that I think that if your members 'lave no problem with that or maybe the contents of that data book would have to be brought in line with those

concerns. Douglas Brookman: Alright any more questions for Michael before we move on to brief comments on members of the industry. I see none. Ok. Thanks Mike. We will pick up with you in a few minutes. I would like to do this is somewhat of an orderly way. I was wondering if possible to have those of which to comment literally to line up behind these two microphones that are here. Have you talked about this, is there any order in which you wish to present. No? Okay. Then I guess we will just go first come is first served. I'd


### 66 documents, the interview summaries and to be put together inone central databook. I think it is a doable task 

### ifpeople think that is something that would be useful. MarkPerlis: Well there was a process here that was implementing process improvement in the instance ofthe Department and while somebody has to go first, the ballast industryhas to go first, I guess it would look a little odd 

### ifwe are going to skip a bunch ofsteps because we have to get the first one done and 

### it would be redundant to (not audible) to be done otherwise. But I think that (not audible). Michael McCabe: The generic approach has been discussed with other industries as well evolving the process ofother industries and specifically the cloths washer industry. They argue that it is unnecessary, that the databeing presented and discussed (not audible) and they can revisit that issue. Michael Rivest: I will tell you about one issue that came up very strongly, for example with another association. They had very serious concerns about DoE putting in one central location a lot ofindustry statistics which although are all public are not all 

### in one place so there is
some uneasiness withthat that 1think: that 

### ifyour members have no problemwiththat or maybe the contents ofthat databook would have to be brought in line withthose
concerns. Douglas Brookman: Alright any more questions for Michael before we move onto briefcomments onmembers ofthe industry. I see none. Ok. Thanks Mike. We will pick up withyou in a few minutes. I would like to do this is somewhat ofan orderly way. I was wondering 

### if possible to have those ofwhich to comment literally to line up behind these two microphones that are here. Have you talked about this, is there any order in which you wishto present. No? Okay. ThenI guess we willjust go first come is first served. I'd


### 66 documents, the interview summaries and to be put together inone central databook. I think it is a doable task 

### ifpeople think that is something that would be useful. MarkPerlis: Well there was a process here that was implementing process improvement in the instance ofthe Department and while somebody has to go first, the ballast industryhas to go first, I guess it would look a little odd 

### ifwe are going to skip a bunch ofsteps because we have to get the first one done and 

### it would be redundant to (not audible) to be done otherwise. But I think that (not audible). Michael McCabe: The generic approach has been discussed with other industries as well evolving the process ofother industries and specifically the cloths washer industry. They argue that it is unnecessary, that the databeing presented and discussed (not audible) and they can revisit that issue. Michael Rivest: I will tell you about one issue that came up very strongly, for example with another association. They had very serious concerns about DoE putting in one central location a lot ofindustry statistics which although are all public are not all 

### in one place so there is
some uneasiness withthat that 1think: that 

### ifyour members have no problemwiththat or maybe the contents ofthat databook would have to be brought in line withthose
concerns. Douglas Brookman: Alright any more questions for Michael before we move onto briefcomments onmembers ofthe industry. I see none. Ok. Thanks Mike. We will pick up withyou in a few minutes. I would like to do this is somewhat ofan orderly way. I was wondering 

### if possible to have those ofwhich to comment literally to line up behind these two microphones that are here. Have you talked about this, is there any order in which you wishto present. No? Okay. ThenI guess we willjust go first come is first served. I'd


### 66like to ask those who wish to speak on behalf of their industry and I would like if all

possible please of course state your name and who you represent. If you can characterize your comments rather than read them off the page that would be helpful. Yes, Gene has a question to ask. Gene Foley: 

### Are we to comment or ask questions after they make their full statements, or how do you want us to deal with that? Douglas Brookman: I guess let's try and have questions after each person presents but on noting that we have pretty significant time constraints here. Gene Foley: Given the whole point of this whole thing was an exchange of information just having them just throw it all out doesn't seem to be quite in line with what the point of the meeting was. Douglas Brookman: Lets try it that way and see how it goes and if it is taking to long for us to get to the primary purpose of our meeting today which is the agenda then we will have to adjust our strategies. Yes, Michael. 

### Michael McCabe: We have what sounds like a number of industry representatives from each industry who were sent to right now identify industries and then just take it in blocks so as not to jump from lamps to copper suppliers to other industries. We will focus in one area and then move around like that. Douglas Brookman: How about that, it sounds like a good idea to me. How many different industries do we have? Michael mentioned lamps, copper suppliers, are there other suppliers? Speakers:


### 67 like to askthose who wish to speak onbehalfoftheir industry and I would like 

### ifall possible please ofcourse state your name and who yourepresent. Ifyou can characterize your comments rather than read them offthe page that would be helpful. Yes, Gene 

### has a questionto ask. Gene Foley: Are we to comment or ask questions after they make their full statements, or how do you want us to deal withthat? Douglas Brookman: I guess let's try and have questions after each personpresents but onnoting that we have pretty significant time constraints here. Gene Foley: Giventhe whole point ofthis whole thing was an exchange ofinformationjusthaving themjust throw it all out doesn't seemto be quite in line with what the point ofthe meeting was. Douglas Brookman: Lets try it that way and see how it goes and 

### ifit is taking to long for us to get to the primarypurpose ofourmeeting todaywhich 

### is the agendathenwe 

### will have to adjust our strategies. Yes, I'vficr..ael. I'vfichael McCabe: We have what sounds like a number ofindustry representatives from eachindustry who
were sent to right now identify industries and thenjusttake it inblocks so as not tojump from lamps to copper suppliers to other industries. We 

### will focus in one area and then
move around like that. Douglas Brookman: How about that, it sounds like a good ideato me. Howmany different industries do we have? I'vfichael mentioned lamps, copper suppliers, are there other suppliers? Speakers:
67 like to askthose who wish to speak onbehalfoftheir industry and I would like 

### ifall possible please ofcourse state your name and who yourepresent. Ifyou can characterize your comments rather than read them offthe page that would be helpful. Yes, Gene 

### has a questionto ask. Gene Foley: Are we to comment or ask questions after they make their full statements, or how do you want us to deal withthat? Douglas Brookman: I guess let's try and have questions after each personpresents but onnoting that we have pretty significant time constraints here. Gene Foley: Giventhe whole point ofthis whole thing was an exchange ofinformationjusthaving themjust throw it all out doesn't seemto be quite in line with what the point ofthe meeting was. Douglas Brookman: Lets try it that way and see how it goes and 

### ifit is taking to long for us to get to the primarypurpose ofourmeeting todaywhich 

### is the agendathenwe 

### will have to adjust our strategies. Yes, I'vficr..ael. I'vfichael McCabe: We have what sounds like a number ofindustry representatives from eachindustry who
were sent to right now identify industries and thenjusttake it inblocks so as not tojump from lamps to copper suppliers to other industries. We 

### will focus in one area and then
move around like that. Douglas Brookman: How about that, it sounds like a good ideato me. Howmany different industries do we have? I'vfichael mentioned lamps, copper suppliers, are there other suppliers? Speakers:
67Metalized film (not audible) electric. Sterile protectors. Electrical coating. Capacitors.

Douglas Brookman: So lets do this and steel. Lets honor the clue that exist and anybody who in that same industry would speak following the, for example started to with coatings or steel, okay. This gentleman here, your name please. Richard Rattray: Very brief, I am from OSRAM Sylvania as a lamp manufacturer, of course. I just wanted to read a permitted statement but it is very quick. OSRAM Sylvania, Incorporated (OSI) is a designer and manufacturer of both florescent lamps and electronic florescent lamp ballast. OSI has commented previously on DoE's proposals for enhanced efficiency standards for florescent lamp ballast's and offers the following statement pertinent to the current state of the market for lamps and ballast. Despite the fact that OSI currently manufactures only electronic ballast we emphasize that both electronic and magnetic ballast technologies are required by the wide variety of applications of our lamp products. Electronic ballast have achieved remarkable penetration of the market in recent years which varies for covered lamp types from approximately 50% for the U.S. as a whole to more than 80% in states where there is aggressive energy code enforcement. That upper level of 80% penetration is good news for us as an electronic ballast manufacturer and is probably as high as it is desirable to achieve. As a lamp manufacturer we much be watchful of the remainder of the market. That market includes applications that are sensitive to the interference caused by operation of lamps at high frequencies typical of electronic ballast where an inappropriate use of replacement electronic ballast and otherwise magnetically ballasted applications will result in inconsistent lamp performance or outright incompatibility and where higher than acceptable life cycle costs will result from the enforced use of electronic ballast. This will occur in all applications with low annual running hours and the greatest impact will be in the residential market. This is or should be a growing sector for florescent lighting. Incandescent products may be retained


### 68 Metalized 

### film (not audible) electric. Sterile protectors. Electrical coating. Capacitors. Douglas Brookman: So lets do this and steel. Lets honor the clue that exist and anybody who in that same industry would speak following the, for example started to with coatings or steel, okay. This gentlemanhere, your name please. Richard Rattray: Verybrief, I amfrom OSRAM Sylvania as a lamp manufacturer, ofcourse. Ijust wanted to read a permitted statement but it is very quick. OSRAM Sylvania, Incorporated (OSI) is a designer and manufacturer ofboth florescent lamps and electronic florescent lamp ballast. OSI has commented previously onDoE's proposals for enhanced efficiency standards for florescent lamp ballast's and offers the following statement pertinent to the current state ofthe market for lamps and ballast. Despite the fact that OSI currently manufactures only electronic ballast we emphasize that bothelectronic and magnetic ballast technologies are required by the wide variety ofapplications ofour lamp products. Electronic ballast have achieved remarkable penetration ofthe market in recent years which varies for covered lamp types from approximately 50% for the U.S. as a whole to
more than 80% in states where there is aggressive energy code enforcement. That upper level of80% penetration is good news for us as an electronic ballast manufacturer and is probably as high as it is desirable to achieve. 

### As a lamp manufacturer we muchbe watchful ofthe remainder ofthe market. That market includes applications that are sensitive to the interference caused by operation oflamps at highfrequencies typical of electronic ballast where aninappropriate use ofreplacement electronic ballast and otherwise magnetically ballasted applications 

### willresult in inconsistent lamp performance
or outright incompatibility andwhere higher than acceptable life cycle costs 

### will result from the enforced use ofelectronic ballast. This 

### will occur in all applications with low annual running hours and the greatest impact 

### will be in the residential market. This is or should be a growing sector for florescent lighting. Incandescent products may be retained
68 Metalized 

### film (not audible) electric. Sterile protectors. Electrical coating. Capacitors. Douglas Brookman: So lets do this and steel. Lets honor the clue that exist and anybody who in that same industry would speak following the, for example started to with coatings or steel, okay. This gentlemanhere, your name please. Richard Rattray: Verybrief, I amfrom OSRAM Sylvania as a lamp manufacturer, ofcourse. Ijust wanted to read a permitted statement but it is very quick. OSRAM Sylvania, Incorporated (OSI) is a designer and manufacturer ofboth florescent lamps and electronic florescent lamp ballast. OSI has commented previously onDoE's proposals for enhanced efficiency standards for florescent lamp ballast's and offers the following statement pertinent to the current state ofthe market for lamps and ballast. Despite the fact that OSI currently manufactures only electronic ballast we emphasize that bothelectronic and magnetic ballast technologies are required by the wide variety ofapplications ofour lamp products. Electronic ballast have achieved remarkable penetration ofthe market in recent years which varies for covered lamp types from approximately 50% for the U.S. as a whole to
more than 80% in states where there is aggressive energy code enforcement. That upper level of80% penetration is good news for us as an electronic ballast manufacturer and is probably as high as it is desirable to achieve. 

### As a lamp manufacturer we muchbe watchful ofthe remainder ofthe market. That market includes applications that are sensitive to the interference caused by operation oflamps at highfrequencies typical of electronic ballast where aninappropriate use ofreplacement electronic ballast and otherwise magnetically ballasted applications 

### willresult in inconsistent lamp performance
or outright incompatibility andwhere higher than acceptable life cycle costs 

### will result from the enforced use ofelectronic ballast. This 

### will occur in all applications with low annual running hours and the greatest impact 

### will be in the residential market. This is or should be a growing sector for florescent lighting. Incandescent products may be retained
68if florescent are inappropriately priced. We also caution DoE not to even think of

efficiency standards based on electronic ballast criteria with exemptions for magnetic. We have only to remind DoE of the agony caused by the BR Reflector Lamp Exemptions contained in the 1992 Energy Policy Act to illustrate the inevitable outcome of a rule making based on a similar premise. If the normal market forces continue their previous trend inappropriate megs of TA florescent lamp and electronic ballast (not audible) prior T12 lamps and energy efficient magnetic ballast will find its own level without government intervention. The transition will also proceed at an orderly pace that the lamp and ballast industries and their component suppliers can accommodate. Douglas Brookman: 

### Thank you and that was about three minutes. If the rest of you can do as well or better than that we will be in good shape. Okay, questions. Brief questions. Go ahead. Gene Foley: Gene Foley, Alliance to Save Energy. Are not residential ballast currently exempted from the regulation and is it not the intention here to maintain that exemption so that residential doesn't factor into any of the government classes: 

### Michael McCabe: There is an exemption for residential ballasts. Douglas Brookman: 

### We are thinking that we should hear from all the light manufacturers before we ask any questions. Any other lamp manufacturers that wish to comment at this point. Is this okay with everybody. Yes. Ed Yandek: My name is Ed Yandek from G.E. Lighting. I would just in the interest of time like to say that from another major lamp manufacturers point of view we have some of the same concerns expressed by my colleague from Sylvania. Thank you. Douglas Brookman:


### 69 ifflorescent are inappropriatelypriced. We also cautionDoE not to even think of efficiency standards based on electronic ballast criteria with exemptions for magnetic. We have onlyto remind DoE ofthe agony caused bythe BRReflector Lamp Exemptions contained inthe 1992 Energy Policy Act to illustrate the inevitable outcome ofa rule making based on a similar premise. Ifthe normal market forces continue theirprevious trend inappropriate megs ofTA florescent lamp and electronic ballast (not audible) prior T12lamps and energy efficient magnetic ballast 

### will find its own level without government intervention. The transition 

### will also proceed at an orderly pace that the lamp and ballast industries and their component suppliers can accommodate. Douglas Brookman: Thank you and that was about three minutes. Ifthe rest ofyou cando as well or better thanthat we 

### will be in good shape. Okay, questions. Briefquestions. Go ahead. Gene Foley: Gene Foley, Alliance to Save Energy. Are not residential ballast currently exempted from the regulation and is it not the intentionhere to maintainthat exemption so that residential doesn't factor into any ofthe government classes: MichaelMcCabe: There is an exemptIon for residential ballasts. Douglas Brookman: We are thinking that we should hear from all the light manufacturers before we ask any questions. Any other lamp manufacturers that wishto comment at this point. Isthis okay witheverybody. Yes. Ed Yandek: My name is Ed Yandek from G.E. Lighting. I wouldjust inthe interest oftime like to say that from another major lamp manufacturers point ofview we have some ofthe same
concerns expressedby my colleague from Sylvania. Thank you. Douglas Brookman:


### 69 ifflorescent are inappropriatelypriced. We also cautionDoE not to even think of efficiency standards based on electronic ballast criteria with exemptions for magnetic. We have onlyto remind DoE ofthe agony caused bythe BRReflector Lamp Exemptions contained inthe 1992 Energy Policy Act to illustrate the inevitable outcome ofa rule making based on a similar premise. Ifthe normal market forces continue theirprevious trend inappropriate megs ofTA florescent lamp and electronic ballast (not audible) prior T12lamps and energy efficient magnetic ballast 

### will find its own level without government intervention. The transition 

### will also proceed at an orderly pace that the lamp and ballast industries and their component suppliers can accommodate. Douglas Brookman: Thank you and that was about three minutes. Ifthe rest ofyou cando as well or better thanthat we 

### will be in good shape. Okay, questions. Briefquestions. Go ahead. Gene Foley: Gene Foley, Alliance to Save Energy. Are not residential ballast currently exempted from the regulation and is it not the intentionhere to maintainthat exemption so that residential doesn't factor into any ofthe government classes: MichaelMcCabe: There is an exemptIon for residential ballasts. Douglas Brookman: We are thinking that we should hear from all the light manufacturers before we ask any questions. Any other lamp manufacturers that wishto comment at this point. Isthis okay witheverybody. Yes. Ed Yandek: My name is Ed Yandek from G.E. Lighting. I wouldjust inthe interest oftime like to say that from another major lamp manufacturers point ofview we have some ofthe same
concerns expressedby my colleague from Sylvania. Thank you. Douglas Brookman:


### 69

### Thank you very much I appreciate you being brief Other lamp manufacturers who wish

to comment at this point. Okay, yes sir. John Forsyth: Yes, my name is John Forsyth, I am the North American Marketing Manager representing Texas Instruments Lighting and Industrial Business Unit. We would like thank the United States DoE for the opportunity to speak at this forum and participate in this workshop on the ballast efficiency regulations and its potential impact on our business, which we believe to substantial. Texas Instruments Materials and Controls Group which is headquartered in Attleboro, Massachusetts is an employer of other 4,000 U. S. workers, many of which are directly associated with the design and manufacture of film protectors which serve the florescent ballast industry. In fact the ballast industry is by far our largest market segment in which nearly one hundred million protectors are supplied by Texas Instruments per year. The current proposal under consideration to revise florescent lamp ballast efficiency regulations which potentially could include outlawing the existing magnetic ballast product line threatens many jobs in our Massachusetts operation. It is our estimate at this time that a minimum of 80 full time employees would be idled. This would include both hourly and salaried employees. Besides the loss of U. S. jobs the premature obsolescence of our product which is used in magnetic ballast would also have substantial and unforecasted financial impact on our division. T.I. has invested greater than twenty million dollars in capital equipment that manufactures the thermal protector used in the majority of magnetic ballast. It is our estimate that as much of 40% of our production assets would be idled or under utilized. Since 1987 the use of electronic ballast has grown from 2% to nearly 40% on the market which is our estimates, we could be wrong, without government mandates. The fact that the market penetration of electronic ballast is occurring naturally at a high rate is strong evidence that natural market forces alone are accomplishing energy efficiency argues against an arbitrary product band. Thank you. Douglas Brookman:


### 70 Thank you very muchI appreciate you being brief. Other lamp manufacturers who wish to comment at this point. Okay, yes sir. JohnForsyth: Yes, my name is JohnForsyth, I amthe North American Marketing Manager representing Texas Instruments Lighting and Industrial Business Unit. We would like thank the United StatesDoE for the opportunity to speak at this forum and participate in this workshop on the ballast efficiency regulations and its potential impact onourbusiness, which we believe to substantial. Texas Instruments Materials and Controls Group which is headquartered in Attleboro, Massachusetts is an employer ofother4,000 U.S. workers, many ofwhich are directly associated with the design and manufacture of

### film protectors which serve the florescent ballast industry. In fact the ballast industry is by far our largest market segment in whichnearly one hundred million protectors are supplied by Texas Instruments per year. The current proposal under consideration to revise florescent lamp ballast efficiency regulations which potentially could include outlawing the existing magnetic ballast product line threatens manyjobs in our Massachusetts operation. It is our estimate atthis time that a minimum of80 full time employees would be idled. This would include bothhourly and salaried employees. Besides the loss ofU.S.jobsthe premature obsolescence ofour product which is used in magnetic ballast would also have substantial and unforecasted financial impact onour division. T.I. has invested greaterthantwenty million dollars in capital equipment that manufactures the thermal protector used in the majority of magnetic ballast. It is our estimate that as much of40% ofourproduction assets would be idled or under utilized. Since 1987 the use ofelectronic ballast 

### has grownfrom 2% to nearly 40% onthe market which is our estimates, we could be wrong, without government mandates. The fact that the market penetration ofelectronic ballast is occurring naturally at a highrate is strong evidence that natural market forces alone are accomplishing energy efficiency argues against an arbitrary product band. Thank you. Douglas Brookman:


### 70 Thank you very muchI appreciate you being brief. Other lamp manufacturers who wish to comment at this point. Okay, yes sir. JohnForsyth: Yes, my name is JohnForsyth, I amthe North American Marketing Manager representing Texas Instruments Lighting and Industrial Business Unit. We would like thank the United StatesDoE for the opportunity to speak at this forum and participate in this workshop on the ballast efficiency regulations and its potential impact onourbusiness, which we believe to substantial. Texas Instruments Materials and Controls Group which is headquartered in Attleboro, Massachusetts is an employer ofother4,000 U.S. workers, many ofwhich are directly associated with the design and manufacture of

### film protectors which serve the florescent ballast industry. In fact the ballast industry is by far our largest market segment in whichnearly one hundred million protectors are supplied by Texas Instruments per year. The current proposal under consideration to revise florescent lamp ballast efficiency regulations which potentially could include outlawing the existing magnetic ballast product line threatens manyjobs in our Massachusetts operation. It is our estimate atthis time that a minimum of80 full time employees would be idled. This would include bothhourly and salaried employees. Besides the loss ofU.S.jobsthe premature obsolescence ofour product which is used in magnetic ballast would also have substantial and unforecasted financial impact onour division. T.I. has invested greaterthantwenty million dollars in capital equipment that manufactures the thermal protector used in the majority of magnetic ballast. It is our estimate that as much of40% ofourproduction assets would be idled or under utilized. Since 1987 the use ofelectronic ballast 

### has grownfrom 2% to nearly 40% onthe market which is our estimates, we could be wrong, without government mandates. The fact that the market penetration ofelectronic ballast is occurring naturally at a highrate is strong evidence that natural market forces alone are accomplishing energy efficiency argues against an arbitrary product band. Thank you. Douglas Brookman:


### 70Are there other members of the same industry , protectors? Okay, if I may I will go back

to this side of the room. John Yodis: My name is John Yodis. I am technical director of the P
.D. George Company. We make magnet-wiring enamels. These are insulating coatings that go on copper and aluminum wire

. We represent a relatively small but essential industry providing the electrical insulation that goes into ballast transformers
. From our industry standpoint a significant percentage of our product goes into our transformers and would simply not be replaced in electronic ballast. We will be negatively impacted by a sudden decision to shift the industry in this direction with no cause for replacement for our technology . Thank you. Douglas Brookman: Is they're anybody else from the same electric insulation industry that wishes to comment. Questions for this gentlemen. Let's just wait and get through all of this and then we will proceed
. To you sir. Eugene Andert: My name is Gene Andert and I'm with the Rea Magnet Wire Company and magnet wire represents the copper aluminum wire that is used in the foil that includes the insulation manufactured by P.D. George

. We ask that as you consider your manufacturing inquiry analysis you consider the impact on our industry as well. Florescent lighting ballast represents 10% of the magnet wire usage in the United States
. It includes somewhere in the neighborhood of 500 to 700 jobs industry wide in the United States and around seventy

-five million dollars in plant equipment investment in the United States
. For our privately held company, Rea Magnet Wire Company it is 17% of our total business. It represents twenty million dollars of our investment in our company and around one hundred jobs so I respectfully ask that you consider that as you consider your analysis. Douglas Brookman: Thank you
. Anybody else from magnet wire manufacturers. Yes.



### 71 Are there other members ofthe same industry, protectors? Okay, ifI may I 

### willgo back to this side ofthe room. John Yodis: Myname is John Yodis. I am technical director ofthe P.D. George Company. We make magnet-wiring enamels. These are insulating coatings that go oncopper and aluminum wire. We represent a relatively small but essential industry providing the electrical insulation that goes into ballast transformers. Fromour industry standpoint a significant percentage ofourproduct goes into ourtransformers and would simply not be replaced in electronic ballast. We 

### will be negatively impacted by a sudden decisionto shift the industry in this direction with no cause for replacement for our technology. Thankyou. Douglas Brookman: Isthey're anybody else from the same electric insulation industry that wishes to comment. Questions for this gentlemen. Let'sjust wait and get through all ofthis and thenwe 

### will proceed. To you sir. Eugene Andert: My name is Gene Andert and I'm with the Rea Magnet Wire Company and magnet wire represents the copper aluminum wire that is used inthe foil that includes the insulation manufactured by P.D. George. We ask that as you consider your manufacturing inquiry analysis you consider the impact onour industry as well. Florescent lighting ballast represents 10% ofthe magnet wire usage in the United States. It includes somewhere 

### in the neighborhood of500 to 700jobs industry wide inthe United States and around seventy-five million dollars in plant equipment investment in the United States. For our privately held company, ReaMagnet Wire Company it is 17% ofourtotalbusiness. It represents twentymillion dollars ofour investment in our company and around one hundredjobs so I respectfully ask that you consider that as you consider your analysis. Douglas Brookman: Thank you. Anybody else from magnet wire manufacturers. Yes.
71 Are there other members ofthe same industry, protectors? Okay, ifI may I 

### willgo back to this side ofthe room. John Yodis: Myname is John Yodis. I am technical director ofthe P.D. George Company. We make magnet-wiring enamels. These are insulating coatings that go oncopper and aluminum wire. We represent a relatively small but essential industry providing the electrical insulation that goes into ballast transformers. Fromour industry standpoint a significant percentage ofourproduct goes into ourtransformers and would simply not be replaced in electronic ballast. We 

### will be negatively impacted by a sudden decisionto shift the industry in this direction with no cause for replacement for our technology. Thankyou. Douglas Brookman: Isthey're anybody else from the same electric insulation industry that wishes to comment. Questions for this gentlemen. Let'sjust wait and get through all ofthis and thenwe 

### will proceed. To you sir. Eugene Andert: My name is Gene Andert and I'm with the Rea Magnet Wire Company and magnet wire represents the copper aluminum wire that is used inthe foil that includes the insulation manufactured by P.D. George. We ask that as you consider your manufacturing inquiry analysis you consider the impact onour industry as well. Florescent lighting ballast represents 10% ofthe magnet wire usage in the United States. It includes somewhere 

### in the neighborhood of500 to 700jobs industry wide inthe United States and around seventy-five million dollars in plant equipment investment in the United States. For our privately held company, ReaMagnet Wire Company it is 17% ofourtotalbusiness. It represents twentymillion dollars ofour investment in our company and around one hundredjobs so I respectfully ask that you consider that as you consider your analysis. Douglas Brookman: Thank you. Anybody else from magnet wire manufacturers. Yes.
71Ray BeeBe:

Yes, Ray BeeBe from Phelps Dodge Corporation, Magnet Wire Division. I just want to agree with my colleague here. I am manager of marketing and business analysis and our independent analysis came up with very similar figures as far as the industry impact of 500 to 700 jobs and approximately equating to about one hundred twenty million pounds of copper and aluminum wire production in copper equivalent pounds. We would be negatively impacted. This would probably be the equivalent of two to three factories worth of magnet wire production nationwide or it would reduce the production in existing factories to subeconomic levels and because of this we perceive this analysis as a well intentioned attempt in the marketplace but believe that the end result will be much like the (not audible) markets that have failed in the east and we think that the marketplace, we concur that marketplace penetration of electronic ballast has gone from 2% in 1987 to we have figures of 40% in 1994, approximately 50% is the figure that is being tossed around now of market penetration. Our colleague says they see a high end of 80%, we would feel that our business would be strongly impacted so we oppose this. 

### Douglas Brookman: Okay, thank you. Would anybody else in magnet wire. Yes, another magnet wire manufacturer. Larry Clark: Larry Clark with Optec. We also manufacture magnet wire and have many of the same comments that my two colleagues have. I would like to take it to an even to a personal level. We only have one plant in the United States and it is in Mexico, Missouri. I grew up there and a lot of those people working there at that plant are my friends and I would sure like to keep them all working so I think we should consider that impact before we change the regulation into a (not audible) industry. Douglas Brookman: Thank you very much. Any other magnet wire manufacturers.



### 72 Ray BeeBe: Yes, Ray BeeBe from Phelps Dodge Corporation, Magnet Wire Division. Ijust want to agree with my colleague here. I ammanager ofmarketing and business analysis and our independent analysis came up withvery similar figures as far as the industry impact of500 to 700jobs and approximately equating to about one hundred twenty million pounds of copper and aluminum wire productionin copper equivalent pounds. We would be negatively impacted. This would probably be the equivalent oftwo to three factories worth ofmagnet wire production nationwide or it would reduce the productionin existing factories to subeconomic levels and because ofthis we perceive this analysis as a well intentioned attempt in the marketplace but believe that the end result 

### will be much like the (not audible) markets that have failed inthe east and we think that the marketplace, we
concur that marketplace penetration ofelectronic ballast 

### has gone from 2% in 1987 to we have figures of40% in 1994, approximately 50% is the figure that is being tossed around
now ofmarket penetration. Our colleague says they see a high end of80%, we would feel that ourbusiness would be strongly impacted so we oppose this. Douglas Brookman: Okay, thank you. Would anybody else in magnet wire. Yes, another magnet wire manufacturer. Larry Clark: Larry Clark with Optec. We also manufacture magnet wire andhave many ofthe same comments that my two colleagues have. I would like to take it to an even to a personal level. We only have one plant inthe United States and it is in Mexico, Missouri. I grew up there and a lot ofthose people working there at that plant are my friends and I would
sure like to keep them 

### all working so I think we should consider that impact before we change the regulation into a (not audible) industry. Douglas Brookman: Thank you very much. Any other magnet wire manufacturers.
72 Ray BeeBe: Yes, Ray BeeBe from Phelps Dodge Corporation, Magnet Wire Division. Ijust want to agree with my colleague here. I ammanager ofmarketing and business analysis and our independent analysis came up withvery similar figures as far as the industry impact of500 to 700jobs and approximately equating to about one hundred twenty million pounds of copper and aluminum wire productionin copper equivalent pounds. We would be negatively impacted. This would probably be the equivalent oftwo to three factories worth ofmagnet wire production nationwide or it would reduce the productionin existing factories to subeconomic levels and because ofthis we perceive this analysis as a well intentioned attempt in the marketplace but believe that the end result 

### will be much like the (not audible) markets that have failed inthe east and we think that the marketplace, we
concur that marketplace penetration ofelectronic ballast 

### has gone from 2% in 1987 to we have figures of40% in 1994, approximately 50% is the figure that is being tossed around
now ofmarket penetration. Our colleague says they see a high end of80%, we would feel that ourbusiness would be strongly impacted so we oppose this. Douglas Brookman: Okay, thank you. Would anybody else in magnet wire. Yes, another magnet wire manufacturer. Larry Clark: Larry Clark with Optec. We also manufacture magnet wire andhave many ofthe same comments that my two colleagues have. I would like to take it to an even to a personal level. We only have one plant inthe United States and it is in Mexico, Missouri. I grew up there and a lot ofthose people working there at that plant are my friends and I would
sure like to keep them 

### all working so I think we should consider that impact before we change the regulation into a (not audible) industry. Douglas Brookman: Thank you very much. Any other magnet wire manufacturers.
72Herb Rice:

My name is Herb Rice and I am general manager of Steiner Film, Inc. We are located in Williamstown, Massachusetts. That is up in the northwestern corner of Massachusetts. Our product that we are involved with the magnetic ballast - Metalized dielectric film. Our customers are actually people who make capacitors, whether they be the ballast manufacturers themselves or they be other companies who just make capacitors and then in turn sell them to the ballast manufacturers. The product that we make for the magnetic ballast is a major portion of our business so that any accelerated decrease in that business over and above what is probably is inevitable as demonstrated in Bob's slide a few minutes ago at least the decrease there that he showed went well into the year 2014 or something like that. Which would give us time to adjust but if we have an abrupt change we are probably putting 40 to 80 jobs in jeopardy. Perhaps that doesn't seem like a lot to some of you but we are in a rural area. We are in an area that's just recovering from the 1970's and 1980's of thousands of manufacturing jobs that were lost there so it is significant. In addition to that we have substantial investments in equipment. We make both the film there from pellets. We make the polypropylene film and then we in turn metalize it. That involves substantial equipment investments, which we have made and a lot of them are geared specifically for this particular market area. We are involved in the electronic ballast. Unfortunately for us in our particular business we are in film capacitors and not electroeletics (not audible) and things like that that can be in the electronic ballast so that while we would be involved in that growth of that market it in no way would replace the volume of work, sales and so on that we do with the magnetic ballast so we just 

### encourage that if we could let the marketplace drive the situation rather than forcing it with some regulation that we be our wish. Douglas Brookman: Okay anyone else from the Metalized film industry. Tony Von Holle:


### 73 Herb Rice: Myname is HerbRice and I am general manager ofSteiner Film, Inc. We are located in Williamstown, Massachusetts. That is up inthe northwestern comer ofMassachusetts. Our product that we are involved withthe magnetic ballast

- Metalized dielectric 

### film. Our customers are actually people who make capacitors, whethertheybe the ballast manufacturers themselves orthey be other companies whojustmake capacitors and then inturn sell themto the ballast manufacturers. The product that wemake for the magnetic ballast is a major portion ofour business so that any accelerated decrease in that business
over and above what is probably is inevitable as demonstrated in Bob's slide a few minutes ago at least the decrease there that he showed went well into the year 2014 or something like that. Which would give us time to adjust but 

### ifwe have an abrupt change we are probably putting 40 to 80jobs injeopardy. Perhapsthat doesn't seem like a lot to some of youbut we are in a rural area. We are in an areathat'sjustrecovering from the 1970's and 1980's ofthousands ofmanufacturingjobsthat were lost there so it is significant. In additionto that we have substantial investments in equipment. We make boththe 

### film there from pellets. We make the polypropylene 

### film and then we in turn metalize it. That involves substantial equipment investments, whichwehave made and a lot ofthem are geared specifically for this particular market area. We are involved in the electronic ballast. Unfortunately for us inourparticular business we are in

### film capacitors and not electroeletics (not audible) and things like thatthat canbe in the electronic ballast so that while we would be involved in that growth ofthat market it inno way wouldreplace the volume ofwork, sales and so onthat we do withthe magnetic ballast so wejust encourage that 

### ifwe could let the marketplace drive the situationrather than forcing 

### it with some regulationthat we be ourwish. Douglas Brookman: Okay anyone else from the Metalized 

### film industry. Tony VonHolle:
73 Herb Rice: Myname is HerbRice and I am general manager ofSteiner Film, Inc. We are located in Williamstown, Massachusetts. That is up inthe northwestern comer ofMassachusetts. Our product that we are involved withthe magnetic ballast

- Metalized dielectric 

### film. Our customers are actually people who make capacitors, whethertheybe the ballast manufacturers themselves orthey be other companies whojustmake capacitors and then inturn sell themto the ballast manufacturers. The product that wemake for the magnetic ballast is a major portion ofour business so that any accelerated decrease in that business
over and above what is probably is inevitable as demonstrated in Bob's slide a few minutes ago at least the decrease there that he showed went well into the year 2014 or something like that. Which would give us time to adjust but 

### ifwe have an abrupt change we are probably putting 40 to 80jobs injeopardy. Perhapsthat doesn't seem like a lot to some of youbut we are in a rural area. We are in an areathat'sjustrecovering from the 1970's and 1980's ofthousands ofmanufacturingjobsthat were lost there so it is significant. In additionto that we have substantial investments in equipment. We make boththe 

### film there from pellets. We make the polypropylene 

### film and then we in turn metalize it. That involves substantial equipment investments, whichwehave made and a lot ofthem are geared specifically for this particular market area. We are involved in the electronic ballast. Unfortunately for us inourparticular business we are in

### film capacitors and not electroeletics (not audible) and things like thatthat canbe in the electronic ballast so that while we would be involved in that growth ofthat market it inno way wouldreplace the volume ofwork, sales and so onthat we do withthe magnetic ballast so wejust encourage that 

### ifwe could let the marketplace drive the situationrather than forcing 

### it with some regulationthat we be ourwish. Douglas Brookman: Okay anyone else from the Metalized 

### film industry. Tony VonHolle:
73Good afternoon I have a brief statement that I would like to read into the record. I am

Tony Von Hole from Armco Incorporated. Armco is a U.S. company producing specialty flat roll steel with over six thousand employees in Pennsylvania and Ohio primarily. Our main products are stainless steels and alloy electrical steels. In fact we are the only full line producer of these electrical steels in the United States. Alloy electrical steels are the most efficient magnetic materials available for the magnetic cores used in motors and transformers including ballast transformers. In fact a significant portion of our production of alloy electrical steels is used in the ballast transformer industry. Since little if any core steel is required for an electronic ballast any regulation that would ban the manufacture of magnetic ballast would obviously result in lost sales to Armco. This lost portion of our business if not replaced would be of a magnitude to cause reductions in revenues and employment levels thus the impact of any such ban would be felt well beyond the ballast industry itself. Thank you for your attention. Douglas Brookman: Thank you. Thank you so much. Yes sir. Earl Sherman: Yes my name is Earl Sherman. I am a senior officer with Aerovox, Inc.. We are located in New Bedford, Massachusetts and we famish products to both the electronic as well as the magnetic ballast manufacturers. Two simple issues. One we would like product preference to be determined by the market without any regulations whatsoever, number one issue. Second issue really relates to the economic impact it would have in our New Bedford facility. We would not be in a position to replace the magnetic ballast capacitor lost with the pickup of electronic components. In other words they just wouldn't balance out and we would be forced to downsize in that operation. We have about 600 people there now. Obviously we wouldn't - the ballast industry wouldn't represent 600 job losses but it would represent a loss and a significant loss of our employees. Thank you. Douglas Brookman:


### 74 Good afternoonI have a briefstatement that I would like to read into the record. I am TonyVonHole from Armco Incorporated. Armco is a U.S. company producing specialty flat roll steel with over six thousand employees inPennsylvania and Ohio primarily. Our mainproducts are stainless steels and alloy electrical steels. Infact we are the only full line producer ofthese electrical steels in the United States. Alloy electrical steels are the most efficient magnetic materials available for the magnetic cores used in motors and transformers including ballast transformers. In fact a significant portion ofourproduction ofalloy electrical steels is used inthe ballast transformer industry. Since little 

### ifany core steel is required for an electronic ballast any regulationthat would banthe manufacture of magnetic ballast would obviously result in lost sales to Armco. This lost portion ofour business 

### ifnot replaced would be ofa magnitude to cause reductions inrevenues and employment levels thus the impact ofany suchbanwould be felt well beyond the ballast industry itself Thank you for yom attention. Douglas Brookman: Thank you. Thankyou so much. Yes sir. Earl Sherman: Yes my name is Earl Sherman. I am a senior officer withAerovox, Inc.. We are located in NewBedford, Massachusetts and we furnish products to boththe electronic as well as the magnetic ballast manufacturers. Two simple issues. One we would like product preference to be determined by the market without any regulations whatsoever, number
one issue. Second issue really relates to the economic impact it would have in ourNew Bedford facility. We would not be in a positionto replace the magnetic ballast capacitor lost withthe pick up ofelectronic components. Inother wordstheyjust wouldn't balance out and we would be forced to downsize inthat operation. We have about 600 people there now. Obviously we wouldn't

- the ballast industry wouldn't represent 600joblosses but it would represent a loss and a significant loss ofour employees. Thank you. Douglas Brookman: 

### 74 Good afternoonI have a briefstatement that I would like to read into the record. I am TonyVonHole from Armco Incorporated. Armco is a U.S. company producing specialty flat roll steel with over six thousand employees inPennsylvania and Ohio primarily. Our mainproducts are stainless steels and alloy electrical steels. Infact we are the only full line producer ofthese electrical steels in the United States. Alloy electrical steels are the most efficient magnetic materials available for the magnetic cores used in motors and transformers including ballast transformers. In fact a significant portion ofourproduction ofalloy electrical steels is used inthe ballast transformer industry. Since little 

### ifany core steel is required for an electronic ballast any regulationthat would banthe manufacture of magnetic ballast would obviously result in lost sales to Armco. This lost portion ofour business 

### ifnot replaced would be ofa magnitude to cause reductions inrevenues and employment levels thus the impact ofany suchbanwould be felt well beyond the ballast industry itself Thank you for yom attention. Douglas Brookman: Thank you. Thankyou so much. Yes sir. Earl Sherman: Yes my name is Earl Sherman. I am a senior officer withAerovox, Inc.. We are located in NewBedford, Massachusetts and we furnish products to boththe electronic as well as the magnetic ballast manufacturers. Two simple issues. One we would like product preference to be determined by the market without any regulations whatsoever, number
one issue. Second issue really relates to the economic impact it would have in ourNew Bedford facility. We would not be in a positionto replace the magnetic ballast capacitor lost withthe pick up ofelectronic components. Inother wordstheyjust wouldn't balance out and we would be forced to downsize inthat operation. We have about 600 people there now. Obviously we wouldn't

- the ballast industry wouldn't represent 600joblosses but it would represent a loss and a significant loss ofour employees. Thank you. Douglas Brookman: 

### 74Thank you very much. Yes sir.

Dennis Kurowski: I am Dennis Kurowski; I am with LTV Steel and like several of my colleagues up here before me LTV Steel would be negatively impacted if the electronic ballasts were mandated
. From a domestic steel producer standpoint the magnetic ballast market is an important segment for cold rolled steel. Specifically cold rolled motor lamination steels that are used in large quantities and they are not used in the electronic ballast. LTV supplies to a number of customers in this market and LTV Steel over the past three to five years has expended a lot of dollars and technical resources to develop better and improved motor lamination steels that deliver greater energy efficiency for these ballast. If the electronic ballast regulations are adopted there could be possible rippling effects in our markets resulting in loss of sales, weakened customer base in several segments and a loss of jobs at our steel mills, primarily our Hamilton mill, which is our major mill for this product. Douglas Brookman: Thank you very much
. is there anyone else representative of the industry that would wish to comment at this time? Let me thank all of you that commented for your discipline. For being brier and being on the point
. I especially appreciate that as does everybody else in the room I am sure. Gene you had a question or two. One was to the magnet wire manufacturers. Gene Foley, Alliance to Save Energy (ASE): 

### I'm just curious for my own sake what balancing effect the motor standard is increased the efficiency of the motor standard that has increased sales, copper wire and high efficiency metal lamination and equipment of that nature compared to the downsizing that the ballancing had on the (not audible). Do you all see a balancing effect there? Eugene Andert; Rea Magnet Wire Division:



### 75 Thankyou very much. Yes sir. Dennis Kurowski: I amDennis Kurowski; I amwithLTV Steel and like several ofmy colleagues up here before me LTV Steel would be negatively impacted 

### ifthe electronic ballasts were mandated. From a domestic steel producer standpoint the magnetic ballast market is an important segment for cold rolled steel. Specifically cold rolled motor lamination steels that are used in large quantities and they are not used inthe electronic ballast. LTV supplies to a number ofcustomers inthis market and LTV Steel over the past three to five years has expended a lot ofdollars and technical resources to develop better and improved motor lamination steels that deliver greater energy efficiency for these ballast. Ifthe electronic ballast regulations are adopted there could be possible rippling effects in our markets resulting in loss ofsales, weakened customer base in several segments and a loss of jobs at our steel

### mills, primarily our Hamilton 

### mill, which is ourmajor 

### mill for this product. Douglas Brookman: Thankyou very much. Is there anyone else representative ofthe industry that would wish to comment at this time? Let me thank all ofyouthat commented for your discipline. For being briefand being on the point. I especially appreciate that as does everybody else 

### in the roomI am sure. Gene you had a question ortwo. One wasto the magnet wire manufacturers. Gene Foley, Alliance to Save Energy (ASE): I'mjust curious for my own sake what balancing effect the motor standard is increased the efficiency ofthe motor standard that has increased sales, copper wire andhigh efficiency metal lamination and equipment ofthat nature compared to the downsizing that the ballancing had onthe (not audible). Do you all see a balancing effect there? Eugene Andert; ReaMagnet Wire Division:

75 Thankyou very much. Yes sir. Dennis Kurowski: I amDennis Kurowski; I amwithLTV Steel and like several ofmy colleagues up here before me LTV Steel would be negatively impacted 

### ifthe electronic ballasts were mandated. From a domestic steel producer standpoint the magnetic ballast market is an important segment for cold rolled steel. Specifically cold rolled motor lamination steels that are used in large quantities and they are not used inthe electronic ballast. LTV supplies to a number ofcustomers inthis market and LTV Steel over the past three to five years has expended a lot ofdollars and technical resources to develop better and improved motor lamination steels that deliver greater energy efficiency for these ballast. Ifthe electronic ballast regulations are adopted there could be possible rippling effects in our markets resulting in loss ofsales, weakened customer base in several segments and a loss of jobs at our steel

### mills, primarily our Hamilton 

### mill, which is ourmajor 

### mill for this product. Douglas Brookman: Thankyou very much. Is there anyone else representative ofthe industry that would wish to comment at this time? Let me thank all ofyouthat commented for your discipline. For being briefand being on the point. I especially appreciate that as does everybody else 

### in the roomI am sure. Gene you had a question ortwo. One wasto the magnet wire manufacturers. Gene Foley, Alliance to Save Energy (ASE): I'mjust curious for my own sake what balancing effect the motor standard is increased the efficiency ofthe motor standard that has increased sales, copper wire andhigh efficiency metal lamination and equipment ofthat nature compared to the downsizing that the ballancing had onthe (not audible). Do you all see a balancing effect there? Eugene Andert; ReaMagnet Wire Division:

75The consumption of magna wire by ballast pressure for magnetic ballast's right now is

larger than the consumption of wire in the industrial size motors that were mandated for efficiency than with the 92 Energy Policy Act that went into effect last October. It's slowly, for the most part; most of those motors were already being manufactured in the United States at a relatively high efficiencies to begin with. There is some additional volume as the result of that, but it is not coming at the rate that could replace the capacity losted of the magnetic ballast (not audible). Brookman: Excuse me could you say you name again please? Gene Andert: Gene Andert with Rea Magnet Wire Division. Brookman: Thank you very much. Yes sir, your name? Gerald F. Beatty: Gerry Beatty, LTV Steel Company. To address the question of the change efficiency in motors, this is basically not resulted in a net increase in steel. It has resulted in a shift of the type of material many of the steels used in the laminations have different core loss which results in efficiency has basically resulted in a shift from certain higher loss materials to much lower lost products, but the net effect has basically been very minimal since many of the motors, the way to steel used it is virtually the same whether its low efficiency or high efficiency. It has resulted in a net shift in the type of materials but not the total volume of materials. Unknown: Has the shift in materials been to the type of materials also used in efficiency magnetic (not audible)? 

### Gerald Beatty: In many cases, yes. Same type of material.


### 76 The consumption ofmagna wire byballast pressure for magnetic ballast's right now is larger thanthe consumption ofwire in the industrial size motors that were mandated for efficiency thanwith the 92 Energy Policy Act that went into effect last October. It's slowly, for the most part; most ofthose motors were already being manufactured in the United States at a relatively high efficiencies to begin with. There is some additional volume as the result ofthat, but it is not coming at therate that could replace the capacity losted ofthe magnetic ballast (not audible). Brookman: Excuse me could you say you name againplease? Gene Andert: Gene Andert with ReaMagnet Wire Division. Brookman: Thank you verymuch. Yes sir, your name? Gerald F. Beatty: Gerry Beatty, LTV Steel Company. To address the question ofthe change efficiency in motors, this is basically not resulted in a net increase in steel. It

### has resulted in a shift of the type ofmaterial many ofthe steels used in the laminations have different core loss which results in efficiency 

### has basically resulted in a shift from certain higher loss materials to much lower lost products, but the net effect 

### has basically beenvery minimal since many ofthe motors, the way to steel used it is virtually the same whether its low efficiency or high efficiency. 

### Ithas resulted in a net shift in the type ofmaterials but not the total volume ofmaterials. Unknown: Hasthe shift in materials beento the type ofmaterials also used in efficiency magnetic (not audible)? Gerald Beatty: Inmany cases, yes. Same type ofmaterial.


### 76 The consumption ofmagna wire byballast pressure for magnetic ballast's right now is larger thanthe consumption ofwire in the industrial size motors that were mandated for efficiency thanwith the 92 Energy Policy Act that went into effect last October. It's slowly, for the most part; most ofthose motors were already being manufactured in the United States at a relatively high efficiencies to begin with. There is some additional volume as the result ofthat, but it is not coming at therate that could replace the capacity losted ofthe magnetic ballast (not audible). Brookman: Excuse me could you say you name againplease? Gene Andert: Gene Andert with ReaMagnet Wire Division. Brookman: Thank you verymuch. Yes sir, your name? Gerald F. Beatty: Gerry Beatty, LTV Steel Company. To address the question ofthe change efficiency in motors, this is basically not resulted in a net increase in steel. It

### has resulted in a shift of the type ofmaterial many ofthe steels used in the laminations have different core loss which results in efficiency 

### has basically resulted in a shift from certain higher loss materials to much lower lost products, but the net effect 

### has basically beenvery minimal since many ofthe motors, the way to steel used it is virtually the same whether its low efficiency or high efficiency. 

### Ithas resulted in a net shift in the type ofmaterials but not the total volume ofmaterials. Unknown: Hasthe shift in materials beento the type ofmaterials also used in efficiency magnetic (not audible)? Gerald Beatty: Inmany cases, yes. Same type ofmaterial.


### 76Unknown:

So the production for that (not audible) gone up. Gerald Beatty: 

### It would in that effect with the decrease in other materials. There's basically been a shift for many of the other ballast's in the, maybe not as high energy efficiency has dropped off, so you're seeing a shift from one particular grade of steel to another grade. Unknown: I have a capacitor question. Brookman: Thank you very much sir. Can someone response to a capacitor questions? Unknown: It was eluded to but again the capacitors as I understand are used in both electronic and magnetic ballast's. From a shift in a industry you don't envision that that change is going to have occur anyway? Herb Rice; Steiner Group: 

### I would agree. There in fact more capacitors, I guess in the (not audible) ballast's, but I they're smaller and they're different types. Unfortunately for us, we just supply one type. The film type as opposed to electro(not audible) ceramic or (not audible). Normally people aren't in those multiple businesses. So what we're looking at is magnetic ballast's that's got a large amount of metalized film in the (not audible) whereas electronic ballast's is a smaller, a very much smaller percentage and probably here that know more about the electronic ballast can comment on that better than I can. Brookman: Your name again please? Herb Rice: Herb Rice. Brookman:



### 77 Unknown: So the production for that (not audible) gone up. Gerald Beatty: It would in that effect withthe decrease in other materials. There'sbasically been a shift for many ofthe other ballast's in the, maybe not as high energy efficiency has dropped off,
so you're seeing a shift from one particular grade ofsteel to another grade. Unknown: I have a capacitor question. Brookman: Thankyou very much sir. Can someone response to a capacitor questions? Unknown: It was eluded to but againthe capacitors as I understand are used inboth electronic and magnetic ballast's. From a shift in a industry you don't envision that that change is going to have occur anyway? Herb Rice; Steiner Group: I would agree. There 

### in fact more**capaci~ors,** I guess in the (not audible) ballast's, but I they're smaller and they're different types. Unfortunately for us, wejust supply one type. The 

### film type as opposed to electro(not audible) ceramic or (not audible). Normally people aren't in those multiple businesses. So what we're looking at is magnetic ballast's that's got a large amount ofmetalized 

### film in the (not audible) whereas electronic ballast's is a smaller, a very much smallerpercentage and probably here thatknowmore about the electronic ballast can comment onthat betterthanI can. Brookman: Your name againplease? Herb Rice: Herb Rice. Brookman: 

### 77 Unknown: So the production for that (not audible) gone up. Gerald Beatty: It would in that effect withthe decrease in other materials. There'sbasically been a shift for many ofthe other ballast's in the, maybe not as high energy efficiency has dropped off,
so you're seeing a shift from one particular grade ofsteel to another grade. Unknown: I have a capacitor question. Brookman: Thankyou very much sir. Can someone response to a capacitor questions? Unknown: It was eluded to but againthe capacitors as I understand are used inboth electronic and magnetic ballast's. From a shift in a industry you don't envision that that change is going to have occur anyway? Herb Rice; Steiner Group: I would agree. There 

### in fact more**capaci~ors,** I guess in the (not audible) ballast's, but I they're smaller and they're different types. Unfortunately for us, wejust supply one type. The 

### film type as opposed to electro(not audible) ceramic or (not audible). Normally people aren't in those multiple businesses. So what we're looking at is magnetic ballast's that's got a large amount ofmetalized 

### film in the (not audible) whereas electronic ballast's is a smaller, a very much smallerpercentage and probably here thatknowmore about the electronic ballast can comment onthat betterthanI can. Brookman: Your name againplease? Herb Rice: Herb Rice. Brookman: 

### 77Thank you.

Earl Sherman, Aerovox, Inc.: I agree with exactly with what Herb was just saying. The electronic ballast casts really manage a type of (not audible) type film and otherwise and it's a different price tag on them with that product of also. I have nothing against buying some foreign product but most of that product is manufactured (not audible) for the purposes of this industry in either the U.S. or (not audible). To make that point even stronger, most of the electronic caps are and we have a number of them manufacturers here can certify to this, that they are manufactured either in the far east or in some cases in Europe. Unknown: This is going to be my last general questions

. The ballast manufactured now is by in large magnetic and electronic (not audible) overseas. For all of your industry (not audible) exporting all your products, overseas to be assembled and all (not audible) Unknown: What do you mean overseas? Unknown: 

### Any work in the United States. Brookman: Across America, most of the ballast's are manufactured in Mexico. Unknown: I just wanted to make sure that I understood the process of all of these suppliers and what's happening to their material and where its going. How this process actually is occurring. Rae Beebe; Phelps Dodge Magnet Wire Company: We recently and our Chairman asserted that last time this iteration went through that we recently built a plant in Monterey Mexico to supply some of our manufacturers and bought a plant and enlarged in Texas, El Paso, Texas, and we envision that a large part of


### 78 Thankyou. Earl Sherman, Aerovox, Inc.: I agree withexactly withwhat Herb wasjust saying. The electronic ballast casts really manage a type of(not audible) type:film and otherwise and it's a different price tag on themwiththat product ofalso. I have nothing against buying some foreign product but most ofthat product is manufactured (not audible) for the purposes ofthis industry in either the U.S. or (not audible). To make that point even stronger, most ofthe electronic caps are and we have a number ofthemmanufacturers here cancertifY to this, that they
are manufactured either inthe far east or in some cases in Europe. Unknown: This is going to be my last general questions. The ballast manufactured now is by in large magnetic and electronic (not audible) overseas. For all ofyour industry (not audible) exporting all yourproducts, overseas to be assembled and all (not audible) Unknown: What do you mean overseas? Unknown: Any work inthe United States. Brookman: Across America, most oftheballast's are manufactured in Mexico. Unknown: Ijust wanted to make sure that I understood the process ofall ofthese suppliers and what'shappening to their material and where its going. Howthis process actually is occurring. Rae Beebe; Phelps Dodge Magnet Wire Company: We recently and our Chairman asserted that last time this iteration went throughthat we recently built a plant in Monterey Mexico to supply some ofourmanufacturers and bought a plant and enlarged in Texas, ElPaso, Texas, and we envision that a large part of
78 Thankyou. Earl Sherman, Aerovox, Inc.: I agree withexactly withwhat Herb wasjust saying. The electronic ballast casts really manage a type of(not audible) type:film and otherwise and it's a different price tag on themwiththat product ofalso. I have nothing against buying some foreign product but most ofthat product is manufactured (not audible) for the purposes ofthis industry in either the U.S. or (not audible). To make that point even stronger, most ofthe electronic caps are and we have a number ofthemmanufacturers here cancertifY to this, that they
are manufactured either inthe far east or in some cases in Europe. Unknown: This is going to be my last general questions. The ballast manufactured now is by in large magnetic and electronic (not audible) overseas. For all ofyour industry (not audible) exporting all yourproducts, overseas to be assembled and all (not audible) Unknown: What do you mean overseas? Unknown: Any work inthe United States. Brookman: Across America, most oftheballast's are manufactured in Mexico. Unknown: Ijust wanted to make sure that I understood the process ofall ofthese suppliers and what'shappening to their material and where its going. Howthis process actually is occurring. Rae Beebe; Phelps Dodge Magnet Wire Company: We recently and our Chairman asserted that last time this iteration went throughthat we recently built a plant in Monterey Mexico to supply some ofourmanufacturers and bought a plant and enlarged in Texas, ElPaso, Texas, and we envision that a large part of
78

### this capacity which is supplying them as well as other industries, motors, automobile

would shift to the east and we'd basically be out of luck in that situation. Brookman: Additional questions for everybody who commented on the impacts on their industry. Michael Rivest: 

### Following up on Gene's question trying to characterize the industry since it's becoming a worldwide industry in the products that ballast manufactures are producing are being made in moderation here in to the states. I assume it ought to be checked in other countries as well. I would assume that for many of the (not audible) suppliers the same is true whether (not audible) supplied to the main ballast manufacturers, some will subject to standards but some will be also manufactured for other countries where there may or may not be regulations. (not audible) is that the case, to what extent would the (not audible) what impact would it have on the manufacturers as a whole. Could you segregate what is manufactured for US consumption as opposed consumption of other ballast (not audible) in other countries may not be subject to standard. Mike Stein: Let me try and respond this way, throughout the world ballast are sold for manufacture. I don't know if there's really two types of technology of fluorescent ballast. Europe and everyone who follows the European standards of 220 volts megahertz. They use reactor product designed to IEC standards. In North America we have 120 volts, 270 (not audible) volts, 60 hertz and transformers designed by industry standards. Canada and Mexico pretty much powerless. There are a few parts of the world also that follow North America practice not too much (not audible) South America (not audible) is relatively limited compared to the IEC environment and what's...as far as the product that can be sold as far as magnetic products. As far as (not audible) products actually that is becoming more global because electronic ballast aren't reactors. Electronic ballast power 220 volts aren't to much different than electronic ballast powered by 120 or 277 volt.


### 79 this capacity which is supplying them as well as other industries, motors, automobile would shift to the east and we'd basically be out ofluck in that situation. Brookman: Additional questions for everybody who commented onthe impacts ontheir industry. Michael Rivest: Following up on Gene's questiontrying to characterize the industry since it'sbecoming a worldwide industry in the productsthatballast manufactures are producing are being made in moderation here in to the states. I assume it ought to be checked in other countries as well. I would assume that for many ofthe (not audible) suppliers the same is true whether (not audible) supplied to the main ballast manufacturers, some 

### will subject to standards but some 

### will be also manufactured for other countries where there mayormay not be regulations. (not audible) is that the case, to what extent would the (not audible) what impact would it have onthe manufacturers as a whole. Could you segregate what is manufactured for US consumption as opposed consumption ofother ballast (not audible) in other countries may not be subject to standard. Mike Stein: Let me try and respond this way, throughout the world ballast are sold for manufacture. I don't know 

### ifthere's really two types oftechnology offluorescent ballast. Europe and everyone who follows the European standards of220 volts megahertz. Theyuse reactor product designed to lEe standards. InNorthAmerica we have 120 volts, 270 (not audible) volts, 60 hertz and transformers designed by industry standards. Canada and Mexico pretty much powerless. There are a few parts ofthe world also that follow North America practice not too much (not audible) SouthAmerica (not audible) is relatively limited comparedto the IEC environment and what's

...as far as the product that canbe sold as far as magnetic products. As far as (not audible) products actually that is becoming more global because electronic ballast aren't reactors. Electronic ballast power 220 volts aren't to much different than electronic ballast powered by 120 or 277 volt.
79 this capacity which is supplying them as well as other industries, motors, automobile would shift to the east and we'd basically be out ofluck in that situation. Brookman: Additional questions for everybody who commented onthe impacts ontheir industry. Michael Rivest: Following up on Gene's questiontrying to characterize the industry since it'sbecoming a worldwide industry in the productsthatballast manufactures are producing are being made in moderation here in to the states. I assume it ought to be checked in other countries as well. I would assume that for many ofthe (not audible) suppliers the same is true whether (not audible) supplied to the main ballast manufacturers, some 

### will subject to standards but some 

### will be also manufactured for other countries where there mayormay not be regulations. (not audible) is that the case, to what extent would the (not audible) what impact would it have onthe manufacturers as a whole. Could you segregate what is manufactured for US consumption as opposed consumption ofother ballast (not audible) in other countries may not be subject to standard. Mike Stein: Let me try and respond this way, throughout the world ballast are sold for manufacture. I don't know 

### ifthere's really two types oftechnology offluorescent ballast. Europe and everyone who follows the European standards of220 volts megahertz. Theyuse reactor product designed to lEe standards. InNorthAmerica we have 120 volts, 270 (not audible) volts, 60 hertz and transformers designed by industry standards. Canada and Mexico pretty much powerless. There are a few parts ofthe world also that follow North America practice not too much (not audible) SouthAmerica (not audible) is relatively limited comparedto the IEC environment and what's

...as far as the product that canbe sold as far as magnetic products. As far as (not audible) products actually that is becoming more global because electronic ballast aren't reactors. Electronic ballast power 220 volts aren't to much different than electronic ballast powered by 120 or 277 volt.
79Different front end but the outlet stage are very similar. Now we can look world wide on

the ballast industry electronically but that means we now have global competion. Gene Andert, Rae Magna Wire: To further respond to your question, the Magna Wire industry worldwide is primarily regional in nature. Most of the Magna Wire that's used in North America, comes out of North America. Most of the Magna Wire used in South America is produced in South America. It's a heavy product to ship and most of its made locally. As we supply the magnetic ballast industry, we're supplying it in North America whether its produced in Canada or United States companies or on the border. It's hard to segregate what they could be potentially be exporting versus what they are going to be shipping into the United States because they buy, by insulation type and size. They don't tell us that it's going to go into a ballast that going to be exported or one that is going to be consumed in the United States. It would be virtually impossible for us to segregate our business, you know that way. Brookman: Additional comments or questions at this before we go back to the Agenda as originally planned. 

### Mike: I would like to ask the question of how this is going to be handled in the manufactures impact analysis. One part there was some mentioned some of the information we had previously that the impact of suppliers through ballast manufacturers were going to be analysis, but as you see there is a number of different industries that are impacted and how are those industries going to be rolled into the whole study and maybe (not audible) talk about later on in the Agenda (not audible). Brookman: Can we move on? OK let's do that then. Yes? Unknown:


### 80 Different front end but the outlet stage are very similar. Now we canlook world wide on the ballast industry electronically but that means we nowhave global competion. Gene Andert, Rae Magna Wire: To further respond to your question, the Magna Wire industry worldwide is primarily regional in nature. Most ofthe Magna Wire that's used inNorthAmerica, comes out of NorthAmerica. Most ofthe Magna Wire used in SouthAmerica is produced in South America. It's a heavy product to ship and most ofits made locally. As we supplythe magnetic ballast industry, we're supplying it inNorthAmerica whether its produced in Canada orUnited States companies or onthe border. It's hard to segregate what they could be potentially be exporting versus what they are going to be shipping into the United States because they buy, by insulationtype and size. They don't tell us that it's going to go into a ballast that going to be exported or one that is going to be consumed in the United States. It would be virtually impossible for us to segregate ourbusiness, youknow that way. Brookman:



### Mike: Additional comments or questions atthis before we go back to the Agenda as originally planned.

I would like to ask the question ofhowthis is going to be handled inthe manufactures impact analysis. One partthere was some mentioned some ofthe information we had previouslythat the impact ofsuppliers throughballast manufacturers were going to be analysis, but as you see there is a number ofdifferent industries that are impacted and how
are those industries going to be rolled into the whole study and maybe (not audible) talk about later onin the Agenda (not audible). Brookman: Canwe move on? OKlet's do that then. Yes? Unknown:


### 80 Different front end but the outlet stage are very similar. Now we canlook world wide on the ballast industry electronically but that means we nowhave global competion. Gene Andert, Rae Magna Wire: To further respond to your question, the Magna Wire industry worldwide is primarily regional in nature. Most ofthe Magna Wire that's used inNorthAmerica, comes out of NorthAmerica. Most ofthe Magna Wire used in SouthAmerica is produced in South America. It's a heavy product to ship and most ofits made locally. As we supplythe magnetic ballast industry, we're supplying it inNorthAmerica whether its produced in Canada orUnited States companies or onthe border. It's hard to segregate what they could be potentially be exporting versus what they are going to be shipping into the United States because they buy, by insulationtype and size. They don't tell us that it's going to go into a ballast that going to be exported or one that is going to be consumed in the United States. It would be virtually impossible for us to segregate ourbusiness, youknow that way. Brookman:



### Mike: Additional comments or questions atthis before we go back to the Agenda as originally planned.

I would like to ask the question ofhowthis is going to be handled inthe manufactures impact analysis. One partthere was some mentioned some ofthe information we had previouslythat the impact ofsuppliers throughballast manufacturers were going to be analysis, but as you see there is a number ofdifferent industries that are impacted and how
are those industries going to be rolled into the whole study and maybe (not audible) talk about later onin the Agenda (not audible). Brookman: Canwe move on? OKlet's do that then. Yes? Unknown:


### 80

### Speaking on behalf of everybody in the room, let me thank again (not audible) set up this

team for your comments and also for your discipline. Mike Rivest: We're going to keep working until almost 3:00 p.m. Let's see if can get to a natural breakpoint in there somewhere, then we'll take a break and then we'll keep going until we get done. Moving on talking about how we might adapt generic methodology to the ballast industry. Phase 1 industry profile I anticipate we'll be talking to members of the ballast industry about how we proceed for Phase 1. In Phase 2, I anticipate preparing a strong (not audible) industry cash flow. When I talked about it a little while earlier, what we're proposing to do is to put together a spreadsheet, the GRIM model with industry average values and to use those as a starting point to initiate discussions which could be part of the interview process. As we go into Phase 3 that interview process that would be the GRIM model with the inputs that would be representative if you will of publicly available information sources could become a methodology by which we can identify large variances, explain any differences along the way. But finally coming back with our interviews and our tailored manufacturing cash flows we can then re-aggregate into a final industry cash flow which would be more accurate than just for Strawman Industry Cash Flow that would have been apparent in Phase 2. We are able to do this in this industry because we were faced with relatively small number of players, which would not be the case for example: Central Air Conditioners were to have 100, 120. 

### Mike Stein: In the Strawman Cash Flow, is it just for comparison purposes for dialog? How important is that being accurate? 

### Mike Rivest: Ballpark accurate? It doesn't have to be accurate of your company. Mike Stein:



### 81 Speaking onbehalfofeverybody inthe room, let me thank again (not audible) set up this team for your comments and also for your discipline. Mike Rivest: We're going to keep working until almost 3:00p.rn. Let's see 

### ifcan get to a natural breakpoint inthere somewhere, thenwe'lltake a break and thenwe'llkeep going until we get done. Moving ontalking about how wemight adapt generic methodologyto the ballast industry. Phase I industry profile I anticipate we'llbe talking to members ofthe ballast industry about how we proceed for Phase 1. InPhase 2, I anticipate preparing a strong (not audible) industry cashflow. WhenI talked about it a little while earlier, what we're proposing to do is to put together a spreadsheet, the GRIMmodel with industry average values and to use those as a starting point to initiate discussions which could be part ofthe interview process. As we go into Phase 3 that interview process that would be the GRIMmodel withthe inputs that would be representative 

### ifyou 

### will ofpublicly available information sources could become a methodology by which we canidentifY large variances, explain any differences along the way. But finally coming back with our interviews and our tailored manufacturing cash flows we canthen re-aggregate into a 

### :final industry cashflow which wouldbe more accurate thanjust for Strawman Industry Cash Flowthat would have been apparent in Phase 2. We are able to do this in this industry because we were faced withrelatively small number ofplayers, which would not be the
case for example: Central 

### Air Conditioners were to have 100, 120. Mike Stein: Inthe Strawman CashFlow, is itjust for comparison purposes for dialog? How important 

### is that being accurate? Mike Rivest: Ballpark accurate? It doesn't have to be accurate ofyour company. Mike Stein:

81 Speaking onbehalfofeverybody inthe room, let me thank again (not audible) set up this team for your comments and also for your discipline. Mike Rivest: We're going to keep working until almost 3:00p.rn. Let's see 

### ifcan get to a natural breakpoint inthere somewhere, thenwe'lltake a break and thenwe'llkeep going until we get done. Moving ontalking about how wemight adapt generic methodologyto the ballast industry. Phase I industry profile I anticipate we'llbe talking to members ofthe ballast industry about how we proceed for Phase 1. InPhase 2, I anticipate preparing a strong (not audible) industry cashflow. WhenI talked about it a little while earlier, what we're proposing to do is to put together a spreadsheet, the GRIMmodel with industry average values and to use those as a starting point to initiate discussions which could be part ofthe interview process. As we go into Phase 3 that interview process that would be the GRIMmodel withthe inputs that would be representative 

### ifyou 

### will ofpublicly available information sources could become a methodology by which we canidentifY large variances, explain any differences along the way. But finally coming back with our interviews and our tailored manufacturing cash flows we canthen re-aggregate into a 

### :final industry cashflow which wouldbe more accurate thanjust for Strawman Industry Cash Flowthat would have been apparent in Phase 2. We are able to do this in this industry because we were faced withrelatively small number ofplayers, which would not be the
case for example: Central 

### Air Conditioners were to have 100, 120. Mike Stein: Inthe Strawman CashFlow, is itjust for comparison purposes for dialog? How important 

### is that being accurate? Mike Rivest: Ballpark accurate? It doesn't have to be accurate ofyour company. Mike Stein:

81Ballpark of the industry. I think Phase 2 and Phase 3A, I mean Phase 2 as the way we see

it now. Phase 3A it's going to be a while before(not audible). As we spend substantial time commenting to make the Strawman right. 

### Mike Divest: Yes but not today. I think it's very important that before we sit with you and have our interviews that we are benchmarking something realistic. If I come in and we're talking about investments as being 3% of revenues and you know very well that it's 8%-9% for example because the statistics I have are based mostly on the magnetic industry and I don't have more recent information on the electronic industry, then I would like to know that in advance so that our spreadsheet is the most realistic possible and that we can go right into the variances. Stein: Basically your prices and (not audible) to start with are wrong. Rivest: Ok. That's fine. I'm going to be going.... Once again we have I see, 6 weeks at least to get it right or to get it more right and any input you have today, I'd appreciate. Especially how I might go about deriving the right inputs. But it was more today in terms of getting the concept and the process going. That's my objective for this afternoon. Looking at the profile, give me an example of how some of this industry statistic type information can be useful in preparing the spreadsheets and also initiating dialog in identifying any strong variances. I have industry statistics from the census of manufacturers who tell me that in 1992 reporting companies talked about 5,200 jobs for an annual sales of $500 million. So right there we have some sort of metric for total jobs. We have some sort of metric jobs per revenue. Figures that might be useful to try and identify any major differences. Foley:



### 82 Ballpark ofthe industry. I think Phase 2 and Phase 3A, I mean Phase 2 as the way we see it now. Phase 3Ait's going to be a while before(not audible). As we spend substantial time commenting to make the Strawmanright. Mike Rivest:

Stein:

Rivest:

Foley: Yes but nottoday. I think it'svery important that before we sit withyou and have our interviews that we are benchmarking something realistic. IfI come in and we're talking about investments as being 3% ofrevenues and youknowvery well that it's 8%-9% for example because the statistics I have are based mostly onthe magnetic industry and I don't have more recent information onthe electronic industry, then I would like to know that in advance so that our spreadsheet is the most realistic possible and that we can go right into the variances.
Basically your prices and (not audible) to start with are wrong.

Ok. That's fine. I'mgoing to be going

.... Once again we have I see, 6 weeks at least to get it right orto get it more right and any input you have today, I'd appreciate. Especially howI might go about deriving the right inputs. But it was more today intenns ofgetting the concept and the process going. That's my objective for this afternoon. Looking at the profile, give me anexample ofhow some ofthis industry statistic type information can be useful inpreparing the spreadsheets and also initiating dialog in identifying any strong variances. I have industry statistics from the census ofmanufacturers who tell me that in 1992 reporting companies talked about 5,200jobs for an annual sales of$500 million. So right there we have some sort ofmetric for totaljobs. We have some sort ofmetricjobs perrevenue. Figures that might be useful to try and identifY any major differences.

82 Ballpark ofthe industry. I think Phase 2 and Phase 3A, I mean Phase 2 as the way we see it now. Phase 3Ait's going to be a while before(not audible). As we spend substantial time commenting to make the Strawmanright. Mike Rivest:

Stein:

Rivest:

Foley: Yes but nottoday. I think it'svery important that before we sit withyou and have our interviews that we are benchmarking something realistic. IfI come in and we're talking about investments as being 3% ofrevenues and youknowvery well that it's 8%-9% for example because the statistics I have are based mostly onthe magnetic industry and I don't have more recent information onthe electronic industry, then I would like to know that in advance so that our spreadsheet is the most realistic possible and that we can go right into the variances.
Basically your prices and (not audible) to start with are wrong.

Ok. That's fine. I'mgoing to be going

.... Once again we have I see, 6 weeks at least to get it right orto get it more right and any input you have today, I'd appreciate. Especially howI might go about deriving the right inputs. But it was more today intenns ofgetting the concept and the process going. That's my objective for this afternoon. Looking at the profile, give me anexample ofhow some ofthis industry statistic type information can be useful inpreparing the spreadsheets and also initiating dialog in identifying any strong variances. I have industry statistics from the census ofmanufacturers who tell me that in 1992 reporting companies talked about 5,200jobs for an annual sales of$500 million. So right there we have some sort ofmetric for totaljobs. We have some sort ofmetricjobs perrevenue. Figures that might be useful to try and identifY any major differences.

82I guess this also to Michael McCabe. You are analyzing the job impacts to these

standards, can we make a differentiation between U.S. jobs and jobs that are not U.S. based? Rivest:



### Foley:

Rivest:



### Foley:

Rivest:


### Foley: These jobs here are all US based and just because of the way census has captures the information that's on a plant level.
As you take this out and go beyond that then you would strictly being looking at US jobs?
My intention is to gather information on jobs at the plant level and not differentiate where the plant is, then report that back to DoE.
That being the US based plant versus the plant in Mexico?
Right. And then reporting that back to DoE
Is it appropriate that the USE DoE gather inibrma:iit n on plants outside of the US boundaries? McCabe: 

### To whether or not is it appropriate, (not audible) if we can gather that information. The administration talks about the economic impact on the manufacturers which is what we tried to capture here, it does not distinguish between were these manufacturers have these facilities located. Some here in the states, some on the border and the firm is a US firm it would be information I would be interested in. I'm not sure if we can get all this data. Foley:



### 83 Rivest:

Foley:

Rivest:

Foley:

Rivest:
Foley: I guess this also to Michael McCabe. You are analyzing thejobimpacts to these standards, can we make a differentiation between

# u.s. jobs andjobsthat are not

# u.s. based?

Thesejobshere are all

# us based andjust because ofthe way census 

### has captures the informationthat's on a plant level.

As you take this out and go beyond that thenyou would strictly being looking at

# us jobs?
My intention is to gather information onjobs at the plant level and not differentiate where the plant is, thenreport that backto DoE.

That being the US based plant versusthe plant inMexico?
Right. And thenreporting that back to DoE

Is it appropriate that the US DoE gather iniormation onplants outside ofthe US boundaries? McCabe:

Foley: To whether or not is it appropriate, (not audible) ifwe can gather that information. The administration talks about the economic impact onthe manufacturers which is what we tried to capture here, it does not distinguish between were these manufacturers have these facilities located. Some here in the states, some onthe border and the 

### :firm is a US 

### :firm 

### lit would be information I would be interested in. I'mnot sure ifwe can get all this data.

83 Rivest:

Foley:

Rivest:

Foley:

Rivest:
Foley: I guess this also to Michael McCabe. You are analyzing thejobimpacts to these standards, can we make a differentiation between

# u.s. jobs andjobsthat are not

# u.s. based?

Thesejobshere are all

# us based andjust because ofthe way census 

### has captures the informationthat's on a plant level.

As you take this out and go beyond that thenyou would strictly being looking at

# us jobs?
My intention is to gather information onjobs at the plant level and not differentiate where the plant is, thenreport that backto DoE.

That being the US based plant versusthe plant inMexico?
Right. And thenreporting that back to DoE

Is it appropriate that the US DoE gather iniormation onplants outside ofthe US boundaries? McCabe:

Foley: To whether or not is it appropriate, (not audible) ifwe can gather that information. The administration talks about the economic impact onthe manufacturers which is what we tried to capture here, it does not distinguish between were these manufacturers have these facilities located. Some here in the states, some onthe border and the 

### :firm is a US 

### :firm 

### lit would be information I would be interested in. I'mnot sure ifwe can get all this data.

83So a non-US firm-manufacturing ballast's overseas is still interested in (not audible)

outside of the United States are still interested in the (not audible) jobs that are impacted beyond the use (not audible). 

### McCabe: I'm interested in getting as rich data as we can on the impacts of the regulation. The policy maker here, the department when presented with information about impacts may look at it and distinguish between US jobs or US firms in a way that maybe significant to them but from an analytic point of view. I would like to capture that information. Foley: Then it would be my request then to or at least that that data be differentiated that way. (not audible) US jobs are identified, the jobs overseas are identified and the US firms are identified and the non-US firms are identified. Brookman: To an extent that can be done, yes. As far as money flows that's an entirely different think. Money has no boundaries. When I do the cash flow analysis ... (not audible)capacity impacts I think what applies to jobs. Wolfrnan: Money in terms of corporate money may have no boundaries but money in terms of payroll does have boundaries. Brookman: Keep going. Rivest: 

### I'm just carrying on with this type of information that might be useful from our data book. The annual investments and new capital expenditures combined with years of service of the equipment might give us an idea of the size of the asset base in the production of ballast's for example. This kind of background information can be very useful in setting up our placeholder values and spreadsheet but also in discussion with manufacturers about
84 So a non-US firm-manufacturing ballast's overseas is still interested in (not audible) outside ofthe United States are still interested inthe (not audible)jobs that are impacted beyond the use (not audible). McCabe:

Foley: I'minterested in getting as rich data as we can onthe impacts ofthe regulation. The policy maker here, the department when presented with information about impacts may look at it and distinguish betweenUSjobs orUS firms in a way that maybe significant to them but from an analytic point ofview. I would like to capture that information.

Then it would be my request thento or at least that that databe differentiated that way. (not audible) USjobs are identified, thejobs overseas are identified and the US firms are identified and the non-US firms are identified. Brookman: To an extent that canbe done, yes, 

### As far as money flows that's an entirely different think. Money 

### has no boundaries. WhenI do the cash flow analysis

...(not audible)capacity impacts I think what applies tojobs. Wo

### l:fi:nan: Money in terms ofcorporate money may have no boundaries but money in terms of payroll does have boundaries. Brookman:

Rivest: Keep going.

I'mjust carrying onwith this type ofinformationthat might be useful from our databook. The annual investments and new capital expenditures combined withyears ofservice of the equipment might give us an idea ofthe size ofthe asset base inthe production of ballast's for example. This kind ofbackground information canbe very useful in setting up our placeholder values and spreadsheet but also in discussion with manufacturers about
84 So a non-US firm-manufacturing ballast's overseas is still interested in (not audible) outside ofthe United States are still interested inthe (not audible)jobs that are impacted beyond the use (not audible). McCabe:

Foley: I'minterested in getting as rich data as we can onthe impacts ofthe regulation. The policy maker here, the department when presented with information about impacts may look at it and distinguish betweenUSjobs orUS firms in a way that maybe significant to them but from an analytic point ofview. I would like to capture that information.

Then it would be my request thento or at least that that databe differentiated that way. (not audible) USjobs are identified, thejobs overseas are identified and the US firms are identified and the non-US firms are identified. Brookman: To an extent that canbe done, yes, 

### As far as money flows that's an entirely different think. Money 

### has no boundaries. WhenI do the cash flow analysis

...(not audible)capacity impacts I think what applies tojobs. Wo

### l:fi:nan: Money in terms ofcorporate money may have no boundaries but money in terms of payroll does have boundaries. Brookman:

Rivest: Keep going.

I'mjust carrying onwith this type ofinformationthat might be useful from our databook. The annual investments and new capital expenditures combined withyears ofservice of the equipment might give us an idea ofthe size ofthe asset base inthe production of ballast's for example. This kind ofbackground information canbe very useful in setting up our placeholder values and spreadsheet but also in discussion with manufacturers about
84how their level of vertical integration may greatly change those ratios for example. It's a

starting point for dialog. We have gained some appreciation of the differences which confirms through a series of interviews that we did last year . My apology is to Robertson which we did not have a chance to interview, but certainly those interviews were instrumental in thinking through about how we would structure this analysis . Not to say that it wasn't useful to talk to the Alliance to Save Energy. Some of the conclusions from that round of interviews we've already touched on those in the last few minutes but, it really is in fact meaningful to talk about sub-groups ballast manufacturers and I think you can dream up more sub

-groups then there are manufacturers so to the extent that we can work directly with individual manufacturers and get an understanding of their situation. I think that's the best way to go. We need to recognize the global nature of the industry. There's four companies that can make product in the US, there are US companies who don't make products in the US, money and the situation I think the cash flow deals at the company level and that goes with the impacts which we are going to try and capture. We will consider the direct industries and suppliers as appropriate

. Appropriateness has possible and I'm happy to see that a lot of those initial contact has been made and it would be my intention to try and talk to each of these people individually if possible. Certainly not with the same interview survey or the same cash flow type analysis but just to try and really understand the size of those impacts and be able confidently report them back to the policy makers at DoE. Rivest: Gene? 

### Gene: On the terms of the companies you interviewed have you considered expanding the scope of the companies interviewing to those that strictly make electronic ballast's? Unknown: Doesn't make
. Well the people impacted the most make strictly magnetic.


### 85 Rivest:

Gene: how their level ofvertical integration may greatly change those ratios for example. It's a starting point for dialog. We have gained some appreciation ofthe differences which confirms through a series ofinterviews that we did last year. My apology is to Robertson which we did not have a chance to interview, but certainlythose interviews were instrumental in thinking through about howwe would structure this analysis. Notto say that it wasn'tuseful to talk to the Alliance to Save Energy. Some ofthe conclusions from that round ofinterviews we've already touched onthose in the last few minutes but, it really is in fact meaningful to talk about sub-groups ballast manufacturers and I think you
candreamup more sub-groups then there are manufacturers so to the extent that we can work directly withindividual manufacturers and get anunderstanding oftheir situation. 

### I think that's the best way to go. We need to recognize the global nature ofthe industry. There's four companies that canmake product inthe US, there are US companies who don't make products in the US, money and the situation 

### I think the cash flow deals at the company level and that goes withthe impacts which we are going to try and capture. We 

### will consider the direct industries and suppliers as appropriate. Appropriateness 

### has possible and I'mhappy to see that a lot ofthose initial contacthas beenmade and it would be my intentionto try and talk to each ofthese people individually 

### if possible. Certainly not withthe same interview surveyorthe same cashflow type analysis butjustto try and really understandthe size ofthose impacts and be able confidently report themback to the policy makers at DoE.

Gene?

Onthe terms ofthe companies you interviewed have you considered expanding the scope ofthe companies interviewing to those that strictly make electronic ballast's? Unknown: Doesn't make. Well the people impacted the most make strictly magnetic. 

### 85 Rivest:

Gene: how their level ofvertical integration may greatly change those ratios for example. It's a starting point for dialog. We have gained some appreciation ofthe differences which confirms through a series ofinterviews that we did last year. My apology is to Robertson which we did not have a chance to interview, but certainlythose interviews were instrumental in thinking through about howwe would structure this analysis. Notto say that it wasn'tuseful to talk to the Alliance to Save Energy. Some ofthe conclusions from that round ofinterviews we've already touched onthose in the last few minutes but, it really is in fact meaningful to talk about sub-groups ballast manufacturers and I think you
candreamup more sub-groups then there are manufacturers so to the extent that we can work directly withindividual manufacturers and get anunderstanding oftheir situation. 

### I think that's the best way to go. We need to recognize the global nature ofthe industry. There's four companies that canmake product inthe US, there are US companies who don't make products in the US, money and the situation 

### I think the cash flow deals at the company level and that goes withthe impacts which we are going to try and capture. We 

### will consider the direct industries and suppliers as appropriate. Appropriateness 

### has possible and I'mhappy to see that a lot ofthose initial contacthas beenmade and it would be my intentionto try and talk to each ofthese people individually 

### if possible. Certainly not withthe same interview surveyorthe same cashflow type analysis butjustto try and really understandthe size ofthose impacts and be able confidently report themback to the policy makers at DoE.

Gene?

Onthe terms ofthe companies you interviewed have you considered expanding the scope ofthe companies interviewing to those that strictly make electronic ballast's? Unknown: Doesn't make. Well the people impacted the most make strictly magnetic. 

### 85

### Gene: People depends on how you define impacted. The people who make magnetic ballast's

are impacted ostensibly because they have lowering amounts of product that they produce and also have lowering employment and all those issues. Unfortunately, we don't get the balance, the symmetry. Unknown: I'd be interested in hearing what industry has to say about that, but I think that everyone who is at this table represents 95% of both magnetic and electronic. So that is a fair estimate? So the balance is here. Gene: 

### I think there's a shift and I think as the industry changes it would be worthwhile speaking to a number of the other manufacturers to see what they envision the changes to occur should a new standard go into effect. I think you're failing to sort of capture. Unknown: Let me give you my rationale on this. I have 100%, I have 30 million magnetic ballast's that are going to be transferred over to electronic perhaps, only 75% of that because of 4 lamp fixtures and the like. I have a market share there of 100% even if I were to interview 12 ballast manufacturers in China and they all tell me they are going to get 100 jobs, they're all still fighting for those 75% of 30 million ballast's

. So the impact when you consider the full range of the 30 million becoming 22 million, the employment, the total employment resulting in electronic versus the total employment shifted from (not audible). I'm not going to forget anything
. You won't let me. McCabe: One thing to reiterate what Michael has just said with respect to the type of supplier industry

. At this point in time, we do not anticipate performing sort of economic impact analysis on the supplier industry as we do on the ballast manufacturer's. We are interested in being able to characterize that industry and to identify ways that metrics can be


### 86 Gene: People depends onhowyou define impacted. The people who make magnetic ballast's
are impacted ostensibly because they have lowering amounts ofproduct that they produce and also have lowering employment and all those issues. Unfortunately, we don't get the balance, the symmetry. Unknown:

Gene: I'dbe interested inhearing what industry has to say about that, but I think. that everyone who is at this table represents 95% ofbothmagnetic and electronic. So that is a fair estimate? So the balance is here.

I think there's a shift and I think asthe industry changes it would be worthwhile speaking to a number ofthe other manufacturers to see what they envisionthe changes to occur should a new standard go into effect. I think. you're failing to sort ofcapture. Unknown: Let me give you myratior..ale onthis. I have 100%, I have 30 million magnetic ballast's that are going to be transferred overto electronic perhaps, only 75% ofthat because of4 lamp fixtures andthe like. I have a market share there of 100% even 

### ifI were to interview 12 ballast manufacturers in China and they 

### all tell me they are going to get 100jobs, they're all still fighting for those 75% of30 million ballast's. So the impact whenyou consider the 

### full range ofthe 30million becoming 22 million, the employment, the total employment resulting in electronic versus the total employment shifted from (not audible). I'mnot going to forget anything. You won't let me. McCabe: One thing to reiterate what Michael hasjust said withrespect to the type ofsupplier industry. At this point in time, we do not anticipate performing sort ofeconomic impact analysis onthe supplier industry as we do onthe ballast manufacturer's. We are interested inbeing able to characterize that industry and to identify ways that metrics can be


### 86 Gene: People depends onhowyou define impacted. The people who make magnetic ballast's
are impacted ostensibly because they have lowering amounts ofproduct that they produce and also have lowering employment and all those issues. Unfortunately, we don't get the balance, the symmetry. Unknown:

Gene: I'dbe interested inhearing what industry has to say about that, but I think. that everyone who is at this table represents 95% ofbothmagnetic and electronic. So that is a fair estimate? So the balance is here.

I think there's a shift and I think asthe industry changes it would be worthwhile speaking to a number ofthe other manufacturers to see what they envisionthe changes to occur should a new standard go into effect. I think. you're failing to sort ofcapture. Unknown: Let me give you myratior..ale onthis. I have 100%, I have 30 million magnetic ballast's that are going to be transferred overto electronic perhaps, only 75% ofthat because of4 lamp fixtures andthe like. I have a market share there of 100% even 

### ifI were to interview 12 ballast manufacturers in China and they 

### all tell me they are going to get 100jobs, they're all still fighting for those 75% of30 million ballast's. So the impact whenyou consider the 

### full range ofthe 30million becoming 22 million, the employment, the total employment resulting in electronic versus the total employment shifted from (not audible). I'mnot going to forget anything. You won't let me. McCabe: One thing to reiterate what Michael hasjust said withrespect to the type ofsupplier industry. At this point in time, we do not anticipate performing sort ofeconomic impact analysis onthe supplier industry as we do onthe ballast manufacturer's. We are interested inbeing able to characterize that industry and to identify ways that metrics can be


### 86appropriate to present to the decision makers of
...or somebody secondary for the impacts

would be so we're not proposing to do any like GRIM (not audible). GRIM Analysis (not audible) film industry, (not audible) industry (not audible). Unknown: I can bound the issue by say, if I have my 22 million magnetic ballast's with the help of industry I may be able to do an estimate of pounds of steel and copper that are involved. Then applies to industry wide ratios (not audible) things like that. It's doable it just won't be a 30 year cash flow process. 

### Howard Wolfman: To keep the record straight and comment on what he was saying one of the ballast manufactures that was interviewed was Motorola and one of (not audible) electronic ballast. 

### Unknown: Thanks for the verification. Rivest: 

### I'll move on and talk about the industry cash flow. First of all the tool we'll be using is an Excel based spreadsheet which is a pro forma cash flow analysis which considers revenues less expenses adds back depreciation and subtracts any capital investments. So I do have a copy of the GRIM here with us and after the break I'll put it up on the screen. You'll see I've linked it to the net spreadsheet to be able to import some of the shipments (not audible). Unknown: Don't you have another program called Jeepers. You put them together and you have Grim Jeepers? Unknown: I was demonstrating the software a little earlier this month, I think to Norm Grimshaw. Rivest:


### 87 appropriate to present to the decision makers of

...or somebody secondary for the impacts wouldbe so we're not proposing to do any like GRIM (not audible). GRIM Analysis (not audible) film industry, (not audible) industry (not audible). Unknown: I canbound the issue by say, 

### ifI have my 22 million magnetic ballast's withthe help of industry 

### I may be able to do an estimate ofpounds ofsteel and copperthat are involved. Thenapplies to industry wide ratios (not audible) things like that. It's doable itjust won't be a 

### 30 year cash flow process. Howard Wolfinan: To keep the record straight and comment onwhat he was saying one ofthe ballast manufactures that was interviewed was Motorola and one of(not audible) electronic ballast. Unknown:

Rivest: Thanks for the verification.

I'llmove on and talk about the industry cashflow. First ofall the tool we'll be using is an Excelbased spreadsheet which is a pro forma cash flow analysis which considers revenues less expenses adds back depreciation and subtracts any capital investments. So I do have
a copy ofthe GRIM here with us and after the break I'llput it up onthe screen. You'll
see I've linked it to the net spreadsheet to be able to import some ofthe shipments (not audible). Unknown: Don't youhave another program called Jeepers. Youput themtogether and youhave 

### GrimJeepers? Unknown: I was demonstrating the software a little earlier this month, I think to Norm Grimshaw. Rivest:


### 87 appropriate to present to the decision makers of

...or somebody secondary for the impacts wouldbe so we're not proposing to do any like GRIM (not audible). GRIM Analysis (not audible) film industry, (not audible) industry (not audible). Unknown: I canbound the issue by say, 

### ifI have my 22 million magnetic ballast's withthe help of industry 

### I may be able to do an estimate ofpounds ofsteel and copperthat are involved. Thenapplies to industry wide ratios (not audible) things like that. It's doable itjust won't be a 

### 30 year cash flow process. Howard Wolfinan: To keep the record straight and comment onwhat he was saying one ofthe ballast manufactures that was interviewed was Motorola and one of(not audible) electronic ballast. Unknown:

Rivest: Thanks for the verification.

I'llmove on and talk about the industry cashflow. First ofall the tool we'll be using is an Excelbased spreadsheet which is a pro forma cash flow analysis which considers revenues less expenses adds back depreciation and subtracts any capital investments. So I do have
a copy ofthe GRIM here with us and after the break I'llput it up onthe screen. You'll
see I've linked it to the net spreadsheet to be able to import some ofthe shipments (not audible). Unknown: Don't youhave another program called Jeepers. Youput themtogether and youhave 

### GrimJeepers? Unknown: I was demonstrating the software a little earlier this month, I think to Norm Grimshaw. Rivest:


### 87My simplified version of the GRIM - prices, shipments, costs, financial information about

ratios, percentage of, typical financial information resulting in a cash flow analysis and a lot of that information is available through analysis and data that was collected for other parts of the analysis. For example, we do have for manufacturing prices, we do have reports from CIR which gives the value of shipments and quantity of shipments for various ballast's categories. There's not a perfect one to one relationship between those and the exact ballast categories we're looking. But we feel it is a very good ballpark value and we'll look at those a little later. Manufacturing cost data, the costs that we had in the first engineering analysis was based on some confidential data that was collected I think through one or two manufacturers. What we're proposing to do here is to based on the industry analysis of a typical cost structure from publicly available financial information, we'll "reverse engineer" some of the cost elements and those can be our starting point to draw some comparisons with specific and individual manufacturer data. The shipments will be linked to the net spreadsheet. It's clear that the manufacturing impacts are directly related to the base K shipments. If the market is to go on its own very rapidly towards all of electronics the impact of the magnetic ballast will be much less than if its anticipated that the market share of magnetic ballast would stay constant. So there's a balancing here. Large energy savings, large manufactures impacts. Compared to few slides, just looking quickly at some of the inputs that we can use for GRIM, for example. For the manufacturer prices we have the current industrial reports, the major ballast categories we'll be looking at and tracking in the cash flow analysis aren't the same as for the National Energy Savings spreadsheet which are the F40's, T12. I think it's only T12 that we're looking at. And we're converting from 4 kinds of, 4 classes of magnetic ballast to 6 classes of electronics ballast I believe, because we do have the possibility of having 3 lamp and 4 lamp electronic ballast's. By the way, you'll notice this is one slide that was revised (not audible). So in the revised slides package you'll see the correct slide which you have here. There was one category, which is not a very good fit between the costs as reported


### 88 My simplified version ofthe GRIM

- prices, shipments, costs, financial information about ratios, percentage of, typical financial information resulting in a cash flow analysis and a lot ofthat information is available through analysis and datathat was collected for other parts ofthe analysis. For example, we do have for manufacturing prices, we do have reports from CIRwhich gives the value ofshipments and quantity ofshipments for various ballast's categories. There's not a perfect one to one relationship betweenthose and the exact ballast categories we're looking. But we feel it is a very good ballpark value and we'll look at those a little later. Manufacturing cost data, the costs that we had inthe first engineering analysis was based on some confidential datathat was collected I think through one ortwo manufacturers. What we'reproposing to do here is to based onthe industry analysis ofa typical cost structure from publicly available financial information, we'll "reverse engineer" some ofthe cost elements and those can be our starting point to draw some comparisons with specific and individual manufacturer data. The shipments 

### will be linked to the net spreadsheet. It's clear that the manufacturing impacts are directly related to the base K smpments. 

### If the market is to go on its ownveryrapidly towards all ofelectronics the impact ofthe magnetic ballast 

### will be much less than 

### ifits anticipated that the market share ofmagnetic ballast would stay constant. So there's a balancing here. Large energy savings, large m'l11ufactures impacts. Compared to few slides,just looking quickly at some ofthe inputs that we canuse for GRIM, for example. Forthe manufacturer prices we have the current industrial reports, the major ballast categories we'llbe looking at and tracking inthe cash flow analysis aren't the same as for the National Energy Savings spreadsheet which are the F40's, T12. I think it's only T12 that we're looking at. And we're converting from 4 kinds of, 4 classes ofmagnetic ballast to 6 classes ofelectronics ballast I believe, because we do have the possibility ofhaving 3 lamp and 4 lamp electronic ballast's. Bythe way, you'll notice this is one slide that was revised (not audible). So in the revised slides package you'll see the correct slide which you have here. There was one category, which is not a very good fit betweenthe costs as reported


### 88 My simplified version ofthe GRIM

- prices, shipments, costs, financial information about ratios, percentage of, typical financial information resulting in a cash flow analysis and a lot ofthat information is available through analysis and datathat was collected for other parts ofthe analysis. For example, we do have for manufacturing prices, we do have reports from CIRwhich gives the value ofshipments and quantity ofshipments for various ballast's categories. There's not a perfect one to one relationship betweenthose and the exact ballast categories we're looking. But we feel it is a very good ballpark value and we'll look at those a little later. Manufacturing cost data, the costs that we had inthe first engineering analysis was based on some confidential datathat was collected I think through one ortwo manufacturers. What we'reproposing to do here is to based onthe industry analysis ofa typical cost structure from publicly available financial information, we'll "reverse engineer" some ofthe cost elements and those can be our starting point to draw some comparisons with specific and individual manufacturer data. The shipments 

### will be linked to the net spreadsheet. It's clear that the manufacturing impacts are directly related to the base K smpments. 

### If the market is to go on its ownveryrapidly towards all ofelectronics the impact ofthe magnetic ballast 

### will be much less than 

### ifits anticipated that the market share ofmagnetic ballast would stay constant. So there's a balancing here. Large energy savings, large m'l11ufactures impacts. Compared to few slides,just looking quickly at some ofthe inputs that we canuse for GRIM, for example. Forthe manufacturer prices we have the current industrial reports, the major ballast categories we'llbe looking at and tracking inthe cash flow analysis aren't the same as for the National Energy Savings spreadsheet which are the F40's, T12. I think it's only T12 that we're looking at. And we're converting from 4 kinds of, 4 classes ofmagnetic ballast to 6 classes ofelectronics ballast I believe, because we do have the possibility ofhaving 3 lamp and 4 lamp electronic ballast's. Bythe way, you'll notice this is one slide that was revised (not audible). So in the revised slides package you'll see the correct slide which you have here. There was one category, which is not a very good fit betweenthe costs as reported


### 88in the CIR and the GRIM product class and a couple of asterisks here. That's one that

we'll be looking at for better information. The 2F96T12HO. We would certainly like to have better information on that price. Unknown: The two areas I wanted to comment on price is that one, because that presently in a since was before, includes a whole group of other (not audible) ballast's which aren't 296 high alpha and the other one to comment on is actually the highest volume one which is a 2F40T12 which includes some product not included in this. (not audible)product. Which brings the price lower than actually is for the ballast to meet the (not audible) requirements. Rivest: One fundamental point that was touched on earlier by Gene and by others was the issue of the conversion

. There's an assumption when we do the manufacturing impact that we're going from magnetic ballast and we're only looking at those magnetic ballast that are impacted by regulation so if it's a declining scenario or fixed scenario we're only tracking those ballast and we're converting them over to either (not audible) or electronic ballast's. One of the assumptions here that you'll see the GRIM later, we did set up the GRIM with the conversion of T1 2 loop magnetic to T12 electronic

. Now it would be up to manufacturers if they have different assumptions about where the market is going to change those ballast shipments and have the correct prices and then costs for those ballast classes
. So that's why here we did in fact look at the average prices of the 32-watt products electronic. The TA type. As place holder values, I worked back from the CIR prices to break down that price into various cost and profit elements. This is the pie chart, it's also a revised slide, breakdowns a little different

. The process we used to generate these numbers we had information from the census of manufacturers which was ballast specific

. Some other categories unfortunately are reported at a higher level of aggregation for the transformer industry

. We had information from Robert Morris Associates and this


### 89 inthe CIRand the GRIMproduct class and a couple ofasterisks here. That's onethat we'llbe looking at for better information. The 2F96T12HO. We would certainly like to have better information onthat price. Unknown:

Rivest: The two areas I wantedto comment onprice is that one, because that presently in a since

. was before, includes a whole group ofother (not audible) ballast's which aren't 296 high alpha and the other one to comment onis actually the highest volume one which is a 2F40T12 which includes some product not included inthis. (not audible)product. Which bringsthe price lower than actually is for the ballast to meet the (not audible) requirements.

One fundamental**~oint** that wastouched onearlier by Gene and by others was the issue of the cODversion. There's an assumption whenwe do the manufacturing impact that we're going from magnetic ballast and we're only looking at those magnetic ballast that are impacted by regulation so ifit's a declining scenario or fixed scenario we're only tracking those ballast and we're converting them over to either (not audible) or electronic ballast's. One ofthe assumptions here that you'll see the GRIM later, we did set up the GRIM with the conversion ofT12 bop magnetic to T12 electronic. Now it would be upto manufacturers ifthey have different assumptions about where the market is going to change those ballast shipments and have the correct prices andthen costs for those ballast classes. So that's whyhere we did in fact look at the average prices ofthe 32-watt products electronic. The TAtype. As place holder values, I worked back from the CIR prices to break downthat price into various cost andprofit elements. This is the pie chart, it's also a revised slide, breakdowns a little different. The process we used to generate these numbers we had information from the census ofmanufacturers which was ballast specific. Some other categories unfortunately are reported at a higher level ofaggregation for the transformer industry. We had information from Robert Morris Associates and this 

### 89new slide reflects the analysis of l OK's from 2 ballast manufacturers to the extent that you

can call the ballast manufacturers because some of them are so diversified there are very few in fact in this room that a) are publicly available and b) have ballast's manufacturing as a significant part of their business. Looking at the cost inputs to GRIM it 's not critical that in doing the cash flow that we have an accurate breakdown of material labor and all these components
. So it is important that we understand fixed versus variable
. The main use of this aggregated data might be to get some handle on some jobs impact, might be able to correlate typical unit shipments and unit labor components inside a ballast for example, what the totaljobs impacting a client could correlate as well as some of the tooling costs with the necessary investments and changing over production to an electronic ballast for example . Mostly that in the GRIM, there's an area where we have to try and anticipate what the investment would be to switch over production to a higher standard level. Bob Wisbey: 

### Could you comment on what you to the right hand column of this as identified as total cost because of the recent, within my normal interpretation where I think is normal interpretation for accounting principals, that isn't really the total cost. Rivest: Cost is one of those things....... Wisbey:Cost for me is revenue minus profit equals cost. - Rivest: As I recall my financial accountant course has different definitions than manufacturing accounting course. I think the cost here is the direct manufacturing cost that you would report in your 1 OK as work in progress for example. Or inventory whereas cost is to my accountant would be what's left. So it's everything except profit here. 

### Wisbey:
90 new slide reflects the analysis of 10K's from 2 ballast manufacturers to the extent that you
cancall the ballast manufacturers because some ofthem are so diversified there are very few in fact in this roomthat a) are publicly available and b) have ballast's manufacturing as
a significant part oftheir business. Looking atthe cost inputs to GRIM it's not critical that in doing the cashflow that we have an accurate breakdown ofmaterial labor and all these components. So it is important that we understand fixed versus variable. The main
use ofthis aggregated datamight be to get some handle on somejobs impact, might be able to correlate typical unit shipments and unit labor components inside a ballast for example, what thetotaljobsimpacting a client could correlate as well as some ofthe tooling costs withthe necessary investments and changing over production to an electronic ballast for example. Mostlythat in the GRIM, there's an area where we have to try and anticipate what the investment would be to switch over productionto a higher standard level. Bob Wisbey:

Rivest: Could you comment onwhat you to the right hand column ofthis as identified as total cost because ofthe recent, within my normal interpretationwhere I think is normal interpretation for accounting principals, that isn'treally the total cost.

Cost is one ofthose things

....... Wisbey:

Rivest: Cost for me is revenue minus profit equals cost.



### As I recall my financial accountant course has different definitions thanmanufacturing accounting course. I think the cost here is the direct manufacturing cost that you would report in your 10Kas work in progress for example. Or inventory whereas cost is to my accountant would be what's left. So it's everything except profit here. Wisbey:
90And I would just say, just ask that as you go on through these that you use some other



### word for that other than total cost. Rivest: 

### Production costs maybe. Wisbey: Identifies it accurately as to what is. Because it is kind of a funny looking picture, someone sitting looking across and looks at selling prices. They can draw completely opposite impression. Divest: Last thing you need is more competitors. The inputs menu you'll see..... you'll see in the GRIM this is one of the first major assumptions stage where you define some of the financial parameters. I've got some values in here that reflect some of the pie chart we saw a little earlier. Also some additional analysis we did on tax rates. Gets a truly complicated when you have companies who have plants spread all over the world to try and really determine what the marginal tax rate is for ballast manufacturing. So we understand that this is going to be out of range. Working capital is to recognize the fact that as your sales go through the roof, if you have a more expensive product, you are also going to have to carry more inventory, higher receivables and that's really a cash drain. Standard SGNA, depreciation depending on the base case, Normally when you look at a company's 1 OK's they're adding capital faster than they are depreciating because there's normally a growth in business. The assumptions would have to be changed if we're seeing flat or decreasing so these wouldn't need to change in the two particular circumstances we're looking at. The shipment values are going to be obtained from the net spreadsheet. I have the GRIM with me but I'd like to take a day or two. A couple of things that need to be changed. Right now, the cash flow goes out to the year 2012 and a lot of our scenarios go for shipments goes as far as I saw 2015, 2018. And since what a trunk hits now, it has residual terminal value calculated as an annuity that will give you a wrong


### 91 Rivest: And I wouldjust say,just ask that as you go onthroughthese that youuse some other word for that otherthantotal cost.

Production costs maybe. Wisbey:

Rivest: Identifies it accurately as to what is. Because it is kind ofa funny looking picture,
someone sitting looking across and looks at selling prices. They can draw completely opposite impression.

Last thing you need is more competitors. The inputs menu you'll see..... you'll see in the GRIMthis is one ofthe first major assumptions stage where you define some ofthe financial parameters. I've got some values in here that reflect some ofthe pie chart we
saw a little earlier. Also some additional analysis we did ontaxrates. Gets a truly complicated whenyouhave companies who have plants spread all over the world to try and really determine what the marginal taxrate is for ballast manufacturing. So we understand that this is going to be out ofrange. Working capital is to recognize the fact that as your sales go throughthe roof, ifyouhave a more expensive product, you are also going to have to carrymore inventory, higher receivables and that'sreally a cash 

### drain. Standard**SGN~** depreciation depending onthe 

### base case, Normally whenyou look at a company's 10K'sthey're adding capital faster thanthey are depreciating because there's normally a growthin business. The assumptions would have to be changed ifwe're seeing flat or decreasing so these wouldn't need to change in the two particular circumstances we're looking at. The shipment values are going to be obtained from the net spreadsheet. I have the GRIM withme but I'd like to take a day ortwo. A couple ofthings that need to be changed. Right now, the cash flow goes outto the year 2012 and a lot ofour scenarios go for shipments goes as far as I saw 2015,2018. And since what a trunk hits now, it has residual terminal value calculated as an annuity that will give you a wrong
91answer. If the shipments are going to continue to change after 2012. So I need to do that

modification. I also need to link it to your new version of the net spreadsheet. Anything scenario you do use to calculate manufacturer impacts are going to a mirror image of whatever scenarios we're calculating national benefits from. One of these slides are just repetitive of some of the stuff you did this morning. I used two scenarios. One with flat magnetic ballast shipments over time, the other with decrease adjunctable on the net spreadsheet. You'll see in the GRIM. Mike, you were tracking shipments in the (not audible). So when we're calculating the cash flow we're comparing it best case scenario. Here we have decreasing shipments scenario and we're comparing that to a situation before and after standards with the large break on a standard year where we go from producing magnetic ballast's to producing electronic ballast. And there's a conversion ratio there that's not necessarily one to one depending on the product class. There's some preliminary discussions I've had with people in this room. It will be possible for manufacturers to make different assumptions about how this transition actually will happen. There may be a large inventory built up towards the end that would cause a spike in shipments and then a large drop of shipments of ballast after the (not audible) of the standards. But significant because that's the point in time when you're investing and you're more vulnerable for any cash shortages. 

### Unknown: What are the bottom graphs? Rivest: That's just. These are the four ballast's, magnetic ballast classes that are being tracked and these are the six electronic ballast classes that are being tracked. And the reason there are six compared to four is because there's one, two, three and four lamp electronic ballast's whereas there's only one and two lamp magnetic ballast's. That's also a revised slide. 

### Unknown:

92 answer. 

### If the shipments are going to continue to change after 2012. So I needto do that modification. I also need to 

### link it to your new version ofthe net spreadsheet. Anything scenario you do use to calculate manufacturer impacts are going to a mirror image of whatever scenarios we're calculating nationalbenefits from. One ofthese slides arejust repetitive ofsome ofthe stuffyou did this morning. I used two scenarios. One with flat magnetic ballast srJpments over time, the other with decrease adjunctable onthe net spreadsheet. You'll see in the GRIM. Mike, you were tracking shipments inthe (not audible). So whenwe're calculating the cashflow we're comparing it best case scenario. Here we ruwe decreasing shipments scenario and we're comparing that to a situation before and after standards withthe large break on a standard year where we go from producing magnetic ballast's to producing electronic ballast. Andthere's a conversion ratio there that's not necessarily one to one depending onthe product class. There's some preliminary discussions I've had withpeople inthis room. It 

### will be possible for manufacturers to make different assumptions about howthis transition actually

### will happen. There maybe a large inventory built uptowards the end that would cause a spike in shipments and then a large drop ofshipments ofballast after the (not audible) ofthe standards. But significant because that'sthe point intime whenyou're investing and you're more vulnerable for any cash shortages. Unknown:

Rivest: What are the bottomgraphs?

That'sjust. These are the four ballast's, magnetic ballast classes that are being tracked and these are the six electronic 

### ballast classes that are being tracked. Andthe reason there
are six comparedto four is because there's one, two, three and four lamp electronic ballast's whereas there's only one and two lamp magnetic ballast's. That's also a revised slide. Unknown:


### 92

### Why did the electronic ballast decrease over time?

Rivest: Because we're only considering the impact to standards on these ballast's. Some subtly of the analysis when we get into comparing or start playing around with the spreadsheet, and I saw the one critical assumption is the magnitude of the investments to upgrade to the new standard and in doing a differential cash flow for a base case, it's pretty easy. The case where things are flat then there would be no investment in the electronic ballast. You're just going along replenishing your depreciation with new capital additions just maintaining an even, equal capital asset base. The case of the standards of magnetic where shipments dropped they are replaced by electronic ballast, you have a large spike in investments. Individually, manufacturers will be able to make their own assumptions about the size and the timing of these investments whether its done over a period of a couple years or over a period of one year for example. Things get a little but more tricky in the situation where the base case is decreasing, in that case to be able to compare investments in an electronic ballast's from one situation to the other that I'm tracking the investment in the electronic ballast's that are continuously replacing these to the scenario here where I'm replacing and the having a large spike to replace the remaining market share. So the differential cash flow has to look at the magnitude, since the market is going to zero, the investment is the same. The timing of the investment that is different. And because of the time value of money, one large hit today is a lot harder than a steady flow of investment. There's several worksheets within the GRIM model. Basically what we did, we're using the GRIM model as it was, what we're preparing a preGRIM, if you will, which is just allowed the aggregation of the different ballast classes. So what you're seeing here is the actual GRIM model which only tracks, total units, total revenues compared to the input sheet which has all the financial parameters for all the different ballast classes. So it's what I call the GRIM of the preGRIM in here as far as this spreadsheet is concerned it's the same for any other analysis for another product. My


### 93 Rivest: Why did the electronic ballast decrease over time?

Because we're only considering the impact to standards onthese ballast's. Some subtly of the analysis when we get into comparing or start playing around withthe spreadsheet, and I sawthe one critical assumption is the magnitude ofthe investments to upgrade to the
new standard and in doing a differential cashflow for a base case, it'spretty easy. The
case where things are flat thenthere would be no investment inthe electronic ballast. You'rejust going along replenishing your depreciation with new capital additionsjust maintaining an even, equal capital asset base. The case ofthe standards ofmagnetic where shipments dropped they are replaced by electronic ballast, you have a large spike in investments. Individually, manufacturers 

### will be able to make their own assumptions about the size and the timing ofthese investments whether its done over a period ofa couple years or over a period ofone year for example. Things get a little but more tricky inthe situation where the base case is decreasing, in that case to be able to compare investments in anelectronic ballast's from one situationto the otherthat I'mtracking the investment in the electronic ballast's that are continuously replacing these to the scenario here where I'mreplacing and the having a large spike to replace the remaining market share. So the differential cash flow has to look at the magnitude, since the market is gomg to zero, the investment is the same. The timing ofthe investment that is different. And because ofthe time value ofmoney, one large hit today is a lot harder than a steady flow ofinvestment. There's several worksheets withinthe GRIMmodel. Basically what we did, we're using the GRIM model as it was, what we're preparing a preGRIM, 

### ifyou

### will, which isjust allowed the aggregation ofthe different ballast classes. So what you're seeing here is the actual GRIM model which onlytracks, totalunits, totalrevenues compared to the input sheet which has all the financial parameters for all the different ballast classes. So it'swhat I callthe GRIM ofthe preGRIM in here as far asthis spreadsheet is concerned it'sthe same for any other analysis for another product. My


### 93following slides are about to say and I'll say it right now, what we 'd be looking for in

terms of reporting back, is reporting at this level of aggregation
. So to maintain some confidentiality and the fact that there 's a few manufacturers, there's so few that may produce one or another ballast type

. We think is just more appropriate to report an average price, total shipments for the whole industry

. Then explain how the different manufacturers ratios might differ from this aggregate industry value. Brookman: Comment on this briefly before we go to break. Questions ? This aspect of Mike Rivest's presentation. 

### Unknown: What appears as 26 in the (not audible) constant shipments scenario and then the one that falls on page 27, the declining shipment scenario,just so that I understand, this is only for new investment

. This doesn't cover the issue of the so-called conversion costs that will be incurred. Rivest: No, this is only investment sort of amortized investments. There may be other one-time capital conversions, one-time costs like there's additional marketing cost, things like that. But you wouldn't depreciate over time. Those are an expense item like in the GRIM. Unknown: Actually you have two items. You have product conversion expense and conversion capital expense. One's capital and one is expense. We actually think that that's sort of critical to the whole analysis. We're wondering are you even going to attempt to identify those for your Strawman or not? Rivest: I think those one-time expenses, I think we should. Unknown: 

### How, I don't' see any tables in here or any charts that even addressed the issue.
94 following slides are about to say and I'll say it right now, what we'd be looking for in terms ofreporting back, is reporting at this level ofaggregation. So to maintain some confidentiality and the fact that there's a few manufacturers, there's so few that may produce one or another ballast type. We think isjust more appropriate to report an average price, total shipments for the whole industry. Then explain how the different manufacturers ratios might differ from this aggregate industry value. Brookman: Comment onthis briefly before we go to break. Questions? This aspect of Mike Rivest's presentation. Unknown:

Rivest: What appears as 26 in the (not audible) constant shipments scenario and thenthe one that falls onpage 27, the declining shipment scenario,just so that I understand, this is only for
new investment. This doesn't cover the issue ofthe so-called conversion costs that 

### will be incurred.

No, this is only investment sort ofamortized investments. There may be other one-time capital conversions,**one~time** costs like there's additional marketing cost, things like that. Butyou wouldn't depreciate overtime. Those are an expense item like in the GRIM. Unknown:

Rivest: Actually you have two items. Youhave product conversion expense and conversion capital expense. One's capital and one is expense. We actually think that that's sort of critical to the whole analysis. We're wondering are you even going to attempt to identifY those for your Strawman or not?

I think those one-time expenses, I think we should. Unknown: How, I don't' see any tables inhere or any charts that even addressed the issue.
94Divest: They don't, you're right.

Unknown: 

### In fact, my (not audible) you handed out you left that blank, that's why I was asking whether (not audible). Divest: 

### I intend to do it. I'm not sure at this point where I can even get that information from public sources, but maybe from sources in this room. I can get a rules of thumb for marketing expense and launching of new products. Unknown: We have a couple of questions about what's on page 34. I think we haven't gotten that far yet. I want to make sure. Rivest: I would rather go on for another 5 or 10 minutes. Go to the end of this section and then after the break we'll just go to the spreadsheet., Brookman: Can everybody hang on 5-10 minutes? Keep going. Rivest: Slides 30 here just reiterates what I said earlier. We're putting together a Strawman and we'll be visiting manufacturers. This describes the aggregation process, putting together a Strawman individual manufacture visits and financial analysis and then the re-aggregation into an industry cash flow. Some discussion here about the fact that we're not interested, well, interested but we're not asking for prices, costs, shipments information at the product class level, but rather at the overall company impact. 34. This is a revised slide. Unknown: 

### (not audible) Rivest:


### 95 Rivest: They don't, you're right. Unknown:

Rivest: Infact, my (not audible) you handed out you left that blank, that's whyI was asking whether (not audible).

I intend to do it. I'mnot sure at this point where I can even get that information from public sources, but maybe from sources in this room. I can get a rules ofthumb for marketing expense and lallDChing ofnewproducts. Unknown:

Rivest: We have a couple ofquestions about what's onpage 34. I think we haven't gotten that far yet. I want to make sure.

I would rather go on for another 5 or 10 minutes. Go to the end ofthis section and then after the break we'lJjust go to the spreadsheet, Brookman:

Rivest: Caneverybody hang on 5-10 minutes? Keep going.

Slides 30 herejustreiterates what I said earlier. We're putting together a Strawman and we'llbe visiting manufacturers. This describes the aggregationprocess, putting together a Strawman individual manufacture visits and financial analysis and thenthe re-aggregation into anindustry cashflow. Some discussion here about the fact that we're not interested, well, interested but we're not asking for prices, costs, shipments information at the product class level, but rather at the overall company impact. 34. This is a revised slide. Unknown: (not audible) Rivest:
95Don't even look at the numbers, don't freak out over that. My analysis is finished I can

take the color out. From the first spreadsheet to other spreadsheets, we've added product classes. I'm not sure what the other changes were. I wouldn't be concerned with what the final numbers are at this point. I didn't even give it a whole lot of thought. The point of this slide is to show you that this is the level of aggregation that it would be reported at for the industry. For the base case and the standards case, for this scenario with decreasing shipments and for the scenario with constant shipments. So you would have four of these essentially. And then a qualitative discussion keeping confidentiality open to individual manufacturers explaining variances using tools like saying things like the negative impacts are born by 90% of the negative impacts by two manufacturers or something like that. Types of things census does with when they have confidentiality issues. Unknown: Before you take 34 off. 34 is a base case scenario so there are not standards right? Rivest: 

### This was no standard. I don't know if this a constant shipments. Unknown: Yes. So when you put in a standard aligns a product conversion expense, conversion capital expense, those will go positive in at least the early years. In some years. Rivest: Exactly, you'll have a capital conversion expense where you would take a large hit to convert over, your revenues would increase, your assets bases increases and then your annual maintenance or capital replenishment, if you will, would also increase substantially. And your product conversion may be something that happens over a period of two-three years, slightly before or slightly after the standards are in place. Educate consumers and what not. 

### Unknown:
96 Don't even look at the numbers, don't freak out overthat. My analysis is finished I can take the color out. Fromthe first spreadsheet to other spreadsheets, we've added product classes. I'mnot sure what the other changes were. I wouldn't be concerned with what the final numbers are at this point. I didn't even give it a whole lot ofthought. The point ofthis slide is to show you that this is the level ofaggregationthat it would be reported at
- for the industry. Forthe base case and the standards case, for this scenario with decreasing shipments and for the scenario with constant shipments. So you would have four ofthese essentially. And then a qualitative discussion keeping confidentiality opento individual manufacturers explaining variances using tools like saying things like the negative impacts are bornby 90% ofthe negative impacts by two manufacturers or something like that. Types ofthings census does with whenthey have confidentiality Issues. Unknown: Before you take 34 off. 34 is a base case scenario so there are not standards right? Rivest: This was no standard. I don't know 

### ifthis a constant shipments. Unknown:

Rivest: Yes. So whenyouput in a standard aligns a product conversion expense, conversion capital expense, those 

### will go positive in at least the early years. In some years.
Exactly, you'llhave a capital conversion expense where you would take a large hit to convert over, yourrevenues would increase, your assets bases increases and thenyour 

### annual maintenance or capitalreplenishment, 

### ifyou

### will, would also increase substantially, And your product conversion may be something that happens over a period oftwo-three years, slightly before or slightly after the standards are in place. Educate consumers and what not. Unknown:


### 96I wonder if you could briefly explain the bottom rows under the cash flow statement. You

have net cash flow, terminal value and the present value factor, discounted cash flow and then say presumably some sort of net present value. 

### Rivest: What this number does is it totals these numbers here. Unknown: The discounted cash flows? Rivest: Yes, this discounted cash flow, this number is an addition of these numbers. This is just a discount factor to take into account the time value of money between one year to the next. So it's compound interest, if you will, discount factor. The terminal values that I explained a little earlier, isn't a problem here because it's a flat shipments for the situation where I've got my base case coming to 2015, 2018 than to just assume here an annuity is wrong. So, I've got some work in extending to at least 2020. 

### Unknown: I'm still not sure if I understand what you might call these two here, but what industry value and present value is? Rivest: That is the value of the industry which is currently shipping 31.5 million magnetic ballast. Unknown: The value in terms that you're capitalizing your earnings? Or are these in terms of capitalization factors? That's what I don't understand. Rivest: It's the revenue stream, what's left in your pocket at the end of the year in real cash money and after you've sold your product, paid you're suppliers, paid back the interest on your debt and that's what's left here. You're making income from operations 8.7 million



### 97 Rivest: I wonder 

### ifyou could briefly explain the bottomrows under the cash flow statement. You have net cash flow, terminal value and the present value factor, discounted cash flow and then say presumably some sort ofnet present value.

What this number does is it totals these numbers here. Unknown:

Rivest: The discounted cashflows?

Yes, this discounted cash flow, this number is an addition ofthese numbers. This isjust a discount factor to take into account the time value ofmoney between one year to the next. So it's compound interest, 

### ifyou 

### will, discount factor. The terminal values that I explained a little earlier, isn't a problemhere because it's a flat shipments for the situation where I've got my base case coming to 2015, 2018 thantojust assume here an annuity is wrong. So, I've got some workin extending to at least 2020. Unknown:

Rivest: I'm still not sure 

### ifI understand what you might call these two here, 

### but what industry value and present value is?

That is the value ofthe industry which is currently shipping 31.5 million magnetic ballast. Unknown:

Rivest: The value in terms that you're capitalizing your earnings? Or are these interms of capitalization factors? That's what I don't understand.

It's the revenue stream, what's left inyour pocket at the end ofthe year in real cash money and after you've sold your product, paid you're suppliers, paid back the interest on your debt and that's what's left here. You're making income from operations 8.7 million



### 97a year before financing and then you have the series of cash outlays. Which reduces your

net cash flow in the year. This just goes over a 12-year period. It's fairly standardized. Unknown: Is this summing the discounted cash flows for each year and that gives you the industry values? Rivest: Yes. Unknown: So the present value factor the discount rate that you're using, is in this one. 

### Rivest: That's a good point. Let me get to that. We looked at what determines the discount rate for a specific company, their costs of capital, the weighted average cost of capital to really sensitive to the debts/equity ratio. Right now, debt is really cheap. You can issue bonds at 6-7 percent and you get your tax deduction 38-40 percent. Debt is really cheap right now. I looked at manufacturers, I saw manufacturers at over 80% debt and I saw manufacturers at 80% equity. That meant that their weighted average cost of capital varies from four point something to eight - nine. In this case I think I used an industry index that published by one of the financial firms like Dunn and Bradstreet. It was 8% or, eight point something. But that would be up to each manufacturer to reflect or do a true cost to capital. Unknown: Is that their cost of capital today with no standards, constant, whatever, whether they take supplying shipments or constant shipments (not audible)? 

### Rivest: Good point. I hadn't thought of that. That's true. If they don't become more highly leveraged, that they are raising too much money then their cost of capital could go up. I should probably have two inputs for cost of capital.


### 98 a year before financing and then youhave the series ofcash outlays. Which reduces your net cash flow inthe year. Thisjust goes over a 12-yearperiod. It's fairly standardized. Unknown:

Rivest: Is this summing the discounted cash flows for eachyear and that gives you the industry values?

Yes. Unknown:

Rivest: So the present value factor the discount rate that you're using, is in this one.

That's a good point. Let me get to that. We looked at what determines the discount rate for a specific company, their costs ofcapital, the weighted average cost ofcapital to really sensitive to the debts/equity ratio. Right now, debt is really cheap. You can issue bonds at 6-7 percent and you get your tax deduction 38-40 percent. Debt is really cheap right
now. I looked at manufacturers, I saw manufacturers at over 80% debt and I saw manufacturers at 80% equity. That meant that their weighted average cost ofcapital varies from four point something to eight

- nine. Inthis case I think I used an industry index that published by one ofthe financial 

### :firms like Dunn and Bradstreet. It was 8% or . eight point something. But that would be upto eachmanufacturer to reflect ordo a true costto capital. Unknown:

Rivest: Isthat their cost ofcapital today with no standards, constant, whatever, whether they take supplying shipments or constant shipments (not audible)?

Good point. I hadn't thought ofthat. That'strue. Ifthey don't become more highly leveraged, that they are raising too muchmoney then their cost ofcapital could go up. I should probably have two inputs for cost ofcapital.
98Unknown:

We're particular that we've thought about is (not audible) anticipate is that when you compare it with or without standard you're going to have the extraordinary capital costs, product conversion costs around the year of change. Maybe in one year or two years or three years (not audible). Those will be extraordinary costs, it will be extraordinary relative to the ongoing capital expenditure perhaps. That would have an enormous effect on the cost of capital for that particular company. Rivest: Did he come in to that? Maybe he can't raise the capital. Unknown: That's precisely the issue, which we believe is the nub of the manufacturing impact analysis. How affordable are these costs going to be and I would just point out that the assumption of (not audible) explain where this number came from to not necessarily realistic for the company that's under going the conversion costs. Rivest: Right at twenty million may be totally unacceptable for one manufacturer but totally acceptable for another. 

### Unknown: It would vary for the manufacturers but we have some manufacturers that are part of a full time national conglomerate and other manufacturers that aren't. Rivest: I think what we will have to is bring this number in terms of the company level to bring this number more in a relative fashion talked about change and return on equity. Change and investment as percentage of existing equity. Brookman: Moving on towards a break here pretty quick. Any additional questions? Unknown:



### 99 Unknown:

Rivest: We're particular that we'vethought about is (not audible) anticipate is that when you compare it with orwithout standard you're going to have the extraordinary capital costs, product conversion costs around the year ofchange. Maybe in one year or two years or three years (not audible). Those 

### will be extraordinary costs, 

### it 

### will be extraordinary relative to the ongoing capital expenditure perhaps. That would have an enormous effect
onthe cost ofcapital for that particular company.

Did he come in to that? Maybe he can't raise the capital. Unknown:

Rivest: That's preciselythe issue, which we believe is the nub ofthe manufacturing impact analysis. How affordable are these costs going to be and I wouldjustpoint out that the assumption of(not audible) explain where this number came from to not necessarily realistic for the company that's under going the conversion costs.
Right at twenty million may be totally unacceptable for one manufacturer but totally acceptable for another. Unknown:

Rivest: It would vary for the manufacturers but we have some manufacturers that are part ofa full time national conglomerate and other manufacturers that aren't.

I think what we 

### will have to is bring this number in terms ofthe company level to bring this number more in a relative fashion talked about change and return onequity. Change and investment as percentage ofexisting equity. Brookman: Moving ontowards a break here pretty quick. Any additional questions? Unknown:


### 99We have one other absolutely critical one, but I'm happy to do it after the break.

Brookman: Howard you've been patient. What's the questions. Wolfman: 

### This type of information, each individual company presuming this information provides it to you indicates that it's not (not audible) information. Will you reserve the right to make a decision based on that point or will you agree a new confidential information not released to the individual company (not audible). Brookman: Would you please repeat the questions Howard? Wolfman: 

### On the information we're just talking about, financial information, each company provides that type of information, states that it is confidential information. Will you agree to hold the company information confidential or do you reserve the right to reveal data and then make some statements? We have no guarantee that you would hold it confidential. Gene: With all the data that's been collected today and (not audible)provided to our contractors (not audible) not available to us and its certainly because it's not available through Freedom of Information Act, as I understand it and we have been working all along with this program. LBNL have been working with the (not audible) code. The reason that information is correct has been provided and if I could (not audible) earlier (not audible) He's going to have a strawman
. He's going to be working with individuals firms (not audible) or he can characterize it, as you have indicated as in a similar matter as how Commerce does it

. So that individual data are not (not audible) what I expect we will have, to submit to, Dan Reicher, the decision maker, will be the same information which will be published, in the technical support guide (not audible) and it's going to be that aggregated data.


### 100 We have one other absolutely critical one, but I'mhappyto do it after the break. Brookman: Howardyou've beenpatient. What's the questions. Wolfman: This type ofinformation, eachindividual company presuming this informationprovides it to you indicates that it'snot (not audible) information. Will youreserve the right to make
a decision based onthat point or

### willyou agree a new confidential information not released to the individual company (not audible). Brookman: Would you please repeat the questions Howard? Wolfman:

Gene: Onthe information we'rejusttalking about, financial information, each company provides that type ofinformation, states that it is confidential information. Will you agree to hold the company information confidential or do youreserve the right to reveal data and then make some statements? We have no guarantee that you would hold it confidential.

With all the datathat's been collected today and (not audible)provided to our contractors (not audible) not available to us and its certainly because it's not available through Freedom ofInformationAct, as I understand it and we have beenworking all along with this program. LBNL have beenworking with the (not audible) code. The reasonthat information is correct 

### has beenprovided and ifl could (not audible) earlier (not audible) He's going to have a strawman. He's going to be working withindividuals 

### firms (not audible) orhe cancharacterize it, as youhave indicated as in a similar matter as how Commerce does it. So that individual data are not (not audible) what I expect we 

### will have, to submit to, DanReicher, the decision maker, 

### willbethe same information which 

### willbe published, in the technical support guide (not audible) and it's going to be that aggregated data.
100Howard:

Let me rephrase the question

. Each one of us furnishes the information to ADL. At what point does that informa tion get aggregated and ADL is the only ones who have the individual company information

. Are they appropriate vehicle for agreeing that that information would be held confidential. Rivest: I have signed confidentiality agreements with manufacturers before and I would do that with each of you. Howard: You would aggregate the data and from that point forward nobody would have an opportunity to see the company data? Rivest: No. Agreed to (not audible). Howard: Then you spoke about Proxy's that could be used for aggregated data. Rivest: I don't even need to have your designer data, profit/cost information

. I really only this sheet which is already one little aggregation lower and that I would aggregate this and the nice thing is everyone falls in the same accounting conventions

. I'm just superimposing 5 or 6 of these collapsing them into one. But then I still need to be able to explain and come up with a good analysis of how some manufacturers are way different from others (not audible). Brookman: Does that answer your question? Howard: Yes, but the answer could have been shorter. Brookman:

1 

### 0 1 Howard:

Rivest: Let me rephrase the question. Each one ofus furnishes the informationto ADL. At what point does that information get aggregated and ADL is the only ones who have the individual company information. Are they appropriate vehicle for agreeing that that information would be held confidential.

I have signed confidentiality agreements with manufacturers before and I would do that with each ofyou. Howard:

Rivest: You would aggregate the data and from that point forward nobody would have an opportunityto see the company data?

No. Agreed to (not audible). Howard:

Rivest: Thenyou spoke about Proxy'sthat could be used for aggregated data.

I don't even need to have your designer data, profit/cost information. I really onlythis sheet which is already one little aggregation lower and that I would aggregate this and the nice thing is everyone falls in the same accounting conventions. I'mjust superimposing 5
or 6 ofthese collapsing theminto one. But then I still need to be able to explain and come up with a good analysis ofhow some manufacturers are way different from others (not audible). Brookman: Doesthat answer your question? Howard: Yes, butthe answer could have been shorter. Brookman:
101Everybody's been real patient about the break. We've covered a lot of ground here. Let's

take a break at this point. It's now almost 3:30. Let's start at 3:40. Thank you very much. We're doing great here. 

### Brookman: Bob raised an issue, I can't tell which one. Bob do you want to raise the issue that you were kind enough to defer until after the break? Wisbey: The questions that I wanted to ask has to do with the whole issue of the confidentiality data because obviously in order to comply with the data requests we will have to supply data that most of us are very concerned about the kind of confidential data, we normally, confidential financial data that we normally don't supply at all. The review of the manufacturer impacts that the department in the end as my understanding is the valuation is look at whether or not they're unacceptable impacts on individual manufacturers. The answer that was given to Howard's question was that by the time the department received the data it would be totally aggregated for the industry to become very confused how the department analyzed the impacts since the impacts as I understand it are primarily intended to be on individual manufacturers. 

### McCabe: (Not audible)look at it in tag team managers with the two of us, but as far as the data that would be collected and reported from the industry status quo is aggregated so that they would not be anything manufacturers(not audible) individual firm impacts at this point is hard to describe that because we don't, haven't seen it, we don't know what they 're going to be. Looking at the individual data will start to characterize it in a way the (not audible). There will be ways that you take that data, that if there were two firms that were going to be impacted more significantly than anyone else in the industry. To be able to talk about that impact in a general fashion that gets the sense of the impact request with the sensitive information.

102 Everybody's beenreal patient about the break. We've covered a lot ofground here. Let's take a break at this point. It's now almost 3:30. Let's start at 3:40. Thank you very much. We're doing great here. Brookman: Bobraised an issue, I can't tell which one. Bob do you want to raise the issue that you
were kind enoughto defer until afterthe break? Wisbey: The questions that I wanted to ask has to do withthe whole issue ofthe confidentiality databecause obviously in order to comply withthe datarequests we 

### will have to supply data that most ofus are very concerned about the kind ofconfidential data, we normally, confidential financial datathat we normally don't supply at all. The review ofthe manufacturer impacts that the department in the end as my understanding is the valuation is look at whether or not they're unacceptable impacts onindividual manufacturers. The
answer that was given to Howard's question was that by the time the department received the data it would be totally aggregated for the industryto become very confused howthe department analyzed the impacts since the impacts as I understand it are primarily intended to be onindividual manufacturers. McCabe: (Not audible)look at it intagteammanagers withthe two ofus, but as far as the data that would be collected and reported from the industry status quo is aggregated so that they would not be anything manufacturers(not audible) individual 

### firm impacts at this point is hard to describe that because we don't, haven't seen it, we don't know what they're going to be. Looking at the individual data

### will start to characterize it in a waythe (not audible). There 

### will be ways that you take that data, that 

### ifthere were two 

### firms that were going to be impacted more significantly than anyone else inthe industry. To be able to talk about that impact in a general fashion that gets the sense ofthe impact request withthe sensitive information.
102Rivest: I think its going to be an interactive process whereby I will, first of all, I can make up

some dummy numbers and show you how I might report them . One way would be for example to talk about number of manufacturers positively impacted and number negatively impacted

. The range of impacts in terms of absolute dollars or in terms of loss of percentage return on equity for example
. A range is loss in total asset base, something like that

. I think from the departments side the more we can publish the better
. So really it's going to be sitting with all ofyou and seeing what you're comfortable with. We'll have creative in how we report it. That's our job, but we'll also go back and forth with you and say, "ok this is the level we're comfortable with or we're willing to go further." I think I understand the dynamics that there are many manufacturers who make magnetic ballast's and two that don't. I can guess where things are going to fall out. Some are bigger than others
. I think in the next few weeks as we talk we'll have to come up with some Strawman exhibits of results is what we should do. I think the aggregate cash flow is going to tell us something as well. 

### McCabe: Mike you could also, I would encourage individual firms to do their own GRIM analysis and instead of reporting the cash flow, talk about the standard at a particular level will result in our cash flow changing in this direction
. We'll just take the results and characterize them in a meaningful fashion without reviewing the information itself. Rivest: You mean it would go on the record to say that they're are negatively impacted? Brookman: A few very brief housekeeping items, before we move on to the rest of the agenda for the afternoon. First and foremost, if Virginia Allen is here, it is requested that you call your office and do it quickly. Anybody, who knows if she's here, we need to find her it says urgent on this. Also, Sandy and Brenda have additional copies of the diskettes for the


### 103 Rivest: I think its going to be an interactive process wherebyI 

### will, first ofall, I can make up
some dummy numbers and show you howI might report them. One way would be for example to talk about number ofmanufacturers positively impacted and number negatively impacted. The range ofimpacts in terms ofabsolute dollars or in terms ofloss of percentage return onequity for example. A range is loss in total asset base, something like that. I think from the departments side the more we canpublishthe better. So really it's going to be sitting with all ofyou and seeing what you're comfortable with. We'll have creative in how we report it. That's ourjob, but we'll also go back and forth with you and say, "okthis is the level we're comfortable with or we're willing to go further." I think I understand the dynamics that there are many manufacturers who make magnetic ballast's and two that don't. I can guess where things are going to fall out. Some are bigger than others. I think in the next few weeks as we talk we'llhave to come up with
some Strawman exhibits ofresults is what we should do. I think the aggregate cash flow is going to tell us something as well. McCabe:

Rivest: Mike you could also, I would encourage individual:firms to do their own GRIM analysis and instead ofreporting the cash flow, talk about the standard at a particular level 

### will result in our cashflow changing inthis direction. We'lljusttake the results and characterize themin a meaningful fashion without reviewing the information itself.

Youmean it would go onthe record to say that they're are negatively impacted? Brookman: A few very briefhousekeeping items, before we move onto the rest ofthe agenda for the afternoon. First and foremost, 

### ifVirginia Allen is here, it is requested that you call your office and do it quickly. Anybody, who knows 

### ifshe's here, we need to find her it says urgent onthis. Also, Sandy and Brendahave additional copies ofthe diskettes for the
103

### NES spreadsheet for those who didn't obtain a copy they are now available over there at

the registration table
. And Barbara has an announcement to make about using Excel. Barbara Atkinson: Simply we've tried to make the spreadsheet compatible with various versions of Excel and if you have a problem, the best thing would be, is to contact Peter Chan whose phone number 510

-486-6510. Unknown: What version of Excel? Atkinson: We use Windows 95 7.0 version apparently the newer version works with windows 97 as well. Perlis: For any questions you got a telephone number or you can call Sandy or Brenda and they will get you the telephone number you need. McCabe: Any other housekeeping items before we proceed? 

### Perlis: Bob asked a procedural question how the department(not audible) work together to evaluate (not audible). I wonder if you could address the substance that will be (not audible). How is the department going to decide what is or is not (not audible) cash flow. One obvious question are you going to emphasize the difference in the whole industry at present values before and after standards to see whether or not that's positive or negative? Is that going to be where the focus is? Is it going to be one how acceptable a one-time extraordinary conversion price will be relative to non-relative normal cash flow (not audible)? How are we going to decide whether or not obvious (not audible) impact are severe or not? McCabe:

104 NBS spreadsheet for those who didn't obtain a copy they are now available over there at the registration table. And Barbarahas an announcement to make about using Excel. Barbara Atkinson: Simply we've tried to make the spreadsheet compatible withvarious versions ofExcel and 

### ifyou have a problem, the best thing would be, is to contact Peter Chanwhose phone number 510-486-6510. Unknown: What version ofExcel? Atkinson:

Pedis: We use Windows 957.0 version apparently the newer version works with windows 97 as well.

For any questions you got a telephone number oryou can call Sandy orBrenda and they 

### will get you the telephone number you need. McCabe:

Pedis: Any otherhousekeeping items before we proceed?

Bob asked a procedural questionhowthe department(not audible) work together to evaluate (not audible). I wonder 

### ifyou could address the substance that 

### will be (not audible). How is the department going to decide what is or is not (not audible) cash flow. One obvious question are you going to emphasize the difference inthe whole industry at present values before and after standards to see whether ornot that's positive or negative? Is that going to be where the focus is? Is it going to be one how acceptable a one-time extraordinary conversionprice 

### willbe relative to non-relative normal cash flow (not audible)? How are we going to decide whether ornot obvious (not audible) impact are
severe ornot? McCabe:
104Mark, I can't answer the questions because I don't know. I don't know what the decision

(not audible) how their going to weigh? Because the energy savings that are anticipated, will be weighed against change in jobs, weighed against environmental impact. What those results look like and the individuals who are going to be making the decision will all come into play and how they, Dan Reicher for example, how he's going to go through this process (not audible). (Not audible) information present it to them, we will explain what we consider to be significant, why we consider it to be significant but if history will run its course. We've done this in the past with other rulemaking. Decision-makers will based 

### on your own background experiences and what have you, we'll go back and present additional detailed information (not audible). Everyone has been different. Different factors in the (not audible). I think the one thing that's going to be arguably different, (not audible), is ballast and other product (not audible) impact (not audible) very significant one time conversion cost dependent to the (not audible) products, the fact that the facility or (not audible). I'm not aware that that's come up in prices (not audible). Unknown: I didn't ask the question to ask how Dan Reicher would even use, to put manufacturer impact into a larger context of the ruling. I'm just hoping to focus a little bit (not audible) on how one evaluates the manufacture impacts by itself. Whether to it's significant or not. Things we talked about among ourselves, we don't have well-developed news on this or going to, one thing is we have this present value. We might (not audible) focus on the change present value that instead is considered (not audible) such as what would be extraordinary cost and how they stack up relative to income. What does a company do when it suffers a loss for a year or two? (Not audible) recovers it over 15 years (not audible) product that they go into to try. How do we begin to, what are we going to compare our (not audible) to determine whether or not it's a significant impact or not. (Not audible). And I think that it is certainly an area where Mike (not audible). Just focusing on the spreadsheet, while very useful, tends to obscure what may turn out to be


### 105 Mark, I can't answer the questions because I don't know. I don't know what the decision (not audible) howtheir going to weigh? Because the energy savings that are anticipated, 

### will be weighed against change injobs, weighed against environmental impact. What those results look like and the individuals who are going to be making the decision 

### will all
come into play and howthey, DanReicher for example, how he's going to go throughthis process (not audible). (Not audible) informationpresent it to them, we 

### will explain what
we consider to be significant, why we consider it to be significant but ifhistory

### will run its
course. We've done this in the past with otherrulemaking. Decision-makers will based

onyour ownbackground experiences and what have you, we'll go back and present additional detailed information (not audible). Everyone has been different. Different factors in the (not audible). I think the one thing that's going to be arguably different, (not audible), is ballast and otherproduct (not audible) impact (not audible) very significant
one time conversion cost dependent to the (not audible) products, the fact that the facility
or (not audible). I'mnot aware that that's come up in prices (not audible). Unknown: I didn't ask the questionto ask how DanReicher would evenuse, to put manufacturer impact into a larger context ofthe ruling. I'mjust hoping to focus a little bit (not audible)
onhow one evaluates the manufacture impacts byitself. Whether to it's significant ornot. Things we talked about among ourselves, we don't have well-developed news onthis or going to, one thing is we have this present value. We might (not audible) focus onthe change present value that instead is considered (not audible) such as what would be extraordinary cost and howthey stack up relative to income. What does a company do when it suffers a loss for a year ortwo? (Not audible) recovers it over 15 years (not audible) product that they go into to try. How do we beginto, what are we going to compare our (not audible) to determine whether or not it's a significant impact or not. (Not audible). And I think that it is certainly an areawhere Mike (not audible). Just focusing onthe spreadsheet, while very useful, tends to obscure what may turn out to be
105the most important factor ofall which is looking at these one-time cost and figuring out

how you compare those to the 15 year recovery of the cost (not audible) ballast's. Unknown: Can you offer? I'm just going to spend a few minutes because we 're running behind schedule just to make you familiar with the interface with the spreadsheet and we've already looked at most of the pages already. We'll go down the tabs are on the bottom. Major assumptions, that's (not audible) basic financial information
. Can you go down a little bit here? Rivest: 

### One very, very critical variable that I'll need more input on here is what is the size of that investment necessary to change production from magnetic to electronic.

Unknown: This is one critical input and Mike; can you go down this tab and go to cash flow? What we have been seeing in the photocopies that you have is that there is some samples, no, go to the exhibits, the graphs, there. Rivest: For example, this reports the cash flow investment relative to the net cash flow in normal years. You see the impact of the standard would be an enormous large cash drain. Eventually, like you said, over 15 years, you get it all back. So the end (not audible) may not reflect that, that well because it does to an extent, discounts these. But certainly what's different from the GRIM from the old model is that that old model that's all you have, is change in return on equity. Here you do see these temporal changes and that's something you have to focus your analysis on when you sit down with the manufacturer, you say, ok where are you going to raise your capital from? 

### Adams:This is the last page of the mock (not audible) of the GRIM handout?


### 106 the most important factor of

### all which is looking at these one-time cost and figuring out howyou compare those to the 15 year recovery ofthe cost (not audible) ballast's. Unknown:

Rivest: Canyou offer? I'mjust going to spend a few minutes because we're running behind schedulejustto make you familiar withthe interface withthe spreadsheet and we've already looked at most ofthepages already. We'll go downthe tabs are onthe bottom. Major assumptions, that's (not audible) basic financial information. Canyou go down a little bit here?

One very, very critical variable that I'llneed more input onhere is what is the size ofthat investment necessary to change productionfrom magnetic to electronic.

Unknown:

Rivest: This is one critical input and Mike; canyou go downthis tab and go to cash flow? What
we have been seeing in thephotocopiesthat you have is that there is some samples, no, go to the exhibits, the graphs, there.

For example, this reports the cashflow investment relative to the net cash flow in normal years. You see the impact ofthe standard would be anenormous large cash drain. Eventually, like you said, over 15 years, you get it all back. So the end (not audible) may not reflect that, that wellbecause it does ,to an extent, discounts these. But certainly what's different from the GRIM from the old model is that that old modelthat's 

### all you have, is change in return onequity. Here you do see these temporal changes and that's something you have to focus your analysis onwhenyou sit down withthe manufacturer, you say, okwhere are you going to raise your capital from? Adams:This is the last page ofthe mock (not audible) ofthe GRIM handout?
106Rivest: 

### Yes. We just don't have the (not audible)

Adams:The last page of the package is titled GRIM. Rivest: 

### Right. Unknown: (Not audible) Rivest: The critical question is well, the government is imposing a cost of 150-700 million, thousands, whatever. The base million, 157 million dollars. Which is, I give you an example, is a hundred time, not a hundred times, but 20 times the ordinary capital (not audible) some huge percent that's relative to your normal income similar to 20 times your net income. 

### Unknown: How does anybody evaluate the (not audible)? Unknown: The Chairman of the Board, what was the shareholders, what's Wall Street going to say? Rivest: 

### I guess we'd like to engage in a dialogue to think about what we're going to do with that number, because that's the critical, that is a very, very critical number and I don't think it"s one that you had to evaluate quite so distinctly as part of the (not audible). Unknown: Final rules for laundry products in 1991, you analyzed the potential efficiency levels (not audible) presented to the decision makers (not audible) where we see some unusual factors outside of the ordinary that we will in the past have presented (not audible) so that certainly a range of information that's typically presented energy savings, impact on the

107 Rivest: Yes. Wejust don't have the (not audible) Adams:The last page ofthe package is titled GRIM. Rivest: Right. Unknown:

Rivest: (Not audible)

The critical question is well, the government is imposing a cost of 150-700 million, thousands, whatever. The base million, 157 million dollars. Which is, I give you an example, is a hundred time, not a hundred times, but 20 times the ordinary capital (not audible) some huge percent that'srelative to your normal income similar to 20 times your net income. Unknown: How does anybody evaluate the (not audible)? Unknown:

Rivest: The Chairman ofthe Board, what wasthe shareholders, what's Wall Street going to say?

I guess we'd like to engage in a dialogue to think about what we're going to do withthat number, because that'sthe critical, that is a very, very critical number and I don't think it's
one that youhadto evaluate quite so distinctly as part ofthe (not audible). Unknown: Final rules for laundry products in 1991, you analyzed the potential efficiency levels (not audible) presentedto the decision makers (not audible) where we see some unusual factors outside ofthe ordinarythat we 

### will inthe past have presented (not audible) so that certainly a range ofinformationthat's typically presented energy savings, impact onthe


### 107environment so the aggregate numbers (not audible). Each standard level for the most

part shows a lot of incremental impacts (not audible) those incremental impacts, the investment structure of (not audible) energy savings (not audible) larger impacts are going to be significantly larger. What I've always found to be particularly noteworthy for discussion has been where the slope changes and you take that's a point of particular note because you have a change. That change is on a slope or some other significant impact is subject of scenario that we have in the past (not audible) to focus on. Rivest: That's certainly the one (not audible) is that is an excellent questions and should be on the questionnaire and I don't even know if it is right now. I would first draft questionnaire and the answer I'm sure, is going to be different from Motorola than it will be from Robertson. Motorola is huge, that's probably not a problem they issue bonds actually shares, they'll just have to issue more shares and they'll have no problem to come into the market. Different issue with MagneTek maybe and with Robertson. So I think that that's certainly something that will be (not audible) specific. 

### Unknown: I think Motorola; (not audible) you don't see any spike at all because as you mentioned they make electronics so we'd actually see a spike going in the other direction. Unknown: They would also have to fork out the cash. Unknown: 

### But their capacity is 100% electronic. So you build electronic standard into effect but can't say that they haven't made additional capital investments to take into account the standards that they only make ballast now which meets ... Unknown: But they're going to provide a cash flow which has zero revenues for magnetic and they'll have positive cash flow for electronic.


### 108 Rivest: environment so the aggregate numbers (not audible). Each standard level for the most part shows a lot ofincremental impacts (not audible) those incremental impacts, the investment structure of(not audible) energy savings (not audible) larger impacts are going to be significantly larger. What I've always found to be particularly noteworthy for discussionhas beenwhere the slope changes and youtake that's a point ofparticular note
- because you have a change. That change is on a slope or some other significant impact is subject ofscenario that we have inthe past (not audible) to focus on.

That's certainlythe one (not audible) is that is an excellent questions and should be onthe questionnaire and I don't evenknow 

### ifit is right now. I would first draft questionnaire and the answer I'm sure, is going to be different from Motorolathan it 

### will be from Robertson. Motorola is huge,**~hat's** probably not a problemthey issue bonds actually shares, they'lljust have to issue more shares and they'll have no problemto come into the market. Different issue withMagneTekmaybe and withRobertson. So I thinkthat that's certainly something that 

### will be (not audible) specific. Unknown: I think Motorola; (not audible) you don't see any spike at all because as you mentioned they make electronics so we'd actually see a spike going in the other direction. Unknown: They would also have to fork outthe cash. Unknown: Buttheir capacity is 100% electronic. So you build electronic standard into effect but can't saythat theyhaven't made additional capital investments to take into account the standards that they only make ballast now which meets
... Unknown: Butthey're going to provide a cashflow which has zero revenues for magnetic and they'll have positive cash flow for electronic.
108Unknown:

(Not audible) Unknown: 

### As a dog in this fight, (not audible) Wolfinan: I think any company, I don't care how big they are, will come down to individual business risks and they have to justify anything they are going to spend on an individual business risks. We would have to look at the growth and expansion in capacity on an individual business unit basis and (not audible) certainly justify the fact that we need to invest in more facilities, more capital because even if we maintain the same market share, if it's a larger market we need more facilities to make the product. We would have to spend some money, yes. But we don't' have deep pockets that are over flowing with cash. This business decision like any other decision is growth market. Any one of us who put in additional capacity over the last 5 years has had to make those decisions. 

### Treado:But hopefully it's Motorola's decision. It's not your bankers' decision. Because that may be the situation that some people who would love to get in the market but they just don't have the money and you don't have the borrowing capacity because they are already leveraged. 

### Divest: That's how they choose to run their business? Treado:(Not audible) in the case of Motorola as an example. In one case investment that you make because you have a product that you have been making is now off (not audible) you want to make product which can be, which meets the standards. First is, in Motorola's case where they actually wouldn't have to do anything, they could just keep doing what



### 109 Unknown: (Not audible) Unknown: As a dog inthis fight, (not audible) Wolfman: I think any company, I don't care how big they are, 

### will come downto individual business risks and they have tojustify anything they are going to spend on anindividual business risks. We would have to look at the growth and expansion in capacity on an individual business unit basis and (not audible) certainlyjustifythe fact that we need to invest in
more facilities, more capital because even 

### ifwe maintain the same market share, 

### ifit's a larger market we need more facilities to make the product. We would have to spend some money, yes. But we don't' have deep pockets that are over flowing with cash. This business decision like any other decision is growthmarket. Anyone ofus who put in additional capacity overthe last 5 years has had to make those decisions. Treado:

Rivest: But hopefully it's Motorola's decision. It's notyourbankers' decision. Because that may be the situationthat some people who would love to get inthe market but theyjust don't have the money andyou don't have the borrowing capacity because they are already leveraged.

That'showthey choose to runtheir business? Treado: (Not audible) in the case ofMotorola as an example. Inone case investment that you make because youhave a product that youhave beenmaking is now off(not audible) you want to make product which canbe, which meets the standards. First is, inMotorola's
case where they actually wouldn't have to do anything, they couldjust keep doing what

109

### they are doing now. What they choose to try to meet the higher demand, is that

considered ........ Unknown: It's an investment to me. I have two, thirty million dollars..... Beebee:A negative impact on a company like that....... Rivest: They may say that it's a positive and if they choose to answer the market they make view this as a positive development because they are losing nothing and they're gaining, let's say they have 25% market share of the electronic ballast's market. Today that is zero, the magnetic. So if they maintain their marketshare of electronic they are going to have build up capacity and may make money on that. Hagen: That may not be considered actually negative thing as, negative impact for them although it is obviously an investment (not audible) just curious how you were able to distinguish between those two classes of investments or if that (not audible). Rivest: I don't think that's important. Beebee:I just wanted to bring up the point, I think what's not being mentioned is that in the case of the existing manufacturers, you're talking about writing off unamortized investments. As opposed to investing in new opportunity. Rivest: Or to stated another way, they way this is captured, you have assets there already generating cash and its being cut off. So you're 100 million dollars in assets are written to zero and you're having to build up capacity for the full 400. You're losing the cash flow you had and then you're getting a new cash flow whereas at Motorola which is the. They


### 110 they are doing now. What they choose to tryto meet the higher demand, is that considered

........ Unknown: It's an investment to me. 

### I have two, thirty million dollars

..... Beebee:

Rivest:

Hagen:

Rivest: A negative impact on a company like that..

..... They may say that it's a positive and 

### ifthey choose to answer the market they make view this as a positive development because they are losing nothing and they're gaining, let's say they have 

### 25% market share ofthe electronic ballast's market. Todaythat is zero, the magnetic. So 

### ifthey maintain their marketshare ofelectronic they are going to have build up capacity and may make money onthat.

That may not be considered actually negative thing as, negative impact for them although it is obviously an investment (not audible)just curious howyou were able to distinguish betweenthose two classes ofinvestments or 

### ifthat (not audible).

I don't think that's important. Beebee:

Rivest: Ijust wanted to bring up the point, I think what's not being mentioned is that in the case ofthe existing manufacturers,**you~re** talking about writing offunamortized investments. As opposed to investing in new opportunity.

Orto stated another way, they waythis is captured, you have assets there already generating cash and its being cut off. So you're 100 million dollars in assets are writtento
zero and you're having to build up capacity for the full 400. You're losing the cash flow you had and thenyou're getting a new cash flow whereas at Motorola which is the. They
110start from zero, they don't' start from plus 7 million dollars

. I just want to take a second

and show you the link to the next spreadsheet. There' s one tab that's called mass shipments. What this does right now since its configured as an industry cash flow it just takes the shipments right out of the net spreadsheet and it places shipment values for the whole industry. So you open up both spreadsheets and you can go change your scenario for shipments and just change the first one to 100% by 2012. Return to the other spreadsheet and then we've just made the two spreadsheets correspond so that the National Energy Savings are calculating on the same basis as the manufacturing impacts you've calculated
. Go to the input space case

. This is just a spreadsheet that's used to input this aggregated price cost information and shipments information. Since these values for example are the unit sales

. All these values here are placeholders individual manufacturers can just go overwrite

. I think right now if you write a value in the year 1998 it just replicates down, but you can go change all your values for your own situation. You could do it simply by just assuming, multiplying the market by marketshares before standards and after standards on the left and on the right, whatever you choose to do. The input standard case is just the shipment information counted from the (not audible ) for the standards case. Right now it's the same price information , this aggregate same (not audible). Then everything is base case, if you could go to the next tab. This is just the aggregation of the all the product classes for the base case

. What's the value on this one? 100 million? I'm just kidding, no, no don't bother. I'd rather not in fact. And then the standards case
. Here we've put in just a dummy value, a placeholder value for the necessary investments
. I think I put 50 cents per electronic ballast's but that would be 50 cents times the number of years. So that could be as much as $5-$7 or something like that. Then I've got a capital conversion expenditures coming in based on whatever shipments were that are converted over to electronic in the year the standards comes into effect. From my experience it takes playing around with this for at least 4 hours to find out all the faulty assumptions.

111 start from zero, they don't' start from plus 7 million dollars. Ijust want to take a second and showyou the 

### link to the next spreadsheet. There's one tabthat's called mass shipments. What this does right now since its configured as an industry cash flow itjust takes the shipments right out ofthe net spreadsheet and it places shipment values for the whole industry. So you openup both spreadsheets and you can go change your scenario for shipments andjust change the first one to 100% by 2012. Returnto the other spreadsheet and thenwe'vejust made the two spreadsheets correspond so that the National Energy Savings are calculating onthe same basis as the manufacturing impacts you've calculated. Go to the input space case. This isjust a spreadsheet that's used to input this aggregated price cost information and shipments information. Since these values for example are the unit sales. All these values here are placeholders individual manufacturers canjust go overwrite. I think right now 

### ifyou write a value in the year 1998 itjust replicates down, but you can go change all your values for your own situation. You could do it simply byjust assuming, multiplying the market by marketshares before standards and after standards onthe left and onthe right, whatever you choose to do. The input standard case isjustthe shipment information counted from the (not audible) for the standards case. Right now it'sthe same price information, this aggregate same (not audible). Then everything is base case, 

### ifyou could go to the next tab. This isjustthe aggregation ofthe all the product classes for the base case. What'sthe value onthis one? 100 million? I'mjust kidding, no, no don't bother. I'd rather not in fact. And thenthe standards case. Here we've put injust a dummy value, a placeholder value for the necessary investments. I think I put 50 cents per electronic ballast's but that would be 50 cents times the number ofyears. So that couldbe as much as $5-$7 or something like that. Then I've got a capital conversion expenditures coming in based onwhatever shipments were that are converted over to electronic in the year the standards comes into effect. Frommy experience it takes playing around withthis for at least 4 hours to find out all the faulty assumptions.
111Hagen: 

### You have a couple of Excel spreadsheets and obviously they are going to go through

future revisions. Is it possible to put those up on the Web so we can have (not audible)? Rivest: Yes. Especially that this version is working off an earlier version of the net spreadsheet when they are both updated we'll have them on the Web. I think we could do that within a week or two. And then the outputs are shown graphically for various things. If you could just move down. That's the cash flow, the NPV before and after standards for the whole industry. Just showing the income (not audible). The big assumption now is that the product classes are all electronic T4, T12's and the information that we have on prices, the prices are quite high compared to T8's. That's why you see a large increase in income. Less of more expensive ballasts are being sold. That's the last one is your net income. Your shipments. You see the quality of shipments decrease, price, and the average price of ballasts. And the investments so they are the mirror image of cash flow. They will be ready in a couple of weeks, they'll be up on the Web and you'll need some playing around with. My plan is within the next six weeks to be working with all of you and getting better placeholder values. Maybe changing some parameters, changing some of the input function if we need to, to make things a little, there's always a trade off here between trying to think of everything that could possibly happen in advance and making it easy to input but then you might lose some flexibility. We can work on that in the next few weeks. That's it for that. Unknown: I'd like to caution everybody with pulling spreadsheets off the Web that we do have some up already for other rulemakings which are in progress fot example (not audible). Don't pull that one off by mistake. In addition LBNL will be putting the same ones on their web sit as (not audible)



### 112 Hagen:

Rivest: You have a couple ofExcel spreadsheets and obviouslythey are going to go through future revisions. Is it possible to put those up onthe Web so we canhave (not audible)?

Yes. Especially thatthis version is working offanearlier version ofthe net spreadsheet whenthey are bothupdated we'llhave them onthe Web. I think we could do that within
a week ortwo. Andthenthe outputs are showngraphically for various things. Ifyou couldjust move down. That'sthe cash flow, the NPV before and after standards for the whole industry. Just showing the income (not audible). The big assumption now is that the product classes are all electronic T4, T12's and the informationthat we have on prices, the prices are quite high comparedto TS's. That's whyyou see a large increase in income. Less ofmore expensive ballasts are being sold. That'sthe last one is your net income. Your shipments. You see the quality ofshipments decrease, price, and the average price ofballasts. And the investments so they are the mirror image ofcash flow. They 

### will be ready in a couple ofweeks, they'll be up onthe Web and you'll need some playing around with. Myplan is within the next six weeks to be working with all ofyou and getting betterplaceholder values. Maybe changing some parameters, changing some ofthe input function ifwe need to, to make things a little, there's always a trade offhere betweentrying to think ofeverything that couldpossibly happen in advance and making 

### it easy to input butthenyou might lose some flexibility. We can work onthat inthe next few weeks. That's it for that. Unknown: I'd like to caution everybody withpulling spreadsheets offthe Web that we do have some up already for otherrulemakings which are inprogress

### fot example (not audible). Don't pullthat one offbymistake. In additionLBNL 

### will be putting the same ones ontheir web sit as (not audible)

112Wolfinan:

Most of us I think have our e-mail addresses on our business cards. Can you send out a notice to us and tell us when these spreadsheets are available specifically what they are called so we can then go get them when we get the right (not audible)? Rivest: Sure. I'll set up a group mail. McCabe: The next part of the Agenda was to talk about. Following up on Howard's suggestion that if your e-mail address is not on your business card that you could e-mail DOE for the announcement. Brenda Jones email address is included in the further information contacts column on the announcement. Email her so that she would note that in the data file. Rivest: I have here a subgroup analysis consists of 5 tasks, the individual manufacturers cash flows, estimating the competitive impacts, the employment's impacts, the impacts on manufacturing capacity and finality reporting the subgroup analysis impacts. Seems we've touched on all this by now. We realized after our preliminary interviews that there's no such thing as a pro-typical manufacturer so any cash flow we would differ the industry would not be applicable to individual manufacturers. We plan on meeting with individual manufacturers, even modifying the spreadsheet to some extent if its required for the (not audible) situation. All along we'll try to document any important variances that there might be between our Strawman values and the particular values that we see have manufacturer visits. We haven't talked at all about the competitive impact assessment. We have not met recently with the DoJ certainly not on ballasts. I anticipate that we'll be meeting with DoJ to finalize the energy questionnaire that Quentin will be talking about in a few minutes. And the idea here is that we want DoJ to tell us what their concerns might be. We'll explain the situation to them and we want to make sure that any information


### 113 Wolfman:

Rivest: Most ofus I think have our e-mail addresses onour business cards. Canyou send out a notice to us and tell us whenthese spreadsheets are available specifically what they are called so we canthen go get themwhen we get the right (not audible)?

Sure. I'll set up a group mail. McCabe:

Rivest: The next part ofthe Agenda was to talk about. Following up onHoward's suggestion that ifyour e-mail address is not onyour business cardthat you could e-mail DOE for the announcement. BrendaJones email address is included in the further information contacts column onthe announcement. Emailher so that she would note that in the data file.

I have here a subgroup analysis consists of5 tasks, the individual manufacturers cash flows, estimating the competitive impacts, the employment's impacts, the impacts on manufacturing capacity and finality reporting the subgroup analysis impacts. Seems we've touched on all this by now. We realized after our preliminary interviews that there's no suchthing as a pro-typical manufacturer so any cashflow we would differ the industry would not be applicable to individual manufacturers. We plan on meeting withindividual manufacturers, even modifying the spreadsheet to some extent ifitsrequired for the (not audible) situation. All along we'lltryto document any important variances thatthere might be between our Strawmanvalues and the particular values that we see have manufacturer visits. We haven't talked at all about the competitive impact assessment. We have not met recently withthe DoJcertainlynot onballasts. I anticipate that we'llbe meeting withDoJto finalize the energy questionnaire that Quentin 

### willbe talking about in
a few minutes. Andthe ideahere is that we want DoJto tell us what their concerns might be. We'll explainthe situationto them and we want to make sure that any information
113they need we will be able to gather for them to make their job easier and for our analysis

to be better. Reading out their own horizontal merger guidelines, their concerns are addressed mostly to smaller significant manufacturers. They'll be involved in drafting of any questions that is relevant to their analysis section and all along they'll be concerned about asymmetrical cost increases to some manufacturers, increased proportions to fixed costs potentially increasing business risk such as some of your issues. One thing we have not talked about, market entry and market exit. This is not necessarily in the context of the DoJ analysis, but there's always the possibility that a large new market with a track new entrance and that certainly the way we've talked so far would not be factored into the cash flow. We would need to have a qualitative discussion of what might be the impact of a new entrant on the existing players. For employment impacts, we plan on gathering employment levels at existing plants particularly those that serve that US market existing data and manufacturing abuse will be used to estimate employment level differences between the different standard levels. Interviews will be used to establish differences in work force skills under different levels of energy of efficiency standards. At DoE interviews, manufacturers will establish likely impact of new efficiency standards on the product mix and employment levels. One thing we really need to improve I think in the Strawman is understanding what the levels of investments to convert over those 30 million ballast's that's going to be and the extent to which any equipment, though I have my own doubts about that, can be reused and also try to understand some of the more.structural changes that may happen on product mix and how although we're only tracking those immediate ballasts that are being impacted, there may be some other effects on product mix or secondary effect. One thing we found about it is what happens if there's suddenly this large production capacity available for producing magnetic ballasts. What happens to people who produce residential ballasts? What would be the impact there if that market becomes more competitive? So that's sort of secondary yet not trivial impact. We put together a very preliminary interview guide. It has as its purpose to do two things really.


### 114 theyneed we 

### will be able to gather for themto make theirjob easier and for our analysis to be better. Reading out their ownhorizontal merger guidelines, their concerns are addressed mostly to smaller significant manufacturers. They'll be involved in drafting of any questions that is relevant to their analysis section and all along they'll be concerned about asymmetrical cost increases to some manufacturers, increased proportions to :fixed costspotentially increasing business risk such as some ofyour issues. One thing we have nottalked about, market entry and market exit. This is not necessarily in the context of the DoJanalysis, but there's always the possibility that a large newmarket with a track
newentrance and that certainlythe way we've talked so far would not be factored into the cash flow. We would need to have a qualitative discussion ofwhat might be the impact of
a newentrant onthe existing players. For employment impacts, we plan ongathering employment levels at existing plants particularly those that serve that US market existing data and manufacturing abuse 

### will be used to estimate employment level differences betweenthe different standard levels. Interviews will be used to establish differences in work force skills under different levels ofenergy ofefficiency standards. At DoE interviews, manufacturers 

### will establish likely impact ofnew efficiency standards onthe product 

### mix and employment levels. One thing we really need to improve I think in the Strawman is understanding what the levels ofinvestments to convert over those 30 million ballast's that's going to be and the extent to which any equipment, though I have my own doubts about that, canbe reused and also tryto understand some ofthe more structural changes that mayhappen onproduct 

### mix and how although we're only tracking those immediate ballasts that are being impacted, there maybe some other effects onproduct 

### mix or secondary effect. One thing we found about it is what happens ifthere's suddenly this large production capacity available for producing magnetic ballasts. What happens to people who produce residential ballasts? What would be the impact there ifthat market becomes more competitive? So that's sort ofsecondaryyet not trivial impact. We put together a very preliminary interview guide. It has as its purpose to do two things really,
114To touch on the cash flow analysis and try to understand any variances there are with our

Strawman and also to touch on the other metrics of impact (not audible) impacts on capacity and employment. I've asked Quentin to, not to overlook the questionnaire but quickly go over some of the key issues and we're hoping to continue to developing that questionnaire over the next six weeks as well. So in 6 weeks what we would have is a completed GRIM spreadsheet with our Strawman inputs and an interview guide that will serve us, would be comprehensive and in some cases not applicable to some manufacturers, but everyone will have a chance to look at before we come and do the interviews. 

### Edward Osann: On the review of the transit employment levels, page 39, in those interviews will you be seeking employment levels at US plants or all plants serving US market or all plants worldwide? Rivest: We're tracking those 30 million ballasts and we want to understand where the jobs are that produce them wherever they are. We report them at 3 levels is what I thought I understood from the discussion this morning, or earlier this afternoon. The US, NEFTA and Global. Brookman: Question? Looney: Thank you. I'm looking forward to getting to know some of the manufacturers better and 2) the series of interviews partly because my first job out of grad school was with a large industrial manufacturing company. I was in the central research facility and one of the things I did over my brief time there. I was there about 7 years was to develop some incremental improvements to some of the processes. So I wound up being out in the industrial plants occasionally. I came to marvel and really respectful of people who run

115 To touch onthe cash flow analysis and tryto understand any variances there are with our Strawman and also to touch onthe other metrics ofimpact (not audible) impacts on capacity and employment. I've asked Quentinto, not to overlook the questionnaire but quickly go over some ofthe key issues and we're hoping to continue to developing that questionnaire overthe next six weeks as well. So in 6 weeks what we would have is a completed GRIM spreadsheet with our Strawman inputs and an interview guide that 

### will
serve us, would be comprehensive and in some cases not applicable to some manufacturers, but everyone will have a chance to look at before we come and do the interviews. Edward Osann:

Rivest: Onthe review ofthetransit employment levels, page 39, in those interviews 

### will yoube seeking employment levels at US plants or all plants serving US market or all plants worldwide?

We're tracking those 30million ballasts and we want to understand where thejobs are that produce them wherever they are. We report them at 3 levels is what I thought I understood from the discussion this morning, or earlier this afternoon. The US, NEFT A and Global. Brookman: Question? Looney: Thank you. I'm looking forward to getting to know some ofthe manufacturers better and 2) the series ofinterviews partly because my firstjobout ofgrad school was with a large industrial manufacturing company. I was in the central research facility and one ofthe things I did over my brieftime there. I was there about 7 years was to develop some incremental improvements to some ofthe processes. So I wound up being out in the industrial plants occasionally. I came to marvel and really respectful ofpeople who run
115these industrial plants or even some pieces of them. It takes a real talent to be able to deal

with all the pressures from management and other pressures from labor, all the constraints that people have to deal with and still make a high quality product at a very low cost. I look at this as a learning experience and appreciate the opportunity. Today, I think what we want to do is outline what our basic needs are from the interviews. Distribute the interview guide, which you already have in the manufacturing impact analysis handout. 

### It's certainly a draft, work in progress and over the next six weeks or so we hope that with help from you we can develop a guide that will be useful for all of us. So we do encourage you to contact us with suggestions and improvements that you think would be useful for the interviews. Basically we're looking to cover 7 topic areas. Some of them are related and most of them have been covered to some extent already. The current organizational characteristics of the company. We really want to focus on the plant level, profit center level, look at industry infrastructure and the global nature of the industry today. Basically the situation in which each plant finds itself for those first three items. The cash flow analysis, we've gone over in some detail already and I'll just mention it again briefly. The impact assessments that you see at the end are really the things which have been added to the rulemaking process in this new round and we know that manufacturers have a lot of information to contribute there and we want to go out and solicit it one on one so that we all can come to understand what we're facing. First, the organizational characteristics, once again we're interested in the plant level, profit center level. We're interested in production levels, production mix, costs, the things that go into the cash flow analysis you saw earlier. We're interested in the organizational setting in which the manufacturer finds itself Are you part of a large conglomerate, a minor part? Is ballast manufacturing your primary business that sort of thing? Much of this we know on a superficial basis. We would like to talk over these things one on one just so we can improve on our understanding. DoE is also interested in the infrastructure from two points of view. One, what is the infrastructure that gets your product from the plant to the

116 these industrial plants or even some pieces ofthem. It takes a real talent to be able to deal with all the pressures from management and other pressures from labor, all the constraints that people have to deal with and still make a high quality product at a very low cost. I look at this as a learning experience and appreciate the opportunity. Today, I think what
we want to do is outline what our basic needs are from the interviews. Distribute the interview guide, whichyou already have in the manufacturing impact analysis handout. It's certainly a draft, work in progress and overthe next six weeks or so we hope that with help from you we can develop a guide that 

### willbe useful for all ofus. So we do encourage you to contact us with suggestions and improvements that youthink would be useful for the interviews. Basically we're looking to cover 7 topic areas. Some ofthem
are related and most ofthem have been covered to some extent already. The current organizational characteristics ofthe company. We really want to focus onthe plant level, profit center level, look at industry infrastructure and the global nature ofthe industry today. Basically the situation inwhich eachplant finds itselffor those first three items. The cash flow analysis, we've gone over in some detail already and 

### I'lljust mention it again briefly. The impact assessments that you see at the end are really the things which have been added to the rulemaking process inthis newround and we knowthat manufacturers have a lot ofinformation to contribute there and we want to go out and solicit it one on one so that we 

### all cancome to understand what we're facing. First, the organizational characteristics, once again we're interested in the plant level, profit center level. We're interested in production levels, productionmix, costs, the things that go into the cash flow analysis you saw earlier. We're interested in the organizational setting in which the manufacturer finds itself. Are you part ofa large conglomerate, a minorpart? Is ballast manufacturing your primary business that sort ofthing? Much ofthis we know
ona superficial basis. We would like to talk overthese things one ononejust so we can improve on our understanding. DoE is also interested in the infrastructure from two points ofview. One, what is the infrastructure that gets your product from the plant to the
116market place? We've seen some diagrams earlier today where we're getting a better

understanding of that as time goes on and we would like to get what the path from the plant to the ultimate customer is with respect to each of the manufacturers. The other side of the coin we're also interested in getting your views on your trade ally and supplier side of the infrastructure. We've had some discussion of that already also, but we do want to revisit that and we'll have an opportunity then for each manufacturer to identify for us as major suppliers, trade allies and we would invite you to put us in contact with them or to arrange for some way for us to get input from your supplier side as well. You can stop me at any time if any questions come up. I'm going to go through these fairly quickly. Also, of course, we are interested in getting your take on the global nature of the ballast industry. We've been through that some already today. We know that there's a lot of movement within the industry, there's the possibility of new entrants. If standards go into effect and we would just like to get your views on how your relationship to the global industry might change if new energy efficiency standards were put into effect. Cash flow analysis, we've been through this in some detail. Each manufacturer will have the opportunity and we hope we'll take this to heart to run the GRIM analysis and go over it with us while we're at the plant. This is just not the same example that you've seen earlier, but once again we would hope that each manufacturer would simply run the GRIM analysis, talk with us between now and the time that we come to visit just to get familiar with the extent to which you might have questions and so on so that you are fairly comfortable with the flow sheet once we get to the facility. It's my expectation that Mike will not really need to take the completed flow sheet with him half the time, if you feel that during the course of the discussion there is some adjustments you want to make or some changes that you want to put into effect because of the conversations that we may have had during the day, on the draft flow sheet that you produce before the visit. Also, to reiterate that the information that is supplied to us can be kept confidential. Our objective is to learn the true unbiased situation as much as closely as we can so that we can do our



### 117 market place? We've seen some diagrams earlier today where we're getting a better understanding ofthat as time goes on and we would like to get what the pathfrom the plant to the ultimate customer is withrespect to each ofthe manufacturers. The other side ofthe coin we're also interested in getting your views onyour trade ally and supplier side ofthe infrastructure. We've had some discussion ofthat already also, but we do want to revisit that and we'llhave an opportunity then for each manufacturer to identify for us as major suppliers, trade allies and we would invite you to put us in contact withthem orto arrange for some way for us to get input from your supplier side as well. You can stop
me at any time 

### ifany questions come up. I'mgoing to go throughthese fairly quickly. Also, ofcourse, we are interested in getting your take onthe global nature ofthe ballast industry. We've been throughthat some already today. We knowthat there's a lot of movement within the industry, there's the possibility ofnew entrants. Ifstandards go into effect and we wouldjust like to get your views onhowyour relationship to the global industry might change 

### ifnew energy efficiency standards were put into effect. Cash flow analysis, we've beenthroughthis in some detail. Eachmanufacturer 

### will have the opportunity and we hope we'll take this to heart to run the GRIM analysis and go over it with us while we're at the plant. This isjust not the same example that you've seen earlier, but once again we would hope that eachmanufacturer would simply runthe GRIM analysis, talk with us betweennow and the time that we come to visitjustto get 

### familiar withthe extent to which you might have questions and so on so that you are fairly comfortable withthe flow sheet once we get to the facility. It's my expectationthat Mike 

### will not really need to take the completed flow sheet with 

### him halfthe time, 

### ifyou feel that during the course ofthe discussion there is some adjustments you want to make or some changes that you want to put into effect because ofthe conversations that we may have had during the day, onthe draft flow sheet that you produce before the visit. Also, to reiterate that the information that is supplied to us canbe kept confidential. Our objective is to learn the true unbiased situation as much as closely as we can so that we can do our
117job more effectively. I think that pretty well covers this. The DoJ impact on competition

once again 

### Foley: (Not audible) page 47.

Rivest: 

### All of the data gathering and the confidentiality and we used the word unbiased (not audible) and that's what finally sent me over the edge here. You are gathering data, you maintain confidentiality so in other words, you are not sharing with anybody and it sounds to me with the exception of Arthur D. Little, there is no way of actually coberating that the data the manufacturer is giving you are in any way indicative of what actuality is. ADL has the opportunity to iook into the possibility of testing the data in any way, a degree of confidence, at lean those of us who have no way of even looking at it until you guys have massaged it (not audible) as being reality based. (Not audible). 

### Foley: The only person that could disagree with the data is Arthur D. Little Company. There is no other way anybody else other than you all can test the validity of the data. From that sense we have a real difficulty with that process. The validity or the reasonableness, either one. We have, (not audible) validity (not audible). McCabe: The first part lies the answer is key. The Strawman that he is developing that he feels is (not audible) public sources, DoE will have access to it as well as anybody else and certainly (not audible) for my office. We look at the results compared to the Strawman (not audible). Look to track and understand those differences so that. Mike talks about being comfortable himself and we'll have those two pieces of information. He's going to have to try and convince us and in turn we're going to have convince everybody else that the aren't being consistent. (Not audible).

118 Foley:

Rivest:

Foley: jobmore effectively. I think that prettywell covers this. The DoJimpact on competition
once again
(Not audible) page 47.

All ofthe data gathering and the confidentiality and we used the word unbiased (not audible) and that's what finally sent me overthe edge here. You are gathering data, you maintain confidentiality so in other words, you are not sharing with anybody and it sounds to me withthe exception ofArthur D. Little, there is no way ofactually coberating that the data the manufacturer is giving you are in any way indicative ofwhat actuality is. ADL 

### has the opportunity to iook into the possibility oftesting the data in any way, a degree ofconfidence, at leasi those ofus who have no way ofeven looking at it until you guys have massaged it (not audible) as being reality based. (Not audible).

The only personthat couid disagree withthe datais Arthur D. Little Company. There is
no other way anybody else otherthan you all cantest the validity ofthe data. Fromthat
sense we have a real difficulty ""ith that process. The validity or the reasonableness, either
one. We have (not audible) validity (not audible). McCabe: The first part lies the answer is key. The Strawman that he is developing that he feels is (not audible) public sources, DoE

### willhave access to it as well as anybody else and certainly (not audible) for my office. We look at the results compared to the Strawman (not audible). Lookto track and understand those differences so that. Mike talks about being comfortable himselfand we'llhave those two pieces ofinformation. He's going to have to try and convince us and in turnwe're going to have convince everybody else that the aren't being consistent. (Not audible).
118Looney:

We also want to explore employment impacts as we mentioned before including both direct and secondary employment impacts. And finally, the any stranded costs or changes in the asset use brought about by standards would also be discussed. Anybody have any questions? Once again, we'll be finalizing this over the next six weeks or so and look forward to talking with you some more and I'll ask Mike to come back up and talk about the next step. Rivest: Going full circle to Carl's slide here with the schedule. Our schedule now is to complete the GRIM Strawman and the interview questionnaire by June 11. We're going to have it mailed out to give you sufficient time to begin internally looking at how we might put together a cash flow analysis, start thinking through the answers to some of those interview questions. And initiate the interview process in the month of July. Stein: Comment period? Yes. We're trying to struggle to get our comments in on information we have until now by May 28th. There are two industry meetmgs that take up two weeks in the next four weeks, the only additional information we've gotten and also to sounds like, input substantial information into the Strawman, I think we need at least another month. If we shoot for your 1 lth date would be great unless you are going to get that information out to us by the 11th. We'll make a formal request of... Rivest: I'll need some time after I've received your comments to factor that back into the spreadsheet and the questionnaire, that's a couple weeks there certainly. Unknown: A lot of new information we would like to be able to give you good comments on it, if we can do it by the deadline, suggests that we're not going to be able to do a good job. We'll make a formal request of extension


### 119 Looney:

Rivest:

Stein:

Rivest: We also want to explore employment impacts as we mentioned before including both direct and secondary employment impacts. And finally, the any stranded costs or changes in the asset use brought about by standards would also be discussed. Anybody have any questions? Once again, we'll be finalizing this overthe next six weeks or so and look forward to talking with you some more and I'll ask Mike to corne back up and talk about the next step.
Going 

### full circle to Carl's slide here with the schedule. Our schedule now is to complete the GRIM Strawrnan and the interview questionnaire by June 11. We're going to have it mailed out to give you sufficient time to begin internally looking at how we might put together a cash flow analysis, start thinking throughthe answers to some ofthose interview questions. And initiate the interview process in the month ofJUly.

Comment period?**Ye~.** We're trying to struggle to get our comments in on information
we have until nowbyMay28th

. There are two industry meetmgs that take up two weeks in the next four weeks, the only additional information we've gotten and also to sounds like, input substantial information into the Strawrnan, I 

### think we need at least another month. 

### Ifwe shoot for your 11thdate would be great unless you are going to get that information outto us bythe 11th. We'llmake a formal request of

...

I'llneed some time after I've received your comments to factor that back into the spreadsheet andthe questionnaire, that's a couple weeks there certainly. Unknown: A lot ofnewinformation we would like to be able to give you good comments on it, ifwe
cando it bythe deadline, suggests that we're not going to be able to do a goodjob. We'll make a formal request ofextension


### 119

### Adams:This is another month for what step?

Rivest: Comments on the workshop. Adams:We've gotten a couple of inches of paper and a couple of new programs here that we're going to try to digest and comment on plus we need accurate information on the Strawman in order for that to work proper. We can't possible do it in the time allotted based upon industry commitments that we already have. Most of the people in this room are tied up with other commitments. The inputs to the Strawman are separate from the comments. Rivest: I would expect those comments to involve a lot of interest in Strawman. (Not audible) Stein: We could separate them out; we're going to go through this old mound information to try to give you information back . That's our comment on it and if that 's unacceptable we'll give you as much information as we can, but certainly we won't be able to do Strawman justice by the deadline
. In the next information, which is brand new information, you have to absorb and then comment on it

. It's always been a struggle on the information we got up until today, and now the new information than we have. 

### Adams:I was going to say how impressed I was with how prepared everyone was coming into this meeting

. There was a lot of information (not audible) some of, which is new. We're struggling here to maintain a schedule that we that we're committed to with our manager if we set a 45 day comment period, I'd just as soon leave here today with knowing what the comment period is rather than having to make a request and you can know what it is ahead of time.

120 Adams:This is another month for what step? Rivest: Comments onthe workshop. Adams:

Rivest:

Stein: We've gotten a couple ofinches ofpaper and a couple ofnewprograms here that we're going to try to digest and comment onplus we need accurate information onthe Strawmanin order for that to workproper. We can't possible do it in the time allotted based upon industry commitments that we already have. Most ofthe people in this room
are tied up with other commitments. The inputs to the Strawman are separate from the comments.

I would expect those comments to involve a lot ofinterest in Strawman. (Not audible)

We could separate them out; we're going to go throughthis old mound information to try to give you informationback. That's our comment on it and 

### if that'sunacceptable we'll give you as much information as we can, but certainly we won't be able to do Strawman justice by the deadline. Inthe next information, which is brand new information, you have to absorb and then comment on it. It's always been a struggle onthe information we got up until today, and nowthe new information thanwe have. Adams:I was going to sayhow impressed I was withhowprepared everyone was coming into this meeting. There was a lot ofinformation (not audible) some of, which is new. We're struggling here to maintain a schedule that we that we're committed to with our managelr 

### ifwe set a 45 day comment period, I'djust as soon leave here today with knowing what the comment period is rather thanhaving to make a request and you canknow what it is ahead oftime.


### 120Invest: That's fair enough. We'll shoot for 45 days, that give us essentially the original 4 weeks

to work on it. 

### Adams:(Not audible) I personally was not aware of your two weeks (not audible) reasonable compromise on the time. Rivest: The timing of the interviews, I anticipate the interviews being conducted over a one-month period of time so we're talking about having interviews from mid July to mid August. Is that something that wouldn't be agreeable to your schedules? There's flexibility there within the month. 

### Stein: That was our vacation times for factory. And I assume that you want to go to the factories, so we would have to see how that works. How many companies will you be visiting over that? Rivest: 

### 6 or 7. 6 Stein: I would like to do this in several facilities, not just one facility. It's one of the main factors also. One thing I did comment on before, we are actually suppliers to ourselves. We do make capacitors, we do make wire, so one of the things we'll be able to show you even though you are probably not going to visit some of, or are required to visit us (not audible) facility and extrapolate that kind of information through (not audible) Rivest: So that could be as many as 10 visits perhaps. Stein:



### 121 Rivest: That's fair enough. We'll shoot for 45 days, that give us essentially the original 4 weeks to work onit. Adams:

Rivest:

Stein:

Rivest:

Stein:

Rivest:

Stein: (Not audible) I personally was not aware ofyour two weeks (not audible) reasonable compromise onthe time.

The timing ofthe interviews, I anticipate the interviews being conducted over a one-month period oftime so we're talking about having interviews from mid July to mid August. Is that something that wouldn't be agreeable to your schedules? There's flexibility there within the month.

That was our vacationtimes for factory. And I assume that you want to go to the factories, so we would have to see howthat works. Howmany companies 

### will you be visiting over that?



### 6 or 7. 

### 6

I would like to do this in several facilities, notjust one facility. It's one ofthe main factors also. One thing I did comment onbefore, we are actually suppliers to ourselves. We do make capacitors, we do make wire, so one ofthe things we'll be able to showyou even thoughyou are probably not going to visit some of, or are required to visit us (not audible) facility and extrapolate that kind ofinformation through (not audible)

So that could be as many as 10 visits perhaps.

121Right. I think we would need at least a month from the time (not audible) Strawman

finalized, GRIM model finalized and of course Strawman finalized (not audible) question (not audible) and now we are stepping back into our own companies to try and gather this information which is (not audible) information

. I don't have this

. I know that people can get a lot of information I think to show everyone up here. I don't think we can start the interviews until a month after we get the final documents. Rivest: 

### That would be June 25th to July 25th. So the interviews are essentially in the month of August. Stein: 

### We can try for the month of August to work it in. I think can start looking at scheduling. We can look at the availability of our facilities. I think all of us over the next 45 days maybe we can start to plan scheduling our commitment and your commitment so you can work in schedule that all of the plant would be available to you. Rivest: 

### So this is a couple of weeks and the interviews wouldn't start until August 1 so that it would be one month from these dates here. 

### Adams: (Not audible) do everything you want to do in a month. You're only talking 20 days in a 

### month not 31. Stein: 

### (Not audible) interview time is preparing and traveling, whatever, I think that it's a very tight schedule to gather all that information. We need to prepare, you can determine what you need to do the job. Adams: So we're talking comments due by roughly mid June, which is June the 12th, would be Friday. We're talking about the interviews being roughly the end of June.

122 Rivest:

Stein:

Rivest:

Adams:

Stein: Right. I think we would need at least a month fromthe time (not audible) Strawman finalized, GRIM model :finalized and ofcourse Strawmanfinalized (not audible) question (not audible) and now we are stepping backinto our owncompanies to try and gather this information which is (not audible) information. I don't have this. I knowthat people can get a lot ofinformationI think to show everyone up here. I don't think we can start the interviews until a month after we get the :final documents.

That would 

### be June 25thto July 25th

. So the interviews are essentially inthe month of August.

We cantryfor the month ofAugust to work it in. I think can start looking at scheduling. We canlook at the availability ofour facilities. I think all ofus overthe next 45 days maybe we can startto plan scheduling our commitment andyour commitment so you can work in schedule that all ofthe plant would 

### be available to you.

So this is a couple ofweeks and the interviews wouldn't start until August 1 so that it would 

### be one month from these dates here.
(Not audible) do everything youwant to do in a month. You're onlytalking 20 days in a month not 31.
(Not audible) interviewtime is preparing and traveling, whatever, I think that it's a very tight schedule to gather all that information. We need to prepare, you can determine what you need to do thejob. Adams:So we're talking comments due by roughly mid June, which is June the 12th, would be Friday. We're talking about the interviews being roughly the end ofJune.
122Perlis: 

### So that it's clear, I think we would very officially request that we have the questionnaires

at least one month prior to actually doing the interview because its going to take us that and better to put it into the schedule if the circulation of the questionnaire slips then we are (not audible) need to slip accordingly so that we could (not audible) one month prior to the interviews. Adams:I think that was falling into place. If we slip the questionnaire and the Strawman to June 26 and if we say August 3 would be, that's a civic holiday in Canada by the way, that way we could begin interviews August 3rd. I guess for the time being we'll just let those know that there are dates up there and float accordingly without trying to put specifics dates on this. Stein: 

### What about the timetable that Carl suggested. Wisbey:(Not audible) Mike Stein said (not audible) question I'm going to ask is how many people have participated on the DoE/A.D. Little side trying to get an idea doing all of the interview information overload you are going to experience personally. Trying to do all of those in one month is an incredibly difficult (not audible). Rivest: 

### I'll negotiate that with Carl
. We're going to make that attempt
. He said they were floating. Wisbey:The question that was embedded in that was what size interview team do you expect to bring to visit manufacturers? Rivest: Three people.


### 123 Perlis: So that it's clear, I think we would very officially request that wehave the questionnaires at least one month prior to actually doing the interview because its going to take us that and better to put it into the schedule ifthe circulation ofthe questionnaire slips then we
are (not audible) need to slip accordingly so that we could (not audible) one monthprior to the interviews. Adams:

Stein: I think that was falling into place. Ifwe slip the questionnaire and the Strawman to June 26 and ifwe say August 3 would be, that's a civic holiday in Canada by the way, that way
we could begin interviews August 

### 3rd. I guess for the time being we'lljust let those know that there are dates up there and float accordingly without trying to put specifics dates on this.

What about the timetable that Carl suggested. Wisbey:

Rivest: (Not audible) Mike Stein said (not audible) questionI'mgoing to ask is how many people have participated onthe DoE/A.D. Little side trying to get an idea doing all ofthe interview information overload you are going to experience personally. Trying to do 

### all IOf those in one month is anincredibly difficult (not audible).

I'llnegotiate that with Carl. We're going to make that attempt. He said they were floating. Wisbey:

Rivest: The question that was embedded in that was what size interview teamdo you expect to bring to visit manufacturers?

Three people.
123Wisbey:



### All of them from AD Little? Rivest: All from AD Little, yes. Wisbey:

### You do not anticipate DoE staff. McCabe: I'd like to talk about that. (Not audible). One of the commitments however that we've made the process (not audible) is that DoE is going to be managing this a lot more closely, closer than we have in the past, that we will be going on. Interviews will be meeting with the manufacturers to (not audible) to be educated as well rather than some were concerned with contractors were guiding the process
. This in fact is our process. I do recognize, however, that this information is very sensitive and with entertain discussion how DoE could play a role in it's discussion. They may be not there for all the discussions, but part of the team that comes to the (not audible) to visit. Wolfinan: If we can't separate the discussions, which are confidential, that (not audible) vs discussion which still don't have that same degree of confidentiality, we all can find extra rooms nearby, and we can ask them to step out while we have that discussion
. So I think we can work something out. 

### McCabe: Would this information, we talked about how its going to be presented to DoE management, Carl needs to understand any others (not audible) in order to be fairly represented. I would like to explore how the DoE staff can be part of this. It may be that some of it may not be possible at all or may not be reasonable or we can split it out. But we need (not audible). Stein:


### 124 Wisbey: All ofthemfrom AD Little? Rivest: All from AD Little, yes. Wisbey: You do not anticipate DoE 

### staff. McCabe: I'd like to talk about that. (Not audible). One ofthe commitments however that we've made the process (not audible) is that DoE is going to be managing this a lot more closely, closer than we have in the past, that we 

### will be going on. Interviews 

### will be meeting with the manufacturers to (not audible) to be educated as well rather than some were concerned with contractors were guIding the process. This in fact is ourprocess. I do recognize, however, that this information is very sensitive and with entertain discussion howDoE could playarole in it's discussion. They may be notthere for all the discussions, but part ofthe teamtMt comes to the (not audible) to visit. Wolfi:nan: Ifwe can't separate the discussions, which are confidential, that (not audible) vs discussion which still don't have that same degree ofconfidentiality, we all canfind extra
rooms nearby, and we can ask themto step out while we have that discussion. So I think
we can work something out. McCabe:

Stein: Wouldthis information, we talked about howits going to be presented to DoE management, Carlneeds to understand any others (not audible) in order to be fairly represented. I would like to explore how the DoE staffcan be part ofthis. Itmay be**tha~** some ofit may not be possible at all or may not be reasonable orwe can split it out. But
we need (not audible).

124From our standpoint, in principle except for (not audible) technicality, we have no more

difficulty in being open to DoE staff than with AD Little staff and would welcome the participation. The technicality that's involved there (not audible) has to be dealt with if we do it, is the (not audible) statements of the former rules of DoE's confidentiality have always said that DoE will take information that we present as confidential and in the end make their own judgment as to whether or not it is truly confidential and if in the DoE's judgment is not truly confidential, it becomes part of the public record. Under those circumstances we find providing confidential information virtually impossible. So it's that piece of rule can be clarified such that DoE will respect confidentiality and can it respect confidentiality when (not audible); we have no problem at all with full participation by DoE. 

### McCabe: So if DoE is taking it to extreme (not audible) walk away without notes or written material of any sort, (not audible) information which could be released. That as far as what you Just referred to, the Freedom of Information Act requires us how the public can access information that the department has. Knowledge that is not written down, not accessible
. It is the written documents, written record or other records that is covered by it that goes FOIA requirement. Brookman: What I heard a moment ago was that the industry was willing to entertain how this stuff gets done. And ranging from whether it was necessary for the departmental officials to move to the next group for part of the conversation to negotiating this point of (not audible) searches. So maybe there's a conversation that should be entertained that you could continue looking ahead
. You might need to tailor it to each individual case, is that also? McCabe: The department might also consider that.


### 125 Fromour standpoint, in principle except for (not audible) technicality, we have no more difficulty in being opento DoE staffthan withAD Little staffand would welcome the participation. Thetechnicality that's involved there (not audible) has to be dealt with ifwe do it, is the (not audible) statements ofthe former rules ofDoE's confidentiality have always said that DoE 

### willtake information that we present as confidential and in the end make their ownjudgment asto whether ornot it is truly confidential and ifin the DoE's judgment is not truly confidential, it becomes part ofthe public record. Under those circumstances we find providing confidential information virtually impossible. So it's that piece ofrule canbe clarified suchthat DoE 

### willrespect confidentiality and canit respect confidentiality when (not audible); we have no problem at 

### all with full participation by DoE. McCabe: So ifDoE is taking it to extreme (not audible) walk away without notes or written material ofany sort, (not audible) information which could be released. That as far as what youjust referred to, the Freedom of InformationAct requires us howthe public can
access informationthat the department has. Knowledge that is not written down, not accessible. It is the written documents, writtenrecord or other records that is covered 

### by it that goes FOIArequirement. Brookman: What I heard a moment ago was that the industry was willing to entertain howthis stuff gets done. And ranging from whether it was necessary for the departmental officials to
move to the next group for part ofthe conversation to negotiating this point of(not audible) searches. So maybe there's a conversationthat should be entertained that you could continue looking ahead. Youmight need to tailor it to eachindividual case, is that also? McCabe: The department might also consider that.
125

### Brookman:

Additional items comments on the subject area? Martin: I have struggled with this (not audible) clearly the possibility of somebody demanding information that is not written down is hard to imagine. Very difficult to access written information unless you know exactly what it is. Then to figure out where you get it from. (Not audible). It is a concern that I don't think we need to have as long as they don't take notes or photographs Franco:I think that probably a few problems are (not audible) regulation. One is the FOIA problem and that is probably more easily addressed because it is (not audible) discovery (not audible) and then there's the secondary problem with the department's own regulation or in terms of confidentiality. I haven't looked at these in a while, unfortunately I'm sure Gene would know if he were in the room, but the bottom line is that sometimes when you make (not audible) then you want certain parts to be kept confidential then you have make requests to the Secretary (not audible). That part of it (not audible) during the interview that that information would get into the department without an ability to make a confidentiality claim and have it ruled upon. It's probably more a sticking point than the FOIA issue. But I would suggest some real time limits at this point anymore, we've looked at the regulations and FOIAs rules but right now we're sort of talking about something we don't have control over. 

### Brookman: Just to clarify. Did I understand the thrust of your points to be that the cumbersome nature of that request and what follows out from, is that Franco:Yeah, because there's a FPOA problem (not audible). But then there's a secondary problem with this information that is needed in the department to keep internally or


### 126 Brookman:

Martin:Additional items comments onthe subject area?

I have struggled withthis (not audible) clearly the possibility ofsomebody demanding informationthat is not written downis hard to imagine. Very difficult to access written information unless you know exactly what it is. Thento figure out where you get it from. (Not audible). Itis a concernthat I don't think we need to have as long as they don't take notes orphotographs Franco: I think that probably a few problems are (not audible) regulation. One is the FOIA problem and that is probably more easily addressed because it is (not audible) discovery (not audible) and thenthere's the secondary problemwiththe department's own regulation or in terms ofconfidentiality. I haven't looked at these in a while, unfortunately I'm sure Gene would know ifhe were in the room, but the bottomline is that sometimes when you make (not audible) then you want certain partsto be kept confidentialthenyou have 

### make:; requests to the Secretary (not audible). That part ofit (not audible) during the interview that that information would get into the department without an ability to make a corJidentiality claim and have it ruled upon. It'sprobably more a sticking point thanthe FOIA issue. But I would suggest some real time limits at this point anymore, we've looked at the regulations and FOIAs rules but right now we're sort oftalking about something we don't have control over. Brookman: Just to clarify. Did I understand the thrust ofyourpoints to be that the cumbersome nature ofthatrequest and what follows out from, is that Franco:Yeah, because there's a FPOAproblem (not audible). Butthenthere's a secondary problemwiththis information that is needed in the department to keep internally or
126whatever and that's usually done, I mean in other department is not just a confidentiality

problem but a lot of times you have to make an obligation to (not audible). There is a period where theoretically the department could rule against you. (Not audible). Brookman: So the way that I interpret this conversation, let me suggest one way forward from this that Michael McCabe and Mike Rivest. Michael McCabe's office is working with Arthur D. Little, Carl and others that they try to arrive at some way that could work for the manufacturers prior to the visits. Adams:Let me just say that from relevant experiences was with the refrigerator rule when there were negotiations going on between the manufacturers and other parties that I did sit in on presentations by manufacturers one by one. We went into a room with the other parties involved and there was a discussion about the financial impacts, very specific information on management impacts. There were no notes taken, there was no written record, it was just a verbal presentation of the financial impacts of various standard levels. There is no record of it; there's nothing to access. I think there's a definitely difference between what's written down and what is said verbally. 

### Brookman: Are there any more comments on this subject before we move onto to the last item of the day? Yes? Osann: I'm looking at the opposite slide that's up and if, is the two week extension on the end of the workshop comment period going to result in a full month revision on the last two items on this page? Brookman: Carl do you want to respond to that again? 

### Adams:

127 whatever and that's usually done, I mean in other department 

### is notjust a confidentiality problembut a lot oftimes you have to make an obligationto (not audible). There is a period wheretheoreticallythe department couldrule against you. (Not audible). Brookman: So the waythat I interpret this conversation, let me suggest one way forward from this that Michael McCabe and Mike Rivest. Michael McCabe's office is working with Arthur D. Little, Carl and others that theytry to arrive at some waythat could work for the manufacturers priorto the visits. Adams:Let mejust saythat from relevant experiences was withthe refrigerator rule when there
were negotiations going on betweenthe manufacturers and otherparties that I did sit in on presentations by manufacturers one by one. We went into a roomwith the other parties involved and there was a discussion about the financial impacts, very specific information
onmanagement impacts. There were no notes taken, there was no written record, it was just a verbal presentation ofthe financial impacts ofvarious standard levels. There 

### is no record ofit; there's nothing to access. I think there's a definitely difference between what's written down and what 

### is said verbally. Brookman:

Osann: Are there any more comments onthis subject before we move onto to the last item ofthe day? Yes?

I'mlooking at the opposite slide that's up and 

### if, is the two week extension onthe end of the workshop comment period going to result in a full monthrevision onthe last two items onthis page? Brookman: Carl do you want to respond to that again? Adams:
127It's certainly a possibility of we're going to try to make up time wherever we can. We're

certainly under pressure to stick to the schedule that we have. Certainly the major milestones when NOPR comes out when the final rule comes out. At some point as you has some slippage on points it beings to effect the overall schedule, but we're certainly going to chance to stay on that overall schedule. McCabe: One additional point to make is that what has been discussed, what the industry were two separate two-week extensions. One was an additional two weeks for the comment period on today's workshop, which was to the June 12th date. We also discussed that it was necessary to have a full month instead of a half month that was up here, to review the Strawman questionnaire so that its not a two week delay that is going to result in an overall four week delay and they proposing to two separate two-week additional (not audible). Osann: Will these revisions result in a change in schedule for the NOPR which is based on the material you've provided February 19, 1999? McCabe: We'll have to map that out. What exactly it has. Osann: 

### Has the standards program committed to the secretary maintained this schedule? McCabe: Yes. Osann: 

### For the NOPR and the final rule? McCabe: Yes, what we're going to. This is information that we will take upstairs to Dan Reicher rationale for the extension. Get back to all parties who take exception to that.


### 128 It's certainly a possibility ofwe're going to try to make up time wherever we can. We're certainly under pressure to stick to the schedule that we have. Certainly the major milestones whenNOPR comes out whenthe final rule comes out. At some point as you has some slippage onpoints it beings to effect the overall schedule, but we're certainly going to chance to stay onthat overall schedule. McCabe:

Osann: One additional point to make is that what has beendiscussed, what the industry were two separate two-week extensions. One was an additional two weeks for the comment period
ontoday's workshop, which wasto the June 12thdate. We also discussed that it was necessaryto have a full month instead ofa halfmonththat was uphere, to review the Strawman questionnaire so that its not a two week delay that is going to result in an overall four week delay and theyproposing to two separate two-week additional (not audible).

Will these revisions result in a change in schedule for the NOPRwhich is based onthe materialyou'veprovided February 19, 1999? McCabe: We'llhave to map that out. What exactly it has. Osann: Hasthe standards programcommitted to the secretary maintained this schedule? McCabe: Yes. Osann: Forthe NOPR and the final rule? McCabe: Yes, what we're going to. This is information that we 

### will take upstairs to DanReicher rationale for the extension. Get back to all parties who take exception to that.
128Osann: With these near term extensions don't necessarily translate into further stretch out on the

NOPR publication of the final rule? McCabe: That's possible

. I would say than with NOPR than with final rule. Brookman: Are there still questions or comments at this point ? I guess then that we should record any additional next steps that would be appropriate. Carl Adams: 

### I believe that we have covered all of the next steps that I had intended. Mark Perlis: 

### I for one feel that LBNL still has additional work to analyzing a couple of the key LCC issues. I hope there's going to be opportunity for us to have some form of dialog about it. The next one is suppose to be on the Manufacturing Impact Analysis. 

### Carl Adams: No that's not correct. Mark Perlis: 

### Oh, that's not correct. Okay, fine, then we will have a chance to look again at (not audible) in October or when ever that is. Carl Adams: Correct. Bob Wisbey: This is just a question of clarification on that because the (not audible) there was a draft document last summer we provided comments in the fall. And we were provided a document about ten days ago that was the result our rebuttal of our



### 129 Osann: Withthese near termextensions don't necessarily translate into further stretch out onthe NOPRpublication ofthe final rule? McCabe: That's possible. I would saythanwithNOPRthan with

### final rule. Brookman: Are there still questions or comments at this point? I guess thenthat we should record any additional next steps that would be appropriate. Carl Adams: I believe that we have covered all ofthe next steps that I had intended. Mark Per1is: I for one feel that LBNL still has additional workto analyzing a couple ofthe key LCC issues. I hope there's going to be opportunity for us to have some form ofdialog about it. The next one is suppose to be onthe Manufacturing Impact Analysis. Carl Adams: No that's not correct. Mark Per1is: Oh, that's not correct. Okay, fine, thenwe 

### will have a chance to look again at (not audible) in October or when ever that is. Carl Adams: Correct. Bob Wisbey: This isjust a question ofclarification onthat because the (not audible) there was
a draft document last summer we provided comments in the fall. And we were provided a document about ten days ago that was the result ourrebuttal ofour

129

### rebuttal. Which we rebutted again today. There are two to three points very

much in contention here in doing LCC (not audible) It is my understanding that LBNL will re-run all of those calculations. Will we again have the opportunity notes or comments that we made today, plus the comments we submit by June 12th, will we have an opportunity to review the decisions that were made of those prior to them being implemented or will that information simple be used, information used, decisions made and then the calculations done? 

### Carl Adams: At some point we have to draw a line and say you know we're moving forward. And the next scheduled opportunity for dialog would be the October workshop were the LLC results will be presented as well as the Manufacture Impact Analysis results. I don't foresee another intermediate step, we will take the comments -- we will take the information that we've received today and we will utilize that information perhaps not to (not audible). Unknown: You will take the information provided today, plus the written comments by June 12th -- you will take that under advisement, make decisions and proceed. 

### Carl Adams: Correct. And that would be presented at the October workshop. Gene Foley: To clarify the October workshop. We seem to spend an awful time (not audible) So the October workshop we will just get a presentation of the final LCC by the Department along with the MIA. 

### Carl Adams: It will be the results although I would expect that the inputs would be made available as to what they were.

130 rebuttal. Which we rebutted again today. There are two to three points very much in contentionhere in doing LCC (not audible) It is my understanding that LBNL 

### willre-run all ofthose calculations. Will we again have the opportunity notes or comments that we made today, plus the comments we submit by June 12th, 

### will we have an opportunityto review the decisions that were made ofthose priorto thembeing implemented or

### will that information simple be used, information used, decisions made and thenthe calculations done? Carl Adams: At some point we have to draw a line and say youknow we're moving forward. And the next scheduled opportunity for dialog would be the October workshop
were the LLC results 

### will be presented as well as the Manufacture Impact Analysis results. I don't foresee another intermediate step, we 

### will take the comments
-- we 

### will take the informationthat we've received today and we 

### will utilize that informationperhaps not to (not audible). Unknown: You

### will take the informationprovidedtoday, plus the written comments by June 12th

-- you 

### willtake that under advisement, make decisions and proceed. Carl Adams: Correct. And that would be presented at the October workshop. Gene Foley: To

## clarifY the October workshop. We seemto spend an awfultime (not audible) So the October workshop we 

### willjust get a presentation ofthe 

### final LCC bythe Department along withthe MIA. Carl Adams: It 

### will be the results althoughI would expect that the inputs would be made available as to what they were.



### l30Unknown:

It is very likely that the outcome of LCC that there need to move on to MIA. (not audible) next step. 

### Unknown: The presentations at the October workshop, will those be conclusions that DoE has reached or will it be another briefing on LCC. Unknown: Prior to publishing a NOPR that we would present the results of all of the analysis 

### for public review prior to being share with the decision makers within the Department. I would expect

-- hope -- this workshop, this rulemaking and others that you can identify the (not audible) presented to management
. There's always the possibility that some proceeding that we will discover that there is an error made or issue that has not been addressed , and we will go back and make the appropriated, make the necessary changes
. But I am hoping that DoE and its contractors will be able to present a whole set of analysis and information as to what the Staff considers to be significant and what we will be presenting to management, so that all parties could look at it and stress those issues for both parties. Barbara Atkinson: Prior to the workshop in October would be put on the web an overview? Carl Adams: I think that would be appropriate to do. Doug Brookman: 

### Final comments before close out this session. Carl Adams: I believe they have just handed over to me the pleasant task of item number 7 on the agenda which is adjournment, but prior to that I would like to thank


### 131 Unknown: It is very likely that the outcome ofLCC that there need to move onto MIA. (not audible) next step. Unknown: The presentations at the October workshop, 

### will those be conclusions that DoE has reached or

### will it be another briefing onLCC. Unknown: Prior to publishing a NOPRthat we would presentthe results ofall ofthe analysis for public reviewpriorto being share withthe decision makers within the Department. I would expect
-- hope

-- this workshop, this rulemaking and others that you canidentifY the (not audible) presented to management. There's always the possibility that some proceeding that we 

### will discover that there is an error made
or issue that has not been addressed, and we 

### will go back and make the appropriated, make the necessary changes. ButI amhoping that DoE and its contractors 

### will be able to present a whole set ofanalysis and information as to what the Staffconsiders to be significant and what we 

### will be presenting to management, so that all parties could look at it and stress those issues for both parties. BarbaraAtkinson: Prior to the workshop in October wouldbe put onthe web an overview? Carl Adams: I think that wouldbe appropriate to do. Doug Brookman: Final comments before close out this session. Carl Adams: I believe they havejusthanded overto me the pleasant task ofitemnumber 7
onthe agendawhich is adjournment, but prior to that I would like to thank
131everyone for coming and I was sincere that I thought that everybody was very

well prepared. And I think that this has been a very worth while workshop. Again, thank you for coming.



### Meeting adjourned.

132 everyone for coming and I was sincerethat I thought that everybody was very well prepared. And I think that this has been a very worthwhile workshop. Again, thank you for coming.
Meeting adjourned.

132